1
EXHIBIT 1.1
EXECUTION COPY
CLASSIC CABLE, INC.
10 1/2% SENIOR SUBORDINATED NOTES DUE 2010
----------------------
PURCHASE AGREEMENT
February 11, 2000
Xxxxxxx, Xxxxx & Co.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Chase Securities Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
As representatives of the several Purchasers
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
Classic Cable, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of $225.0
million principal amount of the 10 1/2% Senior Subordinated Notes due 2010 (the
"Securities") of the Company. The Securities will be unconditionally guaranteed
as to the payment of principal, premium, if any, and interest (the "Guarantees")
by each of the entities named in Schedule II hereto (each a "Guarantor" and,
collectively, the "Guarantors").
The Notes are being issued and sold in connection with an Asset
Purchase Agreement (the "Asset Purchase Agreement") dated as of October 14,
1999, as amended, by and among Universal Cable Holdings, Inc., a Delaware
corporation and a wholly-owned subsidiary of the Company ("Universal") and Star
Cable Associates, a Pennsylvania general partnership ("Star"). The Asset
Purchase Agreement provides that, subject to certain conditions as described
therein, Universal will, directly or indirectly, acquire substantially all of
the assets of Star (the "Acquisition") for a purchase price of approximately
$110.0 million in cash and 555,555 shares of Class A Common Stock, par
2
value $0.01 per share, of Classic Communications, Inc., the direct parent of the
Company, (the "Asset Purchase Consideration").
The proceeds to the Company from the sale to the Purchasers of the
Notes (the "Proceeds") will be used to repay a portion of the outstanding
indebtedness under the Company's credit facility (the "Credit Facility") and to
finance a portion of the Asset Purchase Consideration. In addition to the
Proceeds, the Company will fund the Acquisition and repay a portion of the
Credit Facility with available cash. Simultaneously with the closing of the sale
of the Securities, the Company will enter into an amendment to the Credit
Facility (the "Credit Facility Amendment"), which will (1) allow for the
offering of the Securities, (2) modify some of the covenants in the Credit
Facility and (3) restructure the Term A loan to allow the Company to reborrow
under that tranche under certain circumstances for a period of time.
1. Each of the Company and the Guarantors, jointly and severally,
represents and warrants to, and agrees with, each of the Purchasers that:
(a) A preliminary offering circular, dated February 2, 2000 (the
"Preliminary Offering Circular") and an offering circular, dated
February 11, 2000 (the "Offering Circular"), in each case including
the international supplement thereto, have been prepared in connection
with the offering of the Securities. Any reference to the Preliminary
Offering Circular or the Offering Circular shall be deemed to refer to
and include any Additional Issuer Information (as defined in Section
5(f)) furnished by the Company prior to the completion of the
distribution of the Securities. The Preliminary Offering Circular or
the Offering Circular and any amendments or supplements thereto did
not and will not, as of their respective dates, contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by a Purchaser through
Xxxxxxx, Xxxxx & Co. expressly for use therein;
(b) Neither the Company nor any of its subsidiaries has, and
after giving effect to the Acquisition pursuant to the terms of the
Asset Purchase Agreement will have, sustained since the date of the
latest audited financial statements included in the Offering Circular
any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Offering Circular; and, since the respective dates as of which
information is given in the Offering Circular, there has not been, and
after giving effect to the Acquisition pursuant to the terms of the
Asset Purchase Agreement will not be, any change in the capital stock
or long-term debt of the Company or any of its subsidiaries or any
material adverse change in or affecting the general affairs,
management, the current or future financial position, business,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect") (provided
that "Material Adverse Effect," when used with respect to the Company
after giving effect to the Acquisition pursuant to the terms of the
Asset Purchase Agreement, will be measured with respect to the Company
and its subsidiaries, including Star, taken as a whole), otherwise
than as set forth or contemplated in the Offering Circular;
2
3
(c) The Company and its subsidiaries have, and after giving
effect to the Acquisition pursuant to the terms of the Asset Purchase
Agreement will have, good and marketable title in fee simple to all
real property and good and marketable title to all personal property
owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Offering Circular or
such as do not, in the aggregate, materially affect the value of such
property and do not, in the aggregate, materially interfere with the
use made and proposed to be made of such property by the Company and
its subsidiaries; and any real property and buildings held under lease
by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and
proposed to be made of such property and buildings by the Company and
its subsidiaries;
(d) The Company has been, and after giving effect to the
Acquisition pursuant to the terms of the Asset Purchase Agreement will
be, duly incorporated and is validly existing as a corporation in good
standing under the laws of the state of Delaware, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Offering Circular, and has been, and
after giving effect to the Acquisition pursuant to the terms of the
Asset Purchase Agreement will be, duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, except where the failure to be so qualified or in good
standing in any such jurisdiction would not have a Material Adverse
Effect; and each subsidiary of the Company has been, and after giving
effect to the Acquisition pursuant to the terms of the Asset Purchase
Agreement will be, duly organized and is validly existing in good
standing under the laws of its jurisdiction of organization;
(e) The Company has an authorized capitalization as set forth in
the Offering Circular, and all of the issued shares of capital stock
of the Company are, and after giving effect to the Acquisition
pursuant to the terms of the Asset Purchase Agreement will be, duly
and validly authorized and issued, fully paid and non-assessable; and
all of the issued shares of capital stock of each subsidiary of the
Company are, and after giving effect to the Acquisition pursuant to
the terms of the Asset Purchase Agreement will be, duly and validly
authorized and issued, fully paid and non-assessable and (except for
directors' qualifying shares and except as otherwise set forth in the
Offering Circular) are and will be owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or
claims, except where there is not a Material Adverse Effect;
(f) The Securities have been duly authorized by the Company and,
when issued and delivered pursuant to this Agreement, will have been
duly executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Company entitled to the
benefits provided by the Indenture to be dated as of February 16, 2000
(the "Indenture") between the Company and Chase Bank of Texas,
National Association, as Trustee (the "Trustee"), under which they are
to be issued, which will be substantially in the form previously
delivered to you; the Indenture has been duly authorized and, when
executed and delivered by the Company and the Trustee, the Indenture
will constitute a valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
3
4
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Securities and the
Indenture will conform in all material respects to the descriptions
thereof in the Offering Circular and will be in substantially the form
previously delivered to you;
(g) The Guarantees have been duly authorized and, upon the due
authorization, issuance and delivery of the related Securities and the
due endorsement of the Guarantees thereon, will have been duly
executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of such Guarantor entitled to
the benefits provided by the Indenture under which they are to be
issued, and the Guarantees will conform in all material respects to
the description thereof in the Offering Circular and will be in
substantially the form previously delivered to you;
(h) The exchange and registration rights agreement, to be dated
as of February 16, 2000 (the "Registration Rights Agreement"), between
the Company, the Guarantors and the Purchasers has been duly
authorized by the Company and each of the Guarantors and, when
executed and delivered by the Company and each Guarantor, the
Registration Rights Agreement will constitute a valid and legally
binding instrument of the Company and each Guarantor, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles. Pursuant to the Registration Rights Agreement, the Company
