EXHIBIT 10.1
PAXSON COMMUNICATIONS
CORPORATION
$400,000,000 Floating
Rate First Priority Senior Secured Notes due 2012
$405,000,000 Floating
Rate Second Priority Senior Secured Notes due 2013
Purchase Agreement
New York, New York
December 19,
2005
Citigroup Global Markets Inc.
UBS Securities LLC
Bear, Stearns & Co. Inc.
CIBC World Markets Corp.
Goldman, Sachs & Co.
As Representatives of the Initial Purchasers
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Paxson Communications Corporation, a
corporation organized under the laws of Delaware (the
“Company”), proposes to issue and sell to the several
parties named in Schedule I hereto (the “Initial
Purchasers”), for whom you (the
“Representatives”) are acting as representatives,
$400,000,000 principal amount of its Floating Rate First Priority
Senior Secured Notes due 2012 (the “First Priority
Notes”) and $405,000,000 principal amount of its Floating
Rate Second Priority Senior Secured Notes due 2013 (the
“Second Priority Notes” and, together with the First
Priority Notes, the “Notes”). As described in the
Offering Memorandum, the Company’s obligations with respect
to the First Priority Notes and with respect to a portion of the
Second Priority Notes will be unconditionally guaranteed (the
“Guarantees” and, together with the Notes, the
“Securities”) on a senior secured basis by each of the
Company’s direct and indirect domestic subsidiaries set forth
on the signature page hereto (the “Guarantors” and,
together with the Company, the “Issuers”). The First
Priority Notes are to be issued under an indenture (the
“First Priority Indenture”), to be dated as of the
Closing Date (as defined below), among the Issuers and The Bank of
New York, as trustee (the “First Priority Trustee”).
The Second Priority Notes are to be issued under an indenture (the
“Second Priority Indenture” and, together with the
First Priority Indenture, the “Indentures”), to be
dated as of the Closing Date, among the Issuers and The Bank of New
York, as trustee (the “Second Priority Trustee” and,
together with the First Priority Trustee, the
“Trustees”). The Issuers’ obligations with
respect to the First Priority Notes and the related Guarantees and
to the First Priority Trustee will be secured by first priority
liens on the Collateral (as defined in the Offering Memorandum) and
the Issuers’ obligations with respect to the Second Priority
Notes and the related Guarantees will be secured by second priority
liens on the Collateral pursuant to a Pledge and Security Agreement
(the “Security Agreement” and, together with each other
agreement purporting to create a lien in favor of the Collateral
Agent (as defined below) for the benefit of the holders of the
First Priority Notes or the holders of the Second Priority Notes,
the “Security Documents”), to be dated as of the
Closing Date, by and among the Issuers, the Trustees and the
Collateral Agent. In connection with the issuance of the
Securities, the Company will also borrow $325,000,000 aggregate
principal amount of first priority term loans (the “First
Priority Term Loans”) having terms and conditions
substantially identical to the terms of the First Priority Notes
pursuant to a new term loan facility. The Company intends to apply
the net proceeds from the sale of the Securities and the borrowing
of the First Priority Term Loans to the purchase of all of its
outstanding senior secured floating rate notes due 2010, 12
1/4 % senior subordinated
discount notes due 2009 and 10 3/4 % senior subordinated notes due 2008
(together, the “Existing Notes”) pursuant to the offer
to purchase the Existing Notes made by the Company (the
“Tender Offer”) under the offer to purchase and consent
solicitation statement, dated December 1, 2005 (the
“Offer to Purchase”). The issuance and sale of the
Securities, the borrowing of the First Priority Term Loans, the
granting of the security interests in favor of the Collateral Agent
under the Security Documents and the consummation of the Tender
Offer and the other transactions contemplated by the Offer to
Purchase are sometimes hereinafter collectively referred to as the
“Transactions.” To the extent there are no additional
parties listed on Schedule I other than you, the term
Representatives as used herein shall mean you as the Initial
Purchasers, and the terms Representatives and Initial Purchasers
shall mean either the singular or plural as the context requires.
