Exhibit 1
______________ Shares
JOURNAL COMMUNICATIONS, INC.
CLASS A COMMON STOCK, PAR VALUE $0.01 PER SHARE
UNDERWRITING AGREEMENT
_______________, 2003
______________, 2003
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxx X. Xxxxx & Co. Incorporated
Credit Suisse First Boston LLC
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
The Journal Company, a Wisconsin corporation (the "Company"), currently a
wholly owned subsidiary of Journal Communications, Inc., a Wisconsin corporation
("Old Journal"), which will be renamed Journal Communications, Inc. upon
consummation of the Share Exchange (as defined in Section 1 hereunder) pursuant
to which Old Journal will become a wholly owned subsidiary of the Company,
proposes to issue and sell to the several Underwriters named in Schedule I
hereto (the "Underwriters") _________ shares of its Class A Common Stock, par
value $0.01 per share (the "Firm Shares"). The Company also proposes to issue
and sell to the several Underwriters not more than an additional ______________
shares of its Class A Common Stock, par value $0.01 per share (the "Additional
Shares") if and to the extent that you, as Managers of the offering, shall have
determined to exercise, on behalf of the Underwriters, the right to purchase
such shares of common stock granted to the Underwriters in Section 2 hereof. The
Firm Shares and the Additional Shares are hereinafter collectively referred to
as the "Shares." The shares of Class A Common Stock, par value $0.01 per share,
Class B Common Stock, par value $0.01 per share, and Class C Common Stock, par
value $0.01 per share, of the Company to be outstanding after giving effect to
the sales contemplated hereby are hereinafter referred to as the "Common Stock."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "Prospectus."
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "Rule 462 Registration Statement"), then any reference herein to the
term "Registration Statement" shall be deemed to include such Rule 462
Registration Statement.
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1. Representations and Warranties. Each of the Company and Old Journal
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, (ii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all material
respects with the Securities Act and the applicable rules and regulations
of the Commission thereunder and (iii) the Prospectus does not contain and,
as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company, Old Journal and their respective subsidiaries, taken
as a whole (the "Journal Enterprise").
(d) Old Journal and each subsidiary of the Company or Old Journal each
has been duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the Journal
Enterprise; all of the issued shares of capital stock of each
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subsidiary of the Company or Old Journal, and the issued shares of capital
stock of the Company as of the date of this Agreement have been duly and
validly authorized and issued, are fully paid and non-assessable and are
owned directly by the Company or Old Journal, as applicable, free and clear
of all liens, encumbrances, equities or claims.
(e) On the Closing Date (as defined below) and immediately prior to
the sale of the Firm Shares to the Underwriters in accordance with Section
4 hereof: (i) Old Journal will have effected a share exchange with the
Company, substantially as contemplated by the Registration Statement, the
Prospectus and the Company's registration statement on Form S-4 (File No.
333- ) and the joint proxy statement/prospectus included therein, as mailed
to shareholders of Old Journal on or about _________, 2003, pursuant to
which Old Journal will become a wholly owned subsidiary of the Company (the
"Share Exchange"); (ii) pursuant to the Shareholders Agreement, dated May
__, 2003, by and among Matex, Inc. and Xxxxx Family Journal Stock Trust
(together, the "Grant Family Shareholders"), Old Journal and the Company
(the "Shareholders Agreement"), the Company will have effected an exchange
with the Grant Family Shareholders of _____ shares of Class B Common Stock
for ____ shares of Class C Common Stock; and (iii) all of the issued shares
of capital stock of Old Journal will have been duly and validly authorized
and issued, will be fully paid and non-assessable and will be owned
directly by the Company, free and clear of all liens, encumbrances,
equities or claims.
(f) This Agreement has been duly authorized, executed and delivered by
the Company and Old Journal.
(g) The authorized capital stock of the Company as of the Closing Date
will conform as to legal matters to the description thereof contained in
the Prospectus.
