3,000,000 Shares
XXXXXXXX BROADCAST GROUP, INC.
$3.00 Convertible Exchangeable Preferred Stock
UNDERWRITING AGREEMENT
September 17, 1997
XXXXX XXXXXX INC.
BT ALEX. XXXXX INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
SALOMON BROTHERS INC
CHASE SECURITIES INC.
XXXXXX XXXX LLC
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxxxxx Broadcast Group, Inc., a Maryland corporation (the "Company"),
proposes to issue and sell an aggregate of 3,000,000 shares of its $3.00 Series
D Convertible Exchangeable Preferred Stock, par value $0.01 per share (the
"Preferred Stock"), to Xxxxx Xxxxxx Inc., BT Alex. Xxxxx Incorporated, Credit
Suisse First Boston Corporation, Salomon Brothers Inc, Chase Securities Inc. and
Xxxxxx Xxxx LLC (the "Underwriters"). The Preferred Stock will be convertible
into shares of Class A Common Stock, par value $.01 per share, of the Company
("Class A Common Stock") as set forth in the Articles Supplementary to the
Amended and Restated Articles of Incorporation of the Company as amended
governing the Preferred Stock (the "Articles Supplementary"). Also, on any
dividend payment date on or after December 15, 2000, the Preferred Stock will be
exchangeable at the option of the Company, in whole but not in part, for 6.00%
Convertible Subordinated Exchange Debentures due September 15, 2012 (the
"Exchange Debentures") in a principal amount equal to $50 per share of Preferred
Stock, provided that all accrued dividends (whether or not declared) have been
paid. The Exchange Debentures will be issued pursuant to an indenture (the "Base
Indenture" and as supplemented by a supplemental indenture, the "Indenture")
between the Company and First Union National Bank, as trustee (the "Trustee").
The 3,000,000 shares of Preferred Stock to be issued and sold to the
Underwriters by the Company are hereinafter referred to as the "Firm Shares."
The Company also proposes to sell to the Underwriters, upon the terms and
conditions set forth in Section 2 hereof, up to an additional 450,000 shares of
Preferred Stock (the "Additional Shares"). The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "Shares" and the Shares
and the Exchange Debentures are hereinafter referred to as the "Securities."
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The Company wishes to confirm as follows its respective agreements with you
and the other several Underwriters on whose behalf you are acting, in connection
with the several purchases of the Shares by the Underwriters.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Commission in accordance with the provisions of the Securities
Act of 1933, as amended (the "Act"), a registration statement on Form S-3 under
the Act (the "registration statement"), including a prospectus, and a prospectus
supplement subject to completion, relating to the Securities. The term
"Registration Statement" as used in this Agreement means the registration
statement (including all financial schedules and exhibits), as amended at the
time it becomes effective, or, if the registration statement became effective
prior to the execution of this Agreement, as supplemented or amended prior to
the execution of this Agreement and shall include in any such case the
information, if any, deemed to be a part of such registration statement pursuant
to Rule 430A(b) under the Act. If it is contemplated, at the time this Agreement
is executed, that a post-effective amendment to the registration statement will
be filed and must be declared effective before the offering of the Securities
may commence, the term "Registration Statement" as used in this Agreement means
the registration statement as amended by said post-effective amendment and
including the information, if any, deemed to be a part thereof pursuant to Rule
430A(b), under the Act. If the Company files a registration statement to
register a portion of the Securities pursuant to Rule 462(b) under the Act (the
"Rule 462(b) Registration Statement"), then after such filing the term
"Registration Statement" in this Agreement shall be deemed to include the Rule
462(b) Registration Statement at the time it became effective. The term
"Prospectus" as used in this Agreement means the prospectus, including any
prospectus supplement relating to the offering of the Securities, in the forms
included in the Registration Statement, or, if the prospectus included in the
Registration Statement omits information in reliance on Rule 430A under the Act
and such information is included in prospectuses filed with the Commission
pursuant to Rule 424(b) under the Act, the term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement as supplemented by the addition of the Rule 430A information contained
in the prospectuses filed with the Commission pursuant to Rule 424(b). The term
"Prepricing Prospectus" as used in this Agreement means the prospectus
(including any preliminary prospectus supplement relating to the offering of the
Securities) subject to completion in the form included in the Registration
Statement at the time of the filing of any preliminary prospectus supplement as
part of the Registration Statement with the Commission, and as such prospectus
shall have been amended from time to time prior to the date of the Prospectus.
Any reference in this Agreement to the registration statement, the Registration
Statement, any Prepricing Prospectus 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 under the Act, as of the date of the registration statement, the
Registration Statement, such Prepricing Prospectus or the Prospectus, as the
case may be, and any reference to any amendment or Prepricing Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed after
such date under the Securities Exchange
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Act of 1934, as amended (the "Exchange Act") which, upon filing, are
incorporated by reference therein, as required by paragraph (b) of Item 12 of
Form S-3. As used herein, the term "Incorporated Documents" means the documents
which at the time are incorporated by referencetration statement, the
Registration Statement, any Prepricing Prospectus, the Prospectus, or any
amendment or supplement thereto; "Rules and Regulations" means the rules and
regulations adopted by the Commission under either the Act or the Exchange Act,
as applicable; and "Person" means any individual, partnership, joint venture,
corporation, limited liability company, trust, unincorporated organization or
government or department or agency thereof.
2. Agreements to Sell and Purchase. Subject to such adjustments as you may
determine in order to avoid fractional shares, the Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not jointly,
to purchase from the Company, at a purchase price of $48.625 per Share (the
"Purchase Price Per Share"), the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto (or such number of Firm Shares
increased as set forth in Section 12 hereof).
The Company also agrees, subject to all the terms and conditions set forth
herein, to sell to the Underwriters, and, upon the basis of the representations,
warranties and agreements of the Company herein contained and subject to all the
terms and conditions set forth herein, the Underwriters shall have the right to
purchase from the Company, pursuant to an option (the "over-allotment option")
which may be exercised at any time and from time to time prior to 9:00 P.M., New
York City time, on the 30th day after the date of the Prospectus (or, if such
30th day shall be a Saturday or Sunday or a holiday, on the next business day
thereafter when the New York Stock Exchange is open for trading), up to 450,000
Additional Shares from the Company, at the Purchase Price Percrued dividends
(whether or not declared) from the Closing Date (as defined below) to the Option
Closing Date (as defined below) for such Additional Shares. Additional Shares
may be purchased only for the purpose of covering over-allotments made in
connection with the offering of the Shares. Upon any exercise of the
over-allotment option, each Underwriter, severally and not jointly, agrees to
purchase from the Company the number of Additional Shares which bears the same
proportion to the total number of Additional Shares being sold by the Company
pursuant to the over-allotment option as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule II hereto (or such number of
Firm Shares increased as set forth in Section 12 hereof) bears to the aggregate
number of Firm Shares to be sold by the Company (3,000,000).
3. Terms of Public Offering. The Company has been advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in
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your judgment is advisable and initially to offer the Shares upon the terms set
forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office of
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, at 9:00 A.M., New
York City time, on September 23, 1997 (the "Closing Date"). The place of closing
for the Firm Shares and the Closing Date 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 the aforementioned office of
Xxxxx Xxxxxx Inc. at such time on such date (the "Option Closing Date"), which
may be the same as the Closing Dtwo nor later than ten business days after the
giving of the notice hereinafter referred to, as shall be specified in a written
notice from you on behalf of the Underwriters to the Company of the
Underwriters' determination to purchase a number, specified in such notice, of
Additional Shares. The place of closing for any Additional Shares and the Option
Closing Date for such Shares may be varied by agreement between you and the
Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request by written notice (it being understood that a facsimile
transmission shall be deemed written notice) prior to 9:30 A.M., New York City
time, on the second business day preceding the Closing Date or any Option
Closing Date, as the case may be. Such certificates shall be made available to
you in New York City for inspection and packaging not later than 9:30 A.M., New
York City time, on the business day next preceding the Closing Date or the
Option Closing Date, as the case may be. The certificates evidencing the Firm
Shares and any Additional Shares to be purchased hereunder shall be delivered to
you on the Closing Date or the Option Closing Date, as the case may be, against
payment of the purchase price therefor in immediately available funds to the
order of the Company.
5. Agreements of the Company. The Company agrees with the several
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
Company will endeavor to cause the Registration Statement or such post-effective
amendment to become effective as soon as possible and will advise you promptly
and, if requested by you, will confirm such advice in writing, when the
Registration Statement or such post-effective amendment has become effective.
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(b) The Company will advise you promptly and, if requested by you, will
confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or 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 purpose; and (iii) within the period of time referred to in paragraph (f)
below, of any change in the Company's condition (financial or otherwise),
business, prospects, properties, net worth or results of operations, or of the
happening of any event, including the filing of any information, documents or
reports pursuant to the Exchange Act, which makes any statement of a material
fact made in the Registration Statement or the Prospectus (as then amended or
supplemented) untrue or which requires the making of any additions to or changes
in the Registration Statement or the Prospectus (as then amended or
supplemented) in order to state a material fact required by the Act or the
regulations thereunder to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Prospectus (as then amended or supplemented) to comply with the Act or anl
issue any stop order suspending the effectiveness of the Registration Statement,
the Company will make every reasonable effort to obtain the withdrawal of such
order at the earliest possible time.
(c) The Company will furnish to you, without charge (i) six signed copies
of the Registration Statement as originally filed with the Commission and of
each amendment thereto, including financial statements and all exhibits thereto,
(ii) such number of conformed copies of the Registration Statement as originally
filed and of each amendment thereto, but without exhibits, as you may reasonably
request, (iii) such number of copies of the Incorporated Documents, without
exhibits, as you may request, and (iv) six copies of the exhibits to the
Incorporated Documents.
(d) So long as, in the opinion of counsel for the Underwriters, a
Prospectus is required to be delivered in connection with sales by any
Underwriter or dealer, the Company will not (i) file any amendment to the
Registration Statement, make any amendment or supplement to the Prospectus or
file any document which, upon filing becomes an Incorporated Document, of which
you shall not previously have been advised or to which you shall reasonably
object after being so advised or (ii) file any information, documents or reports
pursuant to the Exchange Act without delivering a copy of such information,
documents or reports to you, as the several Underwriters, prior to such filing.
