4,000,000 Shares
BIG CITY RADIO, INC.
Class A Common Stock
UNDERWRITING AGREEMENT
December __, 1997
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXX XXXX LLC
As representatives of the Several Underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Big City Radio, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to the several underwriters named in Schedule I hereto (the
"Underwriters") 4,000,000 shares (the "Firm Shares") of its Class A Common
Stock, par value $.01 per share (the "Class A Common Stock"). The Company also
proposes to issue and sell to the Underwriters not more than an additional
600,000 shares of its Class A Common Stock (the "Additional Shares"), if
requested by the Underwriters as provided in Section 2 hereof. The Firm Shares
and the Additional Shares are hereinafter collectively referred to as the
"Shares."
Section 1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-1, including a
prospectus, relating to the Shares. The registration statement, as amended
at the time it became 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 Act, is hereinafter referred to as the "Registration
Statement;" and the prospectus in the form first used to confirm sales of
Shares is hereinafter referred to as the "Prospectus." If the Company has
filed or
is required pursuant to the terms hereof to file a registration statement
pursuant to Rule 462(b) under the Act registering additional shares of Class A
Common Stock (a "Rule 462(b) Registration Statement"), then, unless otherwise
specified, any reference herein to the term "Registration Statement" shall be
deemed to include such Rule 462(b) Registration Statement.
Section 2. Agreements to Sell and Purchase and Lock-Up Agreements.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to
issue and sell, and each Underwriter agrees, severally and not jointly, to
purchase from the Company at a price per Share of $_______ (the "Purchase
Price") the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell the Additional Shares and the Underwriters shall have the right to
purchase, severally and not jointly, the Additional Shares from the Company at
the Purchase Price. Additional Shares may be purchased solely for the purpose
of covering over-allotments made in connection with the offering of the Firm
Shares. The Underwriters may exercise their right to purchase Additional Shares
in whole or in part from time to time by giving written notice thereof to the
Company within 30 days after the date of this Agreement. You shall give any
such notice on behalf of the Underwriters and such notice shall specify the
aggregate number of Additional Shares to be purchased pursuant to such exercise
and the date for payment and delivery thereof, which date shall be a business
day (i) no earlier than two business days after such notice has been received
(and, in any event, no earlier than the Closing Date (as hereinafter defined))
and (ii) no later than ten business days after such notice has been received.
If any Additional Shares are to be purchased, each Underwriter, severally and
not jointly, agrees to purchase from the Company the number of Additional Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) which bears the same proportion to the total number of Additional
Shares to be purchased from the Company as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I bears to the total number of
Firm Shares.
The Company hereby agrees not to (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, or 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 shares of Class A
Common Stock
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or (ii) enter into any swap or other arrangement that transfers all or a portion
of the economic consequences associated with the ownership of any shares of
Class A Common Stock (regardless of whether any of the transactions described in
clause (i) or (ii) is to be settled by the delivery of shares of Class A Common
Stock or such other securities, in cash or otherwise), except to the
Underwriters pursuant to this Agreement, for a period of 180 days after the date
of the Prospectus without the prior written consent of Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation ("DLJ"). Notwithstanding the foregoing, during
such period (i) the Company may grant stock options pursuant to the Company's
1997 Incentive Stock Plan (the "Incentive Stock Plan") with respect to up to
[insert number] shares of Class A Common Stock, (ii) the Company may issue
shares of Class A Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof and (iii) the Company
may issue up to 281,265 shares of Class A Common Stock to Xx. Xxxxxxx
Xxxxxxxxxxx pursuant to his employment agreement with the Company, as described
in the Registration Statement and the Prospectus. The Company also agrees not
to file any registration statement with respect to any shares of Class A Common
Stock or any option, warrant or right to purchase or otherwise transfer or
dispose of any shares of Class A Common Stock or any securities convertible into
or exercisable or exchangeable for shares of Class A Common Stock for a period
of 180 days after the date of the Prospectus without the prior written consent
of DLJ. Notwithstanding the foregoing, during such period, the Company may file
a registration statement on Form S-8 with respect to the shares of Class A
Common Stock that may be issued upon exercise of options granted or to be
granted under the Incentive Stock Plan and the 281,265 shares of Class A Common
Stock that may be issued to Mr. Kakoyiannis under his employment agreement with
the Company. The Company shall, prior to or concurrently with the execution of
this Agreement, deliver an agreement executed by each of the directors and
officers of the Company to the effect that such person will not, during the
period commencing on the date such person signs such agreement and ending 180
days after the date of the Prospectus, without the prior written consent of DLJ,
(A) engage in any of the types of transactions described in the first sentence
of this paragraph as if such person were bound in the same manner and to the
same extent as the Company is bound thereby or (B) make any demand for, or
exercise any right with respect to, the registration of any shares of Class A
Common Stock or any option, warrant or right to purchase or otherwise transfer
or dispose of any shares of Class A Common Stock or any securities convertible
into or exercisable or exchangeable for shares of Class A Common Stock.
Notwithstanding the foregoing, during such period, the Company may include the
281,265 shares of Class A Common Stock that may be issued to Mr. Kakoyiannis
under his employment agreement with the Company in the registration statement on
Form S-8 to be filed by
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the Company with respect to the shares of Class A Common Stock that may be
issued upon exercise of options granted or to be granted under the Incentive
Stock Plan.
Section 3. Terms of Public Offering. The Company is advised by you
that the Underwriters propose (i) to make a public offering of their
respective portions of the Shares as soon after the execution and delivery of
this Agreement as in your judgment is advisable and (ii) initially to offer
the Shares upon the terms set forth in the Prospectus.
Section 4. Delivery and Payment. Delivery to the Underwriters of
and payment for the Firm Shares shall be made at 9:00 A.M., New York City
time, on December __, 1997 (the "Closing Date") at such place as you shall
designate. The Closing Date and the location of delivery of and payment for
the Firm Shares may be varied by agreement between you and the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at such place as you shall
designate at 9:00 A.M., New York City time, on the date specified in the
applicable exercise notice given by you pursuant to Section 2 (an "Option
Closing Date"). Any such Option Closing Date and the location of delivery of
and payment for such Additional Shares may be varied by agreement between you
and the Company.