and the Guarantors will agree to file with the Commission, under the
circumstances set forth therein, (i) a registration statement under
the United States Securities Act of 1933, as amended (the "Act"),
relating to another series of debt securities of the Company with
terms substantially identical to the Securities (the "Exchange
Securities") to be offered in exchange for the Securities (the
"Exchange Offer"), (ii) to the extent required by the Registration
Rights Agreement, a shelf registration statement pursuant to Rule 415
of the Act relating to the resale by certain holders of the Securities
and (iii) to the extent required by the Registration Rights Agreement,
a market making registration statement, and in each case, to use its
reasonable best efforts to cause such registration statements to be
declared effective. The Exchange Securities have been duly authorized
for issuance by the Company, and when issued and authenticated in
accordance with the terms of the Indenture will be the valid and
legally binding obligations of the Company, entitled to the benefits
provided by the Indenture, enforceable against the Company in
accordance with their terms. The Guarantees with respect to the
Exchange Securities have been duly authorized for issuance by each
Guarantor, and when issued in accordance with the terms of the
Indenture will be the valid and legally binding obligations of such
Guarantor, entitled to the benefits provided by the Indenture,
enforceable in accordance with their terms. The Registration Rights
Agreement, the Exchange Securities and the Guarantees with respect to
the Exchange Securities will conform, in all material respects, to the
descriptions thereof in the Offering Circular and will be in
substantially the form previously delivered to you;
(i) The Credit Facility Amendment has been duly authorized by the
Company and, when executed and delivered by the Company and the
subsidiaries of the Company that are obligors thereunder, the Credit
Facility Amendment will constitute a valid and legally binding
instrument of the Company, enforceable against the Company in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of
4
5
general applicability relating to or affecting creditors' rights and
to general equity principles; and the Credit Facility Amendment will
conform in all material respects to the descriptions thereof in the
Offering Circular;
(j) The Asset Purchase Agreement has been duly authorized,
executed and delivered by Universal, constitutes a valid and legally
binding instrument of Universal, enforceable against Universal in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Asset Purchase Agreement conforms to the
descriptions thereof in the Offering Circular;
(k) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale
of the Securities) will violate or result in a violation of Section 7
of the Exchange Act, or any regulation promulgated thereunder,
including, without limitation, Regulations T, U, and X of the Board of
Governors of the Federal Reserve System;
(l) Prior to the date hereof, none of the Company, the Guarantors
nor any of their respective affiliates have taken any action which is
designed to or which has constituted or which might have been expected
to cause or result in stabilization or manipulation of the price of
any security of the Company or any Guarantor in connection with the
offering of the Securities and the Guarantees;
(m) The issue and sale of the Securities and the Guarantees and
the compliance by the Company and the Guarantors with all of the
provisions of the Securities, the Guarantees, the Indenture, the
Registration Rights Agreement and this Agreement and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is, or after giving
effect to the Acquisition pursuant to the terms of the Asset Purchase
Agreement will be, a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is, or after giving effect to the
Acquisition pursuant to the terms of the Asset Purchase Agreement will
be, subject (except such as will not individually or in the aggregate
have a Material Adverse Effect), nor will such action result in any
violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any Guarantor or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties (other than immaterial Federal Communications
Commission ("FCC") and local franchise authority requirements); and no
consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required
for the issue and sale of the Securities and the Guarantees or the
consummation by the Company and the Guarantors of the transactions
contemplated by this Agreement, the Registration Rights Agreement or
the Indenture, except for the filing of a registration statement by
the Company with the Commission pursuant to the Act pursuant to
Section 5(k) hereof and qualification of the Indenture under the Trust
Indenture Act of 1939 (the "TIA") and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or
5
6
Blue Sky laws in connection with the purchase and distribution of the
Securities by the Purchasers;
(n) Neither the Company nor any of its subsidiaries is, and after
giving effect to the Acquisition pursuant to the terms of the Asset
Purchase Agreement will be, in violation of its Certificate of
Incorporation or By-laws or in default in the performance or
observance of any obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any
of its properties may be bound, except for such default that would not
have a Material Adverse Effect;
(o) The statements set forth in the Offering Circular under the
caption "Description of Notes", insofar as they purport to constitute
a summary of the terms of the Securities and under the captions
"Legislation and Regulation", "Certain Relationships and Related
Transactions", "Description of Other Indebtedness", "Certain Federal
Income Tax Considerations" and "Underwriting", insofar as they purport
to describe the provisions of the laws and documents referred to
therein, are accurate and complete in all material respects;
(p) Other than as set forth in the Offering Circular, there are
no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is, and after giving effect to the Acquisition
pursuant to the terms of the Asset Purchase Agreement will be, a party
or to which any property of the Company or any of its subsidiaries is,
and after giving effect to the Acquisition pursuant to the terms of
the Asset Purchase Agreement will be, the subject which, if determined
adversely to the Company or any of its subsidiaries, could reasonably
be expected to individually or in the aggregate have a Material
Adverse Effect; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(q) When the Securities and the Guarantees are issued and
delivered pursuant to this Agreement, neither the Securities nor the
Guarantees will be of the same class (within the meaning of Rule 144A
under the Act) as securities of the Company or the Guarantors which
are listed on a national securities exchange registered under Section
6 of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system;
(r) Each of the Company and the Guarantors is not, and after
giving effect to the offering and sale of the Securities and after
giving effect to the Acquisition pursuant to the terms of the Asset
Purchase Agreement, will not be an "investment company", as such term
is defined in the United States Investment Company Act of 1940, as
amended (the "Investment Company Act");
(s) None of the Company, the Guarantors or any person acting on
its or their behalf (other than the Purchasers and their affiliates as
to whom the Company and the Guarantors make no representation) has
offered or sold the Securities by means of any general solicitation or
general advertising within the meaning of Rule 502(c) under the Act
or, with respect to Securities and Guarantees sold outside the United
States to non-U.S. persons (as defined in Rule 902 under the Act), by
means of any directed selling efforts within the meaning of Rule 902
under the Act and the Company, the Guarantors, any affiliate of the
6
7
Company or the Guarantors and any person acting on its or their behalf
(other than the Purchasers and their affiliates as to whom the Company
and the Guarantors make no representation) has complied with and will
implement the "offering restriction" within the meaning of such Rule
902;
(t) Within the preceding six months none of the Company, the
Guarantors or any other person acting on behalf of the Company or any
Guarantor (other than the Purchasers and their affiliates as to whom
the Company and the Guarantors make no representation) has offered or
sold to any person any Securities or Guarantees, or any securities of
the same or a similar class as the Securities or Guarantees, other
than Securities and Guarantees offered or sold to the Purchasers
hereunder. The Company and the Guarantors will take reasonable
precautions designed to insure that any offer or sale, direct or
indirect, in the United States or to any U.S. person (as defined in
