Exhibit 99.8
2,000,000 Shares
AMERICAN RADIO SYSTEMS CORPORATION
11 3/8% Cumulative Exchangeable Preferred Stock
PURCHASE AGREEMENT
January 27, 1997
CREDIT SUISSE FIRST BOSTON CORPORATION
ALEX. XXXXX & SONS INCORPORATED
BT SECURITIES CORPORATION
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXX XXXXXX INC.,
c/o Credit Suisse First Boston Corporation,
00 Xxxxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Dear Sirs:
1. Introductory. American Radio Systems Corporation, a Delaware
corporation (the "Company") proposes, subject to the terms and conditions stated
herein, to issue and sell to the several initial purchasers named in Schedule A
hereto (the "Purchasers") 2,000,000 shares of its 11 3/8% Cumulative
Exchangeable Preferred Stock, initial liquidation preference $100 per share (the
"Shares"). The Shares are exchangeable, in whole but not in part on any dividend
payment date, at the option of the Company, for its 11 3/8% Subordinated
Exchange Debentures Due 2009 (the "Exchange Debentures") to be issued under an
indenture (the "Indenture") between the Company and Fleet National Bank, as
Trustee.
The Company has entered into a $550,000,000 Credit Agreement and a
$350,000,000 Credit Agreement each, dated as of January 24, 1997, with The Bank
of New York as Collateral Agent and Administrative Agent, and the Co-Syndication
Agents, the Managing Agents, the Agent and the Co-Agents named therein and the
lenders parties thereto (together, the "Credit Agreements"). The Purchasers and
their direct and indirect transferees of the Offered Securities will be entitled
to the benefits of the Registration Rights Agreement, to be dated as of January
30, 1997 (the "Registration Rights Agreement"), pursuant to which the Company
has agreed, among other things, to file a registration statement (the
"Registration Statement") with the Securities and Exchange Commission (the
"Commission") registering the Shares or the Exchange Preferred Stock (as defined
in the Registration Rights Agreement) under the Securities Act.
The Company hereby agrees with the several Purchasers as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Purchasers that:
(a) A preliminary offering circular and an offering circular
relating to the Shares to be offered by the Purchasers have been
prepared by the Company. Such preliminary offering circular and
offering circular, as supplemented as of the date of this Agreement and
including the Appendices thereto, and any other document approved by
the Company for use in connection with the contemplated resale of the
Offered Securities are hereinafter collectively referred to as the
"Offering Document". On the date of this Agreement, the Offering
Document does not 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. The preceding sentence does not apply to
statements in or omissions from the Offering Document based upon
written information furnished to the Company by any Purchaser through
Credit Suisse First Boston Corporation ("CSFBC") specifically for use
therein, it being understood and agreed that the only such information
is that described as such in Section 7(b). Except as disclosed in the
Offering Document, on the date of this Agreement, the Company's Annual
Report on Form 10-K most recently filed with the Commission and all
subsequent reports (collectively, the "Exchange Act Reports") which
have been filed by the Company with the Commission or sent to
stockholders pursuant to the Securities Exchange Act of 1934 (the
"Exchange Act") do not include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such
documents, when they were filed with the Commis sion, conformed in all
material respects to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder.
(b) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Offering Document; and the
Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification.
(c) Each subsidiary of the Company has been duly incorporated
and is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Offering Document; and each subsidiary of the Company is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification; all of the
issued and outstanding capital stock of each subsidiary of the Company
has been duly authorized and validly issued and is fully paid and
nonassessable; and, except for the pledge pursuant to the Credit
Agreements, the capital stock of each subsidiary owned by the Company,
directly or through subsidiaries, is owned free from liens,
encumbrances and defects.
(d) The Shares and all other outstanding shares of capital
stock of the Company have been duly authorized; all outstanding shares
of capital stock of the Company are, and, when the Shares have been
delivered and paid for in accordance with this Agreement on the Closing
Date (as hereinafter defined), such Shares will have been, validly
issued, fully paid and nonassessable and will conform to the respective
descriptions thereof contained in the Offering Document; and the
stockholders of the Company have no preemptive rights with respect to
the Shares; and there are no restrictions on transfers of the Shares or
the Exchange Debentures except as required by (A) Rule 144A under the
Securities Act or otherwise described under "Transfer Restrictions" in
the Offering Document, (B) the restrictions on transfer contained in
the Purchaser's Letter (as hereinafter defined) with respect to
Securities (as defined therein) purchased by Institutional Accredited
Investors (as hereinafter defined) and (C) the Indenture, all as
described in the Offering Document under "The Offering", "Risk
Factors--Factors Relating to the Securities--Lack of Trading Market for
the Exchangeable Preferred Stock; Transfer Restrictions", "Description
of the
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Exchangeable Preferred Stock--Book--Entry Only--Issuance--The
Depository Trust Company", "Plan of Distribution" and "Transfer
Restrictions".
(e) The Indenture has been duly authorized by the Company and
meets the requirements for qualification under the Trust Indenture Act
of 1939 (the "Trust Indenture Act"); the Exchange Debentures have been
duly authorized; when the Exchange Debentures are delivered in exchange
for the Shares pursuant to the terms of the Shares, the Exchange
Debentures will have been duly executed, authenticated, issued and
delivered and will conform to the description thereof contained in the
Offering Document, and the Indenture constitutes, and the Exchange
Debentures upon delivery will constitute, valid and legally binding
obligations of the Company, enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(f) The Registration Rights Agreement has been duly authorized
and, when executed and delivered by the Company and the other parties
thereto, will constitute a valid and legally binding obligation of the
Company enforceable in accordance with its terms, subject to
bankruptcy, insol vency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles; the
Registration Rights Agreement will conform in all material respects
with the description thereof contained in the Offering Document; the
Exchange Preferred Stock (as defined in the Registration Rights
Agreement) has been duly authorized and reserved for issuance in
exchange for the Shares and when delivered in accordance with the terms
of the Shares and the Registration Rights Agreement, the Exchange
Preferred Stock will be validly issued, fully paid and nonassessable,
and the stockholders of the Company will have no preemptive rights with
respect to it.
(g) Except as disclosed in the Offering Document, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or any
Purchaser for a brokerage commission, finder's fee or other like
payment in connection with the offering of the Shares.