The Shares shall be (i) evidenced by one or more certificates
registered in the name of Cede & Co. and (ii) eligible for settlement through
the F.A.S.T. system of The Depository Trust Company.
Section 5. Agreements of the Company. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of the
suspension of qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purposes, (iii)
when any amendment to the Registration Statement becomes effective, (iv) if
the Company is required to file a Rule 462(b) Registration Statement after
the effectiveness of this Agreement, when the Rule 462(b) Registration
Statement has become effective and (v) of the happening of any event during
the
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period referred to in Section 5(d) below which makes any statement of a material
fact made in the Registration Statement or the Prospectus untrue or which
requires any additions to or changes in the Registration Statement or the
Prospectus in order to make the statements therein not misleading. If at any
time the Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, the Company will use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(b) To furnish to you without charge originally signed copies of the
Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits and documents incorporated therein by
reference, and to furnish to you and each Underwriter designated by you such
number of conformed copies of the Registration Statement as so filed and of
each amendment to it, without exhibits, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which shall
be satisfactory to you, and to file the Prospectus in such form with the
Commission within the applicable period specified in Rule 424(b) under the
Act; during the period specified in Section 5(d) below, not to file any
further amendment to the Registration Statement and not to make any amendment
or supplement to the Prospectus of which you shall not previously have been
advised or to which you shall reasonably object after being so advised; and,
during such period, to prepare and file with the Commission, promptly upon
your reasonable request, any amendment to the Registration Statement or
amendment or supplement to the Prospectus which may be necessary or advisable
in connection with the distribution of the Shares by you, and to use its best
efforts to cause any such amendment to the Registration Statement to become
promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business
day after the date of this Agreement and from time to time thereafter for
such period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or
a dealer, to furnish in New York City to each Underwriter and any dealer as
many copies of the Prospectus (and of any amendment or supplement to the
Prospectus) as such Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event shall
occur or condition shall exist as a result of which, in the opinion of
counsel for the Underwriters or counsel for the Company, it becomes necessary
to amend or
5
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 or counsel for
the Company, it is necessary to amend or supplement the Prospectus to comply
with applicable law, forthwith to prepare and file with the Commission an
appropriate amendment or supplement to the Prospectus so that the statements in
the Prospectus, as so amended or supplemented, will not in the light of the
circumstances when it is so delivered, be misleading, or so that the Prospectus
will comply with applicable law, and to furnish to each Underwriter and to any
dealer as many copies thereof as such Underwriter or dealer may reasonably
request.
(f) Prior to any public offering of the Shares, to cooperate with
you and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the Underwriters and by
dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such registration or qualification in effect so
long as required for distribution of the Shares and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation
in any jurisdiction in which it is not now so qualified or to take any action
that would subject it to general consent to service of process or taxation
other than as to matters and transactions relating to the Prospectus, the
Registration Statement, any preliminary prospectus or the offering or sale of
the Shares, in any jurisdiction in which it is not now so subject.
(g) To mail and make generally available to its stockholders as soon
as practicable an earning statement covering the twelve-month period ending
December 31, 1998 that shall satisfy the provisions of Section 11(a) of the
Act, and to advise you in writing when such statement has been so made
available.
(h) During the period of three years after the date of this
Agreement, to furnish to you as soon as available copies of all reports or
other communications furnished to the record holders of shares of Class A
Common Stock or furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed
and such other publicly available information concerning the Company or its
subsidiaries as you may reasonably request.
(i) 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
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incident to the performance of its obligations under this Agreement,
including: 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 Act and all other fees and expenses in connection with
the preparation, printing, filing and distribution of the Registration
Statement (including financial statements and exhibits), any preliminary
prospectus, the Prospectus and all amendments and supplements to any of the
foregoing, including the mailing and delivering of copies thereof to the
Underwriters and dealers in the quantities specified herein, (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)
all costs of printing or producing this Agreement and any other agreements or
documents in connection with the offering, purchase, sale or delivery of the
Shares, (iv) all expenses in connection with the registration or
qualification of the Shares for offer and sale under the securities or Blue
Sky laws of the several states and all costs of printing or producing any
Preliminary and Supplemental Blue Sky Memoranda in connection therewith
(including the filing fees and fees and disbursements of one counsel for the
Underwriters in connection with such registration or qualification and
memoranda relating thereto), (v) the filing fees and reasonable disbursements
of one counsel for the Underwriters in connection with the review and
clearance of the offering of the Shares by the National Association of
Securities Dealers, Inc., (vi) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A relating to
the Class A Common Stock and all costs and expenses incident to the listing
of the Shares on the American Stock Exchange (the "AMEX"), (vii) the cost of
printing certificates, if any, representing the Shares, (viii) the costs and
charges of any transfer agent, registrar and/or depositary and (ix) 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.
(j) To use its reasonable best efforts to list, subject to notice of
issuance, the Shares on the AMEX and to use its reasonable best efforts to
maintain the listing of the Shares on the AMEX for a period of three years
after the date of this Agreement.
(k) To use its reasonable best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the Closing Date or any Option Closing Date, as the case may
be, and to satisfy all conditions precedent to the delivery of the Shares.
7
(l) If the Registration Statement at the time of the effectiveness
of this Agreement does not cover all of the Shares, to file a Rule 462(b)
Registration Statement with the Commission registering the Shares not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time, on
the date of this Agreement and to pay to the Commission the filing fee for
such Rule 462(b) Registration Statement at the time of the filing thereof or
to give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
(m) On or prior to the Closing Date, (i) the Company shall have
converted all of its Common Stock, par value $.01 per share, into an
aggregate of 9,375,520 shares of Class A Common Stock, (ii) the Company shall
cause Mr. Xxxxxx Xxxxxxxxx to have contributed, to the Company's capital an
aggregate amount of not less than $13.2 million (either in the form of cash
or contribution of indebtedness of the Company owed to Xx. Xxxxxxxxx), and
(iii) the Company shall cause Mr. Xxxxxx Xxxxxxxxx and Xxx. Xxxxx Xxxxxxxxx
to have converted an aggregate of 8,250,458 shares of Class A Common Stock
into an aggregate of 8,250,458 shares of Class B Common Stock, par value $.01
per share, of the Company. The transactions in clauses (i), (ii) and (iii)
of this Section 5(m) are hereinafter referred to as the "Recapitalization."