The use of the neuter in this Agreement shall include the feminine
and masculine wherever appropriate. Certain terms used herein are
defined in Section 17 hereof.
The sale of the Securities to the
Initial Purchasers will be made without registration of the
Securities under the Act in reliance upon exemptions from the
registration requirements of the Act.
In connection with the sale of the
Securities, the Company has prepared a preliminary offering
memorandum, dated December 6, 2005 (the “Initial
Preliminary Memorandum”), as supplemented and superseded by a
supplemental preliminary memorandum dated December 19, 2005
(the “Supplemental Preliminary Memorandum,” and
together with the Initial Preliminary Memorandum, the
“Preliminary Memorandum”), and has prepared and
delivered to each Initial Purchaser copies of a Pricing Supplement
(the “Pricing Supplement”), dated December 19,
2005 containing pricing information with respect to the Securities
and such other changes from the Supplemental Preliminary Memorandum
as may be mutually agreed among the Company and the
Representatives. As used herein, “Offering Memorandum”
shall mean, with respect to any date or time referred to in this
Agreement, the Preliminary Memorandum, as supplemented by the
Pricing Supplement. Promptly after the Execution Time and in any
event no later than the second Business Day following the Execution
Time, the Company will prepare and deliver to each Initial
Purchaser a Final Offering Memorandum (the “Final
Memorandum”), which will consist of the Supplemental
Preliminary Memorandum with such changes therein as are required to
reflect the information contained in the Pricing Supplement, and
from and after the time such Final Memorandum is delivered to each
Initial Purchaser, all references herein to the Offering Memorandum
shall be deemed a reference to both the Offering Memorandum and the
Final Memorandum. Each of the Offering Memorandum and the Final
Memorandum sets forth certain information concerning the Issuers
and the Securities. Each Issuer hereby confirms that it has
authorized the use of the Offering Memorandum and the Final
Memorandum, and any amendment or supplement thereto, in connection
with the offer and sale of the Securities by the Initial
Purchasers.
1. Representations and
Warranties . The Issuers, jointly and severally, represent and
warrant to each Initial Purchaser as set forth below in this
Section 1:
(a) Neither
the Initial Preliminary Memorandum, at the date thereof, nor the
Supplemental Preliminary Memorandum, at the date thereof, contained
any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. At the Execution Time and on the Closing Date, the
Offering Memorandum did not, and will not (and any amendment or
supplement thereto, at the date thereof and at the Closing Date,
will not), contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided , however , that the
Issuers make no representation or warranty as to the information
contained in or omitted from the Preliminary Memorandum or the
Offering Memorandum, or any amendment or supplement thereto, in
reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of the Initial Purchasers
through the Representatives specifically for inclusion therein.
(b) None of
the Issuers nor any of their Affiliates nor any person acting on
behalf of any of them has, directly or indirectly, made offers or
sales of any security, or solicited offers to buy any security,
under circumstances that would require the registration of the
Securities under the Act.
(c) None of
the Issuers nor any of their Affiliates nor any person acting on
behalf of any of them has engaged in any form of general
solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the
Securities in the United States.
(d) The
Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Act.
(e) None of
the Issuers nor any of their Affiliates nor any person acting on
behalf of any of them has engaged in any directed selling efforts
with respect to the Securities, and each of them has complied with
the offering restrictions requirement of Regulation S. Terms
used in this paragraph have the meanings given to them by
Regulation S.
(f) The
Company has been advised by the NASD’s PORTAL Market that the
Securities have been designated PORTAL-eligible securities in
accordance with the rules and regulations of the NASD.
(g) No
Issuer is, and after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described
in the Offering Memorandum, no Issuer will be, an “investment
company” within the meaning of the Investment Company Act,
without taking account of any exemption arising out of the number
of holders of the Company’s securities.