(h) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by this
Agreement, the Indenture or the Registration Rights Agreement in
connection with the issu ance and sale of the Shares by the Company or
the issuance and delivery of the Exchange Debentures or the Exchange
Preferred Stock, except in the case of the Registration Rights
Agreements for filing and effectiveness of the Exchange Registration
Statement and/or Shelf Registration Statement (as defined therein) with
the Commission.
(i) The execution, delivery and performance of each of the
Indenture the Registration Rights Agreement, this Agreement and the
Credit Agreements by the Company, the issuance and sale of the Shares
and compliance with the respective terms and provisions thereof will
not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any statute, any rule, regulation or
order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company or any subsidiary of the
Company or any of their properties, the Credit Agreements, or any other
agreement or instrument to which the Company or any such subsidiary is
a party or by which the Company or any such subsidiary is bound or has
agreed to be bound or to which of the properties of the Company or any
such subsidiary is subject, or the charter or by-laws of the Company or
any such subsidiary, and the Company has full power and authority to
authorize, issue and sell the Shares as contemplated by this Agreement
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and to authorize, issue and deliver the Exchange Preferred Stock and
the Exchange Debentures as contemplated by the terms of the Shares.
(j) Each of the radio stations owned, operated, programmed,
marketed or for which advertising time is sold by the Company, its
subsidiaries and, to the Company's knowledge, each of EZ
Communications, Inc. and CBC of Baltimore, Inc. and their subsidiaries
(collectively, the "Acquisition Businesses") is validly licensed by the
Federal Communications Commission (the "FCC") and no administrative or
judicial proceedings are pending before or, to the Company's knowledge
threatened by the FCC with respect to such licenses; the Company, its
subsidiaries and, to the Company's knowledge, the Acquisition
Businesses possess adequate certificates, authorizations or permits
which are in full force and effect issued by other appropriate
governmental agencies or bodies necessary to conduct the business now
operated by them and have not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit that, if determined adversely to the Company, any
of its subsidiaries or the Acquisition Businesses, would individually
or in the aggregate have a material adverse effect on the Company and
its subsidiaries taken as a whole (including after the acquisition of
the Acquisition Businesses).
(k) This Agreement has been duly authorized, executed and
delivered by the Company.
(l) Except as disclosed in the Offering Document, the Company,
its subsidiaries and, to the Company's knowledge, the Acquisition
Businesses have good and marketable title to all real properties and
all other properties and assets owned by them, in each case free from
liens, encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or to be made thereof
by them; and except as disclosed in the Offering Document, the Company,
its subsidiaries and, to the Company's knowledge, the Acquisition
Businesses hold any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere
with the use made or to be made thereof by them.
(m) No labor dispute with the employees of the Company, any
subsidiary or, to the Company's knowledge, any Acquisition Businesses
exists or, to the knowledge of the Company, is imminent that might have
a material adverse effect on the Company and its subsidiaries taken as
a whole (including after the acquisition of the Acquisition
Businesses).
(n) The Company, its subsidiaries and, to the Company's
knowledge, the Acquisition Businesses own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and
other intellectual property (collectively, "intellectual property
rights") necessary to conduct the business now operated by them, or
presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with respect
to any intellectual property rights that, if determined adversely to
the Company, any of its subsidiaries or any Acquisition Business, would
individually or in the aggregate have a material adverse effect on the
Company and its subsidiaries taken as a whole (including after the
acquisition of the Acquisition Businesses).
(o) Except as disclosed in the Offering Document, none of the
Company, any of its subsidiaries or, to the Company's knowledge, any
Acquisition Business is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances (collectively, "environmental laws"), owns or operates any
real property contaminated with any substance that is subject to any
environmental laws, is liable for any off-site
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disposal or contamination pursuant to any environmental laws, or is
subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in
the aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole (including after the acquisition of the
Acquisition Businesses); and the Company is not aware of any pending
investigation which might lead to such a claim.
(p) Except as disclosed in the Offering Document, there are no
pending actions, suits or proceedings against or affecting the Company,
any of its subsidiaries, or any of their respective properties or, to
the Company's knowledge, the Acquisition Businesses or any of their
respective properties that, if determined adversely to the Company, any
of its subsidiaries or any of the Acquisition Businesses, would
individually or in the aggregate have a material adverse effect on the
condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries (including after the
acquisition of the Acquisition Businesses) taken as a whole, or would
materially and adversely affect the ability of the Company to perform
its obligations under the Registration Rights Agreement, the Indenture
or this Agreement, or which are otherwise material in the context of
the sale of the Shares (including after the acquisition of the
Acquisition Businesses); and no such actions, suits or proceedings are
threatened or, to the Company's knowledge, contemplated.
(q) The financial statements included in the Offering Document
present fairly the xxxxx cial position of the Company and its
consolidated subsidiaries and the other entities named therein as of
the dates shown and their results of operations and cash flows for the
periods shown, and such financial statements have been prepared in
conformity with the generally accepted accounting principles in the
United States applied on a consistent basis; the pro forma condensed
consolidated financial statements and other pro forma financial
information (including the notes thereto) included in the Offering
Document (A) comply as to form in all material respects with the
applicable requirements of Regulation S-X promulgated under the
Securities Act and (B) have been computed on the bases described
therein; and the assumptions used in preparing such pro forma financial
information provide a reasonable basis for presenting the significant
effects directly attributable to the transactions or events described
therein, the related pro forma adjustments give appropriate effect to
those assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical
financial statement amounts.
(r) Except as disclosed in the Offering Document, since the
date of the latest audited financial statements included in the
Offering Document there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the condition (financial or other), business, properties or results
of operations of the Company and its subsidi aries taken as a whole,
and, except as disclosed in or contemplated by the Offering Document,
there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
(s) The Company is not, and will not be after giving effect to
the American Probable Transactions (as defined in the Offering
Document), an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered
under Section 8 of the United States Investment Company Act of 1940
(the "Investment Company Act"), nor is it a closed-end investment
company required to be registered, but not registered, thereunder; and
the Company is not and, after giving effect to the American Probable
Transactions (as so defined) and the offering and sale of the Shares
and the application of the proceeds thereof as described in the
Offering Document, will not be an "investment company" as defined in
the Investment Company Act.
