SFX BROADCASTING, INC.
12 5/8% Series E Cumulative Exchangeable Preferred Stock due October 31, 2006
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Underwriting Agreement
January 17, 1997
BT Securities Corporation
Xxxxxxx, Xxxxx & Co.
Xxxxxx Brothers Inc.
c/o BT Securities Corporation
One Bankers Trust Plaza
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
SFX Broadcasting, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to BT Securities Corporation ("BT"), Xxxxxxx, Xxxxx & Co. ("Goldman") and
Xxxxxx Brothers Inc. ("Xxxxxx" and, together with BT and Goldman, the
"Underwriters") an aggregate of 2,250,000 shares of 12 5/8% Series E Cumulative
Exchangeable Preferred Stock, par value $.01 per share (Liquidation Preference
$100.00 per share) (the "Shares"), of the Company. The Shares will be
exchangeable as set forth in the Certificate of Designations relating thereto
(the "Certificate of Designations") for the Company's 12 5/8% Senior
Subordinated Exchange Debentures due 2006 (the "Exchange Debentures").
1. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-16995) in
respect of the Shares and the Exchange Debentures has been filed with the
Securities and Exchange Commission (the "Commission"); such registration
statement and any post-effective amendment thereto, if any, each in the form
heretofore delivered to you for each of the other Underwriters, and, excluding
exhibits thereto but including all documents incorporated by reference in the
prospectus contained therein (the "Incorporated Documents"), have been
declared effective by the Commission in such form; no other document with
respect to such registration statement or document incorporated by reference
therein has heretofore been filed with the Commission; and, to the Company's
knowledge, no stop order suspending the effectiveness of such registration
statement has been issued and, to the Company's knowledge, no proceeding for
that purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in such registration statement or filed with
the Commission pursuant to Rule 424(a)
of the rules and regulations of the Commission under the Securities Act of
1933, as amended (the "Act"), is hereinafter called a "Preliminary
Prospectus;" the various parts of such registration statement, including all
exhibits thereto and including (i) the information contained in the form of
final prospectus filed with the Commission pursuant to Rule 424(b) under the
Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the registration statement at the time it was
declared effective and (ii) the Incorporated Documents contained in the
registration statement at the time such part of the registration statement
became effective, each as amended at the time such part of the registration
statement became effective, is hereinafter collectively called the
"Registration Statement;" and such final prospectus, in the form first filed
pursuant to Rule 424(b) under the Act, together with each prospectus
supplement filed on or after the date hereof by the Company pursuant to Rule
424(b) of the Act, is hereinafter called the "Prospectus;" and any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the Incorporated Documents, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; and any reference to
any amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as the
case may be (the term "Incorporated Documents" being deemed to include all
such subsequently filed documents).
(b) The Incorporated Documents, when they became effective or were
filed with the Commission, as the case may be, conformed in all material
respects to the requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder (except to the
extent subsequently superseded or modified in a filing prior to the effective
date of the Registration Statement), and none of such documents contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by reference
in the Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the case may
be, will conform in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
relating to an Underwriter furnished in writing to the Company by an
Underwriter expressly for use therein.
(c) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects, to the requirements of the
Act and the rules and regulations of the Commission thereunder and do not and
will not, as of the applicable effective date as to the Registration Statement
and any amendment thereto, and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, 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;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information relating to an Underwriter furnished in writing to the Company by
an Underwriter expressly
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for use therein;
(d) Except as disclosed in the Registration Statement (including the
Incorporated Documents), none of the Company, any of its direct or indirect
subsidiaries (each, a "Subsidiary" and, collectively, the "Subsidiaries") or
any of the stations to be acquired in the Pending Acquisitions (as defined in
the Prospectus) (collectively, the "Acquisition Entities") have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material losses or
interferences with their businesses, taken as a whole, from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree, otherwise than
as set forth or contemplated in the Prospectus; and, since the respective
dates as of which information is given or incorporated by reference in the
Registration Statement and the Prospectus, there have not been any changes in
the capital stock or long-term debt of the Company, any of the Subsidiaries
or, to the Company's knowledge, any of the Acquisition Entities or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company, any of
the Subsidiaries or any of the Acquisition Entities, otherwise than as set
forth or contemplated in the Prospectus.
