TELEMUNDO GROUP, INC.
$[ ]
[ %] SENIOR NOTES
DUE 2006
UNDERWRITING AGREEMENT
New York, New York
February __, 1996
Salomon Brothers Inc
Xxxx. Xxxxx & Sons Incorporated
BT Securities Corporation
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
Telemundo Group, Inc., a Delaware corporation (the "Company"),
proposes to sell to Salomon Brothers Inc, Xxxx. Xxxxx & Sons Incorporated and BT
Securities Corporation (each an "Underwriter" and together, the "Underwriters")
[ %] Senior Notes due 2006 in the aggregate principal amount of $___,000,000
(the "Securities"). The Securities are to be issued pursuant to an indenture
dated as of _______________________, 1996 (the "Indenture") between the Company
and Bank of Montreal Trust Company, as trustee (the "Trustee"), which shall
contain the terms described in the Prospectus (as defined below).
The Securities are being issued and sold in connection with the
acquisition by the Company through a wholly owned subsidiary (the "Acquisition")
of a 74.5% interest in Video 44, an Illinois general partnership ("Video 44")
and the refinancing (the "Refinancing") of certain of the Company's outstanding
indebtedness. The Refinancing includes (i) the Company's offer (the "Purchase
Offer") to holders of the Company's 10.25% Senior Notes due 2001 (the "Old
Notes"), upon the terms and conditions set forth in the Offer to Purchase and
Consent Solicitation Statement dated November 27, 1995 (the "Offer to
Purchase"), to purchase for cash any and all of the outstanding Old Notes and
(ii) the Company's solicitation of consents from holders of the Old Notes to
amendments (the
"Proposed Amendments") to certain of the provisions in the indenture governing
the Old Notes (the "Old Note Indenture") and payment of a consent fee in
connection therewith as described in the Offer to Purchase. After receipt of
the Requisite Consents (as defined in the Offer to Purchase) from holders of Old
Notes, the Company and the trustee under the Old Note Indenture entered into a
supplemental indenture to give effect to the Proposed Amendments (the
"Supplemental Indenture"). The Acquisition and the Refinancing are
collectively referred to herein as the "Transactions". The Supplemental
Indenture and the Agreement to Purchase NST Venture Interest and Capital Stock
dated as of November 8, 1995 between a subsidiary of the Company and the other
parties thereto are collectively referred to as the "Transaction Documents".
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1. Certain terms used in this Section 1 are defined in paragraph (y)
hereof.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act") and has filed with the Securities and
Exchange Commission (the "Commission") a registration statement (file
number 33-64599) on such Form, including a related form of preliminary
prospectus, for the registration under the Act of the offering and sale of
the Securities. The Company may have filed one or more amendments
thereto, including the related form of preliminary prospectus, each
of which has previously been furnished to you. The Company will next file
with the Commission either (A) prior to effectiveness of such registration
statement, a further amendment to such registration statement, including
the form of final prospectus, (B) after effectiveness of such registration
statement, a final prospectus in accordance with Rules 430A and 424(b)(1)
or (4) or (C) a final prospectus in accordance with Rules 415 and 424(b)(2)
or (5). In the case of clause (B), the Company has included in such
registration statement, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the Act and the rules
thereunder to be included in the Prospectus with respect to the Securities
and the offering thereof. As filed, such amendment and form of final
prospectus, or such final prospectus, shall include all Rule 430A
Information, together with all other such required information, with
respect to the Securities and the offering thereof and, except to the
extent the Underwriters shall agree in writing to a modification, shall be
in all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes (beyond
that contained in the latest Preliminary Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or will,
and when the Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date, the Prospectus (and any supplements
thereto) will, comply in all
-2-
material respects with the applicable requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and the Trust Indenture Act of
1939 (the "Trust Indenture Act") and the respective rules thereunder; on
the Effective Date, the Registration Statement did not or will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; on the Effective Date and on the Closing Date, the
Indenture did or will comply in all material respects with the requirements
of the Trust Indenture Act and the rules thereunder; and on the Effective
Date, the Prospectus, if not filed pursuant to Rule 424(b), did not or will
not, and on the date of any filing pursuant to Rule 424(b) and, on the
Closing Date, the Prospectus (together with any supplement thereto) will
not, include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties
to (i) that part of the Registration Statement which shall constitute the
Statement of Eligibility (Form T-1) under the Trust Indenture Act of the
Trustee or (ii) the information contained in or omitted from the
Registration Statement or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of any Underwriter specifically for use in
connection with the preparation of the Registration Statement or the
Prospectus (or any supplement thereto).
(c) The Company has all necessary corporate power and authority to
execute, deliver and perform its obligations under this Agreement; the
Company and each subsidiary has all necessary corporate power and authority
to enter into and consummate the Transactions and execute, deliver and
perform its obligations under the Transaction Documents to which it is a
party. The execution, delivery and performance by the Company of its
obligations under this Agreement and the Indenture, and the execution,
delivery and performance by the Company and each subsidiary of its
obligations under and each Transaction Document to which it is a party, and
the consummation of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary corporate action on the part of the
Company and such subsidiary. This Agreement has been duly executed and
delivered by the Company. Each Transaction Document has been or, by the
Closing Date, will be duly executed and delivered by the Company or a
subsidiary substantially in the form previously delivered to you and, when
executed and delivered by the Company or such subsidiary and assuming due
execution by the other parties thereto, will constitute legal, valid and
binding obligations of the Company and such subsidiary, enforceable
against the Company or such subsidiary, as the case may be, in accordance
with their respective terms. At or prior to the Closing Date, the Company
will have duly executed and delivered each Transaction Document to be
executed and delivered by the Company or a subsidiary.