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(t) No securities of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as the Shares or Exchange
Debentures are listed on any national securities exchange registered
under Section 6 of the Exchange Act or quoted in a U.S. automated
inter-dealer quotation system.
(u) The offer and sale of the Shares in the manner
contemplated by this Agreement will be exempt from the registration
requirements of the Securities Act by reason of Section 4(2) thereof
and Regulation S thereunder; and it is not necessary to qualify an
indenture prior to the registration of the Exchange Debentures as
contemplated in the Registration Rights Agreement in respect of the
Exchange Debentures under the Trust Indenture Act.
(v) Neither the Company, nor any of its affiliates, nor any
person acting on its or their behalf (i) has, within the six-month
period prior to the date hereof, offered or sold in the United States
or to any U.S. person (as such terms are defined in Regulation S under
the Securities Act ("Regulation S")) any Shares, any Exchange Preferred
Stock, any Exchange Debentures or any security of the same class or
series as any of the foregoing, any instruments representing interests
therein or any depositary shares representing the right to receive any
such securities, or (ii) has offered or will offer or sell the Shares
or Exchange Debentures (A) in the United States by means of any form of
general solicitation or general advertising within the meaning of Rule
502(c) under the Securities Act or (B) with respect to any such
securities sold in reliance on Rule 903 of Regulation S, by means of
any directed selling efforts within the meaning of Rule 902(b) of
Regulation S. The Company, its affiliates and any person acting on its
or their behalf have complied and will comply with the offering
restrictions requirement of Regulation S. The Company has not entered
and will not enter into any contractual arrangement with respect to the
distribution of the Shares or Exchange Debentures except for this
Agreement and the Registration Rights Agreement.
(w) The Company is subject to Section 13 or 15(d) of the
Exchange Act.
3. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Purchasers, and the Purchasers agree, severally and not jointly, to purchase
from the Company, at a purchase price of $96.50 per share plus accumulated
dividends, if any, from January 30, 1997, the respective numbers of Shares set
forth opposite the names of the several Purchasers in Schedule A hereto.
The Company will deliver against payment of the purchase price the
Shares in the form of one or more permanent global securities in definitive form
(the "Global Securities") and registered in the name of Cede & Co., as nominee
for The Depository Trust Company ("DTC"). Interests in any permanent Global
Securities will be held only in book-entry form through DTC, except in the
limited circumstances described in the Offering Document. Payment for the Shares
shall be made by the Purchasers in Federal (same day) funds by official check or
checks or wire transfer to an account previously designated to CSFBC by the
Company at a bank acceptable to CSFBC drawn to the order of the Company at the
office of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 9:30 A.M.
(New York time), on January 30, 1997, or at such other time not later than seven
full business days thereafter as CSFBC and the Company determine, such time
being herein referred to as the "Closing Date", against delivery to Xxxxxx Trust
Company ("Xxxxxx") as custodian for DTC of the Global Securities representing
all of the Shares. The Global Securities will be made available for checking at
the New York office of Xxxxxx at least 24 hours prior to the Closing Date.
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Notwithstanding the foregoing, any Shares sold in reliance on
Regulation S or sold to Institutional Accredited Investors pursuant to Section
4(c) shall be issued in definitive, fully registered form and shall bear the
legend relating thereto set forth under "Transfer Restrictions" in the Offering
Document, but shall be paid for in the same manner as any Shares to be purchased
by the Purchasers hereunder and to be offered and sold by them in reliance on
Rule 144A under the Securities Act.
4. Representations by Purchasers; Resale by Purchasers. (a) Each
Purchaser severally represents and warrants to the Company that it is an
"accredited investor" within the meaning of Regulation D under the Securities
Act.
(b) Each Purchaser severally acknowledges that neither the
Shares nor the Exchange Debentures (collectively, the "Restricted
Securities") have 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 in accordance with Regulation S or
pursuant to an exemption from the registration requirements of the
Securities Act. Each Purchaser severally represents and agrees that it
has offered and sold the Restricted Securities, and will offer and sell
the Restricted Securities (i) as part of its distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of
the offering and the Closing Date, only in accordance with Rule 903 or
Rule 144A under the Securities Act ("Rule 144A") or in the case of
CSFBC or any other Purchaser authorized by CSFBC to a limited number of
Institutional Accredited Investors in accordance with subsection (c).
Accordingly, neither such Purchaser nor its affiliates, nor any persons
acting on its or their behalf, have engaged or will engage in any
directed selling efforts with respect to the Restricted Securities, and
such Purchaser, its affiliates and all persons acting on its or their
behalf have complied and will comply with the offering restrictions
requirement of Regulation S. Each Purchaser severally agrees that, at
or prior to confirmation of sale of the Restricted Securities, other
than a sale pursuant to Rule 144A or a sale to an Institutional
Accredited Investor in accordance with subsection (c), such Purchaser
will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases the Shares
from it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securi ties Act of 1933 (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 date of the commencement of the offering and the
closing date, except in either case in accordance with
Regulation S (or Rule 144A if available) under the Securities
Act. Terms used above have the meanings given to them by
Regulation S."
Terms used in this subsection (b) have the meanings given to them by
Regulation S.
(c) CSFBC and any other Purchaser authorized by CSFBC may
offer and sell Shares in definitive, fully registered form to a limited
number of institutions, each of which is reasonably believed by the
applicable Purchaser to be an "accredited investor" within the meaning
of Rule 501(a)(1), (2) or (3) under the Securities Act or an entity in
which all of the equity owners are accredited investors within the
meaning of Rule 501(a)(1), (2) or (3) under the Securities Act (each,
an "Institutional Accredited Investor"); provided that each such
Institutional Accredited Investor executes and delivers to such
Purchaser and the Company, prior to the consummation of any sale of
Shares to such Institutional Accredited Investor, a Purchaser's Letter
in substantially the form attached hereto as Schedule E (a "Purchaser's
Letter").
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(d) Each Purchaser severally agrees that it and each of its
affiliates has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Restricted
Securities except for any such arrangements with the other Purchasers
or affiliates of the other Purchasers, or with the prior written
consent of the Company.
