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EXHIBIT 1.1
The ▇▇▇▇▇▇▇▇ Group, Inc.
[ ] Shares*
Common Stock
($.01 par value)
Underwriting Agreement
New York, New York
[ ] , 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
First Union Capital Markets Corp.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
As Representatives of the several Underwriters,
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The ▇▇▇▇▇▇▇▇ Group, Inc., a Delaware corporation (the "Company"),
proposes to sell to the several underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, [ ] shares of Common Stock, $.01 par value ("Common Stock"), of
the Company and the persons named in Schedule II hereto (the "Selling
Stockholders") propose to sell to the several Underwriters [ ] shares of Common
Stock (said shares to be issued and sold by the Company and said shares to be
sold by the Selling Stockholders collectively being hereinafter called the
"Underwritten Securities"). The Company also proposes to grant to the
Underwriters an option to purchase up to [ ] additional shares of Common Stock
to cover over-allotments (the "Option Securities"; the Option Securities,
together with the Underwritten Securities, being hereinafter called the
"Securities"). The Underwritten Securities to be sold by the Company, together
with the Option Securities, are hereinafter sometimes called the "Company
Securities"; and the Underwritten Securities to be sold by the Selling
Stockholders are hereinafter sometimes called the "Stockholder Securities". To
the extent there are no additional Underwriters listed on Schedule I other than
you, the term Representatives as used herein shall mean you, as Underwriters,
and the terms Representatives and Underwriters shall mean either the singular or
plural as the context requires. In addition, to
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* Plus an option to purchase from The ▇▇▇▇▇▇▇▇ Group, Inc. up to [ ]
additional shares to cover over-allotments.
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the extent that there is not more than one Selling Stockholder named in Schedule
II, the term Selling Stockholder shall mean either the singular or plural. The
use of the neuter in this Agreement shall include the feminine and masculine
wherever appropriate. Any reference herein to the Registration Statement, a
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated or deemed to be incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the issue date of
such Preliminary Prospectus or the Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or "supplement" with respect
to the Registration Statement, any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement, or the
issue date of any Preliminary Prospectus or the Prospectus, as the case may be,
that is deemed to be incorporated therein by reference. Certain terms used
herein are defined in Section 17 hereof.
1. Representations and Warranties.
(i) The Company and the Selling Stockholders jointly and severally
represent and warrant to, and agree with, each Underwriter as set forth below in
this Section 1.
(a) The Company meets the requirements for use of Form S-3
under the Act and has prepared and filed with the Commission a
registration statement (file number 333-49711) originally on Form S-1,
including a related preliminary prospectus, for the registration under
the Act of the offering and sale of the Securities. The Company has
filed one or more amendments thereto, each including a related
preliminary prospectus, and which amendments, among other things,
amended such registration statement on Form S-1 to a registration
statement on Form S-3, each of which has previously been furnished to
you. The Company will next file with the Commission one of the
following: either (1) prior to the Effective Date of such registration
statement, a further amendment to such registration statement (including
the form of final prospectus) or (2) after the Effective Date of such
registration statement, a final prospectus in accordance with Rules 430A
and 424(b). In the case of clause (2), the Company has included in such
registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and
the rules thereunder to be included in such registration statement and
the Prospectus. As filed, such amendment and form of final prospectus,
or such final prospectus, shall contain all Rule 430A Information,
together with all other such required information, and, except to the
extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior
to the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other
changes (beyond that contained in the latest Preliminary Prospectus) as
the Company has advised you, prior to the Execution Time, will be
included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date (as defined herein) and on any
date on which Option Securities are purchased, if such date is not the
Closing Date (a "settlement date"), the Prospectus (and any supplements
thereto) will, comply in all material respects with the applicable
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requirements of the Act and the Exchange Act and the respective rules
thereunder; on the Effective Date and at the Execution Time, the
Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus, if not filed
pursuant to Rule 424(b), will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date and any settlement date,
the Prospectus (together with any amendment or supplement thereto) will
not, 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 under which they were made, not misleading;
provided, however, that the Company and the Selling Stockholders make no
representations or warranties as to the information contained in or
omitted from the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished herein or in writing to the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion in
the Registration Statement or the Prospectus (or any supplement
thereto).
(c) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered, with full
power and authority as a corporation to own and lease and to operate its
properties and to conduct its business as described in the Prospectus
(exclusive of any amendments or supplements thereto), and is duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction where the nature of its
properties or the conduct of its business requires such qualification,
except in any case in which the failure to be so qualified or in good
standing would not, individually or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries,
taken as a whole.
(d) All of the Company's subsidiaries are corporations and a
true, complete and correct list of all of the Company's subsidiaries and
Material Subsidiaries (as defined below), together with their respective
jurisdictions of incorporation or organization, as the case may be, is
set forth on Exhibit C hereto. Assuming that the sale by the Company of
substantially all of the assets of ▇▇▇▇▇▇▇▇ Airport Advertising, Inc.
and the acquisition by the Company of substantially all of the assets of
WOKR (TV) (as such term is defined in Section 17 of this Agreement) had
occurred (in the case of revenue and net income data) on the first day
of the periods referred to below in this sentence and that the
acquisition of substantially all of the assets of WOKR (TV) had occurred
as of March 31, 1999 (in the case of balance sheet data), the Company
and the Material Subsidiaries would represent, on a pro forma
consolidated basis in accordance with generally accepted accounting
principles (but excluding in such consolidation any subsidiary of a
Material Subsidiary unless such subsidiary is itself a Material
Subsidiary), not less than 90.0% of each of the total revenues and net
income of the Company and its subsidiaries determined on a pro forma
consolidated basis in accordance with generally accepted accounting
principles for the year ended December 31, 1998 and not less than 90.0%
of the total assets, revenues and net income of the Company and its
subsidiaries determined on a pro forma consolidated basis in accordance
with generally accepted accounting principles as
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of and for the three-month period ended March 31, 1999. All the
outstanding shares of capital stock of each such subsidiary have been
duly and validly authorized and issued and are fully paid and
nonassessable and are owned by the Company, either directly or through
wholly owned subsidiaries and, except as set forth in the Prospectus,
free and clear of any perfected security interest or any other security
interests, claims, liens or encumbrances. As used herein, the term
"Material Subsidiaries" means those subsidiaries of the Company which
are designated as "Material Subsidiaries" on Exhibit C hereto.
(e) The Company's authorized, issued and outstanding
capitalization is as set forth in the Prospectus (except for shares of
Common Stock and shares of the Company's Class B Common Stock, $.01 par
value (the "Class B Common Stock") issued pursuant to employee and
director stock option plans or stock purchase agreements referred to in
the Prospectus, exclusive of any amendments or supplements thereto); the
capital stock of the Company conforms to the description thereof
contained in the Prospectus; all of the outstanding shares of Common
Stock (including, without limitation, the Stockholder Securities) and
all of the outstanding shares of the Company's Class B Common Stock,
have been duly and validly authorized and issued and are fully paid and
nonassessable and were not issued in violation of any preemptive or
other similar rights (whether provided contractually or pursuant to any
Organizational Document (as defined below) or arising by operation of
law or otherwise); the Company Securities have been duly and validly
authorized, and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be fully paid and
nonassessable; the certificates for the Securities are in valid and
sufficient form; the holders of outstanding shares of capital stock of
the Company are not entitled to preemptive or other similar rights
(whether provided contractually or pursuant to any Organizational
Document or arising by operation of law or otherwise) to subscribe for
the Securities or any other capital stock of the Company; and, except as
set forth in the Prospectus, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to convert
any obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding.
(f) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not described
or filed as required; and the statements in the Prospectus under the
headings "Risk Factors - Restrictions on Ownership and Transfer of
Common Stock," "Risk Factors - Leverage; Restrictions Under Debt
Instruments; Covenant Compliance," "Risk Factors--Outdoor Media," "Risk
Factors--Television and Radio Broadcasting," "Risk Factors--Sports &
Entertainment," "Risk Factors - Legal Proceedings," "Risk Factors -
Shares Eligible for Future Sale," "Business - Sports & Entertainment,"
"Business--Regulation," "Business--Restrictions on Our Operations,"
"Business--Legal Proceedings" and "Description of Capital Stock" and in
the Company's Form 10-K for the year ended December 31, 1998 (the "1998
Form 10K") under the headings "Business--Out-of-Home Media--Outdoor
Advertising--Regulation," "Business--Television and Radio Broadcasting
Regulation," "Business--Television Broadcasting--Programming" and
"Business--Television Broadcasting--Acquisitions and Time Brokerage
Agreements" and "Legal Proceedings," (except, in the case of any such
information set forth in the 1998 Form 10-K, to the extent that such
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information has been superseded by information in the Prospectus
(excluding the documents incorporated by reference therein)) fairly
summarize the matters therein described in all material respects.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and the Selling Stockholders and constitutes a
valid and binding obligation of the Company and the Selling Stockholders
enforceable in accordance with its terms.
(h) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
from the sale of the Securities as described in the Prospectus under the
heading "Use of Proceeds", will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(i) No consent, approval, resolution, authorization or order
of, or filing or registration with, any court or governmental agency or
body or any NBA Person is required in connection with the consummation
of the transactions contemplated herein by the Company or the Selling
Stockholders or in connection with the purchase, public offering or sale
of the Securities by the Underwriters, except (i) such as have been
obtained under the Act, (ii) such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Prospectus and (iii) the NBA Approval (as
defined below); the only such consent, approval, resolution,
authorization or order of, or filing or registration with, any NBA
Person that is so required are the resolutions of the NBA and the other
NBA Entities approving the offering contemplated hereby (the "NBA
Approval") (which resolutions have been duly adopted by the NBA and the
NBA Entities and a true, complete and correct copy of which has been
delivered to the Representatives); and the only instrument, agreement or
other document that the Company or the Selling Stockholders or any of
their respective subsidiaries or affiliates is required to execute or
deliver to any NBA Person in connection with the transactions
contemplated hereby is an Agreement and Undertaking (the "Indemnity
Agreement") by the Company, SSI, Inc., the Selling Stockholders and [ ]
; the Indemnity Agreement has been duly authorized, executed and
delivered by the Company, SSI, Inc., the Selling Stockholders and [ ]
and is satisfactory to the Commissioner of the NBA, the appropriate
officers of the NBA Entities and counsel to each of the NBA Entities and
a true, correct and complete copy of the Indemnity Agreement has been
delivered to the Representatives; and there are no conditions to the NBA
Approval other than execution and delivery of the Indemnity Agreement,
which condition has been satisfied.