(h) The
Company is subject to and in full compliance with the reporting
requirements of Section 13 or Section 15(d) of the Exchange
Act.
(i) No
Issuer has paid or agreed to pay to any person any compensation for
soliciting another to purchase any Securities (except as
contemplated by this Agreement).
(j) No
Issuer has taken, directly or indirectly, any action designed to
cause or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise,
in the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the
Securities.
(k) Each of
the Issuers has been duly incorporated or organized and is validly
existing as a corporation, limited liability company or limited
partnership in good standing under the laws of the jurisdiction in
which it is chartered or organized with full corporate, limited
liability company or partnership power and authority to own or
lease, as the case may be, and to operate its properties and
conduct its business as described in the Offering Memorandum, and
is duly qualified to do business as a foreign corporation, limited
liability company or partnership and is in good standing under the
laws of each jurisdiction which requires such qualification, except
where the failure to be so qualified would not reasonably be
expected to have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole.
Except as set forth on Schedule II hereto, the Company has no
subsidiaries other than the Guarantors.
(l) With
respect to those Guarantors which are corporations, all the
outstanding shares of capital stock of each Guarantor have been
duly and validly authorized and issued and are fully paid and
nonassessable, and all outstanding shares of capital stock of the
Guarantors are owned by the Company either directly or through
other wholly owned Guarantors and on the Closing Date such
ownership is free and clear of any perfected security interest or
any other security interests, claims, liens or encumbrances except
for Permitted Liens (as defined in the Offering Memorandum).
(m) The
statements in the Offering Memorandum under the headings
“Description of Material Indebtedness and Preferred
Stock,” “Description of the Notes” and
“Important Federal Income Tax Considerations” fairly
summarize the matters therein described.
(n) This
Agreement has been duly authorized, executed and delivered by each
Issuer; each Indenture has been duly authorized and, assuming due
authorization, execution and delivery thereof by the applicable
Trustee, when executed and delivered by each Issuer, will
constitute a legal, valid and binding instrument enforceable
against each Issuer in accordance with its terms (subject, as to
the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors’ rights generally from time to time in effect and
to general principles of equity); the Securities have been duly
authorized, and, when executed and, in the case of the Notes,
authenticated, in accordance with the provisions of the applicable
Indenture and delivered to and paid for by the Initial Purchasers,
will have been duly executed and delivered by the Company and each
Guarantor, as applicable, and will constitute the legal, valid and
binding obligations of the Company and each Guarantor, as
applicable, entitled to the benefits of the applicable Indenture
(subject, as to the enforcement of remedies, to applicable
bankruptcy, insolvency, moratorium or other laws affecting
creditors’ rights generally from time to time in effect and
to general principles of equity); and each Security Document has
been duly authorized and, when executed and delivered by the
applicable Issuers, the Trustees and the Collateral Agent, will
constitute the legal, valid, binding and enforceable agreement of
each Issuer (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors’ rights generally from time to
time in effect and to general principles of equity). The Security
Documents, when executed and delivered in connection with the sale
of the Securities, will create in favor of the Collateral Agent for
the benefit of the First Priority Secured Parties (as defined in
the Security Agreement), valid and enforceable first priority,
subject to Permitted Liens, security interests in the Collateral
and valid and enforceable second priority, subject to Permitted
Liens, security interests in the Collateral and, upon the filing of
appropriate Uniform Commercial Code financing statements and the
taking of the other actions described in the Security Documents,
the security interests for the benefit of the First Priority
Secured Parties in the rights of the Issuers in such Collateral
will be perfected and superior to and prior to the liens for the
benefit of the Second Priority Secured Parties and of all other
third persons other than Permitted Liens and the security interests
for the benefit of the Second Priority Secured Parties in the
rights in the Collateral of the Issuers will be perfected and
junior to the liens for the benefit of the First Priority Secured
Parties but superior to and prior to the liens of all other third
persons other than Permitted Liens.