(e) Each Purchaser severally agrees that it and each of its
affiliates will not offer or sell the Restricted Securities in the
United States by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act,
including, but not limited to (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar
media or broadcast over television or radio, or (ii) any seminar or
meeting whose attendees have been invited by any general solicitation
or general advertising. Each Purchaser severally agrees, with respect
to resales by it of Shares purchased from the Company made in reliance
on Rule 144A, other than through the National Association of Securities
Dealers ("NASD"), the Private Offerings, Resale and Trading through
Automated Linkages ("PORTAL") market, to deliver either with the
confirmation of such resale or otherwise prior to settlement of such
resale a notice to the effect that the resale of such Shares has been
made in reliance upon the exemption from the registration requirements
of the Securities Act provided by Rule 144A.
(f) Each of the Purchasers severally represents and agrees
that (i) it has not offered or sold, and prior to the date six months
after the date of issue of the Restricted Securities will not offer or
sell, any Restricted Securities to persons in the United Kingdom except
to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public
in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995, (ii) it has complied and will comply with
all applicable provisions of the Financial Services Xxx 0000 with
respect to anything done by it in relation to the Restricted Securities
in, from or otherwise involving the United Kingdom, and (iii) it has
only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Restricted Securities to a person who is of a kind described in Article
11(3) of the Financial Services Xxx 0000 (Investment Advertisements)
(Exemptions) Order 1996 or is a person to whom the document may
otherwise lawfully be issued or passed on.
5. Certain Agreements of the Company. The Company agrees with the
several Purchasers that:
(a) The Company will advise CSFBC promptly of any proposal to
amend or supplement the Offering Document and will not effect such
amendment or supplementation without CSFBC's consent. If, at any time
prior to the completion of the resale of the Shares by the Purchasers,
any event occurs as a result of which the Offering Document as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, the Company promptly will notify CSFBC of
such event and promptly will prepare, at its own expense, an amendment
or supplement which will correct such statement or omission. Neither
CSFBC's consent to, nor the Purchasers' delivery to offerees or
investors of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 6.
(b) The Company will furnish to CSFBC copies of any
preliminary offering circular, the Offering Document and all amendments
and supplements to such documents, in each case as soon as available
and in such quantities as CSFBC requests, and the Company will furnish
to CSFBC on the date hereof five copies of the Offering Document signed
by a duly authorized officer of the
8
Company, one of which will include the independent accountants' reports
therein manually signed by such independent accountants. At any time
when the Company is not subject to Section 13 or 15(d) of the Exchange
Act, the Company will promptly furnish or cause to be furnished to
CSFBC (and, upon request, to each of the other Purchasers) and, upon
request of holders and prospective purchasers of the Shares and the
Exchange Debentures to such holders and purchasers, copies of the
information required to be delivered to holders and prospective
purchasers of such securities pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto) in order to permit
compliance with Rule 144A in connection with resales by such holders of
such securities. The Company will pay the expenses of printing and
distributing to the Purchasers (and such holders and prospective
purchasers) all such documents.
(c) The Company will arrange for the qualification of the
Shares for sale and the determination of their eligibility for
investment under the laws of such jurisdictions in the United States
and Canada as CSFBC designates and will continue such qualifications in
effect so long as required for the resale of the Shares by the
Purchasers, provided that the Company will not be required to qualify
as a foreign corporation or to file a general consent to service of
process in any such state or subject itself to taxation generally in
any jurisdiction.
(d) During the period of five years hereafter, the Company
will furnish to CSFBC and, upon request, to each of the other
Purchasers, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year; and the
Company will furnish to CSFBC and, upon request, to each of the other
Purchasers (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission
under the Exchange Act or mailed to stockholders; and (ii) from time to
time, such other information concerning the Company as CSFBC may
reasonably request.
(e) During the period (the "Restriction Period") from the date
hereof until the earlier of three years after the Closing Date or the
date on which all the Restricted Securities held by persons that are
not affiliates of the Company may be sold without registration pursuant
to Rule 144(k), the Company will, upon request, furnish to CSFBC, each
of the other Purchasers and any holder of Restricted Securities a copy
of the restrictions on transfer applicable to the Restricted
Securities.
(f) During the Restriction Period, 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 Restricted Securities that have
been reacquired by any of them except pursuant to an effective
Registration Statement under the Securities Act.
(g) During the Restriction Period, the Company will not be or
become, an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered
under Section 8 of the Investment Company Act, and is not, and will not
be or become, a closed-end investment company required to be
registered, but not registered, under the Investment Company Act.
(h) The Company will pay all expenses incidental to the
performance of its obligations under this Agreement, the Indenture and
the Registration Rights Agreement, including (i) the fees and expenses
of the Trustee, the registrar, transfer agent of the Shares, any
custodian and their professional advisers; (ii) all expenses in
connection with the execution, issue, authentication, packaging and
initial delivery of the Shares, the Exchange Debentures and the
Exchange Preferred Stock, the preparation and printing of this
Agreement, the Shares, the Indenture, the Registration Rights
Agreement, the Offering Document and amendments and supplements
thereto, and any
9
other document relating to the issuance, offer, sale and delivery of
the Shares, the Exchange Preferred Stock and the Exchange Debentures;
(iii) the cost of qualifying the Shares for trading in the PORTAL
market and any expenses incidental thereto; and (iv) the cost of any
advertising approved by the Company in connection with the issue of the
Shares. The Company will also pay or reimburse the Purchasers (to the
extent incurred by them) for any expenses (including fees and
disbursements of counsel) incurred in connection with qualification of
the Shares, the Exchange Debentures and the Exchange Preferred Stock
for sale under the laws of such jurisdictions in the United States and
Canada as CSFBC designates and the printing of memoranda relating
thereto, for any fees charged by investment rating agencies for the
rating of the Restricted Securities, for any travel expenses of the
Company's officers and employees and any other expenses of the Company
in connection with attending or hosting meetings with prospective
purchasers of the Shares and for expenses incurred in distributing
preliminary offering circulars and the Offering Document (including any
amendments and supplements thereto) to the Purchasers.
(i) In connection with the offering, until CSFBC shall have
notified the Company and the other Purchasers of the completion of the
resale of the Shares, neither the Company nor any of its affiliates has
or will, either alone or with one or more other persons, bid for or
purchase for any account in which it or any of its affiliates has a
beneficial interest any, Shares or Exchange Debentures or any
securities of the same class as any of the foregoing (collectively,
"Subject Securities") or attempt to induce any person to purchase any
Subject Securities; and neither it nor any of its affiliates will make
bids or purchases for the purpose of creating actual, or apparent,
active trading in, or of raising the price of, any Subject Securities.