(j) Neither the execution, delivery or performance by the
Company or the Selling Stockholders of this Agreement nor the issue and
sale by the Company of the Securities to be issued and sold by it
hereunder, nor the sale by the Selling Stockholders of the Securities to
be sold by them hereunder, nor the consummation of any other of the
transactions herein contemplated, nor the fulfillment of the terms
hereof will conflict with, or constitute or result in a breach or
violation of any of the terms or provisions of, or constitute a default
(or an event which, with notice or lapse of time or both, would
constitute a default) under, or give rise to any right to accelerate the
maturity or require the prepayment of any indebtedness under, or result
in the creation or imposition of any
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lien, charge or encumbrance upon any property or assets of the Company
or any of its subsidiaries pursuant to, (i) the charter or by-laws of
the Company or the charter or by-laws or other organizational documents
of any of its subsidiaries (the documents referred to in this clause (i)
are herein called, collectively, "Organizational Documents"), (ii) the
terms of any Subject Document (as defined below) or of any other
indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, covenant or
instrument to which the Company or any of its subsidiaries is a party or
bound or to which its or their property is subject, (iii) the terms of
any license or franchise (including the NBA franchise or any
broadcasting license) granted to or held by the Company or any of its
subsidiaries or the terms of any broadcasting or similar license granted
to or held by a third party with respect to a television or radio
station operated but not owned by the Company or any of its
subsidiaries, (iv) any statute, law, rule, regulation, judgment, order
or decree applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or
any of its subsidiaries or any of its or their properties or (v) any
provision of the constitution or by-laws of the NBA or any rule or
regulation of the NBA or any other NBA Person. As used herein, "Subject
Documents" means the Bank Credit Agreement, the Indenture, and the
Guarantees (as such terms are defined below) and the other instruments,
agreements and documents listed as Exhibits 10.1, 10.2, 10.3 and 10.8
through 10.17, inclusive to the 1998 Form 10-K, in each case including
all amendments and supplements to such instruments, agreements and other
documents; and "Subject Document" means any of the Subject Documents.
(k) There are no persons with registration or other similar
rights to have any securities registered by the Company under the Act
and there are no persons who have rights to the registration of such
securities under the Registration Statement or to include any such
securities in the offering made by the Prospectus.
(l) The consolidated historical financial statements and
schedules of the Company and its consolidated subsidiaries and of WOKR
(TV) included in and incorporated by reference in the Prospectus and the
Registration Statement present fairly in all material respects the
financial condition, results of operations and cash flows of the Company
and its consolidated subsidiaries and of WOKR (TV), respectively, as of
the dates and for the periods indicated, comply as to form with the
applicable accounting requirements of the Act and the Exchange Act and
have been prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved (except as otherwise noted therein). The financial data set
forth under the captions "Prospectus Summary--Summary Financial Data"
and "Selected Consolidated Financial Data" in the Prospectus and
Registration Statement fairly present, on the basis stated in the
Prospectus and the Registration Statement, the information included
therein. The unaudited pro forma financial statements included and
incorporated by reference in the Prospectus and the Registration
Statement include assumptions that provide a reasonable basis for
presenting the significant effects directly attributable to the
transactions and events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the pro
forma adjustments reflect the proper application of those adjustments to
the historical financial statement
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amounts in the pro forma financial statements included and incorporated
by reference in the Prospectus and the Registration Statement. The
unaudited pro forma financial statements included and incorporated by
reference in the Prospectus and the Registration Statement comply as to
form with the applicable accounting requirements of Regulation S-X under
the Act and the pro forma adjustments have been properly applied to the
historical amounts in the compilation of those statements.
(m) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending
or, to the best knowledge of the Company, threatened that, individually
or in the aggregate, (i) could reasonably be expected to have a material
adverse effect on the performance of this Agreement or the consummation
of any of the transactions contemplated hereby or (ii) except as
disclosed in the Prospectus (exclusive of any amendments or supplements
thereto), could reasonably be expected to have a material adverse effect
on the condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business.
(n) Except as disclosed in the Prospectus (exclusive of any
amendments or supplements thereto), each of the Company and each of its
subsidiaries owns or leases all such properties as are necessary to the
conduct of its operations as presently conducted, except in any case in
which the failure to own or lease such properties would not, either
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole.
(o) Neither the Company nor any subsidiary of the Company is
in violation or default of (i) any provision of its Organizational
Documents, (ii) the terms of any Subject Document, (iii) terms of any
other indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject, (iv) the terms of any license or franchise
(including the NBA franchise or any broadcasting license) granted to or
held by the Company or any of its subsidiaries or the terms of any
broadcasting license granted to or held by a third party with respect to
a television or radio station operated but not owned by the Company or
any of its subsidiaries, or (v) any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any such subsidiary or any of its
properties, as applicable, except in the case of clauses (iii), (iv) and
(v) of this paragraph, for such violations or defaults which either
individually or in the aggregate, with all other violations or defaults
would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole. Without limitation to the
foregoing, each of the Company and its subsidiaries is in compliance in
all material respects with all applicable statutes, rules, regulations
and orders of and licenses granted by the Federal Communications
Commission (the "FCC"), and the issuance of the Securities by the
Company and the sale by the Company and the Selling Stockholders of the
Securities pursuant to this
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Agreement do not and will not constitute the transfer, assignment or
disposition in any manner, voluntarily or involuntarily, directly or
indirectly, of any license granted the FCC or the transfer of control of
the Company or any of its subsidiaries within the meaning of Section
310(d) of the Communications Act of 1934, as amended, and do not and
will not otherwise contravene or violate any law, rule or regulation
applicable to the Company or any of its subsidiaries with respect to
telecommunications or broadcasting.
(p) Ernst & Young LLP, who have audited certain financial
statements of the Company and its consolidated subsidiaries and of WOKR
(TV) and delivered their reports with respect to the audited
consolidated financial statements and schedules included in the
Prospectus, are independent auditors with respect to the Company and
WOKR (TV) within the meaning of the Act and the Exchange Act and the
respective applicable published rules and regulations thereunder.
(q) Other than any New York State stock transfer taxes
applicable to the sale of the Stockholder Securities, there are no
transfer taxes or other similar fees or charges under federal law or the
laws of any state, or any political subdivision thereof, required to be
paid in connection with the execution and delivery of this Agreement or
the issuance by the Company of the Company Securities or the sale by the
Company or the Selling Stockholders of the Securities.
(r) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
would not, individually or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole), and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of
the foregoing is due and payable, except for any such assessments, fines
or penalties that are currently being contested in good faith or as
would not, individually or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole.
(s) No labor problem or dispute with the employees of the
Company or any of its subsidiaries exists or is threatened or imminent,
and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or its subsidiaries'
principal suppliers, contractors or customers, that could have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, except as set forth in or contemplated
in the Prospectus (exclusive of any amendments or supplements thereto).
(t) The Company and each of the subsidiaries maintain
insurance of the types and in the amounts that are reasonable for the
business operated by them, including, but not limited to, insurance
covering real and personal property owned and leased by the Company and
the subsidiaries against theft, damage, destruction, acts of vandalism
and liability, all of which insurance is in full force and effect; and
neither the Company nor any such subsidiary has any reason to believe
that it will not be able to renew its existing
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insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not, individually or in the aggregate,
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole.
(u) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends or making any advances
to the Company, from making any other distribution on such subsidiary's
capital stock, from repaying to the Company any loans or advances to
such subsidiary from the Company or from transferring any of such
subsidiary's property or assets to the Company or any other subsidiary
of the Company, except as disclosed in the Prospectus (exclusive of any
amendments or supplements thereto) with respect to the pledge of certain
assets to secure amounts owing under the Bank Credit Agreement and
except for transfer restrictions arising (i) as a result of other liens
on assets, which assets are, in the aggregate, not material to the
Company and its subsidiaries taken as a whole, (ii) under leases
existing on the date of this Agreement or (iii) under applicable law or
franchises (such as the NBA franchise) that may require prior approval
of any transfer.
(v) The Company and its subsidiaries possess all licenses,
franchises, certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities or granted
by the NBA or any other NBA Person necessary to conduct their respective
businesses in the manner described in the Prospectus (exclusive of any
amendments or supplements thereto) and, in the case of television or
radio stations operated but not owned by the Company and its
subsidiaries, the owners of such stations possess all necessary
broadcasting and similar licenses with respect to such stations, and
neither the Company nor any such subsidiary has received any notice of
proceedings relating to the revocation or modification of any such
license, franchise, certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business.
(w) The Company and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(x) Neither the Company nor any of the Selling Stockholders
has taken, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result in,
under the Exchange Act or otherwise,
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stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities. Neither the
Company nor any of the Selling Stockholders has paid or agreed to pay to
any person any compensation for soliciting another to purchase any
securities of the Company (except as contemplated by this Agreement).
(y) The Company and its subsidiaries are (i) in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received and are in
compliance with all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses and (iii) have not received notice of any actual or potential
liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or
contaminants, except where such non-compliance with Environmental Laws,
failure to receive required permits, licenses or other approvals, or
liability would not, individually or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in
the Prospectus (exclusive of any amendments or supplements thereto).
Except as set forth in the Prospectus (exclusive of any amendments or
supplements thereto), neither the Company nor any of the subsidiaries
has been named as a "potentially responsible party" under the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended.