Rule 902 under the Act) of any Securities, any Guarantee or any
substantially similar security issued by the Company or any Guarantor,
within six months subsequent to the date on which the distribution of
the Securities and the Guarantees has been completed (as notified to
the Company by Xxxxxxx, Xxxxx & Co.), is made under restrictions and
other circumstances reasonably designed not to affect the status of
the offer and sale of the Securities and the Guarantees in the United
States and to U.S. persons contemplated by this Agreement as
transactions exempt from the registration provisions of the Act;
(u) Pricewaterhouse Coopers, LLP, who has certified certain
financial statements of the Company and its subsidiaries and Star and
its subsidiaries, Ernst & Young, LLP, who has certified certain
financial statements of the Company its subsidiaries, and KPMG LLP,
who has certified certain financial statements of Xxxxxx Group, Inc.,
a Delaware corporation, and its subsidiaries, are each independent
public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(v) The Company has reviewed its operations and those of its
subsidiaries and any third parties with which the Company or any of
its subsidiaries has a material relationship to evaluate the extent to
which the business or operations of the Company or any of its
subsidiaries has been or will be affected by the Year 2000 Problem. As
a result of such review, the Company has no reason to believe, and
does not believe, that the Year 2000 Problem has had or will have a
Material Adverse Effect or has resulted or will result in any material
loss or interference with the Company's business or operations. The
"Year 2000 Problem" as used herein means any significant risk that
computer hardware or software used in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical
systems of any kind is not functioning or will not function, in the
case of dates or time periods occurring after December 31, 1999, at
least as effectively as in the case of dates or time periods occurring
prior to January 1, 2000;
(w) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, and after giving effect to the
Acquisition pursuant to the terms of the Asset Purchase Agreement will
own or possess, or be able to acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or
7
8
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, or operated
by them after giving effect to the Acquisition, except as would not
result in a Material Adverse Effect, and neither the Company nor any
of its subsidiaries has received, and after giving effect to the
Acquisition pursuant to the terms of the Asset Purchase Agreement will
have received, any notice or is otherwise aware of any infringement of
or conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect;
(x) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of (collectively,
"authorizations"), any court or governmental authority or agency
(including the FCC) is necessary or required for the performance by
the Company of its obligations hereunder, in connection with the
offering, issuance or sale of the Securities hereunder or the
consummation of the transactions contemplated by this Agreement or the
Asset Purchase Agreement (other than filings which have been made and
authorizations which have been obtained in the case of the Asset
Purchase Agreement and other than immaterial FCC and local franchise
authority requirements); except for the filing of a registration
statement by the Company with the Commission pursuant to the Act
pursuant to Section 5(k) hereof and qualification of the Indenture
under the TIA and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Purchasers or the failure of
which to obtain would not have a Material Adverse Effect;
(y) The Company and its subsidiaries possess, and after giving
effect to the Acquisition pursuant to the terms of the Asset Purchase
Agreement will possess, such permits, franchises, licenses (including
licenses of the FCC), approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, except where
the failure to possess such Governmental Licenses would not have a
Material Adverse Effect; the Company and its subsidiaries are, and
after giving effect to the Acquisition pursuant to the terms of the
Asset Purchase Agreement will be, in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in
a Material Adverse Effect;
(z) The Company and its subsidiaries have filed, and after giving
effect to the Acquisition pursuant to the terms of the Asset Purchase
Agreement will have filed, all federal, state, local and foreign tax
returns that are required to be filed or have duly requested
extensions thereof and have paid all material taxes required to be
paid by any of them and
8
9
any related assessments, fines or penalties, except where failure to
so file would not have a Material Adverse Effect, and except for any
such tax, assessment, fine or penalty that is being contested in good
faith and by appropriate proceedings; and adequate charges, accruals
and reserves have been provided for in the financial statements,
together with the related schedules and notes, included in the
Offering Circular in respect of all material federal, state, local and
foreign taxes for all periods as to which the tax liability of the
Company or any of its subsidiaries has not been fully determined or
remains open to examination by applicable taxing authorities;
(aa) Except as described in the Offering Circular and except as
such matters as would not, singly or in the aggregate, result in a
Material Adverse Effect, (i) neither the Company nor any of its
subsidiaries is, and after giving effect to the Acquisition pursuant
to the terms of the Asset Purchase Agreement will be, in violation of
any federal, state, local or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (ii) the Company and its subsidiaries have, and after giving
effect to the Acquisition pursuant to the terms of the Asset Purchase
Agreement will have, all permits, authorizations and approvals
required under any applicable Environmental Laws and are each, and
after giving effect to the Acquisition pursuant to the terms of the
Asset Purchase Agreement will each be, in compliance with their
requirements, (iii) there are, and after giving effect to the
Acquisition pursuant to the terms of the Asset Purchase Agreement
there will be, no pending or to the Company's knowledge threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Laws
against the Company or any of its subsidiaries and (iv) there are, and
after giving effect to the Acquisition pursuant to the terms of the
Asset Purchase Agreement there will be, no events or circumstances
that might reasonably be expected to form the basis of an order for
clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency against or affecting the
Company or any of its subsidiaries relating to Hazardous Materials or
Environmental Laws;
(bb) The Company and its subsidiaries carry or are entitled to
the benefits of, and after giving effect to the Acquisition pursuant
to the terms of the Asset Purchase Agreement will carry or be entitled
to the benefits of, insurance, with financially sound and reputable
insurers, in such amounts and covering such risks as is generally
maintained by companies of established repute engaged in the same or
similar business, and all such insurance is in full force and effect
in all material respects;
(cc) The Company is, and after giving effect to the Acquisition
pursuant to the terms of the Asset Purchase Agreement will be,
Solvent. As used herein, the term "Solvent" means,
9
10
with respect to the Company on a particular date, that on such date
(i) the fair market value of the assets of the Company is greater than
the total amount of liabilities (including contingent liabilities) of
the Company, (ii) the present fair salable value of the assets of the
Company is greater than the amount that will be required to pay the
probable liabilities of the Company on its debts as they become
absolute and matured, (iii) the Company is able to realize upon its
assets and pay its debts and other liabilities, including contingent
obligations, as they mature, and (iv) the Company does not have
unreasonably small capital; and
(dd) The Company is not in default under any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument
constituting Senior Debt (as defined in the Indenture) or under the
Asset Purchase Agreement, except for defaults of the Company or any of
its subsidiaries that would not have a Material Adverse Effect.
2. Subject to the terms and conditions herein set forth, the Company
and the Guarantors agree to issue and sell to each of the Purchasers, and each
of the Purchasers agrees, severally and not jointly, to purchase from the
Company and the Guarantors, at a purchase price of 97.375% of the principal
amount thereof, plus accrued interest, if any, from February 16, 2000 to the
Time of Delivery hereunder, the principal amount of Securities (including the
Guarantees thereof) set forth opposite the name of such Purchaser in Schedule I
hereto.
