EXHIBIT 10.21
▇▇▇▇▇ INTERNATIONAL NETWORKS, LTD.
$100,000,000
11-3/4% Senior Secured Notes due 2005
PURCHASE AGREEMENT
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July 2, 1998
NatWest Capital Markets Limited
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Ladies and Gentlemen:
The undersigned hereby confirms its agreement with you (the "Initial
Purchaser") as set forth below.
1. The Notes. Subject to the terms and conditions herein contained,
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▇▇▇▇▇ International Networks, Ltd., a Colorado corporation (the "Company"),
proposes to issue and sell to the Initial Purchaser $100,000,000 aggregate
principal amount of its 11-3/4% Senior Secured Notes due 2005 (the "Notes").
The Notes will be offered and sold to the Initial Purchaser without
being registered under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance on exemptions therefrom. The Notes are to be issued under an
indenture (the "Indenture") to be dated as of July 10, 1998 between the Company
and United States Trust Company of New York, as trustee (the "Trustee").
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum dated June 11, 1998 (the "Preliminary
Memorandum") and will prepare a final offering memorandum dated July 2, 1998
(the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum
each herein being referred to as the "Memorandum") setting forth or including a
description of the terms of the Notes, the terms of the offering of the Notes, a
description of the Company and the Subsidiaries (as defined below) and any
material developments relating to the Company and the Subsidiaries occurring
after the date of the most recent historical financial statements included
therein.
The Company and the Initial Purchaser will enter into an Exchange and
Registration Rights Agreement (the "Registration Rights Agreement") prior to or
concurrently with the issuance of the Notes. Pursuant to the Registration
Rights Agreement, under the circumstances and the terms set forth therein, the
Company will agree to file with the Securities and Exchange Commission (the
"Commission"): (i) a registration statement on Form S-4 (the "Exchange Offer
Registration Statement") relating to a registered Exchange Offer (as defined in
the Registration Rights Agreement) for the Notes under the Securities Act to
offer to the holders of the Notes the opportunity to exchange their Notes for an
issue of notes substantially identical to the Notes (except that (a) interest
thereon will accrue from the last date on which interest was paid on the Notes,
or if no such interest has been paid, from the date of original issuance of the
Notes, (b) such Notes will not contain restrictions on transfer, and (c) such
Notes will not contain provisions relating to an increase in their interest rate
under certain circumstances) that would be registered under the Securities Act
(the "Exchange Notes"); or (ii) alternatively, in the event that applicable
interpretations of the Commission do not permit the Company to effect the
Exchange Offer or do not permit any holder of the Notes who is not eligible to
participate in the Exchange Offer and who so requests, a shelf registration
statement (the "Shelf Registration Statement") to cover resales of Notes (the
"Resale Notes") by such holders who satisfy certain conditions, including the
provision of information in connection with the Shelf Registration Statement.
2. Representations and Warranties. The Company represents and
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warrants to, and agrees with the Initial Purchaser that:
(a) Neither the Preliminary Memorandum as of the date thereof nor the
Final Memorandum nor any amendment or supplement thereto as of the date
thereof and, in the case of the Final Memorandum and any amendment or
supplement thereto, at all times subsequent thereto up to the Closing Date
(as defined in Section 3 below) contained or shall contain any untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations
and warranties set forth in this Section 2(a) do not apply to statements or
omissions made in reliance upon and in conformity with information
furnished to the Company in writing by the Initial Purchaser expressly for
use in the Preliminary Memorandum, the Final Memorandum or any amendment or
supplement thereto.
(b) As of the Closing Date, the Company will have the following
authorized and issued capital stock: 50,000,000 shares and 3,647,620
shares of Class A Common Stock authorized and issued, respectively, and
1,785,120 shares of Class B Common Stock authorized and issued; the Company
will own the percentage of the issued and outstanding stock or other equity
securities of each of the subsidiaries listed on Schedule 2 hereto
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(collectively, the "Subsidiaries"); all of the outstanding shares of
capital stock of the Company and those Subsidiaries that are corporations
as of the Closing Date will be duly authorized and validly issued, will be
fully paid and nonassessable and were not issued in violation of any
statutory preemptive rights; all of the outstanding ownership interests of
▇▇▇▇▇/▇▇▇▇▇ Programming LLC ("▇▇▇▇▇/▇▇▇▇▇") held by ▇▇▇▇▇ Radio Network
Ventures, Inc., will be duly authorized and validly existing and will not
have been issued in violation of any statutory preemptive rights, or
preemptive rights under the operating agreement or articles of organization
of ▇▇▇▇▇/▇▇▇▇▇, respectively. Except as set forth in the Final Memorandum,
there are no outstanding (i) options, warrants or other rights to purchase
from the Company and the Subsidiaries, (ii) agreements or other obligations
of the Company or any of the Subsidiaries to issue or (iii) other rights to
convert any obligation into, or exchange any securities of, shares of
capital stock of, or other equity securities of, the Company or any of the
Subsidiaries. The Subsidiaries and the
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subsidiaries set forth on Schedule 3 are the only subsidiaries, direct or
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indirect, of the Company. Except as disclosed on Schedule 2 and Schedule 3,
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the Company does not own, directly or indirectly, any capital stock or any
other equity securities or have any equity interests in any firm,
partnership, joint venture, limited liability company or other entity or
long term debt securities of any firm, partnership, joint venture, limited
liability company or other entity.
(c) The Company and each of the Subsidiaries has been duly
incorporated or organized, is validly existing and is in good standing as a
corporation or limited liability company under the laws of its jurisdiction
of incorporation or organization, with all requisite corporate power and
authority to own its properties and conduct its business as now conducted,
and as described in the Final Memorandum; none of the Company and the
Subsidiaries is duly qualified to do business as a foreign corporation or
limited liability company in good standing in any other jurisdictions
because the ownership or leasing of its properties or the conduct of its
business does not require such qualification, or the failure to be so
qualified would not, individually or in the aggregate, have a material
adverse effect on the general affairs, management, business, condition
(financial or otherwise), prospects or results of operations of the Company
and the Subsidiaries, taken as a whole (any such event, a "Material Adverse
Effect").
(d) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Notes. The Notes,
when issued, will be in the form contemplated by the Indenture. The Notes
have been duly and validly authorized by the Company and, when executed and
delivered by the Company and authenticated by the Trustee in accordance
with the provisions of the Indenture and when delivered to and paid for by
the Initial Purchaser in accordance with the terms of this Agreement, will
have been duly executed, issued and delivered and will constitute valid and
legally binding obligations of the Company, will entitle the Initial
Purchaser to the benefits of the Indenture and will be enforceable against
the Company in accordance with their terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
(e) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture. The
Indenture meets the requirements for qualification under the Trust
Indenture Act of 1939, as amended (the "TIA"). The Indenture has been duly
and validly authorized, executed and delivered by the Company and when duly
and validly authorized, executed and delivered by the Trustee, will
constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles.
(f) The Exchange Notes have been duly and validly authorized by the
Company and, when the Exchange Notes have been duly executed and delivered
by the
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Company and authenticated by the Trustee in accordance with the terms of
the Registration Rights Agreement and the Indenture, will constitute valid
and legally binding obligations of the Company, will entitle the holder to
the benefits of the Indenture, and will be enforceable against the Company
in accordance with their terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance reorganization or
other similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles.
(g) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Registration Rights
Agreement. The Registration Rights Agreement has been duly and validly
authorized by the Company, and when executed and delivered by the Company,
will constitute a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles.
(h) Each of the Company and JPN, Inc. (the "Subsidiary Pledgor"), as
applicable, has all requisite corporate power and authority to execute,
deliver and perform its respective obligations under the Pledge Agreement,
to be dated the Closing Date, whereby each of the Company and the
Subsidiary Pledgor pledge all of its Pledged Stock (as defined in such
agreement) to United States Trust Company of New York in its capacity as
collateral agent (the "Collateral Agent") for the benefit of the holders of
the Notes (the "Pledge Agreement"). The Pledge Agreement has been duly and
validly authorized by the Company and the Subsidiary Pledgor and, when
executed and delivered by the Company and the Subsidiary Pledgor, will
constitute a valid and legally binding agreement of the Company and the
Subsidiary Pledgor enforceable against them in accordance with its terms
and granting a security interest in the Pledged Stock in favor of the
Collateral Agent, except as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization or other
similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles.
(i) Each of the Subsidiaries (the "Subsidiary Guarantors") has all
requisite corporate power and authority to execute, deliver and perform its
obligations under the subsidiary guaranty executed by it (each, a
"Subsidiary Guaranty"). Each Subsidiary Guaranty will be duly and validly
authorized at the Closing Date, and when executed and delivered by the
applicable Subsidiary Guarantor, will constitute a valid and legally
binding agreement of such Subsidiary Guarantor enforceable against such
Subsidiary Guarantor in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles.
(j) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. This Agreement has been
duly and validly authorized, executed and delivered by the Company.