Section 6. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other than any
Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement
filed after the effectiveness of this Agreement will become effective no
later than 10:00 P.M., New York City time, on the date of this Agreement; and
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 (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement), when it became effective, did not contain and, as amended
through the date hereof, 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 (other than any Rule 462(b) Registration Statement to
be filed by the Company after the effectiveness of this Agreement) and the
Prospectus comply and, as amended or supplemented through
8
the date hereof, if applicable, will comply in all material respects with the
Act; (iii) if the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement and any amendments thereto, when they become effective
(A) 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 and (B) will comply in all material respects with the
Act; and (iv) the Prospectus does not contain and, as amended or supplemented
through the date hereof, 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) 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 Act, complied when so filed in all material
respects with the Act, and did not contain an 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, 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 any preliminary prospectus based upon information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(d) The Company and each of its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Prospectus and to own,
lease and operate its respective properties, and is duly qualified and is in
good standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing
of property requires such qualification, except where the failure to be so
qualified could not be reasonably expected to have a material adverse effect
on the business, prospects, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole.
(e) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible or exchangeable securities, commitments of sale
or liens granted or
9
issued by the Company or any of its subsidiaries relating to or entitling any
person to purchase or otherwise to acquire any shares of the capital stock of
the Company or any of its subsidiaries except as otherwise disclosed in the
Registration Statement.
(f) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid, nonassessable and
not subject to any preemptive or similar rights; and the Shares have been
duly authorized and, when issued and delivered to the Underwriters against
payment therefor as provided by this Agreement, will be validly issued, fully
paid and nonassessable, and the issuance of such Shares will not be subject
to any preemptive or similar rights.
(g) All the outstanding shares of capital stock of each subsidiary
of the Company have been duly authorized and are validly issued, fully paid
and nonassessable and not subject to any preemptive or similar rights and are
owned, directly or indirectly, by the Company.
(h) The authorized capital stock of the Company conforms in all
material respects to the description thereof contained in the Prospectus.
(i) Neither the Company nor any of its subsidiaries is in violation
of its charter, by-laws or other constitutive documents or in default in the
performance of any obligation, agreement, covenant or condition contained in
any indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Company and its subsidiaries, taken as a
whole, to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries or any of their respective property is
bound.
(j) This Agreement has been duly authorized, executed and delivered
by the Company.
(k) The execution, delivery and performance of this Agreement by the
Company, the compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not (i) require any
consent, approval, authorization or other order of, or qualification with,
any court or governmental body or agency (except such as may be required
under the securities or Blue Sky laws of the various states), (ii) conflict
with or constitute a breach of any of the terms or provisions of, or a
default under, the charter or by-laws or other constitutive documents of the
Company or its subsidiaries or any indenture, loan agreement, mortgage, lease
or other agreement or instrument that is material to the
10
Company and its subsidiaries, taken as a whole, to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
or any of their respective property is bound, (iii) violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree of any court
or any governmental body or agency having jurisdiction over the Company or any
of its subsidiaries or any of their respective property or (iv) result in the
suspension, termination or revocation of any Authorization (as defined below) of
the Company or of any of its subsidiaries or any other impairment of the rights
of the holder of any such Authorization.
(l) There are no legal or governmental proceedings pending or, to
the Company's knowledge, threatened to which the Company or any of its
subsidiaries is or, to the Company's knowledge, could be a party or to which
any of their respective property is or, to the Company's knowledge, could be
subject that are required to be described in the Registration Statement or
the Prospectus and are not so described; nor are there 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 so described or filed as required.
(m) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection
of human health and safety, the environment or hazardous or toxic substances
or wastes, pollutants or contaminants ("Environmental Laws") or any
provisions of the Employee Retirement Income Security Act of 1974, as
amended, or the rules and regulations promulgated thereunder, except for such
violations which, singly or in the aggregate, could not reasonably be
expected to have a material adverse effect on the business, prospects,
financial condition or results of operation of the Company and its
subsidiaries, taken as a whole.
(n) The Company and its subsidiaries each possess such permits,
licenses, approvals, consents, and other authorizations (collectively,
"Government Licenses") issued by the appropriate federal, state, or local
regulatory agencies or bodies necessary to conduct the Company's and its
subsidiaries' respective business as it is currently operated and, except as
discussed in the Prospectus, as it is currently proposed to be conducted;
each of the Governmental Licenses are valid, in full force and effect, have
not been suspended, revoked, cancelled, or modified in any adverse way, and
are not subject to any conditions or requirements that are not generally
imposed by the relevant government bodies upon the holders of such
authorizations generally; to the Company's knowledge, except for proceedings
that affect the radio
11
broadcasting industry generally and as described in the Prospectus, there is not
pending any application, petition, objection or other pleading with any
government body which questions the validity of or contests any of the
Governmental Licenses; no application, action, or proceeding is pending or, to
the Company's knowledge, threatened, that would permit, or after notice or lapse
of time or both would permit, any modification, revocation, suspension or
termination of any of the Governmental Licenses or may result in the revocation,
modification, non-renewal, suspension, or termination of any of the Governmental
Licenses, the issuance of a cease-and-desist order, or the imposition of any
administrative or judicial sanction with respect to any of the Governmental
Licenses; and the Company and each of its subsidiaries is in compliance with the
terms and conditions of all such Governmental Licenses, except where the failure
to so comply could not, singly or in the aggregate, be reasonably expected to
have a material adverse effect on the business, prospects, financial condition
or results of operations of the Company and its subsidiaries, taken as a whole.