3. Upon the authorization by you of the release of the Securities and
the Guarantees, the several Purchasers propose to offer the Securities for sale
upon the terms and conditions set forth in this Agreement and the Offering
Circular, and each Purchaser hereby represents and warrants to, and agrees with
the Company and the Guarantors that:
(a) It will offer and sell the Securities only to: (i) persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A under the Act in transactions meeting the requirements of
Rule 144A or (ii) upon the terms and conditions set forth in Annex I to this
Agreement;
(b) It is an Institutional Accredited Investor; and
(c) It will not offer or sell the Securities and Guarantees by any form
of general solicitation or general advertising, including but not limited to the
methods described in Rule 502(c) under the Act.
4. (a) The Securities to be purchased by each Purchaser hereunder will
be represented by one or more definitive global Securities in book-entry form,
which will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company and the Guarantors will
deliver the Securities and the Guarantees to Xxxxxxx, Xxxxx & Co., for the
account of each Purchaser, against payment by or on behalf of such Purchaser of
the purchase price therefor by wire transfer of Federal (same day) funds to an
account designated by the Company, by causing DTC to credit the Securities to
the account of Xxxxxxx, Sachs & Co. at DTC. The Company and the Guarantors will
cause the certificates representing the Securities to be made available to
Xxxxxxx, Xxxxx & Co. for checking at least twenty-four hours prior to the Time
of Delivery (as defined below) at the office of DTC or its designated custodian
(the "Designated Office"). The time and date of such delivery and payment shall
be 9:30 a.m., New York City time, on February
10
11
16, 2000 or such other time and date as Xxxxxxx, Sachs & Co. and the Company may
agree upon in writing. Such time and date are herein called the "Time of
Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Purchasers pursuant to Section 7(i) hereof, will be delivered at such time and
date at the offices of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx,
Xxx Xxxx 00000 (the "Closing Location"), and the Securities and Guarantees will
be delivered at the Designated Office, all at the Time of Delivery. A meeting
will be held at the Closing Location at 3:00 p.m., New York City time, on the
New York Business Day next preceding the Time of Delivery, at which meeting the
final drafts of the documents to be delivered pursuant to the preceding sentence
will be available for review by the parties hereto. For the purposes of this
Section 4, "New York Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close.
5. Each of the Company and the Guarantors, jointly and severally,
agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to make
no amendment or any supplement to the Offering Circular which shall be
disapproved by you promptly after reasonable notice thereof; and to furnish you
with copies thereof;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith neither the Company nor
any Guarantor shall be required to qualify as a foreign corporation or subject
itself to taxation in respect of doing business or to file a general consent to
service of process in any jurisdiction;
(c) To furnish the Purchasers with five copies of the Offering Circular
and each amendment or supplement thereto signed by an authorized officer of the
Company with the independent accountants' report(s) in the Offering Circular,
and any amendment or supplement containing amendments to the financial
statements covered by such report(s), signed by the accountants, and additional
copies thereof in such quantities as you may from time to time reasonably
request, and if, at any time prior to the expiration of nine months after the
date of the Offering Circular, any event shall have occurred as a result of
which the Offering Circular as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made when such Offering Circular is delivered, not misleading,
or, if for any other reason it shall be necessary during such period to amend or
supplement the Offering Circular, to notify you and upon your request to prepare
and furnish without charge to each Purchaser and to any dealer in securities as
many copies as you may from time to time reasonably request of an amended
Offering Circular or a supplement to the Offering Circular which will correct
such statement or omission or effect such compliance;
11
12
(d) During the period beginning from the date hereof and continuing
until the date six months after the Time of Delivery, not to offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder any
securities of the Company or any Guarantor that are substantially similar to the
Securities or the Guarantees; except to the extent required by existing
registration rights agreements;
(e) Not to be or become, at any time prior to the expiration of three
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, for the benefit of holders from time to time of Securities,
to furnish at its expense, upon request, to holders of Securities and
prospective purchasers of securities information (the "Additional Issuer
Information") satisfying the requirements of subsection (d)(4)(i) of Rule 144A
under the Act;
(g) If requested by you, to use its best efforts to cause such
Securities to be eligible for the PORTAL trading system of the National
Association of Securities Dealers, Inc.;
(h) To furnish to the holders of the Securities as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the date of the
Offering Circular), to make available to holders of the Securities consolidated
summary financial information of the Company and its subsidiaries for such
quarter in reasonable detail;
(i) During a period of five years from the date of the Offering
Circular, to furnish to you copies of all reports or other communications
(financial or other) furnished to holders of Securities of the Company or any of
the Guarantors, and to deliver to you (i) as soon as they are available, copies
of any reports and financial statements furnished to or filed with the
Commission or any securities exchange on which the Securities or any class of
securities of the Company or the Guarantors is listed; and (ii) such additional
information concerning the business and financial condition of the Company or
the Guarantors as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
(j) During a period of two years after the Time of Delivery, the
Company will not, and will not permit any of its "affiliates" (as defined in
Rule 144 under the Act) to, resell any of the Securities which constitute
"restricted securities" under Rule 144 that have been reacquired by them;
(k) The Company and the Guarantors shall file and use their best
efforts to cause to be declared or become effective under the Act, on or prior
to 210 days after the Time of Delivery, a registration statement on Form S-4
providing for the registration of the Exchange Securities and the Guarantees
thereon, and the exchange of the Securities for the Exchange Securities, all in
a manner
12
13
which will permit persons who acquire the Exchange Securities to resell the
Exchange Securities pursuant to Section 4(1) of the Act; and
(l) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Offering
Circular under the caption "Use of Proceeds".