(e) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware with full corporate
power and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus, is and, after giving effect to
the Pending Acquisitions, will be duly registered and qualified to conduct its
business and is and, after giving effect to the Pending Acquisitions, will be
in good standing, in each jurisdiction or place where the nature of its
business requires such registration or qualification, except where the failure
to be so qualified would not have a material adverse effect or a prospective
material adverse effect on the assets, liabilities, results of operations,
management, condition (financial or other), prospects, properties, business or
net worth of the Company and the Subsidiaries, taken as a whole (a "Material
Adverse Effect").
(f) All of the issued shares of capital stock of the Company have
been duly authorized, are validly issued, fully paid and nonassessable and
have been issued in compliance with all applicable federal and state
securities laws; the Shares have been duly authorized by the Company for
issuance and sale to the Underwriters pursuant to this Agreement and the
Shares, when issued and delivered against payment therefor in accordance with
the terms hereof, will be validly issued, fully paid and non-assessable, will
have been issued in compliance with all applicable federal and state
securities laws and will be entitled to the rights, privileges and preferences
set forth in the Certificate of Designations. The stockholders of the Company
have no preemptive rights with respect to the Shares.
(g) Each Subsidiary of the Company is listed on Schedule II hereto.
Each Subsidiary is a corporation duly organized, validly existing and in good
standing in the jurisdiction of its incorporation, with full corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus, and is and, after giving effect to
the Pending Acquisitions, will be duly registered and qualified to conduct its
business and is and, after giving effect to the Pending Acquisitions, will be
in good standing, in each jurisdiction or place where the nature of its
business requires such registration or qualification, except where the failure
to be so qualified would not have a
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Material Adverse Effect; 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 free of any preemptive or similar rights, 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 or
other encumbrance (except for security interests under the New Credit
Agreement) and have been issued in compliance with all applicable federal and
state securities laws.
(h) The Company and each of the Subsidiaries, as applicable, has full
corporate power and authority to issue, sell and deliver the Shares to the
Underwriters as provided herein and to enter into this Agreement, the
Certificate of Designations, the indenture governing the Exchange Debentures
(the "Exchange Indenture"), the New Credit Agreement, the purchase agreements,
letters of intent and other agreements relating to each of the Pending
Acquisitions (the "Acquisition Documents"), and the purchase agreements,
letters of intent and other agreements relating to each of the Pending
Dispositions (as defined in the Prospectus) (the "Disposition
Documents")(each, a "Transaction Document" and, collectively, the "Transaction
Documents"), to carry out all the terms and provisions hereof and thereof to
be carried out by them and to issue, and deliver the Shares as provided herein
and therein.
(i) This Agreement has been duly authorized, validly executed and
delivered by the Company and constitutes a legal, valid and binding agreement
of the Company (assuming it is a legal, valid and binding agreement of the
Underwriters), enforceable against the Company in accordance with its terms
except to the extent that: (i) the same may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other laws
now or hereafter in effect relating to creditors' rights generally or by
general principles of equity whether asserted in an action at law or in
equity; and (ii) rights to indemnity and contribution hereunder may be limited
by state or federal securities laws.
(j) The Certificate of Designations has been duly authorized by all
necessary corporate and stockholder action.
(k) The execution and delivery of the Exchange Indenture has been
duly authorized by the Company and when duly executed and delivered by the
Company (assuming the due execution and delivery by the trustee thereunder)
will constitute the legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except to the
extent that: (i) the same may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other laws now or
hereafter in effect relating to creditors' rights generally or by general
principles of equity whether asserted in an action at law or in equity; and
(ii) rights to indemnity and contribution thereunder may be limited by state
or federal securities laws.
(l) The Exchange Debentures have been duly authorized, and, when duly
executed, authenticated, issued and delivered in exchange for the Shares in
accordance with the terms of the Certificate of Designations and the Exchange
Indenture, will be validly issued and outstanding, and will constitute the
legal, valid and binding obligations of the Company, entitled to the benefits
of the Exchange Indenture and enforceable against the Company in accordance
with their terms except to the extent that: (i) the same may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other laws now or hereafter in effect relating to creditors' rights generally
or by general
4
principles of equity whether asserted in an action at law or in equity; and
(ii) rights to indemnity and contribution thereunder may be limited by state
or federal securities laws.
(m) The execution and delivery of each of the other Transaction
Documents to which the Company or any Subsidiary is a party have been duly
authorized by the Company and each Subsidiary party thereto and each of the
other Transaction Documents which has been executed prior to or on the date
hereof has been duly executed and delivered by the Company and each Subsidiary
party thereto and is the legal, valid and binding agreement of the Company and
each Subsidiary party thereto (assuming it is a legal, valid and binding
agreement of the other parties thereto), enforceable against the Company and
each Subsidiary party thereto in accordance with its terms except to the
extent that: (i) the same may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other laws now or
hereafter in effect relating to creditors' rights generally or by general
principles of equity whether asserted in an action at law or in equity; and
(ii) rights to indemnity and contribution thereunder may be limited by state
or federal securities laws.