(d) The Company has all requisite corporate power and authority to
execute, issue and deliver the Securities and to incur and perform its
obligations thereunder. The Securities have been duly authorized by the
Company and, when executed, authenticated and issued in the manner provided
for in the Indenture and the Securities, as applicable, and delivered
against payment of the purchase price therefor
-3-
as provided herein, the Securities will constitute valid and binding
obligations of the Company, entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms; the
Securities will, when issued, authenticated and delivered, conform in
all material respects to the description thereof contained in the
Prospectus;
(e) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture; and the
Indenture has been duly authorized by the Company, will be substantially in
the form heretofore delivered to you, and, when executed and delivered by
the Company and assuming due execution by the Trustee, will constitute a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms. At the Closing Date, the Company
will have duly executed and delivered the Indenture, and the Indenture will
have been duly qualified under the Trust Indenture Act. The Indenture
when executed and delivered will conform in all material respects to the
description thereof contained in the Prospectus.
(f) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is organized, with full
corporate power and authority to own its properties and conduct its
business as described in the Prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification wherein it owns or
leases properties or conducts business, and in which the failure to be so
qualified or to be in good standing would, in the aggregate in all such
cases, have a material adverse effect on the business, condition
(financial or otherwise), results of operation, operations or prospects of
the Company and its subsidiaries on a consolidated basis (a "Material
Adverse Effect"). Except for __________, the Company's only subsidiaries
are those listed on Exhibit 21 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994, and the only subsidiaries that are
"significant subsidiaries" as defined in Regulation S-X under the Act
are ___________.
(g) The Company's authorized equity capitalization is as set forth in
the Prospectus; the capital stock and indebtedness of the Company conforms
to the description thereof to the extent contained in the Prospectus; the
outstanding shares of Series A common stock, par value $.01 per share, and
Series B common stock, par value $.01 per share (collectively, the "Common
Stock") have been duly authorized and validly issued and are fully paid
and nonassessable; and none of such shares have been issued in violation
of or subject to preemptive rights, co-sale rights, rights of first
refusal or other rights to subscribe for the capital stock of the Company.
(h) All of the outstanding shares of capital stock of each of the
Company's subsidiaries have been duly and validly authorized and issued and
are fully paid and
-4-
nonassessable, and all such outstanding shares are owned by the Company
either directly or through wholly-owned subsidiaries free and clear of any
lien, claim, security interest or other encumbrance, restriction on
transfer or other defect in title except for encumbrances under the
Credit Facility (as defined in the Prospectus).
(i) Except as described in the Prospectus, there are no outstanding
options, warrants or other rights calling for the issuance of, and no
commitments, plans or arrangements to issue, any shares of capital stock of
the Company or any security convertible into or exchangeable or exercisable
for capital stock of the Company; and except as described in the Prospectus
or in the Registration Rights Agreement dated December 30, 1994 (the
"Registration Rights Agreement"), by and among the Company, Apollo
Advisors, L.P. ("Apollo"), and Reliance Insurance Company, as supplemented
by the letter dated December 27, 1995, among the Company, Salomon and
Apollo, there is no holder of any securities of the Company or any other
person who has the right, contractual or otherwise, to cause the Company to
sell or otherwise issue to them, or to permit them to underwrite the sale
of, any of the Securities or the right to have any Common Stock or other
securities of the Company included in the Registration Statement or the
right, as a result of the filing of the Registration Statement, to require
registration under the Act of any shares of Common Stock or other
securities of the Company. The description of the Company's stock option
and other stock plans or arrangements, and the options or other rights
granted and exercised thereunder, set forth in the Prospectus accurately
and fairly presents the information required under the Act and the rules
and regulations of the Commission thereunder (the "Regulations") to be
shown with respect to such plans, arrangements, options and rights.
(j) There is no pending or threatened action, suit or proceeding
before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries of a character
required to be disclosed in the Prospectus which is not adequately
disclosed in the Prospectus, and there is no franchise, contract, agreement
or other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an exhibit to the
Registration Statement, or required to be filed under the Exchange Act if
upon such filing they would be incorporated by reference therein, which is
not described or filed as required. The statements in the Prospectus under
the captions "Business--Legal Proceedings" and "Risk Factors--Telenoticias"
and descriptions in the Registration Statement and the Prospectus of
statutes, regulations, contracts, franchises, other documents, and pending
or threatened actions, suits or proceedings before any court or arbitrator,
or brought by any governmental agency, authority or body are accurate in
all material respects and fairly summarize the matters therein described.
-5-
(k) The consolidated financial statements of the Company and its
consolidated subsidiaries, and the financial statements of Video 44
together with related schedules and notes, included in the Registration
Statement and the Prospectus present fairly the consolidated financial
position and the consolidated results of operations and cash flows of the
Company and its consolidated subsidiaries and Video 44, respectively, for
the periods or at the dates therein specified; such consolidated financial
statements and related schedules and notes have been prepared in conformity
with generally accepted accounting principles, consistently applied
throughout the periods involved except as otherwise noted in such financial
statements; and the other financial data concerning the Company, its
subsidiaries and Video 44 set forth in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) are accurately
presented and were derived from such financial statements and the books and
records of the Company or Video 44, as the case may be. The pro forma
consolidated financial statements and other pro forma financial data
included in the Prospectus present fairly the information shown therein,
have been prepared in accordance with the Commission's rules and guidelines
with respect to pro forma financial statements, have been properly compiled
on the pro forma bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein. Deloitte & Touche LLP and, with respect to the financial
statements of Video 44 only, Price Waterhouse LLP, whose reports are filed
with the Commission as a part of the Registration Statement and the
Prospectus, are independent public accountants as required by the Act and
the Regulations.
(l) Neither the Company nor any of its subsidiaries is, and after
giving effect to the Transactions will be, in violation of its charter,
bylaws, agreement of partnership or limited partnership or other
organizational documents, or in violation in any material respect of any
law, ordinance, administrative or governmental rule or regulation
applicable to the Company or its subsidiaries, or in violation of any
decree of any court or governmental agency or body having jurisdiction over
the Company or its subsidiaries, or in default in any material respect in
the performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
material agreement, indenture, lease or other instrument to which the
Company or its subsidiaries are a party or by which it or any of their
properties may be bound.