(o) No
consent, approval, authorization, filing with or order of any court
or governmental agency or body is required in connection with the
execution of this Agreement, the Indentures or the Security
Documents or the consummation of the Transactions, or the
fulfillment of the terms hereof or thereof, except such as may be
required under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the Initial
Purchasers in the manner contemplated herein and in the Offering
Memorandum and filings required to be made by the Security
Agreement in order to perfect the liens created by the Security
Agreement.
(p) Neither
the execution and delivery of the Indentures, this Agreement or any
Security Document, the issue and sale of the Securities, nor the
consummation of any of the Transactions, nor the fulfillment of the
terms hereof or thereof will conflict with, or result in a breach
or violation or imposition of any lien, charge or encumbrance
(other than the liens created by the Security Documents) upon any
property or assets of the Company or any of its subsidiaries
pursuant to, (i) the charter (including any certificates of
designation), by-laws or other organizational documents of the
Company or any of its subsidiaries; (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or any of
its subsidiaries is a party or bound or to which its or their
property is subject; or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or
any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its
subsidiaries or any of its or their properties.
(q) The
consolidated historical financial statements and schedules of the
Company and its consolidated subsidiaries included in the Offering
Memorandum present fairly in all material respects the financial
condition, results of operations and cash flows of the Company as
of the dates and for the periods indicated, comply as to form with
the applicable accounting requirements of the Act and have been
prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein); the selected
financial data set forth under the captions “Summary
Consolidated Financial and Other Data” and “Selected
Consolidated Financial and Other Data” in the Offering
Memorandum fairly present, on the basis stated in the Offering
Memorandum, the information included therein.
(r) Except
as set forth in the Offering Memorandum, no action, suit or
proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its
subsidiaries or its or their property is pending or, to the
knowledge of the Issuers, threatened that (i) could reasonably
be expected to have a material adverse effect on the performance of
this Agreement, the Indentures or the Security Documents, or the
consummation of the Transactions; or (ii) could reasonably be
expected to have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business.
(s) Each of
the Company and its subsidiaries owns or leases all such properties
as are used in the conduct of its operations as presently
conducted, except where the failure to own or lease such properties
would not reasonably be expected to have a material adverse effect
on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken
as a whole.
(t) Neither
the Company nor any subsidiary is in violation or default of
(i) any provision of its charter (including any certificates
of designation), by-laws or other organizational documents;
(ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which it is a
party or bound or to which its property is subject; or (iii) any
statute, law, rule, regulation, judgment, order or decree
applicable to the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company
or such subsidiary or any of its properties, as applicable, except
in the case of each of clauses (ii) and (iii) for such
violations or defaults which would not reasonably be expected to
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, except as set forth
in or contemplated in the Offering Memorandum.
(u) Ernst
& Young LLP, who has certified certain financial statements of
the Company and its consolidated subsidiaries and delivered its
reports with respect to the audited consolidated financial
statements included in the Offering Memorandum, and Rachlin Cohen
& Holtz LLP are, in the case of Rachlin, Cohen & Holtz LLP,
and were prior to May 25, 2005, in the case of Ernst &
Young LLP, independent certified public accountants with respect to
the Company within the meaning of the Act and the applicable
published rules and regulations thereunder.
(v) There
are no stamp or other issuance or transfer taxes or duties or other
similar fees or charges required to be paid in connection with the
execution and delivery of this Agreement or the issuance or sale by
the Issuers of the Securities.
(w) The
Issuers have filed all foreign, federal, state and local tax
returns that are required to be filed or have requested extensions
thereof, except in any case in which the failure so to file would
not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Offering Memorandum
and have paid all taxes required to be paid by them and any other
assessment, fine or penalty levied against any of them, to the
extent that any of the foregoing are due and payable, except for
any such assessment, fine or penalty that is currently being
contested in good faith or as would not have a material adverse
effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Offering Memorandum.