(z) Each of the Company and its subsidiaries has fulfilled
its obligations, if any, under the minimum funding standards of ▇▇▇▇▇▇▇
▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Employee Retirement Income Security Act of 1974
("ERISA") and the regulations and published interpretations thereunder
with respect to each "plan" (as defined in Section 3(3) of ERISA and
such regulations and published interpretations) in which employees of
the Company and its subsidiaries are eligible to participate and each
such plan is in compliance in all material respects with the presently
applicable provisions of ERISA and such regulations and published
interpretations. The Company and its subsidiaries have not incurred any
unpaid liability to the Pension Benefit Guaranty Corporation (other than
for the payment of premiums in the ordinary course) or to any such plan
under Title IV of ERISA.
(aa) No person or entity, together with its affiliates, will
receive from the Company and/or the Selling Stockholders 10% or more of
the net proceeds from the offering of the Securities except the lending
banks under the Bank Credit Agreement. No person or entity, together
with its affiliates, owns 10% or more of the outstanding shares of Class
B Stock, other than ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or more than
10% of the outstanding shares of Common Stock, other than ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and the Gabelli Funds, Inc.
(bb) The Company, through a wholly-owned subsidiary, holds
all right, title and interest in and to the NBA franchise for the
Seattle Supersonics basketball team.
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(cc) The statistical and market-related data included in the
Prospectus are based on or derived from independent sources which the
Company believes to be reliable and accurate or represent the Company's
good faith estimates that are made on the basis of data derived from
such sources.
(dd) The financial statements of WOKR (TV) included and
incorporated by reference in the Prospectus and the Registration
Statement, and the financial information set forth under the columns
"Historical WOKR" which appear under the caption "Unaudited Pro Forma
Condensed Consolidated Financial Information" in the Prospectus, (i)
present fairly in all material respects the financial condition and
results of operations of WOKR (TV) as of March 31, 1999 and for the year
and three months ended December 31, 1998 and March 31, 1999,
respectively, (ii) fairly and accurately reflect all of the assets
acquired and all of the liabilities assumed by the Company pursuant to
the Acquisition Agreement (as such term is defined in Section 17 of this
Agreement) as of the dates specified, (iii) present fairly the financial
condition and results of operations of WOKR (TV) as of the dates and for
the periods indicated and (iv) have been prepared in conformity with
GAAP applied on a consistent basis throughout the periods involved.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a joint and several representation
and warranty by the Company and the Selling Stockholders, as to matters covered
thereby, to each Underwriter.
(ii) Each Selling Stockholder represents and warrants to, and agrees
with, each Underwriter that:
(a) Such Selling Stockholder is the record and beneficial
owner of the Securities to be sold by it hereunder free and clear of all
liens, encumbrances, equities and claims and has duly indorsed such
Securities in blank, and, assuming that each Underwriter acquires its
interest in the Securities it has purchased from such Selling
Stockholder without notice of any adverse claim (within the meaning of
Section 8-105 of the New York Uniform Commercial Code ("UCC")), each
Underwriter that has purchased such Securities delivered on the Closing
Date to the Depository Trust Company or other securities intermediary,
by making payment therefor as provided herein, and that has had such
Securities credited to the securities account or accounts of such
Underwriter maintained with The Depository Trust Company or such other
securities intermediary, will have acquired a security entitlement
(within the meaning of Section 8-102(a)(17) of the UCC) to such
Securities purchased by such Underwriter, and no action based on an
adverse claim (within the meaning of Section 8-102(a)(1) of the UCC) may
be asserted against such Underwriter with respect to such Securities.
(b) Such Selling Stockholder has not taken, directly or
indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result, under the Exchange Act
or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
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(c) Certificates in negotiable form for such Selling
Stockholder's Securities have been placed in custody, for delivery
pursuant to the terms of this Agreement, under a Custody Agreement and
Power of Attorney duly authorized (if applicable), executed and
delivered by such Selling Stockholder, in the form heretofore furnished
to you (a "Custody Agreement") with First Union National Bank, N.A., as
Custodian (the "Custodian"), pursuant to the Custody Agreement, each of
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ has been
duly appointed as the attorney-in-fact (each, an "Attorney-in-Fact") of
such Selling Stockholder; such Custody Agreement constitutes a valid and
binding agreement of such Selling Stockholder, enforceable against such
Selling Stockholder in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors'
rights generally or by general equitable principles, the Securities
represented by the certificates so held in custody for each Selling
Stockholder are subject to the interests hereunder of the Underwriters;
the arrangements for custody and delivery of such certificates made by
such Selling Stockholder hereunder and under the Custody Agreement are
not subject to termination by any acts of such Selling Stockholder or by
operation of law, whether by the death or incapacity, if applicable, of
such Selling Stockholder or the occurrence of any other event; if any
such death or incapacity, if applicable, or any other such event shall
occur before the delivery of the Securities to be sold by such Selling
Stockholder hereunder, such certificates for the Securities will be
delivered by the Custodian in accordance with the terms and conditions
of this Agreement and the Custody Agreement as if such death, incapacity
or other event had not occurred, regardless of whether or not the
Custodian shall have received notice of such death, incapacity or other
event; and the Custodian is authorized to deliver the Securities to be
sold by such Selling Stockholder under this Agreement, to accept payment
therefor from the Underwriters and to execute and deliver a receipt for
such payment. For purposes of this Agreement, references to its "Custody
Agreement", when used with respect to any Selling Stockholder, means the
Custody Agreement which has been executed by such Selling Stockholder.
(d) Such Selling Stockholder (if not a natural person) has
been duly organized and is validly existing and in good standing under
the laws of the jurisdiction of its organization. Such Selling
Stockholder has full right, power and authority to execute, deliver and
perform its obligations under this Agreement and its Custody Agreement,
and to sell, transfer and delivery the Securities to be sold by such
Selling Stockholder under this Agreement. Neither the sale of the
Securities being sold by such Selling Stockholder nor the consummation
of any other of the transactions herein contemplated by such Selling
Stockholder nor the fulfillment of the terms hereof by such Selling
Stockholder nor the execution, delivery or performance by such Selling
Stockholder of its Custody Agreement will conflict with, result in a
breach or violation of, or constitute a default under any law or (if
applicable) the charter or by-laws, partnership agreement, trust
agreement or other organizational documents of such Selling Stockholder
or the terms of any indenture or other agreement or instrument to which
such Selling Stockholder is a party or bound, or any judgment, order or
decree applicable to such Selling Stockholder of any court, regulatory
body, administrative agency, governmental body or arbitrator having
jurisdiction over such Selling Stockholder. Such Selling Stockholder
does not have any direct or indirect subsidiaries.
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(e) All of the representations and warranties made by the
other Selling Stockholder in this Section 1(ii) are true, complete and
correct.
(f) Any certificate signed by or on behalf of any Selling
Stockholder (including any certificate signed on behalf of a Selling
Stockholder by any Attorney-in-Fact) and delivered to the
Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a joint and several
representation and warranty by the Company and the Selling Stockholders,
as to matters covered thereby, to each Underwriter.
2. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company and the
Selling Stockholders agree, severally and not jointly, to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Company and the Selling Stockholders, at a purchase
price of $ [ ] per share, the number of the Underwritten Securities set
forth opposite such Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company hereby
grants an option to the several Underwriters to purchase, severally and
not jointly, up to [ ] Option Securities at the same purchase price per
share as the Underwriters shall pay for the Underwritten Securities;
provided that the purchase price per share for any Option Securities
shall be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Underwritten
Securities but not payable on the Option Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or
in part at any time (but not more than once) on or before the 30th day
after the date of the Prospectus upon written, telecopied or telegraphic
notice by the Representatives to the Company setting forth the number of
shares of the Option Securities as to which the several Underwriters are
exercising the option and the settlement date. Delivery of certificates
for the shares of Option Securities by the Company, and payment therefor
to the Company, shall be made as provided in Section 3 hereof. The
number of shares of the Option Securities to be purchased by each
Underwriter shall be the same percentage of the total number of shares
of the Option Securities to be purchased by the several Underwriters as
such Underwriter is purchasing of the Underwritten Securities, subject
to such adjustments as you in your absolute discretion shall make to
eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
[ ] , 1999, or at such time on such later date not more than three Business Days
after the foregoing date as the Representatives shall designate, which date and
time may be postponed by agreement among the Representatives, the Company and
the Selling Stockholders or as provided in Section 9 hereof (such date and time
of delivery and payment for the Securities being herein called the "Closing
Date"). Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters
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against payment by the several Underwriters through the Representatives of the
purchase price thereof to or upon the order of the Company and the Selling
Stockholders by wire transfer payable in same-day funds to an account specified
by the Company and the Selling Stockholders. The Selling Stockholders agree that
payment for the Securities sold by them may be made to the Custodian on their
behalf. Delivery of the Underwritten Securities and the Option Securities shall
be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
Each Selling Stockholder will pay all applicable state transfer taxes,
if any, involved in the transfer to the several Underwriters of the Securities
to be purchased by them from such Selling Stockholder and the respective
Underwriters will pay any additional stock transfer taxes involved in further
transfers.
If the option provided for in Section 2(b) hereof is exercised after the
third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the Representatives, at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer payable in
same-day funds to an account specified by the Company. If settlement for the
Option Securities occurs after the Closing Date, the Company will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates, comfort
letters and other documents confirming as of such date the opinions,
certificates and letters delivered on the Closing Date pursuant to Section 6
hereof, as well as such other certificates and documents as the Representatives
may reasonably request in connection therewith.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements.