(e) Prior to the execution and delivery of this Agreement, the Company has
delivered to you, without charge, in such quantities as you have reasonably
requested, copies of each form of the Prepricing Prospectus. The Company
consents to the use, in accordance with the provisions of the Act and with the
securities or Blue Sky laws of the jurisdictions in which the Shares are
offered, by the several Underwriters and by dealers,
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prior to the date of the Prospectus, of each Prepricing Prospectus so furnished
by the Company.
(f) As soon after the execution and delivery of this Agreement as possible
and thereafter from time to time for such period as in the opinion of counsel
for the Underwriters a Prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or dealer, the Company will
expeditiously deliver to each Underwriter and each dealer, without charge, as
many copies of the Prospectus (and of any amendment or supplement thereto) as
you may reasonably request. The Company consents to the use of the Prospectus
(and of any amendment or supplement thereto), in accordance with the provisions
of the Act and with the securities or Blue Sky laws of the jurisdictions in
which the Shares are offered, by the several Underwriters and by all dealers to
whom Shares may be sold, both in connection with the offering and sale of the
Shares and for such period of time thereafter as the Prospectus is required by
the Act to be delivered in connection with sales by any Underwriter or dealer.
If during such period of time any event shall occur that in the judgment of the
Company or in the opinion of counsel for the Underwriters is required to be set
forth in the Prospectus (as then amended or supplemented) or should be set forth
therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the Prospectus (or to file under the Exchange Act any
document which, upon filing, becomes an Incorporated Document) to comply with
the Act or any other law, the Company will forthwith prepare and, subject to the
provisions of paragraph (d) above, file with the Commission an appropriate
supplement or amendment thereto or file an Incorporated Document, and will
expeditiously furnish to the Underwriters and dealers a reasonable number of
copies thereof. In the event that the Company and you, as the several
Underwriters, agree that the Prospectus should be amended or supplemented, the
Company, if requested by you, will promptly issue a press release announcing or
discmatters to be covered by the proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may reasonably
designate and will file such consents to service of process or other documents
necessary or appropriate in order to effect such registration or qualification;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to service of process in suits, other than those
arising out of the offering or sale of the Shares, in any jurisdiction where it
is not now so subject.
(h) The Company will make generally available to its security holders a
consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than fifteen months thereafter, as soon as
practicable after the end of such period,
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which consolidated earnings statement shall satisfy the provisions of Section
11(a) of the Act and the Rules and Regulations (including, at the option of the
Company, Rule 158).
(i) During the period of five years after the date of this Agreement, the
Company will furnish to you (i) as soon as available, a copy of each report of
the Company mailed to stockholders or filed with any stock exchange or
regulatory body and (ii) from time to time such other information concerning the
Company as you may reasonably request.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 10 hereof or by notice given by you terminating this
Agreement pursuant to Section 10 or Section 1erwriters because of any failure or
refusal on the part of the Company to comply with the terms or fulfill any of
the conditions of this Agreement, the Company agrees to reimburse the
Underwriters for all out-of-pocket expenses (including fees and expenses of
counsel for the Underwriters) incurred by you in connection herewith.
(k) The Company will apply the net proceeds from the sale of the Shares
substantially in accordance with the description set forth in the Prospectus.
(l) If Rule 430A of the Act is employed, the Company will timely file the
Prospectus in the proper manner pursuant to Rule 424(b) under the Act and will
advise you of the time and manner of such filing.
(m) Except as provided in this Agreement, the Company will not offer to
sell, sell, contract to sell or otherwise dispose of any common stock or
preferred stock of the Company ("Capital Stock") or any securities convertible
into or exercisable or exchangeable for Capital Stock, or grant any options or
warrants to purchase Capital Stock or such securities, for a period of 90 days
after the date of the Prospectus, without the prior written consent of Xxxxx
Xxxxxx Inc.
(n) The Company has furnished or will furnish to you "lock-up" letters, in
form and substance satisfactory to you, signed by each of its current officers
and directors and each of its stockholders designated by you.
(o) Except as stated in this Agreement and in the Prepricing Prospectus and
Prospectus, the Company has not taken, nor will it take, directly or indirectly,
any action designed to or that might reasonably be expected to cause or result
in stabilization or manipulation of the price of any shares of its capital stock
to facilitate the sale or resale of the Shares.
(p) The Company will use its reasonable and diligent efforts to have the
Shares listed, subject to notice of issuance of Shares, on the Nasdaq National
Market as soon as practicable following the execution of this Agreement.
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6. Representations and Warrant ies of the Company. The Company represents
and warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the Registration
Statement as originally filed or as part of any amendment or supplement thereto,
or filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the provisions of the Act. The Commission has not issued
any order preventing or suspending the use of any Prepricing Prospectus.
(b) The Company and the transactions contemplated by this Agreement meet
the requirements for using Form S-3 under the Act. The Registration Statement in
the form in which it became or becomes effective and also in such form as it may
be when any post-effective amendment thereto shall become effective and the
Prospectus and any supplement or amendment thereto when filed with the
Commission under Rule 424(b) under the Act, complied or will comply in all
material respects with the provisions of the Act and did not or will not at any
such times 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 not misleading; except that this representation and warranty does not
apply (i) to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information furnished to
the Company in writing by or on behalf of any Underwriter through you expressly
for use therein and (ii) to that part of the Registration Statement that
constitutes the Statement of Eligibility (Form T-1) under the Trust Indenture
Act of 1939, as amended (the "Form T-1").
(c) The Incorporated Documents heretofore filed, when they were filed (or,
if any amendment with respect to any such document was filed, when such
amendment was filed), conformed in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder, any further
Incorporatey are filed, conform in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder; no such document
when it was filed (or, if an amendment with respect to any such document was
filed, when such amendment was filed), contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading; and no such
further document, when it is filed, will contain an untrue statement of a
material fact or will omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading.
(d) All the outstanding shares of capital stock of the Company have been
duly authorized and validly issued, are fully paid and nonassessable and are
free of any preemptive or similar rights; the Shares to be issued and sold by
the Company have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with the terms hereof, will
be validly issued, fully paid and
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nonassessable and free of any preemptive or similar rights, and the capital
stock of the Company conforms to the description thereof in the Registration
Statement and the Prospectus. The shares of Class A Common Stock issuable upon
conversion of Preferred Stock or Exchange Debentures have been duly and validly
authorized and reserved for issuance upon such conversion by all necessary
corporate action and such shares of Class A Common Stock, when issued upon such
conversion, will be duly and validly issued, fully paid and non-assessable, and
the issuance of such shares upon such conversion will not be subject to
preemptive or other similar rights of any stockholder of the Company arising by
operation of law, under the charter or by-laws of the Company or under any
agreement to which the Company or any of its Subsidiaries is a party; and the
shares of Class A Common Stol material respects to the descriptions thereof
contained in the Prospectus.
(e)The Company is a corporation duly organized and validly existing in good
standing under the laws of the State of Maryland with full 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 is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
so to register or qualify would not have a material adverse effect on the
condition (financial or other), business, properties, net worth or results of
operations of the Company and the Subsidiaries (as hereinafter defined) taken as
a whole (a "Material Adverse Effect").
(f) All the Company's subsidiaries (collectively, the "Subsidiaries") are
listed on Exhibit A hereto. Each Subsidiary is a corporation or a trust duly
organized, validly existing and in good standing in the jurisdiction of its
incorporation or organization, as the case may be, with full 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 is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
so to register or qualify does not have a Material Adverse Effect; all the
outstanding shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable, and are owned
by the Company directly, or indirectly through one of the other Subsidiaries,
free and clear of any lien, adverse claim, security interest, equity or other
enhe Prospectus.
(g) The Company has full legal right, power and authority to enter into
this Agreement, the Exchange Debentures and the Indenture and to issue, sell and
deliver the Shares to be sold by it as provided herein. No consent, approval,
authorization, order, registration or qualification of or with any court or
governmental agency or body is required for the execution, delivery or
performance of this Agreement, the Exchange
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Debentures or the Indenture by the Company or the consummation by the Company or
any Subsidiary, as the case may be, of the transactions contemplated hereby, in
the Exchange Debentures or in the Indenture, except such as may be required
under the Act, the Exchange Act and state securities or blue sky laws or by the
National Association of Securities Dealers, Inc. The execution, delivery and
performance of this Agreement, the Articles Supplementary, the Indenture if and
when executed and, if and when issued, the Exchange Debentures by the Company
and the consummation by the Company or any Subsidiary, as the case may be, of
the transactions contemplated hereby and thereby does not and will not conflict
with or result in a breach or violation by the Company of any of the terms or
provisions of, constitute a default by the Company under, or result in the
creation or imposition of any lien, charge, security interest or encumbrance
upon any of the assets of the Company or any Subsidiary pursuant to the terms of
any (A) indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or any of the Subsidiaries, as the
case may be, is a party or to which any of them or any of their respective
properties is subject, (B) the charter or bylaws of the Company or any of the
Subsidiaries, as the case may be, or (C) any statute, judgment, decree, order,
rule or regulation of any court or governmental agency or body applicable to the
Company or any of the Subsidiaries or any of their respective properties.