(o) The Company and its subsidiaries each has such permits,
licenses, consents, exemptions, franchises, authorizations and other
approvals (each, an "Authorization") of, and has made all filings with and
notices to, all governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including, without
limitation, under any applicable Environmental Laws and the Communications
Act (as defined below), as are necessary to own, lease, license and operate
its respective properties and to conduct its business, except where the
failure to have any such Authorization or to make any such filing or notice
could not, singly or in the aggregate, be reasonably expected to have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole.
To the best of the Company's knowledge, each such Authorization is valid and
in full force and effect and the Company is in compliance with all the terms
and conditions thereof and with the rules and regulations of the authorities
and governing bodies having jurisdiction with respect thereto; and no event
has occurred (including, without limitation, the receipt of any notice from
any authority or governing body) which allows or, after notice or lapse of
time or both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would
result in any other impairment of the rights of the holder of any such
Authorization; and no such Authorization contains any restrictions that,
singly or in the aggregate, are materially burdensome to the Company and its
subsidiaries, taken as a whole; except where such failure to be valid and in
full force and effect or to be in compliance, the occurrence of any such
event or the presence of any such restriction could not, singly or in the
12
aggregate, be reasonably expected to have a material adverse effect on the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole.
(p) The execution, delivery and performance of this Agreement,
compliance by the Company with all the provisions hereof and the consummation
of the transactions contemplated hereby have not and will not (A) require any
consent, approval, authorization or other order of the Federal Communications
Commission the ("FCC") or (B) violate or conflict with the Communications Act
of 1934, as amended, and the rules and regulations of the FCC thereunder
(collectively called the "Communications Act") or rulings or court decrees
thereunder.
(q) To the best of the Company's knowledge, the operation of the
radio stations identified in the Registration Statement and the Prospectus
under the caption "Business" (collectively, the "Radio Stations") in the
manner and to the full extent now operated or proposed to be operated as
described in the Registration Statement and the Prospectus is in accordance
with the Authorizations issued by the FCC, the Communications Act and all
orders, rules and regulations of the FCC. To the best of the Company's
knowledge, no event has occurred which permits (nor has an event occurred
which with notice or lapse of time or both would permit) the revocation,
suspension or termination of the Authorizations issued by the FCC or which
might result in any other material impairment of the rights of the Company or
any of its subsidiaries therein or thereunder, and the Company and its
subsidiaries each is in compliance with all statutes, orders, rules or
regulation of the FCC relating to or affecting the broadcasting operations of
any of its Radio Stations.
(r) 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 Authorization, any related constraints on operating activities
and any potential liabilities to third parties) which could, singly or in the
aggregate, be reasonably expected to have a material adverse effect on the
business, prospects, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole.
(s) KPMG Peat Marwick LLP are independent public accountants with
respect to the Company, WZFU-FM ("WZVU") and WVVX, Inc. ("WVVX") as required
by the Act. Xxxxx Xxxxxxxxxx & Co., LLP are independent accountants with
respect to the Company as required by the Act.
13
(t) The pro forma statements of the Company and the related notes
thereto set forth in the Registration Statement and the Prospectus (and in
each case, any amendment or supplement thereto) (i) have been prepared on a
basis consistent with the historical financial statements of the Company,
(ii) give effect to the assumptions used in the preparation thereof on a
reasonable basis and (iii) in good faith present fairly the historical and
proposed transactions contemplated therein. Such pro forma financial
statements have been prepared in accordance with the applicable requirements
of Rule 11-02 of Regulation S-X promulgated by the Commission. The other pro
forma financial and statistical information and data set forth in the
Registration Statement and the Prospectus (and any supplement or amendment
thereto) are, in all material respects, accurately presented and prepared on
a basis consistent with the pro forma financial statements.
(u) The Company and its subsidiaries each maintains a system of
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(v) The financial statements included in the Registration Statement
and the Prospectus (and any amendment or supplement thereto), together with
related schedules and notes, present fairly the financial position, results
of operations and changes in financial position of the Company, WZVU and WVVX
on the basis stated therein at the respective dates, as applicable, or for
the respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved;
the supporting schedules, if any, included or incorporated in the
Registration Statement (and any amendment or supplement thereto) present
fairly, in accordance with generally accepted accounting principles, the
information required to be stated therein; and the other financial and
statistical information and data set forth in the Registration Statement and
the Prospectus (and any amendment or supplement thereto) are, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
14
(w) All tax returns required to be filed by the Company or any of
its subsidiaries in any jurisdiction have been filed, other than those
filings being contested in good faith and other than those filings of which
the failure to file could not, singly or in the aggregate, be reasonably
expected to have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, and all material taxes, including withholding
taxes, penalties and interest, assessments, fees and other charges due or
claimed to be due from such entities have been paid, other than those being
contested in good faith and for which adequate reserves have been provided or
those currently payable without penalty or interest.
(x) The Company and each of its subsidiaries is not and, after
giving effect to the offering and sale of the Shares and the application of
the proceeds thereof as described in the Prospectus, will not be, an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended.
(y) Except (i) as provided under the Registration Rights Agreement
between the Company and Mr. Kakakoyiannis and between the Company and Mr. and
Xxx. Xxxxxxxxx (collectively, the "Registration Rights Agreements"), (ii)
except as provided in Mr. Kakoyiannis' employment agreement with the Company
and (iii) with respect to the shares of Class A Common Stock that may be
issued upon exercise of options granted or to be granted under the Incentive
Stock Plan, there are no contracts, agreements or understandings between the
Company or any of its subsidiaries and any person granting such person the
right to require the Company or any of its subsidiaries to file a
registration statement under the Act with respect to any securities of the
Company or to require the Company or any of its subsidiaries to include any
securities of the Company or of any of its subsidiaries with the Shares
registered pursuant to the Registration Statement.
(z) Since the respective dates as of which information is given in
the Prospectus, other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement),
(i) there has not occurred any material adverse change or any development
involving a prospective material adverse change in the condition, financial
or otherwise, or the earnings, business, prospects, management or operations
of the Company or any of its subsidiaries, (ii) there has not been any
material adverse change or any development involving a prospective material
adverse change in the capital stock or in the long-term debt of the Company
or any of its subsidiaries and (iii) neither the
15
Company nor any of its subsidiaries has incurred any material liability or
obligation, direct or contingent.