(h) Upon consummation of the Share Exchange and consummation of the
exchange with the Grant Family Shareholders of Class B Common Stock for
Class C Common Stock and prior to the sale of the Shares to the
Underwriters pursuant to Section 2 hereof: (i) the Company will not have
any shares of capital stock outstanding other than the shares issued in the
Share Exchange and pursuant to the Shareholders Agreement; and (ii) all of
the shares of Common Stock issued in the Share Exchange and pursuant to the
Shareholders Agreement have been duly authorized and will have been validly
issued, fully paid and non-assessable.
(i) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares will
not be subject to any preemptive or similar rights.
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(j) The execution and delivery by each of the Company and Old Journal
of, and the performance by each of the Company and Old Journal of their
respective obligations under, this Agreement will not contravene any
provision of applicable law or the articles of incorporation or by-laws of
the Company or Old Journal or any agreement or other instrument binding
upon the Company, Old Journal, or any of their respective subsidiaries that
is material to the Journal Enterprise, or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the
Company, Old Journal or any of their respective subsidiaries, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company
or Old Journal of their respective obligations under this Agreement, except
such as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Shares.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Journal Enterprise from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date
of this Agreement).
(l) There are no legal or governmental proceedings pending or
threatened to which the Company, Old Journal or any of their respective
subsidiaries is a party or to which any of the properties of the Company,
Old Journal or any of their respective subsidiaries is subject that are
required to be described in the Registration Statement or the Prospectus
and are not so described or any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(m) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(n) Neither the Company nor Old Journal is, and, after giving effect
to the offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, neither the Company nor Old Journal
will be, required to register as an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(o) The Company, Old Journal and their respective subsidiaries (i) are
in compliance with any and all applicable foreign, federal, state and
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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 all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure
to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, have a material adverse effect on
the Journal Enterprise.
(p) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a material adverse
effect on the Journal Enterprise.
(q) Except for rights that have been described in the Prospectus,
there are no contracts, agreements or understandings between the Company or
Old Journal and any person granting such person the right to require the
Company or Old Journal to file a registration statement under the
Securities Act with respect to any securities of the Company or Old Journal
or to require the Company or Old Journal to include such securities with
the Shares registered pursuant to the Registration Statement.
(r) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) neither the
Company nor Old Journal nor any of their respective subsidiaries has
incurred any material liability or obligation, direct or contingent, or
entered into any material transaction not in the ordinary course of
business; (ii) neither the Company nor Old Journal has purchased any of its
outstanding capital stock, or declared, paid or otherwise made any dividend
or distribution of any kind on its capital stock other than ordinary and
customary dividends; and (iii) there has not been any material change in
the capital stock, short-term debt or long-term debt of either the Company
and its consolidated subsidiaries or Old Journal and its consolidated
subsidiaries, except in each case as described in the Prospectus.
(s) The Company, Old Journal and their respective subsidiaries have
good and marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them which is material
to the business of the Journal Enterprise, in each case free and
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clear of all liens, encumbrances and defects except such as are described
in the Prospectus 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, Old Journal and their respective
subsidiaries; and any real property and buildings held under lease by the
Company, Old Journal and their respective subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are
not material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company, Old Journal and their
respective subsidiaries, in each case except as described in the
Prospectus.
(t) The Company, Old Journal and their respective subsidiaries own or
possess, or can acquire on reasonable terms, all material patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade
names currently employed by them in connection with the business now
operated by them, and neither the Company nor Old Journal nor any of their
respective subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse
effect on the Journal Enterprise.
(u) No material labor dispute with the employees of the Company, Old
Journal or any of their respective subsidiaries exists or, to the knowledge
of the Company or Old Journal, is imminent; and neither the Company nor Old
Journal is aware of any existing, threatened or imminent labor disturbance
by the employees of any of its principal suppliers, manufacturers or
contractors that could have a material adverse effect on the Journal
Enterprise.
(v) The Company, Old Journal and their respective subsidiaries are
insured by the insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor Old Journal
nor any of their respective subsidiaries has been refused any insurance
coverage sought or applied for; and neither the Company nor Old Journal nor
any of their respective subsidiaries has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not have a
material adverse effect on the Journal Enterprise.