(h) The execution and delivery of, and the performance by the Company of
its obligations under, this Agreement have been duly authorized by all necessary
corporate action on the part of the Company, and this Agreement has been duly
executed and delivered by the Company. The Articles Supplementary have been duly
authorized by all necessary corporate and stockholder action. The Shares have
been duly authorized, and, when issued and delivered to the Underwriters against
payment therefor in accordance with the terms hereof, are validly issued, fully
paid and non-assessable, and free of any preemptive or similar rights; the
Preferred Stock conforms to the description thereof in the Prospectus; the
Preferred Stock has the rights set forth in the Articles Supplementary, and the
terms of the Preferred Stock are valid and binding on the Company. The execution
and delivery of the Indenture will be duly authorized by all necessary corporate
action on the part of the Company, and when executed and delivered by the
Company, and assuming due authorization, execution and delivery by the Trustee,
will be a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally,
and subject, as to enforceability, to general principles of equity. The
issuance, execution and delivery of the Exchange Debentures if and when issued
will be duly authorized by all necessary corporate action of the Company and, if
and when executed, issued and delivered by the Company and authenticated by the
Trustee, the Exchange Debentures will be the legal, valid, binding and
enforceable obligations of the Company entitled to the benefits of the
Indenture, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally, and subject, as to enforceability, to
general principles of equity. The Exchange Debentures and the Indenture conform
to the descriptions therescribed or referred to in the Prospectus.
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(i) Except as described or referred to in the Prospectus, there is not
pending or to the knowledge of the Company threatened, any action, suit,
proceeding, inquiry or investigation, to which the Company or any of the
Subsidiaries is a party, or to which the property of the Company or any of the
Subsidiaries is subject, before or brought by any court or governmental agency
or body, which, if determined adversely to the Company or any of the
Subsidiaries would individually or in the aggregate result in a Material Adverse
Effect or might materially adversely affect the consummation of the transactions
contemplated by this Agreement; and all pending legal or governmental
proceedings to which the Company or any of the Subsidiaries is a party or that
affect any of their respective properties, that are not described in the
Prospectus or the Incorporated Documents, including ordinary routine litigation
incidental to the business, would not, if determined adversely to the Company or
any of the Subsidiaries, individually or in the aggregate, result in a Material
Adverse Effect.
(j) Neither the Company nor any of the Subsidiaries is in violation of its
certificate or articles of incorporation or bylaws, or other organizational
documents, or of any law, ordinance, administrative or governmental rule or
regulation applicable to the Company or any of the Subsidiaries or of any decree
of any court or governmental agency or body having jurisdiction over the Company
or any of the 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 agreement,
indenture, lease or other instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of their respective
properties may be bound and no condition or state of facts exists, with which
the passage of time or the giving of notice or both would constitute such a
would not, singly or in the aggregate, have a Material Adverse Effect.
(k) There are no agreements, contracts, indentures, leases or other
instruments that are 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 described or filed as required by the Act.
(l) The accountants, Xxxxxx Xxxxxxxx LLP, Ernst & Young LLP, KPMG Peat
Marwick LLP and Price Waterhouse LLP, who have certified or shall certify the
financial statements included in or incorporated by reference in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto), are independent public accountants as required by the Act.
(m) The consolidated financial statements, together with the related
schedules and notes included in or incorporated by reference in the Registration
Statement and the Prospectus present fairly the consolidated financial position,
results of operations and changes in financial position of the entities
purported to be shown thereby at the dates and for the periods indicated and
have been prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis, except
11
as otherwise stated therein. The selected financial data and summary financial
data included in or incorporated by reference in the Registration Statement and
the Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited consolidated financial
statements included in the Registration Statement and the Prospectus. The pro
forma financial statements and other pro forma financial information included in
or incorporated by reference in the Registration Statement and the Prospectus
present fairly the information shown therein in accordance with the adjustments
and assumptions described therein, have been prepared in accordance with the
Commission's rules and guidelines with reiled on the pro forma basis described
therein and in the opinion of the Company, 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.
(n) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement thereto), subsequent to the respective dates as
of which such information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), neither the Company nor any
of the Subsidiaries has incurred any liability or obligation, direct or
contingent, or entered into any transaction, not in the ordinary course of
business, that is material to the Company and the Subsidiaries taken as a whole,
and there has not been any change in the capital stock, or material increase in
the short-term debt or long-term debt, of the Company or any of the
Subsidiaries, or any material adverse change, or any development involving or
which may reasonably be expected to involve, a prospective material adverse
change, in the condition (financial or other), business, net worth or results of
operations of the Company and the Subsidiaries taken as a whole.
(o) Each of the Company and the Subsidiaries has good and marketable title
to all property (real and personal) described in the Prospectus as being owned
by it, free and clear of all liens, claims, security interests or other
encumbrances, except such as are described in the Registration Statement and the
Prospectus or with such exceptions as are not material and do not interfere with
the use made and proposed to be made of such properties by the Company and the
Subsidiaries and could not reasonably be expected individually or in the
aggregate to result in a Material Adverse Effect; and all of the leases and
subleases material to the business of the Company and the Subsidiaries taken as
a whole, and under which the Company t described in the Registration Statement
and the Prospectus, are in full force and effect and neither the Company nor any
of the Subsidiaries has any notice of any claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any of the
Subsidiaries under any of the leases or subleases mentioned above, or affecting
or questioning the rights of the Company or any of the Subsidiaries to the
continued possession of the leased or subleased premises under any such lease or
sublease, which claim could reasonably be expected individually or in the
aggregate to result in a Material Adverse Effect.
12
(p) Each of the Company and the Subsidiaries owns or possesses, or can
acquire on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, trademarks, service marks, trade names and know-how
(including trade secrets and other patentable and/or unpatentable proprietary or
confidential information or procedures) (collectively, "intellectual property")
necessary to carry on its business as presently operated by it, except where the
failure to own or possess or have the ability to acquire any such intellectual
property would not individually or in the aggregate result in a Material Adverse
Effect; and none of the Company or any of the Subsidiaries has received any
notice or is otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any intellectual property or of any facts which
would render any intellectual property invalid or inadequate to protect the
interest of the Company or any of the Subsidiaries therein and which
infringement or conflict could reasonably be expected in the aggregate to result
in a Material Adverse Effect.
(q) The Company has not distributed and, prior to the later to occur of (i)
the Closing Date and (ii) completion of the distribution of the Shares, will not
distribute any offering material in connection with the offering and sing
Prospectus, the Prospectus or other materials, if any, permitted by the Act.
None of the Company or any of the Subsidiaries has taken, or will take, directly
or indirectly, any action designed to, or that might reasonably be expected to,
cause or result in stabilization or manipulation of the price of the Shares or
any shares of capital stock of the Company.
(r) Except as described in or contemplated by the Prospectus, each of the
Company and the Subsidiaries owns or possesses all governmental licenses,
permits, certificates, consents, orders, approvals and other authorizations
necessary to own its properties and to conduct its business in the manner
described in the Prospectus, except where the failure to own or possess such
licenses, permits, certificates, consents, orders, approvals and other
authorizations (collectively, "Material Licenses") would not individually or in
the aggregate result in a Material Adverse Effect; all of the Material Licenses
are valid and in full force and effect; and no event, including receipt of
notice of proceedings relating to revocation or modification of any Material
Licenses, has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or result in any other material
impairment of the rights of any holder of any such Material License, subject in
each case to such qualifications as may be set forth in the Prospectus.
(s) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (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 authorization; and (iv) the
recorded accountability for assets is compared with existing
13
assets at reasonable intervals and appropriate action is taken with respect to
any differences.
(t) To the best of the Company's knowledge, neither the Company nor any of
its Subsidiaries nor any employee or agent of the Company or any Subsidiary has
made any payment of funds of the Company or any Subsidiary or received or
retained any funds in violation of any law, rule or regulation, which payment,
receipt or retention of funds is of a character required to be disclosed in the
Prospectus.
(u) Except as disclosed in the Prospectus, all United States federal income
tax returns of the Company and the Subsidiaries required by law to be filed have
been filed (taking into account extensions granted by the applicable federal
governmental agency) and all taxes shown by such returns or otherwise assessed,
which are due and payable, have been paid, except for such taxes, if any, as are
being contested in good faith and as to which adequate reserves have been
provided and except for such taxes the payment of which would not individually
or in the aggregate result in a Material Adverse Effect. All other corporate
franchise and income tax returns of the Company and the Subsidiaries required to
be filed pursuant to applicable foreign, state or local law have been filed
except insofar as the failure to file such returns would not individually or in
the aggregate result in a Material Adverse Effect, and all taxes shown on such
returns or otherwise assessed which are due and payable have been paid, except
for such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided and except for such taxes the payment of
which would not individually or in the aggregate result in a Material Adverse
Effect.
(v) Except for rights which have been waived, no holder of any security of
the Company or any Subsidiary has any right to require registration of shares of
capital stock or any other security of the Company because of consummation of
the transactions ce. Except as described or incorporated by reference in or
contemplated by the Prospectus, there are no outstanding options, warrants or
other rights calling for the issuance of, and there are no commitments, plans or
arrangements to issue, any shares of capital stock or debt securities of the
Company or any security convertible into or exchangeable or exercisable for
capital stock or debt securities of the Company.
(w) Each of the Company and the Subsidiaries is not now, and after sale of
the Shares as contemplated hereunder and application of the net proceeds from
such sale as described in the Prospectus under the caption "Use of Proceeds"
will not be, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act").
(x) The Company has filed in a timely manner each document or report
required to be filed by it pursuant to the Exchange Act and the rules and
regulations thereunder; each such document or report (including any financial
statements) and any amendment thereto at the time it was filed conformed to the
requirements of the
14
Exchange Act and the rules and regulations thereunder; and none of such
documents or reports contained an untrue statement of any material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
(y) Except as described in the Prospectus, the Company and the Subsidiaries
comply in all material respects with all Environmental Laws (as defined below),
except to the extent that failure to comply with such Environmental Laws would
not individually or in the aggregate result in a Material Adverse Effect. To the
knowledge of the Company, none of the Company or any of the Subsidiaries is the
subject of any pending or, to the knowledge of the Company, threatened federal,
state or local investigation evaluating whether any remedial action by the
Company or any of the Subsidiaries is needed to respond to a release of any
Hazefined below) into the environment, resulting from the Company's or any of
the Subsidiaries' business operations or ownership or possession of any of their
properties or assets or is in contravention of any Environmental Law that could
reasonably be expected individually or in the aggregate to result in a Material
Adverse Effect. None of the Company or any of the Subsidiaries have received any
notice or claim, nor are there pending or, to the knowledge of the Company,
threatened lawsuits against them, with respect to violations of an Environmental
Law or in connection with any release of any Hazardous Material into the
environment that could reasonably be expected in the aggregate to result in a
Material Adverse Effect. As used herein, "Environmental Laws" means any federal,
state or local law or regulation applicable to the Company's or any of the
Subsidiaries' business operation or ownership or possession of any of their
properties or assets relating to environmental matters, and "Hazardous
Materials" means those substances that are regulated by or form the basis of
liability under any Environmental Laws.
