Exhibit 1.1
150,000 Shares
Granite Broadcasting Corporation
12 3/4% Cumulative Exchangeable Preferred Stock
Purchase Agreement
January 27, 1997
Xxxxxxx, Xxxxx & Co.,
BT Securities Corporation,
Lazard Freres & Co. LLC,
Salomon Brothers Inc,
c/o Goldman, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
Granite Broadcasting Corporation, a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Purchasers named in Schedule I hereto (the
"Purchasers") 150,000 shares of its 12 3/4% Cumulative Exchangeable Preferred
Stock, initial liquidation preference $1,000 per share (the "Securities",
which term shall, unless the context otherwise requires, include the Exchange
Offer Preferred Stock (as defined in the Exchange and Registration Rights
Agreement to be dated January 31, 1997 (the "Registration Rights
Agreement")). The Securities are exchangeable, in whole or in part on any
dividend payment date, at the option of the Company, for its 12 3/4% Exchange
Debentures due 2009 (the "Exchange Debentures", which term shall, unless the
context otherwise requires, include the Exchange Offer Debentures (as defined
in the Registration Rights Agreement) to be issued under an indenture
substantially in the form thereof to be delivered to the Purchasers prior to
or at the Time of Delivery (as defined below) (the "Indenture").
The Purchasers and their direct and indirect transferees of the
Securities will be entitled to the benefits of the Registration Rights
Agreement, pursuant to which the Company has agreed, among other things, to
file a registration statement (the "Registration Statement") with the
Securities and Exchange Commission (the "Commission") registering the
Securities or the Exchange Debentures under the Securities Act of 1933, as
amended (the "Act").
1. The Company represents and warrants to, and agrees with, each of the
Purchasers that:
(a) A preliminary offering circular, dated January 22, 1997 (the
"Preliminary Offering Circular"), and an offering circular, dated
January 27, 1997 (the "Offering Circular"), have been prepared in
connection with the offering of the Securities. The Preliminary Offering
Circular and the Offering Circular and any amendments or supplements
thereto and the Exchange Act Reports (as defined below) did not and will
not, as of their respective dates, contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the
Company by a Purchaser through Xxxxxxx, Sachs & Co. expressly for use
therein. The Exchange Act Reports, when they were filed with the
Securities and Exchange Commission (the "Commission"), conformed in all
material respects to the applicable requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the applicable
rules and regulations of the Commission thereunder. "Exchange Act
Reports" means the Company's most recent Annual Report on Form 10-K and
all subsequent documents filed with the Commission pursuant to Section
13(a), 13(c) or 15(d) of the Exchange Act on or prior to the date of the
Preliminary Offering Circular or the Offering Circular, as the case may
be.
(b) The Company and its subsidiaries, taken as a whole, have not
sustained since the date of the latest unaudited financial statements
included in the Offering Circular any material loss or interference with
its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Circular; and, since the respective dates as
of which information is given in the Offering Circular, there has not been
any change in the capital stock (other than conversion of preferred stock
into Common Stock (Nonvoting) and the exercise of certain employee stock
options and awards) or any increase in the short-term debt (other than
trade payables), long-term debt (other than an increase of not more than
$500,000 under the Company's revolving credit facility (the "Revolving
Credit Facility") under the Credit Agreement (as such term is defined in
the Offering Circular) or redeemable stock of the Company and its
subsidiaries or any material adverse change, or any development involving
a prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Offering Circular;
(c) The Company and its subsidiaries have good and marketable (or,
with respect to property in the State of Texas, indefeasible) title in
fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Offering
Circular or such as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and any real property and
buildings held under lease by the Company and its subsidiaries are held
by them under valid, subsisting and enforceable leases with such
exceptions as are not
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material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries;
(d) 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 its jurisdiction of incorporation, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Offering Circular, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to require such
qualification, except where the failure to be so qualified would not have
a material adverse effect on the Company and its subsidiaries, taken as a
whole, or is subject to no material liability or disability by reason of
the failure to be so qualified in any such jurisdiction;
(e) The Company has an authorized capitalization at December 31, 1996
as set forth in the Offering Circular, and all of the issued shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable; and all of the issued
shares of capital stock of each subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares and except as otherwise set forth
in the Offering Circular) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims;
(f) The Securities have been duly and validly authorized, and, when
the Securities are issued and delivered pursuant to this Agreement and if
applicable the Registration Rights Agreement, such Securities will be duly
and validly issued and fully paid and non-assessable; and the Securities
conform in all material respects to the description thereof contained in
the Offering Circular;
(g) The Exchange Debentures have been duly authorized, and, when
issued and delivered in exchange for the Securities pursuant to the terms
thereof, will have been duly executed, authenticated, issued and delivered
and will constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture, under which they are
to be issued; the Indenture has been duly authorized and, when executed
and delivered by the Company and the trustee under the Indenture (the
"Trustee"), will constitute a valid and legally binding instrument of the
Company, enforceable against the Company in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles; the Indenture will be in a form
which would meet the requirements for qualification under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"); and the
Exchange Debentures and the Indenture will conform in all material
respects to the descriptions thereof in the Offering Circular and will be
in substantially the form delivered to the Purchasers prior to or at the
Time of Delivery.