(w) The Company, Old Journal and their respective subsidiaries possess
all certificates, authorizations and permits issued by the
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appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, and neither the Company nor Old
Journal nor any of their respective subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
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 Journal Enterprise.
(x) All licenses (the "FCC Licenses") issued by the Federal
Communications Commission ("FCC") required for the operation of the
businesses of the Company, Old Journal and their respective subsidiaries
are in full force and effect, and there are no proceedings pending or
threatened against the Company, Old Journal or any of their respective
subsidiaries before or by the FCC or any court having jurisdiction over the
matter relating to the modification, amendment, invalidity or revocation of
any FCC authorizations, approvals, consents, orders, licenses, certificates
and permits which would have a material adverse effect on the Journal
Enterprise. All fees due and payable to governmental authorities pursuant
to the rules governing FCC Licenses have been paid and no event has
occurred with respect to the FCC Licenses held by the Company, Old Journal
and their respective subsidiaries which, with the giving of notice or the
lapse of time or both, would constitute grounds for revocation thereof.
Each of the Company, Old Journal and their respective subsidiaries is in
compliance in all material respects with the terms of the FCC Licenses, as
applicable, and there is no condition, event or occurrence existing, nor is
there any proceeding being conducted of which the Company or Old Journal
has received notice, nor, to the Company's or Old Journal's knowledge, is
there any proceeding threatened, by any governmental authority, which would
cause the termination, suspension, cancellation or nonrenewal of any of the
FCC Licenses, or the imposition of any penalty or fine by any regulatory
authority. No registration, filing, application, notice, transfer, consent,
approval, audit, qualification, waiver or other action of any kind is
required by virtue of the execution and delivery of this Agreement or of
the issuance and sale under this Agreement by the Company of the Shares,
other than as previously obtained from the FCC (a) to avoid the loss of any
such license, permit, consent, concession or other authorization or any
asset, property or right pursuant to the terms thereof, or the violation or
breach of any applicable law thereto or (b) to enable the Company, Old
Journal or any of their respective subsidiaries to hold and enjoy the same
after the Closing Date in the conduct of its businesses as conducted prior
to the Closing Date.
(y) The Company, Old Journal and each of their respective subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial
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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.
(z) The Shares have been approved for listing on the New York Stock
Exchange, Inc., subject to notice of issuance, and, at the Closing Date and
the Option Closing Date (as defined in Section 3 hereunder), the Shares
listed at or prior to the time of delivery on such closing date will be
listed thereon.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Firm Shares set forth in Schedule I hereto
opposite its name at $______ a share (the "Purchase Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Shares, and the Underwriters shall have the
right to purchase, severally and not jointly, up to _______________ Additional
Shares at the Purchase Price. You may exercise this right on behalf of the
Underwriters in whole or from time to time in part by giving written notice of
each election to exercise the option not later than 30 days after the date of
this Agreement. Any exercise notice shall specify the number of Additional
Shares to be purchased by the Underwriters and the date on which such shares are
to be purchased. Each purchase date must be at least one business day after the
written notice is given and may not be earlier than the Closing Date for the
Firm Shares nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 4 hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. On each day, if any, that Additional Shares are to be purchased
(an "Option Closing Date"), each Underwriter agrees, severally and not jointly,
to purchase the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same proportion
to the total number of Additional Shares to be purchased on such Option Closing
Date as the number of Firm Shares set forth in Schedule I hereto opposite the
name of such Underwriter bears to the total number of Firm Shares.
The Company hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not, during
the period ending 180 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or
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otherwise transfer or dispose of, directly or indirectly, any shares of Class A
Common Stock or any securities convertible into or exercisable or exchangeable
for Class A Common Stock or (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the Class A Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Class A Common Stock or
such other securities, in cash or otherwise. The foregoing sentence shall not
apply to the Shares to be sold hereunder.
3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Shares are to be offered to the public initially at
$_____________ a share (the "Public Offering Price") and to certain dealers
selected by you at a price that represents a concession not in excess of $______
a share under the Public Offering Price, and that any Underwriter may allow, and
such dealers may reallow, a concession, not in excess of $_____ a share, to any
Underwriter or to certain other dealers.