(z) No labor problem exists with the employees of the Company or any of the
Subsidiaries or, to the knowledge of the Company, is imminent that, in either
case, could reasonably be expected individually or in the aggregate to result in
a Material Adverse Effect.
(aa) The Company and each of the Subsidiaries maintain insurance of the
types and in the amounts that are reasonable for the businesses operated by
them, including, but not limited to, insurance covering real and personal
property owned or leased by the Company and the Subsidiaries against theft,
damage, destruction, acts of vandalism, liability and malpractice, all of which
insurance is in full force and effect.
(bb) The Company and each of the Subsidiaries is in compliance with, and
each such entity has not received any notice of any outstanding violation of,
all laws, regulations, ordinances and rules applicable to it and its operations,
except, in either case, where any failure by the Company or any of the
Subsidiaries to comply with any such law, regulation, ordinance or rule would
not individually or in the aggregate result in a Material Adverse Effect.
15
(cc) There are no business relationships or related-party transactions of
the nature described in Item 404 of Regulation S-K involving the Company or any
of its Subsidiaries and any person described in such Item that are required to
be disclosed in the Prospectus and which have not been so disclosed.
(dd) To the best of the Company's knowledge, each of Baltimore (WNUV-TV)
Licensee, Inc. as the licensee of WNUV-TV, Baltimore, Maryland; WVTV Licensee,
Inc. as the licensee of WVTV(TV), Milwaukee, Wisconsin; WPTT, Inc. as the
licensee of WPTT(TV), Pittsburgh, Pennsylvania; Raleigh (WRDC-TV) Licensee, Inc.
as the licensee of WRDC(TV), Durham, North Carolina; River City License
Partnership as the licensee of WTTV(TV), Bloomington, Indiana and WTTK(TV),
Kokomo, Indiana; Anderson (WFBC-TV) Licensee, Inc. as the licensee of WFBC-TV,
Anderson, South Carolina; San Antonio (KRRT-TV) Licensee, Inc. as the licensee
of KRRT(TV), Kerrville, Texas; Tiab Communications Corporation as the licensee
of XXXX(AM), Mt. Pocono, Pennsylvania; WDBB-TV, Inc. as the licensee of
WDBB(TV), Tuscaloosa, Alabama; and Birmingham (WABM-TV) Licensee, Inc. as the
licensee of WABM(TV), Birmingham, Alabama (each individually an "LMA Station"
and together the "LMA Stations") owns or possesses all governmental licenses,
permits, certificates, consents, orders, approvals and other authorizations
necessary to own its properties (collectively, the "LMA Material Licenses"), and
to conduct its business in the manner described in the Prospectus, except where
the failure to own or possess such licenses, permits, certificates, consents,
orders, approvals and other authorizations would not individually or in the
aggregate result in any Material Adverse Eare valid and in full force and
effect; and no event, including receipt of notice of proceedings relating to
revocation or modification of any LMA Material License, has occurred which
allows, or after notice or lapse of time would allow, revocation or termination
thereof or result in any other material impairment of the rights of any holder
of any such permit, subject in each case to such qualifications as may be set
forth in the Prospectus; and, except as described in the Prospectus, none of
such permits contains any restriction that is materially burdensome to the LMA
Station or the Company and the Subsidiaries; and there is in full force and
effect with each LMA Station a contract, enforceable in accordance with its
terms against the Company and against the LMA Station pursuant to which the
Company provides programming services to the LMA Station as described or except
as described in the Incorporated Documents.
(ee) The execution and delivery of the Heritage Acquisition Agreements (as
defined in the Prospectus) by the Company have been duly authorized by all
necessary corporate action. The Heritage Acquisition Agreements have been duly
executed and delivered by the Company and after execution and delivery by the
other parties thereto are the legal, valid, binding and enforceable obligations
of the parties thereto. There have been no amendments to the Heritage
Acquisition Agreements subsequent to the date thereof.
16
(ff) The execution and delivery of the Underwriting Agreement, dated
September 17, 1997 (the "Common Underwriting Agreement") among the Company,
certain stockholders of the Company and certain underwriters, relating to the
sale of 5,300,000 shares of Class A Common Stock of the Company, by the Company
have been duly authorized by all necessary corporate action. The Common
Underwriting Agreement has been duly executed and delivered by the Company and
when executed and delivered by the Underwriters will be the legal, approval,
authorization, order, registration or qualification of or with any court or
governmental agency or body is required for the execution, delivery or
performance of the Common Underwriting Agreement by the Company or the
consummation by the Company of the transactions contemplated thereby, except
such as may be required under the Act, the Exchange Act and state securities or
blue sky laws or by the National Association of Securities Dealers, Inc. (the
"NASD") The execution, delivery and performance of the Common Underwriting
Agreement by the Company and the consummation by the Company or any Subsidiary,
as the case may be, of the transactions contemplated thereby does not and will
not conflict with or result in a breach or violation by the Company of any of
the terms or provisions of, constitute a default by the Company under, or result
in the creation or imposition of any lien, charge, security interest or
encumbrance upon any of the assets of the Company or any Subsidiary pursuant to
the terms of any (A) indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which the Company or any of the
Subsidiaries, as the case may be, is a party or to which any of them or any of
their respective properties is subject, (B) the charter or bylaws of the Company
or any of the Subsidiaries, as the case may be, or (C) any statute, judgment,
decree, order, rule or regulation of any court or governmental agency or body
applicable to the Company or any of the Subsidiaries or any of their respective
properties. The representations and warranties made by the Company in the Common
Underwriting Agreement are true, complete and correct.
(gg) Neither the issuance of, exchange involving or delivery of the
Exchange Debentures nor the application of the proceeds thereof by the Company
as set forth in the Prospectus will violate Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System or any other regulation of such
Board of Governers.
(hh)Each of the Company and the Subsidiaries is, and immediately after the
issuance of the Exchange Debentures will be, Solvent. As used herein, the term
"Solvent" means, with respect to any such entity on a particular date, that on
such date (A) the fair market value of the assets of such entity is greater than
the amount that will be required to pay the probable liabilities of such entity
on its debts as they become absolute and matured, (B) such entity is able to
realize upon its assets and pay its debts and other liabilities, including
contingent obligations, as they mature and (C) such entity does not have
unreasonably small capital to carry out such entities' business as now
conducted, taking into account such entities' projected capital requirements and
availability.
17
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each of you and each
other Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act from
and against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prepricing Prospectus or the Prospectus or in any
amendment or supplement thereto, or arising out of or based upon 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 expenses arise out of or are based
upon any untrue statement or omission or alleged untrue statement or omission
which has been made therein or omitted therefrom in reliance upon and in
conformity with the information furnished in writing to the Company by or on
behalf of any Underwriter through you expressly for use in connection therewi
however, that the indemnification contained in this paragraph (a) with respect
to any Prepricing Prospectus shall not inure to the benefit of any Underwriter
(or to the benefit of any person controlling such Underwriter) on account of any
such loss, claim, damage, liability or expense arising from the sale of the
Shares by such Underwriter to any person if a copy of the Prospectus shall not
have been delivered or sent to such person within the time required by the Act
and the regulations thereunder, and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in such
Prepricing Prospectus was corrected in the Prospectus, provided that the Company
has delivered the Prospectus to the several Underwriters in requisite quantity
on a timely basis to permit such delivery or sending. The foregoing indemnity
agreement shall be in addition to any liability which the Company may otherwise
have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company, such Underwriter or such
controlling person shall promptly notify the party against whom indemnification
is being sought (the "indemnifying parties"), and such indemnifying parties
shall assume the defense thereof, including the employment of counsel and
payment of all fees and expenses. Such Underwriter or any such controlling
person shall have the right to employ separate counsel in any such action, suit
or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or such
controlling person unless (i) the indemnifying parties have agreed in writing to
pay such fees and expenses, (ii) the indemnifying parties have failed to assume
the defense and employ counsel or (iii) the named parties to any such action,
suit or proceeding (including any impleaded parties)ling person and the
indemnifying parties and such Underwriter or such controlling person shall have
been advised by its counsel that representation of such indemnified party and
any indemnifying party by the same counsel would be inappropriate under
applicable
18
standards of professional conduct (whether or not such representation by the
same counsel has been proposed) due to actual or potential differing interests
between them (in which case the indemnifying party shall not have the right to
assume the defense of such action, suit or proceeding on behalf of such
Underwriter or such controlling person). It is understood, however, that the
indemnifying parties shall, in connection with any one such action, suit or
proceeding or separate but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Underwriters and controlling persons not having actual or potential
differing interests with you or among themselves, which firm shall be designated
in writing by Xxxxx Xxxxxx Inc., and that all such reasonable fees and expenses
shall be reimbursed as they are incurred. The indemnifying parties shall not be
liable for any settlement of any such action, suit or proceeding effected
without their written consent, but if settled with such written consent, or if
there be a final judgment for the plaintiff in any such action, suit or
proceeding, the indemnifying parties agree to indemnify and hold harmless any
Underwriter, to the extent provided in the preceding paragraph, and any such
controlling person from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
(c) Each Underwriter severally agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration State within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act to the
same extent as the foregoing indemnity from the Company to each Underwriter, but
only with respect to information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter through you expressly for use in the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto. If any action, suit or proceeding shall be
brought against the Company, any of its directors, any such officer or any such
controlling person based on the Registration Statement, the Prospectus or any
Prepricing Prospectus, or any amendment or supplement thereto, and in respect of
which indemnity may be sought against any Underwriter pursuant to this paragraph
(c), such Underwriter shall have the rights and duties given to the Company by
paragraph (b) above (except that if the Company shall have assumed the defense
thereof such Underwriter shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at such Underwriter's expense), and the
Company, its directors, any of such officers and any such controlling persons
shall have the rights and duties given to the Underwriters by paragraph (b)
above. The foregoing indemnity agreement shall be in addition to any liability
which the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 7 is unavailable to
an indemnified party under paragraphs (a) or (c) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by
19
such indemnified party as a result of such losses, claims, damages, liabilities
or expenses (i) in such proportion as is appropriate to reflect the relative
benefits received other hand from the offering of the Shares or (ii) if the
allocation provided by clause (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 (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 that resulted in such losses, claims, damages,
liabilities or expenses, 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 of the Shares (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus; provided that, in the event that the
Underwriters shall have purchased any Additional Shares hereunder, any
determination of the relative benefits received by the Company or the
Underwriters from the offering of the Shares shall include the net proceeds
(before deducting expenses) received by the Company and the underwriting
discounts and commissions received by the Underwriters, from the sale of such
Additional Shares, in each case computed on the basis of the respective amounts
set forth in the notes to 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
on the one hand or by the Underwriters on the other hand and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(e) The Company and the underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by a pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
any claim or defending any such action, suit or proceeding. 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 fees received (and not
reimbursed to the Company) by such Underwriter with respect to the Shares
underwritten by it and distributed 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 entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
20
The Underwriters' obligations to contribute pursuant to this Section 7 are
several in proportion to the respective numbers of Firm Shares set forth
opposite their names in Schedule I hereto (or such numbers of Firm Shares
increased as set forth in Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunincludes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding and (ii) does not
include a statement as to, or an admission of, fault, culpability or a failure
to act by or on behalf of any indemnified party.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any person
controlling the Company, (ii) acceptance of any Shares and payment therefor
hereunder and (iii) any termination of this Agreement. A successor to any
Underwriter or any person controlling any Underwriter, or to the Company, its
directors or officers or any person controlling the Company shall be entitled to
the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 7.