(i) The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of
the Registration Statement or supplement to the Prospectus or any Rule
462(b) Registration Statement unless the Company has furnished you a
copy for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the
foregoing sentence, if the Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), the Company will cause the
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence satisfactory
to the Representatives of such timely
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filing. The Company will promptly advise the Representatives (1) when
the Registration Statement, if not effective at the Execution Time,
shall have become effective, (2) when the Prospectus, and any supplement
thereto, shall have been filed (if required) with the Commission
pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement
shall have been filed with the Commission, (3) when, prior to
termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (4) of
any request by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration Statement, or
for any supplement to the Prospectus or for any additional information,
(5) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (6) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act or the rules thereunder, the Company
promptly will (1) notify the Representatives of such event, (2) prepare
and file with the Commission, subject to the second sentence of
paragraph (i)(a) of this Section 5, an amendment or supplement which
will correct such statement or omission or effect such compliance and
(3) supply any supplemented Prospectus to you in such quantities as you
may reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of each Preliminary
Prospectus and the Prospectus and any supplement thereto as the
Representatives may reasonably request. The Company will pay the
expenses of printing or other production of all documents relating to
the offering.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate, will maintain such
qualifications in effect so long as required for the distribution of the
Securities and will pay any fee of the National Association of
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16
Securities Dealers, Inc. in connection with its review of the offering;
provided that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to
take any action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the Securities,
in any jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent
of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., for a period of 90 days following the date
of this Agreement, offer, sell or contract to sell, or otherwise dispose
of (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person
in privity with the Company or any affiliate of the Company), directly
or indirectly, including the filing (or participation in the filing) of
a registration statement with the Commission in respect of, or establish
or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act
with respect to, any shares of Common Stock or any shares of Class B
Stock or any securities convertible into, or exchangeable or exercisable
for, shares of Common Stock or Class B Stock or publicly announce an
intention to effect any such transaction; provided, however, that the
Company may issue and sell Common Stock pursuant to any director or
employee stock option or stock ownership plan or dividend reinvestment
plan of the Company in effect at the Execution Time and the Company may
issue Common Stock issuable upon the conversion of securities or the
exercise of warrants outstanding at the Execution Time and may issue
shares of Common Stock to the Underwriters pursuant to this Agreement.
(g) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(h) The Company agrees to pay the costs and expenses
relating to the following matters: (i) the preparation, printing or
reproduction and filing with the Commission of the Registration
Statement (including financial statements and exhibits thereto), each
Preliminary Prospectus, the Prospectus, and each amendment or supplement
to any of them; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, each
Preliminary Prospectus, the Prospectus, and all amendments or
supplements to any of them, as may, in each case, be reasonably
requested for use in connection with the offering and sale of the
Securities; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (iv) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of
the Securities; (v) the registration of the Securities under the
Exchange Act and the listing of the Securities on the New York Stock
Exchange; (vi) any registration or qualification of the Securities for
offer and sale under the securities or blue sky laws of the several
states (including filing fees and the
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reasonable fees and expenses of counsel for the Underwriters relating to
such registration and qualification); (vii) any filings required to be
made with the National Association of Securities Dealers, Inc.
(including filing fees and the reasonable fees and expenses of counsel
for the Underwriters relating to such filings); (viii) the
transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective
purchasers of the Securities; (ix) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including
local and special counsel) for the Company and the Selling Stockholders;
and (x) all other costs and expenses incident to the performance by the
Company and the Selling Stockholders of their obligations hereunder.
(ii) Each Selling Stockholder agrees with the several Underwriters
that:
(a) Such Selling Stockholder will not, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, offer, sell, contract to sell,
pledge or otherwise dispose of (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by such Selling
Stockholder or any affiliate of such Selling Stockholder or any person
in privity with such Selling Stockholder or any affiliate of such
Selling Stockholder) directly or indirectly, or file (or participate in
the filing of) a registration statement with the Commission in respect
of, or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of
the Exchange Act with respect to, any shares of Common Stock, Class B
Common Stock or other capital stock of the Company, or any securities
convertible into or exercisable or exchangeable for shares of Common
Stock, Class B Common Stock or other capital stock of the Company, or
publicly announce an intention to effect any such transaction, for a
period of 90 days after the date of this Agreement, other than shares of
Common Stock disposed of as bona fide gifts approved in advance in
writing by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney and other than shares of Common Stock
sold to the Underwriters pursuant to this Agreement.
(b) Such Selling Stockholder will not take any action
designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(c) Such Selling Stockholder will advise you promptly, and
if requested by you, will confirm such advice in writing, so long as
delivery of a prospectus relating to the Securities by an underwriter or
dealer may be required under the Act, of (i) any material change in the
Company's condition (financial or otherwise), prospects, earnings,
business or properties, (ii) any change in information in the
Registration Statement or the Prospectus relating to such Selling
Stockholder or (iii) any new material information relating to the
Company or relating to any matter stated in the Prospectus which comes
to the attention of such Selling Stockholder.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may
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be, shall be subject to the accuracy of the representations and warranties on
the part of the Company and the Selling Stockholders contained herein as of the
Execution Time, the Closing Date and any settlement date pursuant to Section 3
hereof, to the accuracy of the statements of the Company and the Selling
Stockholders made in any certificates pursuant to the provisions hereof, to the
performance by the Company and the Selling Stockholders of their respective
obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in writing
to a later time, the Registration Statement will become effective not
later than (i) 6:00 PM New York City time on the date of determination
of the public offering price, if such determination occurred at or prior
to 3:00 PM New York City time on such date or (ii) 9:30 AM on the
Business Day following the day on which the public offering price was
determined, if such determination occurred after 3:00 PM New York City
time on such date; if filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Prospectus, and any
such supplement, will be filed in the manner and within the time period
required by Rule 424(b); and no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings
for that purpose shall have been instituted or threatened.
(b) The Company shall have furnished to the Representatives
the opinion of ▇▇▇▇▇▇ & ▇▇▇▇ PC, counsel for the Company, dated the
Closing Date and addressed to the Representatives, to the effect that:
(i) each of the Company and the Material
Subsidiaries has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the
jurisdiction in which it is chartered, with full power and
authority as a corporation to own and lease and to operate its
properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns
or leases material properties or conducts material business,
except where the failure to be so qualified or in good standing
would not, individually or in the aggregate, have a material
adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole; and without limitation to
the foregoing, the Company is duly qualified to do business as a
foreign corporation and is in good standing under the laws of
the State of Washington;
(ii) all the outstanding shares of capital stock of
each Material Subsidiary have been duly and validly authorized
and issued and are fully paid and nonassessable; and all
outstanding shares of capital stock of the Material Subsidiaries
are owned of record by the Company or by one or more of its
wholly owned subsidiaries, free and clear, except as set forth
in the Prospectus, of any perfected security interests and, to
the knowledge of such counsel, any other security interests,
claims, liens or encumbrances;
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(iii) the authorized, issued and outstanding
capitalization of the Company is as set forth in the Prospectus
under the caption "Capitalization" (except for shares of capital
stock issued pursuant to employee or director plans and certain
stock purchase agreements referred to in the Prospectus); the
capital stock of the Company conforms in all material respects
to the description thereof contained in the Prospectus; all of
the outstanding shares of Common Stock (including the
Stockholder Securities) and Class B Stock have been duly
authorized and validly issued, are fully paid and nonassessable,
and none of such shares was issued in violation of any
preemptive or other rights to subscribe for such shares arising
under the charter or by-laws of the Company or the General
Corporation Law of the State of Delaware or, to the knowledge of
such counsel, otherwise; the Company Securities have been duly
authorized, and, when issued and delivered to and paid for by
the Underwriters pursuant to this Agreement, will be validly
issued, fully paid and nonassessable; the certificates for the
Securities are in valid and sufficient form; and the holders of
outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe for the
Securities; and, except as set forth in the Prospectus, to the
knowledge of such counsel no options, warrants or other rights
to purchase, agreements or other obligations to issue, or rights
to convert any obligations into or exchange any securities for,
shares of capital stock of or ownership interests in the Company
are outstanding;
(iv) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries or
its or their property of a character required to be disclosed in
the Registration Statement which is not adequately disclosed in
the Prospectus, and to the knowledge of such counsel there is no
franchise, contract or other document of a character required to
be described in the Registration Statement or Prospectus, or to
be filed as an exhibit thereto, which is not described or filed
as required; and the information in the Prospectus under the
captions "Risk Factors--Leverage; Restrictions Under Debt
Instruments; Covenant Compliance," "Risk Factors - Shares
Eligible for Future Sale," "Business--Restrictions on Our
Operations," and "Description of Capital Stock," to the extent
that it constitutes matters of law, summaries of legal matters,
summaries of the Company's charter or by-laws or other
instruments, agreements or documents, summaries of legal
proceedings, or legal conclusions, fairly summarizes the matters
therein described in all material respects;
(v) the Registration Statement has become effective
under the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b);
to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened
and the Registration Statement and the Prospectus, including the
documents incorporated or deemed to be incorporated by reference
therein (in each case other than the financial statements
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20
and other financial information contained therein, as to which
such counsel need express no opinion), comply as to form in all
material respects with the applicable requirements of the Act
and the Exchange Act and the respective rules thereunder; and
such counsel shall additionally state that it has no reason to
believe that on the Effective Date or at the Execution Time the
Registration Statement contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus as of its date and on the date
of such opinion included or includes any untrue statement of a
material fact or omitted or omits 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
(in each case other than the financial statements and other
financial information contained therein, as to which such
counsel need express no opinion);
(vi) this Agreement has been duly authorized,
executed and delivered by the Company;
(vii) the Company is not and, after giving effect to
the offering and sale of the Securities and the application of
the proceeds from the sale of Securities as described in the
Prospectus under "Use of Proceeds", will not be an "investment
company" as defined in the Investment Company Act of 1940, as
amended;
(viii) no consent, approval, authorization or order of,
or registration or filing with, any court or governmental agency
or body is required for the execution, delivery or performance
by the Company of this Agreement or for the consummation of any
of the transactions contemplated hereby (including, without
limitation, the issuance and sale of the Securities hereunder),
except such as have been obtained under the Act and such as may
be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities
by the Underwriters in the manner contemplated in this Agreement
and in the Prospectus and such other approvals (specified in
such opinion) as have been obtained;
(ix) The execution, delivery and performance by the
Company of this Agreement and the consummation by the Company of
the transactions contemplated hereby (including, without
limitation, the issuance of the Securities to be sold by the
Company hereunder, and the sale of the Securities to be sold
hereunder) and the compliance by the Company with the terms
hereof do not and will not conflict with, or constitute or
result in a breach or violation of any of the terms or
provisions of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default)
under, or give rise to any right to accelerate the maturity or
require the prepayment of any indebtedness under, or result in
the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its
subsidiaries pursuant to (i) the Organizational Documents of the
Company or any of its subsidiaries, (ii) the Bank Credit
Agreement, the Indenture or the Guarantees (as such terms are
defined below); (iii) the terms of any Subject Document (other
than the Bank
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Credit Agreement, the Indenture and the Guarantees, which are
covered in clause (ii) of this sentence), (iv) the terms of any
other indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument known to such counsel to which
the Company or any of its subsidiaries is a party or bound or to
which its or their property is subject (other than those related
to the NBA or to any NBA Person as to which such counsel need
express no opinion), (v) the terms of any license or franchise
(other than the NBA franchise or any broadcast license, as to
which such counsel need express no opinion) known to such
counsel granted to or held by the Company or any of its
subsidiaries, or (vi) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any of
its subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its subsidiaries or any
of its or their properties except, solely in the case of clauses
(iii), (iv), (v) and (vi) above, for such violations and
defaults as would not, either individually or in the aggregate,
with all other violations and defaults referred to in clauses
(iii), (iv), (v) and (vi) (if any), have a material adverse
effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business. As used in this
Agreement, the term "Bank Credit Agreement" means, collectively,
the Credit Agreement dated January 22, 1999, by and among the
Company, First Union National Bank, Fleet Bank, N.A., and the
other parties thereto, and all amendments, security agreements,
notes, pledge agreements, consents, waiver and other agreements
executed by the Company or any of its subsidiaries pursuant
thereto; the term "Indenture" means the Indenture dated as of
December 14, 1998 among the Company, the Guarantors named
therein and the Bank of New York, as Trustee, and all
supplements thereto and all securities issued and outstanding
thereunder; and the term "Guarantees" means, collectively, all
guarantees or similar agreements issued or entered into by any
subsidiaries of the Company pursuant to or in connection with
the Bank Credit Agreement or the Indenture;
(x) To the knowledge of such counsel, there are no
persons with registration rights or similar rights to have any
securities registered by the Company under the Act and there are
no persons who have rights to the registration of such
securities under the Registration Statement or to include any
such securities in the offering made by the Prospectus; and
(xi) The Company has all requisite power and
authority to execute, deliver and perform its obligations under
this Agreement, including without limitation, to issue and sell
the Company Securities as contemplated by this Agreement.