4. Payment and Delivery. Payment for the Firm Shares shall be made to the
Company in Federal or other funds immediately available in New York City against
delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on ____________, 2003, or at
such other time on the same or such other date, not later than _________, 2003,
as shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Closing Date."
Payment for any Additional Shares shall be made to the Company in Federal
or other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
10:00 a.m., New York City time, on the date specified in the corresponding
notice described in Section 2 or at such other time on the same or on such other
date, in any event not later than _______, 2003, as shall be designated in
writing by you.
The Firm Shares and Additional Shares shall be registered in such names and
in such denominations as you shall request in writing not later than one full
business day prior to the Closing Date or the applicable Option Closing Date, as
the case may be. The Firm Shares and Additional Shares shall be delivered to you
on the Closing Date or an Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The obligations of the
Company to sell the Shares to the Underwriters and the several obligations of
the
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Underwriters to purchase and pay for the Shares on the Closing Date are subject
to the condition that the Registration Statement shall have become effective not
later than 4:00 p.m. (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or
of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's or Old Journal's securities by any "nationally recognized
statistical rating organization," as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of
the Journal Enterprise from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement) that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to market
the Shares on the terms and in the manner contemplated in the
Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate of the Company and Old Journal, dated the Closing Date and
signed by an executive officer of the Company and Old Journal, to the
effect (i) set forth in Section 5(a)(i) above, (ii) that no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before, or to the best of
such officer's knowledge, threatened by, the Commission, (iii) that the
representations and warranties of the Company and Old Journal contained in
this Agreement are true and correct as of the Closing Date and (iv) that
the Company and Old Journal have complied with all of the agreements and
satisfied all of the conditions on their respective parts to be performed
or satisfied hereunder on or before the Closing Date. The officer signing
and delivering such certificate may rely upon the best of his or her
knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx & Xxxxxxx, outside counsel for the Company and Old
Journal, dated the Closing Date, to the effect that:
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(i) each of the Company and Old Journal has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Journal Enterprise;
(ii) each subsidiary of the Company and Old Journal has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its property and to conduct
its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Journal Enterprise;
(iii) the Company and Old Journal have effected the Share
Exchange;
(iv) the authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus;
(v) except for the shares of Common Stock issued in the Share
Exchange and to the Grant Family Shareholders pursuant to the
Shareholders Agreement, the Company does not have any shares of
capital stock outstanding; all of the shares of Common Stock issued in
the Share Exchange and to the Grant Family Shareholders pursuant to
the Shareholders Agreement have been duly authorized and are validly
issued, fully paid and non-assessable;
(vi) all of the issued shares of capital stock of Old Journal
have been duly and validly authorized and issued, are fully paid and
non-assessable, and after the consummation of the Share Exchange will
be owned directly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(vii) all of the issued shares of capital stock of each
subsidiary of the Company and Old Journal have been duly and
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validly authorized and issued, are fully paid and non-assessable and
are owned directly by the Company or Old Journal, free and clear of
all liens, encumbrances, equities or claims;
(viii) the Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive or similar rights;
(ix) this Agreement has been duly authorized, executed and
delivered by the Company and Old Journal;
(x) the execution and delivery by each of the Company and Old
Journal of, and the performance by each of the Company and Old Journal
of their respective obligations under, this Agreement will not
contravene any provision of applicable law or the articles of
incorporation or by-laws of the Company or Old Journal or, to the best
of such counsel's knowledge, any agreement or other instrument binding
upon the Company, Old Journal or any of their respective subsidiaries
that is material to the Journal Enterprise, or, to the best of such
counsel's knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company, Old
Journal or any of their respective subsidiaries, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company or Old Journal of their respective obligations under this
Agreement, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale
of the Shares;
(xi) the statements relating to legal matters, documents or
proceedings included in the Prospectus under the captions
"Business-Regulation," "Business-Legal Proceedings,"
"Management-Long-Term Incentive Plan," "Management-Pension Plan and
Supplemental Benefit Plan," "JESTA," "The Share Exchange and the
Tender Offer," "Certain Relationships and Related Transactions,"
"Description of Capital Stock," "Shares Eligible for Future Sale,"
"Certain U.S. Federal Income Tax Consequences," and "Underwriters" and
the Registration Statement in Items 14 and 15, in each case fairly
summarize in all material respects such matters, documents or
proceedings;
(xii) after due inquiry, such counsel does not know of any legal
or governmental proceedings pending or threatened to which the
Company, Old Journal or any of their respective
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subsidiaries is a party or to which any of the properties of the
Company, Old Journal or any of their respective subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not
described or filed as required;
(xiii) neither the Company nor Old Journal is, and, after giving
effect to the offering and sale of the Shares and the application of
the proceeds thereof as described in the Prospectus, neither the
Company nor Old Journal will be, required to register as an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended; and
(xiv) nothing has come to the attention of such counsel that
causes such counsel to believe that the Registration Statement or the
Prospectus (except for the financial statements and financial
schedules and other financial and statistical data included therein,
as to which such counsel need not express any belief) do not comply as
to form in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the
Commission thereunder, the Registration Statement or the prospectus
included therein (except for the financial statements and financial
schedules and other financial and statistical data included therein,
as to which such counsel need not express any belief) at the time the
Registration Statement became effective contained an 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 the Prospectus (except for the financial statements and
financial schedules and other financial and statistical data included
therein, as to which such counsel need not express any belief) as of
its date or as of the Closing Date contained or contains an 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.
(d) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Underwriters, dated
the Closing Date, covering the matters referred to in Sections 5(c)(viii),
5(c)(ix), 5(c)(xi) (but only as to the statements in the Prospectus under
"Description of Capital Stock" and "Underwriters") and 5(c)(xiv) above.
14
With respect to Section 5(c)(xiv) above, Xxxxx & Lardner and Xxxxxxx
Xxxxxxx & Xxxxxxxx may state that their beliefs are based upon their
participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification, except as specified.
The opinion of Xxxxx & Lardner described in Section 5(c) above shall
be rendered to the Underwriters at the request of the Company and shall so
state therein.
(e) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the Underwriters,
from Ernst & Young LLP, independent auditors, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectus; provided that the letter delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(f) Old Journal shall have effected the Share Exchange with the
Company.
(g) The Company and Old Journal shall have obtained all consents,
authorizations or approvals under any agreement, contract or other
instrument binding upon Old Journal requiring a consent, authorization or
approval as a result of the Share Exchange, except such consents,
authorizations or approvals the failure to obtain which would not, singly
or in the aggregate, have a material adverse effect on the Journal
Enterprise.
(h) The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on the applicable
Option Closing Date of such documents as you may reasonably request with
respect to the good standing of the Company and its subsidiaries, the due
authorization and issuance of the Additional Shares to be sold on such
Option Closing Date and other matters related to the issuance of such
Additional Shares.
6. Covenants of the Company. In further consideration of the agreements of
the Underwriters herein contained, the Company covenants with each Underwriter
as follows:
(a) To furnish to you, without charge, [number of co-managers,
including Xxxxxx Xxxxxxx, plus one] signed copies of the Registration
Statement (including exhibits thereto) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without
15
exhibits thereto) and to furnish to you in New York City, without charge,
prior to 10:00 a.m., New York City time, on the business day next
succeeding the date of this Agreement and during the period mentioned in
Section 6(c) below, as many copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public offering
of the Shares as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by
an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will furnish
to the Company) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the
twelve-month period ending ________, 2004 that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) To take all necessary action to effect the Share Exchange on the
Closing Date and prior to the sale of the Shares to the Underwriters
pursuant to Section 2 hereof.