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(k) No consent, approval, authorization or order of any court or
governmental agency or body or third party is required for the execution,
delivery or performance by the Company or any Subsidiary party thereto, as
applicable, of this Agreement, the Registration Rights Agreement, the
Subsidiary Guaranties, the Indenture and the Pledge Agreement, or the
consummation by the Company or any of the Subsidiaries party thereto, as
applicable, of the transactions contemplated hereby or thereby that are to
be completed on or before the Closing Date, except such as have been
obtained or disclosed in the Final Memorandum and such as may be required
under state securities or "Blue Sky" laws in connection with the purchase
and resale of the Notes by the Initial Purchaser. None of the Company or
any of the Subsidiaries is (i) in violation of its certificate of
incorporation or bylaws (or similar organizational document), (ii) in
breach or violation of any statute, judgment, decree, order, rule or
regulation applicable to any of them or any of their respective properties
or assets, or (iii) in breach of or in default under (nor has any event
occurred which, with notice or passage of time or both, would constitute a
default under) or in violation of any of the terms or provisions of any
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate, contract or other agreement or
instrument to which any of them is a party or to which any of them or their
respective properties or assets is subject which is material to the Company
and its Subsidiaries taken as a whole (collectively, "Contracts"), except
where such violation, breach or default would not have a Material Adverse
Effect.
(l) The execution, delivery and performance by the Company and the
Subsidiaries party thereto, as applicable, of this Agreement, the
Indenture, the Registration Rights Agreement, the Pledge Agreement and the
Subsidiary Guaranties and the consummation by the Company and the
Subsidiaries party thereto, as applicable, of the transactions contemplated
hereby and thereby, and the fulfillment of the terms hereof and thereof,
and the retention by the Company of NatWest Capital Markets Limited
("NatWest") pursuant to those certain letter agreements (including the
engagement and indemnity letter agreements) dated April 16, 1998
(collectively, the "Engagement Letter") and NatWest's acting as
contemplated hereby and thereby, will not conflict with or constitute or
result in a breach of or a default under (or an event which with notice or
passage of time or both would constitute a default under) or violation of
any of (i) the terms or provisions of any Contract, (ii) the certificate of
incorporation or by-laws (or similar organizational document) of the
Company or any of the Subsidiaries, or (iii) any statute, judgment, decree,
order, rule or regulation applicable to the Company or any of the
Subsidiaries or any of their respective properties or assets, except such
conflicts, breaches, defaults or violations that would not, individually or
in the aggregate, have a Material Adverse Effect.
(m) The audited consolidated financial statements of the Company and
to our knowledge of MediaAmerica, Inc. ("MediaAmerica"), included in the
Preliminary Memorandum and the Final Memorandum present fairly in all
material respects the financial position, results of operations and cash
flows of such entities at the dates and for the periods to which they
relate and have been prepared in accordance with U.S. generally accepted
accounting principles applied on a consistent basis except as otherwise
stated therein. The income statement and balance sheet data appearing
under the caption
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"Selected Consolidated Financial Data" in the Preliminary Memorandum and
the Final Memorandum present fairly in all material respects the
information shown therein and have been prepared and compiled on a basis
consistent with the audited financial statements included therein, except
as otherwise stated therein. Each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP and to our
knowledge, ▇▇▇▇▇ ▇▇▇▇▇▇ & Co. is an independent public accounting firm
within the meaning of the Securities Act and the rules and regulations
promulgated thereunder.
(n) The income statement and balance sheet data appearing under the
caption "Selected Unaudited Pro Forma Financial Data" included in the
Preliminary Memorandum and the Final Memorandum have been properly computed
on the bases described therein; the assumptions used in the preparation of
such financial data are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein.
(o) There is not, to the knowledge of the Company, pending or
threatened, any action, suit, proceeding, inquiry or investigation to which
the Company or any of the Subsidiaries is a party, or to which the property
or assets of the Company or any of the Subsidiaries are subject, before or
brought by any court, arbitrator or governmental agency or body which is
reasonably likely to, individually or in the aggregate, have a Material
Adverse Effect or which seeks to restrain, enjoin, prevent the consummation
of or otherwise challenge the issuance or sale of the Notes to be sold
hereunder or the consummation of the transactions contemplated by this
Agreement, the Indenture, the Registration Rights Agreement, the Pledge
Agreement, the Subsidiary Guarantees and the Acquisition Agreements (as
defined below) (the "Transactions").
(p) The Company or its Subsidiaries have adopted, affixed and used
each of the designations listed in Schedule (p)(1) attached hereto (the
"Marks") in association with goods or services offered for sale by the
Company or its Subsidiaries. The Company or its Subsidiaries have a
license from ▇▇▇▇▇ International, Ltd. to use each of the designations
listed in Schedule (p)(2) attached hereto (the "Licensed Marks"). To the
best of each of their knowledge, the Company and its Subsidiaries have the
right to use each of such Marks and Licensed Marks that is a material
trademark, service mark or trade name necessary to conduct the
business now or proposed to be operated by it or them as described in the
Preliminary Memorandum and Final Memorandum. None of the Company nor any of
the Subsidiaries has received any notice of infringement of or conflict of
any of the Marks or Licensed Marks with asserted rights of others with
respect to any trademark, service mark or tradename which, if such
assertion of infringement or conflict were sustained, would, individually
or in the aggregate, have a Material Adverse Effect.
To the best of each of their knowledge, the Company and its
Subsidiaries own or possess adequate licenses or other rights to use, all
material patents, copyrights or know-how necessary to conduct the business
now or proposed to be operated by it or them as described in the
Preliminary Memorandum and Final Memorandum (collectively, the "Other
Intellectual Property"). To the best of each of their knowledge, the
Company and its Subsidiaries have the right to use such Other Intellectual
Property to conduct the
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business now or proposed to be operated as so described. None of the
Company nor any of the Subsidiaries has received any notice of infringement
of or conflict with asserted rights of others with respect to any patents,
copyrights or know-how which, if such assertion of infringement or conflict
were sustained, would, individually or in the aggregate, have a Material
Adverse Effect.
(q) The Company and each of the Subsidiaries possesses all material
licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all self-
regulatory organizations and all courts and other tribunals, presently
required or necessary to own or lease, as the case may be, and to operate
its respective properties and to carry on its respective businesses as now
or proposed to be conducted as described in the Preliminary Memorandum and
the Final Memorandum (collectively, the "Permits"); each of the Company and
the Subsidiaries has fulfilled and performed all of its obligations with
respect to such Permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder of any
such Permit; and none of the Company or the Subsidiaries has received any
notice of any proceeding relating to revocation or modification of any such
Permit; except in each such case to the extent that failure to have such
Permits or the nonperformance, revocation, modification or termination of
the Permits would not result in a Material Adverse Effect.
(r) Since the date of the most recent financial statements appearing
in the Final Memorandum, except as described therein, (i) none of the
Company nor the Subsidiaries has incurred any liabilities or obligations,
direct or contingent, or entered into or agreed to enter into any
transactions or contracts (written or oral) which are not in the ordinary
course of business and which liabilities, obligations, transactions or
contracts would, individually or in the aggregate, be material to the
general affairs, management, business, condition (financial or otherwise),
prospects or results of operations of the Company and the Subsidiaries,
either individually or taken as a whole (a "Material Change"), (ii) none of
the Company nor the Subsidiaries has purchased any of its outstanding
capital stock, nor has the Company declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock and (iii) other
than as described in the Final Memorandum, there have been no changes in
the capital stock or long-term indebtedness of the Company or the
Subsidiaries.
(s) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the general
affairs, management, business, condition, (financial or otherwise),
prospects or results of operations of the Company and the Subsidiaries,
either individually or taken as a whole, from that set forth in the
Preliminary Memorandum and the Final Memorandum.
(t) The Company and each of the Subsidiaries has filed all necessary
federal, state, local and foreign income and franchise tax returns, and has
paid all taxes shown as due thereon; there is no tax deficiency that has
been asserted against the Company or any of the Subsidiaries other than tax
deficiencies which the Company or any Subsidiary is
7
contesting in good faith and for which the Company or such Subsidiary has
provided adequate reserves.
(u) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which the Company and the
Subsidiaries have a reasonable belief to be reliable and accurate.
(v) None of the Company, the Subsidiaries nor any agent acting on any
of their behalf has taken or will take any action that might cause this
Agreement or the sale of the Notes to violate Regulation T, U or X of the
Board of Governors of the Federal Reserve System, in each case as in effect
on the Closing Date.
(w) Each of the Company and the Subsidiaries has good and marketable
title to all real property and good title to all tangible personal property
specifically identified and described in the Preliminary Memorandum and the
Final Memorandum as being owned by it and good and marketable title to any
leasehold estate in the real and personal property described in the
Preliminary Memorandum and the Final Memorandum as being leased by it free
and clear of all liens, charges, encumbrances or restrictions, except as
described in the Preliminary Memorandum and the Final Memorandum or to the
extent the failure to have such title or the existence of such liens,
charges, encumbrances or restrictions would not, individually or in the
aggregate, have a Material Adverse Effect after giving effect to the
repayment of the indebtedness under the credit facility of ▇▇▇▇▇ Radio
Holdings, Inc. ("Radio Holdings") and the release of all liens, charges,
encumbrances and restrictions thereunder.