In rendering such opinion, such counsel shall state that such
opinion covers matters involving the application of the laws of the
State of Washington, the General Corporation Law of the State of
Delaware and the federal laws of the United States (except that such
counsel may state that the opinions set forth in subparagraphs (viii)
and
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(ix) above exclude matters related to federal communications laws or FCC
matters), and such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of
Washington, the General Corporation Law of the State of Delaware or the
federal laws of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to
counsel for the Underwriters (provided that (x) counsel to the Company
shall state that they believe that they and the Representatives and
Underwriters are justified in relying upon each such opinion of local
counsel and (y) the opinion of each such local counsel shall be dated
the same date as such opinion of counsel to the Company, shall expressly
state that counsel to the Company may rely on such opinion in rendering
their opinion pursuant to this Agreement, that the Representatives and
the Underwriters may rely on such opinion as if such opinion were
addressed to them and that such opinion is being rendered to the
Underwriters at the request of the Company, and shall be delivered to
the Representatives on the Closing Date) and (B) as to matters of fact,
to the extent they deem proper, on certificates of responsible officers
of the Company and public officials. Such opinion shall state that, to
the extent that such opinion relates to this Agreement, such counsel has
assumed that the laws of the State of New York are identical to the laws
of the State of Washington and that, to the extent that such opinion
otherwise relates to the laws of any jurisdiction (other than the State
of Washington, the General Corporation Law of the State of Delaware and
the federal laws of the United States), such counsel has assumed that
such laws are in all relevant respects identical to the laws of the
State of Washington. References to the Prospectus in this paragraph (b)
include any supplements thereto at the date of such opinion. The opinion
of such counsel shall be rendered to the Underwriters at the request of
the Company and shall so state therein.
(c) The Company shall have furnished to the Representatives
the opinion of ▇▇▇▇ ▇. ▇▇▇▇▇, General Counsel of the Company, dated the
Closing Date and addressed to the Representatives, to the effect that:
(i) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries or
its or their property of a character required be disclosed in
the Registration Statement which is not adequately disclosed in
the Prospectus, and there is no franchise, contract or other
document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required;
(ii) the information in the Prospectus under the
captions "Risk Factors - Restrictions on Ownership and Transfer
of Our Common Stock" (other than matters relating to federal
communications laws), "Risk Factors--Outdoor Media," "Risk
Factors--Sports & Entertainment," "Risk Factors - Legal
Proceedings," "Business - Regulation - Outdoor Media," and
"Business - Legal Proceedings" and in the 1998 Form 10-K under
the captions "Business - Out-of-Home Media - Outdoor Advertising
- Regulation" and "Legal Proceedings" fairly summarizes the
matters therein described in all material respects, except, in
the
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case of any such information set forth in the 1998 Form 10-K, to
the extent that such information has been superseded by
information in the Prospectus (excluding the documents
incorporated by reference therein);
(iii) other than (x) the NBA Approval which has been
obtained by the Company and delivered to the Representatives and
is in full force and effect and (y) the Indemnity Agreement, no
consent, approval, resolution, authorization or order of, or
filing or registration with, the NBA or any other NBA Person is
required in connection with the transactions contemplated by
this Agreement, and all conditions in the NBA Approval have been
satisfied; and the only instrument, agreement or other document
that the Company or the Selling Stockholders or any of their
respective subsidiaries or affiliates is required to execute or
deliver to any NBA Person in connection with the transactions
contemplated by this Agreement is the Indemnity Agreement; the
Indemnity Agreement has been duly authorized, executed and
delivered by the Company, SSI, Inc., the Selling Stockholders
and such counsel has been advised by the NBA that the Indemnity
Agreement is satisfactory to the Commissioner of the NBA, the
appropriate officers of the NBA Entities and counsel to each of
the NBA Entities; and there are no conditions to the NBA
Approval other than the execution and delivery of the Indemnity
Agreement, which condition has been satisfied.
(iv) (A) the execution, delivery and performance by
the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby (including,
without limitation, the issuance and sale of the Securities by
the Company pursuant to this Agreement and the sale of the
Securities by the Selling Stockholders pursuant to this
Agreement), (B) compliance by the Company with the terms hereof
and (C) the purchase, public offering and sale of the Securities
by the Underwriters pursuant to this Agreement, do not and will
not conflict with, or result in a breach or violation of, or
imposition of any lien, charge or encumbrance upon any property
or assets of the Company or its subsidiaries pursuant to any
provision of, the constitution or by-laws of the NBA or any rule
or regulation of the NBA or any other NBA Person or the
Company's NBA franchise for the Seattle SuperSonics, except
(solely in the case of clauses (A) and (B) of this paragraph)
for such conflicts, breaches, violations or liens which would
not, either individually or in the aggregate, with all other
such conflicts, breaches, violations and liens, have a material
adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole; and
(v) the Company and its subsidiaries possess all
licenses, franchises, certificates, permits and other
authorizations issued or granted by the NBA or any other NBA
Person necessary to conduct the business of owning and operating
the Seattle SuperSonics in the manner described in the
Prospectus, and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such license, franchise, certificate,
authorization or permit which, singly or in the aggregate, if
the subject of an
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unfavorable decision, ruling or finding, would have a material
adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
In addition, such counsel shall state that such counsel has
participated in conferences with representatives of the Underwriters,
officers and other representatives of the Company and representatives of
the independent certified accountants of the Company, at which
conferences the contents of the Prospectus and the Registration
Statement (including the documents incorporated or deemed to be
incorporated by reference therein) and the business and affairs of the
Company and its subsidiaries were discussed, and although such counsel
has not independently verified and does not pass upon or assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Prospectus and the Registration Statement
(except to set forth in subparagraphs (i) and (ii) above), on the basis
of the foregoing, no facts have come to the attention of such counsel
which lead such counsel to believe that the Registration Statement, on
the Effective Date or at the Execution Time, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading or that the Prospectus, as of its date
or on the date of such opinion, included or includes an untrue statement
of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need not express any comment with respect
to the financial statements, including the notes thereto and supporting
schedules, or any other financial data included in the Prospectus and
the Registration Statement).
In rendering such opinion, such counsel may state that he
expresses no opinion as to matters governed by laws of any other
jurisdictions other than the District of Columbia, the General
Corporation Law of the State of Delaware and the federal laws of the
United States, and such counsel shall state that, to the extent that
such opinion relates to laws of other jurisdictions, such counsel has
assumed that such laws are in all relevant respects identical to the
laws of the District of Columbia. In rendering such opinion, such
counsel may rely as to matters of fact, to the extent he deems proper,
on certificates of responsible officers of the Company and public
officials. References to the Prospectus in this paragraph (c) include
any supplements thereto at the date of such opinion. The opinion of such
counsel shall be rendered to the Underwriters at the request of the
Company and shall so state therein.