(aa) Each certificate signed by any officer of the Company and
delivered to the Underwriters, or counsel for the Underwriters, pursuant to
the terms hereof shall be deemed to be a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
(ab) The Company and each of its subsidiaries maintains insurance
covering its respective properties, operations, personnel and businesses.
Such insurance insures against such losses and risks as are reasonably
adequate in accordance with customary industry practice to protect the
Company, its subsidiaries and their respective business.
(ac) Each of the documents required to consummate the
Recapitalization have been duly authorized by the Company and as of the
Closing Date will have been duly executed, delivered, and, if necessary,
filed with the Secretary of State of the State of Delaware and with any other
applicable governmental body, and assuming the due authorization, execution
and delivery by the other parties thereto, will constitute valid and binding
obligations of the Company enforceable against the Company in accordance with
each of their respective terms, except that enforcement thereof may be
limited by (i) applicable bankruptcy, fraudulent transfer, moratorium and
other laws affecting creditors' rights generally and (ii) general principles
of equity.
Section 7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, its directors, its officers and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), from and against any and all losses, claims, damages, liabilities and
judgments (including, without limitation, any legal or other expenses
incurred in connection with investigating or defending any matter, including
any action, that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), the Prospectus (or any amendment or supplement thereto)
or any preliminary prospectus, 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, liabilities or
16
judgments are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to any Underwriter
furnished in writing to the Company by such Underwriter through you expressly
for use therein. The foregoing indemnity agreement with respect to any untrue
statement or omission from a preliminary prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
liabilities, claims, damages or expenses purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus as then amended or
supplemented (if the Company shall have furnished such Underwriter such amended
or supplemented Prospectus on a timely basis) was not sent or given by or on
behalf of the Underwriters to such person, if such was required by law, at or
prior to the written confirmation of the sale of such Shares to such person and
the untrue statement contained in or omission from such preliminary prospectus
was corrected in such Prospectus (or such Prospectus as amended or
supplemented).
(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 Section 15 of the Act or Section 20 of the Exchange
Act, to the same extent as the foregoing indemnity from the Company to such
Underwriter but only with reference to information relating to such
Underwriter furnished in writing to the Company by such Underwriter through
you expressly for use in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 7(a) or Section
7(b) (the "indemnified party"), the indemnified party shall promptly notify
the person against whom such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party shall assume the defense of
such action, including the employment of counsel reasonably satisfactory to
the indemnified party and the payment of all reasonable fees and expenses of
such counsel, as incurred (except that in the case of any action in respect
of which indemnity may be sought pursuant to both Sections 7(a) and 7(b), the
Underwriter shall not be required to assume the defense of such action
pursuant to this Section 7(c), but may employ separate counsel and
participate in the defense thereof, but the fees and expenses of such
counsel, except as provided below, shall be at the expense of such
Underwriter). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall
17
be at the expense of the indemnified party unless (i) the employment of such
counsel shall have been specifically authorized in writing by the indemnifying
party, (ii) the indemnifying party shall have failed to assume the defense of
such action within a reasonable period of time or employ counsel reasonably
satisfactory to the indemnified party or (iii) the named parties to any such
action (including any impleaded parties) include both the indemnified party and
the indemnifying party, and the indemnified party shall have been reasonably
advised by such counsel that a conflict may exist between the indemnified party
and the indemnifying party (in which case the indemnifying party shall not have
the right to assume the defense of such action on behalf of the indemnified
party). In any such case, the indemnifying party shall not, in connection with
any one action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all indemnified parties and all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by DLJ, 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 indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than thirty business days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party), and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 7
is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or
18
payable by such indemnified party as a result of such losses, claims, damages,
liabilities and judgments (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 the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other hand shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company, and the total underwriting discounts and
commissions received by the Underwriters, bear to the total price to the public
of the Shares, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company 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 the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) 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 which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. 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 which 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 Act)
shall be
19
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 7(d) are several in proportion to the respective number of Shares
purchased by each of the Underwriters hereunder and not jointly.
(e) 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.
Section 8. Conditions of Underwriter's Obligations. The several
obligations of the Underwriters to purchase Shares under this Agreement are
subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained
in this Agreement shall have been true and correct in all material respects
on the date of this Agreement and shall be true and correct in all material
respects on the Closing Date and, if applicable, on the Option Closing Date
with the same force and effect as if made on and as of the Closing Date and,
if applicable, on the Option Closing Date (except that such phrase "in all
material respects" shall be disregarded to the extent that any such
representation and warranty is qualified by "material," "material adverse
effect" or any similar terms or by any phrase using any of such terms).
(b) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York
City time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c) You shall have received on the Closing Date and, if applicable,
on the Option Closing Date, a certificate dated such date, signed by the
President of the Company and the Chief Financial Officer of the Company, in
their capacities as such officers of the Company, confirming the matters set
forth in Sections 6(z), 8(a) and 8(b) and that the Company has complied with
all of the agreements and satisfied all of the conditions herein contained
and required to be complied with or satisfied by the Company on or prior to
such date.
20
(d) Since the respective dates as of which information is given in
the Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement),
(i) there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management, prospects, operations of the Company, (ii) there shall
not have been any change or any development involving a prospective change in
the capital stock or in the long-term debt of the Company and (iii) the
Company shall not have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause
8(d)(i), 8(d)(ii) or 8(d)(iii), in your judgment, is material and adverse
and, in your judgment, makes it impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
(e) You shall have received on the Closing Date and on the Option
Closing Date, if applicable, an opinion (satisfactory to you and counsel for
the Underwriters), dated the Closing Date and on the Option Closing Date, if
applicable, of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, counsel for the
Company, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware.
(ii) The Company has the corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus and to
enter into and perform its obligations under this Agreement.