(n) Each of the Transaction Documents, the Shares and the Exchange
Debentures conforms in all material respects to the respective statements
relating thereto contained in the Prospectus.
(o) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus. The authorized capital stock of
the Company conforms to the description thereof contained in the Prospectus.
(p) The Company's capitalization at September 30, 1996, and adjusted
capitalization at such date after giving effect to the Transactions is, in
each case, as set forth in the Prospectus under the caption "Capitalization."
(q) Except as disclosed in the Prospectus, there are no outstanding
(A) securities or obligations of the Company or any of the Subsidiaries
convertible into or exchangeable for any capital stock of the Company or any
such Subsidiary, (B) warrants, rights or options to subscribe for or purchase
from the Company or any of the Subsidiaries any such capital stock or any such
convertible or exchangeable securities or obligations or (C) obligations of
the Company or any of the Subsidiaries to issue any shares of capital stock,
any such convertible or exchangeable securities or obligations, or any such
warrants, rights or options.
(r) Except for (a) certain registration rights in respect of shares
held by Nomura Holdings America Inc., (b) as otherwise disclosed in the
Prospectus and (c) in connection with and assumed by the Company as a result
of the MMR Merger, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to require
the Company to file a registration statement under the Act with respect to any
securities owned or to be owned by such person or to require the Company to
include such securities in any securities being registered pursuant to any
registration statement filed by the Company under the Act.
(s) The consolidated financial statements and schedules of the
Company and the financial statements and schedules of each of the Acquisition
Entities included or incorporated by reference in the
5
Registration Statement and the Prospectus present fairly in all material
respects the financial position of the Company on a consolidated basis and of
each of the Acquisition Entities, respectively, and the results of operations
and changes in financial condition as of the dates and for the periods therein
specified. Such financial statements and schedules have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise noted therein). The
selected financial data set forth under the captions "Summary--Summary
Consolidated Financial Data" and "Unaudited Pro Forma Condensed Combined
Financial Statements" in the Preliminary Prospectus and the Prospectus fairly
present, on the basis stated in the Preliminary Prospectus and the Prospectus,
the information included. The other financial and statistical information and
data set forth or incorporated by reference in the Preliminary Prospectus and
the Prospectus is, in all material respects, accurately presented and prepared
on a basis consistent with published industry sources (with respect to certain
statistical information) and such financial statements and the books and
records of the Company, the Subsidiaries and the Acquisition Entities, as
applicable. The unaudited pro forma condensed combined financial statements
and the related notes thereto included in the Preliminary Prospectus and the
Prospectus present fairly, as stated therein, the pro forma financial position
and results of operations at the respective dates and for the respective
periods indicated. The pro forma adjustments are factually supportable. All
adjustments necessary to fairly present such pro forma information have been
made.
(t) Each of Ernst & Young LLP, KPMG Peat Marwick LLP, Coopers &
Xxxxxxx LLP, Deloitte & Touche LLP, Xxxxxx Xxxxxxxx LLP, Xxxxx, Xxxxx, Xxxx,
Xxxxxx & Xxxxxxx, LLP and Xxxxxx Xxxxxxx Xxxxxx Rokenbrod & Xxxxxxx, who have
certified certain financial statements of the Company, the Subsidiaries and
the Acquisition Entities, and whose reports appear or are incorporated by
reference in the Preliminary Prospectus and the Prospectus, were independent
public accountants as required by the Act and the rules and regulations of the
Commission thereunder.
(u) Subsequent to the date of the most recent consolidated balance
sheets for the Company and each of the Acquisition Entities included or
incorporated by reference in the Preliminary Prospectus and the Prospectus,
except as set forth in the Preliminary Prospectus and the Prospectus, (i) none
of the Company, any of the Subsidiaries or, to the Company's knowledge, any
Acquisition Entity has incurred any liabilities or obligations, direct or
contingent, or entered into any transaction not in the ordinary course of
business, except such as would not have a Material Adverse Effect and (ii)
none of the Company, any of the Subsidiaries or, to the Company's knowledge,
any Acquisition Entity has sustained, since the date of the latest audited
financial statements included or incorporated by reference in the Preliminary
Prospectus and the Prospectus, any material losses or interferences with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, except such as would not have a Material Adverse Effect.