(h) The Registration Rights Agreement has been duly authorized, and,
when executed and delivered by the Company, will constitute a valid and
legally binding agreement of the
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Company enforceable against the Company in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles; the Registration Rights Agreement
will conform in all material respects to the description thereof in the
Offering Circular; the Exchange Offer Preferred Stock has been duly
authorized and reserved for issuance in exchange for the Securities; and
when delivered in accordance with the terms of the Securities and the
Registration Rights Agreement, the Exchange Offer Preferred Stock will be
validly issued, fully paid and non-assessable and will conform in all
material respects to the description thereof in the Offering Circular;
(i) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of the
Exchange Act, or any regulation promulgated thereunder, including, without
limitation, Regulations G, T, U, and X of the Board of Governors of the
Federal Reserve System;
(j) Prior to the date hereof, neither the Company nor any of its
affiliates has taken any action which is designed to or which has
constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the Company
in connection with the offering of the Securities;
(k) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, the
Registration Rights Agreement and this Agreement and the consummation of
the transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
sale/leaseback agreement, loan agreement or other similar financing
agreement or instrument or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties, except, in each case, for such conflicts, breaches, violations
or defaults as would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole; and, assuming the accuracy of the
representations and warranties of the Purchasers in Section 3, no consent,
approval, authorization, order, registration or qualification of or with
any such court or governmental agency or body is required for the issue
and sale of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement, the Indenture or the
Registration Rights Agreement, except such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Purchasers, and such consents,
approvals, authorizations, registrations and qualifications as may be
required under the Act, the Trust Indenture Act of 1939 and state or
foreign securities or Blue Sky laws in connection with the exchange offer
or resale registration
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statement contemplated in the Offering Circular and described in the
Registration Rights Agreement;
(l) Neither the Company nor any of its subsidiaries is in violation
of its Certificate of Incorporation or By-laws or in default in the
performance or observance of any obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which it is a party or by which
it or any of its properties may be bound, except for such violations or
non-compliances as would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole;
(m) The statements set forth in the Offering Circular under the
captions "Description of the New Preferred Stock" and "Description of the
Exchange Debentures" insofar as they purport to constitute a summary of
the terms of the Securities and the Exchange Debentures, and under the
caption "Registration Covenant; Exchange Offer", insofar as they purport
to describe the provisions of the laws and documents referred to therein
(other than any agreement among Purchasers), are accurate and fair in all
material respects;
(n) Other than as set forth in the Offering Circular, there are no
legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the current or future consolidated
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole; and, other than as set
forth in the Offering Circular and to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(o) The Company and each of its subsidiaries holds all material
licenses, certificates, permits, consents, orders, authorizations and
approvals for the Existing Stations (as defined below) (collectively,
"Licenses") from governmental authorities which are necessary to the
conduct of their businesses in the manner and to the full extent now
operated or proposed to be operated as described in the Offering Circular;
such Licenses are in full force and effect and no proceeding has been
instituted or pending or, to the knowledge of the Company, is contemplated
or threatened which in any manner affects or draws into question the
validity or effectiveness thereof; such Licenses contain no materially
burdensome restrictions not customarily imposed by the Federal
Communications Commission (the "FCC") on television stations of the same
class and type; the operation of the television stations identified,
excluding WXON-TV and WLAJ-TV, in the Offering Circular under the caption
"Business -- Stations Overview" (collectively, the "Existing Stations") in
the manner and to the full extent now operated or proposed to be operated
as described in the Offering Circular is in accordance with the
Communications Act of 1934, as amended (the "Communications Act"), the
Telecommunications Act of 1996, and all orders, rules and regulations of
the FCC, except for such noncompliance as would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole; no
event has occurred which permits (nor has an event occurred which with
notice or lapse of time or both would permit) the revocation or
termination of such Licenses or which might result in any other material
impairment of the
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rights of the Company or its subsidiaries therein; the Company and its