6. Each of the Company and the Guarantors, jointly and severally,
covenants and agrees with the several Purchasers that the Company and the
Guarantors will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's and the Guarantors' counsel and
accountants in connection with the issue of the Securities and all other
expenses in connection with the preparation, printing and filing of the
Preliminary Offering Circular and the Offering Circular and any amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Purchasers and dealers; (ii) the cost of printing or producing any Agreement
among Purchasers, this Agreement, the Indenture, the Registration Rights
Agreement, the Blue Sky and Legal Investment Memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities and Guarantees;
(iii) all expenses in connection with the qualification of the Securities and
the Exchange Securities for offering and sale under state securities laws as
provided in Section 5(b) hereof, including the fees and disbursements of counsel
for the Purchasers in connection with such qualification and in connection with
the Blue Sky and legal investment surveys; (iv) any fees charged by securities
rating services for rating the Securities and the Exchange Securities; (v) the
cost of preparing the Securities, the Exchange Securities and the Guarantees
with respect thereto; (vi) the fees and expenses of the Trustee and any agent of
the Trustee and the fees and disbursements of counsel for the Trustee in
connection with the Indenture, the Securities and the Exchange Securities; (vii)
any cost incurred in connection with the designation of the Securities for
trading in PORTAL; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Purchasers will pay
all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Purchasers hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company and the Guarantors herein are, at and as of the
Time of Delivery, true and correct, the condition that the Company and the
Guarantors shall have performed all of its obligations hereunder theretofore to
be performed, and the following additional conditions:
(a) Xxxxxx & Xxxxxxx, counsel for the Purchasers, shall have furnished
to you such opinion or opinions, dated the Time of Delivery, with respect to the
matters covered in paragraphs (i), (vii), (viii), (ix), (x), (xi), (xii), (xiv)
and (xv) of subsection (b) below as well as such other related matters as you
may reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(b) Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois), counsel for the
Company, shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect that:
13
14
(i) The Company has been duly incorporated and is validly
existing and in good standing under the Delaware General Corporation
Law (the "DGCL"), with the corporate power and corporate authority to
own or lease its properties and conduct its business as described in
the Offering Circular;
(ii) The execution and delivery by Universal of the Asset
Purchase Agreement and the consummation by Universal of the
transactions contemplated thereby have been duly authorized by all
requisite corporate action on the part of Universal under the DGCL.
The Asset Purchase Agreement has been duly executed and delivered by
Universal. The Asset Purchase Agreement constitutes the valid and
binding obligation of Universal enforceable against Universal in
accordance with its terms under the DGCL;
(iii) The authorized capital stock of the Company consists of
1,000 shares of Common Stock, par value $0.01 per share;
(iv) The outstanding shares of capital stock of the Company have
been duly authorized and validly issued and, to such counsel's
knowledge, are fully paid and nonassessable;
(v) To such counsel's knowledge and other than as set forth in
the Offering Circular, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or
of which any property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate reasonably be
expected to have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company and each of Classic Cable Holdings, Inc.,
Universal Cable Holdings, Inc., Universal Cable Communications Inc.,
Universal Cable of Beaver, Oklahoma, Inc., Universal Cable Midwest,
Inc., Classic Telephone, Inc., WT Acquisition Corporation, Black Creek
Management, L.L.C., Black Creek Communications, L.P., and Classic
Network Transmission, L.L.C. (collectively, the "Delaware
Guarantors");
(vii) The Securities have been duly authorized and executed by
the Company and, when duly authenticated in accordance with the terms
of the Indenture, and issued and delivered to and paid for by you
pursuant to this Agreement, will be valid and legally binding
obligations of the Company entitled to the benefits of the Indenture,
enforceable against the Company in accordance with their terms, except
to the extent that enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity);
14
15
(viii) The Guarantees have been duly authorized and executed by
each Delaware Guarantor and, when duly authenticated in accordance
with the terms of the Indenture, and issued and delivered to and paid
for by you pursuant to this Agreement, will be valid and legally
binding obligations of the Delaware Guarantors entitled to the
benefits of the Indenture, enforceable against each Delaware Guarantor
in accordance with their terms, except to the extent that enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity);
(ix) The Exchange Securities have been duly authorized;
(x) The Guarantees with respect to the Exchange Securities have
been duly authorized by each Delaware Guarantor;
(xi) The Indenture has been duly authorized, executed and
delivered by the Company and the Delaware Guarantors and is a valid
and legally binding agreement of the Company and each Delaware
Guarantor, enforceable against the Company and each Delaware Guarantor
in accordance with its terms, except to the extent that enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity);
(xii) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and the Delaware Guarantors and
is a valid and legally binding agreement of the Company and each
Delaware Guarantor, enforceable against the Company and each Delaware
Guarantor in accordance with its terms, except to the extent that (a)
enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar
laws now or hereafter in effect relating to or affecting creditors'
rights generally and (ii) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in
equity) and (b) the enforceability of indemnification and contribution
provisions may be limited by federal and state securities laws and the
policies underlying such laws;
(xiii) The Credit Facility Amendment has been duly authorized,
executed and delivered by the Company and the Delaware Guarantors and
is a valid and legally binding agreement of the Company and each
Delaware Guarantor, enforceable against the Company and each Delaware
Guarantor in accordance with its terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar
laws now or hereafter in effect relating to or affecting creditors'
rights generally and (ii) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in
equity);
(xiv) The statements set forth in the Offering Circular under the
caption "Description of Notes", insofar as they purport to summarize
certain terms of the Indenture, the Guarantees, the Securities and the
Registration Rights Agreement, and under the captions "Certain
15
16
Relationships and Related Transactions", "Description of Other
Indebtedness" and "Certain Federal Income Tax Considerations", insofar
as they purport to describe or summarize the provisions of specific
agreements, statutes and regulations referred to therein, are true and
correct in all material respects;
(xv) Assuming (a) the accuracy of the representations and
warranties of the Company and the Guarantors set forth in Section 1 of
this Agreement and of your representations, warranties and agreements
set forth in Section 3 of this Agreement, (b) the due performance by
the Company and the Guarantors of the covenants and agreements set
forth in Section 5 of this Agreement, and (c) the compliance by the
Company and the Guarantors and you with the offering and transfer
procedures and restrictions described in the Offering Circular, the
offer, sale and delivery of the Securities to you in the manner
contemplated by this Agreement and the Offering Circular, and the
initial resale of the Securities by you in the manner contemplated in
the Offering Circular and the Purchase Agreement, do not require
registration under the Securities Act, and the Indenture does not
require qualification under the Trust Indenture Act, it being
understood that we do not express any opinion as to any subsequent
resale of any Security;
(xvi) Each of the Company and the Delaware Guarantors is not an
"investment company", required to register as such under the
Investment Company Act; and
Such counsel's opinion shall also include the following statement:
In addition, we have participated in conferences with officers
and other representatives of the Company, representatives of the
independent public accountants of the Company, you and your counsel at
which the contents of the Offering Circular and related matters were
discussed and, although we are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the
statements contained in the Offering Circular and have made no
independent check or verification thereof, on the basis of the
foregoing, no facts have come to our attention that have led us to
believe that the Offering Circular, at the Time of Delivery, contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or that the Offering Circular, as of its date
and the date hereof, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that we express no
opinion or belief with respect to the financial statements, schedules
and other financial information included therein or excluded
therefrom.