(m) The Company and each of its subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits") as are necessary to own their properties and to
conduct their business in the manner described in the Prospectus and to
consummate the Transactions, except where the failure so to have would not,
in all such cases in the aggregate, result in a Material Adverse Effect;
the Company and each subsidiary has fulfilled and performed all of
-6-
their obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other impairment
of the rights of the holder of any such permit which would result, in the
aggregate, in a Material Adverse Effect; and none of such permits contains
any restriction that is burdensome to the Company or its subsidiaries in
conducting its or their business as described in the Prospectus or to
consummate the Transactions which would result, in the aggregate, in a
Material Adverse Effect.
(n) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been (1)
any material adverse change in the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company, (2)
any transaction that is material to the Company, except transactions
entered into in the ordinary course of business, (3) any obligation, direct
or contingent, that is material to the Company incurred by the Company,
except obligations incurred in the ordinary course of business, (4) any
change in the capital stock or outstanding indebtedness of the Company that
is material to the Company, (5) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or (6) any loss
or damage (whether or not insured) to the property of the Company which has
been sustained or will have been sustained which has a Material Adverse
Effect.
(o) Except as set forth in the Registration Statement and Prospectus,
(1) the Company has good and marketable title to all properties and assets
described in the Registration Statement and Prospectus as owned by it, free
and clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest, other than such as would not have a Material Adverse
Effect, (2) except where the failure would not have a Material Adverse
Effect, the agreements to which the Company is a party described in the
Registration Statement and Prospectus are valid agreements, enforceable by
the Company and its subsidiaries (as applicable), except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles and, to the
Company's knowledge, the other contracting party or parties thereto are not
in material breach or material default under any of such agreements, and
(3) except where the failure would not have a Material Adverse Effect, the
Company has valid and enforceable leases for all properties described in
the Registration Statement and the Prospectus as leased by it, except as
the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
or affecting creditors' rights generally or by general equitable
principles. Except as set forth in the Registration Statement and the
Prospectus, and except where the failure would not have a Material Adverse
Effect, the Company owns or leases all such properties as are necessary to
its operations as now conducted or as proposed to be conducted.
(p) The Company and its subsidiaries have filed all federal, state,
local, and foreign tax returns required to be filed, which returns are true
and correct in all
-7-
material respects, and the Company and its subsidiaries are not in default
in the payment of any taxes which were payable pursuant to said returns or
any assessments with respect thereto, except where either (i) the amount of
such unpaid taxes is not in excess of the amount reserved therefor, or (ii)
the Company is contesting such default in good faith through appropriate
proceedings.
(q) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that: (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general
or specific authorizations; 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.
(r) The Company and its subsidiaries own or possess adequate licenses
or other rights to use all patents, trademarks, trademark registrations,
service marks, service mark registrations, trade names, copyrights,
licenses, inventions, trade secrets, and know-how or other similar rights
("Intellectual Property") necessary for the conduct of their business as
described in the Prospectus, neither the Company nor its subsidiaries have
infringed, are now infringing, and their business as presently conducted
and as proposed to be conducted will not cause any of them to infringe, any
Intellectual Property belonging to any other person, which infringement or
infringements, either individually or in the aggregate, could have a
Material Adverse Effect; the Company has not received any claim or notice
of infringement or potential infringement of any Intellectual Property of
any other person which could have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has any claim against a third party
with respect to the infringement by such third party of Intellectual
Property of the Company or any such subsidiary material to the business or
prospects of the Company and its subsidiaries considered as a whole. To
the Company's knowledge, the Company is not using any confidential
information or trade secrets of any former employer of any past or present
employees.
(s) Neither the Company nor any of its subsidiaries is involved in
any labor dispute with any union or group of employees nor, to the
knowledge of the Company, is any dispute threatened; and the Company is not
aware of any existing or imminent labor disturbance by the employees of any
of its principal suppliers, manufacturers, distributors, licensees or
contractors, in each case, which might reasonably be expected to result in
a Material Adverse Effect.
-8-
(t) There has not been any generation, use, handling, transportation,
treatment, storage, release or disposal of any Hazardous Substance (as
defined herein) in connection with the conduct of the business of the
Company or any subsidiary or the use of any property or facility of the
Company or any subsidiary which has created any liability under any
Environmental Laws that is or could reasonably be expected to have a
Material Adverse Effect. Except as described in the Prospectus and except
for matters that in the aggregate could not reasonably be expected to have
a Material Adverse Effect, (i) neither the Company nor any subsidiary has
received (1) any notice or claim to the effect that it is or may be liable
to any person as a result of the release or threatened release of any
Hazardous Substance or (2) any letter or request for information under
Section 104 of the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9604) or comparable state laws, and (ii)
to the best of the Company's knowledge, none of the operations of the
Company or any subsidiary is the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond
to a release or a threatened release of any Hazardous Substance at any
facility of the Company or any subsidiary or at any other location at which
work produced by the Company's or subsidiaries' operations may have been
disposed.
"Hazardous Substance" shall mean any (1) substance that is
defined or listed in, or otherwise classified pursuant to, any applicable
laws or regulations as a "hazardous substance," "hazardous material,"
"hazardous waste," "toxic substance," or any other formulation intended to
define, list, or classify substances by reason of deleterious properties
such as ignitability, corrosivity, reactivity, carcinogenicity,
reproductive toxicity, "TCLP toxicity," or "EP toxicity," (2) oil,
petroleum or petroleum-derived substance and drilling fluid, produced
water, and other waste associated with the exploration, development, or
production or crude oil, natural gas, or geothermal resources, or
(3) flammable substance or explosive, any radioactive material, any
hazardous waste or substance, any toxic waste or substance or any other
material or pollutant which poses a hazard to any property of the Company
or to persons on or about such property.
(u) The Company and its subsidiaries maintain insurance of the types
and in the amounts generally deemed adequate for their respective
businesses, including, but not limited to, general liability insurance and
insurance covering real and personal property owned or leased by the
Company or any of its subsidiaries against theft, damage, destruction, acts
of vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
(v) Neither the Company nor any subsidiary is an investment company
or is controlled by an investment company or investment companies
required to be registered under
-9-
the Investment Company Act of 1940, as amended, and the rules and
regulation of the Commission thereunder.