16
(g) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Securities Act and all
other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies
thereof to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and delivery
of the Shares to the Underwriters, including any transfer or other taxes
payable thereon, (iii) the cost of printing or producing any Blue Sky or
Legal Investment memorandum in connection with the offer and sale of the
Shares under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities laws
as provided in Section 6(d) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky or
Legal Investment memorandum, (iv) all filing fees and the reasonable fees
and disbursements of counsel to the Underwriters incurred in connection
with the review and qualification of the offering of the Shares by the
National Association of Securities Dealers, Inc., (v) all fees and expenses
in connection with the preparation and filing of the registration statement
on Form 8-A relating to the Common Stock and all costs and expenses
incident to listing the Shares on the New York Stock Exchange, (vi) the
cost of printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, (viii) the costs
and expenses of the Company relating to investor presentations on any "road
show" undertaken in connection with the marketing of the offering of the
Shares, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and
the cost of any aircraft chartered in connection with the road show, (ix)
the document production charges and expenses associated with printing this
Agreement, (x) all expenses in connection with any offer and sale of the
Shares outside of the United States, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in
connection with offers and sales outside of the United States and (xi) all
other costs and expenses incident to the performance of the obligations of
the Company hereunder for which provision is not otherwise made in this
Section. It is understood, however, that except as provided in this
Section, Section 7 entitled "Indemnity and Contribution", and the last
paragraph of
17
Section 9 below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, stock transfer taxes
payable on resale of any of the Shares by them and any advertising expenses
connected with any offers they may make.
7. Indemnity and Contribution. (a) The Company agrees to indemnify and hold
harmless each Underwriter, each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and each
affiliate of any Underwriter within the meaning of Rule 405 under the Securities
Act, from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company or Old Journal
in writing by such Underwriter through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company and
Old Journal to such Underwriter, but only with reference to information relating
to such Underwriter furnished to the Company or Old Journal in writing by such
Underwriter through you expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 7(a) or 7(b), such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party
18
shall have mutually agreed to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impleaded parties) include both
the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated, in the case of
parties indemnified pursuant to Section 7(a), and by the Company, in the case of
parties indemnified pursuant to Section 7(b). The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in Section 7(a) or
7(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause 7(d)(i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
7(d)(i) above but also the relative fault of the Company on the one hand and of
the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters
19
on the other hand in connection with the offering of the Shares shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of the Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of the Company
or Old Journal on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the respective number of Shares they have purchased
hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 7(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, 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 Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter, any person controlling
any Underwriter or any affiliate of any Underwriter or by or on behalf of the
Company, its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Shares.
20
8. Termination. The Underwriters may terminate this Agreement by notice
given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the Nasdaq National Market,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
material disruption in securities settlement, payment or clearance services in
the United States shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State authorities or
(v) there shall have occurred any outbreak or escalation of hostilities, or any
change in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and which, singly or together with any other event
specified in this clause (v), makes it, in your judgment, impracticable or
inadvisable to proceed with the offer, sale or delivery of the Shares on the
terms and in the manner contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 9 by an amount in excess of one-ninth of such
number of Shares without the written consent of such Underwriter. If, on the
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Firm Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares to
be purchased, and arrangements satisfactory to you and the Company for the
purchase of such Firm Shares are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on an Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to
21
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased on such Option Closing Date, the
non-defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase the Additional Shares to be sold on such Option
Closing Date or (ii) purchase not less than the number of Additional Shares that
such non-defaulting Underwriters would have been obligated to purchase in the
absence of such default. Any action taken under this paragraph shall not relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
22
12. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
THE JOURNAL COMPANY
By:_______________________________________
Name:
Title:
JOURNAL COMMUNICATIONS, INC.
By:_______________________________________
Name:
Title:
Accepted as of the date
hereof
Xxxxxx Xxxxxxx & Co.
Incorporated
Xxxxxx X. Xxxxx & Co. Incorporated
Credit Suisse First Boston LLC
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Acting severally on behalf of
themselves and the
several Underwriters
named in Schedule I
hereto.
By: Xxxxxx Xxxxxxx & Co.
Incorporated
By:_______________________________________
Name:
Title:
SCHEDULE I
Number of Firm Shares To
Underwriter Be Purchased
--------------------------------------------------- ------------------------
Xxxxxx Xxxxxxx & Co. Incorporated ...............
Xxxxxx X. Xxxxx & Co. Incorporated ..............
Credit Suisse First Boston LLC .................
Xxxxxxx, Xxxxx & Co. ...........................
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ...........................
Total: ........................................