subsidiaries are in compliance with all statutes, orders, rules or
regulations of the FCC relating to or affecting the broadcasting
operations of any of the Existing Stations, except for such noncompliance
as would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(p) To the best of the Company's knowledge, neither the Company nor
any of its subsidiaries has infringed any patents, patent rights, trade
names, trademarks or copyrights, which infringement might have a material
adverse effect on the general affairs, management financial position,
stockholders' equity or results of operations or the Company and its
subsidiaries, taken as a whole;
(q) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the
meaning of Rule 144A under the Act) as securities which are listed on a
national securities exchange registered under Section 6 of the Exchange
Act or quoted in a U.S. automated inter-dealer quotation system;
(r) The Company is subject to Section 13 or 15(d) of the Exchange Act;
(s) The Company is not, and after giving effect to the offering and
sale of the Securities, will not be an "investment company", or an entity
"controlled" by an "investment company", as such terms are defined in the
United States Investment Company Act of 1940, as amended (the "Investment
Company Act");
(t) Assuming the accuracy of the representations and warranties of
the Purchasers in Section 3, neither the Company, nor any person acting on
its or their behalf has offered or sold the Securities by means of any
general solicitation or general advertising within the meaning of Rule
502(c) under the Act;
(u) Other than the conversion of preferred stock into Common Stock
(Nonvoting) and the exercise of certain employee stock options and awards,
within the preceding six months, neither the Company nor any other person
acting on behalf of the Company has offered or sold to any person any
Securities, or any securities of the same or a similar class as the
Securities, other than Securities offered or sold to the Purchasers
hereunder. The Company will take reasonable precautions designed to
insure that any offer or sale, direct or indirect, in the United States
or to any U.S. person (as defined in Rule 902 under the Act) of any
Securities or any substantially similar security issued by the Company,
within six months subsequent to the date on which the distribution of the
Securities has been completed (as notified to the Company by Xxxxxxx,
Sachs & Co.), is made under restrictions and other circumstances
reasonably designed not to affect the status of the offer and sale of the
Securities in the United States and to U.S. persons contemplated by this
Agreement as transactions exempt from the registration provisions of the
Act;
(v) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes; and
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(w) Ernst & Young LLP, who have certified certain financial statements
of the Company and its subsidiaries, are independent public accountants
as required by the Act and the rules and regulations of the Commission
thereunder.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Purchasers, and each of the
Purchasers agrees, severally and not jointly, to purchase from the Company,
at a purchase price of $965.00 per share plus accumulated dividends, if any,
from January 31, 1997, the respective number of Securities set forth opposite
the name of such Purchaser in Schedule I hereto.
3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms
and conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company that:
(a) It has offered or sold and will offer and sell the Securities
only (i) to persons who it reasonably believes are "qualified
institutional buyers" ("QIBs") within the meaning of Rule 144A under the
Act in transactions meeting the requirements of Rule 144A or (ii) subject
to an initial minimum purchase requirement of $100,000, to a limited
number of institutional investors that it reasonably believes are
"accredited investors" within the meaning of Rule 501(a)(1), (2), (3) or
(7) under the Securities Act ("Institutional Accredited Investors");
(b) It is an Institutional Accredited Investor; and
(c) It has not offered or sold and will not offer or sell the
Securities by any form of general solicitation or general advertising,
including but not limited to the methods described in Rule 502(c) under
the Act.
4. (a) Except as set forth in the next paragraph, the Securities to be
purchased by each Purchaser hereunder will be represented by one definitive
global certificate for the Securities in book-entry form, which will be
deposited by or on behalf of the Company with The Depository Trust Company
("DTC") or its designated custodian. The Company will deliver the Securities
to Xxxxxxx, Xxxxx & Co., for the account of each Purchaser, against payment
by or on behalf of such Purchaser of the purchase price therefor by certified
or official bank check or checks, payable to the order of the Company in, or
by wire transfer to an account specified by the Company of, Federal (same
day) funds, by causing DTC to credit the Securities to the account of
Xxxxxxx, Sachs & Co. at DTC. The Company will cause the certificate
representing the Securities to be made available to Xxxxxxx, Xxxxx & Co. for
checking at least twenty-four hours prior to the Time of Delivery (as defined
below) at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be 9:30 a.m.,
New York City time, on January 31, 1997 or such other time and date as
Xxxxxxx, Sachs & Co. and the Company may agree upon in writing. Such time
and date are herein called the "Time of Delivery".