(v) Except as disclosed in the Prospectus (including, without
limitation, the documents incorporated by reference therein), there are no
business relationships or related party transactions which would be required
to be disclosed therein by Item 404 of Regulation S-K of the Commission and
each business relationship or related party transaction described therein is a
fair and accurate description of the relationships and transactions so
described.
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(w) None of the Company, the Subsidiaries or the Acquisition
Entities, nor, to the Company's or any Subsidiary's knowledge, any director,
officer, agent, employee or other person associated with or acting on behalf
of the Company or any of the Subsidiaries, has used any corporate funds during
the last five years for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; made any unlawful
payment to any foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment, except such as would
not have a Material Adverse Effect.
(x) Except (i) as disclosed in the Prospectus, (ii) for the approval
by the Federal Communications Commission (the "FCC") of the assignment or
transfer or control of the FCC licenses or authorizations in connection with
certain of the Pending Acquisitions or Pending Dispositions, (iii) from time
to time, for FCC authorizations required in the ordinary course of business of
the Company, (iv) for FCC approvals in connection with the exercise of certain
rights or remedies under the New Credit Agreement and (v) for approvals under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, the execution,
delivery and performance of this Agreement, the execution, delivery and
performance of the other Transaction Documents, and the consummation by the
Company and the Subsidiaries of the transactions contemplated hereby and
thereby will not (A) require any consent, approval, authorization or other
order (which has not been obtained) of any court, regulatory body,
administrative agency or other governmental body, including the FCC, except
such as may be required under the Act, the Exchange Act, the Trust Indenture
Act of 1939, as amended (the "TIA"), securities regulatory bodies (including
self-regulatory bodies), securities exchanges or the securities or Blue Sky
laws of the various states; (B) conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the charter or by-laws of the
Company or any of the Subsidiaries; (C) require any consent or approval (which
has not been obtained) of the parties to, or conflict with or constitute a
breach of any of the terms or provisions of, or a default under, any agreement
or other instrument to which the Company or any of the Subsidiaries is a party
or by which the Company or any of the Subsidiaries or their respective
property is bound; (D) violate or conflict with any laws or administrative
regulations, including without limitation, the Communications Act of 1934, as
amended, and the rules and regulations of the FCC thereunder (collectively
called the "Communications Act"), rulings of court, decrees applicable to the
Company, any of the Subsidiaries or their respective property; (E) result in
termination or revocation of any of the permits, licenses, approvals, orders,
certificates, franchises or authorizations of governmental or regulatory
authorities, including those relating to the Communications Act, owned or held
by the Company or any of the Subsidiaries in order to conduct the broadcast
operations of the stations owned or operated by them (collectively,
"Licenses") or result in any other material impairment of the rights of the
holder of any such License; or (F) result in the creation or imposition of any
lien (other than under the New Credit Agreement) on any asset of the Company
or any of the Subsidiaries, except, in the case of (A), (C), (D), (E) or (F)
above, such as would not, either singly or in the aggregate, have a Material
Adverse Effect.
(y) Except as disclosed in the Prospectus, each of the Company, the
Subsidiaries and the Acquisition Entities is operating in material compliance
with all laws, regulations, administrative orders or rulings or court decrees
applicable to it or to any of its property (including without limitation those
relating to broadcast operations, environmental, safety or similar matters,
federal or state laws relating
7
to the hiring, promotion or pay of employees), except for violations which
would not have a Material Adverse Effect.
(z) Except as disclosed in the Prospectus, each of the Company, the
Subsidiaries and, to the Company's knowledge, the Acquisition Entities has
such Licenses as are necessary to own, lease and operate its respective
properties and to conduct its respective business; each of the Company and the
Subsidiaries has and, after giving effect to the Pending Acquisitions, will
have fulfilled and performed all of its material obligations with respect to
such Licenses and, to the best knowledge of the Company, no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the rights
of the holder of any such License that would result in a Material Adverse
Effect; the Licenses are in full force and effect, are valid for the balance
of their respective terms, are unimpaired by any acts or omissions of the
Company, the Subsidiaries, any of their employees, agents, officers, directors
or stockholders and are free and clear of any material non-standard
restrictions that might limit the full operation of any stations of the
Company or the Subsidiaries, or, to the Company's knowledge, of the
Acquisition Entities; no renewal of any License would constitute a major
environmental action under Sections 1.1305 or 1.1307 of the FCC's rules; all
information contained in any pending application for modification, extension
or renewal of the Licenses or other applications filed with the FCC by the
Company, the Subsidiaries or, to the Company's knowledge, the Acquisition
Entities is true, complete and accurate in all material respects.