(iii) Based solely on a certificate of the Company's
transfer agent and after giving effect to the transactions
contemplated by this Agreement, [5,125,062]shares of Class A Common
Stock are issued and outstanding as of the Closing Date and
8,250,458 shares of Class B Common Stock, par value $.01 per share,
of the Company, are issued and outstanding as of the Closing Date,
and no other shares of capital stock of the Company are issued or
outstanding on the Closing Date.
(iv) The Shares have been duly authorized for issuance and
sale to the Underwriters pursuant to this Agreement and,
21
when issued and delivered by the Company pursuant to this Agreement
against payment of the consideration set forth herein, will be
validly issued and fully paid and nonassessable.
(v) The issuance of the Shares is not subject to preemptive
or other similar rights arising by operation of law, under the
charter or by-laws of the Company or under any agreement listed or
set forth in the Registration Statement.
(vi) This Agreement has been duly authorized, executed and
delivered by the Company.
(vii) The Registration Statement has been declared
effective under the Act; and, to such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement has
been issued under the Act or proceedings therefor initiated or
threatened by the Commission.
(viii) The Registration Statement, including any
information included in accordance with Rule 430A promulgated under
the Act (the "430A Information") and the Prospectus, as of their
respective effective or issue dates (other than the financial
statements and supporting schedules included therein, as to which
such counsel need express no opinion) complied as to form in all
material respects with the requirements of the Act. In passing upon
the compliance as to form of the Registration Statement and
Prospectus, such counsel may assume that the statements made in the
Registration Statement and the Prospectus are complete and correct.
(ix) Neither the Company nor any of its subsidiaries is in
violation of its respective charter, by-laws or other constitutive
document and, to the best of such counsel's knowledge after due
inquiry, neither the Company nor any of its subsidiaries is in
default in the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement, mortgage,
lease or other agreement or instrument that is material to the
Company and its subsidiaries, taken as a whole, to which the Company
or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries or their respective property is bound.
22
(x) All descriptions in the Prospectus of the capital stock
of the Company and of contracts and other documents to which the
Company or its subsidiaries is a party are in all material respects
accurate and fair summaries thereof. To such counsel's knowledge,
there are no franchises, contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement or to be
filed as exhibits thereto other than those described or referred to
therein or filed as exhibits thereto and the descriptions thereof or
references thereto are correct in all material respects.
(xi) No authorization, approval, consent or order of any
court or governmental authority or agency under the laws of the
Federal government of the United States or the State of New York or
under the General Corporation Law of the State of Delaware (other
than those under the Act which have been obtained or made, or as may
be required under the securities or Blue Sky laws of the various
states or foreign jurisdictions or the National Association of
Securities Dealers, Inc., as to each of which such counsel need
express no opinion) is required in connection with the due
authorization, execution and delivery of this Agreement or for the
offering, issuance or sale of the Shares to the Underwriters.
(xii) The execution, delivery and performance of this
Agreement and compliance by the Company with its obligations under
this Agreement will not, to such counsel's knowledge, conflict with
or constitute a breach of, or default under or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries
pursuant to any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, lease or any other agreement or
instrument listed as an exhibit to the Registration Statement
(except for such conflicts, breaches, defaults or liens, charges or
encumbrances that could not, singly or in the aggregate, be
reasonably expected to result in a material adverse effect on the
business, prospects, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole), nor will such
action result in any violation of the provisions of the charter,
by-laws or other constitutive document of the Company or any of its
subsidiaries, or any applicable law, statute, rule or regulation of
the Federal
23
government of the United States (including, but not limited to, the
FCC) or the State of New York or under the General Corporation Law
of the State of Delaware, or, to such counsel's knowledge, any
judgment, order, writ or decree of any government, government
instrumentality (including, but not limited to, the FCC) or court
having jurisdiction over the Company, any of its subsidiaries or any
of their respective properties, assets or operations except for such
violations of law, statute, rule, regulation, judgment, order, writ
or decree that could not be reasonably expected to result in a
material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its
subsidiaries, taken as a whole.
(xiii) The Company and its subsidiaries each are not an
"investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended.
(xiv) To such counsel's knowledge, except as provided under
the Registration Rights Agreements and Xx. Xxxxxxxxxx'x employment
agreement with the Company, and except for the shares of Class A
Common Stock that may be issued upon exercise of options granted or
to be granted under the Incentive Stock Plan, there are no persons
with registration or other similar rights to have any securities
registered pursuant to the Registration Statement.
(xv) Such counsel shall state that they have participated
in the preparation of the Registration Statement and the Prospectus
and, although such counsel have not undertaken to investigate or
verify independently, did not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in
the Registration Statement or the Prospectus or any amendments or
supplements thereto, based upon such participation (and to relying
as to materiality to the extent such counsel deemed reasonable on
officers, employees and other representatives of the Company), no
facts have come to such counsel's attention that would lead them to
believe that the Registration Statement or any amendment thereto
(except for financial statements and schedules and other financial
or statistical data included therein or omitted therefrom, as to
which such counsel need make no statement), at the time the
Registration Statement became
24
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 that the Prospectus, or any amendment or
supplement thereto (except for financial statements and schedules and other
financial or statistical data included therein or omitted therefrom, as to
which such counsel need make no statement), on the date the Prospectus was
issued or on the Closing Date, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(f) You shall have received, on the Closing Date, an opinion, dated
the Closing Date, of Xxxxx & Xxxxxxx, special radio communications counsel to
the Company, to the effect that:
(i) No authorization, approval, order, consent or filing
with the FCC on the part of the Company or its subsidiaries with
regard to any of the FCC Licenses (as defined below) is required in
connection with the Recapitalization or the issuance of the Shares
pursuant to this Agreement, other than such has been obtained or
filed and other than filings with the FCC required subsequent to the
consummation of the Recapitalization and the issuance and sale of
the Shares. The consummation of the Recapitalization and the
issuance and sale of the Shares pursuant to this Agreement, in each
case by the Company, do not violate applicable provisions of the
Communications Act or any published rules, regulations or policies
of the FCC thereunder.