(d) The Company shall have furnished to the Representatives
the opinion of ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P., counsel
for the Company, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) the information in the Prospectus under the
captions "Risk Factors - Restrictions on Ownership and Transfer
of our Common Stock (solely insofar as relates to the Federal
Communications Law (as defined below) and the Company's charter
and by-laws), "Risk Factors--Television and Radio Broadcasting,"
"Business - Regulation - Television and Radio Broadcasting,"
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25
"Description of Capital Stock - Common Stock and Class B Common
Stock - Restrictions on Ownership and Transfer of Common Stock
and Class B Common Stock" and in the 1998 Form 10-K under the
captions "Business--Television and Radio--Broadcasting
Regulation," "Business--Television Broadcasting--Programming,"
and "Business--Television Broadcasting--Acquisitions and Time
Brokerage Agreements" fairly summarizes the matters described
therein in all material respects, except, in the case of any
such information set forth in the 1998 Form 10-K, to the extent
that such information has been superseded by information in the
Prospectus (excluding the documents incorporated by reference
therein);
(ii) to the knowledge of such counsel, each of the
Company and its subsidiaries is in compliance with all Federal
Communications Law (as defined below) and the FCC Licenses (as
defined below) granted to or held by the Company or any of its
subsidiaries, except where such noncompliance would not, either
individually or in the aggregate, have a material adverse effect
on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries,
taken as a whole. As used herein, the term "FCC Licenses" means
any licenses, permits and other authorizations issued by the
FCC. As used herein, the term "Federal Communications Law" means
the Communications Act of 1934, as amended, and the rules and
regulations of the Federal Communications Commission. The
Federal Communications Laws are the only federal laws, rules or
regulations relating to radio broadcasting or television
broadcasting which are applicable to the Company's radio and
television broadcasting operations;
(iii) the issuance and sale of the Company Securities
and the sale of the Stockholders Securities pursuant to this
Agreement, do not constitute (i) the transfer, assignment or
disposition in any manner, voluntarily or involuntarily,
directly or indirectly, of any FCC License granted to or held by
the Company or any of its subsidiaries or of any FCC License
granted to or held by a third party with respect to a television
or radio station operated but not owned by the Company or any of
its subsidiaries or (ii) the transfer of control of the Company
or any of its subsidiaries within the meaning of Section 310(d)
of the Communications Act of 1934, as amended;
(iv) no consent, approval, authorization or order of,
or registration or filing with, the FCC or under Federal
Communications Law is required for the execution, delivery or
performance by the Company and the Selling Stockholders of this
Agreement or for the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance
and sale of the Company Securities and the sale of the
Stockholders Securities pursuant to this Agreement);
(v) the execution, delivery and performance by the
Company and the Selling Stockholders of this Agreement and the
consummation of the transactions contemplated hereby (including,
without limitation, the issuance and sale of the
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26
Company Securities and the sale of the Stockholders Securities
pursuant to this Agreement) and compliance by the Company and
the Selling Stockholders with the terms hereof, do not and will
not conflict with, or result in a breach or violation of, (i)
any FCC License granted to or held by the Company or any of its
subsidiaries or any FCC License granted to or held by a third
party with respect to a television or radio station operated but
not owned by the Company or any of its subsidiaries, or (ii) any
Federal Communications Law or (iii) any order or ruling of the
FCC to which the Company or any of its subsidiaries is subject
or any order, judgment or decree of any court with respect to
any Federal Communications Law, except for such conflicts,
breaches or violations which would not, either individually or
in the aggregate, have a material adverse effect on the
condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries,
taken as a whole; and
(vi) the Company and its subsidiaries possess all FCC
Licenses necessary to conduct their respective radio and
television broadcasting businesses in the manner described in
the Prospectus and, in the case of television or radio stations
operated but not owned by the Company and its subsidiaries, the
owners of such stations possess all necessary FCC Licenses with
respect to such stations, and, to the knowledge of such counsel,
neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification
of any such FCC License, which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole.
In rendering such opinion, such counsel may state that such
counsel expresses no opinion as to matters governed by laws of any other
jurisdiction other than the laws of the District of Columbia and the
Federal Communications Laws, and such counsel shall state that, to the
extent that such opinion relates to laws of other jurisdictions, such
counsel has assumed that such laws are in all relevant respects
identical to the laws of the District of Columbia. In rendering such
opinion, such counsel may rely as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company and
public officials. References to the Prospectus in this paragraph (d)
include any supplements thereto at the date of such opinion. The opinion
of such counsel shall be rendered to the Underwriters at the request of
the Company and shall so state therein.
(e) The Selling Stockholders shall have furnished to the
Representatives the opinion of ▇▇▇▇▇▇ & ▇▇▇▇ PC, counsel for the Selling
Stockholders, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) The Ginger and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Foundation (the
"Foundation") has been duly organized and is validly existing
and in good standing under the laws of the State of Washington;
each of the Selling Stockholders has full right, power and
authority to execute, deliver and perform its obligations under
this Agreement and its Custody Agreement and to sell, transfer
and deliver the Securities to be sold by such Selling
Stockholder under this Agreement.
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27
(ii) this Agreement and a Custody Agreement have been
duly authorized by the Foundation; this Agreement and a Custody
Agreement have been duly executed and delivered by each of the
Selling Stockholders; each Custody Agreement is valid and
binding on the Selling Stockholder party thereto; and each
Selling Stockholder has full legal right and authority to sell,
transfer and deliver, in the manner provided in this Agreement
and the Custody Agreement to which it is a party, the Securities
being sold by such Selling Stockholder hereunder;
(iii) assuming that each Underwriter acquires its
interest in the Securities it has purchased from the Selling
Stockholders without notice of any adverse claim (within the
meaning of Section 8-105 of the UCC), each Underwriter that has
purchased such Securities delivered on the Closing Date to The
Depository Trust Company or other securities intermediary by
making payment therefor as provided herein, and that has had
such Securities credited to the securities account or accounts
of such Underwriter maintained with The Depository Trust Company
or such securities intermediary, will have acquired a security
entitlement (within the meaning of Section 8-102(a)(17) of the
UCC) to such Securities purchased by such Underwriter, and no
action based on an adverse claim (within the meaning of Section
8-102(a)(1) of the UCC) may be asserted against such Underwriter
with respect to such Securities.
(iv) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation by any Selling Stockholder of the transactions
contemplated herein, except such as may have been obtained under
the Act and such as may be required under the blue sky laws of
any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters;
(v) neither the sale of the Securities being sold by
any Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by any Selling Stockholder or
the fulfillment of the terms hereof by any Selling Stockholder
will conflict with, result in a breach or violation of, or
constitute a default under any law or the charter or by-laws,
partnership agreements, trust agreement or other organizational
documents (if applicable) of any Selling Stockholder or the
terms of any indenture or other agreement or instrument known to
such counsel and to which any Selling Stockholder is a party or
bound, or any judgment, order or decree known to such counsel to
be applicable to any Selling Stockholder of any court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over any Selling Stockholder; and
(vi) the Indemnity Agreement has been duly authorized
by the Foundation and has been duly executed and delivered by
the Selling Stockholders.
In rendering such opinion, such counsel shall state that such
opinion covers matters involving the application of the laws of the
State of Washington, the State of New
27
28
York, and the federal laws of the United States, that such counsel has
relied, as to matters involving the application of the laws of the State
of New York, on the opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq. delivered pursuant
to subsection (f) below, and that such counsel believes that they and
the Representatives and the Underwriters are justified in relying on
such New York counsel. Such counsel may also rely, as to matters
involving the application of laws of any jurisdiction other than the
State of Washington, the State of New York or the federal laws of the
United States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the
Underwriters (provided that (x) counsel to the Selling Stockholders
shall state that they believe that they and the Representatives and the
Underwriters are justified in relying upon such opinion of local counsel
and (y) the opinion of each such local counsel shall be dated the same
date as such opinion of counsel to the Selling Stockholders, shall
expressly state that counsel to the Company may rely on such opinion in
rendering their opinion pursuant to this Agreement, that the
Representatives and the Underwriters may rely on such opinion as if such
opinion were addressed to them and that such opinion is being rendered
to the Underwriters at the request of the Company, and shall be
delivered to the Representatives on the Closing Date); and such counsel
also may rely as to matters of fact, to the extent they deem proper, on
certificates signed by any of the Selling Stockholders who are natural
persons or by responsible officers of Selling Stockholders which are not
natural persons and on certificates of public officials. Such opinion of
counsel to the Selling Stockholders shall also state that, to the extent
that such opinion relates to the laws of any jurisdiction (other than
the State of Washington, the State of New York or the federal laws of
the United States), such counsel has assumed that such laws are in all
relevant respects identical to the laws of the State of Washington. The
opinion of such counsel shall be rendered to the Underwriters at the
request of the Company and the Selling Stockholders and shall so state
therein.
(f) The Company shall have furnished to the Representatives
the opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq., special New York counsel to the
Selling Stockholders, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) assuming that this Agreement and a Custody
Agreement have been duly authorized by the Foundation under the
laws of the State of Washington, this Agreement and a Custody
Agreement have been duly executed and delivered by each of the
Selling Stockholders; each Custody Agreement is a valid and
binding obligation of the Selling Stockholder party thereto and
each Selling Stockholder has full legal right and authority
under the laws of the State of New York to sell, transfer and
deliver, in the manner provided in this Agreement and the
Custody Agreement to which it is a party, the Securities being
sold by such Selling Stockholder hereunder;
(ii) assuming that each Underwriter acquires its
interest in the Securities it has purchased from the Selling
Stockholders without notice of any adverse claim (within the
meaning of Section 8-105 of the UCC), each Underwriter that has
purchased such Securities delivered on the Closing Date to The
Depository Trust Company or other securities intermediary by
making
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29
payment therefor as provided herein, and that has had such
Securities credited to the securities account or accounts of
such Underwriter maintained with The Depository Trust Company or
such securities intermediary, will have acquired a security
entitlement (within the meaning of Section 8-102(a)(17) of the
UCC) to such Securities purchased by such Underwriter, and no
action based on an adverse claim (within the meaning of Section
8-102(a)(1) of the UCC) may be asserted against such Underwriter
with respect to such Securities;
(iii) no consent, approval, authorization or order of
any court or governmental agency or body of the State of New
York is required for the consummation by any Selling Stockholder
of the transactions contemplated herein, except such as may be
required under the blue sky laws of the State of New York in
connection with the purchase and distribution of the Securities
by the Underwriters; and
(iv) neither the sale of the Securities being sold by
any Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by any Selling Stockholder or
the fulfillment of the terms hereof by any Selling Stockholder
will conflict with, result in a breach or violation of, or
constitute a default under, any law of the State of New York.