(aa) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending which are required to be described therein to
which the Company, any of the Subsidiaries or, to the Company's knowledge, any
of the Acquisition Entities is a party or to which the property (including
without limitation Licenses) of the Company, any of the Subsidiaries or any of
the Acquisition Entities is subject, and, to the Company's knowledge, no such
proceedings have been threatened against the Company, any of the Subsidiaries
or any of the Acquisition Entities or with respect to any of their respective
properties (including without limitation Licenses).
(ab) All reports, filings and regulatory fees required to be filed
with the FCC by the Company, the Subsidiaries or, to the Company's knowledge,
any of the Acquisition Entities with respect to the operation of the stations
of the Company, the Subsidiaries or of the Acquisition Entities have been
timely filed, except for such filings which if not timely filed would not have
a Material Adverse Effect. All such reports and filings are accurate and
complete in all material respects. The Company, the Subsidiaries and, to the
Company's knowledge, the Acquisition Entities maintain appropriate local
public files as required by FCC rules. The Company, the Subsidiaries and the
Acquisition Entities are operating only those facilities for which an
appropriate FCC license, permit or authorization has been obtained and is in
effect.
(ac) None of the Company, the Subsidiaries or, to the knowledge of
the Company, the sellers of the Acquisition Entities is in breach or violation
of any of the terms or provisions of any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company, any of
the Subsidiaries or, to the knowledge of the Company, any of sellers of the
Acquisition Entities, as applicable, are a party or by which the Company, any
of the Subsidiaries or, to the knowledge of the Company, any of the sellers of
the Acquisition Entities, as applicable, are bound or to which any of the
8
property or assets of the Company, any of the Subsidiaries or, to the
knowledge of the Company, any of sellers of the Acquisition Entities, as
applicable, are subject, nor is the Company, any of the Subsidiaries or, to
the knowledge of the Company, any of the sellers of the Acquisition Entities
in violation of the provisions of its charter, by-laws, operating agreement or
other organizational documents or any statute or any judgment, order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company, any of the Subsidiaries, to the knowledge of the Company,
any of the sellers of the Acquisition Entities or any of their properties or
assets (except to the extent any such conflict, breach, violation or default
is cured at or prior to the Time of Delivery and within the grace period
applicable thereto or would not have a Material Adverse Effect).
(ad) Each of the Company, the Subsidiaries and, to the Company's
knowledge, the sellers of each of the Acquisition Entities has (i) good title
to all of the properties and assets owned by them as described in the
Prospectus, free and clear of all liens, charges, encumbrances or restrictions
(except security interests under the New Credit Agreement), except as would
not have a Material Adverse Effect after giving effect to the Pending
Acquisitions and (ii) peaceful and undisturbed possession in all material
respects under all material leases to which such person is a party as lessee,
except as would not have a Material Adverse Effect after giving effect to the
Pending Acquisitions.
(ae) The Company, the Subsidiaries and, to the Company's knowledge,
the sellers of each of the Acquisition Entities own or possess adequate rights
to use all material trademarks, service marks, tradenames, trademark
registrations, service mark registrations and copyrights necessary for the
conduct of their businesses, and to the Company's knowledge, the conduct of
their businesses will not conflict with, and neither the Company nor any of
the Subsidiaries has received any notice of any claim of conflict with, any
such rights of others (except in any such case for any conflict that would not
have a Material Adverse Effect).
(af) Each of the Company, the Subsidiaries and, to the Company's
knowledge, the Acquisition Entities is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in ERISA)
for which the Company or any Subsidiary would have any liability; none of the
Company or the Subsidiaries has incurred or expects to incur liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Section 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the Company or any
Subsidiary would have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would
cause the loss of such qualification, except, in each case, as would not have
a Material Adverse Effect.
