Exhibit 10.1

 

 

$400,000,000

Graham Holdings Company

5.750% Senior Notes due 2026

Purchase Agreement

May 24, 2018

J.P. Morgan Securities LLC
  As Representative of the
  several Initial Purchasers listed
  in Schedule 1 hereto
c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179

Ladies and Gentlemen:

Graham Holdings Company, a Delaware corporation (the “Company”), proposes to
issue and sell to the several initial purchasers listed in Schedule 1 hereto
(the “Initial Purchasers”), for whom you are acting as representative (the
“Representative”), $400,000,000 principal amount of its 5.750% Senior Notes due
2026 (the “Securities”).  The Securities will be issued pursuant to an Indenture
to be dated as of May 30, 2018 (the “Indenture”), among the Company, the
guarantors listed in Schedule 2 hereto (the “Guarantors”) and The Bank of New
York Mellon Trust Company, N.A., as trustee (the “Trustee”), and will be
guaranteed on an unsecured senior basis by each of the Guarantors (the
“Guarantees”).

The Company and the Guarantors hereby confirm their agreement with the several
Initial Purchasers concerning the purchase and resale of the Securities, as
follows:

1.
Offering Memorandum and Transaction Information.

The Securities will be sold to the Initial Purchasers without being registered
under the Securities Act of 1933, as amended (the “Securities Act”), in reliance
upon an exemption therefrom.  The Company and the Guarantors have prepared a
preliminary offering memorandum dated May 21, 2018 (the “Preliminary Offering
Memorandum”) and will prepare an offering memorandum dated the date hereof (the
“Offering Memorandum”) setting forth information concerning the Company, the
Guarantors and the Securities.  Copies of the Preliminary Offering Memorandum
have been, and copies of the Offering Memorandum will be, delivered by the
Company to the Initial Purchasers pursuant to the terms of this purchase
agreement (the “Agreement”).  The Company hereby confirms that it has authorized
the use of the Preliminary Offering Memorandum, the other Time of Sale
Information (as defined below) and the Offering Memorandum in connection with
the offering and resale of the Securities by the Initial Purchasers in the
manner contemplated by this Agreement.  References herein to the Preliminary
Offering Memorandum, the Time of Sale Information and the Offering Memorandum
shall be deemed to refer to and include any document incorporated by reference
therein and any reference to “amend,” “amendment” or “supplement” with respect
to the Preliminary Offering Memorandum or the Offering Memorandum shall be
deemed to refer to and include any documents filed after such date and
incorporated by reference therein.  Capitalized terms used but not defined
herein shall have the meanings given to such terms in the Preliminary Offering
Memorandum.
 
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At or prior to the time when sales of the Securities were first made (the “Time
of Sale”), the Company had prepared the following information (collectively, the
“Time of Sale Information”): the Preliminary Offering Memorandum, as
supplemented and amended by the written communications listed on Annex A hereto.

The Company intends to use the proceeds of the offering of the Securities to
redeem the Company’s existing 7.250% Notes due February 1, 2019.

2.            Purchase and Resale of the Securities.

(a)            The Company agrees to issue and sell the Securities to the
several Initial Purchasers as provided in this Agreement, and each Initial
Purchaser, on the basis of the representations, warranties and agreements set
forth herein and subject to the conditions set forth herein, agrees, severally
and not jointly, to purchase from the Company the respective principal amount of
Securities set forth opposite such Initial Purchaser’s name in Schedule 1 hereto
at a price equal to 98.875% of the principal amount thereof plus accrued
interest, if any, from May 30, 2018 to the Closing Date.  The Company will not
be obligated to deliver any of the Securities except upon payment for all the
Securities to be purchased as provided herein.

(b)            The Company understands that the Initial Purchasers intend to
offer the Securities for resale on the terms set forth in the Time of Sale
Information.  Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:

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(i)            it is a qualified institutional buyer within the meaning of Rule
144A under the Securities Act (a “QIB”) and an accredited investor within the
meaning of Rule 501(a) of Regulation D under the Securities Act (“Regulation
D”);

(ii)            it has not solicited offers for, or offered or sold, and will
not solicit offers for, or offer or sell, the Securities by means of any form of
general solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D or in any manner involving a public offering within the meaning of
Section 4(a)(2) of the Securities Act; and

(iii)            it has not solicited offers for, or offered or sold, and will
not solicit offers for, or offer or sell, the Securities as part of their
initial offering except:

(A)            to persons whom it reasonably believes to be QIBs in transactions
pursuant to Rule 144A under the Securities Act (“Rule 144A”) and in connection
with each such sale, it has taken or will take reasonable steps to ensure that
the purchaser of the Securities is aware that such sale is being made in
reliance on Rule 144A; or

(B)            in accordance with the restrictions set forth in Annex C hereto.

(c)            Each Initial Purchaser acknowledges and agrees that the Company
and, for purposes of the “no registration” opinions to be delivered to the
Initial Purchasers pursuant to Sections 6(f) and 6(g), counsel for the Company
and counsel for the Initial Purchasers, respectively, may rely upon the accuracy
of the representations and warranties of the Initial Purchasers, and compliance
by the Initial Purchasers with their agreements, contained in paragraph (b)
above (including Annex C hereto), and each Initial Purchaser hereby consents to
such reliance.

(d)            The Company and each Guarantor acknowledges and agrees that the
Initial Purchasers may offer and sell Securities to or through any affiliate of
an Initial Purchaser and that any such affiliate may offer and sell Securities
purchased by it to or through any Initial Purchaser.

(e)            Payment for and delivery of the Securities will be made at the
offices of Simpson Thacher & Bartlett LLP at 10:00 A.M., New York City time, on
May 30, 2018, or at such other time or place on the same or such other date, not
later than the fifth business day thereafter, as the Representative and the
Company may agree upon in writing.  The time and date of such payment and
delivery is referred to herein as the “Closing Date.”

(f)            Payment for the Securities shall be made by wire transfer in
immediately available funds to the account(s) specified by the Company to the
Representative against delivery to the nominee of The Depository Trust Company
(“DTC”), for the account of the Initial Purchasers, of one or more global notes
representing the Securities (collectively, the “Global Note”), with any transfer
taxes payable in connection with the sale of the Securities duly paid by the
Company.  The Global Note will be made available for inspection by the
Representative not later than 1:00 P.M., New York City time, on the business day
prior to the Closing Date.
 

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(g)            The Company and the Guarantors acknowledge and agree that each
Initial Purchaser is acting solely in the capacity of an arm’s length
contractual counterparty to the Company and the Guarantors with respect to the
offering of Securities contemplated hereby (including in connection with
determining the terms of the offering) and not as a financial advisor or a
fiduciary to, or an agent of, the Company, the Guarantors or any other person. 
Additionally, neither the Representative nor any other Initial Purchaser are
advising the Company, the Guarantors or any other person as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction.  The Company
and the Guarantors shall consult with their own advisors concerning such matters
and shall be responsible for making their own independent investigation and
appraisal of the transactions contemplated hereby, and the Initial Purchasers
shall have no responsibility or liability to the Company or the Guarantors with
respect thereto. Any review by the Representative or any Initial Purchaser of
the Company, the Guarantors, and the transactions contemplated hereby or other
matters relating to such transactions will be performed solely for the benefit
of the Representative or such Initial Purchaser, as the case may be, and shall
not be on behalf of the Company, the Guarantors or any other person.

3.            Representations and Warranties of the Company and the Guarantors. 
The Company and the Guarantors jointly and severally represent and warrant to
each Initial Purchaser that:

(a)            Preliminary Offering Memorandum, Time of Sale Information and
Offering Memorandum.  The Preliminary Offering Memorandum, as of its date, did
not, the Time of Sale Information, at the Time of Sale, did not, and at the
Closing Date, will not, and the Offering Memorandum, in the form first used by
the Initial Purchasers to confirm sales of the Securities and as of the Closing
Date, will not, contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that
the Company and the Guarantors make no representation or warranty with respect
to any statements or omissions made in reliance upon and in conformity with
information relating to any Initial Purchaser furnished to the Company in
writing by such Initial Purchaser through the Representative expressly for use
in the Preliminary Offering Memorandum, the Time of Sale Information or the
Offering Memorandum.
 

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(b)            Additional Written Communications.  The Company and the
Guarantors (including their agents and representatives, other than the Initial
Purchasers in their capacity as such) have not prepared, made, used, authorized,
approved or referred to and will not prepare, make, use, authorize, approve or
refer to any written communication that constitutes an offer to sell or
solicitation of an offer to buy the Securities (each such communication by the
Company and the Guarantors or their agents and representatives (other than a
communication referred to in clauses (i) and (ii) below) an “Issuer Written
Communication”) other than (i) the Preliminary Offering Memorandum, (ii) the
Offering Memorandum, (iii) the documents listed on Annex A hereto, including a
term sheet substantially in the form of Annex B hereto, which constitute part of
the Time of Sale Information, and (iv) any electronic road show or other written
communications, in each case used in accordance with Section 4(c) hereof.  Each
such Issuer Written Communication, when taken together with the Time of Sale
Information at the Time of Sale, did not, and at the Closing Date will not,
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company and the Guarantors make no representation or warranty with respect to
any statements or omissions made in each such Issuer Written Communication in
reliance upon and in conformity with information relating to any Initial
Purchaser furnished to the Company in writing by such Initial Purchaser through
the Representative expressly for use in any Issuer Written Communication.