(j) For a period of 90 days after the date of the initial
offering of the Shares by the Purchasers, the Company will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under
the Securities Act (other than as contemplated by the Registration
Rights Agreement) relating to (a) any exchangeable nonconvertible
preferred stock or any other securities of the Company which are
substantially similar to any of the Restricted Securities, or (b) any
other securities convertible into or exchange able or exercisable for
exchangeable nonconvertible preferred stock or substantially similar
securities of the Company, or publicly disclose the intention to make
any such offer, sale, pledge or disposal, without the prior written
consent of CSFBC, except for any such offer, sale, contract to sell,
pledge or other disposition of (i) any of the Restricted Securities,
(ii) securities issued or delivered upon conversion, exchange or
exercise of any other securities of the Company outstanding on the date
hereof, (iii) securities issued in connection with mergers,
acquisitions or similar transactions or (iv) the Exchange Preferred
Stock. The Company will not at any time offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, any securities
under circumstances where such offer, sale, pledge, contract or
disposition would cause the exemption afforded by Section 4(2) of the
Securities Act or the safe harbor of Regulation S there under to cease
to be applicable to the offer and sale of the Restricted Securities.
6. Conditions of the Obligations of the Purchasers. The obligations of
the several Purchasers to purchase and pay for the Shares on the Closing Date
will be subject to the accuracy of the representations and warranties on the
part of the Company herein, to the accuracy of the statements of officers of the
Company made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a) The Purchasers shall have received a letter, dated the
date of this Agreement, of Deloitte & Touche LLP confirming that they
are independent public accountants under rule 101 of the American
Institute of Certified Public Accountants Code of Professional Conduct,
and its interpretation and rulings and to the effect set forth in
Schedule B-1 hereto.
10
(b) The Purchasers shall have received letters, dated the date
of delivery thereof (which shall be on or prior to the date of this
Agreement), of Ernst & Young LLP, Miller, Kaplan, Arase & Co. and Price
Waterhouse LLP, confirming that they are independent public accountants
under rule 101 of the American Institute of Certified Public
Accountants Code of Professional Conduct and its interpretation and
rulings and to the effect set forth in Schedule B-2 hereto.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of
the Company or its subsidiaries which, in the judgment of a majority in
interest of the Purchasers including CSFBC, is material and adverse and
makes it impractical or inadvisable to proceed with completion of the
offering or the sale of and payment for the Shares; (ii) any
downgrading in the rating of any debt securities or preferred stock of
the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the
Securities Act), or any public announcement that any such organization
has under surveillance or review its rating of any debt securities of
the Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of
such rating); (iii) any suspension or limitation of trading in
securities generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such exchange or on the Nasdaq National
Market, or any suspension of trading of any securities of the Company
on any exchange or in the over-the-counter market; (iv) any banking
moratorium declared by U.S. Federal or New York authorities; or (v) any
outbreak or escalation of major hostilities in which the United States
is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in the
judgment of a majority in interest of the Purchasers including CSFBC,
the effect of any such outbreak, escalation, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with
completion of the offering or sale of and payment for the Shares.
(d) The Purchasers shall have received an opinion, dated the
Closing Date, of Xxxxxxxx & Worcester, counsel for the Company, to the
effect set forth in Schedule C hereto.
(e) The Purchasers shall have received an opinion, dated the
Closing Date, of Dow, Xxxxxx & Xxxxxxxxx, FCC counsel for the Company,
to the effect set forth in Schedule D hereto.
(f) The Purchasers shall have received from Xxxxxxxx &
Xxxxxxxx, counsel for the Purchasers, such opinion or opinions, dated
the Closing Date, with respect to the incorporation of the Company, the
validity of the Shares, the Offering Document, the exemption from
registra tion for the offer and sale of the Shares by the Company to
the several Purchasers and the resales by the several Purchasers as
contemplated hereby and other related matters as CSFBC may require, and
the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(g) The Purchasers shall have received a certificate, dated
the Closing Date, of the Chief Executive Officer of the Company and the
Chief Financial Officer of the Company in which such officers, to the
best of their knowledge after reasonable investigation, shall state
that the represen tations and warranties of the Company in this
Agreement are true and correct, that the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, and that,
subsequent to the date of the most recent financial statements in the
Offering Document there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the condition (financial or other), business, properties or results
of operations of the Company and its
11
subsidiaries taken as a whole except as set forth in or contemplated by
the Offering Document or as described in such certificate.
(h) The Purchasers shall have received a letter, dated the
Closing Date, of each of Deloitte & Touche LLP and Ernst and Young LLP
which meets the requirements of subsections (a) and (b), respectively
of this Section, except that the specified date referred to in such
subsection will be a date not more than five days prior to such Closing
Date for the purposes of this subsection.
(i) On the Closing Date, the Registration Rights Agreement, in
form and substance reasonably satisfactory to the Purchasers, shall
have been duly executed and delivered by the Company and in full force
and effect.
The Company will furnish the Purchasers with such conformed copies of such
opinions, certificates, letters and documents as the Purchasers reasonably
request. CSFBC may in its sole discretion waive on behalf of the Purchasers
compliance with any conditions to the obligations of the Purchasers hereunder.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Purchaser against any losses, claims, damages or liabilities,
joint or several, to which such Purchaser may become subject, under the
Securities Act or the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Offering Document, or any amendment or supplement thereto, or
any related preliminary offering circular or the Exchange Act Reports, or arise
out of or are based upon the 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, and will reimburse
each Purchaser for any legal or other expenses reasonably incurred by such
Purchaser in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Purchaser through CSFBC specifically
for use therein, it being understood and agreed that the only such information
consists of the information described as such in subsection (b) below.
(b) Each Purchaser will severally and not jointly indemnify
and hold harmless the Company against any losses, claims, damages or liabilities
to which the Company may become subject, under the Securities Act or the
Exchange Act or otherwise, insofar as such losses, claims, damages or lia
bilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Offering Document, or any amendment or supplement thereto, or any related
preliminary offering circular, or arise out of or are based upon the omission or
the 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 to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Purchaser through CSFBC specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Purchaser consists of
the following information in the Offering Document furnished on behalf of each
Purchaser: the last paragraph at the bottom of the cover page concerning the
terms of the offering by the Purchasers, the legends concerning (x)
over-allotments and stabilizing and (y)
12
and transactions by affiliated persons on the bottom of page (ii) and the
material relationship disclosure appearing in the eighth paragraph under the
caption "Plan of Distribution".