(w) Neither the issuance and sale of the Securities, the execution,
delivery or performance of this Agreement, the Indenture or each
Transaction Document by the Company nor the consummation by the Company or
by a subsidiary of the transactions contemplated hereby, thereby or by the
Prospectus (i) requires any consent, approval, authorization or other order
of or registration or filing with any court, regulatory body,
administrative agency or other governmental body, agency or official
(except such as may have been obtained or such as may be required for the
registration of the Securities under the Act and compliance with the
securities or Blue Sky laws of various jurisdictions) or conflicts or will
conflict with or constitutes or will constitute a breach of, or a default
under, the certificate of incorporation or bylaws of the Company or
(ii) conflicts or will conflict with or constitutes or will constitute a
breach of, or a default under, any agreement, indenture, lease or other
instrument to which the Company is a party or by which it or any of its
properties may be bound, or violates or will violate any statute, law,
regulation or filing or judgment, injunction, order or decree applicable
to the Company or any subsidiary or any of its properties, or will result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary pursuant to the terms
of any agreement or instrument to which it is a party or by which it may
be bound or to which any of its property or assets is subject, in each
case which would have a Material Adverse Effect.
(x) The Company's plan of reorganization (the "Plan of
Reorganization") was confirmed by order (Doc. No. 297) (the "Confirmation
Order") of the United States Bankruptcy Court for the Southern District of
New York (the "Bankruptcy Court") on July 20, 1994 after adequate notice
and a hearing, both in compliance with the United States Bankruptcy Code,
11 U.S.C. Section 101 et. seq. (the "Code"), and applicable national and
local bankruptcy rules (the "Bankruptcy Rules"). Notice in compliance with
the Code, the Bankruptcy Rules and the Confirmation Order was given of the
time fixed for filing proofs of claims by the order of the Bankruptcy Court
entered ___________________. Each of the Plan of Reorganization and the
Confirmation Order remains in force and effect, without amendment, and the
Plan of Reorganization has been consummated (within the meaning of 11
U.S.C. Section 1101(2)) in accordance with its terms. The Company is not
in violation of, and no default by the Company exists with respect to, any
term or provision of the Plan of Reorganization or the Confirmation Order.
There is no condition specified in the Plan of Reorganization the
occurrence of which would result in the termination of the Plan of
Reorganization. The bankruptcy petition regarding the Company was
terminated on July 19, 1995. No appeal of the Confirmation Order has been
filed, and no request for revocation of the Confirmation Order under 11
U.S.C. Section 1144 has
-10-
been made and the time permitted under the Code for filings appeals or
requesting revocation has lapsed; and there is no other legal or
governmental proceeding pending or, to the Company's knowledge, threatened
challenging or questioning the Plan of Reorganization, the Confirmation
Order, or the implementation of either of them.
(y) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "the Effective Date" shall mean each date
that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective. "Execution Time" shall mean
the date and time that this Agreement is executed and delivered by the
parties hereto. "Preliminary Prospectus" shall mean any preliminary
prospectus referred to in paragraph (a) above and any preliminary
prospectus included in the Registration Statement at the Effective Date
that omits Rule 430A Information. "Prospectus" shall mean the prospectus
relating to the Securities that is first filed pursuant to Rule 424(b)
after the Execution Time or, if no filing pursuant to Rule 424(b) is
required, shall mean the form of final prospectus relating to the
Securities included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement referred to
in paragraph (a) above, including incorporated documents, exhibits and
financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment thereto or a
registration statement filed with respect to the Securities pursuant to
Rule 462(b) (or post-effective amendment thereto), becomes effective prior
to the Closing Date (as hereinafter defined), shall also mean such
registration statement as so amended or registration statement (or
amendment thereto) pursuant to Rule 462(b), respectively. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A or any Term Sheet filed pursuant to
Rule 434. "Rule 424", "Rule 430A," "Rule 434" and Rule 462 refer to such
rules under the Act. "Rule 430A Information" means information with
respect to the Securities and the offering thereof permitted to be omitted
from the Registration Statement when it becomes effective pursuant to Rule
430A. Any reference herein to the Registration Statement, a Preliminary
Prospectus
-11-
or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Exchange Act.
2. PURCHASE AND SALE. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to issue and sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, the respective
principal amounts of the Securities set forth opposite such Underwriter's name
in Schedule I hereto at a purchase price of ___% of the principal amount
thereof.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Securities
shall be made at 10:00 AM, New York City time, on ________________, 1996, or
such later date (not later than _______________, 1996) as the Underwriters shall
designate, which date and time may be postponed by agreement between the
Underwriters and the Company or as provided in Section 10 hereof (such date and
time of delivery and payment for the Securities being herein called the "Closing
Date"). Delivery of the Securities shall be made to the respective accounts of
the Underwriters against payment by the several Underwriters of the respective
aggregate purchase prices of the Securities being sold by the Company to or upon
the order of the Company at the Company's request by certified or official bank
check or checks drawn on or by a New York Clearing House bank and payable in
next day funds or wire transfer and payable in immediately available funds,
with appropriate reimbursement for the cost of funds. Delivery of the
Securities shall be made at such location in New York, New York as the
Underwriters shall reasonably designate at least one business day in advance of
the Closing Date and payment for the Securities shall be made at the offices of
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000. Certificates for the Securities shall be registered in such names and
in such denominations as the Underwriters may request not less than two full
business days in advance of the Closing Date.
The Company agrees to have the Securities available for inspection,
checking and packaging by the Underwriters in New York, New York, not later than
1:00 PM on the business day prior to the Closing Date.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. AGREEMENTS. The Company agrees with the several Underwriters
that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the Registration
Statement or supplement to
-12-
the Prospectus unless the Company has furnished you a copy for your review
prior to filing and will not file any such proposed amendment or supplement
to which you reasonably object. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectus is otherwise required under Rule 424(b),
the Company will cause the Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Underwriters of such timely
filing. The Company will promptly advise the Underwriters (A) when the
Registration Statement, if not effective at the Execution Time, and any
amendment thereto, shall have become effective, (B) when the Prospectus,
and any supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b), (C) when, prior to termination of the
offering of the Securities, any amendment to the Registration Statement
shall have been filed or become effective, (D) of any request by the
Commission for any amendment of the Registration Statement or supplement to
the Prospectus or for any additional information, (E) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding
for that purpose and (F) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the rules thereunder, the Company promptly will prepare and file
with the Commission, subject to the second sentence of paragraph (a) of
this Section 5, an amendment or supplement which will correct such
statement or omission or effect such compliance.