In rendering such opinion, such counsel shall state that such
opinion covers matters involving the application of the laws of the
State of New York. Such counsel may rely as to matters of fact, to the
extent he deems proper, on certificates signed by any of the Selling
Stockholders who are natural persons or by responsible officers of
Selling Stockholders which are not natural persons and on certificates
of public officials. The opinion of such counsel shall be rendered to
the Underwriters at the request of the Company and the Selling
Stockholders and shall so state therein.
(g) The Representatives shall have received from ▇▇▇▇▇ &
Wood LLP, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date and addressed to the Representatives, with respect to
the issuance and sale of the Securities, the Registration Statement, the
Prospectus (together with any supplements thereto) and other related
matters as the Representatives may reasonably require, and the Company
and each Selling Stockholder shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters. The opinion or opinions of such counsel shall be rendered
to the Underwriters at the request of the Company and shall so state
therein.
(h) The Company shall have furnished to the Representatives
a certificate of the Company, signed by the Chairman of the Board or a
Co-President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus, any supplements to the Prospectus and this Agreement and
that:
(i) the representations and warranties of the
Company in this Agreement are true and correct on and as of the
Closing Date with the same effect
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30
as if made on the Closing Date and the Company has complied with
all the agreements and satisfied all the conditions on its part
to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included or incorporated by reference in the
Prospectus (exclusive of any supplement thereto), there has been
no material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(i) Each Selling Stockholder shall have furnished to the
Representatives a certificate, signed on behalf of such Selling
Stockholder by an Attorney-in-Fact, dated the Closing Date, to the
effect that such Selling Stockholder has carefully examined the
Registration Statement, the Prospectus, any supplement to the Prospectus
and this Agreement and that the representations and warranties of such
Selling Stockholder in this Agreement are true and correct on and as of
the Closing Date to the same effect as if made on the Closing Date.
(j) Prior to the Execution Time, the Company shall have
furnished to the Representatives a waiver and amendment of certain
provisions of the Bank Credit Agreement, executed by the requisite
percentage or proportion of the bank lenders thereunder and in form and
substance satisfactory to the Representatives, and such waiver and
amendment shall be in full force and effect.
(k) At the Execution Time and at the Closing Date, Ernst &
Young LLP shall have furnished to the Representatives letters, dated
respectively as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the Representatives, confirming that
they are independent auditors within the meaning of the Act and the
Exchange Act and the respective applicable rules and regulations adopted
by the Commission thereunder and that they have performed a review of
the unaudited interim financial information of the Company for the
three-month period ended March 31, 1999, and as at March 31, 1999 in
accordance with Statement on Accounting Standards No. 71, and stating in
effect that:
(i) in their opinion, the audited financial
statements of the Company and of WOKR (TV) included or
incorporated in the Registration Statement and the Prospectus
and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the Act
and the Exchange Act and the related published rules and
regulations adopted by the Commission;
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(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company and
its subsidiaries; their limited review, in accordance with
standards established under Statement on Auditing Standards No.
71, of the unaudited interim financial information for the
three-month period ended March 31, 1999 and 1998, and as at
March 31, 1999 and 1998 included or incorporated in the
Registration Statement and the Prospectus; carrying out certain
specified procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and the audit
committee and any other committee, if any, of the Company; and
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the
Company and its subsidiaries as to transactions and events
subsequent to March 31, 1999, nothing came to their attention
which caused them to believe that:
(1) any unaudited financial statements
included or incorporated in the Registration Statement
and the Prospectus do not comply as to form in all
material respects with applicable accounting
requirements of the Act and the Exchange Act and with
the respective published rules and regulations of the
Commission with respect to financial statements included
or incorporated in Quarterly Reports on Form 10-Q under
the Exchange Act; and any material modifications should
be made to the unaudited financial statements for them
to be in conformity with generally accepted accounting
principles;
(2) with respect to the period subsequent to
March 31, 1999, there were, at a specified date not more
than five days prior to the date of the letter, any
changes in the consolidated capital stock of the Company
and its subsidiaries or any increases in the
consolidated long-term debt or consolidated
stockholders' deficiency of the Company and its
subsidiaries or any increases in the deficiency in net
current assets of the Company and its subsidiaries as
compared with the amounts shown on the March 31, 1999
unaudited consolidated balance sheet included in the
Registration Statement and the Prospectus, or for the
period from April 1, 1999 to such specified date there
were any decreases, as compared with the corresponding
period in the preceding year, in consolidated revenue,
consolidated net revenue, consolidated operating cash
flow, consolidated income before income taxes and
extraordinary items or in total or per share amounts
(actual and assuming dilution) of consolidated net
income of the Company and its subsidiaries, except in
all instances for changes or decreases set forth in such
letter, in which case the letter shall be accompanied by
an explanation by the Company as to the significance
thereof unless said explanation is not deemed necessary
by the Representatives;
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(3) the information included or incorporated
by reference in the Registration Statement and
Prospectus in response to Regulation S-K, Item 301
(Selected Financial Data) and Item 402 (Executive
Compensation) is not in conformity with the applicable
disclosure requirements of Regulation S-K; or
(4) If the interim financial statements
included in the Registration Statement and Prospectus
are supplemented by later income statement information
(so called "capsule" information), such capsule
information (which capsule information and its location
in the Prospectus shall be described in such letter) do
not agree with the amounts set forth in the unaudited
financial statements for the 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 Registration Statement and
the Prospectus; and, if the capsule information meets
the minimum disclosure requirements of APB Opinion No.
28, paragraph 30, the foregoing will be expanded also to
cover "conformity with generally accepted accounting
principles"; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Prospectus, including the information set
forth under the headings "Prospectus Summary-Summary Financial
Data," "Selected Consolidated Financial Data," "Unaudited Pro
Forma Condensed Consolidated Financial Information," and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Prospectus, the information set
forth in Items 1, 2, 6, 7 and 11 of the Company's 1998 Form
10-K, the information included in the Management's Discussion
and Analysis of Financial Condition and Results of Operations"
included in the Company's Quarterly Reports on Form 10-Q,
incorporated by reference in the Prospectus and the information
set forth in Item 7 in the Company's Current Reports on Form 8-K
dated April 27, 1999 and June 17, 1999, incorporated by
reference in the Prospectus, agrees with the accounting records
of the Company and its subsidiaries or with the accounting
records of WOKR (TV), excluding any questions of legal
interpretation; and
(iv) on the basis of a reading of the unaudited
condensed consolidated pro forma financial statements included
and incorporated by reference in the Registration Statement and
the Prospectus (the "pro forma financial statements"); carrying
out certain specified procedures; inquiries of certain officials
of the Company who have responsibility for financial and
accounting matters; and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical
amounts in the pro forma financial statements, nothing came to
their attention which caused them to believe that the pro forma
financial statements do
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not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation
S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of such
statements.
References to the Prospectus in this paragraph (k) include any
supplement thereto at the date of the letter.
(l) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change,
increase or decrease specified in the letter or letters referred to in
paragraph (k) of this Section 6 or (ii) any change, or any development
involving a prospective change, in or affecting the condition (financial
or otherwise), earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any amendments or
supplements thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto).
(m) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt securities
by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or any notice given
of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the direction
of the possible change.
(n) The Securities shall have been listed and admitted and
authorized for trading on the New York Stock Exchange, and satisfactory
evidence of such actions shall have been provided to the
Representatives.
(o) At the Execution Time, the Company shall have furnished
to the Representatives a letter substantially in the form of Exhibit A
hereto from each person listed on Exhibit B hereto.
(p) Prior to the Closing Date, the Company and the Selling
Stockholders shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may
reasonably request.
(q) Prior to the Execution Time, the Company shall have
furnished to the Representatives a true, complete and correct copy of
the NBA Approval and the Indemnity Agreement; on the Closing Date, the
NBA Approval shall be in full force and effect and all conditions set
forth in the NBA Approval shall have been satisfied.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and
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certificates mentioned above or elsewhere in this Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the
Representatives and counsel for the Underwriters, this Agreement and all
obligations of the Underwriters hereunder may be canceled at, or at any time
prior to, the Closing Date by the Representatives. Notice of such cancellation
shall be given to the Company and the Selling Stockholders in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, at
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company or any Selling
Stockholder to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally through ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. on demand
for all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Securities. If the Company is required to make any
payments to the Underwriters under this Section 7 because of any Selling
Stockholder's refusal, inability or failure to satisfy any condition to the
obligations of the Underwriters set forth in Section 6, the Selling Stockholders
pro rata in proportion to the percentage of Securities to be sold by each shall
reimburse the Company on demand for all amounts so paid.
8. Indemnification and Contribution.
(a) The Company and the Selling Stockholders jointly and severally
agree to indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or other
federal or state statutory law or regulation, at common law 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 a material fact contained in the registration statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in any Preliminary Prospectus or the Prospectus, or in any amendment thereof
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company and the Selling Stockholders will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the
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Representatives specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company or the Selling
Stockholders may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, and each person who controls the Company
within the meaning of either the Act or the Exchange Act and each Selling
Stockholder, to the same extent as the foregoing indemnity to each Underwriter,
but only with reference to written information relating to such Underwriter
furnished to the Company by or on behalf of such Underwriter through the
Representatives specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company and each Selling
Stockholder acknowledge that the statements set forth in the last paragraph of
the cover page regarding delivery of the Securities, and, under the heading
"Underwriting", (i) the sentences related to concessions and reallowances and
(ii) the paragraphs related to stabilization, syndicate covering transactions
and penalty bids constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in any Preliminary Prospectus
or the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 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 this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder
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(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Selling Stockholders,
jointly and severally, and the Underwriters severally agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company, the Selling Stockholders and one
or more of the Underwriters may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Selling
Stockholders on the one hand and by the Underwriters on the other from the
offering of the Securities; provided, however, that in no case shall any
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Selling Stockholders, jointly and severally, and the Underwriters severally
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the Selling
Stockholders on the one hand and of the Underwriters on the other in connection
with the statements or omissions which resulted in such Losses as well as any
other relevant equitable considerations. Benefits received by the Company and
the Selling Stockholders shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses) received by them, and benefits
received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Prospectus. Relative fault shall be determined by reference to,
among other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information provided by the Company or the Selling Stockholders on
the one hand or the Underwriters on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company, the Selling Stockholders
and the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
(e) The liability of each Selling Stockholder under such Selling
Stockholder's representations and warranties contained in Section 1 hereof and
under the indemnity and contribution agreements contained in this Section 8
shall be limited to an amount equal to the
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initial public offering price of the Securities sold by such Selling Stockholder
to the Underwriters. The Company and the Selling Stockholders may agree, as
among themselves and without limiting the rights of the Underwriters under this
Agreement, as to the respective amounts of such liability for which they each
shall be responsible.