8. Conditions of Underwriters' Obligations. The several obligations of the
Underwriters to purchase the Firm Shares hereunder are subject to the following
conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
Registration Statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consenou, and all filings, if any,
required by Rules 424 and 430A under the Act shall have been timely made; 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,
to the knowledge of the Company or any Underwriter, threatened by the
Commission, and any request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to your satisfaction.
21
(b) Subsequent to the effective date of this Agreement, there shall not
have occurred (i) any change, or any development involving a prospective change,
in or affecting the condition (financial or other), business, properties, net
worth or results of operations of the Company or the Subsidiaries not
contemplated by the Prospectus, which in your opinion, as the several
Underwriters, would materially, adversely affect the market for the Shares, or
(ii) any event or development relating to or involving the Company or any
officer or director of the Company which makes any statement made in the
Prospectus untrue or which, in the opinion of the Company and its counsel or the
Underwriters and their counsel, requires the making of any addition to or change
in the Prospectus in order to state a material fact required by the Act or any
other law to be stated therein or necessary in order to make the statements
therein not misleading, if amending or supplementing the Prospectus to reflect
such event or development would, in your opinion, as Representatives of the
several Underwriters, materially adversely affect the market for the Shares.
(c) You shall have received on the Closing Date, an opinion of Xxxxxx &
Xxxxxxxx, P.A., counsel for the Company, dated the Closing Date and addressed to
you, as the several Underwriters, 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 Maryland, with full
power and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and is duly qualified to transact
business as a foreign corporation in good standing under the laws of each
jurisdiction where the ownership or leasing of its properties or the conduct of
its business requires such qualification except where the failure to so qualify
would not have a material adverse effect upon its business taken as a whole;
(ii) All of the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and non-assessable
and were not issued in violation of any preemptive or similar rights of
stockholders of the Company arising under the corporation laws of the State of
Maryland, under the charter or bylaws of the Company or, to the best of such
counsel's knowledge, under any agreement to which the Company is a party;
(iii) Each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
respective jurisdiction of incorporation, with full power and authority to own
its properties and conduct its business as described in the Prospectus, and is
duly qualified to transact business as a foreign corporation in good standing
under the laws of each jurisdiction where the ownership or leasing of its
properties or the conduct of its business requires such qualification; and all
of the outstanding shares of capital stock of each of the Subsidiaries have been
duly authorized and validly issued, are fully paid and nonassessable and were
not issued in violation of any preemptive or similar rights of
22
stockholders of such Subsidiary arising under the corporation law of its
respective jurisdiction of incorporation, its charter or bylaws or, to the best
of such counsel's knowledge, under any agreement to which such Subsidiary is a
party, and all of the outstanding shares of capital stock of each of the
Subsidiaries are owned beneficially by the Company free and clear of all liens,
encumbrances, equities and claims except as described in the Prospectus;
(iv) To the knowledge of such counsel, except as described or referred
to in the Prospectus, there is not pending or threatened any action, suit,
proceeding, inquiry or investigation, to which the Company or any of the
Subsidiaries is a party, or to which the property of the Company or any of the
Subsidiaries is subject, before or brought by any court or governmental agency
or body which, if determined adversely to the Company or any of the
Subsidiaries, would individually or in the aggregate result in any material
adverse change in the business, financial position, net worth, results of
operation or prospects, or materially adversely affect the properties and assets
collectively of the Company and the Subsidiaries taken as a whole or might
materially adversely affect the consummation of the transactions contemplated by
the Registration Statement; and all pending legal or governmental proceedings to
which the Company or any of the Subsidiaries is a party or that affect any of
their respective properties that are not described in the Prospectus, including
ordinary routine litigation incidental to the business, are considered in the
aggregate not to result in a material adverse change in the business, financial
position, net worth, results of operation or prospects, or materially adversely
affect the properties and assets collectively of the Company and the
Subsidiaries taken as a whole;
(v) The execution, delivery and performance of this Agreement, the
Articles Supplementary and the Indenture and the consummation by the Company of
the transactions contemplated hereby and thereby and compreof does not and will
not conflict with or result in a breach or violation by the Company or any
Subsidiary, as the case may be, of any of the terms or provisions of, constitute
a default by the Company or any Subsidiary, as the case may be, under, or result
in the creation or imposition of any lien, charge, security interest or
encumbrance upon any of the assets of the Company or any Subsidiary, as the case
may be, pursuant to the terms of (a) any material indenture, mortgage, deed of
trust, loan or credit agreement, bond, debenture, note, lease or other agreement
or instrument to which the Company or any Subsidiary, as the case may be, is a
party or to which any of them or any of their respective properties is subject;
(b) the charter or bylaws of the Company or any Subsidiary, as the case may be;
or (c) any statute, rule or regulation or, to the best of such counsel's
knowledge, any judgment, decree or order of any court or governmental agency or
court or body applicable to the Company or any of the Subsidiaries or any of
their respective properties;
(vi) Neither the Company nor any of the Subsidiaries is in violation of
its respective certificate or articles of incorporation or bylaws, or other
23
organizational documents, or to the knowledge of such counsel after reasonable
inquiry, is in default in the performance of any material obligation, agreement
or condition contained in any bond, debenture, note or other evidence of
indebtedness, except as may be disclosed in the Prospectus;
(vii) Except as described or incorporated by reference in the
Prospectus, there are no outstanding options, warrants or other rights calling
for the issuance of, and such counsel does not know of any commitment, plan or
arrangement 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;
(viii) Except for rights which have been waived, there is no holder of
any security of the Comptractual or otherwise, to cause the Company to sell or
otherwise issue to them, or to permit them to underwrite the sale of, the Shares
or the right to have any shares of capital 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 capital stock or other securities of the Company;
(ix) The execution and delivery of, and the performance by the Company
of its obligations under, this Agreement have been duly authorized by all
necessary corporate action on the part of the Company, and this Agreement has
been duly executed and delivered by the Company. The Articles Supplementary have
been duly authorized by all necessary corporate and stockholder action (if any
such stockholder action is required). The Shares have been duly authorized, and,
when issued and delivered to the Underwriters against payment therefor in
accordance with the terms hereof, are validly issued, fully paid and
non-assessable, and free of any preemptive or similar rights; the Preferred
Stock conforms to the description thereof in the Prospectus; the Preferred Stock
has the rights set forth in the Articles Supplementary, and the terms of the
Preferred Stock are valid and binding on the Company;
(x) The execution and delivery of the Base Indenture has been duly
authorized by all necessary corporate action on the part of the Company, and the
Indenture has been duly executed and delivered by the Company. The Exchange
Debentures, if and when issued by the Company, assuming due authorization by the
Company and due authentication by the Trustee, will be the legal, valid, binding
and enforceable obligations of the Company entitled to the benefits of the
Indenture, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally, and subject, as to enforceability, to
general principles of equity. The Exchaptions thereof in the Prospectus; and
(xi) The execution and delivery of the Heritage Acquisition Agreements
by the Company have been duly authorized by all necessary corporate action, and
the Heritage Acquisition Agreements have been duly executed and delivered by the
Company and after execution and delivery by the other parties thereto are the
legal, valid,
24
binding and enforceable obligations of the Company. To the best knowledge of
such counsel, there have been no amendments to the Heritage Acquisition
Agreements subsequent to the date thereof.
In addition, such opinion shall state that such counsel has not
independently verified the accuracy, completeness or fairness of the statements
made or the information contained in or incorporated by reference in the
Registration Statement or the Prospectus and such counsel is not passing upon
and does not assume any responsibility therefor. In the course of the
preparation by the Company and the Subsidiaries of the Registration Statement
and the Prospectus, such counsel has participated in discussions with
representatives of the Underwriters and those of the Company and the
Subsidiaries and their independent accountants, in which the business and
affairs of the Company and the Subsidiaries and the contents of the Registration
Statement and the Prospectus (including the Incorporated Documents) were
discussed. Based upon the information such counsel gained in the course of such
counsel's representation of the Company and the Subsidiaries in connection with
their preparation of the Registration Statement and the Prospectus and such
counsel's participation in the discussions referred to above, such counsel has
no reason to believe that (i) as of its effective date, the Registration
Statement (including the Rule 430A Information, if applicable, and any amendment
thereto) or any of the Incorporated Documents contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
thererein not misleading or (ii) the Prospectus, or any amendment or supplement
thereto, at the time the Prospectus was issued, at the time any such amended or
supplemented prospectus was issued or at the Closing Date, contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. Such counsel need express no opinion, however, as to
the financial statements, including the notes and schedules thereto, or any
other financial data included in the Registration Statement, the Prospectus or
the Incorporated Documents.