(c)            Incorporated Documents.  The documents incorporated by reference
in each of the Time of Sale Information and the Offering Memorandum, when they
were filed with the Commission, conformed or will conform, as the case may be,
in all material respects to the requirements of the Exchange Act, and the rules
and regulations of the Commission thereunder, and did not and will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

(d)            Financial Statements.  The financial statements and the related
notes thereto included or incorporated by reference in each of the Time of Sale
Information and the Offering Memorandum present fairly the financial position of
the Company and its subsidiaries as of the dates indicated and the results of
their operations and the changes in their cash flows for the periods specified;
such financial statements have been prepared in conformity with generally
accepted accounting principles (“GAAP”) applied on a consistent basis throughout
the periods covered thereby; and the other financial information included or
incorporated by reference in each of the Time of Sale Information and the
Offering Memorandum has been derived from the accounting records of the Company
and its subsidiaries and presents fairly the information shown thereby. The
interactive data in eXtensible Business Reporting Language included or
incorporated by reference in each of the Preliminary Offering Memorandum, the
Time of Sale Information and the Offering Memorandum fairly presents the
information called for in all material respects and is prepared in accordance
with the Commission’s rules and guidelines applicable thereto.
 

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(e)            No Material Adverse Change.  Since the date of the most recent
financial statements of the Company included or incorporated by reference in
each of the Time of Sale Information and the Offering Memorandum (i) there has
not been any change in the capital stock or long-term debt of the Company or any
of its subsidiaries, or any dividend or distribution of any kind declared, set
aside for payment, paid or made by the Company on any class of capital stock, or
any material adverse change, or any development involving a prospective material
adverse change, in or affecting the business, properties, management, financial
position, results of operations or prospects of the Company and its subsidiaries
taken as a whole; (ii) neither the Company nor any of its subsidiaries has
entered into any transaction or agreement that is material to the Company and
its subsidiaries taken as a whole or incurred any liability or obligation,
direct or contingent, that is material to the Company and its subsidiaries taken
as a whole; and (iii) neither the Company nor any of its subsidiaries has
sustained 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 disturbance or dispute or any action, order or decree of any court or
arbitrator or governmental or regulatory authority, except in each case as
otherwise disclosed in each of the Time of Sale Information and the Offering
Memorandum.

(f)            Organization and Good Standing.  The Company, each Guarantor and
each of its significant subsidiaries, as defined in Rule 1-02 of Regulation S-X
under the Exchange Act, have been duly organized and are validly existing and in
good standing under the laws of their respective jurisdictions of organization,
are duly qualified to do business and are in good standing in each jurisdiction
in which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to be so
qualified, in good standing or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on the
business, properties, management, financial position, results of operations or
prospects of the Company and its subsidiaries taken as a whole or on the
performance by the Company and the Guarantors of their obligations under this
Agreement, the Securities and the Guarantees (a “Material Adverse Effect”). The
subsidiaries listed in Schedule 3 to this Agreement are the only significant
subsidiaries of the Company.

(g)            Capitalization.  The Company has the capitalization as set forth
in each of the Time of Sale Information and the Offering Memorandum under the
heading “Capitalization”; and all the outstanding shares of capital stock or
other equity interests of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of any lien, charge,
encumbrance, security interest, restriction on voting or transfer or any other
claim of any third party, except where the existence of such lien or any other
claim is disclosed in the Time of Sale Information and the Offering Memorandum
and would not have a Material Adverse Effect.
 

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(h)            Due Authorization.  The Company and each of the Guarantors have
full right, power and authority to execute and deliver this Agreement, the
Securities and the Indenture (including each Guarantee set forth therein)
(collectively, the “Transaction Documents”) and to perform their respective
obligations hereunder and thereunder; and all action required to be taken for
the due and proper authorization, execution and delivery of each of the
Transaction Documents and the consummation of the transactions contemplated
thereby has been duly and validly taken.

(i)            The Indenture.  The Indenture has been duly authorized by the
Company and each of the Guarantors and on the Closing Date will be duly executed
and delivered by the Company and each of the Guarantors and, when duly executed
and delivered in accordance with its terms by each of the parties thereto, will
constitute a valid and legally binding agreement of the Company and each of the
Guarantors enforceable against the Company and each of the Guarantors in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally or by equitable principles relating to enforceability
(collectively, the “Enforceability Exceptions”).

(j)            The Securities and the Guarantees.  The Securities have been duly
authorized by the Company and, when duly executed, authenticated, issued and
delivered as provided in the Indenture and paid for as provided herein, will be
duly and validly issued and outstanding and will constitute valid and legally
binding obligations of the Company enforceable against the Company in accordance
with their terms, subject to the Enforceability Exceptions, and will be entitled
to the benefits of the Indenture; and the Guarantees have been duly authorized
by each of the Guarantors and, when the Securities have been duly executed,
authenticated, issued and delivered as provided in the Indenture and paid for as
provided herein, will be valid and legally binding obligations of each of the
Guarantors, enforceable against each of the Guarantors in accordance with their
terms, subject to the Enforceability Exceptions, and will be entitled to the
benefits of the Indenture.

(k)            Purchase Agreement.  This Agreement has been duly authorized,
executed and delivered by the Company and each of the Guarantors.

(l)            Descriptions of the Transaction Documents.  Each Transaction
Document conforms in all material respects to the description thereof contained
in each of the Time of Sale Information and the Offering Memorandum.
 

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(m)            No Violation or Default.  Neither the Company nor any of its
subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument 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; or
(iii) in violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority,
including under the Federal Communications Act of 1934, as amended, and the
regulations thereunder, all relevant rules, regulations and policies of the U.S.
Federal Communications Commission and any applicable state, local and foreign
governmental authority (collectively, the “Communications Laws”) except, in the
case of clauses (ii) and (iii) above, for any such default or violation that
would not, individually or in the aggregate, have a Material Adverse Effect.

(n)            No Conflicts.  The execution, delivery and performance by the
Company and each of the Guarantors of each of the Transaction Documents to which
each is a party, the issuance and sale of the Securities and the issuance of the
Guarantees and compliance by the Company and each of the Guarantors with the
terms thereof and the consummation of the transactions contemplated by the
Transaction Documents will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or asset of the Company or any of its subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument 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 property
or asset of the Company or any of its subsidiaries is subject, (ii) result in
any violation of the provisions of the charter or by-laws or similar
organizational documents of the Company or any of its subsidiaries or (iii)
result in the violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority,
except, in the case of clauses (i) and (iii) above, for any such conflict,
breach, violation, default, lien, charge or encumbrance that would not,
individually or in the aggregate, have a Material Adverse Effect.

(o)            No Consents Required.  No consent, approval, authorization,
order, registration or qualification of or with any court or arbitrator or
governmental or regulatory authority, including under the Communications Laws,
is required for the execution, delivery and performance by the Company and each
of the Guarantors of each of the Transaction Documents to which each is a party,
the issuance and sale of the Securities and the issuance of the Guarantees and
compliance by the Company and each of the Guarantors with the terms thereof and
the consummation of the transactions contemplated by the Transaction Documents,
except for such consents, approvals, authorizations, orders and registrations or
qualifications as may be required under applicable state securities laws in
connection with the purchase and resale of the Securities by the Initial
Purchasers.
 

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(p)            Legal Proceedings.  Except as described in each of the Time of
Sale Information and the Offering Memorandum, there are no legal, governmental
or regulatory investigations, actions, demands, claims, suits, arbitrations,
inquiries or proceedings (“Actions”) pending, or threatened in writing, to which
the Company or any of its subsidiaries is or may be a party or to which any
property of the Company or any of its subsidiaries is or may be the subject
that, individually or in the aggregate, if determined adversely to the Company
or any of its subsidiaries, could reasonably be expected to have a Material
Adverse Effect; and no such Actions are threatened or, to the knowledge of the
Company and each of the Guarantors, contemplated by any governmental or
regulatory authority or threatened by others.

(q)            Independent Accountants.  PricewaterhouseCoopers, LLP, who have
certified certain financial statements of the Company and its subsidiaries are
independent public accountants with respect to the Company and its subsidiaries
within the applicable rules and regulations adopted by the Commission and the
Public Company Accounting Oversight Board (United States) and as required by the
Securities Act.

(r)            Investment Company Act.  Neither the Company nor any of the
Guarantors is, and after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in each of
the Time of Sale Information and the Offering Memorandum, none of them will be,
an “investment company” or an entity “controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as amended, and the
rules and regulations of the Commission thereunder (collectively, the
“Investment Company Act”).

(s)            Title to Real and Personal Property.  The Company and its
subsidiaries have good and marketable title in fee simple to, or have valid
rights to lease or otherwise use, all items of real, personal and intangible
property that are material to the respective businesses of the Company and its
subsidiaries, in each case free and clear of all liens, encumbrances, claims and
defects and imperfections of title except those that (i) do not materially
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries or (ii) could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.