(x) There are no legal or governmental proceedings or Contracts
involving or affecting the Company or any Subsidiary or any of their
respective properties or assets which would be required to be described in
a prospectus forming part of a registration statement filed with the
Commission pursuant to the Securities Act that are not described in the
Preliminary Memorandum and the Final Memorandum.
(y) Except as would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect (A) each of the
Company and the Subsidiaries is in compliance with and not subject to
liability under applicable Environmental Laws (as defined below), (B) each
of the Company and the Subsidiaries has made all filings and provided all
notices required under any applicable Environmental Laws, and has and is in
compliance with all Permits required under any applicable Environmental
Laws and each of them is in full force and effect, (C) there is no civil,
criminal or administrative action, suit, demand, claim, hearing, notice of
violation, investigation, proceeding, notice or demand letter or request
for information pending or, to the knowledge of the Company or any of the
Subsidiaries, threatened against the Company or any of the Subsidiaries
under any Environmental Law, (D) no lien, charge, encumbrance or
restriction has been recorded under any Environmental Law with respect to
any assets, facility or property owned, operated, leased or controlled by
the Company or any of the Subsidiaries, (E) none of the Company or the
Subsidiaries has received notice that it has been identified as a
potentially responsible party under the Comprehensive Environmental
Response,
8
Compensation and Liability Act of 1980, as amended ("CERCLA") or any
comparable state law, (F) no property or facility of the Company or any of
the Subsidiaries is listed or proposed for listing on the National
Priorities List under CERCLA or is listed in the Comprehensive
Environmental Response, Compensation, Liability Information System List
promulgated pursuant to CERCLA, or on any comparable list maintained by any
state or local governmental authority.
For purposes of this Agreement, "Environmental Laws" means the common
law and all applicable federal, state and local laws or regulations, codes,
orders, decrees, judgments or injunctions issued, promulgated, approved or
entered thereunder, relating to pollution or protection of public or
employee health and safety or the environment, including, without
limitation, laws relating to (i) emissions, discharges, releases or
threatened releases of hazardous materials into the environment (including,
without limitation, ambient air, surface water, ground water, land surface
or subsurface strata), (ii) the manufacture, processing, distribution, use,
generation, treatment, storage, disposal, transport or handling of
hazardous materials, and (iii) underground and above ground storage tanks,
and related piping, and emissions, discharges, releases or threatened
releases therefrom.
(z) There is no strike, labor dispute, slowdown or work stoppage with
the employees of the Company or any of the Subsidiaries which is pending
or, to the knowledge of the Company or any of the Subsidiaries, threatened.
(aa) Each of the Company and the Subsidiaries carries insurance in
such amounts and covering such risks as is adequate for the conduct of its
business and the value of its properties. Neither the Company nor any of
the Subsidiaries has received notice from any insurer or agent of such
insurer that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance.
(bb) To the knowledge of the Company, none of the Company nor the
Subsidiaries has any material liability for any prohibited transaction
(within the meaning of Section 4975(c) of the Internal Revenue Code of
1986, as amended (the "Code") or Part 4 of Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) (or an
accumulated funding deficiency within the meaning of Section 412 of the
Code or Section 302 of ERISA) or any complete or partial withdrawal
liability (within the meaning of Section 4201 of ERISA) with respect to any
pension, profit sharing or other plan which is subject to ERISA, to which
the Company or any of the Subsidiaries makes or ever has made a
contribution and in which any employee of the Company or of any Subsidiary
is or has ever been a participant. To the knowledge of the Company, with
respect to such plans, to the extent applicable, the Company and each
Subsidiary is in compliance in all material respects with all applicable
provisions of ERISA.
(cc) The Company and each of the Subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls
which provide reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions are recorded
as necessary to permit preparation of its
9
financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(dd) None of the Company or the Subsidiaries will be an "investment
company" or a person "controlled by" an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended, and
the rules and regulations thereunder.
(ee) The Notes, the Exchange Notes, the Registration Rights Agreement
and the Indenture will conform in all material respects to the
descriptions thereof in the Final Memorandum.
(ff) No holder of securities of the Company nor any of the
Subsidiaries will be entitled to have such securities registered under the
registration statements required to be filed by the Company pursuant to the
Registration Rights Agreement other than as expressly permitted thereby.
(gg) Immediately after the consummation of the transactions
contemplated by this Agreement, the fair value of the assets of the Company
and the Subsidiaries (on a consolidated basis) will exceed the sum of its
stated liabilities and identified contingent liabilities; the Company and
the Subsidiaries (on a consolidated basis) are not and the Company and the
Subsidiaries (on a consolidated basis) will not be, after giving effect to
the execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, (a) left with
unreasonably small capital with which to carry on its business as it is
currently or proposed to be conducted, (b) unable to pay its debts
(contingent or otherwise) as they mature or otherwise become due or (c)
otherwise insolvent.
(hh) None of the Company, the Subsidiaries or any of their respective
Affiliates (as defined in Rule 501(b) of Regulation D under the Securities
Act) has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
"security" (as defined in the Securities Act) which is or could be
integrated with the sale of the Notes in a manner that would require the
registration under the Securities Act of the Notes or (ii) engaged in any
form of general solicitation or general advertising (as those terms are
used in Regulation D under the Securities Act) in connection with the
offering of the Notes or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act. Other than materials
prepared for use in the "road show" relating to the offering of the Notes,
the Company has not distributed and will not distribute any offering
material to prospective purchasers in connection with the offering of the
Notes other than the Final Memorandum and any Preliminary Memorandum. No
securities of the same class as the Notes have been issued and sold by the
Company within the six-month period immediately prior to the date hereof.
(ii) Assuming the accuracy of the representations and warranties of
the Initial Purchaser in Section 8 hereof and of the deemed representations
of purchasers of the
10
Notes under the caption "Transfer Restrictions" in the Final Offering
Memorandum, it is not necessary in connection with the offer, sale and
delivery of the Notes to the Initial Purchaser in the manner contemplated
by this Agreement to register any of the Notes under the Securities Act or
to qualify the Indenture under the TIA, except as provided in the
Registration Rights Agreement.
(jj) No securities of the Company or any Subsidiary are of the same
class (within the meaning of Rule 144A as promulgated under the Securities
Act ("Rule 144A")) as the Notes and listed on a national securities
exchange registered under Section 6 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or quoted in a U.S. automated inter-dealer
quotation system.
(kk) None of the Company or the Subsidiaries has taken, nor will any
of them take, directly or indirectly, any action designed to, or that might
be reasonably expected to, cause or result in stabilization or manipulation
of the price of the Notes in violation of Regulation M under the Exchange
Act.
(ll) None of the Company or the Subsidiaries, or any person acting on
any of their behalf (other than the Initial Purchaser) has engaged in any
directed selling efforts (as that term is defined in Regulation S under the
Securities Act ("Regulation S")) with respect to the Notes; the Company and
its respective Affiliates and any person acting on any of their behalf have
complied with the offering restrictions requirement of Regulation S.
(mm) Each of the Preliminary Memorandum and the Final Memorandum, as
of its respective date, contains all of the information that, if requested
by a prospective purchaser of the Notes, would be required to be provided
to such prospective purchaser pursuant to Rule 144A(d)(4) under the
Securities Act.
(nn) The Notes satisfy the eligibility requirements of Rule 144A(d)(3)
under the Securities Act.
(oo) Neither the Company nor any of the Subsidiaries nor, to the
Company's knowledge, any officer or director purporting to act on behalf of
the Company or any of the Subsidiaries has at any time: (i) made any
contributions to any candidate for political office, or failed to disclose
fully any such contributions, in violation of law, (ii) made any payment of
funds to, or received or retained any funds from, any state, federal or
foreign governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or
allowed by applicable law, (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977, (iv) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment or (v) engaged in any transactions, maintained any bank
account or used any corporate funds except for transactions, bank accounts
and funds which have been and are reflected in the normally maintained
books and records of the Company and the Subsidiaries.
11
(pp) Except as disclosed in any Memorandum, there are no material
outstanding loans or advances or material guarantees of indebtedness by the
Company or any of its Subsidiaries to or for the benefit of any of the
officers or directors of the Company or any of its Subsidiaries or any of
the members of the families of any of them.
(qq) None of the Company or any of the Subsidiaries has engaged or
retained any person, other than NatWest and ▇. ▇▇▇▇ and Company, to act as
a financial advisor, underwriter or placement agent in connection with the
issuance of the Notes and, except for the fees and expenses payable to the
Initial Purchaser and ▇. ▇▇▇▇ and Company, no person has the right to
receive a material amount of financial advisory, underwriting, placement,
finder's or similar fees in connection with, or as a result of, the
issuance of the Notes and the purchase of the Notes by the Initial
Purchaser or the consummation of the other transactions contemplated
hereby.