(ii) A schedule to such counsel's opinion accurately and
completely lists all of the FCC licenses that have been issued to
and are held by the Company or its subsidiaries (the "FCC
Licenses"). Each of the FCC Licenses is valid and in full force and
effect on the Closing Date and is not subject to any conditions
(other than conditions generally applicable to radio stations of the
type described in the Registration Statement and the Prospectus).
To such counsel's knowledge, the FCC License constitute all of the
FCC authorizations, consents and approvals that are required for the
25
Company and its subsidiaries to carry on their broadcasting business
business as presently conducted.
(iii) Applications for renewals of the FCC Licenses of
[four] of the stations are pending at the FCC, as indicated on a
schedule to such counsel's opinion. To such counsel's knowledge,
there is no FCC order, judgment, decree, notice of apparent
liability or order of forfeiture, investigation or other proceeding
pending or threatened, by or before the FCC against the Company or
any of its subsidiaries that might result in revocation,
cancellation, suspension, now-renewal, or short-term renewal of the
FCC Licenses, except FCC rulemaking proceedings generally affecting
the radio broadcasting industry.
(g) You shall have received on the Closing Date, an opinion, dated
the Closing Date of Xxxxxx X. Xxxxxx, Vice President and Secretary of the
Company, to the effect that:
(i) To the best of his knowledge, Xx. Xxxxxx does not know
of any legal or governmental proceeding pending or threatened to
which the Company or any of its subsidiaries is or could be a party
or to which any of their respective property is or could be subject
that is required to be described in the Registration Statement or
the Prospectus and is not so described, or of any statute,
regulation, contract or other document that is required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement that are not so
described or filed as required;
(ii) To the best of his knowledge the Company and its
subsidiaries each has such Authorizations of, and has made all
filings with and notices to, all governmental or regulatory
authorities and self-regulatory organizations and all courts and
other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and
operate its respective properties and to conduct its business,
except where the failure to have any such Authorization or to make
any such filing or notice could not, singly or in the aggregate, be
reasonably expected to have a material adverse effect on the
business, prospects, financial condition or results
26
of operations of the Company and its subsidiaries, taken as a whole;
each such Authorization is valid and in full force and effect and
the Company and each of its subsidiaries is in compliance with all
the terms and conditions thereof and with the rules and regulations
of the authorities and governing bodies having jurisdiction with
respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or
governing body) which allows or, after notice or lapse of time or
both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both,
would result in any other impairment of the rights of the holder of
any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company; except where such
failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any
such restriction would not, singly or in the aggregate, have a
material adverse effect on the business, prospects, financial
condition or results of operations of the Company;
(iii) To the best of his knowledge, neither the Company nor
any of its subsidiaries is in default in any respect in the
performance of any material contract, loan agreement, mortgage, deed
of trust, material lease or other material written contract or
agreement or of any respective order, award or decree of any court,
arbitrator or governmental or administrative body binding upon or
affecting it or by which any of its respective properties or assets
is bound or affected, except for defaults which could not reasonably
be expected to have a material adverse effect on the business,
prospects, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole.
(h) You shall have received on the Closing Date an opinion, dated
such date, of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Underwriters, as to the matters referred to in Sections 8(e)(iv), 8(e)(vi)
and 8(e)(x) (first sentence only and then only with respect to the statements
under the caption "Description of the Common Stock").
(i) You shall have received letters on and as of the date hereof as
well as on and as of the Closing Date and, if applicable, the Option Closing
Date (in the latter case constituting an affirmation of the statements set
forth in the former), in form
27
and substance satisfactory to you, from KPMG Peat Marwick LLP and Xxxxx
Xxxxxxxxxx & Co. LLP, independent public accountants, with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(j) The Company shall have delivered to you the agreements specified
in Section 2 hereof which agreements shall be in full force and effect on the
Closing Date and, if applicable, the Option Closing Date.
(k) At the Closing Date and, if applicable, the Option Closing Date
the Shares shall have been approved for listing, subject to notice of
issuance, on the AMEX.
(l) The Company shall not have failed, on or prior to the Closing
Date and, if applicable, the Option Closing Date, to perform or comply with
any of the agreements herein contained and required to be performed or
complied with by the Company on or prior to such date. The several
obligations of the Underwriters to purchase any Additional Shares hereunder
are subject to the delivery to the Underwriters on the applicable Option
Closing Date of such documents as they may reasonably request with respect to
the good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such
Additional Shares.
(m) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency which would, as of the Closing Date and, if applicable, the Option
Closing Date, prevent the issuance of the Shares; no injunction, restraining
order or order of any nature by a Federal or state court of competent
jurisdiction shall have been issued as of the Closing Date and, if
applicable, the Option Closing Date which would prevent the issuance of the
Shares; and on the Closing Date and, if applicable, the Option Closing Date,
no action, suit or proceeding shall be pending against, or, to the knowledge
of the Company, threatened against the Company or any of its subsidiaries,
before any court or arbitrator or any governmental body, agency or official
which, if adversely determined, would interfere with or adversely affect the
issuance of the Shares or could, singly or in the aggregate, reasonably be
expected to have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
(n) The Recapitalization shall have been consummated.
28
Section 9. Effectiveness of Agreement and Termination. This
Agreement shall become effective upon the later of (i) the execution and
delivery of this Agreement by the parties hereto, (ii) the effectiveness of
the Registration Statement, and (iii) if a post-effective amendment is
required to be filed pursuant to Rule 430A under the Act, the effectiveness
of such post-effective amendment.