(t)            Intellectual Property.  The Company and its subsidiaries own or
possess adequate rights to use all patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service mark registrations,
copyrights, licenses, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), and other intellectual property necessary for the conduct of their
respective businesses, except where the failure to own or possess such rights
could not be reasonably expected, individually or in the aggregate, to have a
Material Adverse Effect; and the conduct of their respective businesses will not
infringe or conflict in any material respect with any such rights of others, and
the Company and its subsidiaries have not received any notice of any claim of
infringement or conflict with any such rights of others that could reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
 

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(u)            Cyber Security; Data Protection.  Except as would not be expected
to have a Material Adverse Effect, either individually or in the aggregate: (i)
the Company and its subsidiaries have implemented and maintained commercially
reasonable policies and procedures, consistent with industry standards, to
maintain and protect the integrity, continuous operation, redundancy and
security of all information technology assets and equipment, computers, systems,
networks, hardware, software, web-sites, applications, and databases
(collectively “IT Systems”) used in connection with their businesses (and all
data therein), and there have been no breaches, violations, outages or
unauthorized uses of or accesses to same; (ii) the Company and its subsidiaries
are in compliance with all current (and have taken all necessary actions to
comply with all pending) applicable laws, statutes, judgments, orders, rules,
regulations and directives of any court, arbitrator or governmental or
regulatory authority, and their own posted policies and contractual obligations
relating to the privacy and security of IT Systems used in connection with their
businesses (and the data therein).

(v)            No Undisclosed Relationships.  No relationship, direct or
indirect, exists between or among the Company or any of its subsidiaries, on the
one hand, and the directors, officers, stockholders, customers, suppliers or
other affiliates of the Company or any of its subsidiaries, on the other, that
would be required by the Securities Act to be described in a registration
statement on Form S-1 to be filed with the Commission and that is not so
described in each of the Time of Sale Information and the Offering Memorandum.

(w)            Taxes.  The Company and its subsidiaries have paid all material
federal, state, local and foreign taxes and filed all U.S. federal and other
material tax returns required to be paid or filed through the date hereof; and
except as otherwise disclosed in each of the Time of Sale Information and the
Offering Memorandum, there is no material tax deficiency that has been, or could
reasonably be expected to be, asserted against the Company or any of its
subsidiaries or any of their respective properties or assets.

(x)            Licenses and Permits.  The Company and its subsidiaries possess
all licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local or
foreign governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of their
respective businesses as described in each of the Time of Sale Information and
the Offering Memorandum, except where the failure to possess or make the same
would not, individually or in the aggregate, have a Material Adverse Effect; and
except as described in each of the Time of Sale Information and the Offering
Memorandum, neither the Company nor any of its subsidiaries has received notice
of any revocation or modification of any such license, certificate, permit or
authorization or has any reason to believe that any such license, sub-license,
certificate, permit or authorization will not be renewed in the ordinary course.
 

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(y)            No Labor Disputes.  No labor disturbance by or dispute with
employees of the Company or any of its subsidiaries exists or, to the knowledge
of the Company and each of the Guarantors, is contemplated or threatened and
neither the Company nor any Guarantor is aware of any existing or imminent labor
disturbance by, or dispute with, the employees of any of the Company’s or any of
the Company’s subsidiaries’ principal suppliers, contractors or customers, in
each case except as would not have a Material Adverse Effect.  Neither the
Company nor any of its subsidiaries has received any notice of cancellation or
termination with respect to any collective bargaining agreement to which it is a
party.

(z)            Certain Environmental Matters.  (i) The Company and its
subsidiaries (x) are, and at all prior times were, in compliance with any and
all applicable federal, state, local and foreign laws rules, regulations,
requirements, decisions and orders relating to the protection of human health or
safety, the environment, natural resources, hazardous or toxic substances or
wastes, pollutants or contaminants (collectively, “Environmental Laws”);
(y) have received and are in compliance with all permits, licenses, certificates
or other authorizations or approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and (z) have not
received notice of any actual or potential liability under or relating to any
Environmental Laws, including for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes, pollutants or
contaminants and have no knowledge of any event or condition that would
reasonably be expected to result in any such notice; (ii) there are no costs or
liabilities associated with Environmental Laws of or relating to the Company or
its subsidiaries, except in the case of each of (i) and (ii) above, for any such
failure to comply with, or failure to receive required permits, licenses or
approvals, or cost or liability as would not, individually or in the aggregate,
have a Material Adverse Effect and (iii) except as described in each of the Time
of Sale Information and the Prospectus, (x) there are no proceedings that are
pending, or that are known to be contemplated, against the Company or any of its
subsidiaries under any Environmental Laws, including those in which a
governmental entity is also a party, that individually or in the aggregate, if
determined adversely to the Company or any of its subsidiaries, could reasonably
be expected to have a Material Adverse Effect, (y) the Company and its
subsidiaries are not aware of any issues regarding compliance with Environmental
Laws, or liabilities or other obligations under Environmental Laws or concerning
hazardous or toxic substances or wastes, pollutants or contaminants, that could
reasonably be expected to have a material effect on the capital expenditures,
earnings or competitive position of the Company and its subsidiaries, and
(z) none of the Company and its subsidiaries anticipates material capital
expenditures relating to any Environmental Laws.

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(aa)            Compliance with ERISA.  (i) Each employee benefit plan, within
the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), for which the Company or any member of its
“Controlled Group” (defined as any entity, whether or not incorporated, that is
under common control with the Company within the meaning of Section 4001(a)(14)
of ERISA or any entity that would be regarded as a single employer with the
Company under Section 414(b),(c),(m) or (o) of the Internal Revenue Code of
1986, as amended (the “Code”)) would have any liability (each, a “Plan”) has
been maintained in compliance with its terms and the requirements of any
applicable statutes, orders, rules and regulations, including but not limited to
ERISA and the Code; (ii) no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to
any Plan, excluding transactions effected pursuant to a statutory or
administrative exemption; (iii) for each Plan that is subject to the funding
rules of Section 412 of the Code or Section 302 of ERISA, no Plan has failed
(whether or not waived), or is reasonably expected to fail, to satisfy the
minimum funding standards (within the meaning of Section 302 of ERISA or Section
412 of the Code) applicable to such Plan; (iv) no Plan is, or is reasonably
expected to be, in “at risk status” (within the meaning of Section 303(i) of
ERISA), and no Plan that is a “multiemployer plan” within the meaning of Section
4001(a)(3) of ERISA is in “endangered status” or “critical status” (within the
meaning of Sections 304 and 305 of ERISA); (v) no “reportable event” (within the
meaning of Section 4043(c) of ERISA and the regulations promulgated thereunder,
other than those events as to which the notice period referred to in Section
4043(a) of ERISA has been waived) has occurred or is reasonably expected to
occur; (vi) each Plan that is intended to be qualified under Section 401(a) of
the Code is so qualified, and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification; (vii) neither
the Company nor any member of the Controlled Group has incurred, nor reasonably
expects to incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the Pension Benefit Guarantee
Corporation, in the ordinary course and without default) in respect of a Plan
(including a “multiemployer plan” within the meaning of Section 4001(a)(3) of
ERISA); and (viii) none of the following events has occurred or is reasonably
likely to occur: (A) a material increase in the aggregate amount of
contributions required to be made to all Plans by the Company or its Controlled
Group affiliates in the current fiscal year of the Company and its Controlled
Group affiliates compared to the amount of such contributions made in the
Company’s and its Controlled Group affiliates’ most recently completed fiscal
year; or (B) a material increase in the Company and its subsidiaries’
“accumulated post-retirement benefit obligations” (within the meaning of
Accounting Standards Codification Topic 715-60) compared to the amount of such
obligations in the Company and its subsidiaries’ most recently completed fiscal
year, except in each case with respect to the events or conditions set forth in
(i) through (viii) hereof, as would not, individually or in the aggregate, have
a Material Adverse Effect.
 

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(bb)             Disclosure Controls.  Except as described in each of the Time
of Sale Information and the Offering Memorandum, the Company and its
subsidiaries maintain an effective system of “disclosure controls and
procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that is designed
to ensure that information required to be disclosed by the Company in reports
that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Commission’s
rules and forms, including controls and procedures designed to ensure that such
information is accumulated and communicated to the Company’s management as
appropriate to allow timely decisions regarding required disclosure.  The
Company and its subsidiaries have carried out evaluations of the effectiveness
of their disclosure controls and procedures as required by Rule 13a-15 of the
Exchange Act.

(cc)            Accounting Controls.  Except as described in each of the Time of
Sale Information and the Offering Memorandum, the Company and its subsidiaries
maintain systems of “internal control over financial reporting” (as defined in
Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the
Exchange Act and have been designed by, or under the supervision of, their
respective principal executive and principal financial officers, or persons
performing similar functions, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with GAAP.  Except as described in each of
the Time of Sale Information and the Offering Memorandum, the Company and its
subsidiaries maintain 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
GAAP and to maintain asset accountability; (iii) access to assets is permitted
only in accordance with management’s general or specific authorization; (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; and (v) interactive data in eXtensible Business Reporting Language
included or incorporated by reference in each of the Preliminary Offering
Memorandum, the Time of Sale Information and the Offering Memorandum is prepared
in accordance with the Commission’s rules and guidelines applicable thereto.
Except as disclosed in each of the Time of Sale Information and the Offering
Memorandum, there are no material weaknesses or significant deficiencies in the
Company’s internal controls.

(dd)            Insurance.  The Company and its subsidiaries have insurance
covering their respective properties, operations, personnel and businesses,
which insurance is in amounts and insures against such losses and risks as are,
in the reasonable judgment of the Company, adequate to protect the Company and
its subsidiaries and their respective businesses; and the Company and its
subsidiaries have no reason to believe that they will not be able to renew their
existing insurance coverage as and when such coverage expires or to obtain
similar coverage at reasonable cost from similar insurers as may be necessary to
continue its business at a cost that would not, individually or in the
aggregate, have a Material Adverse Effect.
 