(rr) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under each of (i) the
Agreement, dated as of June 2, 1998, among MediaAmerica, Inc., a New York
corporation ("MediaAmerica"), ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ Network
Holdings LLC and the Company, whereby the Company has agreed to purchase
certain of the advertising representation and radio programming assets and
assume certain liabilities of MediaAmerica (the "Agreement") and the
Employment Agreement, Post-Closing Agreement and Registration Rights
Agreement (together, the "Acquisition Agreements"). The Agreement has been
duly and validly authorized, executed and delivered by the Company and
constitutes a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles.
3. Purchase, Sale and Delivery of the Notes. On the basis of the
----------------------------------------
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchaser, and the Initial Purchaser agrees to
purchase from the Company the principal amount of Notes set forth opposite its
name on Schedule 1 hereto at 96.5% of their principal amount. One or more
----------
certificates in definitive form for the Notes that the Initial Purchaser has
agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Initial Purchaser reasonably requests,
shall be delivered by or on behalf of the Company to the Initial Purchaser,
against payment by or on behalf of such Initial Purchaser of the purchase price
therefor by wire transfer of immediately available funds to such account or
accounts as the Company shall specify prior to the Closing Date, or by such
means as the parties hereto shall agree prior to the Closing Date. Such
delivery of and payment for the Notes shall be made at the offices of the
Company in Englewood, Colorado at 8:00 A.M., Colorado time, on July 10, 1998, or
at such other place, time or date as the Initial Purchaser and the Company may
agree upon, such time and date of delivery against payment (which shall,
notwithstanding anything to the contrary, mean immediately prior to the closing
of the Acquisition) being herein referred to as the "Closing Date."
12
4. Offering by the Initial Purchaser. The Initial Purchaser
---------------------------------
proposes to make an offering of the Notes at the price and upon the terms set
forth in the Final Memorandum, as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchaser is advisable.
5. Covenants of the Company. The Company covenants and agrees with
------------------------
the Initial Purchaser that:
(a) The Company will not amend or supplement the Final Memorandum or
any amendment or supplement thereto of which the Initial Purchaser shall
not previously have been advised and furnished a copy for a reasonable
period of time prior to the proposed amendment or supplement and as to
which the Initial Purchaser shall not have consented, which consent shall
not be unreasonably withheld. The Company will promptly, upon the
reasonable request of the Initial Purchaser or counsel for the Initial
Purchaser, make any amendments or supplements to the Final Memorandum that
may be necessary or advisable in connection with the resale of the Notes by
the Initial Purchaser.
(b) The Company will cooperate with the Initial Purchaser in
arranging for the qualification of the Notes for offering and sale under
the securities or "Blue Sky" laws of such jurisdictions as the Initial
Purchaser may designate and will continue such qualifications in effect for
as long as may be necessary to complete the resale of the Notes; provided,
--------
however, that in connection therewith, the Company shall not be required to
-------
qualify as a foreign corporation or to execute a general consent to service
of process in any jurisdiction or subject itself to taxation in excess of a
nominal dollar amount in any such jurisdiction where it is not now so
subject.
(c) If, at any time prior to the completion of the distribution by
the Initial Purchaser of the Notes, any event occurs or information becomes
known as a result of which the Final Memorandum as then amended or
supplemented would, in the judgment of the Company or in the reasonable
opinion of counsel to the Company include any untrue statement of a
material fact, or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it is necessary at any
time to amend or supplement the Final Memorandum to comply with applicable
law, the Company will promptly notify the Initial Purchaser thereof and
will prepare, at the expense of the Company, an amendment or supplement to
the Final Memorandum that corrects such statement or omission or effects
such compliance.
(d) The Company will, without charge, provide to the Initial
Purchaser and to counsel for the Initial Purchaser as many copies of the
Preliminary Memorandum and the Final Memorandum or any amendment or
supplement thereto as the Initial Purchaser may reasonably request.
(e) The Company will apply the net proceeds from the sale of the
Notes substantially as set forth under "Use of Proceeds" in the Final
Memorandum.
13
(f) Until the date on which there are no Notes outstanding, the
Company will furnish to the Initial Purchaser copies of all reports and
other communications (financial or otherwise) furnished by the Company to
the Trustee or the holders of the Notes and, as soon as available, copies
of any reports or financial statements furnished to or filed by the Company
with the Commission or any national securities exchange on which any class
of securities of the Company may be listed, unless otherwise publicly
available.
(g) Until the date on which there are no Notes outstanding, the
Company will furnish to the Initial Purchaser a copy of any unaudited
interim financial statements of the Company and the Subsidiaries for any
period subsequent to the period covered by the most recent financial
statements appearing in the Final Memorandum, unless otherwise publicly
available.
(h) None of the Company, the Subsidiaries or any of their Affiliates
will sell, offer for sale or solicit offers to buy or otherwise negotiate
in respect of any "security" (as defined in the Securities Act) which could
reasonably be expected to be integrated with the sale of the Notes in a
manner which would require the registration under the Securities Act of the
Notes.
(i) None of the Company nor the Subsidiaries will engage in any form
of "general solicitation" or "general advertising" (as those terms are used
in Regulation D under the Securities Act) in connection with the offering
of the Notes or in any manner involving a public offering of the Notes
within the meaning of Section 4(2) of the Securities Act.
(j) None of the Company, the Subsidiaries nor their Affiliates nor any
person acting on any of their behalf will engage in any directed selling
efforts (as that term is defined in Regulation S) with respect to the Notes
and the Company covenants to comply, and to have its Affiliates and each
person acting on its or their behalf comply, with the offering requirements
of Regulation S.
(k) For so long as any of the Notes remain outstanding, the Company
will make available, upon request, to any seller of Notes engaged in a
transaction as to which Rule 144A is applicable the information specified
in Rule 144A(d)(4) under the Securities Act, unless the Company is then
subject to Section 13 or 15(d) of the Exchange Act.
(l) For a period of 180 days from the date of the Final Memorandum,
except Indebtedness (as defined in the Indenture) permitted by the
Indenture, the Company and the Subsidiaries will not offer for sale, sell,
contract to sell or otherwise dispose of, directly or indirectly, or file a
registration statement for, or announce any offer, sale, contract for sale
of or other disposition of any debt securities issued or guaranteed by the
Company or any Subsidiaries (other than the Notes, Resale Notes and
Exchange Notes) without the prior written consent of the Initial Purchaser.
(m) During the period from the Closing Date until two years after the
Closing Date, without the prior written consent of the Initial Purchaser,
the Company and the
14
Subsidiaries will not, and will not permit any of their affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the Notes
that have been reacquired by them, except for Notes purchased by the
Company or any of its affiliates and resold in a transaction registered
under the Securities Act.
(n) In connection with the offering of the Notes, until the Initial
Purchaser shall have notified the Company of the completion of the resale
of the Notes, the Company and the Subsidiaries will not, and will cause
their affiliated purchasers (as defined in the Exchange Act) not to, either
alone or with one or more other persons, bid for or purchase, for any
account in which it or any of its affiliated purchasers has a beneficial
interest, any Notes and not to, and to cause its affiliated purchasers not
to, make bids or purchase for the purpose of creating actual, or apparent,
active trading in or of raising the price of the Notes.
(o) The Company and the Subsidiaries will not take any action prior to
the execution and delivery of the Indenture which, if taken after such
execution and delivery, would have violated any of the covenants contained
in the Indenture.
(p) The Company and the Subsidiaries will not take any action prior to
the Closing Date which would require the Final Memorandum to be amended or
supplemented pursuant to Section 5(c).
(q) Prior to the Closing Date, the Company and the Subsidiaries will
not issue any press release or other communication directly or indirectly
or hold any press conference with respect to the Company, its condition,
financial or otherwise, or earnings, business affairs or business prospects
(except for communications in the ordinary course of business and
consistent with the past practices of the Company and, with respect to a
press release or press conference, of which the Initial Purchaser is
notified), without the prior written consent of the Initial Purchaser,
unless in the judgment of the Company and its counsel, after notification
to the Initial Purchaser, such press release or communication or conference
is required by law.
(r) The Company will use its best efforts to (i) permit the Notes to
be designated PORTAL securities in accordance with the rules and
regulations adopted by the NASD relating to trading in the Private
Offerings, Resales and Trading through Automated Linkages market (the
"PORTAL Market") and (ii) permit the Notes (other than Notes that will be
sold pursuant to Regulation D or Regulations S under the Securities Act) to
be eligible for clearance and settlement through the Depository Trust
Company ("DTC").