(c) Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., counsel for the Company, shall
have furnished to you their written opinion, dated the Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, or is
subject to no material liability or disability by reason of the
failure to be so qualified in any such
16
17
jurisdiction (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect
of matters of fact upon certificates of officers of the Company,
provided that such counsel shall state that they believe that both you
and they are justified in relying upon such opinions and
certificates);
(ii) Each subsidiary of the Company has been duly organized and
is validly existing as a corporation, limited liability company or
limited partnership, in good standing under the laws of its
jurisdiction of organization; and all of the issued shares of capital
stock of each such subsidiary have been duly and validly authorized
and issued, are fully paid and non-assessable, and (except for
directors' qualifying shares and except as otherwise set forth in the
Offering Circular) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims (such
counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of matters of
fact upon certificates of officers of the Company or its subsidiaries,
provided that such counsel shall state that they believe that both you
and they are justified in relying upon such opinions and
certificates);
(iii) The issue and sale of the Securities and the Guarantees and
the compliance by the Company and the Guarantors with all of the
provisions of the Securities, the Guarantees, the Indenture, the
Registration Rights Agreement and this Agreement and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other material agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such actions
result in any violation of the provisions of the Certificate of
Incorporation or By-laws, or Certificate of Limited Liability Company
or Limited Liability Company Agreement, or Certificate of Limited
Partnership or Limited Partnership Agreement, of the Company or any
Guarantor or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties;
(iv) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Securities and the
Guarantees or the consummation by the Company and the Guarantors of
the transactions contemplated by this Agreement, the Registration
Rights Agreement or the Indenture, except such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Purchasers; and
(v) Except as set forth in the Offering Circular, each of the
Company and its subsidiaries has all of the licenses, permits,
franchises and authorizations required by each state in which it
operates, or the political subdivisions thereof, for the provision of
cable television services (as such counsel understands service to be
provided which may be based on a certificate of an officer of the
Company, provided that such counsel shall state that they believe that
both the Purchasers and such counsel are justified in relying on such
certificate),
17
18
where the failure to obtain or hold such license, permit, franchise or
authorization would have a Material Adverse Effect;
(vi) This Agreement has been duly authorized, executed and
delivered by Friendship Cable of Texas, Inc. ("FCT"), Correctional
Cable TV, Inc. ("CCTV"), CallCom 24, Inc. ("CC24"), Friendship Cable
of Arkansas, Inc. ("FCA"), Television Enterprises, Inc. ("TE" and,
together with FCT, CCTV, CC24 and FCA, the "Texas Guarantors") and
W.K. Communications, Inc. (the "Kansas Guarantor");
(vii) The Guarantees have been duly authorized, executed, issued
and delivered and constitute valid and legally binding obligations of
the Texas Guarantors and the Kansas Guarantor entitled to the benefits
provided by the Indenture;
(viii) The Guarantees with respect to the Exchange Securities
have been duly authorized by the Texas Guarantors and the Kansas
Guarantor;
(ix) The Indenture has been duly authorized, executed and
delivered by the Texas Guarantors and the Kansas Guarantor and
constitutes a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(x) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Texas Guarantors and the Kansas
Guarantor and constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles;
(xii) The Credit Facility Amendment has been duly authorized,
executed and delivered by the Texas Guarantors and the Kansas
Guarantor and constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles;
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction outside the
United States.
(d) Cole Raywid & Xxxxxxxxx, regulatory counsel for the Company, shall
have furnished to you their written opinion, dated the Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The statements set forth in the Offering Circular under the
caption "Legislation and Regulation," insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate and complete in all material respects;
18
19
(ii) The Company and its subsidiaries operate cable television
systems which serve the communities listed on Attachment 1 hereto.
Each such community has been registered with the FCC;
(iii) The Company and its subsidiaries hold the FCC licenses set
forth on Attachment 1 hereto, each of which is in full force and
effect, and each of the Company and its subsidiaries have fulfilled
and performed all material obligations with respect thereto. To the
best of our knowledge, these are the only FCC licenses which are
presently necessary to the business of the Company and its
subsidiaries as now conducted, except for those licenses that are not
material to the Company. To the best of our knowledge, no condition
exists or event has occurred which permits or which after lapse of
time or the giving of notice or both would permit the suspension,
revocation, impairment, forfeiture, nonrenewal or termination of any
FCC license set forth on Attachment 1. To the best of our knowledge,
neither the Company nor any of its subsidiaries has received written
notice of any violation or institution of any cease and desist
proceeding with respect thereto;
(iv) Except with respect to general rulemakings and similar
matters relating generally to the cable television industry, there is
no action, suit or proceeding pending at the FCC, or, to the best of
our knowledge after due investigation with respect thereto, any
inquiry or investigation by the FCC pending or proceeding threatened
by the FCC against or affecting the Company or any of its subsidiaries
which might have Material Adverse Effect upon the Company and its
subsidiaries or the operation of the cable systems of the Company and
its subsidiaries; and
(v) The execution, delivery and performance by the Company of the
Purchase Agreement, the Registration Rights Agreement, the Indenture,
the Notes and the Credit Facility Amendment and the consummation of
the Acquisition do not require the approval of the FCC and will not
result in any violation of the Communications Act of 1934, as amended,
or any rule or regulation of the FCC; provided however, that prior FCC
approval is required for the transfer of control of FCC licenses.
(e) Wiley, Rein & Fielding, regulatory counsel for Star, shall have
furnished to you their written opinion, dated the Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) Star and its subsidiaries operate cable television systems
which serve the communities listed on Attachment 1 hereto. Each such
community has been registered with the FCC;
(ii) Star and its subsidiaries hold the FCC licenses set forth on
Attachment 1 hereto, each of which is in full force and effect, and
each of Star and its subsidiaries have fulfilled and performed all
material obligations with respect thereto. To the best of our
knowledge, these are the only FCC licenses which are presently
necessary to the business of Star and its subsidiaries as now
conducted, except for those licenses that are not material to Star. To
the best of our knowledge, no condition exists or event has occurred
which permits or which after lapse of time or the giving of notice or
both would permit the suspension, revocation, impairment, forfeiture,
nonrenewal or termination of any FCC license set forth on Attachment
19
20
1. To the best of our knowledge, neither Star nor any of its
subsidiaries has received written notice of any violation or
institution of any cease and desist proceeding with respect thereto;
(iii) Except with respect to general rulemakings and similar
matters relating generally to the cable television industry, there is
no action, suit or proceeding pending at the FCC, or, to the best of
our knowledge after due investigation with respect thereto, any
inquiry or investigation by the FCC pending or proceeding threatened
by the FCC against or affecting Star or any of its subsidiaries which
might have Material Adverse Effect upon Star and its subsidiaries or
the operation of the cable systems of Star and its subsidiaries; and
(f) On the date of the Offering Circular prior to the execution of this
Agreement and also at the Time of Delivery, Pricewaterhouse Coopers, LLP shall
have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex II hereto;
(g) On the date of the Offering Circular prior to the execution of this
Agreement and also at the Time of Delivery, Ernst & Young, LLP shall have
furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set forth in
Annex II hereto;
(h) On the date of the Offering Circular prior to the execution of this
Agreement and also at the Time of Delivery, KPMG LLP shall have furnished to you
a letter or letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, to the effect set forth in Annex II hereto;
(i) On the date of the Offering Circular prior to the execution of this
Agreement and also at the Time of Delivery, Xxxxxx Xxxxxxxx & Xxxxxxxxx shall
have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you;
(j) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Offering Circular any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Circular, and (ii) since the
respective dates as of which information is given in the Offering Circular there
shall not have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Offering
Circular, the effect of which, in any such case described in Clause (i) or (ii),