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(ee)            No Unlawful Payments.  Neither the Company nor any of its
subsidiaries, nor any director, officer or employee of the Company or any of its
subsidiaries nor, to the knowledge of the Company and each of the Guarantors,
any agent, affiliate or other person associated with or acting on behalf of the
Company or any of its subsidiaries has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made or taken an act in furtherance of an offer,
promise or authorization of any direct or indirect unlawful payment or benefit
to any foreign or domestic government official or employee , including of any
government-owned or controlled entity or of a public international organization,
or any person acting in an official capacity for or on behalf of any of the
foregoing, or any political party or party official or candidate for political
office; (iii) violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977, as amended, or any applicable law or regulation
implementing the OECD Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions, or committed an offence under 
the Bribery Act 2010 of the United Kingdom, or any other applicable anti-bribery
or anti-corruption law; or (iv) made, offered, agreed, requested or taken an act
in furtherance of any unlawful bribe or other unlawful benefit, including,
without limitation, any  rebate, payoff, influence payment, kickback or other
unlawful or improper payment or benefit.  The Company and its subsidiaries have
instituted, maintain and enforce policies and procedures designed to promote and
ensure compliance with all applicable anti-bribery and anti-corruption laws.

(ff)            Compliance with Anti-Money Laundering Laws.  The operations of
the Company and its subsidiaries are and have been conducted at all times in
compliance with applicable financial recordkeeping and reporting requirements,
including those of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, the applicable money laundering statutes of all jurisdictions where
the Company or any of its subsidiaries conducts business, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Anti-Money Laundering Laws”), and 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 with respect to
the Anti-Money Laundering Laws is pending or, to the knowledge of the Company or
any of the Guarantors, threatened.

(gg)            No Conflicts with Sanctions Laws.  Neither the Company nor any
of its subsidiaries, nor, to the knowledge of the Company or any of the
Guarantors, any director, officer, employee, agent, affiliate or other person
associated with or acting on behalf of the Company or any of its subsidiaries is
currently the subject or the target of any sanctions administered or enforced by
the U.S. government, (including, without limitation, the Office of Foreign
Assets Control of the U.S. Department of the Treasury (“OFAC”) or the U.S.
Department of State and including, without limitation, the designation as a
“specially designated national” or “blocked person”), the United Nations
Security Council (“UNSC”), the European Union, Her Majesty’s Treasury (“HMT”),
or other relevant sanctions authority (collectively, “Sanctions”), nor is the
Company, any of its subsidiaries or any of the Guarantors located, organized or
resident in a country or territory that is the subject  or target of Sanctions,
including, without limitation, Cuba, Iran, North Korea, Syria and Crimea (each,
a “Sanctioned Country”); and the Company will not directly or indirectly use the
proceeds of the offering of the Securities hereunder, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner
or other person or entity (i) to fund or facilitate any activities of or
business with any person that, at the time of such funding or facilitation, is
the subject or target of Sanctions, (ii) to fund or facilitate any activities of
or business in any Sanctioned Country or (iii) in any other manner that will
result in a violation by any person (including any person participating in the
transaction, whether as underwriter, initial purchaser, advisor, investor or
otherwise) of Sanctions. For the past five years, the Company and its
subsidiaries have not knowingly engaged in, and are not now knowingly engaged in
any dealings or transactions with any person that at the time of the dealing or
transaction is or was the subject or the target of Sanctions or with any
Sanctioned Country.
 

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(hh)            Solvency.  On and immediately after the Closing Date, the
Company and each Guarantor (after giving effect to the issuance and sale of the
Securities, the issuance of the Guarantees and the other transactions related
thereto as described in each of the Time of Sale Information and the Offering
Memorandum) will be Solvent.  As used in this paragraph, the term “Solvent”
means, with respect to a particular date and entity, that on such date (i) the
fair value (and present fair saleable value) of the assets of such entity is not
less than the total amount required to pay the probable liability of such entity
on its total existing debts and liabilities (including contingent liabilities)
as they become absolute and matured; (ii) such entity is able to realize upon
its assets and pay its debts and other liabilities, contingent obligations and
commitments as they mature and become due in the normal course of business;
(iii) assuming consummation of the issuance and sale of the Securities and the
issuance of the Guarantees as contemplated by this Agreement, the Time of Sale
Information and the Offering Memorandum, such entity does not have, intend to
incur or believe that it will incur debts or liabilities beyond its ability to
pay as such debts and liabilities mature; (iv) such entity is not engaged in any
business or transaction, and does not propose to engage in any business or
transaction, for which its property would constitute unreasonably small capital;
and (v) such entity is not a defendant in any civil action that would result in
a judgment that such entity is or would become unable to satisfy.

(ii)            No Restrictions on Subsidiaries.  No subsidiary of the Company
is currently prohibited, directly or indirectly, under any agreement or other
instrument to which it is a party or is subject, from paying any dividends to
the Company, from making any other distribution on such subsidiary’s capital
stock or similar ownership interest, from repaying to the Company any loans or
advances to such subsidiary from the Company or from transferring any of such
subsidiary’s properties or assets to the Company or any other subsidiary of the
Company on the Closing Date, except in each case (a) as described in each of the
Time of Sale Information and the Offering Memorandum, or (b) that will be
permitted by the Indenture.
 

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(jj)            No Broker’s Fees.  Neither the Company nor any of its
subsidiaries is a party to any contract, agreement or understanding with any
person (other than this Agreement) that would give rise to a valid claim against
any of them or any Initial Purchaser for a brokerage commission, finder’s fee or
like payment in connection with the offering and sale of the Securities.

(kk)            Rule 144A Eligibility.  On the Closing Date, the Securities will
not be of the same class as securities listed on a national securities exchange
registered under Section 6 of the Exchange Act or quoted in an automated
inter-dealer quotation system; and each of the Preliminary Offering Memorandum
and the Offering Memorandum, as of its respective date, contains or will contain
all the information that, if requested by a prospective purchaser of the
Securities, would be required to be provided to such prospective purchaser
pursuant to Rule 144A(d)(4) under the Securities Act.

(ll)            No Integration.  Neither the Company nor any of its affiliates
(as defined in Rule 501(b) of Regulation D) has, directly or through any agent,
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.

(mm)            No General Solicitation or Directed Selling Efforts.  None of
the Company or any of its affiliates or any other person acting on its or their
behalf (other than the Initial Purchasers, as to which no representation is
made) has (i) solicited offers for, or offered or sold, the Securities by means
of any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D or in any manner involving a public offering within
the meaning of Section 4(a)(2) of the Securities Act or (ii) engaged in any
directed selling efforts within the meaning of Regulation S under the Securities
Act (“Regulation S”), and all such persons have complied with the offering
restrictions requirement of Regulation S.

(nn)            Securities Law Exemptions.  Assuming the accuracy of the
representations and warranties of the Initial Purchasers contained in Section
1(b) (including Annex C hereto) and their compliance with their agreements set
forth therein, it is not necessary, in connection with the issuance and sale of
the Securities to the Initial Purchasers and the offer, resale and delivery of
the Securities by the Initial Purchasers in the manner contemplated by this
Agreement, the Time of Sale Information and the Offering Memorandum, to register
the Securities under the Securities Act or to qualify the Indenture under the
Trust Indenture Act.
 

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(oo)            No Stabilization.  Neither the Company nor any of the Guarantors
has taken, directly or indirectly, any action designed to or that could
reasonably be expected to cause or result in any stabilization or manipulation
of the price of the Securities.

(pp)            Margin Rules.  Neither the issuance, sale and delivery of the
Securities nor the application of the proceeds thereof by the Company as
described in each of the Time of Sale Information and the Offering Memorandum
will violate Regulation T, U or X of the Board of Governors of the Federal
Reserve System or any other regulation of such Board of Governors.

(qq)            Forward-Looking Statements.  No forward-looking statement
(within the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act) included or incorporated by reference in any of the Time of Sale
Information or the Offering Memorandum has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.

(rr)            Statistical and Market Data.  Nothing has come to the attention
of the Company or any Guarantor that has caused the Company or such Guarantor to
believe that the statistical and market-related data included or incorporated by
reference in each of the Time of Sale Information and the Offering Memorandum is
not based on or derived from sources that are reliable and accurate in all
material respects.

(ss)            Sarbanes-Oxley Act.  There is and has been no failure on the
part of the Company or any of the Company’s directors or officers, in their
capacities as such, to comply with any provision of the Sarbanes-Oxley Act of
2002, as amended, 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.

4.            Further Agreements of the Company and the Guarantors.  The Company
and the Guarantors jointly and severally covenant and agree with each Initial
Purchaser that:

(a)            Delivery of Copies.  The Company will deliver, without charge, to
the Initial Purchasers as many copies of the Preliminary Offering Memorandum,
any other Time of Sale Information, any Issuer Written Communication and the
Offering Memorandum (including all amendments and supplements thereto) as the
Representative may reasonably request.

(b)            Offering Memorandum, Amendments or Supplements.  Before
finalizing the Offering Memorandum or making or distributing any amendment or
supplement to any of the Time of Sale Information or the Offering Memorandum or
filing with the Commission any document that will be incorporated by reference
therein, the Company will furnish to the Representative and counsel for the
Initial Purchasers a copy of the proposed Offering Memorandum or such amendment
or supplement or document to be incorporated by reference therein for review,
and, except where required by law, will not distribute any such proposed
Offering Memorandum, amendment or supplement or file any such document with the
Commission to which the Representative reasonably objects.
 