(c) As soon as practicable, the Company will make generally available
to its security holders and to the Underwriters an earnings statement or
statements of the Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Underwriters and counsel for the
Underwriters, without charge, signed copies of the Registration Statement
(including
-13-
exhibits thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of each
Preliminary Prospectus and the Prospectus and any supplement thereto as the
Underwriters may reasonably request. The Company will pay the expenses of
printing or other production of all documents relating to the offering.
(e) The Company will arrange for the qualification of the Securities
for sale under the laws of such jurisdictions as the Underwriters may
designate, will maintain such qualifications in effect so long as required
for the distribution of the Securities and will pay the fee of the National
Association of Securities Dealers, Inc., in connection with its review of
the offering.
(f) The Company will apply the net proceeds from the sale of its
Securities substantially in accordance with the description set forth in
the Prospectus and any Preliminary Prospectus under the heading "Use of
Proceeds."
(g) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, AN ACT RELATING TO DISCLOSURE OF DOING BUSINESS WITH CUBA, and the
Company further agrees that if it commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba after
the date the Registration Statement becomes or has become effective with
the Securities and Exchange Commission or with the Florida Department of
Banking and Finance (the "Department"), whichever date is later, or if the
information reported in the Prospectus, if any, concerning the Company's
business with Cuba or with any person or affiliate located in Cuba changes
in any material way, the Company will provide the Department notice of such
business or change, as appropriate, in a form acceptable to the Department.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time and the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company made in any certificates pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Underwriters agree in writing to a later
time, the Registration Statement will become effective not later than
(i) 6:00 PM New York City time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 12:00 Noon on the business day
following the day on which the public offering
-14-
price was determined, if such determination occurred after 3:00 PM New York
City time on such date; if filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Prospectus, and any such
supplement, will be filed in the manner and within the time period required
by Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) The Company shall have furnished to the Underwriters the opinions
of the Assistant General Counsel of the Company, Xxxx, Xxxx, Xxxxxxx,
Xxxxx & Xxxx, L.L.P., and Xxxxx & Xxxxxxx, L.L.P., counsel for the Company,
dated the Closing Date, substantially in the form of Exhibit A hereto.
(c) The Underwriters shall have received from Xxxxxx, Xxxxxx & Xxxxx,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Securities, the
Registration Statement, the Prospectus (together with any supplement
thereto) and other related matters as the Underwriters may reasonably
require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to
pass upon such matters.
(d) The Company shall have furnished to the Underwriters a
certificate of the Company, signed on behalf of the Company by the Chief
Executive Officer and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus, any supplement to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto),
there has been no material adverse change in the condition (financial
or other), earnings, business or properties of the Company, whether or
not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto).
-15-
(e) At the Execution Time and at the Closing Date, Deloitte & Touche
LLP shall have furnished to the Underwriters a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance satisfactory to the Underwriters, confirming that they are
independent accountants within the meaning of the Act and the Exchange Act
and the respective applicable published rules and regulations thereunder
and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated in the
Registration Statement and the Prospectus and reported on by them
comply in form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act the respective applicable
published rules and regulations thereunder;
(ii) on the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of
the following:
(1) a reading of the minutes of the meetings of the
stockholders, directors and the Audit and Compensation Committees
of the Company and, where applicable, the Company's subsidiaries;
(2) performing the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim
Financial Information, on the unaudited interim financial
statements of the Company and its consolidated subsidiaries
included in the Registration Statement and reading the unaudited
interim financial data for the period from the date of the latest
audited balance sheet included in the Registration Statement to
the date of the latest available interim financial data; and
(3) inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the
Company regarding its subsidiaries as to transactions and events
subsequent to the December 31, 1994 audited financial statements
incorporated in the Prospectus,
nothing came to their attention which caused them to believe that:
(1) the unaudited financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus do not comply in form in all material respects with
the
-16-
applicable accounting requirements of the Act and the Exchange
Act and the respective applicable published rules and regulations
thereunder;
(2) any material modifications should be made to the
unaudited financial statements for them to be in conformity with
generally accepted accounting principles; or
(3) with respect to the period subsequent to September 30,
1995, at a specified date not more than five business days prior
to the date of the letter, there was any change in the capital
stock, increase in long-term debt, or decrease in consolidated
net current assets or stockholders' equity (deficiency) of the
Company as compared with the amounts shown on the September 30,
1995 consolidated balance sheet included in the Registration
Statement and the Prospectus, or for the period from October 1,
1995 to such specified date there were any decreases, as compared
with the corresponding period in the preceding year, in
consolidated net revenue or in total or per share amounts of net
income of the Company and its consolidated subsidiaries, except
in all instances for changes or decreases set forth in such
letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof unless
said explanation is not deemed necessary by the Underwriters; and
(iii) they are unable to and do not express any opinion on
the pro forma capitalization or Pro Forma Consolidated Financial
Statements of the Company or on the pro forma adjustments applied to
the historical amounts included in such statements (the "Pro Forma
Information"); however, for purposes of such letter they have:
(1) read the Pro Forma Information;
(2) made inquiries of certain officials of the Company who
have responsibility for financial and accounting matters about
the basis for their determination of the pro forma adjustments
and whether the Pro Forma Information above complies in form in
all material respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X;
(3) compared the historical amounts in the Pro Forma
Information with the Company's audited financial statements or
accounting records; and
-17-
(4) proved the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the Pro Forma
Information; and
on the basis of such procedures, and such other inquiries and
procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that the Pro Forma
Information included in the Registration Statement does not
comply as to form in all material respects with the applicable
requirements of Rule 11-02 of Regulation S-X and that the pro
forma adjustments have not been properly applied to the
historical amounts in the compilation of such statements; and
(iv) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Prospectus, including the
information set forth under the captions "Summary Historical and
Proforma Consolidated Financial Data," "Risk Factors", "Selected
Historical Consolidated Financial Data," "Capitalization,"
"Management's Discussion and Analysis of Results of Operations and
Financial Condition" and "Business" in the Prospectus, agrees with the
accounting records of the Company and its subsidiaries.