is in the judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities on the terms and in the manner contemplated in this Agreement
and in the Offering Circular;
(k) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's and any Guarantors' debt securities by any
"nationally recognized statistical rating organization", as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under
20
21
surveillance or review, with possible negative implications, its rating of any
of the Company's and any Guarantors' debt securities;
(l) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a general moratorium on
commercial banking activities declared by either Federal or New York State
authorities; or (iii) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war, if the effect of any such event specified in this Clause (iii) in the
judgment of the Representatives makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Securities on the terms and in
the manner contemplated in the Offering Circular; or (iv) the occurrence of any
material adverse change in the existing, financial, political or economic
conditions in the United States or elsewhere which, in the judgment of the
Representatives, would materially and adversely affect the financial markets or
the markets for the Securities and other debt securities;
(m) The Securities have been designated for trading on PORTAL;
(n) The Company shall have furnished or caused to be furnished to you
at the Time of Delivery certificates of officers of the Company and the
Guarantors satisfactory to you as to the accuracy of the representations and
warranties of the Company and the Guarantors herein at and as of such Time of
Delivery, as to the performance by the Company of all of its obligations
hereunder to be performed at or prior to such Time of Delivery, as to the
matters set forth in subsections (h) and (i) of this Section and as to such
other matters as you may reasonably request;
(o) The Company shall have entered into the Credit Facility Amendment
(the form and substance of which shall be acceptable to the Purchasers) and the
Purchasers shall have received copies of counterparts, conformed as executed
thereof and of all other documents and agreements entered into in connection
therewith; and
(p) The Company shall have entered into the Asset Purchase Agreement
and the Purchasers shall have received counterparts, conformed as executed
thereof and of all other documents and agreements entered into in connection
therewith. The Asset Purchase Agreement shall be in full force and effect, all
conditions thereto shall have been satisfied, and no condition shall have been
waived without the express consent of Xxxxxxx, Sachs & Co., which consent shall
not be unreasonably withheld.
8. (a) The Company and each Guarantor will, jointly and severally,
indemnify and hold harmless each Purchaser against any losses, claims, damages
or liabilities, joint or several, to which such Purchaser may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Circular or the Offering Circular, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein not misleading, and will reimburse each Purchaser for any legal or other
expenses reasonably incurred by such Purchaser in connection with investigating
or defending any such action or claim as such expenses are incurred; provided,
however, that neither the Company nor any Guarantor shall be liable in any such
case to the extent that any such loss, claim, damage or
21
22
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Offering
Circular or the Offering Circular or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Purchaser through Xxxxxxx, Xxxxx & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company and the
Guarantors against any losses, claims, damages or liabilities to which the
Company and any Guarantor may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Offering Circular or
the Offering Circular, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact or necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary Offering
Circular or the Offering Circular or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Purchaser through Xxxxxxx, Sachs & Co. expressly for use
therein; and will reimburse the Company and the Guarantors for any legal or
other expenses reasonably incurred by the Company and the Guarantors in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability hereunder to the extent it is not materially
prejudiced as a result thereof and in any event shall not relieve it from any
liability which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (which shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act, by or on behalf of any
indemnified party. No indemnifying party shall be required to indemnify an
indemnified party for any amount paid or payable by such indemnified party in
the settlement of any action, proceeding or investigation without the written
consent of such indemnifying party, which consent shall not be unreasonably
withheld.
22
23
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party 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 the
relative benefits received by the Company and the Guarantors on the one hand and
the Purchasers on the other from the offering of the Securities. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Guarantors on the one hand and the Purchasers on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Guarantors on the one hand and the Purchasers on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company and the
Guarantors bear to the total underwriting discounts and commissions received by
the Purchasers, in each case as set forth in the Offering Circular. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
and the Guarantors on the one hand or the Purchasers on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Guarantors and
the Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to
investors were offered to investors exceeds the amount of any damages which such
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The Purchasers' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company and the Guarantors under this
Section 8 shall be in addition to any liability which the Company and the
Guarantors may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Purchaser within the
meaning of the Act; and the obligations of the Purchasers under this Section 8
shall be in addition to any liability which the respective Purchasers may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company or any Guarantor and to each person, if any,
who controls the Company or any Guarantor within the meaning of the Act.
23
24
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Offering Circular,
or in any other documents or arrangements, and the Company agrees to prepare
promptly any amendments to the Offering Circular which in your opinion may
thereby be made necessary. The term "Purchaser" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of a defaulting Purchaser or Purchasers, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Purchaser or the Company and the Guarantors, except for the expenses to be borne
by the Company, the Guarantors and the Purchasers as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Purchaser from liability for its
default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Guarantors and the several Purchasers,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Purchaser or any controlling person of any Purchaser, or the
Company, the Guarantors or any officer or director or controlling person of the
Company or a Guarantor, and shall survive delivery of and payment for the
Securities.
24
25
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Purchaser except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities (including the Guarantees with respect thereto) are not delivered by
or on behalf of the Company and the Guarantors as provided herein, the Company
and the Guarantors will reimburse the Purchasers through you for all
out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Purchasers in making
preparations for the purchase, sale and delivery of the Securities, but the
Company shall then be under no further liability to any Purchaser except as
provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or given
by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Sachs &
Co., 00 Xxx Xxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the Offering
Circular, Attention: Secretary, with a copy to Brera Classic, L.L.C., 000 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000; provided, however, that any notice to a
Purchaser pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Purchaser at its address set forth in
its Purchasers' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Purchasers, the Company, the Guarantors and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and the Guarantors and each person who controls the Company, a Guarantor or any
Purchaser, and their respective heirs, executors, administrators, successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. No purchaser of any of the Securities from any Purchaser
shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and each of the Representatives plus one
for each counsel counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Purchasers, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Purchasers and the
25
26
Company. It is understood that your acceptance of this letter on behalf of each
of the Purchasers is pursuant to the authority set forth in a form of Agreement
among Purchasers, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
26
27
Very truly yours,
CLASSIC CABLE, INC.
By: /s/ XXXXXX X. SEACH
--------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
CLASSIC CABLE HOLDING, INC.
By: /s/ XXXXXX X. SEACH
--------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
CLASSIC TELEPHONE, INC.
By: /s/ XXXXXX X. SEACH
--------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
UNIVERSAL CABLE HOLDINGS, INC.
By: /s/ XXXXXX X. SEACH
--------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
UNIVERSAL CABLE COMMUNICATIONS INC.
By: /s/ XXXXXX X. SEACH
--------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
28
UNIVERSAL CABLE OF BEAVER, OKLAHOMA,
INC.