Such Securities, if any, as Xxxxxxx, Xxxxx & Co. may request upon at
least forty-eight hours' prior notice to the Company (such request to include
the authorized denominations and the names in which they are to be
registered), shall be delivered in definitive certificated form, by or on
behalf of the Company to Xxxxxxx, Sachs & Co. for the account of certain of
the Purchasers,
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against payment by or on behalf of such Purchaser of the purchase price
therefor by certified or official bank check or checks, payable to the order
of the Company in, or by wire transfer to an account specified by the Company
of, Federal (same day) funds. The Company will cause the certificate
representing the Securities to be made available for checking and packaging
at least twenty-four hours prior to the Time of Delivery at the office of
Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by
the Purchasers pursuant to Section 7(i) hereof, will be delivered at such
time and date at the offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (the "Closing Location"), and the Securities will be
delivered at the Designated Office, all at the Time of Delivery. A meeting
will be held at the Closing Location at 3:00 p.m., New York City time, on the
New York Business Day next preceding the Time of Delivery, at which meeting
the final drafts of the documents to be delivered pursuant to the preceding
sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you;
to make no amendment or any supplement to the Offering Circular which
shall be disapproved by you promptly after reasonable notice thereof;
and to furnish you with copies thereof;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions as you may request
and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Securities, provided
that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Purchasers with four copies of the Offering
Circular and each amendment or supplement thereto, signed by an
authorized officer of the Company, and any amendment or supplement
containing amendments to the financial statements covered by such
report, signed by the accountants, and additional copies thereof in
New York City in such quantities as you may reasonably request and, if
at any time prior to the earlier of (i) nine months after the date of
the Offering Circular and (ii) the consummation of the exchange offer
registered with the Commission as contemplated by the Registration
Rights Agreement, any event shall have occurred as a result of which the
Offering Circular as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the
8
light of the circumstances under which they were made when such
Offering Circular is delivered, not misleading or, if for any other
reason it shall be necessary or desirable during such same period to
amend or supplement the Offering Circular, to notify you and upon your
request to prepare and furnish without charge to each Purchaser and to
any dealer in securities as many copies as you may from time to time
reasonably request of an amended Offering Circular or a supplement to
the Offering Circular which will correct such statement or omission or
effect such compliance;
(d) During the period beginning from the date hereof and
continuing until the date six months after the Time of Delivery, not to
offer, sell, contract to sell or otherwise dispose of, except as
provided hereunder, any securities of the Company that are substantially
similar to the Securities;
(e) Not to be or become, at any time prior to the expiration of
three years after the Time of Delivery, an open-end investment company,
unit investment trust, closed-end investment company or face-amount
certificate company that is or is required to be registered under
Section 8 of the Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or
15(d) of the Exchange Act, for the benefit of holders from time to time
of Securities, to furnish at its expense, upon request, to holders of
Securities and prospective purchasers of securities information (the
"Additional Issuer Information") satisfying the requirements of
subsection (d)(4)(i) of Rule 144A under the Act;
(g) If reasonably requested by you at any time when any of the
Securities are (i) restricted securities, as defined in Rule 144(a)(3)
under the Act or (ii) securities that can only be sold pursuant to
Regulation S under the Act, Rule 144A under the Act or Rule 144 under
the Act or in a transaction exempt from the registration requirements
under the Act pursuant to Section 4 of the Act and not involving a
public offering, to use its reasonable best efforts to cause such
Securities to be eligible for the PORTAL trading system of the National
Association of Securities Dealers, Inc.;
(h) With respect to the sale of the Securities to the Purchasers,
to file with the Commission, not later than 15 days after the Time of
Delivery, five copies of a notice on Form D under the Act (one of which
will be manually signed by a person duly authorized by the Company); to
otherwise comply with the requirements of Rule 503 under the Act; and to
furnish promptly to you evidence of each such required timely filing
thereunder (including a copy thereof);
(i) During a period of five years from the date of the Offering
Circular, to furnish to you copies of all reports or other communications
(financial or other) furnished to stockholders of the Company, and to
deliver to you (i) as soon as they are available, copies of any reports
and financial statements furnished to or filed with the Commission or
any securities exchange on which the Securities or any class of
securities of the Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company as you may
from time to time reasonably request (such financial statements to be on
a consolidated basis to the
9
extent the accounts of the Company and its subsidiaries are consolidated
in reports furnished to its stockholders generally or to the Commission);
(j) During the period of three years (or such lesser period
required by Rule 144(k) in the event Rule 144(k) under the Act is
amended) after the Time of Delivery, the Company will not, and will not
permit any of its "affiliates" (as defined in Rule 144 under the Act) to,
resell any of the Securities which constitute "restricted securities"
under Rule 144 that have been reacquired by any of them;
(k) The Company will comply with the Registration Rights
Agreement; and
(l) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the
Offering Circular under the caption "Use of Proceeds".
6. The Company covenants and agrees with the several Purchasers that the
Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the issue of the Securities and all other expenses in
connection with the preparation, printing and filing of the Preliminary
Offering Circular and the Offering Circular and any amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Purchasers and dealers; (ii) the cost of printing or producing any Agreement
among Purchasers, this Agreement, the Indenture, any Blue Sky and Legal
Investment Memoranda, closing documents (including any compilations thereof)
and any other documents in connection with the offering, purchase, sale and
delivery of the Securities, excluding (except as provided in clause (iii))
fees for legal services of counsel for the Purchasers; (iii) all expenses in
connection with the qualification of the Securities for offering and sale
under state securities laws as provided in Section 5(b) hereof, including the
fees and disbursements of counsel for the Purchasers in connection with such
qualification and in connection with the Blue Sky and legal investment
surveys; (iv) any fees charged by securities rating services for rating the
Securities; (v) the cost of preparing the Securities; (vi) the fees and
expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities; (vii) any cost incurred in connection with the designation of
the Securities for trading in PORTAL; and (viii) all other costs and expenses
incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, and Sections 8 and 11
hereof, the Purchasers will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the
Securities by them, and any advertising expenses connected with any offers
they may make.