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
(f) At the Execution Time and at the Closing Date, Price Waterhouse
LLP shall have furnished to the Underwriters a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance satisfactory to the Underwriters, confirming that they are
independent accountants within the meaning of the Act and the Exchange Act
and the respective applicable published rules and regulations thereunder
and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated in the
Registration Statement and the Prospectus and reported on by them
comply in form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the respective
applicable published rules and regulations thereunder;
-18-
(ii) on the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of
the following:
(1) a reading of the minutes of the meetings, if any, of
the stockholders, directors and the management committee of
Video 44;
(2) performing the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim
Financial Information, on the unaudited interim financial
statements of Video 44 included in the Registration Statement and
reading the unaudited interim financial data for the period from
the date of the latest audited balance sheet included in the
Registration Statement to the date of the latest available
interim financial data; and
(3) inquiries of certain officials of Video 44 who have
responsibility for financial and accounting matters of Video 44
as to whether the unaudited financial statements referred to
above comply as to form in all material respects with the
applicable accounting requirements of the Act and the published
rules and regulations thereunder,
nothing came to their attention which caused them to believe that:
(1) the unaudited financial statements included in the
Registration Statement and the Prospectus do not comply in form
in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the respective
applicable published rules and regulations thereunder;
(2) any material modifications should be made to the
unaudited financial statements for them to be in conformity with
generally accepted accounting principles; or
(3) with respect to the period subsequent to September 30,
1995, at a specified date not more than five business days prior
to the date of the letter, of Video 44 as compared with the
amounts shown on the September 30, 1995 balance sheet included in
the Registration Statement and the Prospectus, or for the period
from October 1, 1995 to such specified date there were any
decreases, as compared with the corresponding period in the
preceding year, in net revenues, or in total
-19-
or per share amounts of net income of Video 44, except in all
instances for changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an explanation by
Video 44 as to the significance thereof unless said explanation
is not deemed necessary by the Underwriters.
References to the Prospectus in this paragraph (f) include any supplement
thereto at the date of the letter.
(g) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraphs (e) and (f) of this Section
6 or (ii) any change, or any development involving a prospective change, in
or affecting the business or properties of the Company and its subsidiaries
the effect of which, in any case referred to in clause (i) or (ii) above,
is, in the reasonable judgment of the Underwriters, so material and adverse
as to make it impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of any
supplement thereto).
(h) The NASD shall not have raised any objection to the fairness and
reasonableness of the underwriting terms and arrangements which remain
unresolved.
(i) The Indenture shall have been executed by the parties thereto in
the form heretofore approved by and delivered to you and such agreement
shall not have been amended.
(j) All of the conditions to have occurred on or prior to such time
to the obligations of the Company and the Subsidiaries to consummate the
Transactions shall have been satisfied or waived.
(k) At or prior to the Closing Date, the Transactions shall have
been or will be contemporaneously duly and validly consummated.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
this Agreement and all obligations of the Underwriters hereunder may be
canceled at, or at any time prior to, the Closing Date by the Underwriters.
Notice of such
-20-
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the
Securities provided for herein is not consummated because of any condition to
the obligations of the Underwriters set forth in Section 6 hereof, because of
any termination pursuant to Section 11 hereof or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof other than by reason of a default by the
Underwriters, the Company will reimburse the Underwriters severally upon demand
for all out-of-pocket expenses (including fees and disbursements of counsel)
that shall have been reasonably incurred by them in connection with the proposed
purchase and sale of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls any Underwriter within the meaning
of the Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the
Act or other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement for the registration of the Securities as originally
filed or in any amendment thereof, or in any Preliminary Prospectus or the
Prospectus, or in any amendment thereof or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, and agrees to reimburse each such indemnified party,
as incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that (i) the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of an Underwriter specifically for use in
connection with the preparation thereof and (ii) such indemnity with
respect to any Preliminary Prospectus shall not inure to the benefit of
any Underwriter (or any person controlling such Underwriter) from whom the
person asserting any such loss, claim, damage or liability purchased the
Securities which are the subject thereof if such person did not receive a
copy of the Prospectus (or the Prospectus as supplemented) at or prior to
the confirmation of the sale of such Securities to such person in any case
where delivery is required by the Act and the untrue statement or omission
of a material fact contained in such Preliminary Prospectus was corrected
in the Prospectus (or the Prospectus was supplemented). This indemnity
agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either
-21-
the Act or the Exchange Act, to the same extent as the foregoing indemnity
from the Company to each Underwriter, but only with reference to written
information relating to such Underwriter furnished to the Company by or on
behalf of such Underwriter specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement will be
in addition to any liability which any Underwriter may otherwise have. The
Company acknowledges that the statements set forth in the last paragraph on
the cover page, and under the heading "Underwriting" (except for statements
relating to sales or dispositions of Old Notes (as defined in the
Prospectus) by affiliates of the Company) in any Preliminary Prospectus and
the Prospectus constitute the only information furnished in writing by or
on behalf of the several Underwriters for inclusion in any Preliminary
Prospectus or the Prospectus, and the Underwriters confirm that such
statements are correct.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in
which case the indemnifying party shall not thereafter be responsible for
the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); PROVIDED, HOWEVER, that such
counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, (iii) the indemnifying party
shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after
notice of the institution of such action or (iv) the indemnifying party
shall authorize in writing the indemnified party to
-22-
employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or
proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters agree to
contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the
Company and one or more of the Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received by
the Company and by the Underwriters from the offering of the Securities;
PROVIDED, HOWEVER, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of
the Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such
Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the
Underwriters shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and of the Underwriters in connection with the statements or
omissions which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Company shall be deemed
to be equal to its net proceeds from the offering (before deducting
expenses), and benefits received by the Underwriters shall be deemed to be
equal to the total underwriting discounts and commissions, in each case as
set forth on the cover page of the Prospectus. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or the Underwriters. The
Company and the Underwriters agree that it would not be just and equitable
if contribution were determined by pro rata allocation or any other method
of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d),
no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning
of either the Act or the Exchange Act and each director, officer, employee
and agent of an Underwriter shall have the same rights to contribution as
such Underwriter, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, each officer of
-23-
the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of
this paragraph (d).