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(c)            Additional Written Communications.  Before making, preparing,
using, authorizing, approving or referring to any Issuer Written Communication,
the Company and the Guarantors will furnish to the Representative and counsel
for the Initial Purchasers a copy of such written communication for review and,
except where required by law, will not make, prepare, use, authorize, approve or
refer to any such written communication to which the Representative reasonably
objects.

(d)            Notice to the Representative.  The Company will advise the
Representative promptly, and confirm such advice in writing, (i) of the issuance
by any governmental or regulatory authority of any order preventing or
suspending the use of any of the Time of Sale Information, any Issuer Written
Communication or the Offering Memorandum or the initiation or threatening of any
proceeding for that purpose; (ii) of the occurrence of any event at any time
prior to the completion of the initial offering of the Securities as a result of
which any of the Time of Sale Information, any Issuer Written Communication or
the Offering Memorandum as then amended or supplemented would include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances existing when
such Time of Sale Information, Issuer Written Communication or the Offering
Memorandum is delivered to a purchaser, not misleading; and (iii) of the receipt
by the Company of any notice with respect to any suspension of the qualification
of the Securities for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and the Company will use its
reasonable best efforts to prevent the issuance of any such order preventing or
suspending the use of any of the Time of Sale Information, any Issuer Written
Communication or the Offering Memorandum or suspending any such qualification of
the Securities and, if any such order is issued, will obtain as soon as possible
the withdrawal thereof.

(e)            Time of Sale Information.  If at any time prior to the Closing
Date (i) any event shall occur or condition shall exist as a result of which any
of the Time of Sale Information as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (ii) it is necessary
to amend or supplement the Time of Sale Information to comply with law, the
Company will immediately notify the Initial Purchasers thereof and forthwith
prepare and, subject to paragraph (b) above, furnish to the Initial Purchasers
such amendments or supplements to the Time of Sale Information (or any document
to be filed with the Commission and incorporated by reference therein) as may be
necessary so that the statements in any of the Time of Sale Information as so
amended or supplemented (including such documents to be incorporated by
reference therein) will not, in the light of the circumstances under which they
were made, be misleading or so that any of the Time of Sale Information will
comply with law.
 

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(f)            Ongoing Compliance.  If at any time prior to the completion of
the initial offering of the Securities (i) any event shall occur or condition
shall exist 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 in order to make the statements therein, in
the light of the circumstances existing when the Offering Memorandum is
delivered to a purchaser, not misleading or (ii) it is necessary to amend or
supplement the Offering Memorandum to comply with law, the Company will
immediately notify the Initial Purchasers thereof and forthwith prepare and,
subject to paragraph (b) above, furnish to the Initial Purchasers such
amendments or supplements to the Offering Memorandum (or any document to be
filed with the Commission and incorporated by reference therein) as may be
necessary so that the statements in the Offering Memorandum as so amended or
supplemented (including such document to be incorporated by reference therein)
will not, in the light of the circumstances existing when the Offering
Memorandum is delivered to a purchaser, be misleading or so that the Offering
Memorandum will comply with law.

(g)            Blue Sky Compliance.  The Company will qualify the Securities for
offer and sale under the securities or Blue Sky laws of such jurisdictions as
the Representative shall reasonably request and will continue such
qualifications in effect so long as required for the offering and resale of the
Securities; provided that neither the Company nor any of the Guarantors shall be
required to (i) qualify as a foreign corporation or other entity or as a dealer
in securities in any such jurisdiction where it would not otherwise be required
to so qualify, (ii) file any general consent to service of process in any such
jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it
is not otherwise so subject.

(h)            Clear Market.  During the period from the date hereof through and
including the date that is 60 days after the date hereof, the Company and each
of the Guarantors will not, without the prior written consent of the
Representative, offer, sell, contract to sell or otherwise dispose of any debt
securities issued or guaranteed by the Company or any of the Guarantors and
having a tenor of more than one year.

(i)            Use of Proceeds.  The Company will apply the net proceeds from
the sale of the Securities as described in each of the Time of Sale Information
and the Offering Memorandum under the heading “Use of proceeds.”
 

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(j)            Supplying Information.  While the Securities remain outstanding
and are “restricted securities” within the meaning of Rule 144(a)(3) under the
Securities Act, the Company and each of the Guarantors will, during any period
in which the Company is not subject to and in compliance with Section 13 or
15(d) of the Exchange Act, furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon the request of
such holders or such prospective purchasers, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(k)            DTC.  The Company will assist the Initial Purchasers in arranging
for the Securities to be eligible for clearance and settlement through DTC.

(l)            No Resales by the Company.  Prior to the one year anniversary of
the Closing Date, the Company will not, and will not permit any of its
affiliates (as defined in Rule 144 under the Securities Act) to, resell any of
the Securities that have been acquired by any of them, except for Securities
purchased by the Company or any of its affiliates and resold in a transaction
registered under the Securities Act.

(m)            No Integration.  Neither the Company nor any of its affiliates
(as defined in Rule 501(b) of Regulation D) will, directly or through any agent,
sell, offer for sale, solicit offers to buy or otherwise negotiate in respect
of, any security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.

(n)            No General Solicitation or Directed Selling Efforts.  None of the
Company or any of its affiliates or any other person acting on its or their
behalf (other than the Initial Purchasers, as to which no covenant is given)
will (i) solicit offers for, or offer or sell, the Securities by means of any
form of general solicitation or general advertising within the meaning of Rule
502(c) of Regulation D or in any manner involving a public offering within the
meaning of Section 4(a)(2) of the Securities Act or (ii) engage in any directed
selling efforts within the meaning of Regulation S, and all such persons will
comply with the offering restrictions requirement of Regulation S.

(o)            No Stabilization.  Neither the Company nor any of the Guarantors
will take, directly or indirectly, any action designed to or that could
reasonably be expected to cause or result in any stabilization or manipulation
of the price of the Securities.

5.            Certain Agreements of the Initial Purchasers.  Each Initial
Purchaser hereby represents and agrees that it has not and will not use,
authorize use of, refer to, or participate in the planning for use of, any
written communication that constitutes an offer to sell or the solicitation of
an offer to buy the Securities other than (i) the Preliminary Offering
Memorandum and the Offering Memorandum, (ii) any written communication that
contains either (a) no “issuer information” (as defined in Rule 433(h)(2) under
the Securities Act) or (b) “issuer information” that was included (including
through incorporation by reference) in the Time of Sale Information or the
Offering Memorandum, (iii) any written communication listed on Annex A or
prepared pursuant to Section 4(c) (including any electronic road show) above,
(iv) any written communication prepared by such Initial Purchaser and approved
by the Company and the Representative in advance in writing or (v) any written
communication relating to or that contains the terms of the Securities and/or
other information that was included (including through incorporation by
reference) in the Time of Sale Information or the Offering Memorandum.
 

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6.            Conditions of Initial Purchasers’ Obligations.  The obligation of
each Initial Purchaser to purchase Securities on the Closing Date as provided
herein is subject to the performance by the Company and each of the Guarantors
of their respective covenants and other obligations hereunder and to the
following additional conditions:

(a)            Representations and Warranties.  The representations and
warranties of the Company and the Guarantors contained herein shall be true and
correct on the date hereof and on and as of the Closing Date; and the statements
of the Company, the Guarantors and their respective officers made in any
certificates delivered pursuant to this Agreement shall be true and correct on
and as of the Closing Date.

(b)            No Downgrade.  Subsequent to the earlier of (A) the Time of Sale
and (B) the execution and delivery of this Agreement, (i) no downgrading shall
have occurred in the rating accorded the Securities or any other debt securities
or preferred stock issued or guaranteed by the Company or any of its
subsidiaries by any “nationally recognized statistical rating organization,” as
such term is defined under Section 3(a)(62) under the Exchange Act and (ii) no
such organization shall have publicly announced that it has under surveillance
or review, or has changed its outlook with respect to, its rating of the
Securities or of any other debt securities or preferred stock issued or
guaranteed by the Company or any of its subsidiaries (other than an announcement
with positive implications of a possible upgrading).

(c)            No Material Adverse Change.  No event or condition of a type
described in Section 3(e) hereof shall have occurred or shall exist, which event
or condition is not described in each of the Time of Sale Information (excluding
any amendment or supplement thereto) and the Offering Memorandum (excluding any
amendment or supplement thereto) the effect of which in the judgment of the
Representative makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Securities on the terms and in the manner
contemplated by this Agreement, the Time of Sale Information and the Offering
Memorandum.

(d)            Officer’s Certificate.  The Representative shall have received on
and as of the Closing Date a certificate of an executive officer of the Company
and of each Guarantor who has specific knowledge of the Company’s or such
Guarantor’s financial matters and is satisfactory to the Representative (i)
confirming that such officer has carefully reviewed the Time of Sale Information
and the Offering Memorandum and, to the knowledge of such officer, the
representations set forth in Sections 3(a) and 3(b) hereof are true and correct,
(ii) confirming that the other representations and warranties of the Company and
the Guarantors in this Agreement are true and correct and that the Company and
the Guarantors have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied hereunder at or prior to the Closing
Date and (iii) to the effect set forth in paragraphs (b) and (c) above.
 