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of the indemni fied party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Purchasers on the other from the offering of
the Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Purchasers on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company bear to the total discounts and commissions received by the
Purchasers from the Company under this Agreement. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Purchasers
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Purchaser shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
purchased by it were resold exceeds the amount of any damages which such
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The Purchasers' obligations in
this subsection (d) to contribute are several in proportion to their respective
purchase obligations and not joint.
13
(e) The obligations of the Company under this Section shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Purchaser within the meaning of the Securities Act or the Exchange Act; and
the obligations of the Purchasers under this Section shall be in addition to any
liability which the respective Purchasers may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act.
8. Default of Purchasers. If any Purchaser or Purchasers default in
their obligations to purchase Shares hereunder on the Closing Date and the
aggregate number of Shares that such defaulting Purchaser or Purchasers agreed
but failed to purchase does not exceed 10% of the total number of Shares that
the Purchasers are obligated to purchase on the Closing Date, CSFBC may make
arrangements satisfactory to the Company for the purchase of such Shares by
other persons, including any of the Purchasers, but if no such arrangements are
made by the Closing Date, the non-defaulting Purchasers shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Shares that such defaulting Purchasers agreed but failed to purchase on the
Closing Date. If any Purchaser or Purchasers so default and the aggregate number
of Shares with respect to which such default or defaults occur exceeds 10% of
the total number of Shares that the Purchasers are obligated to purchase on the
Closing Date and arrangements satisfactory to CSFBC and the Company for the
purchase of such Shares by other persons are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Purchaser or the Company, except as provided in Section 9. As
used in this Agreement, the term "Purchaser" includes any person substituted for
a Purchaser under this Section. Nothing herein will relieve a defaulting
Purchaser from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Purchaser, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Shares. If this Agreement is terminated pursuant to Section
8 or if for any reason the purchase of the Shares by the Purchasers is not
consummated, the Company shall remain responsible for the expenses to be paid or
reimbursed by it pursuant to Section 5 and the respective obligations of the
Company and the Purchasers pursuant to Section 7 shall remain in effect. If the
purchase of the Shares by the Purchasers is not consummated for any reason other
than solely because of the termination of this Agreement pursuant to Section 8
or the occurrence of any event specified in clause (iii), (iv) or (v) of Section
6(b), the Company will reimburse the Purchasers for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Shares.
10. Notices. All communications hereunder will be in writing and, if
sent to the Purchasers will be mailed, delivered or telegraphed and confirmed to
the Purchasers, c/o Credit Suisse First Boston Corporation, 00 Xxxxxxx Xxxxxx,
Xxx Xxxx, X.X. 00000, Attention: Investment Banking Department--Transactions
Advisory Group, or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 000 Xxxxxxxxxx Xxxxxx, Xxxxxx, XX 00000,
Attention: Xxxxxx X. Xxxxx; provided, however, that any notice to a Purchaser
pursuant to Section 7 will be mailed, delivered or telegraphed and confirmed to
such Purchaser.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder, except that holders and prospective purchasers of
Shares and Exchange Debentures shall be entitled to enforce the agreements for
their benefit contained in the
14
second and third sentences of Section 5(b) hereof against the Company as if such
holders were parties hereto.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without regard to
principles of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and 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.
If the foregoing is in accordance with the Purchasers' understanding of
our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the several
Purchasers in accordance with its terms.
Very truly yours,
AMERICAN RADIO SYSTEMS CORPORATION
By
Name:
Title:
The foregoing Purchase Agreement is hereby confirmed and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
ALEX. XXXXX & SONS INCORPORATED
BT SECURITIES CORPORATION
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXX XXXXXX INC.,
By CREDIT SUISSE FIRST BOSTON CORPORATION
By
Name:
Title:
15
SCHEDULE A
Number of
Purchaser Shares
--------- ------
Credit Suisse First Boston Corporation.............. 1,200,000
Alex. Xxxxx & Sons Incorporated..................... 200,000
BT Securities Corporation........................... 200,000
Xxxxxx Xxxxxxx & Co. Incorporated................... 200,000
Xxxxx Xxxxxx Inc.................................... 200,000
Total.................... 2,000,000
=========
16
SCHEDULE B-1
Letter of Independent Public Accountants
Referred to in Section 6(a)
(i) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on the unaudited
financial statements included in the Offering Document;
(ii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements
of the Company, inquiries of officials of the Company who have
responsibility for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them to believe
that:
(A) the summary combined financial information
included in the Offering Document for each of the five years
ended December 31, 1995 do not agree with, or were not
properly derived from, the amounts set forth in each of the
constituent companies' selected financial data included in the
Offering Document for those same periods;
(B) the selected financial data included in the
Offering Document for each of the five years ended December
31, 1995 do not agree with, or were not properly derived from,
the amounts set forth in the audited financial statements of
the Company; Atlantic Radio, L.P.; Multi Market
Communications, Inc.; SBS Holding, Inc.; and Boston AM Radio
Corporation for those same periods or were not determined on a
basis substantially consistent with that of the corresponding
amounts in the audited financial statements included in the
Offering Document;
(C) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date
not more than five days prior to the date of this Agreement,
there was any change in the capital stock or any increase in
short-term debt or long-term debt of the Company and its
xxxxxxx dated subsidiaries or, at the date of the latest
available balance sheet read by such accountants, there was
any decrease in consolidated net current assets or net assets,
as compared with amounts shown on the latest balance sheet
included in the Offering Document;
(D) for the period from the closing date of the
latest statement of operations included in the Offering
Document to the closing date of the latest available statement
of operations read by such accountants there were any
decreases, as compared with the corresponding period of the
previous year and with the period of corresponding length
ended the date of the latest statement of operations included
in the Offering Document, in consolidated net revenues,
station operating income (defined as net revenues less
operating expenses, excluding depreciation, amortization and
corporate expenses) or in other income and expense, net, or in
the total amounts of consolidated income in the ratio of
earnings to fixed charges and preferred stock dividend; or
17
(E) the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of the
pro forma financial data set forth in the Offering Document;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Offering Document
discloses have occurred or may occur or which are described in
such letter; and
(iii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Offering Document (in each case to the
extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the
Company, its subsidiaries and certain other entities whose financial
statements are included in the Offering Document subject to the
internal controls of the Company's or such entity's accounting system
or are derived directly from such records by analysis or computation)
with the results obtained from inquiries, a reading of such general
accounting records and other procedures specified in such letter and
have found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as otherwise
specified in such letter.