6. Expenses. The Company agrees to pay all costs and expenses
--------
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and expenses
incident to (i) the printing, word processing or other production of documents
with respect to the transactions contemplated hereby, including any costs of
printing the Preliminary Memorandum and the Final Memorandum and any amendment
or
15
supplement thereto, and any "Blue Sky" memoranda, (ii) all arrangements relating
to the delivery to the Initial Purchaser of copies of the foregoing documents,
(iii) the fees and disbursements of counsel, accountants and any other experts
or advisors retained by the Company, (iv) preparation (including printing),
issuance and delivery to the Initial Purchaser of the Notes, (v) the
qualification of the Notes under state securities and "Blue Sky" laws, including
filing fees and reasonable fees and disbursements of counsel for the Initial
Purchaser relating thereto, (vi) fees and expenses of the Trustee and the
Collateral Agent (including fees and expenses of counsel), (vii) all expenses
and listing fees incurred in connection with the application for quotation of
the Notes on the PORTAL Market, (viii) all expenses incurred in connection with
the approval of the Notes for book-entry transfer by DTC, (ix) any fees charged
by Standard & Poors Ratings Service and ▇▇▇▇▇'▇ Investor's Service for the
rating of the Notes and (x) expenses in connection with any meeting with
prospective investors and all other reasonable out-of-pocket expenses of the
Initial Purchaser (including, without limitation, all road show expenses)
incurred by the Initial Purchaser or any of its affiliates in connection with,
or arising out of, the offering and sale of the Notes, provided, that all
expenses paid or reimbursed by or on behalf of the Company to the Initial
Purchaser or any of its affiliates or to its counsel shall be limited to the
extent provided in the Engagement Letter.
7. Conditions of the Initial Purchaser's Obligations. The
-------------------------------------------------
obligation of the Initial Purchaser to purchase and pay for the Notes shall, in
its sole discretion, be subject to the satisfaction or waiver of the following
conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchaser shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchaser, of ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel for the Company, in form
and substance satisfactory for counsel to the Initial Purchaser, dated the
Closing Date, substantially to the effect that:
(i) The Company has been duly incorporated and each of the
Company and the Subsidiaries that are corporations or limited
liability companies are validly existing and is in good standing as a
corporation or limited liability company, as applicable, under the
laws of its jurisdiction of incorporation or organization, with all
requisite corporate or limited liability company power and authority
to own its properties and conduct its business as now conducted, and
as described in the Final Memorandum.
(ii) All of the outstanding shares of capital stock of the
Company and those Subsidiaries that are corporations as of the Closing
Date are duly authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any statutory
preemptive rights; all of the outstanding ownership interests of all
Subsidiaries that are limited liability companies will be duly
authorized and validly existing and will not have been issued in
violation of any statutory preemptive rights, or preemptive rights
under the operating agreement or articles of organization of such
limited liability companies. Except as set forth in the Final
Memorandum, to our knowledge, there are no outstanding (i) options,
warrants or other rights to purchase from the Company and the
Subsidiaries, (ii) agreements or other obligations of the Company or
any of the Subsidiaries to issue or (iii) other
16
rights to convert any obligation into, or exchange any securities of,
shares of capital stock of, or other equity securities of, the Company
or any of the Subsidiaries.
(iii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Notes. The Notes, when issued, will be substantially in the form
contemplated by the Indenture. The Notes have been duly and validly
authorized and when executed and delivered by the Company and
authenticated by the Trustee in accordance with the provisions of the
Indenture and delivered to and paid for by the Initial Purchaser in
accordance with the terms of this Agreement, will constitute valid and
legally binding obligations of the Company, will entitle the holders
to the benefits of the Indenture and will be enforceable against the
Company in accordance with their terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles.
(iv) The Global Note (as such term is defined in the Indenture)
is substantially in the form contemplated by the Indenture.
(v) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Indenture. The Indenture meets the requirements for qualification
under the TIA. The Indenture has been duly and validly authorized,
executed and delivered by the Company and (assuming due authorization,
execution and delivery thereof by the Trustee) constitutes a valid and
legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles.
(vi) The Exchange Notes have been duly and validly authorized
by the Company, and when the Exchange Notes have been duly executed
and delivered by the Company and authenticated by the Trustee in
accordance with the terms of the Registration Rights Agreement and the
Indenture (assuming due authorization, execution and delivery thereof
by the Trustee), will constitute the valid and legally binding
obligations of the Company, will entitle the holder to the benefits of
the Indenture, and will be enforceable against the Company in
accordance with their terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
(vii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Registration Rights Agreement. The Registration Rights Agreement has
been duly and validly authorized, executed and delivered by the
Company and, assuming due
17
authorization, execution and delivery thereof by the Initial
Purchaser, constitutes a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization or other similar
laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
(viii) Each of the Company and the Subsidiary Pledgor, as
applicable, has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Pledge
Agreement, dated the Closing Date, whereby the Company and the
Subsidiary Pledgor pledge all of their Pledged Stock to the Collateral
Agent for the benefit of the holders of the Notes. The Pledge
Agreement has been duly and validly authorized, executed and delivered
by the Company and the Subsidiary Pledgor and constitutes a valid and
legally binding agreement of the Company and the Subsidiary Pledgor,
as applicable, enforceable against them in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization or other similar
laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
(ix) Assuming receipt of consideration therefor and that the
Subsidiary Guarantees are entered into for a valid corporate purpose,
each of the Subsidiary Guarantors has all requisite corporate power
and authority to execute, deliver and perform its obligations under
its respective Subsidiary Guaranty. Each Subsidiary Guaranty has been
duly and validly authorized, executed and delivered by the applicable
Subsidiary.
(x) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly and validly authorized, executed and delivered
by the Company and the Subsidiaries.
(xi) No consent, approval, authorization or order of any court
or governmental agency or body or third party is required for the
execution, delivery or performance by the Company or any Subsidiary of
this Agreement, the Registration Rights Agreement (except as may be
required by the Securities Act, the Exchange Act and the TIA as
contemplated therein), the Indenture, the Subsidiary Guaranties or the
Pledge Agreement, or the consummation by the Company or any of the
Subsidiaries party thereto, as applicable, of the transactions
contemplated hereby or thereby that are to be completed prior to or on
the date hereof, except such as have been obtained or disclosed in the
Final Memorandum or as may be required by state securities laws.
(xii) The execution, delivery and performance by the Company
and the Subsidiaries party thereto, as applicable, of this Agreement,
the Indenture, the
18
Registration Rights Agreement, the Pledge Agreement and the Subsidiary
Guaranties and the consummation by the Company and the Subsidiaries
party thereto of the transactions contemplated hereby and thereby will
not conflict with or constitute or result in a breach of or a default
under (or an event which with notice or passage of time or both would
constitute a default under) any material contract (relying as to
materiality solely upon a certificate of officers of the Company
identifying such contracts) or violation of any of the certificate of
incorporation or by-laws (or similar organizational document) of the
Company or any of the Subsidiaries, or, to such counsel's knowledge,
violate any statute, judgment, decree, order, rule or regulation
applicable to the Company or any of the Subsidiaries or any of their
respective properties or assets.
(xiii) To such counsel's knowledge, there is not pending or
threatened, any action, suit, proceeding, inquiry or investigation to
which the Company or any of the Subsidiaries is a party or to which
the property or assets of the Company or any of the Subsidiaries are
subject, before or brought by any court, arbitrator or governmental
agency or body which are reasonably likely to, individually or in the
aggregate, have a Material Adverse Effect or which seeks to restrain,
enjoin, prevent the consummation of or otherwise challenge the
issuance or sale of the Notes to be sold hereunder or the consummation
of the Transactions.
(xiv) The use of the proceeds of the Notes by the Company, as
described in the Final Memorandum under the caption "Use of Proceeds,"
will not violate Regulation T, U or X of the Board of Governors of the
Federal Reserve System.
(xv) There are no legal or governmental proceedings to which
the Company or any Subsidiary is a party which would be required to be
described in a prospectus forming part of a registration statement
filed with the Commission pursuant to the Securities Act that are not
described in the Preliminary Memorandum and the Final Memorandum.
(xvi) Neither the Company nor any of the Subsidiaries is or
immediately after the sale of the Notes to be sold hereunder and the
application of the proceeds from such sale (as described in the Final
Memorandum under the caption "Use of Proceeds") will be an "investment
company" as such term is defined in the Investment Company Act of
1940, as amended, and the rules and regulations thereunder.
(xvii) The Notes satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(xviii) The statements in the Final Memorandum under the caption
"Description of Notes" and "Exchange Offer and Registration Rights,"
insofar as they describe the provisions of the documents and
instruments therein described, constitute fair summaries thereof
accurate in all material respects.
19
(xix) No registration under the Securities Act of the Notes is
required in connection with the sale of the Notes to the Initial
Purchaser or the initial resale of the Notes by the Initial Purchaser
in the manner contemplated by this Agreement and the Final Memorandum
and prior to the commencement of the Exchange Offer or the
effectiveness of the Shelf Registration Statement (as defined in the
Registration Rights Agreement), the Indenture is not required to be
qualified under the TIA, in each case assuming (i) the accuracy of the
representations and warranties set forth in the Final Memorandum under
the caption "Transfer Restrictions" by purchasers who buy such Notes
in the resale thereof, (ii) the accuracy of the Initial Purchaser's
representations in Section 8 hereof and (iii) the due performance by
the Initial Purchaser of the agreements set forth in Section 8 hereof.
(xx) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under each
of the Acquisition Agreements. Each of the Acquisition Agreements has
been duly and validly authorized, executed and delivered by the
Company and (assuming due authorization, execution and delivery
thereof by the other parties thereto) constitutes a valid and legally
binding agreement of the Company enforceable against the Company in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
In rendering such opinion, such counsel (A) may assume as to laws of
any state other than the State of Colorado that such laws are identical to
the laws of the State of Colorado, to the extent specified in such opinion
and (B) may rely as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public officials.