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(e)            Comfort Letters.  On the date of this Agreement and on the
Closing Date, PricewaterhouseCoopers, LLP, shall have furnished to the
Representative, at the request of the Company, letters, dated the respective
dates of delivery thereof and addressed to the Initial Purchasers, in form and
substance reasonably satisfactory to the Representative, containing statements
and information of the type customarily included in accountants’ “comfort
letters” to underwriters with respect to the financial statements and certain
financial information contained or incorporated by reference in each of the Time
of Sale Information and the Offering Memorandum; provided that the letter
delivered on the Closing Date shall use a “cut-off” date no more than three
business days prior to the Closing Date.

(f)            Opinion and 10b-5 Statement of Counsel for the Company.  Cravath,
Swaine & Moore LLP, counsel for the Company, shall have furnished to the
Representative, at the request of the Company, a written opinion and a 10b-5
statement, dated the Closing Date and addressed to the Initial Purchasers, in
form and substance reasonably satisfactory to the Representative, to the effect
set forth in Annex D hereto.

(g)            Opinion and 10b-5 Statement of Counsel for the Initial
Purchasers.  The Representative shall have received on and as of the Closing
Date an opinion and 10b-5 statement, addressed to the Initial Purchasers, of
Simpson Thacher & Bartlett LLP, counsel for the Initial Purchasers, with respect
to such matters as the Representative may reasonably request, and such counsel
shall have received such documents and information as they may reasonably
request to enable them to pass upon such matters.

(h)            Opinion of Florida Counsel for the Company.  Latham, Shuker, Eden
& Beaudine, LLP, Florida counsel for the Company, shall have furnished to the
Representative, at the request of the Company, a written opinion, dated the
Closing Date and addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to the Representative, to the effect set forth in Annex
E hereto.

(i)            No Legal Impediment to Issuance.  No action shall have been taken
and no statute, rule, regulation or order shall have been enacted, adopted or
issued by any federal, state or foreign governmental or regulatory authority
that would, as of the Closing Date, prevent the issuance or sale of the
Securities or the issuance of the Guarantees; and no injunction or order of any
federal, state or foreign court shall have been issued that would, as of the
Closing Date, prevent the issuance or sale of the Securities or the issuance of
the Guarantees.
 

22

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(j)            Good Standing.  The Representative shall have received on and as
of the Closing Date satisfactory evidence of the good standing of the Company
and its subsidiaries in their respective jurisdictions of organization and their
good standing in such other jurisdictions as the Representative may reasonably
request, in each case in writing or any standard form of telecommunication from
the appropriate governmental authorities of such jurisdictions.

(k)            DTC.  The Securities shall be eligible for clearance and
settlement through DTC.

(l)            Indenture and Securities.  The Indenture shall have been duly
executed and delivered by a duly authorized officer of the Company, each of the
Guarantors and the Trustee, and the Securities shall have been duly executed and
delivered by a duly authorized officer of the Company and duly authenticated by
the Trustee.

(m)            Additional Documents.  On or prior to the Closing Date, the
Company and the Guarantors shall have furnished to the Representative such
further certificates and documents as the Representative may reasonably request.

All opinions, letters, certificates and evidence mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Initial Purchasers.

7.            Indemnification and Contribution.

(a)            Indemnification of the Initial Purchasers.  The Company and each
of the Guarantors jointly and severally agree to indemnify and hold harmless
each Initial Purchaser, its affiliates, directors and officers and each person,
if any, who controls such Initial Purchaser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any and
all losses, claims, damages and liabilities (including, without limitation,
legal fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are incurred), joint
or several, that arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum, any of the other Time of Sale Information, any Issuer
Written Communication or the Offering Memorandum (or any amendment or supplement
thereto) or any omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case except
insofar as such losses, claims, damages or liabilities arise out of, or are
based upon, any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with any information relating
to any Initial Purchaser furnished to the Company in writing by such Initial
Purchaser through the Representative expressly for use therein.
 

23

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(b)            Indemnification of the Company and the Guarantors.  Each Initial
Purchaser agrees, severally and not jointly, to indemnify and hold harmless the
Company, each of the Guarantors, each of their respective directors and officers
and each person, if any, who controls the Company or any of the Guarantors
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the indemnity set forth in paragraph (a)
above, but only with respect to any losses, claims, damages or liabilities that
arise out of, or are based upon, any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with any
information relating to such Initial Purchaser furnished to the Company in
writing by such Initial Purchaser through the Representative expressly for use
in the Preliminary Offering Memorandum, any of the other Time of Sale
Information, any Issuer Written Communication or the Offering Memorandum (or any
amendment or supplement thereto), it being understood and agreed that the only
such information consists of the following paragraphs in the Preliminary
Offering Memorandum and the Offering Memorandum: the information contained in
the third and fourth sentences of the seventh paragraph and the entirety of the
ninth paragraph under the heading “Plan of distribution.”

(c)            Notice and Procedures.  If any suit, action, proceeding
(including any governmental or regulatory investigation), claim or demand shall
be brought or asserted against any person in respect of which indemnification
may be sought pursuant to either paragraph (a) or (b) above, such person (the
“Indemnified Person”) shall promptly notify the person against whom such
indemnification may be sought (the “Indemnifying Person”) in writing; provided
that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have under paragraph (a) or (b) above except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and provided, further, that the failure to
notify the Indemnifying Person shall not relieve it from any liability that it
may have to an Indemnified Person otherwise than under paragraph (a) or (b)
above.  If any such proceeding shall be brought or asserted against an
Indemnified Person and it shall have notified the Indemnifying Person thereof,
the Indemnifying Person shall retain counsel reasonably satisfactory to the
Indemnified Person (who shall not, without the consent of the Indemnified
Person, be counsel to the Indemnifying Person) to represent the Indemnified
Person and any others entitled to indemnification pursuant to this Section 7
that the Indemnifying Person may designate in such proceeding and shall pay the
fees and expenses of such proceeding and shall pay the fees and expenses of such
counsel related to such proceeding, as incurred.  In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary; (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person; (iii) the Indemnified Person shall have reasonably concluded that there
may be legal defenses available to it that are different from or in addition to
those available to the Indemnifying Person; or (iv) the named parties in any
such proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them.  It is understood and agreed that the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be paid or reimbursed as they are incurred.  Any
such separate firm for any Initial Purchaser, its affiliates, directors and
officers and any control persons of such Initial Purchaser shall be designated
in writing by J.P. Morgan Securities LLC and any such separate firm for the
Company, the Guarantors, their respective directors and officers and any control
persons of the Company and the Guarantors shall be designated in writing by the
Company.  The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment.  No Indemnifying Person
shall, without the written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnification could have
been sought hereunder by such Indemnified Person, unless such settlement (x)
includes an unconditional release of such Indemnified Person, in form and
substance reasonably satisfactory to such Indemnified Person, from all liability
on claims that are the subject matter of such proceeding and (y) does not
include any statement as to or any admission of fault, culpability or a failure
to act by or on behalf of any Indemnified Person.
 

24

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(d)            Contribution.  If the indemnification provided for in paragraph
(a) or (b) above is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors on the one hand and the
Initial Purchasers on the other from the offering of the Securities or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Company and the
Guarantors on the one hand and the Initial Purchasers on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations.  The
relative benefits received by the Company and the Guarantors on the one hand and
the Initial Purchasers on the other shall be deemed to be in the same respective
proportions as the net proceeds (before deducting expenses) received by the
Company from the sale of the Securities and the total discounts and commissions
received by the Initial Purchasers in connection therewith, as provided in this
Agreement, bear to the aggregate offering price of the Securities.  The relative
fault of the Company and the Guarantors on the one hand and the Initial
Purchasers on the other 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 or any Guarantor or by the Initial Purchasers and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
 

25

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(e)            Limitation on Liability.  The Company, the Guarantors and the
Initial Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in paragraph (d) above.  The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages and liabilities
referred to in paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with any such action or claim.  Notwithstanding
the provisions of this Section 7, in no event shall an Initial Purchaser be
required to contribute any amount in excess of the amount by which the total
discounts and commissions received by such Initial Purchaser with respect to the
offering of the Securities exceeds the amount of any damages that such Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.  The Initial Purchasers’
obligations to contribute pursuant to this Section 7 are several in proportion
to their respective purchase obligations hereunder and not joint.

(f)            Non-Exclusive Remedies.  The remedies provided for in this
Section 7 are not exclusive and shall not limit any rights or remedies that may
otherwise be available to any Indemnified Person at law or in equity.

8.            Effectiveness of Agreement.  This Agreement shall become effective
as of the date first written above.

9.            Termination.  This Agreement may be terminated in the absolute
discretion of the Representative, by notice to the Company, if after the
execution and delivery of this Agreement and on or prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on the New
York Stock Exchange or the over-the-counter market; (ii) trading of any
securities issued or guaranteed by the Company or any of the Guarantors shall
have been suspended on any exchange or in any over-the-counter market; (iii) a
general moratorium on commercial banking activities shall have been declared by
federal or New York State authorities; or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis, either within or outside the United States, that, in the
judgment of the Representative, is material and adverse and makes it
impracticable or inadvisable to proceed with the offering, sale or delivery of
the Securities on the terms and in the manner contemplated by this Agreement,
the Time of Sale Information and the Offering Memorandum.
 

26

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10.            Defaulting Initial Purchaser.