(ag) There is (i) no material unfair labor practice complaint pending
against the Company, any of the Subsidiaries or, to the Company's knowledge,
any of the Acquisition Entities, or, to the best knowledge of the Company,
threatened against any of them, before the National Labor Relations Board or
any state or local labor relations board, and no significant grievance or
significant arbitration
9
proceeding arising out of or under any collective bargaining agreement is so
pending against the Company, any of the Subsidiaries or any of the Acquisition
Entities, or, to the best knowledge of the Company, threatened against any of
them, (ii) no material strike, labor dispute, slowdown or stoppage pending
against the Company, any of the Subsidiaries or any of the Acquisition
Entities nor, to the best knowledge of the Company or any Subsidiary,
threatened against the Company, any of the Subsidiaries or any of the
Acquisition Entities and (iii) to the best knowledge of the Company and each
Subsidiary, no union representation question existing with respect to the
employees of the Company, any of the Subsidiaries or any of the Acquisition
Entities and, to the best knowledge of the Company and each Subsidiary, no
union organizing activities are taking place, except, in each case, as would
not have a Material Adverse Effect.
(ah) The Company and each of the Subsidiaries has reviewed the effect
of Environmental Laws (as defined below) and the disposal of hazardous or
toxic substances, wastes, pollutants and contaminants on the business, assets,
operations and properties of the Company, each of the Subsidiaries and each of
the Acquisition Entities, as applicable, and identified and evaluated
associated costs and liabilities (including, without limitation, any material
capital and operating expenditures required for clean-up, closure of
properties and compliance with Environmental Laws, all permits, licenses and
approvals, all related constraints on operating activities and all potential
liabilities to third parties). Except as described in the Prospectus, on the
basis of such reviews, the Company has reasonably concluded that such
associated costs and liabilities would not have a Material Adverse Effect.
Except as described in the Prospectus, none of the Company, the Subsidiaries
or the Acquisition Entities has violated any environmental, safety or similar
law or regulation applicable to it or its business or property relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), lacks
any permit, license or other approval required of it under applicable
Environmental Laws or is violating any term or condition of such permit,
license or approval which could reasonably be expected to, either individually
or in the aggregate, have a Material Adverse Effect.
(ai) The Company, the Subsidiaries and, to the Company's knowledge,
the Acquisition Entities have filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and have
paid, or made adequate reserve or provision for the payment of, all taxes
shown as due thereon except in any case where such failure would not have a
Material Adverse Effect, and the Company has no knowledge of any tax
deficiency that has had (or would have) a Material Adverse Effect.
(aj) The Company and the Subsidiaries (i) make and keep accurate
books and records and (ii) maintain internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance with
management's specific or general authorization, (B) transactions are recorded
as necessary to permit preparation of their consolidated financial statements
and to maintain accountability for their assets, (C) access to their assets is
permitted only in accordance with management's specific or general
authorization and (D) the reported accountability for their assets is compared
with existing assets at reasonable intervals.
(ak) Neither the Company nor any of the Subsidiaries is (i) an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act
10
of 1940, as amended, or (ii) a "holding company" or a "subsidiary company" or
an "affiliate" of a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
(al) Each of the Company, the Subsidiaries and, to the Company's
knowledge, the Acquisition Entities has complied with all provisions of
Florida Statutes, ss.517.075, relating to doing business in Cuba.
(am) None of the Company, the Subsidiaries or any agent thereof
acting on behalf of any of them has taken, and none of them will take, any
action that might cause this Agreement or the issuance or sale of the Shares
to violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part
220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224)
of the Board of Governors of the Federal Reserve.
(an) The Company is subject to Section 13 or 15(d) of the Exchange
Act.
(ao) The Company has delivered to the Underwriters true and correct,
executed copies of each of the Transaction Documents which has been executed
prior to the date hereof and, except as described in the Prospectus, there
have been no amendments, alterations, modifications or waivers thereto or in
the exhibits or schedules thereto other than those as to which the
Underwriters shall previously have been advised and shall not have reasonably
objected after being furnished a copy thereof.
(ap) Other than as contemplated by this Agreement, the Transaction
Documents and the Prospectus, there is no broker, finder or other party that
is entitled to receive from the Company or any of the Subsidiaries any
brokerage or finder's fee or other fee or commission as a result of any of the
transactions contemplated by this Agreement or any of the Transaction
Documents (other than customary brokerage or similar fees payable to third
parties in connection with the Transaction Documents).
The Company and the Subsidiaries acknowledge that the Underwriters
and, for purposes of the opinions to be delivered to the Underwriters pursuant
to Section 7 hereof, counsel for the Company and the Subsidiaries and counsel
for the Underwriters, will rely upon the accuracy and truth of the foregoing
representations and hereby consent to such reliance.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company,
at a purchase price per share of $96.25, the number of Shares set forth
opposite the name of such Underwriter in Schedule I hereto.