In addition to the foregoing, such counsel shall state that it is has
participated in conferences with directors, executive officers and other
representatives of the Company, representatives of the Company's
independent public accountants and representatives of the Initial Purchaser
and its counsel, at which conferences the contents of the Final Memorandum
and related matters were discussed, and although such counsel is not
passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements in the Final Memorandum, on the
basis of the foregoing (relying as to materiality to a large extent upon
the views of officers and other representatives of the Company), no facts
have come to such counsel's attention to lead it to believe that the Final
Memorandum and any further amendments or supplements thereto as of their
respective dates and on the date of such opinion letter contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact required to be stated therein, or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading (it being understood that such counsel expresses
no view with respect to forward looking information, including, without
limitation, the information identified under the caption "Forward-Looking
Information" in
20
the Final Memorandum, the financial statements and the financial, industry,
market and statistical data included therein or omitted therefrom). The
opinion of ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP described in this Section shall be
rendered to the Initial Purchaser at the request of the Company and shall
so state therein.
(b) On the Closing Date, the Initial Purchaser shall have received
the opinion, in form and substance satisfactory to the Initial Purchaser,
dated as of the Closing Date and addressed to the Initial Purchaser, of
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel for the Initial Purchaser, with respect
to certain legal matters relating to this Agreement and such other related
matters as the Initial Purchaser may reasonably require. In rendering such
opinion, ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ shall have received and may rely upon
such certificates and other documents and information as it may reasonably
request to pass upon such matters.
(c) On the Closing Date, the Initial Purchaser shall have received
the certificate of the Trustee, dated as of the Closing Date and addressed
to the Initial Purchaser, in form and substance satisfactory to counsel for
the Initial Purchaser.
(d) On the Closing Date, the Initial Purchaser shall have received
good standing certificates for the Company and the Subsidiaries other than
for any Subsidiaries incorporated or organized after the date hereof.
(e) On the Closing Date, the Initial Purchaser shall have received
the following documents duly authorized, executed and delivered by each of
the parties thereto, in form and substance satisfactory for counsel to the
Initial Purchaser, and containing such terms and conditions that are usual
and customary in transactions similar to those contemplated hereby and
thereby, dated the Closing Date:
(i) the Subsidiary Guaranties;
(ii) the Pledge Agreement;
(iii) the Indenture; and
(iv) the Registration Rights Agreement.
(f) On the Closing Date, the creditors under the existing credit
facility of each of Radio Holdings and MediaAmerica shall have terminated
and released all security interests and liens held by them on the assets
owned by the Company and its Subsidiaries. The Collateral Agent shall have
received such releases of security interests and liens on the assets owned
by the Company and its Subsidiaries as may have been reasonably requested
by the Initial Purchaser, which releases shall be in form and substance
reasonably satisfactory to counsel to the Initial Purchaser. Without
limiting the foregoing, there shall have been delivered proper termination
statements (Form UCC-3 or the appropriate equivalent) for filing under the
UCC of each jurisdiction where a financing statement (Form UCC-1 or the
appropriate equivalent) was filed with respect to the Company or any of its
Subsidiaries in connection with the security interests created with respect
to the
21
existing credit facilities of each of Radio Holdings and MediaAmerica and
the documentation related thereto.
(g) On the Closing Date, the Global Group Note (as defined in the
Memorandum) shall have been converted into Class A Common Stock as
described in the Memorandum and the Initial Purchaser shall have received
evidence thereof.
(h) On the Closing Date, the Initial Purchaser shall have received a
copy of the resolutions of the Company and the Subsidiary Pledgor,
certified by the Secretary of the applicable entity, approving the pledge
of the Pledged Stock (as defined in the Pledge Agreement) and the
resolutions of the Board of Directors, certified by the Secretary of the
applicable entity, of each Subsidiary Guarantor, approving the execution
and delivery of its Subsidiary Guaranty.
(i) On the Closing Date, the Initial Purchaser shall have received
all of the certificates evidencing the Pledged Stock pledged under the
Pledge Agreement, together with executed and undated stock powers.
(j) The Initial Purchaser shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP comfort letters dated the date hereof and the Closing Date, in form and
substance satisfactory to counsel for the Initial Purchaser, which describe
the procedures as the Initial Purchaser may request and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
is willing to perform and report upon.
(k) The Initial Purchaser shall have received from ▇▇▇▇▇ ▇▇▇▇▇▇ & Co.
LLP comfort letters dated the date hereof and the Closing Date with respect
to the financial information relating to MediaAmerica, in form and
substance satisfactory to counsel for the Initial Purchaser.
(l) The representations and warranties of the Company and the
Subsidiaries contained in this Agreement shall be true and correct in all
material respects on and as of the date hereof and on and as of the Closing
Date as if made on and as of the Closing Date; the statements of the
Company's or any Subsidiaries' officers made pursuant to any certificate
delivered in accordance with the provisions hereof shall be true and
correct in all material respects on and as of the date made and on and as
of the Closing Date; the Company and the Subsidiaries shall have performed
in all material respects all covenants and agreements and satisfied all
conditions on their part to be performed or satisfied hereunder at or prior
to the Closing Date; and, except as described in the Final Memorandum
(exclusive of any amendment or supplement thereto after the date hereof),
subsequent to the date of the most recent financial statements in such
Final Memorandum, there shall have been no event or development that,
individually or in the aggregate, has had, or would be reasonably likely to
have, a Material Adverse Effect.
(m) The sale of the Notes hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
22
(n) There shall not have occurred any invalidation of Rule 144A under
the Securities Act by any court or any withdrawal or proposed withdrawal of
any rule or regulation under the Securities Act or the Exchange Act by the
Commission or any amendment or proposed amendment thereof by the Commission
which in the reasonable judgment of the Initial Purchaser would materially
impair the ability of the Initial Purchaser to purchase, hold or effect
resales of the Notes as contemplated hereby.
(o) There shall not have occurred any change, or any development
involving a prospective change, in the general business affairs, condition
(financial or otherwise), prospects or results of operations, of the
Company and the Subsidiaries taken as a whole, from that set forth in the
Final Memorandum that constitutes a Material Adverse Effect and that makes
it, in the Initial Purchaser's reasonable judgment, impracticable to market
the Notes on the terms and in the manner contemplated in the Final
Memorandum.
(p) Subsequent to the date of the most recent financial statements in
the Final Memorandum (exclusive of any amendment or supplement thereto
after the date hereof), the conduct of the business and operations of the
Company and the Subsidiaries shall not have been interfered with by strike,
fire, flood, hurricane, accident or other calamity (whether or not insured)
or by any court or governmental action, order or decree, and, except as
otherwise stated therein, the properties of the Company and the
Subsidiaries shall not have sustained any loss or damage (whether or not
insured) as a result of any such occurrence, except any such interference,
loss or damage which would not, individually or in the aggregate, have a
Material Adverse Effect.
(q) No securities of the Company shall have been downgraded or placed
on any "watch list" for possible downgrading by any nationally recognized
statistical rating organization.
(r) The Initial Purchaser shall have received certificates of the
Company, dated the Closing Date, signed by its Chief Executive Officer and
Chief Financial Officer, to the effect that:
(i) The representations and warranties of the Company contained
in this Agreement are true and correct in all material respects as of
the date thereof and as of the Closing Date, and the Company has
performed in all material respects all covenants and agreements and
satisfied in all material respects all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date;
(ii) At the Closing Date, since the date hereof or since the date
of the most recent financial statements in the Final Memorandum
(exclusive of any amendment or supplement thereto after the date
hereof), no event or events have occurred, no information has become
known nor does any condition exist that, individually or in the
aggregate, has had, or could reasonably be expected to have, a
Material Adverse Effect;
23
(iii) The sale of the Notes hereunder has not been enjoined
(temporarily or permanently); and
(iv) The conditions (other than the consummation of the
offering of the Notes) in the Acquisition Agreement to the closing of
the Acquisition (as defined in the Final Memorandum) have been
satisfied or waived by the parties to the Acquisition Agreement.
(s) The Initial Purchaser shall have received a certificate from the
corporate secretary of the Company, dated the Closing Date, attaching
certified copies of (i) all resolutions of the Board of Directors of the
Company authorizing (a) the transactions contemplated by this Agreement and
(b) the Acquisition Agreements, including, without limitation, approving
the offering of the Notes, the entering into of this Agreement, the
Indenture, the Registration Rights Agreement and the Pledge Agreement and
(ii) the certificate of incorporation and by-laws (or other organizational
documents) of the Company and each of the Subsidiaries, and certifying the
names and true signatures of those officers of the Company and each of the
Subsidiaries executing any documents contemplated by this Agreement.
On or before the Closing Date, the Initial Purchaser and counsel for
the Initial Purchaser shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company and the Subsidiaries as
they shall have heretofore reasonably requested from the Company and the
Subsidiaries.
The Company and the Subsidiaries shall furnish to the Initial
Purchaser such conformed copies of such documents, opinions, certificates,
letters, schedules and instruments in such quantities as the Initial Purchaser
shall reasonably request.