(a)            If, on the Closing Date, any Initial Purchaser defaults on its
obligation to purchase the Securities that it has agreed to purchase hereunder,
the non-defaulting Initial Purchasers may in their discretion arrange for the
purchase of such Securities by other persons satisfactory to the Company on the
terms contained in this Agreement.  If, within 36 hours after any such default
by any Initial Purchaser, the non-defaulting Initial Purchasers do not arrange
for the purchase of such Securities, then the Company shall be entitled to a
further period of 36 hours within which to procure other persons satisfactory to
the non-defaulting Initial Purchasers to purchase such Securities on such
terms.  If other persons become obligated or agree to purchase the Securities of
a defaulting Initial Purchaser, either the non‑defaulting Initial Purchasers or
the Company may postpone the Closing Date for up to five full business days in
order to effect any changes that in the opinion of counsel for the Company or
counsel for the Initial Purchasers may be necessary in the Time of Sale
Information, the Offering Memorandum or in any other document or arrangement,
and the Company agrees to promptly prepare any amendment or supplement to the
Time of Sale Information or the Offering Memorandum that effects any such
changes.  As used in this Agreement, the term “Initial Purchaser” includes, for
all purposes of this Agreement unless the context otherwise requires, any person
not listed in Schedule 1 hereto that, pursuant to this Section 10, purchases
Securities that a defaulting Initial Purchaser agreed but failed to purchase.

(b)            If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph (a)
above, the aggregate principal amount of such Securities that 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 Initial Purchaser to purchase the principal amount of Securities
that such Initial Purchaser agreed to purchase hereunder plus such Initial
Purchaser’s pro rata share (based on the principal amount of Securities that
such Initial Purchaser agreed to purchase hereunder) of the Securities of such
defaulting Initial Purchaser or Initial Purchasers for which such arrangements
have not been made.
 

27

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(c)            If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph (a)
above, the aggregate principal amount of such Securities that 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
paragraph (b) above, then this Agreement shall terminate without liability on
the part of the non-defaulting Initial Purchasers.  Any termination of this
Agreement pursuant to this Section 10 shall be without liability on the part of
the Company or the Guarantors, except that the Company and each of the
Guarantors will continue to be liable for the payment of expenses as set forth
in Section 11 hereof and except that the provisions of Section 7 hereof shall
not terminate and shall remain in effect.

(d)            Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company, the Guarantors or any
non-defaulting Initial Purchaser for damages caused by its default.

11.            Payment of Expenses.

(a)            Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, the Company and each of the
Guarantors jointly and severally agree to pay or cause to be paid all costs and
expenses incident to the performance of their respective obligations hereunder,
including without limitation, (i) the costs incident to the authorization,
issuance, sale, preparation and delivery of the Securities and any taxes payable
in that connection; (ii) the costs incident to the preparation and printing of
the Preliminary Offering Memorandum, any other Time of Sale Information, any
Issuer Written Communication and the Offering Memorandum (including any
amendment or supplement thereto) and the distribution thereof; (iii) the costs
of reproducing and distributing each of the Transaction Documents; (iv) the fees
and expenses of the Company’s and the Guarantors’ counsel and independent
accountants; (v) the fees and expenses incurred in connection with the
registration or qualification and determination of eligibility for investment of
the Securities under the laws of such jurisdictions as the Representative may
designate and the preparation, printing and distribution of a Blue Sky
Memorandum (including the related fees and expenses of counsel for the Initial
Purchasers); (vi) any fees charged by rating agencies for rating the Securities;
(vii) the fees and expenses of the Trustee and any paying agent (including
related fees and expenses of any counsel to such parties); (viii) all expenses
and application fees incurred in connection with the approval of the Securities
for book-entry transfer by DTC; and (ix) all expenses incurred by the Company in
connection with any “road show” presentation to potential investors (including
50% of the expense of any chartered aircraft jointly used).

28

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(b)            If (i) this Agreement is terminated pursuant to Section 9, (ii)
the Company for any reason fails to tender the Securities for delivery to the
Initial Purchasers or (iii) the Initial Purchasers decline to purchase the
Securities for any reason permitted under this Agreement, the Company and each
of the Guarantors jointly and severally agree to reimburse the Initial
Purchasers for all out-of-pocket costs and expenses (including the fees and
expenses of their counsel) reasonably incurred by the Initial Purchasers in
connection with this Agreement and the offering contemplated hereby.

12.            Persons Entitled to Benefit of Agreement.  This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and any controlling persons
referred to herein, and the affiliates of each Initial Purchaser referred to in
Section 7 hereof.  Nothing in this Agreement is intended or shall be construed
to give any other person any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision contained herein.  No purchaser of
Securities from any Initial Purchaser shall be deemed to be a successor merely
by reason of such purchase.

13.            Survival.  The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Guarantors and
the Initial Purchasers contained in this Agreement or made by or on behalf of
the Company, the Guarantors or the Initial Purchasers pursuant to this Agreement
or any certificate delivered pursuant hereto shall survive the delivery of and
payment for the Securities and shall remain in full force and effect, regardless
of any termination of this Agreement or any investigation made by or on behalf
of the Company, the Guarantors or the Initial Purchasers.

14.            Certain Defined Terms.  For purposes of this Agreement, (a)
except where otherwise expressly provided, the term “affiliate” has the meaning
set forth in Rule 405 under the Securities Act; (b) the term “business day”
means any day other than a day on which banks are permitted or required to be
closed in New York City; (c) the term “subsidiary” has the meaning set forth in
Rule 405 under the Securities Act; (d) the term “Exchange Act” collectively
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder; and (e) the term “written
communication” has the meaning set forth in Rule 405 under the Securities Act.

15.            Compliance with USA Patriot Act.  In accordance with the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)), the Initial Purchasers are required to obtain, verify
and record information that identifies their respective clients, including the
Company, which information may include the name and address of their respective
clients, as well as other information that will allow the Initial Purchasers to
properly identify their respective clients.

16.            Miscellaneous.
 

29

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(a)            Authority of the Representative.  Any action by the Initial
Purchasers hereunder may be taken by J.P. Morgan Securities LLC on behalf of the
Initial Purchasers, and any such action taken by J.P. Morgan Securities LLC
shall be binding upon the Initial Purchasers.

(b)            Notices.  All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
and confirmed by any standard form of telecommunication.  Notices to the Initial
Purchasers shall be given to the Representative c/o J.P. Morgan Securities LLC,
383 Madison Avenue, New York, New York 10179 (fax: 212-270-1063); Attention: Jay
Droogan. Notices to the Company and the Guarantors shall be given to them at
Graham Holdings Company, 1300 North 17th Street, 17th Floor, Arlington, Virginia
22209 (fax: 703-345-6545; email: Nicole.Maddrey@ghco.com); Attention: Nicole M.
Maddrey.

(c)            Governing Law.  This Agreement and any claim, controversy or
dispute arising under or related to this Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

(d)            Submission to Jurisdiction.  The Company and each of the
Guarantors hereby submit to the exclusive jurisdiction of the U.S. federal and
New York state courts in the Borough of Manhattan in The City of New York in any
suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.  The Company and each of the Guarantors waive
any objection which it may now or hereafter have to the laying of venue of any
such suit or proceeding in such courts.  Each of the Company and each of the
Guarantors agrees that final judgment in any such suit, action or proceeding
brought in such court shall be conclusive and binding upon the Company and each
Guarantor, as applicable, and may be enforced in any court to the jurisdiction
of which Company and each Guarantor, as applicable, is subject by a suit upon
such judgment.

(e)            Waiver of Jury Trial.  Each of the parties hereto hereby waives
any right to trial by jury in any suit or proceeding arising out of or relating
to this Agreement.

(f)            Counterparts.  This Agreement may be signed in counterparts
(which may include counterparts delivered by any standard form of
telecommunication), each of which shall be an original and all of which together
shall constitute one and the same instrument.

(g)            Amendments or Waivers.  No amendment or waiver of any provision
of this Agreement, nor any consent or approval to any departure therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
parties hereto.
 
(h)            Headings.  The headings herein are included for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
 
30

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If the foregoing is in accordance with your understanding, please indicate your
acceptance of this Agreement by signing in the space provided below.
 

  Very truly yours,           GRAHAM HOLDINGS COMPANY                      
 
By:
/s/ Wallace R. Cooney       Name:     Wallace R. Cooney       Title: Senior Vice
President-Finance, Chief Financial Officer          

 
 

  GRAHAM MEDIA GROUP, INC.          
 
By:
/s/ Heidi I. Schmid Whiting       Name:     Heidi I. Schmid Whiting       Title:
Vice President and General Counsel          

 
 

  GRAHAM MEDIA GROUP, HOUSTON, INC.          
 
By:
/s/ Heidi I. Schmid Whiting       Name:     Heidi I. Schmid Whiting       Title:
Vice President and General Counsel          

 
 

  GRAHAM MEDIA GROUP, MICHIGAN, INC.          
 
By:
/s/ Heidi I. Schmid Whiting       Name:     Heidi I. Schmid Whiting       Title:
Vice President and General Counsel          

 
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  GRAHAM MEDIA GROUP, ORLANDO, INC.          
 
By:
/s/ Heidi I. Schmid Whiting       Name:     Heidi I. Schmid Whiting       Title:
Vice President and General Counsel          

 
 

  GRAHAM MEDIA GROUP, SAN ANTONIO, INC.          
 
By:
/s/ Heidi I. Schmid Whiting       Name:     Heidi I. Schmid Whiting       Title:
Vice President and General Counsel          

 
 

  GRAHAM MEDIA GROUP, FLORIDA, INC.          
 