(x) No labor
problem or dispute with the employees of the Company or any of its
subsidiaries exists or is threatened or imminent, and no Issuer is
aware of any existing or imminent labor disturbance by the
employees of any of its or its subsidiaries’ principal
suppliers, contractors or customers, that could have a material
adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Offering Memorandum.
(y) The
Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses
in which they are engaged; all policies of insurance and fidelity
or surety bonds insuring the Company or any of its subsidiaries or
their respective businesses, assets, employees, officers and
directors are in full force and effect; the Company and its
subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by
the Company or any of its subsidiaries under any such policy or
instrument as to which any insurance company is denying liability
or defending under a reservation of rights clause, where the
failure of the Company or such subsidiary to prevail on such claim
would reasonably be expected to have a material adverse effect on
the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken
as a whole; and neither the Company nor any such subsidiary has any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a material
adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, as to each of the
foregoing clauses of this sentence except as set forth in or
contemplated in the Offering Memorandum.
(z) No
subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making
any other distribution on such subsidiary’s capital stock,
from repaying to the Company any loans or advances to such
subsidiary from the Company or from transferring any of such
subsidiary’s property or assets to the Company or any other
subsidiary of the Company, except as described in or contemplated
by the Offering Memorandum.
(aa) The
Company and its subsidiaries possess all licenses, certificates,
franchises, permits and other authorizations
(“Licenses”) issued by the appropriate federal, state,
local or foreign regulatory authorities, including, without
limitation, Licenses from the United States Federal Communications
Commission (the “FCC”), necessary to own their
respective properties and to conduct their respective businesses in
all material respects, and neither the Company nor any such
subsidiary has received any notice of proceedings relating to the
revocation or modification of any such License which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Offering
Memorandum; the Company and each of its subsidiaries have fulfilled
and performed in all material respects all of their respective
obligations with respect to such Licenses and no event has occurred
that allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holders of any such License, except
as individually or in the aggregate could not reasonably be
expected to have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business; and except as described in the Offering Memorandum, none
of such Licenses contains any restriction that is materially
burdensome to the Company or any of its subsidiaries, taken as a
whole. There are no license renewal or rate or tariff proceedings
existing, pending or, to the best knowledge of the Company,
threatened that could reasonably be expected to have a material
adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole.
(bb) The
Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(cc) The
Company and its subsidiaries are (i) in compliance with any
and all applicable federal, state, local and foreign laws and
regulations relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (“Environmental Laws”);
(ii) have received and are in compliance with all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and
(iii) have not received notice of any actual or potential
liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or
contaminants, except where such non-compliance with Environmental
Laws, failure to receive required permits, licenses or other
approvals, or liability would not, individually or in the
aggregate, have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Offering
Memorandum; except as set forth in the Offering Memorandum, neither
the Company nor any of its subsidiaries has been named as a
“potentially responsible party” under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended.
(dd) The
Company has reasonably concluded that the costs and liabilities
associated with the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries
(including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or
compliance with Environmental Laws, or any permit, license or
approval under Environmental Laws, any related constraints on
operating activities imposed by Environmental Laws and any
potential liabilities to third parties under Environmental Laws)
would not, singly or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Offering Memorandum.
(ee) Each of
the Company and its subsidiaries has fulfilled its obligations, if
any, under the minimum funding standards of Section 302 of the
United States Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), and the regulations and published
interpretations thereunder with respect to each “plan”
(as defined in Section 3(3) of ERISA and such regulations and
published interpretations) in which employees of the Company and
its subsidiaries are eligible to participate and each such plan is
in compliance in all material respects with the presently
applicable provisions of ERISA and such regulations and published
interpretations; the Company and its subsidiaries have not incurred
any unpaid liability to the Pension Benefit Guaranty Corporation
(other than for the payment of premiums in the ordinary course) or
to any such plan under Title IV of ERISA.