In giving such opinion, such counsel may rely, as to all matters governed
by the laws of jurisdictions other than the federal law of the United States and
the law of the State of Maryland, upon the opinions of counsel satisfactory to
the Underwriters. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers or other appropriate representatives of the Company and
the Subsidiaries and certificates of public officials.
(d) You shall have received on the Closing Date, an opinion of Xxxxxx,
Xxxxxx & Xxxxxxxxx, securities counsel for the Company, dated the Closing Date
and addressed to you, as Representatives of the several Underwriters, 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 Maryland, with
full power and authority (corporate and other) to own its properties and conduct
its
25
business as described in the Prospectus, and is duly qualified to transact
business as a foreign corporation in good standing under the laws of each
jurisdiction where the ownership or leasing of its properties or the conduct of
its business requires such qualification except where the failure to so qualify
would not have a material adverse effect upon its business taken as a whole;
(ii) The execution and delivery of, and the performance by the
Company of its obligations under, this Agreement have been duly authorized by
all necessary corporate action on the part of the Company, and this Agreement
has been duly executed and delivered by the Company. The Articles Supplementary
have been duly authorized by all necessary corporate and stockholder action;
(iii) The execution and delivery of the Base Indenture has been
duly authorized by all necessary corporate action on the part of the Company.
The Exchange Debentures, if and when issued by the Company, assuming due
authorization by the Company and due authentication by the Trustee, will be the
legal, valid, binding and enforceable obligations of the Company entitled to the
benefits of the Indenture, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally, and subject, as to
enforceability, to general principles of equity. The Exchange Debentures and the
Indenture conform to the descriptions thereof in the Prospectus;
(iv) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is required
for the execution, delivery or performance of this Agreement by the Company or
the consummation by the Company of the transactions contemplated by this
Agreement, except (i) such as have been obtained under the Act and the Exchange
Act and (ii) such as may be required under state securities or blue sky laws in
connection with the purchase and distribution of the Shares by the several
Underwriters or as may be required by the NASD, as to each of which in clause
(ii) such counsel expresses no opinion;
(v) The descriptions in the Registration Statement and Prospectus
of statutes, legal and governmental proceedings, and contracts and other
documents present fairly in all material respects the information required to be
shown; and such counsel does not know of any statutes or regtal proceedings
required to be described in the Prospectus which are not described as required,
nor of any contracts or documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement which are not described or filed as required. Such
counsel need express no opinion as to the description of any statute, regulation
or proceedings with respect to the regulation of the Company and the
Subsidiaries by the Federal Communications Commission.
(vi) The authorized and outstanding capital stock of the Company
is as set forth under the caption "Capitalization" in the Prospectus; and the
authorized capital stock of the Company conforms in all material respects as to
legal matters to the
26
description thereof contained in the Prospectus under the caption "Description
of Capital Stock;"
(vii) All the shares of capital stock of the Company outstanding
prior to the issuance of the Shares to be issued and sold by the Company
pursuant to this Agreement have been duly authorized and validly issued, and are
fully paid and nonassessable;
(viii) The Shares have been duly authorized, and, when issued and
delivered to the Underwriters against payment therefor in accordance with the
terms hereof, are validly issued, fully paid and non-assessable, and free of any
preemptive or similar rights; the Preferred Stock conforms to the description
thereof in the Prospectus; the Preferred Stock has the rights set forth in the
Articles Supplementary, and the terms of the Preferred Stock are valid and
binding on the Company;
(ix) The form of certificates for the Shares conforms to the
requirements of the corporation law of the State of Maryland;
(x) The shares of Class A Common Stock issuable upon conversion of
the Shares or Exchange Debentures have been duly authorized and reserved for
issuance upon such conversion by all necessary corporate action and such shares
of Class A Common Stock, when issued upon such conversionlidly issued, fully
paid and non-assessable and free of any preemptive or similar rights that
entitle or will entitle any person to acquire any shares of Class A Common Stock
upon the issuance thereof by the Company;
(xi) The Registration Statement and the Prospectus and any
supplements or amendments thereto as of their respective dates of filing with
the Commission, comply as to form in all material respects to the requirements
of the Act as applicable to registration statements on Form S-3, except that
such counsel, however, need express no opinion as to the financial statements,
schedules and other financial data included in the Registration Statement or the
Prospectus;
(xii) The Registration Statement has become effective under the
Act, any required filing of the Prospectus or any supplement thereto has been
made with the Commission pursuant to Rule 424(b), in the manner and within the
time period required by Rule 424(b), and, to the best knowledge of such counsel,
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
threatened, pending or contemplated under the Act;
(xiii) Upon delivery of the Shares pursuant to the Underwriting
Agreement and payment therefor as contemplated therein, assuming that the
Underwriters are bona fide purchasers within the meaning of the New York Uniform
Commercial Code, the Underwriters will acquire good and marketable title to the
Shares free and clear
27
of any lien, claim, security interest, or other encumbrance, restriction on
transfer or other defect in title;
(xiv) Neither the Company nor any Subsidiary is an investment
company within the meaning of the Investment Company Act of 1940, as amended;
(xv) All Incorporated Documents, when they were filed with the
Commission, complied as to form in all material respects with the requirements
of the Exchange Act; and such counsel has no reason to believe that any of such
documents, when they were so filed, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made
when such documents were so filed, not misleading (except for the financial
statements, schedules or other financial data contained in any such document as
to which counsel need express no opinion); and
(xvi) The Indenture has been qualified under the Trust Indenture
Act of 1939.
In addition, such opinion shall state that such counsel has not
independently verified the accuracy, completeness or fairness of the statements
made or the information contained in the Registration Statement or the
Prospectus (including the Incorporated Documents) and, except with respect to
the descriptions referred to in paragraphs (iv) and (v) above, such counsel is
not passing upon and does not assume any responsibility therefor. In the course
of the preparation by the Company of the Registration Statement and the
Prospectus (including the Incorporated Documents), such counsel has participated
in discussions with representatives of the Underwriters and thoseich the
business and affairs of the Company and the Subsidiaries and the contents of the
Registration Statement and the Prospectus (including the Incorporated Documents)
were discussed. Based upon the information such counsel gained in the course of
such counsel's representation of the Company in connection with its preparation
of the Registration Statement and the Prospectus and such counsel's
participation in the discussions referred to above, nothing has come to such
counsel's attention that leads them to believe that (i) as of its effective
date, the Registration Statement (including the Rule 430A Information, if
applicable, and any amendment thereto) or any of the Incorporated Documents
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or (ii) the Prospectus, or any amendment or supplement
thereto, at the time the Prospectus were issued, at the time any such amended or
supplemented prospectus was issued or at the Closing Date, contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. Such counsel need express no opinion, however, as to
the financial statements, including the notes and schedules thereto, or any
other financial information included in the Registration Statement, the
Prospectus or the Incorporated Documents.
28
In giving such opinion, such counsel may rely, as to all matters governed
by the laws of jurisdictions other than the federal law of the United States,
the law of the State of New York, the law of the State of Maryland and the
General Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Underwriters. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of office appropriate representatives of the Company
and the Subsidiaries and certificates of public officials.
(e) The Underwriters shall have received an Opinion, dated the Closing
Date of Xxxxxx, Xxxxxxx, Xxxxxx, Leader & Xxxxxxxx, L.L.P., regulatory counsel
for the Company, in form and substance satisfactory to the Underwriters to the
effect that:
(i) Except for such Federal Communications Commission (the "FCC")
approvals that have already been obtained, which approvals, to such counsel's
knowledge, are in full force and effect, no FCC approval, authorization, consent
or license is required under the Communications Act of 1934, as amended, and the
rules and regulations promulgated thereunder (the "Communications Laws") for the
consummation of the transactions contemplated by this Agreement and the issuance
and sale under this Agreement of the Shares. The execution, delivery and
performance in accordance with the terms of this Agreement by the Company will
not violate the Communications Laws. It should be noted that, under the
Communications Laws, FCC approval is required prior to the transfer of control
of the Company or any of the Subsidiaries which hold broadcast licenses or the
assignment of any FCC licenses or authorizations or prior to the exercise of any
voting rights or management authority over the Company or any of the
Subsidiaries which hold broadcast licenses to the extent that such exercise
constitutes a transfer of control of the Company or any of such Subsidiaries or
an assignment of any FCC licenses or authorizations.