3. Upon the authorization by you of the release of the Shares, the
several Underwriters propose to offer the Shares for sale upon the terms and
conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder will
be represented by one or more Global Shares in book-entry form which will be
deposited by or on behalf of the Company with The Depository Trust Company
("DTC") or its designated custodian. The Company will deliver the Shares to BT
against payment by or on behalf of each Underwriter of the purchase price
11
therefor by wire transfer to or at the direction of the Company of Federal
(same day) funds, by causing DTC to credit the Shares to the account of BT at
DTC. The Company will cause the certificates representing the Shares to be
made available to BT for checking at least twenty-four hours prior to the Time
of Delivery at the office of DTC or its designated custodian (the "Designated
Office").
(b) The time and date of delivery and payment for the Shares shall be
9:30 a.m., New York City time, on January 23, 1997 (the "Time of Delivery") or
such other time and date as BT and the Company may agree upon in writing.
(c) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7 hereof, will be delivered at such time and
date at the offices of Xxxxx & XxXxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Closing Location"), and the Shares will be delivered at the
Designated Office, all at the Time of Delivery. A meeting will be held at the
Closing Location at 1:00 p.m., New York City time, on the New York Business
Day immediately preceding the Time of Delivery at which meeting the final
drafts of the documents to be delivered pursuant to the preceding sentence
will be available for review by the parties hereto. For the purposes of this
Section 4, "New York Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New
York are generally authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file a
supplement to such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on January 17, 1997; to make no
further amendment or any supplement to the Registration Statement or
Prospectus (including, without limitation, by way of filing additional
Incorporated Documents with the Commission) prior to the Time of Delivery (or
the completion of the distributions by the Underwriters of the Shares, if
later) which shall be disapproved by you promptly after reasonable notice
thereof; to prepare and file with the Commission, promptly upon your
reasonable request, any amendment or supplement to the Registration Statement
or Prospectus which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its best efforts to cause the
same to become promptly effective; to advise you, promptly after it receives
notice thereof, of the time when any amendment to the Registration Statement
has been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish you with copies thereof; to
file promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Shares; to advise you, promptly
after it receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any Preliminary
Prospectus or prospectus, of the suspension of the qualification of the Shares
or the Exchange Debentures issuable upon exchange of the Shares for offering
or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus or for
additional
12
information; and, in the event of the issuance of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
prospectus or suspending any such qualification, promptly to use its best
efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares or the Exchange Debentures issuable
upon exchange of the Shares for offering and sale under the securities laws of
such jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Shares,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus in such
quantities as you may from time to time reasonably request, and, if the
delivery of a prospectus is required at any time prior to the expiration of
nine months after the time of issue of the Prospectus in connection with the
offering or sale of the Shares or the Exchange Debentures issuable upon
exchange of the Shares and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during such
period to amend or supplement the Prospectus or to file under the Exchange Act
any document incorporated by reference in the Prospectus in order to comply
with the Act or the Exchange Act, to notify you and upon your request to file
such document and to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance, and
in case any Underwriter is required to deliver a prospectus in connection with
sales of any of the Shares and the Exchange Debentures issuable upon exchange
of the Shares at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter, to
prepare and deliver to such Underwriter as many copies as you may request of
an amended or supplemented Prospectus complying with Section 10(a)(3) of the
Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Act), an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Act and the rules and
regulations thereunder (including, at the option of the Company, Rule 158);
(e) To furnish to the Underwriters, without charge (i) four signed
copies of the Registration Statement as first filed with the Commission and of
each amendment to it, including all exhibits, (ii) such number of conformed
copies of the Registration Statement as so filed and of each amendment to it,
without exhibits, as the Underwriters may reasonably request and (iii) for a
period of five years following the Time of Delivery, copies of any annual
reports, quarterly reports and current reports filed with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar forms as may be designated by
the Commission;
13
(f) To furnish to its holders of the Shares and the Exchange
Debentures as soon as practicable after the end of each fiscal year an annual
report (including a balance sheet and statements of income, stockholders'
equity and cash flows of the Company and its consolidated subsidiaries
certified by independent public accountants) and, as soon as practicable after
the end of each of the first three quarters of each fiscal year (beginning
with the fiscal quarter ending after the effective date of the Registration
Statement), consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail.
(g) To use their best efforts to permit the Shares to be eligible for
clearance and settlement through The Depository Trust Company ("DTC").
(h) To apply the net proceeds from the sale of the Shares as set
forth in the Prospectus.