7. The obligations of the Purchasers hereunder shall be subject, in their
discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the Time of
Delivery, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and
the following additional conditions:
(a) Xxxxxxxx & Xxxxxxxx, counsel for the Purchasers, shall have
furnished to you such opinion or opinions, dated the Time of Delivery,
with respect to the matters covered in paragraphs (i), (vii), (viii),
(ix), (xx) and (xxi) of subsection (b) below as well
10
as such other related matters as you may reasonably request, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(b) Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., counsel for the
Company, shall have furnished to you their written opinion, dated the
Time of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) The Company and each of its subsidiaries is duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, with power and
authority (corporate and other) to own its properties and conduct
its business as described in the Offering Circular;
(ii) The Company has an authorized capitalization as set forth
in the Offering Circular, and all of the issued shares of capital
stock of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable;
(iii) The Company and each of its subsidiaries has been duly
qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties or conducts any business so as to
require such qualification, except where the failure to be so
qualified would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole, or is subject to no material
liability or disability by reason of the failure to be so qualified
in any such jurisdiction (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local counsel
and in respect of matters of fact upon certificates of officers of
the Company, provided that such counsel shall state that they believe
that both you and they are justified in relying upon such opinions
and certificates);
(iv) All of the issued shares of capital stock of each such
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable, and (except for directors'
qualifying shares and except as otherwise set forth in the Offering
Circular) are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims (such counsel
being entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters of fact upon
certificates of officers of the Company or its subsidiaries, provided
that such counsel shall state that they believe that both you and
they are justified in relying upon such opinions and certificates);
(v) To the best of such counsel's knowledge and other than as
set forth or contemplated in the Offering Circular, there are no
legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
11
individually or in the aggregate have a material adverse effect on
the current or future consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries;
and, other than as set forth in the Offering Circular and to the best
of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company;
(vii) The Securities have been duly and validly authorized and
issued and are fully paid and non-assessable; a sufficient number
of shares of Exchange Offer Preferred Stock have been duly authorized
and reserved for issuance; and the Exchange Offer Preferred Stock,
when issued in accordance with the terms of the Registration Rights
Agreement, will be validly issued and fully paid and non-assessable;
(viii) The Exchange Debentures and the Indenture have been
duly authorized; when the Indenture has been duly executed and
delivered by the Company and the Exchange Offer Debentures have been
duly executed, authenticated, issued and delivered in exchange for
the Securities pursuant to the terms thereof, the Exchange Debentures
and the Indenture will constitute valid and legally binding
obligations of the Company, enforceable against the Company in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(ix) The Registration Rights Agreement has been duly
authorized, executed and delivered, and constitutes a valid and
legally binding obligation of the Company enforceable in accordance
with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(x) The issue and sale of the Securities and the compliance
by the Company with all of the provisions of the Securities, the
Indenture, the Registration Rights Agreement and this Agreement and
the consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, sale/leaseback agreement, loan
agreement or other financing agreement or any other agreement or
instrument that has been or, to the knowledge of such counsel, is
required to be filed by the Company with the Commission, nor will
such actions result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any statute,
rule or regulation of any governmental agency or body of the United
States or the State of New York or Texas having jurisdiction over the
Company or any of its subsidiaries or any of their properties or any
court order identified by the Company to such counsel as potentially
relevant to such transaction, except,
12
in each case, for such conflicts, breaches, violations or defaults
as would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(xi) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body
of the United States or the State of New York or Texas having
jurisdiction over the Company or any of its subsidiaries or any of
their properties is required for the issue and sale of the Securities
or the consummation by the Company of the transactions contemplated
by this Agreement or the Indenture, except such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Purchasers and
such consents, approvals, authorizations, registrations and
qualifications as may be required under the Act, the Trust Indenture
Act and state or foreign securities or Blue Sky laws in connection
with the exchange offer or resale registration statement contemplated
in the Offering Circular and described in the Registration Rights
Agreement;
(xii) To the knowledge of such counsel after reasonable
investigation, neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws or in
default in the performance or observance of any obligation, covenant
or condition contained in any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument that has been
or is required to be filed by the Company with the Commission, except
for such violations or non-compliances as would not have a material
adverse effect on the Company and its subsidiaries taken as a whole;
(xiii) The statements set forth in the Offering Circular under
the captions "Business -- Competition", "Business -- FCC Licenses",
"Business -- The Cable Television Consumer Protection and Competition
Act of 1992", "Business -- Proposed Legislation and Regulations" and
the statements set forth in the documents incorporated by reference in
the Offering Circular relating thereto and the statements set forth in
the Offering Circular under the captions "Description of the New
Preferred Stock", "Registration Covenant; Exchange Offer,"
"Description of the Exchange Debentures," "Description of Certain Debt
Instruments", "Description of Preferred Stock" and "Certain U.S.