8. Offering of Notes; Restrictions on Transfer. The Initial
-------------------------------------------
Purchaser agrees with the Company that (i) it has not and will not solicit
offers for, or offer or sell, the Notes by any form of general solicitation or
general advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act and (ii) it has and will solicit offers
for the Notes only from, and will offer the Notes only to (A) in the case of
offers inside the United States, persons whom the Initial Purchaser reasonably
believes to be QIBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Initial Purchaser that each such
account is a QIB, to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A, and, in each case, in transactions under
Rule 144A and (B) in the case of offers outside the United States, to persons
other than U.S. persons ("foreign purchasers," which term shall include dealers
or other professional fiduciaries in the United States acting on a discretionary
basis for foreign beneficial owners (other than an estate or trust)).
The Initial Purchaser agrees that it has (i) not offered or sold and
will not offer or sell any Notes to persons in the United Kingdom prior to
admission of the Notes as applicable, to
24
listing in accordance with Part IV of the Financial Services Act of 1986 (the
"Financial Services Act"), except to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments (as principal
or agent) for purpose of their business or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulation 1995 or the
Financial Services Act, (ii) complied and will comply with all applicable
provisions of the Financial Services Act with respect to anything done by them
in relation to the Notes in, from or otherwise involving the United Kingdom, and
(iii) only issued or passed on, and will only issue or pass on, in the United
Kingdom any document received by it in connection with the issue of the Notes
other than any document which consists of or any part of listing particulars,
supplementary listing particulars or any other document required or permitted to
be published by listing rules under Part IV of the Financial Services Act, to a
person who is of a kind described in Article 11(3) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1996 or is a person to whom
the document may otherwise lawfully be issued or passed on.
In connection with sales outside the United States, the Initial
Purchaser agrees that it will not offer, sell or deliver the Notes to, or for
the account or benefit of, U.S. Persons (i) as part of its distribution at any
time or (ii) otherwise prior to 40 days after the closing of the Offering, and
it will send to any dealer to whom it sells Notes during such period a
confirmation or other notice setting forth the restrictions on offers and sales
of the Notes within the United States or to, or for the account or benefit of,
U.S. Persons.
The Initial Purchaser represents and warrants that it is an Accredited
Investor, with such knowledge and experience in financial and business matters
as are necessary in order to evaluate the merits and risks of an investment in
the Notes. The Initial Purchaser agrees to comply with the applicable
provisions of Rule 144A and Rule 144 under the Securities Act. The Initial
Purchaser hereby acknowledges that the Company and, for purposes of the opinions
to be delivered to the Initial Purchaser pursuant to Section 7(a) hereof,
counsel to the Company will rely upon the accuracy and truth of the
representations contained in this Section 8 and the Initial Purchaser hereby
consents to such reliance.
9. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless the Initial Purchaser and each person controlled by
or under common control with the Initial Purchaser, and directors, officers,
agents, representatives, general partners and employees of the Initial Purchaser
or such persons, and each other person who controls the Initial Purchaser or
such persons within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, to the full extent lawful against any losses, claims,
damages, expenses or liabilities to which the Initial Purchaser or such other
person may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as any such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in any Memorandum or any amendment or
supplement thereto or any application or other document, or any
amendment or supplement thereto, executed by the Company or any
Subsidiary or based upon written information furnished by or on behalf
of the Company or any Subsidiary filed in any jurisdiction
25
in order to qualify the Notes under the securities or "Blue Sky" laws
thereof or filed with any securities association or securities
exchange (each an "Application") or;
(ii) the omission or alleged omission to state, in any Memorandum
or any amendment or supplement thereto or any Application, a material
fact required to be stated therein or necessary to make the statements
therein not misleading;
and will reimburse, as incurred, the Initial Purchaser and each such other
person for any reasonable legal or other expenses incurred by the Initial
Purchaser or such other person in connection with investigating, defending
against or appearing as a third-party witness in connection with any such loss,
claim, damage, liability or action; provided, however, the Company will not be
-------- -------
liable in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in the Final Memorandum or any
amendment or supplement thereto or any Application in reliance upon and in
conformity with written information furnished to the Company by the Initial
Purchaser specifically for use therein. This indemnity agreement will be in
addition to any liabilities or obligations that the Company or any Subsidiary
may otherwise have to the indemnified parties, including under the Engagement
Letter. Subject to Section 9(c), the Company shall not be liable under this
Section 9 for any settlement of any claim or action effected without its prior
consent, which consent shall not be unreasonably withheld; provided, further,
-------- -------
that the Company will not be required to indemnify a person if such person sold
to the person asserting the claim the Notes which are the subject of such claim
and such untrue statement or omission or alleged untrue statement or omission
was contained or made in the Preliminary Memorandum and corrected in the Final
Memorandum or any amendment or supplement thereto and the Final Memorandum does
not contain any other untrue statement or omission or alleged untrue statement
or omission of a material fact that was the subject matter of the related
proceeding and such person failed to deliver or provide a copy of the Final
Memorandum (as amended or supplemented) to such person with or prior to the
confirmation of the sale of such Notes sold to such person if required by
applicable laws, unless such failure to deliver or provide a copy of the Final
Memorandum (as amended or supplemented) was a result of noncompliance by the
Company with its duties under this Agreement.
(b) The Initial Purchaser agrees to indemnify and hold harmless the
Company, its directors, officers, agents, representatives, general partners
and employees, and each other person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities to which
the Company or any such director, officer, agent, representative, general
partner, employee or controlling person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon (i) any untrue statement or alleged untrue statement of
any material fact contained in any Memorandum or any amendment or
supplement thereto or any Application, or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in any
Memorandum or any amendment or supplement thereto or any Application, or
necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue
26
statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished
to the Company by the Initial Purchaser specifically for use therein; and
subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any reasonable legal or other expenses incurred by
the Company or any such director, officer or controlling person in
connection with investigating or defending against or appearing as a third
party witness in connection with any such loss, claim, damage, liability or
action in respect thereof. This indemnity agreement will be in addition to
any liability that the Initial Purchaser may otherwise have to the
indemnified parties. Subject to Section 9(c), the Initial Purchaser shall
not be liable under this Section 9 for any settlement of any claim or
action effected without its written consent, which consent shall not be
unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of the commencement of any action for which such indemnified
party is entitled to indemnification under this Section 9, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party of
the commencement thereof in writing; but the omission to so notify the
indemnifying party (i) will not relieve it from any liability under
paragraph (a) or (b) above unless and to the extent such failure results in
the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification
obligation provided in paragraphs (a) and (b) above. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein with counsel reasonably satisfactory to
such indemnified party and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof; provided, however, that (i) the defendants in any such action
-------- -------
include both the indemnified party and the indemnifying party and the
indemnified party shall have been advised by counsel that there may be one
or more legal defenses available to it and/or other indemnified parties
that are different from or additional to those available to the
indemnifying party, or (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after receipt by the
indemnifying party of notice of the institution of such action, then, in
each such case, the indemnifying party shall not have the right to direct
the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party
or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party will not be liable to such indemnified party under this Section 9 for
any legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the
defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the immediately
preceding sentence (it being understood, however, that in connection with
such action the indemnifying party shall not be liable for the expenses of
more than one separate counsel
27
(in addition to local counsel) in any one action or separate but
substantially similar actions arising out of the same general allegations
or circumstances designated by the Initial Purchaser in the case of
paragraph (a) of this Section 9 or either the Company or any of the
Subsidiaries in the case of paragraph (b) of this Section 9, representing
the indemnified parties under such paragraph (a) or paragraph (b), as the
case may be, who are parties to such action or actions) or (ii) the
indemnifying party has authorized in writing the employment of counsel for
the indemnified party at the expense of the indemnifying party. After such
notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the
prior written consent of the indemnifying party, unless such indemnified
party waived in writing its rights under this Section 9, in which case the
indemnified party may effect such a settlement without such consent. An
indemnifying party shall not, without the prior written consent of the
indemnified party, which consent may not be unreasonably withheld, effect
any settlement or compromise of any pending or threatened proceeding in
respect of which the indemnified party is or could have been a party, or
indemnity could have been sought hereunder by the indemnified party, unless
such settlement (A) includes an unconditional written release of the
indemnified party, in form and substance reasonably satisfactory to the
indemnified party, from all liability on claims that are the subject matter
of such proceeding and (B) does not include any statement as to an
admission of fault, culpability or failure to act by or on behalf of the
indemnified party.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is unavailable to an indemnified
party in respect of any losses, claims, damages or liabilities (or actions
in respect thereof), each indemnifying party, in order to provide for just
and equitable contribution, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Notes or (ii) if the allocation provided
by the foregoing clause (i) is not permitted by applicable law, not only
such relative benefits but also the relative fault of the indemnifying
party or parties on the one hand and the indemnified party on the other in
connection with the statements or omissions or alleged statements or
omissions or breaches that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative benefits received
by the Company on the one hand and the Initial Purchaser on the other shall
be deemed to be in the same proportion as the total proceeds from the
offering (net of discounts and commissions and before deducting expenses)
received by the Company bears to the total discounts and commissions
received by the Initial Purchaser. The relative fault of the parties shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand, or the Initial Purchaser on the other, the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission or alleged statement or
omission, and any other equitable considerations appropriate in the
circumstances. The
28
Company and the Initial Purchaser agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per capita
allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the first sentence of
this paragraph (d). Notwithstanding any other provision of this paragraph
(d), the Initial Purchaser shall not be obligated to make contributions
hereunder that in the aggregate exceed the total discounts, commissions and
other compensation received by the Initial Purchaser under this Agreement,
less the aggregate amount of any damages for which indemnification is not
available that the Initial Purchaser has otherwise been required to pay by
reason of the untrue or alleged untrue statements or the omissions or
alleged omissions to state a material fact, and no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this
paragraph (d), each person, if any, who controls the Initial Purchaser
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Initial
Purchaser, and each director of the Company, each officer of the Company
and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, shall
have the same rights to contribution as the Company.