9. QUALIFIED INDEPENDENT UNDERWRITER. The Company hereby confirms
that at its request Xxxx. Xxxxx & Sons, Incorporated has without compensation
acted as "qualified independent underwriter" (in such capacity, the "QIU")
within the meaning of Schedule E to the By-Laws of the National Association of
Securities Dealers, Inc. in connection with the offering of the Securities. The
Company will indemnify and hold harmless the QIU against any losses, claims,
damages or liabilities, joint or several, to which the QIU 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 any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the QIU for any legal or other expenses
reasonably incurred by the QIU in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are
incurred. The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
the QIU within the meaning of the Act.
10. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; PROVIDED, HOWEVER, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed ___% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company. In the event of a default by any Underwriter as set forth in this
Section 10, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Underwriters shall determine in order that the required
changes in the Registration Statement and the Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Company and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
11. TERMINATION. This Agreement shall be subject to termination in
the absolute discretion of the Underwriters, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in the Company's Common Stock shall have been suspended by the
Commission or on the Nasdaq National Market System ("NMS"), (ii) trading in
securities generally on NMS shall have been suspended or limited or minimum
prices shall have been established on NMS, (iii) a banking moratorium shall have
been declared either by federal or New York state authorities or (iv) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war or other calamity or crisis the
effect of which on financial markets is such as to make it, in the judgment of
the Underwriters, impracticable or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Prospectus (exclusive of any
supplement thereto).
12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will
-24-
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 7 and 8 hereof
shall survive the termination or cancellation of this Agreement.
13. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Underwriters, will be mailed,
delivered or telegraphed and confirmed to them, care of Salomon Brothers Inc, at
Seven World Trade Center, New York, New York 10048; or, if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at 0000 Xxxx 0xx
Xxxxxx, Xxxxxxx, Xxxxxxx 00000, Attention: Chief Executive Officer.
14. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees and agents and controlling persons referred to
in, and to the extent referred to in, Section 8 hereof, and no other person
will have any right or obligation hereunder.
15. APPLICABLE LAW. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
to be entered into and wholly performed in such state.
-25-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and you.
Very truly yours,
TELEMUNDO GROUP, INC.
By:
--------------------------------
Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON BROTHERS INC
XXXX. BROWN & SONS INCORPORATED
BT SECURITIES CORPORATION
Acting on behalf of themselves
By: Salomon Brothers Inc
By:
------------------------------
Its:
-----------------------------
-26-
SCHEDULE I
Amount of
Underwriter Securities
----------- ----------
Salomon Brothers Inc
Alex. Brown & Sons Incorporated
BT Securities Corporation
Total
-27-
EXHIBIT A
FORM OF OPINION
(a) each of the Company and its subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
the jurisdiction in which it is organized, with full corporate power and
authority to own and lease its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein the Prospectus
states it owns or leases properties or conducts business except where a
failure to be so qualified would not have a Material Adverse Effect on the
Company or any such subsidiary;
(b) the Company's authorized equity capitalization is as set forth in the
Prospectus; the capital stock and indebtedness of the Company conforms to
the descriptions thereof contained in the Prospectus; the outstanding
shares of Common Stock have been duly and validly authorized and issued and
are fully paid and non-assessable; the Company has all requisite power and
authority to execute, deliver and perform its obligations under each of the
Transaction Documents; each of the Transaction Documents to which the
Company or a subsidiary is a party has been duly authorized, executed and
delivered and constitutes a legal, valid and binding obligation of the
Company or its subsidiary, enforceable against the Company or its
subsidiary subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to general principles
of equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity);
(c) all of the outstanding shares of capital stock of each of the
Company's "significant subsidiaries", as defined in Regulation S-X under
the Act, have been duly and validly authorized and issued and are fully
paid and nonassessable, and all such outstanding shares are owned by the
Company either directly or through wholly-owned subsidiaries free and
clear of any perfected security interest and, to the best knowledge of
such counsel, after due inquiry, any other security interests, claims,
liens or encumbrances other than under the Credit Facility (as defined
in the Prospectus);
(d) to the best knowledge of such counsel, except as disclosed in the
Prospectus, there are no outstanding rights, warrants, or options to
acquire, or instruments convertible into or exchangeable for any shares of
capital stock of or equity interest in the Company's subsidiaries;
(e) to the best knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of
its subsidiaries of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the Prospectus,
and there is no franchise, contract or other document of a character
required to be described in the Registration Statement or Prospectus, or to
be filed as an exhibit, which is not described or filed as required; the
descriptions in the Registration Statement and the Prospectus of statutes,
regulations, contracts, franchises,
-28-
other documents, pending or threatened actions, suits or proceedings before
any court or arbitrator, or brought by any governmental agency, authority
or body fairly present the information required to be shown;
(f) the Registration Statement has become effective under the Act; any
required filing of the Prospectus, and any supplements thereto, pursuant to
Rule 424(b), have been filed in the manner and within the time period
required by Rule 424(b); to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been instituted or threatened
and the Registration Statement and the Prospectus (other than the financial
statements, schedules and other financial information contained therein as
to which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act, the Exchange
Act and the Trust Indenture Act and the respective rules thereunder;
(g) the descriptions contained in the Prospectus under the heading
"Certain Federal Income Tax Considerations" fairly summarize the matters
therein described; the statements in the Prospectus under the headings
"Principal Stockholders--Related Party Transactions" and "The Acquisition,"
insofar as such statements purport to summarize the provisions of
agreements referred to therein, conform in all material respects to the
terms of the applicable documents;
(h) the Company has all necessary corporate power and authority to