(ff) Each of
the relationships and transactions specified in Item 404 of
Regulation S-K that would have been required to be described
in a prospectus if this offering had been registered under the Act
has been so described in the Offering Memorandum.
(gg) The
Company and its subsidiaries own, possess, license or have other
rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service mark
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
necessary for and material to the conduct of the Company’s
business as described in the Offering Memorandum (collectively, the
“Intellectual Property”). Except as set forth in the
Offering Memorandum, (a) there are no conflicting rights of
third parties with respect to any such Intellectual Property; (b)
there is no material infringement by third parties of any such
Intellectual Property; (c) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or
claim by others challenging the Company’s rights in or to any
such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim;
(d) there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property, and the
Company is unaware of any facts which would form a reasonable basis
for any such claim; (e) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or
claim by others that the Company infringes or otherwise violates
any patent, trademark, copyright, trade secret or other proprietary
rights of others, which if determined adversely to the Company,
individually or in the aggregate, would have a material adverse
effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, and the Company is unaware of any
other fact which would form a reasonable basis for any such claim;
(f) there is no U.S. patent or published U.S. patent
application which contains claims that dominate or may dominate any
Intellectual Property described in the Offering Memorandum as being
owned by or licensed to the Company or that interferes with the
issued or pending claims of any such Intellectual Property; and
(g) there is no prior art of which the Company is aware that
may render any U.S. patent held by the Company invalid or any U.S.
patent application held by the Company unpatentable which has not
been disclosed to the U.S. Patent and Trademark Office.
(hh) Based
upon a review of the FCC files, (a) the Company and its
subsidiaries hold the broadcast licenses issued by the FCC with
respect to each of the stations set forth in the table under
“Business—Distribution” in the Offering
Memorandum (except for stations which the Offering Memorandum
discloses are operated by the Company or its subsidiaries under
time brokerage agreements with the station owners and except as
otherwise disclosed therein) without which the station would not be
permitted to broadcast its signal (the “FCC Licenses”)
and (b) each of the FCC Licenses authorizes television
broadcast operations by the holder thereof using the broadcast
channel assignment and serving the community of license that is
identified in such table.
(ii) To each
Issuer’s knowledge, there is no order, judgment, decree,
notice of apparent liability, or order of forfeiture outstanding,
and no petition, objection, notice of apparent liability, order of
forfeiture, investigation, complaint, or other proceeding pending
before the FCC against the stations authorized by the FCC Licenses
set forth in the table referred to in clause (hh) above (the
“Stations”) or the FCC Licenses that reasonably could
be expected to result in the termination, revocation, suspension,
or denial of renewal of any of the FCC Licenses, except for rule
making and other similar proceedings generally applicable to the
television broadcasting industry or substantial segments
thereof.
(jj) To each
Issuer’s knowledge, except as set forth in the Offering
Memorandum, (a) there are no license renewal proceedings (other
than applications for renewal filed in the ordinary course) pending
for any of the FCC Licenses; and (b) none of the FCC Licenses
is subject to any condition imposed by the FCC that reasonably
could be expected to have a material adverse effect on the
Company’s ability to conduct its broadcast operations as
described in the Offering Memorandum, taken as a whole.
(kk) The
execution, delivery and performance of this Agreement, the Security
Agreement and the Indentures and the issuance, sale and delivery of
the Securities pursuant to this Agreement and the consummation of
the other Transactions (A) do not require any consent or
authorization from the FCC, and (B) do not constitute a
violation of the Communications Act or the published rules and
regulations of the FCC promulgated thereunder.
(ll) The
statements in the Offering Memorandum under the captions
“Risk Factors—Risks Relating to Our Business — We
are required by the FCC to abandon the analog broadcast service of
22 of our full power stations occupying the 700 MHz spectrum, and
the digital broadcast service of two stations occupying the 700 MHz
spectrum, and may suffer adverse consequences if we are unable to
secure alternative distribution on reasonable terms,”
“Risk Factors—Risks Relating to Our Business—We
could be adversely affected by actions of the FCC, the U.S.