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter, the
Selling Stockholders or the Company. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
the Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Company, the Selling Stockholders and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) trading in the Company's Common Stock shall have been suspended by
the Commission or the New York Stock Exchange or trading in securities generally
on the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the sole judgment of the Representatives, impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of each Selling Stockholder and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter,
any Selling Stockholder, or the Company or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 7 and 8 hereof
shall survive the termination or cancellation of this Agreement.
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12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., Attention: General
Counsel (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., at
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel; or,
if sent to the Company, will be mailed, delivered or telefaxed to the Chief
Financial Officer (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Co-President and Chief Financial Officer at The ▇▇▇▇▇▇▇▇ Group, Inc., ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; or if sent to any Selling Stockholder,
will be mailed, delivered or telefaxed and confirmed to such Selling Stockholder
in care of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Attorney-in-Fact (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and
confirmed to such Selling Stockholder in care of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Attorney-in-Fact, at The ▇▇▇▇▇▇▇▇ Group, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees and agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Acquisition Agreement" shall mean the Purchase Agreement dated
as of September 25, 1998 with ▇▇▇▇▇▇▇▇ Communications, Inc. ("▇▇▇▇▇▇▇▇")
pursuant to which the Company acquired (the "Asset Acquisition")
substantially all of the assets of the television station known as WOKR
(TV) and assumed certain related liabilities.
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange Commission.
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"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"NBA" means The National Basketball Association.
"NBA Entities" means, collectively, the NBA, NBA Properties,
Inc., NBA Media Ventures, LLC and NBA Development, LLC.
"NBA Persons" means the NBA, the NBA Entities, Planet Insurance,
Ltd., WNBA, LLC, WNBA Enterprises, LLC, any subsidiary of any of the
foregoing, the Commissioner of the NBA, the Board of Governors of the
NBA, and any and all members, owners, governing bodies and committees of
the NBA, its Board of Governors or any of the other NBA Entities; and
"NBA Person" means any of the NBA Persons.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(i)(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(i)(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective) and,
in the event any post-effective amendment thereto or any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date,
shall also mean such registration statement as so amended or such Rule
462(b) Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under
the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the initial registration statement
referred to in Section 1(i)(a) hereof.
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"WOKR (TV)" shall mean the assets (including licenses and other
intangibles) acquired and the liabilities assumed by the Company
pursuant to the Acquisition Agreement.
"▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney" shall mean ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
18. NBA Matters. (a) In the event that any consent, approval,
resolution, authorization or order of, or registration or filing with, the NBA
or any other NBA Person shall be required in connection with, or in the event
that any instrument, agreement or other document is required to be executed or
delivered to the NBA or any other NBA Person by the Company, any of the Selling
Stockholders or any of their respective subsidiaries or affiliates or any other
person in connection with, (i) the purchase, public offering or sale of
Securities by any of the Underwriters or any of the other transactions
contemplated by this Agreement or (ii) the ownership, sale or other disposition
by any of the Underwriters or any of their subsidiaries or affiliates of any of
the Securities purchased pursuant to this Agreement or any other shares of
Common Stock acquired in connection with stabilization or other transactions
relating to the offering of the Securities, in market-making transactions, or
otherwise in the ordinary course of business, the Company and the Selling
Stockholders, jointly and severally, agree that they will use their best efforts
to obtain such consent, approval, resolution, authorization or order, or make
such registration or filing, as the case may be, and to execute and deliver or
obtain, as the case may be, such instrument, agreement or other document, as
soon as possible and otherwise to take any and all action as may be requested at
any time by the Representatives in connection with the purchase, ownership, sale
or other disposition of any such Securities or shares of Common Stock.
(b) Without limitation to any other provision of this Agreement, the
Company and the Selling Stockholders jointly and severally agree to indemnify
and hold harmless each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls any Underwriter within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under federal or state statutory law or regulation, at common
law, under the constitution or by-laws of the NBA or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of any failure to obtain any consent, approval, resolution, authorization or
order of, or any failure to make any registration or filing with, or to deliver
any instrument, agreement or other document to, the NBA or any other NBA Person
or any breach or violation of, or default under, or failure to comply with, or
otherwise relating to, any of the terms or provisions of the constitution,
by-laws or other governing documents or any rule or regulation of the NBA or any
other NBA Person, including reasonable fees, costs and expenses of counsel
appointed by the Representatives.
(c) The Company and the Selling Stockholders, for themselves, their
respective predecessors and successors in interest, attorneys, subsidiaries,
affiliates, assigns, directors, officers, stockholders, heirs, executors, legal
representatives, agents, servants, associates, principals, employees and
representatives (collectively, including the Company and the Selling
Stockholders, the "Subject Parties") hereby absolutely and unconditionally,
jointly and severally, release and forever discharge the Representatives and the
Underwriters and their respective predecessors and successors in interest,
attorneys, parent corporations, subsidiaries, affiliates,
40
41
assigns, directors, officers, general partners, limited partners, stockholders,
heirs, executors, legal representatives, agents, servants, associates,
principals, employees and representatives from any and all Released Claims that
any of the Subject Parties, directly, indirectly, derivatively or in any other
capacity now or hereafter has or shall or may have. As used herein, "Released
Claims" means Claims directly or indirectly based upon, arising out of, or in
any manner related to, in whole or in part, (i) any failure to obtain any
consent, approval, resolution, authorization or order of, or any failure to make
any filing or registration with, or to deliver any instrument, agreement or
other document to, the NBA or any other NBA Person or (ii) any breach or
violation of, or default under, or failure to comply with, or otherwise relating
to, any of the terms or provisions of the constitution, by-laws or other
governing documents or any rule or regulation of the NBA or any other NBA Person
or (c) otherwise relating to the constitution, by-laws or other governing
documents or any rule or regulation of the NBA or any other NBA Person. "Claims"
means any and all civil (i.e. non-criminal) claims, demands, actions, suits,
causes of action, damages, rights or liabilities of any nature, including,
without limitation, civil and administrative penalties and punitive damages as
well as costs, expenses and attorneys' fees, whether known or unknown, suspected
or unsuspected, accrued or unaccrued, or legal, equitable, or statutory based
upon, arising out of, or in any manner related to past, present or future
conduct, acts or omissions.
41
42
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
The ▇▇▇▇▇▇▇▇ Group, Inc.
By: _____________________________________
Name:
Title:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
The Ginger and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Foundation
By: _____________________________________
Attorney-in-Fact
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
First Union Capital Markets Corp.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
By: _________________________________
Name:
Title:
For themselves and the other several Underwriters
named in Schedule I to the foregoing Agreement.
42
43
EXHIBIT A
The ▇▇▇▇▇▇▇▇ Group, Inc.
Public Offering of Common Stock
__________, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
As a Representative of the several Underwriters,
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement") between The ▇▇▇▇▇▇▇▇
Group, Inc., a Delaware corporation (the "Company"), the selling stockholders to
be named in the Underwriting Agreement, and the representative or
representatives, as the case may be (including ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.), of a
group of underwriters (the "Underwriters") to be named in the Underwriting
Agreement, relating to an underwritten public offering of Common Stock, $.01 par
value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., offer, sell, contract to sell, pledge or
otherwise dispose of (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or an affiliate of the undersigned or any person
in privity with the undersigned or an affiliate of the undersigned) directly or
indirectly, or file (or participate in the filing of) a registration statement
with the Securities and Exchange Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder with respect to, any shares of capital stock
of the Company or any securities convertible into or exercisable or exchangeable
for such capital stock, or publicly announce an intention to effect any such
transaction, for a period of 90 days after the date of the Underwriting
Agreement, other than shares of Common Stock disposed of as bona fide gifts
approved in writing by ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
A-1
44
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
Yours very truly,
-----------------------------------------
Name:
Telephone No.:
Fax No.:
Address:
A-2
45
EXHIBIT B
List of Persons Delivering Lock-Up Agreements
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
M. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ("▇▇▇▇▇") ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
B-1
46
EXHIBIT C
Subsidiaries
Name of Subsidiary Jurisdiction of Organization
------------------ ----------------------------
▇▇▇▇▇▇▇▇ Airport Advertising, Inc. Washington
*AK Media Group, Inc. Washington
*Central NY News, Inc. Washington
*KJR Radio, Inc. Washington
*SSI, Inc. Washington
TC Aviation, Inc. Oregon
KVOS TV Ltd.(1) British Columbia
----------
* Subsidiaries marked with an asterisk are Material Subsidiaries.
(1) Direct subsidiary of AK Media Group, Inc.
C-1
47
SCHEDULE I
Number of Underwritten
Underwriters Securities to be Purchased
------------ --------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc..........................................
First Union Capital Markets Corp..................................
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated....................................
-----------------
Total.................................................. [ ]
=================
Schedule I-1
48
SCHEDULE II
Number of Underwritten
Selling Stockholders Securities to be Sold
-------------------- ----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
The Ginger and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Foundation
-----------------
Total....................................................... [ ]
=================
Schedule II-1