By: /s/ XXXXXX X. SEACH
-------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
29
UNIVERSAL CABLE MIDWEST, INC.
By: /s/ XXXXXX X. SEACH
--------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
WT ACQUISITION CORPORATION
By: /s/ XXXXXX X. SEACH
--------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
W.K. COMMUNICATIONS, INC.
By: /s/ XXXXXX X. SEACH
--------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
TELEVISION ENTERPRISES, INC.
By: /s/ XXXXXX X. SEACH
--------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
BLACK CREEK MANAGEMENT, L.L.C.
By: /s/ XXXXXX X. SEACH
--------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
30
BLACK CREEK COMMUNICATIONS, L.P.
By: /s/ XXXXXX X. SEACH
--------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
31
FRIENDSHIP CABLE OF TEXAS, INC.
By: /s/ XXXXXX X. SEACH
--------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
CALLCOMM 24, INC.
By: /s/ XXXXXX X. SEACH
--------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
CORRECTIONAL CABLE TV, INC.
By: /s/ XXXXXX X. SEACH
--------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
FRIENDSHIP CABLE OF ARKANSAS, INC.
By: /s/ XXXXXX X. SEACH
--------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
CLASSIC NETWORK TRANSMISSION, L.L.C.
By: /s/ XXXXXX X. SEACH
--------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
32
Accepted as of the date hereof:
XXXXXXX, XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
CHASE SECURITIES INC.
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
BY: /s/ XXXXXXX, SACHS & CO.
------------------------------------
(XXXXXXX, XXXXX & CO)
On behalf of each of the Purchasers
33
SCHEDULE I
PRINCIPAL
AMOUNT OF
SECURITIES
TO BE
PURCHASER PURCHASED
--------- ------------
Xxxxxxx, Sachs & Co. ............................................ $101,250,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated .................................. 78,750,000
Chase Securities Inc. ........................................... 22,500,000
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation ............. 22,500,000
------------
Total ......................................... $225,000,000
============
34
SCHEDULE II
GUARANTORS
Classic Cable Holding, Inc.
Classic Telephone, Inc.
Universal Cable Holdings, Inc.
Universal Cable Communications Inc.
Universal Cable of Beaver, Oklahoma, Inc.
Universal Cable Midwest, Inc.
WT Acquisition Corporation
W.K. Communications, Inc.
Television Enterprises, Inc.
Black Creek Management, L.L.C.
Black Creek Communications, L.P.
Friendship Cable of Texas, Inc.
CallComm 24, Inc.
Correctional Cable TV, Inc.
Friendship Cable of Arkansas, Inc.
Classic Network Transmission, L.L.C.
35
ANNEX I
(1) The Securities have not been and will not be registered under the
Act and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S under
the Act or pursuant to an exemption from the registration requirements of the
Act. Each Purchaser represents that it has offered and sold the Securities, and
will offer and sell the Securities (i) as part of its distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of the
offering and the Time of Delivery, only in accordance with Rule 903 of
Regulation S or Rule 144A under the Act. Accordingly, each Purchaser agrees that
neither it, its affiliates nor any persons acting on its or their behalf has
engaged or will engage in any directed selling efforts with respect to the
Securities, and it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Purchaser agrees that, at or
prior to confirmation of sale of Securities (other than a sale pursuant to Rule
144A), it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
during the restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of
the offering and the closing date, except in either case in accordance
with Regulation S (or Rule 144A if available) under the Act. Terms used
above have the meaning given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
Each Purchaser further agrees that it has not entered and will not
enter into any contractual arrangement with respect to the distribution or
delivery of the Securities, except with its affiliates or with the prior written
consent of the Company.
(2) Notwithstanding the foregoing, Securities in registered form may be
offered, sold and delivered by the Purchasers in the United States and to U.S.
persons pursuant to Section 3 of this Agreement without delivery of the written
statement required by paragraph (1) above.
(3) Each Purchaser further represents and agrees that (a) it has not
offered or sold and will not offer or sell any Securities to persons in the
United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, (b) it
has complied, and will comply, with all applicable provisions of the Financial
Services Act of 1986 of Great Britain with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom,
and (c) it has 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 issuance of
the Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Xxx 0000 (Investment Advertisements) (Exemptions) Order 1996
of Great Britain or is a person to whom the document may otherwise lawfully be
issued or passed on.
A-1
36
(4) Each Purchaser agrees that it will not offer, sell or deliver any
of the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each Purchaser
understands that no action has been taken to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purpose. Each Purchaser agrees not to cause any advertisement of the Securities
to be published in any newspaper or periodical or posted in any public place and
not to issue any circular relating to the Securities, except in any such case
with Xxxxxxx, Xxxxx & Co.'s express written consent and then only at its own
risk and expense.
A-2
37
ANNEX II
Pursuant to Section 7(c) and 7(d) of the Purchase Agreement, the
accountants shall furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Securities Exchange Act of 1934 (the "Exchange Act") and the applicable
published rules and regulations thereunder;
(ii) In our opinion, the consolidated financial statements and
financial statement schedules audited by us and included in the
Offering Circular comply as to form in all material respects with the
applicable requirements of the Exchange Act and the related published
rules and regulations;
(iii) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Offering
Circular agrees with the corresponding amounts (after restatements
where applicable) in the audited consolidated financial statements for
such five fiscal years;
(iv) On the basis of limited procedures not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included in
the Offering Circular, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Offering Circular are not in
conformity with generally accepted accounting principles
applied on the basis substantially consistent with the basis
for the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Offering Circular;
(B) any other unaudited income statement data and balance
sheet items included in the Offering Circular do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included in the Offering Circular;
(C) the unaudited financial statements which were not
included in the Offering Circular but from which were derived
any unaudited condensed financial statements referred to in
Clause (A) and any unaudited income statement data and balance
sheet
AII-1
38
items included in the Offering Circular and referred to in
Clause (B) were not determined on a basis substantially
consistent with the basis for the audited consolidated
financial statements included in the Offering Circular;
(D) any unaudited pro forma consolidated condensed
financial statements included in the Offering Circular do not
comply as to form in all material respects with the applicable
accounting requirements or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest financial statements included in the
Offering Circular or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or stockholders'
equity or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance
sheet included in the Offering Circular except in each case
for changes, increases or decreases which the Offering
Circular discloses have occurred or may occur or which are
described in such letter; or
(F) for the period from the date of the latest financial
statements included in the Offering Circular to the specified
date referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or
per share amounts of consolidated net income or other items
specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as
compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Representatives, except in each case for decreases or
increases which the Offering Circular discloses have occurred
or may occur or which are described in such letter.
(v) In addition to the examination referred to in their
report(s) included in the Offering Circular and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (iii) and (iv) above, they have carried out certain
specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives,
which are derived from the general accounting records of the Company
and its subsidiaries, which appear in the Offering Circular, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and
have found them to be in agreement.
AII-2