By:
/s/ Heidi I. Schmid Whiting       Name:     Heidi I. Schmid Whiting       Title:
Vice President and General Counsel          

 
 

  KAPLAN, INC.          
 
By:
/s/ Matthew C. Seelye       Name:     Matthew C. Seelye       Title: Executive
Vice President, Chief Financial Officer and Treasurer          

 
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  KAPLAN INTERNATIONAL NORTH AMERICA, LLC          
 
By:
/s/ Ashley Pomonis       Name:     Ashley Pomonis       Title: Assistant
Secretary          

 
 

  IOWA COLLEGE ACQUISITIONS, LLC          
 
By:
/s/ David Adams       Name:     David Adams       Title: Vice President, General
Counsel and Secretary          

 
 

  GROUP DEKKO HOLDINGS, INC.          
 
By:
/s/ David Burnworth       Name:     David Burnworth       Title: President and
Chief Executive Officer          

 
 
 

  GROUP DEKKO, INC.          
 
By:
/s/ David Burnworth       Name:     David Burnworth       Title: President and
Chief Executive Officer          

 
 
 

  FRTW HOLDINGS, LLC          
 
By:
/s/ Barry W. Holden       Name:     Barry W. Holden       Title: President      
   

 
 
33

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  DF INSTITUTE, LLC          
 
By:
/s/ David Adams       Name:     David Adams       Title: Vice President, General
Counsel and Assistant Secretary          

 
 
34

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Accepted: As of the date first written above

J.P. MORGAN SECURITIES LLC

 For itself and on behalf of the
 several Initial Purchasers listed
 in Schedule 1 hereto.
 

    By:   
/s/ Lorna Hajdini
 
Authorized Signatory
 
 

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Schedule 1
 
 
 
Initial Purchaser
 
Principal Amount
 
J.P. Morgan Securities LLC  
 
$
120,000,000
 
Wells Fargo Securities, LLC  
 
$
120,000,000
 
HSBC Securities (USA) Inc.  
 
$
49,400,000
 
Merrill Lynch, Pierce, Fenner & Smith
Incorporated  
 
$
49,400,000
 
PNC Capital Markets LLC  
 
$
42,400,000
 
BNY Mellon Capital Markets, LLC  
 
$
18,800,000
           
Total  
 
$
400,000,000
 

 
 
 
36

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Schedule 2
 
 
Guarantors

Graham Media Group, Inc.

Graham Media Group, Florida, Inc.

Graham Media Group, Houston, Inc.

Graham Media Group, Michigan, Inc.

Graham Media Group, Orlando, Inc.

Graham Media Group, San Antonio, Inc.

Kaplan, Inc.

DF Institute, LLC

Iowa College Acquisition, LLC

Kaplan International North America, LLC

Group Dekko Holdings Inc.

Group Dekko, Inc.

FRTW Holdings LLC
 

37

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Schedule 3

Significant Subsidiaries

Graham Media Group, Inc.

Kaplan, Inc.

Iowa College Acquisition, LLC
 

38

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ANNEX A

 
Additional Time of Sale Information

1.            Term sheet containing the terms of the Securities, substantially
in the form of Annex B.

39

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ANNEX B

Pricing Term Sheet
 
 
Pricing Term Sheet, dated May 24, 2018
to Preliminary Offering Memorandum dated May 21, 2018
Strictly Confidential

Graham Holdings Company

This pricing term sheet is qualified in its entirety by reference to the
Preliminary Offering Memorandum (the “Preliminary Offering Memorandum”). The
information in this pricing term sheet supplements the Preliminary Offering
Memorandum and updates and supersedes the information in the Preliminary
Offering Memorandum to the extent it is inconsistent with the information in the
Preliminary Offering Memorandum. Terms used and not defined herein have the
meanings assigned in the Preliminary Offering Memorandum.

The notes have not been registered under the Securities Act of 1933, as amended,
or the securities laws of any other jurisdiction. The notes may not be offered
or sold in the United States or to U.S. persons (as defined in Regulation S)
except in transactions exempt from, or not subject to, the registration
requirements of the Securities Act. Accordingly, the notes are being offered
only to (1) “qualified institutional buyers” as defined in Rule 144A under the
Securities Act and (2) outside the United States to non-U.S. persons in
compliance with Regulation S under the Securities Act.

Issuer:
Graham Holdings Company
Security Description:
Senior unsecured notes
Distribution:
144A/RegS for life
Size:
$400,000,000
Gross Proceeds:
$400,000,000
Maturity:
June 1, 2026
Coupon:
5.750%
Issue Price:
100.000% of face amount
Yield to Maturity:
5.750%
Spread to Benchmark Treasury:
+278 basis points
Benchmark Treasury:
UST 2.000% due November 15, 2026
Interest Payment Dates:
June 1 and December 1, commencing December 1, 2018
Equity Clawback:
Up to 40% at 105.750% prior to June 1, 2021
Optional Redemption:
Make-whole call @ T+50 bps prior to June 1, 2021, then:
     
On or after:
Price:
   
June 1, 2021
104.313%
 
June 1, 2022
102.875%
 
June 1, 2023
101.438%
 
June 1, 2024 and
thereafter
100.000%
   
Change of control triggering event:
Putable at 101% of principal plus accrued and unpaid interest
Trade date:
May 24, 2018

 
 
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Settlement:
T+3; May 30, 2018. It is expected that delivery of the notes will be made
against payment therefor on or about May 30, 2018, which is the third business
day following the date hereof (such settlement cycle being referred to as
“T+3”). Under Rule 15c6-1 under the Exchange Act, trades in the secondary market
generally are required to settle in two business days unless the parties to any
such trade expressly agree otherwise. Accordingly, purchasers who wish to trade
the notes on any date prior to the second business day before delivery thereof
will be required, by virtue of the fact that the notes initially will settle in
T+3, to specify an alternative settlement cycle at the time of any such trade to
prevent a failed settlement. Purchasers of the notes who wish to trade the notes
on any date prior to the second business day before delivery thereof should
consult their own advisors.
CUSIP:
384637AA2 (144A) / U3824RAA3 (Reg S)
ISIN:
US384637AA23 (144A) / USU3824RAA33 (Reg S)
Denominations/Multiple:
2,000 x 1,000
Joint book-running managers:
J.P. Morgan Securities LLC
 
Wells Fargo Securities, LLC
 
HSBC Securities (USA) Inc.
 
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
 
PNC Capital Markets LLC
 
Co-Manager:
BNY Mellon Capital Markets, LLC
   

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This material is confidential and is for your information only and is not
intended to be used by anyone other than you. This information does not purport
to be a complete description of these notes or the offering. Please refer to the
Preliminary Offering Memorandum for a complete description.

This communication is being distributed in the United States solely to Qualified
Institutional Buyers, as defined in Rule 144A under the Securities Act of 1933,
as amended, and outside the United States solely to Non-U.S. persons as defined
under Regulation S.

This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction.

Any disclaimer or other notice that may appear below is not applicable to this
communication and should be disregarded.  Such disclaimer or notice was
automatically generated as a result of this communication being sent by
Bloomberg or another email system.
 

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ANNEX C

Restrictions on Offers and Sales Outside the United States

In connection with offers and sales of Securities outside the United States:

(a)            Each Initial Purchaser acknowledges that the Securities have not
been registered under the Securities 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 transactions not subject to, the
registration requirements of the Securities Act.

(b)            Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:

(i)            Such Initial Purchaser has offered and sold the Securities, and
will offer and sell the Securities, (A) as part of their distribution at any
time and (B) otherwise until 40 days after the later of the commencement of the
offering of the Securities and the Closing Date, only in accordance with
Regulation S under the Securities Act (“Regulation S”) or Rule 144A or any other
available exemption from registration under the Securities Act.

(ii)            None of such Initial Purchaser or any of its affiliates or any
other person acting on its or their behalf has engaged or will engage in any
directed selling efforts with respect to the Securities, and all such persons
have complied and will comply with the offering restrictions requirement of
Regulation S.

(iii)            At or prior to the confirmation of sale of any Securities sold
in reliance on Regulation S, such Initial Purchaser will have sent to each
distributor, dealer or other person receiving a selling concession, fee or other
remuneration that purchases Securities from it during the distribution
compliance 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, as amended (the “Securities 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 of the Securities and the
date of original issuance of the Securities, except in accordance with
Regulation S or Rule 144A or any other available exemption from registration
under the Securities Act.  Terms used above have the meanings given to them by
Regulation S.
 
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(iv)            Such Initial Purchaser has not and will not enter into any
contractual arrangement with any distributor with respect to the distribution of
the Securities, except with its affiliates or with the prior written consent of
the Company.

Terms used in paragraph (a) and this paragraph (b) and not otherwise defined in
this Agreement have the meanings given to them by Regulation S.

(c)            Each Initial Purchaser acknowledges that no action has been or
will be taken by the Company that would permit a public offering of the
Securities, or possession or distribution of any of the Time of Sale
Information, the Offering Memorandum, any Issuer Written Communication or any
other offering or publicity material relating to the Securities, in any country
or jurisdiction where action for that purpose is required.

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ANNEX D

Form of Opinion and 10b-5 Letter of Counsel for the Company and the Guarantors

[Attached]
 

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ANNEX E

Form of Opinion of Florida Counsel for the Company and the Guarantors

[Attached]
 
 
 
 
 
 
 
 
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