(ii) The following Subsidiaries are the licensees of the
respective stations as identified below, and, except as disclosed in the
Prospectus, are authorized to own and operate their respective stations:
Subsidiary Station
---------- -------
Chesapeake Television WBFF(TV)
Licensee, Inc. Baltimore, MD
WTTE, Channel 28 Licensee, WTTE(TV)
Inc. Columbus, OH
WPGH Licensee, Inc. WPGH-TV
Pittsburgh, PA
WCGV Licensee, Inc. WCGV-TV
Xxxxxxxxx, Xxxxxxxxx
00
WTTO Licensee, Inc. WTTO(TV)
Birmingham, Alabama
WLFL Licensee, Inc. WLFL(TV)
Raleigh, North Carolina
WTVZ Licensee, Inc. WTVZ-TV
Norfolk, Virginia
WSTR Licensee, Inc. WSTR-TV
Cincinnati, Ohio
KSMO Licensee, Inc. KSMO-TV
Kansas City, MO
WYZZ Licensee Inc. WYZZ(TV)
Bloomington, Illinois
Superior OK License Corp. KOCB(TV)
Oklahoma City, OK
Superior KY License Corp. WDKY-TV
Danville, KY
WSMH Licensee, Inc. WSMH(TV)
Flint, MI
KOVR Licensee, Inc. KOVR(TV)
Stockton, CA
KDSM Licensee, Inc. KDSM-TV
Des Moines, IA
KDNL Licensee, Inc. KDNL-TV
St. Louis, MO
KUPN Licensee, Inc. KUPN(TV)
Las Vegas, NV
KABB Licensee, Inc. KABB(TV)
San Antonio, TX
WLOS Licensee, Inc. WLOS(TV)
Asheville, NC
Xxxxxxxx Radio of Los Angeles Licensee, Inc. KBLA(AM)
Santa Monica, CA
30
Xxxxxxxx Radio of New Orleans Licensee, Inc. WWL(AM), New Orleans, Louisiana
WSMB(AM), New Orleans, Louisiana
WLMG(FM), New Orleans, Louisiana
KMEZ(FM), Belle Xxxxxx, Louisiana
Xxxxxxxx Radio of Buffalo Licensee, Inc. WBEN(AM), Buffalo, New York
WWKB(AM), Buffalo, New York
WMJQ(FM), Buffalo, New York
WKSE(FM), Niagara Falls, New York
WGR(AM), Buffalo, New York
WWWS (AM), Buffalo, New York
Xxxxxxxx Radio of Memphis Licensee, Inc. WJCE(AM), Memphis, Tennessee
WRVR-FM, Memphis, Tennessee
WOGY-FM, Germantown, Tennessee
Xxxxxxxx Radio of Nashville Licensee, Inc. WLAC(AM), Nashville, Tennessee
WLAC-FM, Nashville, Tennessee
WJZC(FM), Russellville, Kentucky
Xxxxxxxx Radio of Xxxxxx-Xxxxx Licensee, Inc. WGBI(AM), Scranton, Pennsylvania
XXXX(AM), Xxxxxx-Xxxxx, Pennsylvania
WGGY(FM), Scranton, Pennsylvania
WKRZ(FM), Xxxxxx-Xxxxx, Pennsylvania
WILP(AM), West Xxxxxxxx, Pennsylvania
WWFH(FM), Freeland, Pennsylvania
WKRF(FM), Tobyhanna, Pennsylvania
WWSH(FM), Pittston, Pennsylvania
Xxxxxxxx Radio of St. Louis Licensee, Inc. WVRV(FM), East St. Louis, Illinois
KPNT(FM), St. Xxxxxxxxx, Missouri
To such counsel's knowledge, all of the licenses held by the subsidiaries
identified in this paragraph (ii) necessary to operate their respective stations
(the "FCC Material Licenses") are valid and in full force and effect. The
stations identified in this paragraph (ii) are collectively referred to as the
"Stations."
(iii) To the best of such counsel's knowledge, Baltimore
(WNUV-TV) Licensee, Inc. is the licensee of WNUV-TV, Baltimore, Maryland; WVTV
Licensee, Inc. is the licensee of WVTV(TV), Milwaukee, Wisconsin; WPTT, Inc. is
the licensee of WPTT(TV), Pittsburgh, Pennsylvania; Raleigh (WRDC-TV) Licensee,
Inc. is the licensee of WRDC(TV), Durham, North Carolina; River City License
Partnership is the licensee of WTTV(TV), Bloomington, Indiana and WTTK(TV),
Kokomo, Indiana; Anderson (WFBC-TV) Licensee, Inc. is the licensee of WFBC-TV,
Anderson, South Carolina; San Antonio (KRRT-TV) Licensee, Inc. is the licensee
of KRRT(TV), Kerrville, Texas; Tiab Communications Corporation is the licensee
of XXXX(AM), Mt. Pocono, Pennsylvania; WDBB-TV, Inc. is the licensee of
WDBB(TV), Tuscaloosa, Alabama; and Birmingham
31
(WABM-TV) Licensee, Inc., is the licensee of WABM(TV), Birmingham, Alabama. To
the best of such counsel's knowledge, Baltimore (WNUV-TV) Licensee, Inc., WVTV
Licensee, Inc., WPTT, Inc., Raleigh (WRDC-TV) Licensee, Inc., River City License
Partnership, Anderson (WFBC-TV) Licensee, Inc., San Antonio (KRRT-TV) Licensee,
Inc., Tiab Communications Corporation, WDBB-TV, Inc., and Birmingham (WABM-TV)
Licensee, Inc., (collectively the "LMA Station Licensees"), except as disclosed
in the Prospectus, are authorized to own and operate their respective LMA
stations identified in this Paragraph (iii) (each individually a "LMA Station"
and collectively the "LMA Stations". To such counsel's knowledge, the licenses
held by the LMA Station Licensees to own and operate their respective LMA
Stations are valid and in full force and effect.
(iv) Except as set forth in the Prospectus, to such counsel's
knowledge, there are no proceedings pending or threatened in writing under the
Communications Laws that are specifically directed against the Company, the
Subsidiaries, or the Stations before or by the FCC or any court having
jurisdiction over matters arising under the Communicationsting to any
invalidity, revocation, or modification of any FCC Material Licenses, wherein an
unfavorable ruling, decision, or finding would materially and adversely change
the financial condition, business or properties of the Company and the
Subsidiaries individually or taken as a whole. To such counsel's knowledge,
based solely upon such counsel's examination of records available for public
inspection at the FCC in Washington, D.C., the Stations are operating in
compliance with their FCC Material Licenses, except possibly for noncompliance
that would not have a material adverse effect on the financial condition,
business or properties of the Company and the Subsidiaries individually or taken
as a whole.
(v) The statements in the Prospectus under the captions (a) "RISK
FACTORS--Competition" "--Impact of New Technologies," "--Governmental
Regulations; Necessity of Maintaining FCC Licenses," "--Multiple Ownership Rules
and Effect on LMAs," and "--LMAs - Rights of Preemption and Termination" and (b)
"BUSINESS OF XXXXXXXX-- Federal Regulation of Television and Radio Broadcasting"
insofar as such statements constitute a summary of material Communications Laws
and material proceedings, fairly and in all material respects present the
information contained under such captions in light of the circumstances in which
such statements are made, and to the extent they constitute matters of law and
legal conclusions under the Communications Laws, fairly and in all material
respects accurately present the information contained under such captions in
light of the circumstances in which such statements are made.
Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certificates of
officers or other appropriate representatives of the Company and the
Subsidiaries and certificates of public officials.
32
(f) You shall have received on the Closing Date an opinion of Fried,
Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel for the Underwriters, dated the
Closing Date and addressed to you, as Representatives of the several
Underwriters, with respect to the matters agreed upon. In addition, such opinion
shall also state the following: In the course of the preparation by the Company
of the Registration Statement and the Prospectus, such counsel participated in
conferences with certain of the officers and representatives of, and the
independent public accountants for, the Company, at which the Registration
Statement and the Prospectus were discussed. Between the date of effectiveness
of the Registration Statement and the time of delivery of such opinion, such
counsel attended additional conferences with certain of the officers and
representatives of the Company, at which the contents of the Prospectus were
discussed to a limited extent. Given the limitations inherent in the independent
verification of factual matters and the character of determinations involved in
the registration process, such counsel is not passing upon or assuming any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus. Subject to the
foregoing and on the basis of the information gained in the performance of the
services referred to above, including information obtained from officers and
other representatives of, and the independent public accountants for, the
Company, no facts have come to such counsel's attention that cause such counsel
to believe that the Registration Statement, as of its effective date, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading or that the Prospectus as of its effective date contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein in light oing. Also, subject to the foregoing, no facts have come to
such counsel's attention in the course of proceedings described in the second
sentence of this paragraph that cause such counsel to believe that the
Prospectus, at the Closing Date, 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, in the light of the circumstances in
which they were made, not misleading. Such counsel express no view or belief,
however, with respect to financial statements, notes or schedules thereto or
other financial information included in or omitted from the Registration
Statement or Prospectus.
In giving such opinion, such counsel may rely, as to all matters governed
by the laws of jurisdictions other than the federal law of the United States,
the law of the State of New York, and the General Corporation Law of the State
of Delaware, upon the opinions of counsel satisfactory to the Underwriters. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
or other appropriate representatives of the Company and the Subsidiaries and
certificates of public officials.
(g) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and the
Closing Date from Xxxxxx
00
Xxxxxxxx XXX, Xxxxx & Young LLP, KPMG Peat Marwick and Price Waterhouse LLP,
independent certified public accountants, substantially in the forms heretofore
approved by you.
(h) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of the Company, shall be contemplated by the
Commission at or prior to the Closing Date; (ii) there shall not have been any
change in the capital stock of the Company nor any material increase in the sh
(other than in the ordinary course of business) from that set forth or
contemplated in the Registration Statement or the Prospectus (or any amendment
or supplement thereto); (iii) there shall not have been, since the respective
dates as of which information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), except as may otherwise be
stated in the Registration Statement and Prospectus (or any amendment or
supplement thereto), any material adverse change in the condition (financial or
other), business, prospects, properties, net worth or results of operations of
the Company and the Subsidiaries taken as a whole; (iv) the Company and the
Subsidiaries shall not have any liabilities or obligations, direct or contingent
(whether or not in the ordinary course of business), that are material to the
Company and the Subsidiaries, taken as a whole, other than those reflected in
the Registration Statement or the Prospectus (or any amendment or supplement
thereto); and (v) all the representations and warranties of the Company
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date, and you shall have received a certificate, dated the Closing Date and
signed by the chief executive officer and the chief financial officer of the
Company (or such other officers as are acceptable to you), to the effect set
forth in this Section 10(h) and in Section 10(i) hereof.
(i) The Company shall not have failed at or prior to the Closing Date
to have performed or complied with any of its agreements contained in this
Agreement and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(j) Each of Xxxxxx & Xxxxxxxx, P.A. and Xxxxxx, Xxxxxx & Xxxxxxxxx
shall have delivered to you a signed copy of the opinion rendered by such
counsel pursuant to the Common Unate of such opinion stating that you may rely
on such opinion as if it were addressed to you.