10. Survival Clause. The respective representations, warranties,
---------------
agreements, covenants, indemnities and other statements of the Company, its
officers and the Initial Purchaser set forth in this Agreement or made by or on
behalf of them pursuant to this Agreement shall remain in full force and effect,
regardless of (i) any investigation made by or on behalf of the Company, any of
its officers or directors, the Initial Purchaser or any other person referred to
in Section 9 hereof and (ii) delivery of and payment for the Notes. The
respective agreements, covenants, indemnities and other statements set forth in
Sections 6, 9 and 15 hereof shall remain in full force and effect, regardless of
any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
-----------
discretion of the Initial Purchaser by written notice to the Company given prior
to the Closing Date in the event that the Company shall have failed, refused or
been unable to perform all obligations and satisfy all conditions on its part to
be performed or satisfied hereunder at or prior thereto or, if at or prior to
the Closing Date any of the following has occurred:
(i) any of the Company or the Subsidiaries has sustained any
loss or interference with respect to its businesses or properties from
fire, flood, earthquakes, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike, labor
dispute, slow down or work stoppage or any legal or governmental
proceeding, which loss or interference has had or is reasonably likely
to have a Material Adverse Effect, or there shall have been, in the
sole judgment of the Initial Purchaser, any other event or development
that, individually or in the aggregate, has or is reasonably likely to
have a Material Adverse Effect (including without limitation a change
in control of the Company or the Subsidiaries), except in each case as
described in the Final Memorandum (exclusive of any amendment or
supplement thereto);
29
(ii) there shall have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations, of the Company
and the Subsidiaries, taken as a whole, from that set forth in the
Final Memorandum that is material and adverse and that makes it, in
the Initial Purchaser's sole judgment, impracticable to market the
Notes on the terms and in the manner contemplated in the Final
Memorandum;
(iii) trading generally shall have been suspended or materially
limited on or by, as the case may be, either of the New York Stock
Exchange or the National Association of Securities Dealers, Inc. or
the setting of minimum prices for trading on such exchange or market
shall have occurred;
(iv) a banking moratorium shall have been declared by New York,
Colorado or United States authorities;
(v) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States, (C) any material change in the financial
markets of the United States or (D) any other national or
international calamity or emergency which, in the case of (A), (B),
(C) or (D) above and in the sole judgment of the Initial Purchaser,
makes it impracticable or inadvisable to proceed with the offering or
the delivery of the Notes as contemplated by the Final Memorandum; or
(vi) any securities of the Company or any Subsidiary shall have
been downgraded or placed on any "watch list" for possible downgrading
by any nationally recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 11 shall be
without liability of any party to any other party except as provided in
Sections 6 and 10 hereof.
12. Information Supplied by the Initial Purchaser. The failure to
---------------------------------------------
state the Initial Purchaser's commission and discount, the omission or statement
of information relating to state securities blue sky laws and statements set
forth in the last paragraph on the cover page of the Final Memorandum, the first
sentence of the penultimate paragraph under the heading "Risk Factors-Lack of
Public Market; Restrictions on Resale" and paragraphs 2 and 5 through 8 under
the heading "Plan of Distribution" in the Final Memorandum constitute the only
information furnished by the Initial Purchaser to the Company for the purposes
of Sections 2(a) and 9 hereof.
13. Notices. All communications hereunder shall be in writing and,
-------
if sent to the Initial Purchaser, shall be mailed or delivered to (i) NatWest
Capital Markets Limited, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, with a copy to
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇, Esq.; if sent to the Company, shall be mailed or
delivered to the Company at ▇▇▇▇▇ International Networks, Ltd., ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ with a copy
to ▇▇▇▇▇
30
▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; and one business
day after being timely delivered to a next-day air courier.
14. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the Initial Purchaser, the Company and its successors and legal
representatives, and nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person any legal or equitable
right, remedy or claim under or in respect of this Agreement, or any provisions
herein contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person except that (i) the indemnities of the
Company contained in Section 9 of this Agreement shall also be for the benefit
of any person or persons who control the Initial Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act and (ii) the
indemnities of the Initial Purchaser contained in Section 9 of this Agreement
shall also be for the benefit of the directors of the Company and officers and
any person or persons who control the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act. No purchaser of Notes
from the Initial Purchaser will be deemed a successor because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
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AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
16. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
31
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company
and the Initial Purchaser.
Very truly yours,
▇▇▇▇▇ INTERNATIONAL NETWORKS, LTD.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Group Vice President
SCHEDULE 1
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Initial Purchaser Principal Amount
----------------- ----------------
NatWest Capital Markets Limited $100,000,000
SCHEDULE 2
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SUBSIDIARIES
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Percentage Number of Class of Jurisdiction of
Subsidiary Ownership* Shares Stock Organization
---------- --------- ------ ----- ------------
JPN, Inc. 100% 2,980,953 Class A Colorado
100% 1,785,120 Class B
▇▇▇▇▇ Space Holdings, Inc. 100% 1,000 Common Colorado
▇▇▇▇▇ Earth Segment, Inc. 100% 6,296 Class A Colorado
6,296 Class B
▇▇▇▇▇ Infomercial Networks, Inc. 100% 6,296 Class A Colorado
6,296 Class B
▇▇▇▇▇ Radio Holdings, Inc. 100% 10,000 Class A Colorado
10,000 Class B
Great American Country, Inc. 100% 10,000 Class A Colorado
10,000 Class B
▇▇▇▇▇ Galactic Radio, Inc. 100% 62,963 Class A Colorado
62,963 Class B
▇▇▇▇▇ Infomercial Network Ventures, Inc. 100% 10,000 Class A Colorado
10,000 Class B
▇▇▇▇▇ Galactic Radio Partners, Inc. 100% 10,000 Class A Colorado
10,000 Class B
▇▇▇▇▇ Radio Network, Inc. 100% 10,000 Class A Colorado
10,000 Class B
▇▇▇▇▇ Audio Services, Inc. 100% 1,000 Common Colorado
▇▇▇▇▇ Radio Network Ventures, Inc. 100% 10,000 Class A Colorado
10,000 Class B
▇▇▇▇▇/▇▇▇▇▇ Radio Programming LLC 90% N/A N/A Colorado
▇▇▇▇▇ ▇▇▇, Inc. 100% 100 Common New York
▇▇▇▇▇ ▇▇▇ Radio, Inc. 100% 1,000 Common Colorado
* Ownership of these subsidiaries are held indirectly by ▇▇▇▇▇ International
Networks, Ltd., except for JPN, Inc.
SCHEDULE 3
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OTHER INTERESTS
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Product Information Network Venture 54% N/A N/A Colorado
Galactic/Tempo d/b/a Superaudio 50% N/A N/A Colorado
SCHEDULE P(1)
Note: various of the designations listed below are trakemarks or servicemarks of
the respective owners thereof, and are used by the Company or its Subsidiaries
with permission.
ADULT HIT RADIO
SOFT HITS
US COUNTRY
GOOD-TIME OLDIES
NAC (NEW ADULT CONTEMPORARY)
Z-SPANISH
ROCK ALTERNATIVE
THE NEW MUSIC OF YOUR LIFE
CLASSICAL CONNECTION
CLASSIC HIT COUNTRY
ROCK CLASSICS
▇▇▇▇▇ & ▇▇▇▇▇ CENTERSTAGE SPECIALS
THE ▇▇▇▇▇ & ▇▇▇▇▇ COUNTRY COUNTDOWN
THE ▇▇▇▇▇ ▇▇▇▇▇▇ ENTERTAINMENT REPORT
OUTDOOR LIFE RADIO
SCHEDULE P(2)
CD COUNTRY U.S. Trademark Registration No. 1,873,415
DRAGON (design) U.S. Trademark Registration Nos. 1,576,854 and 1,825,499
GALACTIC RADIO U.S. Trademark Registration No.1,580,588
GREAT AMERICAN COUNTRY U.S. Trademark Registration Nos. 2,080,904 and 2,068,897
PIN, PRODUCT INFORMATION NETWORK U.S. Trademark Registration No. 2,037,430
SUPERAUDIO U.S. Trademark Registration No. 1,705,987 and 1,795,464