Federal Income Tax Consequences", insofar as they purport to
constitute a summary of the documents referred to therein or matters
of law, are accurate summaries and fairly and correctly present, in
all material respects, the information called for with respect to
such documents and matters;
(xiv) The Company and its subsidiaries have such Licenses from
the FCC as are necessary for the lawful operation of the Existing
Stations in the manner and to the full extent now operated or
proposed to be operated as described in the Offering Circular; such
Licenses are in full force and effect and, to the best of such
counsel's knowledge, no proceeding has been instituted or is
threatened,
13
pending or contemplated which in any manner affects or draws into
question the validity or effectiveness thereof; such Licenses contain
no materially burdensome restrictions not customarily imposed by the
FCC on television stations of the same class and type;
(xv) To the best of such counsel's knowledge, the operation of
the Existing Stations in the manner and to the full extent now
operated or proposed to be operated as described in the Offering
Circular is in accordance with the Licenses, the Communications Act,
the Telecommunications Act of 1996 and all orders, rules and
regulations of the FCC, except for such noncompliance as would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(xvi) To the best of such counsel's knowledge, no event has
occurred which permits (nor has an event occurred which with notice
or lapse of time or both would permit) the revocation or termination
of the Licenses from the FCC or which would reasonably be expected to
result in any other material impairment of the rights of the Company
or its subsidiaries to such Licenses, taken as a whole;
(xvii) To the best of such counsel's knowledge, the Company and
its subsidiaries are in compliance with all statutes, orders, rules
or regulations of the FCC relating to or affecting the broadcasting
operations of any of the Existing Stations, except for such
noncompliance as would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(xviii) The Exchange Act Reports (other than the financial
statements and related schedules therein and other financial
information, as to which such counsel need express no opinion), when
they were filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act, and the
rules and regulations of the Commission thereunder;
(xix) Assuming the accuracy of the representations and
warranties of the Purchasers in Section 3, compliance with the resale
limitations contained in the Offering Circular under the caption
"Notice to Investors" and that the Purchasers have not resold the
Securities in any Regulation S transactions, no registration of the
Securities under the Act, and no qualification of an indenture under
the Trust Indenture Act with respect thereto, is required for the
offer, sale and initial resale of the Securities by the Purchasers
in the manner contemplated by this Agreement; and
(xx) The Company is not an "investment company" or an
entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act.
In addition, such counsel shall also state that such
counsel has no reason to believe that (i) the Offering Circular and
any further amendments or
14
supplements thereto made by the Company prior to the Time of
Delivery (other than the financial statements therein and other
financial information, as to which such counsel need express no
opinion) contained as of its date or contains as of the Time of
Delivery an untrue statement of a material fact or omitted or omits,
as the case may be, to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading and (ii) any of the Exchange Act
Reports (other than the financial statements and related schedules
therein and other financial information, as to which such counsel
need express no opinion), when such documents were filed with the
Commission, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made when such documents were so filed, not misleading.
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P. may limit their opinion to the laws
of the United States, the District of Columbia, New York, Texas and Virginia
and Delaware corporate law.