(k) The Company shall have entered into an amendment to the Bank Credit
Agreement (as defined in the Prospectus) previously submitted to the
Underwriters and in form and substance satisfactory to them which permits the
transactions contemplated hereby and the use of the proceeds of such
transactions as described in the Prospectus.
34
(l) The Company shall have furnished to you "lock-up" letters, in form
and substance satisfactory to you, signed by each of its current officers and
directors and each of its stockholders designated by you.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and your counsel.
Any certificate or document signed by any officer of the Company or any
Attorney-in-Fact or any Selling Stockholder and delivered to you, as the several
Underwriters, or to counsel for the Underwriters, shall be deemed a
representation and warranty by the Company to each Underwriter as to the
statements made therein.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the satisfaction on and as of any Option Closing Date
of the conditions set forth in this Section 8, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (c) through (g) shall be dated the Option
Closing Date in question and the opinions called for by paragraphs (c), (d) and
(f) shall be revised to reflect the sale of Additional Shares.
9. Expenses. The Company agrees to pay the following costs and expenses and
all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing or reproduction, and filing
with the Commission of the Registration Statement (including financial statement
the Prepricing Prospectus, the Prospectus, and each amendment or supplement to
any of them; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the Registration Statement, the Prepricing Prospectus, the Prospectus,
and all amendments or supplements to any of them as may be reasonably requested
for use in connection with the offering and sale of the Shares; (iii) the
preparation, printing, authentication, issuance and delivery of certificates for
the Shares, including any stamp taxes in connection with the original issuance
and sale of the Shares; (iv) the printing (or reproduction) and delivery of this
Agreement, the Blue Sky Memorandum and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Shares; (v)
the registration of the Preferred Stock under the Exchange Act and the listing
of the Shares on the Nasdaq National Market; (vi) the lodging, meals and
expenses incurred by or on behalf of Company officers in connection with
presentations to prospective purchasers of the Shares; (vii) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of the several states as provided in Section 5(g) hereof (including the
reasonable fees and expenses of counsel for the Underwriters relating to the
preparation, printing or reproduction, and delivery of the preliminary and
supplemental Blue Sky Memoranda and such registration and qualification); and
(viii) the fees and expenses of the Company's accountants and the fees and
expenses of counsel (including local and special counsel) for the Company.
35
10. Effective Date of Agreement. This Agreement shall become effective: (i)
upon the execution and delivery hereof by the parties hereto; or (ii) if, at the
time this Agreement is executed and delivered, it is necessary for the
registration statement or a post-effeo to be declared effective before the
offering of the Shares may commence, when notification of the effectiveness of
the Registration Statement or such post-effective amendment has been released by
the Commission. Until such time as this Agreement shall have become effective,
it may be terminated by the Company, by notifying you, or by you, as
Representatives of the several Underwriters, by notifying the Company.
If any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they are obligated to purchase hereunder on the Closing Date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters are obligated but fail or refuse to purchase is not more than
one-tenth of the aggregate number of Shares which the Underwriters are obligated
to purchase on the Closing Date, each non-defaulting Underwriter shall be
obligated, severally, in the proportion which the number of Firm Shares set
forth opposite its name in Schedule I hereto bears to the aggregate number of
Firm Shares set forth opposite the names of all non-defaulting Underwriters or
in such other proportion as you may specify in accordance with Section 20 of the
Master Agreement Among Underwriters of Xxxxx Xxxxxx Inc. to purchase the Shares
which such defaulting Underwriter or Underwriters are obligated, but fail or
refuse, to purchase. If any one or more of the Underwriters shall fail or refuse
to purchase Shares which it or they are obligated to purchase on the Closing
Date and the aggregate number of Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares which the
Underwriters are obligated to purchase on the Closing Date and arrangements
satisfactory to you and the Company for the purchase of such Shares by one or
more non-defaulting Underwriters or other party or parties approved by you and
the Company are not made within 36 hours after such default, this Agreement will
terminate without liability the Company. 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, 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. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any such default of any such Underwriter under this
Agreement. The term "Underwriter" as used in this Agreement includes, for all
purposes of this Agreement, any party not listed in Schedule I hereto who, with
your approval and the approval of the Company, purchases Shares which a
defaulting Underwriter is obligated, but fails or refuses, to purchase.
Any notice under this Section 10 may be given by fax, telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
36
11. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company, if prior to the Closing Date or any Option Closing
Date (if different from the Closing Date and then only as to the Additional
Shares), as the case may be, (i) trading in securities generally on the New York
Stock Exchange, American Stock Exchange or the Nasdaq National Market shall have
been suspended or materially limited, (ii) trading in the Class A Common Stock
on the Nasdaq National Market shall have been suspended or materially limited,
(iii) a general moratorium on commercial banking activities in New York or
Maryland shall have been declared by either federal or state authorities, or
(iv) there shall have occurred any outbreak or escalation of hostilities or
other international or domestic calamity, crisis or change in political,
financial or economic conditions, the effect of which on the financial markets
of the United States is such ait, in your judgment, impracticable or inadvisable
to commence or continue the offering of the Shares at the offering price to the
public set forth on the cover page of the Prospectus or to enforce contracts for
the resale of the Shares by the Underwriters. Notice of such termination may be
given to the Company by fax., telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
12. Information Furnished by the Underwriters. The statements set forth in
the last paragraph on the cover page, the stabilization legend on the inside
cover page, and the statements in the first, third and seventh paragraphs under
the caption "Underwriting" in any Prepricing Prospectus and in the Prospectus
constitute the only information furnished by or on behalf of the Underwriters
through you as such information is referred to in Sections 6(b) and 7 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10 and 11
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at 0000 Xxxx 00xx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X.
Xxxxx, President, with a copy to Xxxxxx & Xxxxxxxx, P.A., 000 Xxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx, Esq., with a
copy to Xxxxxx, Xxxxxx & Xxxxxxxxx, 0000 X Xxxxxx, Xxxxxxxxxx, X.X. 00000,
Attention: Xxxx X. Xxxxxxx, Esq.; or (ii) if to you, as the several
Underwriters, c/o Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Manager, Investment Banking Division, with a copy to Fried,
Frank, Harris, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx Xxxx Jacob, Esq.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company, its directors and officers,r respective successors
and assigns, to the extent provided herein, and no other person shall acquire or
have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any Underwriter of any of the Shares in his
status as such purchaser.
37
14. Applicable Law; Counterparts. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
38
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
XXXXXXXX BROADCAST GROUP, INC.
By:/s/ Xxxxx X. Xxx
---------------------------
Name: Xxxxx X. Xxx
Title: Chief Financial Officer
Confirmed as of the date first above mentioned.
XXXXX XXXXXX INC.
BT ALEX. XXXXX INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
SALOMON BROTHERS INC
CHASE SECURITIES INC.
XXXXXX XXXX LLC
By XXXXX XXXXXX INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
39
SCHEDULE I
XXXXXXXX BROADCAST GROUP, INC.
Underwriter Number of Firm Shares
Xxxxx Xxxxxx Inc. 637,500
BT Alex. Xxxxx Incorporated 637,500
Credit Suisse First Boston Corporation 637,500
Salomon Brothers Inc 637,500
Chase Securities Inc. 225,000
Xxxxxx Xxxx LLC 225,000
---------------------
Total: 3,000,000
1
EXHIBIT A
XXXXXXXX BROADCAST GROUP, INC.
Chesapeake Television, Inc.
Chesapeake Television Licensee, Inc.
Xxxxxx Enterprises, Inc.
FSF-TV, Inc.
KABB Licensee, Inc.
KDNL Licensee, Inc.
KDSM, Inc.
KDSM Licensee, Inc.
KSMO, Inc.
KSMO Licensee, Inc.
KUPN Licensee, Inc.
SCI-Indiana Licensee, Inc.
SCI-Sacramento Licensee, Inc.
Xxxxxxxx Capital (Delaware statutory trust)
Xxxxxxxx Communications, Inc.
Xxxxxxxx Radio of Albuquerque, Inc.
Xxxxxxxx Radio of Albuquerque Licensee, Inc.
Xxxxxxxx Radio of Buffalo, Inc.
Xxxxxxxx Radio of Buffalo Licensee, Inc.
Xxxxxxxx Radio of Greenville, Inc.
Xxxxxxxx Radio of Greenville Licensee, Inc.
Xxxxxxxx Radio of Los Angeles, Inc.
Xxxxxxxx Radio of Los Angeles Licensee, Inc.
Xxxxxxxx Radio of Memphis, Inc.
Xxxxxxxx Radio of Memphis Licensee, Inc.
Xxxxxxxx Radio of Nashville, Inc.
Xxxxxxxx Radio of Nashville Licensee, Inc.
Xxxxxxxx Radio of New Orleans, Inc.
Xxxxxxxx Radio of New Orleans Licensee, Inc.
Xxxxxxxx Radio of St. Louis, Inc.
Xxxxxxxx Radio of St. Louis Licensee, Inc.
Xxxxxxxx Radio of Xxxxxx-Xxxxx, Inc.
Xxxxxxxx Radio of Xxxxxx-Xxxxx Licensee, Inc.
Xxxxxxxx Communications of Kentucky, Inc.
Xxxxxxxx Communications of Oklahoma, Inc.
Superior KY License Corp.
Superior OK License Corp.
2
Tuscaloosa Broadcasting, Inc.
WCGV, Inc.
WCGV Licensee, Inc.
WDBB, Inc.
WLFL, Inc.
WLFL Licensee, Inc.
WLOS Licensee, Inc.
WPGH, Inc.
WPGH Licensee, Inc.
WSMH, Inc.
WSMH Licensee, Inc.
WSTR, Inc.
WSTR Licensee, Inc.
WSYX, Inc.
WTTE, Channel 28, Inc.
WTTE, Channel 28 Licensee, Inc.
WTTO, Inc.
WTTO Licensee, Inc.
WTVZ, Inc.
WTVZ Licensee, Inc.
WYZZ, Inc.
WYZZ Licensee, Inc.
3