18
SCHEDULE B-2
Letter of Independent Public Accountants
Referred to in Section 6(b)
(i) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on the unaudited
financial statements included or incorporated by reference in the
Offering Document; and
(ii) if applicable, they have compared specified dollar
amounts (or percentages derived from such dollar amounts) and other
financial information contained or incorporated by reference in the
Offering Document (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the
general accounting records of the entity whose financial statements
they have audited subject to the internal controls of such entity's
accounting system or are derived directly from such records by analysis
or computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter.
19
SCHEDULE C
Opinion of Counsel for the Company
Referred to in Section 6(d)
(i) Each of the Company and its Organized Subsidiaries has
been duly incorporated and is an existing corporation in good standing
under the laws of the jurisdiction of its incorporation, with corporate
power and authority to own its properties and conduct its business as
described in the Offering Document; and is duly qualified to do
business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where the
failure to be so qualified would not individually have a material
adverse effect on the Company or such Organized Subsidiary;
(ii) The Shares, the Exchange Preferred Stock (when issued in
accordance with the terms of the Registration Rights Agreement) and all
other outstanding shares of capital stock of the Company have been duly
authorized and are, or in the case of the Exchange Preferred Stock,
will be, validly issued, are fully paid and nonassessable and conform
and will, in the case of the Exchange Preferred Stock, conform to the
respective descriptions thereof contained in the Offering Document; the
Exchange Preferred Stock has been reserved for issuance; and the
stockholders of the Company have no preemptive or other rights with
respect to the any of such shares;
(iii) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and constitutes a
valid and legally binding obligation of the Company enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles and conforms in all material respects to the
description thereof in the Offering Document; except that such counsel
need not express any opinion concerning the validity or enforceability
of Section 7 thereof;
(iv) Each of the Credit Agreements has been duly authorized,
executed and delivered by the Company, has become effective and
constitutes a valid and legally binding obligation of the Company,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(v) The Indenture has been duly authorized, executed and
delivered by the Company; the Exchange Debentures have been duly
authorized by the Company; the Indenture constitutes and, when the
Exchange Debentures have been duly executed, authenticated, issued and
delivered in exchange for the Shares or the Exchange Preferred Stock
pursuant to the terms of the Certificate of Designation of either the
Shares or the Exchangeable Preferred Stock, the Exchange Debentures
will constitute, valid and legally binding obligations of the Company
enforceable in accordance with their respective terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; the Indenture
conforms and the Exchange Debentures will conform to the descriptions
thereof contained in the Offering Document;
20
(vi) No consent, approval, authorization or order of, or
filing with, any govern mental agency or body or any court is required
for the consummation of the transactions contemplated by this
Agreement, the Indenture or the Registration Rights Agreement (except
with respect to the filing with the Commission and the effectiveness of
the registration statements contemplated therein and with respect to
any applicable Blue Sky or State securities law filings) in connection
with the issuance or sale of the Shares by the Company or the issuance
and delivery of the Exchange Preferred Stock or the Exchange
Debentures, except that such counsel need not express any opinion as to
such as may be required by the Communications Act of 1934, as amended
(the "Communications Act") and the rules, and regulations and orders of
the FCC promulgated thereunder;
(vii) The execution, delivery and performance by the Company
of the Indenture, the Registration Rights Agreement and, this
Agreement, the issuance and sale of the Shares and compliance with the
respective terms and provisions thereof will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any statute, any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over the
Company or any subsidiary of the Company or any of their properties,
or, to such counsel's knowledge, any agreement or instrument to which
the Company or any such subsidiary is a party or by which the Company
or any such subsidiary is bound including, but not limited to, the
Credit Agreements, or to which any of the properties of the Company or
any such subsidiary is subject, or the charter or by-laws of the
Company or any such subsidiary, except that such counsel need not
express any opinion with respect to the Communications Act, or the
rules, regulations and orders of the FCC promulgated thereunder, and
the Company has full power and authority to authorize, issue and sell
the Shares and the Exchange Preferred Stock as contemplated by this
Agreement and the Registration Rights Agreement and to authorize issue
and deliver the Exchange Debentures as contemplated by the terms of the
Shares and the Exchange Preferred Stock;
(viii) Such counsel have no reason to believe that the
Offering Document, or any amendment or supplement thereto, as of the
date hereof and as of the Closing Date, contained any untrue statement
of a material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein in the light
of the circumstances under which they were made not misleading; the
descriptions in the Offering Document of statutes, legal and
governmental proceedings and contracts and other documents are accurate
in all material respects and fairly present the information required to
be shown; it being understood that such counsel need express no opinion
as to the financial statements or other financial data contained in the
Offering Document;
(ix) This Agreement has been duly authorized, executed and
delivered by the Company; and
(x) It is not necessary in connection with (i) the offer, sale
and delivery of the Shares by the Company to the several Purchasers
pursuant to this Agreement or (ii) the resales of the Shares by the
several Purchasers in the manner contemplated by this Agreement, to
register the Shares or Exchange Debentures under the Securities Act or
to qualify an indenture in respect of the Exchange Debentures under the
Trust Indenture Act.