execute, deliver and perform its obligations under the Agreement, and the
Company and its subsidiaries have all necessary corporate power and
authority to enter into and consummate the Transactions and execute,
deliver and perform their respective obligations under each Transaction
Document. The execution, delivery and performance by the Company of its
obligations under the Agreement, the Indenture and each Transaction
Document, and the consummation of the transactions contemplated hereby and
thereby, have been duly authorized by all necessary corporate action on the
part of the Company. The Agreement has been duly executed and delivered by
the Company. Each Transaction Document has been or, by the Closing Date,
will be duly executed and delivered by the Company substantially in the
form previously delivered to you and, when executed and delivered by the
Company and assuming due execution by the other parties thereto, will
constitute legal, valid and binding obligations of the Company, enforceable
against the
-29-
Company in accordance with their respective terms. At or prior to the
Closing Date, the Company will have duly executed and delivered each
Transaction Document;
(i) the Company has all requisite corporate power and authority to
execute, issue and deliver the Securities and to incur and perform its
obligations thereunder. The Securities have been duly authorized by the
Company and, when executed, authenticated and issued in the manner provided
for in the Indenture and the Securities, as applicable, and delivered
against payment of the purchase price therefor as provided herein, the
Securities will constitute valid and binding obligations of the Company,
entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar
laws affecting creditors' rights and remedies generally and to general
principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought
in a proceeding at law or in equity) and except to the extent that the
provisions of the Indenture purport to waive benefits or advantages of
any stay, extention or usury law. The Securities will conform in all
material respects to the description thereof contained in the Prospectus;
(j) the Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture; the
Indenture has been duly authorized by the Company, will be substantially
in the form heretofore delivered to you, and, when executed and delivered
by the Company and assuming due execution by the Trustee, will constitute
a valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar
laws affecting creditors' rights and remedies generally and to general
principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought
in a proceeding at law or in equity) and except to the extent that the
provisions of the Indenture purport to waive benefits or advantages of
any stay, extention or usury law. At the Closing Date, the Company
will have duly executed and delivered the Indenture, and the Indenture
will have been duly qualified under the Trust Indenture Act. The
Indenture will conform in all material respects to the description thereof
contained in the Prospectus;
(k) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
Offering and the Transactions, except such as have been obtained under the
Act, [in connection with the Acquisition] and such as may be required
under the Blue Sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the Underwriters;
(l) neither the issue and sale of the Securities, nor the fulfillment of
the terms hereof will conflict with, result in a breach or violation of,
or constitute a default, under any law (except Blue Sky laws, as to which
such counsel expresses no opinion) or the Restated Certificate of
Incorporation or Amended and Restated Bylaws of the Company or the terms
of any material agreement or instrument known to such counsel and to which
the Company or any of its subsidiaries is a party or bound or any
judgment, order or decree known to such counsel to be applicable to the
Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over the Company or any of its subsidiaries. For the purposes of such
opinion, the term "material agreement" shall mean an agreement that was
filed (or incorporated by reference) as an exhibit to the Company's Annual
Report on Form 10-K for the year ended December 31, 1994;
-30-
(m) to the best of such counsel's knowledge, except as described in the
Prospectus or the Registration Rights Agreement, no holders of securities
of the Company have rights to the registration of such securities under the
Registration Statement;
(n) the consummation of the Offering and the Transactions and the
execution and delivery by the Company and its subsidiaries of, and the
performance by the Company
-31-
and its subsidiaries of obligations under the Agreement, the Indenture and
the Transaction Documents (to the extent each is a party thereto), did not
or will not result in a violation of the Federal Communications Act of
1934, as amended, and the rules, regulations and orders promulgated
thereunder (the "Communications Laws") by the Federal Communications
Commission (the "FCC");
(o) except for such approval of the FCC that has already been obtained,
which approval, to such counsel's knowledge, is in full force and effect,
no consent, approval, authorization, order, registration or qualification
of or with any governmental agency or body is required under the
Communications Laws for the transactions contemplated in this Agreement,
the Indenture and the Transaction Documents and the issuance and sale of
the Securities;
(p) The Company, its subsidiaries and Video 44 are the holders of the
licenses issued by the FCC listed in an attachment to such opinion (the
"FCC LICENSES"), all of which have been granted by the FCC; to the
knowledge of counsel, such FCC Licenses constitute all of the FCC Licenses
necessary for the Company, its subsidiaries and Video 44 to own their
properties and to conduct their businesses in the manner and to the full
extent now operated or proposed to be operated as described in either
Prospectus;
(q) Other than matters described in the Prospectus, such counsel does not
know of any proceedings threatened or pending before the FCC against or
involving the properties, businesses or FCC Licenses of the Company, any
of its subsidiaries or Video 44, which could reasonably be expected to
have a Material Adverse Effect excluding laws generally applicable to
the television industry;
-32-
In addition, such counsel shall state that in the course of the preparation
of the Registration Statement and the Prospectus, such counsel has
participated in conferences with officers and representatives of the
Company and with the Company's independent public accountants, at which
conferences such counsel made inquiries of such officers, representatives
and accountants and discussed the contents of the Registration Statement
and the Prospectus and (without taking any further action to verify
independently the statements made in the Registration Statement and the
Prospectus and, except solely as expressly stated in the foregoing opinion,
without assuming responsibility for the accuracy, completeness or fairness
of such statements) nothing has come to such counsel's attention that
causes such counsel to believe that the Registration Statement as of the
Effective Date and as of the Closing Date or the Prospectus as of the date
thereof and as of the Closing Date contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading
(it being understood that such counsel need not express any statement with
respect to the financial statements, schedules and other financial
information included in the Registration Statement or the Prospectus).
References to the Prospectus in this Exhibit include any supplements
thereto at the Closing Date.
-33-