(c) On the date of the Offering Circular prior to the execution of
this Agreement and also at the Time of Delivery, Ernst & Young LLP shall
have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect
set forth in Annex I hereto;
(d) (i) The Company and its subsidiaries, taken as a whole, shall
not have sustained since the date of the latest unaudited financial
statements included in the Offering Circular any loss or interference
with its business from fire, explosion, flood or other calamity, whether
or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Circular, and (ii) since the respective dates
as of which information is given in the Offering Circular there shall not
have been any change in the capital stock (other than conversion of
preferred stock into Common Stock (Nonvoting) and the exercise of certain
employee stock options and awards) or any increase in the short-term debt
(other than trade payables) or long-term debt (other than an increase of
not more than $500,000 under the Revolving Credit Facility) of the Company
and its subsidiaries, taken as a whole, or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Offering Circular, the
effect of which, in any such case described in Clause (i) or (ii), is in
your judgment so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of the Securities
on the terms and in the manner contemplated in this Agreement and in the
Offering Circular;
(e) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act,
and (ii) no such organization shall have publicly announced
15
that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities;
(f) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or on the Nasdaq
National Market; (ii) a suspension or material limitation in trading in
the Company's securities on the Nasdaq National Market; (iii) a general
moratorium on commercial banking activities declared by either Federal or
New York State authorities; (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in
this Clause (iv) in your judgment makes it impracticable or inadvisable to
proceed with the offering or the delivery of the Securities on the terms
and in the manner contemplated in the Offering Circular; or (v) the
occurrence of any material adverse change in the existing, financial,
political or economic conditions in the United States or elsewhere which,
in your judgment, would materially and adversely affect the financial
markets or the markets for the Securities and other equity or debt
securities;
(g) The Securities shall have been designated for trading on PORTAL;
(h) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of Offering Circulars, amendments and
supplements on the New York Business Day next succeeding the date of this
Agreement;
(i) The Company shall have furnished or caused to be furnished to you
at the Time of Delivery certificates of officers of the Company satisfactory
to you as to the accuracy of the representations and warranties of the
Company herein at and as of such Time of Delivery, as to the performance by
the Company of all of its obligations hereunder to be performed at or prior
to such Time of Delivery, as to the matters set forth in subsection (e) of
this Section and as to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Purchaser
against any losses, claims, damages or liabilities, joint or several, to
which such Purchaser may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Offering Circular
or the Offering Circular or any Exchange Act Report, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and will reimburse each Purchaser for any legal or other expenses
reasonably incurred by such Purchaser in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Offering Circular or the Offering Circular
or any such amendment or supplement in reliance upon and in conformity
16
with written information furnished to the Company by any Purchaser through
Xxxxxxx, Xxxxx & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Offering Circular or the Offering Circular, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Offering Circular or the
Offering Circular or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such
Purchaser through Xxxxxxx, Sachs & Co. expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of
the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act,
by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a)
or (b) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion
17
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Purchasers on the other from the offering of the
Securities. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then
each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company on the
one hand and the Purchasers on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and the Purchasers on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total Purchasers' discounts and
commissions received by the Purchasers, in each case as set forth in the
Offering Circular. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the
Purchasers on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company and the Purchasers agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by
pro rata allocation (even if the Purchasers were treated as one entity for
such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this subsection
(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding
the provisions of this subsection (d), no Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities purchased by it and distributed to investors were
offered to investors exceeds the amount of any damages which such Purchaser
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The Purchasers' obligations in
this subsection (d) to contribute are several in proportion to their
respective purchase obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Purchaser within the meaning of the Act; and the obligations of
the Purchasers under this Section 8 shall be in addition to any liability
which the respective Purchasers may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Purchaser shall default in its obligation to purchase
the Securities which it has agreed to purchase hereunder, you may in your
discretion arrange for you or another party or other parties to purchase such
Securities on the terms contained herein. If within thirty-six hours after
such default by any Purchaser you do not arrange for the purchase of such
Securities, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Securities on such terms. In the event
18
that, within the respective prescribed periods, you notify the Company that
you have so arranged for the purchase of such Securities, or the Company
notifies you that it has so arranged for the purchase of such Securities, you
or the Company shall have the right to postpone the Time of Delivery for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Offering Circular, or in any other documents
or arrangements, and the Company agrees to prepare promptly any amendments to
the Offering Circular which in your opinion may thereby be made necessary.
The term "Purchaser" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and,
in addition, to require each non-defaulting Purchaser to purchase its pro
rata share (based on the principal amount of Securities which such Purchaser
agreed to purchase hereunder) of the Securities of such defaulting Purchaser
or Purchasers for which such arrangements have not been made; but nothing
herein shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of
Securities which remains unpurchased exceeds one-eleventh of the aggregate
principal amount of all the Securities, or if the Company shall not exercise
the right described in subsection (b) above to require non-defaulting
Purchasers to purchase Securities of a defaulting Purchaser or Purchasers,
then this Agreement shall thereupon terminate, without liability on the part
of any non-defaulting Purchaser or the Company, except for the expenses to be
borne by the Company and the Purchasers as provided in Section 6 hereof and
the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Purchaser from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Purchasers, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on
behalf of any Purchaser or any controlling person of any Purchaser, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Purchaser except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided
herein, the Company will reimburse the Purchasers through you for all
out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Purchasers in making
preparations for the purchase, sale and delivery of the Securities, but the
19
Company shall then be under no further liability to any Purchaser except as
provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex
or facsimile transmission to you as the representatives in care of Xxxxxxx,
Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Registration Department; and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth
in the Offering Circular, Attention: Secretary; provided, however, that any
notice to a Purchaser pursuant to Section 8(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Purchaser at its
address set forth in its Purchasers' Questionnaire, or telex constituting
such Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Purchasers, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Purchaser, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser
of any of the Securities from any Purchaser shall be deemed a successor or
assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one
and the same instrument.
20
If the foregoing is in accordance with your understanding, please sign
and return to us six counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Purchasers
and the Company.