21
SCHEDULE D
Opinion of FCC Counsel for the Company
Referred to in Section 6(e)
(i) No consent, approval, authorization, order or waiver of filing
(other than information filings) with the FCC is required under the
Communications Act of 1934, as amended, and the published rules, regulations and
policies of the FCC (the "Communications Act") to be obtained or made by the
Company or any subsidiary of the Company for the issuance and sale of the Shares
by the Company or the issuance and delivery of the Exchange Preferred Stock or
the Exchange Debentures, and the compliance with the terms and provisions
thereof, the offering thereof by the Purchasers, and the execution, delivery and
performance of the Indenture, the Registration Rights Agreement and this
Agreement;
(ii) The execution, delivery and performance by the Company of the
Indenture, the Registration Rights Agreement, and this Agreement and the
issuance and sale of the Shares and the issuance and delivery of the Exchange
Debentures and the Exchange Preferred Stock, and the compliance with the
respective terms and provisions thereof, and the offering thereof by the
Purchasers, do not violate any of the terms or provisions of (i) the
Communications Act or (ii) those radio broadcast licenses that are held by the
Company or any subsidiary of the Company;
(iii) The Offering Document as of the date of the Offering Document and
as of the Closing Date, with respect to statements of federal broadcast
communications law or legal conclusions solely with respect to federal broadcast
communications law did not contain any untrue statement of a material fact or
omitted to state any material fact necessary in order to make such statements or
conclusions, in light of the circumstances under which they were made, not
misleading;
(iv) The statements set forth under "Risk Factors - Factors Relating to
American and its Business - Regulatory Matters" and "Business - Federal
Regulation of Radio Broadcasting" in the Offering Document, insofar as they are,
or refer to, statements of federal broadcast communications law, or legal
conclusions with respect to federal broadcast communications law, have been
reviewed by us and, taken together, present the information required to make
such statements of federal law or legal conclusions, in light of the
circumstances in which they were made, accurate in all material respects;
(v) The licensee for each of the radio broadcast stations identified in
the Offering Document as (a) radio broadcast stations either (i) owned or (ii)
operated, programmed and marketed by the Company or a subsidiary of the Company,
or (b) radio broadcast stations for which advertising time is sold by the
Company or a subsidiary of the Company, holds a currently effective radio
broadcast license issued by the FCC for such radio broadcast station; and
(vi) Except as may be described in the Offering Document, to our
knowledge (a) there is no administrative proceeding pending before the FCC
against the radio broadcast stations described in the Offering Document as being
licensed to the Company or a subsidiary of the Company or any of the Acquisition
Businesses which, if determined adversely, could reasonably be expected to have
a material adverse effect upon any of the Company's or any of the Acquisition
Businesses' radio broadcast stations, and (b) the radio broadcast licenses
issued by the FCC for such radio broadcast stations are in full force and effect
in that, except as may be described in the Offering Document, they are held by a
subsidiary of the Company or of one of the Acquisition Businesses, as the case
may be, are currently effective and are not subject to any special conditions
(other than those conditions of a type customarily imposed under the general
rules, regulations and policies of the FCC) that would materially and adversely
affect the operation of such radio broadcast stations as currently operated.
22
SCHEDULE E
Form of Letter to be Delivered
for Institutional Accredited Investors
American Radio Systems Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Credit Suisse First Boston Corporation
Alex. Xxxxx & Sons Incorporated
BT Securities Corporation
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxx Xxxxxx Inc.,
c/o Credit Suisse First Boston Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Dear Sirs,
We are delivering this letter in connection with an offering of %
Exchangeable Preferred Stock (such securities, together with the related
securities exchangeable therefor, the "Securities"), of American Radio Systems
Corporation, a Delaware corporation (the "Company") all as described in the
Confidential Offering Circular (the "Offering Circular") relating to the
offering.
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act of 1933, as amended (the
"Securities Act"), or any entity in which all of the equity owners are
accredited investors within the meaning of Rule 501(a)(l), (2) or (3)
under the Securities Act (an "Institutional Accredited Investor");
(ii) (A) any purchase of the Securities by us will be for our
own account or for the account of one or more other Institutional
Accredited Investors or a fiduciary for the account of one or more
trusts, each of which is an "accredited investor" within the meaning of
Rule 501(a)(7) under the Securities Act and for each of which we
exercise sole investment discretion or (B) we are a "bank", within the
meaning of Section 3(a)(2) of the Securities Act, or a "savings and
loan association" or other institution described in Section 3(a)(5)(A)
of the Securities Act, that is acquiring the Securities as a fiduciary
for the account of one or more institutions for which we exercise sole
investment discretion;
(iii) in the event that we purchase any of the Securities, we
will acquire Securities having a minimum purchase price of not less
than $100,000 for our own account or for any separate account described
above for which we are acting;
(iv) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks
of purchasing the Securities;
(v) we are not acquiring the Securities with a view of
distribution thereof or with any present intention of offering or
selling any of the Securities, except inside the United States in
accordance with Rule 144A under the Securities Act or outside the
United States in accordance with Regulation S under the Securities Act,
as provided below; provided that the disposition or
23
our property and the property of any accounts for which we are acting
as fiduciary shall remain at all times within our control; and
(vi) we have received a copy of the Offering Circular relating
to the offering of the Securities and acknowledge that we have had
access to such financial and other information, and have been afforded
the opportunity to ask such questions of representatives of the Issuer
and receive answers thereto, as we deem necessary in connection with
our decision to purchase the Securities.
We understand that the Securities are being offered in a transaction
not involving any public offering within the Untied States within the meaning of
the Securities Act and that the Securities have not been and will not be
registered under the Securities Act, and we agree, on our own behalf and on
behalf of each account for which we acquire any Securities, that if in the
future we decide to resell, pledge or otherwise transfer such Securities, such
Securities may be offered, resold, pledged or otherwise transferred only (i)
inside the United States to a person who we reasonably believe is a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act) in a
transaction meeting the requirements of Rule 144A, or (ii) outside the United
States in a transaction in accordance with Rule 904 under the Securities Act,
(iii) pursuant to an exemption from registration under the Securities Act
provided by Rule 144 thereunder (if available), (iv) pursuant to an effective
registration statement under the Securities Act, in each of cases (i) through
(iv) in accordance with any applicable securities laws of any State of the
United States or other applicable jurisdiction. We agree to notify any
purchaser, pledgee or transferee of such Securities of the restrictions referred
to in (i) through (iv) above. We understand that the registrar and transfer
agent for the Securities will not be required to accept for registration of
transfer any Securities acquired by us, except upon presentation of evidence
satisfactory to the Company and the transfer agent that the foregoing
restrictions on transfer have been complied with. We further understand that any
Securities acquired by us (other than pursuant to Rule 144A) will be in the form
of definitive physical certificates and that such certificates will bear a
legend reflecting the substance of this paragraph.
We acknowledge that you, the Company and others will rely upon our
confirmations, acknowledgements and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein cease to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.
Date: ____________________ ____________________________________
(Name of Purchaser)
By: ________________________________
Name:
Title:
Address:
24