Congress and the courts that could alter broadcast television
ownership rules in a way that would materially affect our present
operations or future business alternatives,” “Risk
Factors—Risks Relating to Our Industry — Our business
is subject to extensive and changing regulation that could increase
our costs, expose us to greater competition, or otherwise adversely
affect the ownership and operation of our stations or our business
strategies,” “Risks Factors — Risks Relating to
Our Industry — We believe that the success of our television
operations depends to a significant extent upon access to
households served by cable television systems. If the law requiring
cable system operators to carry our signal were to change, we might
lose access to cable television households, which could adversely
affect our operations” and “Business — Federal
Regulation of Broadcasting,” insofar as they constitute
summaries of laws and the published rules and regulations
promulgated thereunder, fairly summarize the matters therein
described and are accurate in all material respects.
(mm) There
are no restrictions or limitations imposed by the FCC on the
ability of the Company to make cash payments in respect of the
Securities in accordance with their terms.
(nn) The
Issuers believe that the Issuers and their directors or officers,
in their capacities as such, are in compliance in all material
respects with the applicable provisions of the Sarbanes-Oxley Act
of 2002 and the rules and regulations promulgated in connection
therewith (the “Sarbanes-Oxley Act”), including
Section 402 related to loans and Sections 302 and 906
related to certifications.
(oo) The
Issuers have taken all actions necessary for the First Priority
Notes to be designated as Designated Senior Debt under each class
of the Company’s subordinated debt.
Any certificate signed by any
officer of the Company and delivered to the Representatives or
counsel for the Initial Purchasers in connection with the offering
of the Securities shall be deemed a representation and warranty by
the Company, as to matters covered thereby, to each Initial
Purchaser. Additionally, the representations and warranties made by
the Issuers in the Security Agreement shall be deemed to have been
made to the Initial Purchasers.
2. Purchase and Sale .
Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company and
the Guarantors agree to sell to each Initial Purchaser, and each
Initial Purchaser agrees, severally and not jointly, to purchase
from the Company and the Guarantors, at a purchase price of
(A) 97.625% of the principal amount thereof, plus accrued
interest from December 30 to the Closing Date, the principal
amount of First Priority Notes set forth opposite such Initial
Purchaser’s name in Schedule I hereto and (B) 97.5%
of the principal amount thereof, plus accrued interest from
December 30, 2005 to the Closing Date, the principal amount of
Second Priority Notes set forth opposite such Initial
Purchaser’s name in Schedule I hereto.
3. Delivery and Payment
. Delivery of and payment for the Securities shall be made at 9:00
A.M., New York City time, on December 30, 2005, which date and
time may be postponed by agreement between the Representatives and
the Company or as provided in Section 9 hereof (such date and
time of delivery and payment for the Securities being herein called
the “Closing Date”). Delivery of the Securities shall
be made to the Representatives for the respective accounts of the
several Initial Purchasers against payment by the several Initial
Purchasers through the Representatives of the purchase price
thereof to or upon the order of the Company by wire transfer
payable in same-day funds to the account specified by the Company.
Delivery of the Securities shall be made through the facilities of
The Depository Trust Company unless the Representatives shall
otherwise instruct.
4. Offering by Initial
Purchasers .
(a) Each
Initial Purchaser acknowledges that 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 pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Act.