Very truly yours,
Granite Broadcasting Corporation
By: /s/ XXXXX X. XXXXX
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President -- Finance
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
/s/ XXXXXXX, SACHS & CO.
------------------------------
(Xxxxxxx, Xxxxx & Co.)
BT Securities Corporation
By: /s/ X. XXXX
---------------------------
Name: X. Xxxx
Title: Managing Director
Lazard Freres & Co. LLC
By: /s/ XXXXXX X. XXXXXX
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
Salomon Brothers Inc
By: /s/ XXXX X. XXXXXX
----------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
21
SCHEDULE I
Number of
Securities
to be
Purchaser Purchased
Xxxxxxx, Xxxxx & Co.............................................. 67,500
BT Securities Corporation........................................ 30,000
Lazard Freres & Co. LLC.......................................... 30,000
Salomon Brothers Inc............................................. 22,500
-------
Total.............................................. 150,000
22
ANNEX I
Pursuant to Section 7(c) of the Purchase Agreement, the accountants
shall furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Securities
Exchange Act of 1934 (the "Exchange Act") and the applicable published rules
and regulations thereunder;
(ii) In their opinion, the consolidated financial statements and
financial statement schedules audited by them and included or incorporated by
reference in the Offering Circular comply as to form in all material respects
with the requirements of the Exchange Act and the related published rules and
regulations; and they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of the
consolidated interim financial statements, selected financial data, pro forma
financial information, financial forecasts and/or condensed financial
statements derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports thereon,
copies of which have been furnished to the Purchasers and are attached hereto;
(iii) They have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in or incorporated by
reference in the Offering Circular and included in the Company's quarterly
reports on Form 10-Q as indicated in their reports thereon, copies of which
have been furnished to the Purchasers and are attached hereto; and on the
basis of specified procedures including inquiries of officials of the Company
who have responsibility for financial and accounting matters regarding
whether the unaudited condensed consolidated financial statements referred to
in paragraph (v)(A)(i) below comply as to form in all material respects with
the accounting requirements of the Exchange Act and the related published
rules and regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements do not
comply as to form in all material respects with the accounting requirements
of the Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for
the five most recent fiscal years included or incorporated by reference in
the Offering Circular agrees with the corresponding amounts (after
restatements where applicable) in the audited consolidated financial
statements for such five fiscal years;
(v) On the basis of limited procedures not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information referred
to below, a reading of the latest available interim financial statements of
the Company and its subsidiaries, inspection of the minute books of the
Company and its subsidiaries since the date of the latest audited financial
statements included or incorporated by reference in the Offering Circular,
inquiries of officials of the
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Company and its subsidiaries responsible for financial and accounting matters
and such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included or
incorporated by reference in the Offering Circular do not comply as to form
in all material respects with the accounting requirements of the Exchange Act
and the related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated statements
of cash flows included or incorporated by reference in the Offering Circular
for them to be in conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet items
included in the Offering Circular do not agree with the corresponding items
in the unaudited consolidated financial statements from which such data and
items were derived, and any such unaudited data and items were not determined
on a basis substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included or
incorporated by reference in the Offering Circular;
(C) the unaudited financial statements which were not included in the
Offering Circular but from which were derived any unaudited condensed
financial statements referred to in Clause (A) and any unaudited income
statement data and balance sheet items included in the Offering Circular and
referred to in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited consolidated financial statements
included in the Offering Circular;
(D) any unaudited pro forma consolidated condensed financial statements
included in the Offering Circular do not comply as to form in all material
respects with the accounting requirements of the Exchange Act and the
published rules and regulations thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the compilation of
those statements;
(E) as of a specified date not more than five days prior to the date of
such letter, there have been any changes in the consolidated capital stock
(other than issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were outstanding on
the date of the latest financial statements included or incorporated by
reference in the Offering Circular) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or other items
specified by the Purchasers, or any increases in any items specified by the
Purchasers, in each case as compared with amounts shown in the latest balance
sheet included or incorporated by reference in the Offering Circular, except
in each case for changes,
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increases or decreases which the Offering Circular discloses have occurred or
may occur or which are described in such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Offering Circular to the
specified date referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per share
amounts of consolidated net income or other items specified by the
Purchasers, or any increases in any items specified by the Purchasers, in
each case as compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the Purchasers,
except in each case for decreases or increases which the Offering Circular
discloses have occurred or may occur or which are described in such letter;
and
(vi) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Offering Circular and the
limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (iv) above, they have carried
out certain specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Purchasers, which are
derived from the general accounting records of the Company and its
subsidiaries, which appear in the Offering Circular or in documents
incorporated by reference in the Offering Circular, and have compared certain
of such amounts, percentages and financial information with the accounting
records of the Company and its subsidiaries and have found them to be in
agreement.
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