This Agreement may be terminated at any time on or prior to the
Closing Date or the Option Closing Date, if applicable, by you by written
notice to the Company if any of the following has occurred: (i) any outbreak
or escalation of hostilities or other national or international calamity or
crisis or change in economic conditions or in the financial markets of the
United States or elsewhere that, in DLJ's judgment, on behalf of the
Underwriters, is material and adverse and, in DLJ's judgment, on behalf of
the Underwriters, makes it impracticable or inadvisable to market the Shares
on the terms and in the manner contemplated in the Prospectus, (ii) the
suspension or material limitation of trading generally in securities or other
instruments on the New York Stock Exchange, AMEX, the Chicago Board of
Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
enactment, publication, decree or other promulgation of any of the Federal or
state statute, regulation, rule or order of any court or other governmental
authority which in DLJ's opinion materially and adversely affects, or will
materially and adversely affect, singly or in the aggregate, the business,
prospects, financial condition or results of operations of the Company and
its subsidiaries, taken as a whole, (v) any declaration of a banking
moratorium by any Federal or New York State authorities, (v) the taking of
any action by any Federal, state or local government or agency in respect of
its monetary or fiscal affairs which in DLJ's opinion has a material adverse
effect on the financial markets in the United States and would, in DLJ's
judgment, make it impracticable or inadvisable to market the Shares or to
enforce contracts for the sale of the Shares, or (vi) subsequent to the date
the Registration Statement is declared effective or the date of this
Agreement, any material adverse change on the business, prospects, financial
condition or results of operations of the Company occurs which, in DLJ's
judgment, makes it impracticable or inadvisable to market the Shares or to
enforce contracts for the sale of the Shares.
If on the Closing Date or on any Option Closing Date, as the case
may be, any one or more of the Underwriters shall fail or refuse to purchase
the Firm Shares or Additional Shares, as the case may be, which it has or
they have agreed to purchase hereunder on such date, and the aggregate number
of Firm Shares or Additional Shares, as the case may be, which such
defaulting Underwriter or Underwriters
29
agreed but failed or refused to purchase on such date is not more than
one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters; each
non-defaulting Underwriter shall be obligated severally, in the proportion
which the number of Firm Shares set forth on Schedule I bears to the total
number of Firm Shares which all the non-defaulting Underwriters have agreed
to purchase, or in such other proportion as you may specify, to purchase the
Firm Shares or Additional Shares, as the case may be, which the defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused
to purchase on such date; provided that in no event shall the number of Firm
Shares or Additional Shares, as the case may be, which any Underwriter has
agreed to purchase pursuant to Section 2 hereof be increased pursuant to this
Section 9 by any amount, without the written consent of such Underwriter. If
on the Closing Date or the Option Closing Date, as applicable, any
Underwriter shall fail or refuse to purchase the 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 such Firm Shares to be
purchased on such date by all of the Underwriters and arrangements
satisfactory to you and the Company for the purchase of such Firm Shares are
not made within 48 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter and the
Company except as provided in this Section 9. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Date or the Option Date, as the case
may be, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. If, on any Option
Closing Date, any Underwriter or Underwriters shall fail or refuse to
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 date, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation
hereunder to purchase such Additional Shares or (ii) purchase not less than
the number of Additional Shares that such non-defaulting Underwriters would
have been obligated to purchase on such date 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 any such Underwriter
under this Agreement.
Section 10. Miscellaneous. Notices given pursuant to any provision
of this Agreement shall be addressed as follows: (i) if to the Company, to
Big City Radio, Inc., 00 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx, 00000,
Attention: President, with a copy to (which shall not constitute notice)
Xxxx, Weiss, Rifkind, Xxxxxxx &
30
Xxxxxxxx, 1285 Avenue of the Americas, New York, New York 10019-6064,
Attention: Xxxxx X. Xxxxx and further copy (which shall not constitute
notice) to Metromedia Company, Xxx Xxxxxxxxxxx Xxxxx, Xxxx Xxxxxxxxxx, Xxx
Xxxxxx 00000-0000, Attention: Xx. Xxxxxx X. Xxxxxx and (ii) if to any
Underwriter, c/x Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department with
a copy to (which shall not constitute notice) Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxxxxxx X. Xxxxxxx, or in any case to such other address as the person to be
notified may have requested in writing.
The indemnity and contribution provisions and the other agreements,
representations, warranties and other statements of the Company and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of
and payment for the Shares, regardless of (i) any investigation, or statement
as to the results thereof, made by or on behalf of any Underwriter, the
officers or directors of any Underwriter any person controlling any
Underwriter, the Company, the officers or directors of the Company or any
person controlling the Company, (ii) acceptance of the Shares and payment for
them hereunder, and (iii) termination of this Agreement.
If for any reason the Shares are not delivered by or on behalf of
the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 9), except pursuant to clause (vi) of the
second paragraph of Section 9, the Company agrees to reimburse the several
Underwriters for all reasonable and documented out-of-pocket expenses
(including the reasonable fees and disbursements of counsel) incurred by
them. Notwithstanding any termination of this Agreement, the Company shall
be liable for all expenses which it has agreed to pay pursuant to Section
5(i) hereof. The Company also agrees to reimburse the several Underwriters,
their directors and officers and any persons controlling any of the
Underwriters for any and all fees and expenses (including, without
limitation, the reasonable fees disbursements of one counsel) incurred by it
in connection with enforcing their rights hereunder (including, without
limitation, pursuant to Section 7 hereof).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriters, the Underwriters' directors and officers, and controlling
persons referred to herein, the Company's directors and the Company's
officers who sign the Registration Statement and their respective successors
and assigns, all as and to the extent provided in this
31
Agreement, and no other person shall acquire or have any right or obligation
under or by virtue of this Agreement. The term "successors and assigns"
shall not include a purchaser of any of the Shares from any of the several
Underwriters merely because of such purchase.
This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof.
If any provision of this Agreement is held invalid or unenforceable
by any court of competent jurisdiction, the other provisions of this
Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE AND
PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAW. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF
NEW YORK, THE BOROUGH OF MANHATTAN IN CONNECTION WITH ANY SUIT, ACTION OR
PROCEEDING RELATED TO THIS AGREEMENT OR ANY OF THE MATTERS CONTEMPLATED
HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL JURISDICTION AND
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE COMPANY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
32
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
BIG CITY RADIO, INC.
By:
-----------------------------------
Name:
Title:
By: XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXX XXXX, LLC
Acting on behalf of themselves and the several
Underwriters named in Schedule I
By: XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By:
------------------------------
SCHEDULE I
Number of
Firm Shares
Underwriter to be Purchased
----------- ---------------
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
Xxxxxx Xxxx LLC
---------------
I-1