(b) Each Initial Purchaser,
severally and not jointly, represents and warrants to and agrees
with the Issuers that:
(i) it has
not offered or sold, and will not offer or sell, any Securities
within the United States or to, or for the account or benefit of,
U.S. persons (x) as part of its distribution at any time or
(y) otherwise until 40 days after the later of the
commencement of the offering and the date of closing of the
offering except:
(A) to those
it reasonably believes to be “qualified institutional
buyers” (as defined in Rule 144A under the Act) or
(B) in
accordance with Rule 903 of Regulation S;
(ii) neither
it nor any person acting on its behalf has made or will make offers
or sales of the Securities in the United States by means of any
form of general solicitation or general advertising (within the
meaning of Regulation D) in the United States;
(iii) in
connection with each sale pursuant to Section 4(b)(i)(A), it
has taken or will take reasonable steps to ensure that the
purchaser of such Securities is aware that such sale is being made
in reliance on Rule 144A;
(iv) neither
it nor any of its Affiliates nor any person acting on its or their
behalf has engaged or will engage in any directed selling efforts
(within the meaning of Regulation S) with respect to the
Securities;
(v) it has
not entered and will not enter into any contractual arrangement
with any distributor (within the meaning of Regulation S) with
respect to the distribution of the Securities, except with its
affiliates or with the prior written consent of the Company;
(vi) it and
its Affiliates have complied and will comply with the offering
restrictions requirement of Regulation S;
(vii) at or
prior to the confirmation of a sale of the Securities (other than a
sale of Securities pursuant to Section 4(b)(i)(A) of this
Agreement), it shall have sent to each distributor, dealer or
person receiving a selling concession, fee or other remuneration
that purchases Securities from it during the distribution
compliance period (within the meaning of Regulation S) 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 “Act”) and may not be
offered or 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 date of closing
of the offering, except in either case in accordance with
Regulation S or Rule 144A under the Act. Terms used in
this paragraph have the meanings given to them by
Regulation S.
(viii) it
has not offered or sold and, prior to the date six months after the
date of issuance of the Securities, 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 as 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;
(ix) it has
complied and will comply with all applicable provisions of the FSMA
with respect to anything done by it in relation to the Securities
in, from or otherwise involving the United Kingdom;
(x) it has
only communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
section 21 of the FSMA) received by it in connection with the issue
or sale of any Securities, in circumstances in which section 21(1)
of the FSMA does not apply to the Company;
(xi) it is a
person whose ordinary activities involve it in acquiring, holding,
managing or disposing of investments (as principal or agent) for
the purposes of its business and it has not offered or sold and
will not offer or sell any Securities other than 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 who it is reasonable to expect will acquire,
hold, manage or dispose of investments (as principal or agent) for
the purposes of their businesses where the issue of the Securities
would otherwise constitute a contravention of section 19 of the
FSMA by the Company; and
(xii) it is
an “accredited investor” (as defined in Rule 501(a) of
Regulation D).
5. Agreements . Each
Issuer agrees with each Initial Purchaser that:
(a) The
Company will furnish to each Initial Purchaser and to counsel for
the Initial Purchasers, without charge, during the period referred
to in paragraph (c) below, as many copies of the Final
Memorandum and any amendments and supplements thereto as they may
reasonably request.
(b) The
Company will not amend or supplement the Offering Memorandum
without the prior written consent of the Representatives.
(c) If at
any time prior to the completion of the sale of the Securities by
the Initial Purchasers (as determined by the Representatives), any
event occurs as a result of which the Offering Memorandum, as then
amended or supplemented, would include any untrue statement of a
material fact or omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it should be necessary
to amend or supplement the Offering Memorandum to comply with
applicable law, the Company promptly (i) will notify the
Representatives of any such event; (ii) subject to the requirements
of paragraph (b) of this Section 5, will prepare an
amendment or supplement that will correct such statement or
omission or effect such compliance; and (iii) will supply any
supplemented or amended Offering Memorandum to the several Initial
Purchasers and counsel for the Initial Purchasers without charge in
such quantities as they may reasonably request.
(d) The
Company will arrange, if necessary, for the qualification of the
Securities for sale by the Initial Purchasers under the laws of
such jurisdictions as the Representatives may designate and will
maintain such qualifications in effect so long as required for the
sale of the Securities; provided that in no event shall any
Issuer be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action