(i) To take such steps as shall be necessary to ensure that neither
the Company nor any of the Subsidiaries shall become an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or (ii)
a "holding company" or a "subsidiary company" or an "affiliate" of a holding
company within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
(j) To cause the Certificate of Designations to be filed with the
appropriate authorities prior to the Time of Delivery.
(k) If, prior to the completion of the distribution of the Shares,
the Company or any Subsidiary commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba after the
date the Prospectus or if the information reported in the Prospectus, if any,
concerning the Company's or any Subsidiary's business with Cuba or with any
person or affiliate located in Cuba changes in any material way, the Company
will provide the Florida Department of Banking and Finance (the "Department")
notice of such business or change, as appropriate, in a form acceptable to the
Department.
(l) Use its best efforts to do all things necessary to satisfy the
closing conditions set forth in Section 7 hereof.
6. The Company agrees to pay all costs and expenses incident to the
performance of their obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 10 hereof, including all costs and expenses
incident to (i) the printing, word processing or other production of documents
with respect to the transactions, including any costs of printing of the
Registration Statement, any Preliminary Prospectus, the Prospectus and any
amendment or supplement thereto and any "Blue Sky" memoranda, (ii) all
arrangements relating to the delivery to the Underwriters of copies of the
foregoing documents and the costs of distributing the foregoing documents,
(iii) the fees and disbursements of the counsel, the accountants and any other
experts or advisors retained by the Company, (iv) preparation (including
printing), issuance and delivery to the Underwriters of the Shares and the
Exchange Debentures, including transfer agent's fees, (v) the qualification of
the Shares and Exchange Debentures under state securities and "Blue Sky" laws,
including filing fees and fees and disbursements of counsel for the
Underwriters relating thereto, (vi) the
14
costs and expenses of DTC and its nominee, including its book-entry system;
(vii) the filing fees of the Commission and the National Association of
Securities Dealers, Inc. relating to the Shares and the Exchange Debentures
(including the fees, disbursements and charges of counsel to the Underwriters
in connection therewith), (viii) expenses of the Company in connection with
any meetings with prospective investors in the Shares and Exchange Debentures,
(ix) fees and expenses of the Trustee, including fees and expenses of counsel
to the Trustee, (x) any fees charged by investment rating agencies for the
rating of the Shares and Exchange Debentures and (xi) all other costs and
expenses incident to the performance of the obligations of the Company under
this Agreement. If the sale of the Shares provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 7 hereof is not satisfied, because this Agreement is
terminated pursuant to Section 10 hereof or because of any failure, refusal or
inability on the part of the Company to perform all obligations and satisfy
all conditions on their part to be performed or satisfied hereunder other than
by reason of a default by the Underwriters, the Company will reimburse the
Underwriters upon demand (accompanied by documentation) for all out-of-pocket
expenses (including counsel fees and disbursements) that shall have been
incurred by the Underwriters in connection with the proposed purchase and sale
of the Shares. The Company shall not in any event be liable to the
Underwriters for the loss of anticipated profits from the transactions covered
by this Agreement.
7. The obligations of the Underwriters hereunder, as to the Shares to
be delivered at the Time of Delivery, shall be subject, in their reasonable
discretion, to the condition that all representations and warranties and other
statements of the Company herein are, at and as of the Time of Delivery, true
and correct in all material respects, the condition that the Company shall
have performed all of its obligations hereunder theretofore to be performed,
and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall
have been complied with to your reasonable satisfaction.
(b) All of the representations and warranties of the Company and the
Subsidiaries contained in this Agreement shall be true and correct in all
material respects on the date hereof and at the Time of Delivery with the same
force and effect as if made on and as of the date hereof, at the Time of
Delivery. The Company and the Subsidiaries shall have performed or complied
with all of the agreements herein contained and required to be performed or
complied with by them at or prior to the Time of Delivery.
(c) The Prospectus, in form and substance reasonably satisfactory to
the Underwriters, shall have been printed and copies distributed to the
Underwriters not later than 12:00 p.m., New York City time, on the day
following the date of this Agreement or at such later date and time as to
which the Underwriters may agree. No stop order suspending the qualification
or exemption from qualification of the Shares in any jurisdiction referred to
in Section 5(b) shall have been issued and no proceeding for that purpose
shall have been commenced or shall be pending or threatened.
15
(d) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental agency
which would, as of the Time of Delivery, have a Material Adverse Effect; no
action, suit or proceeding shall have been commenced and be pending against or
affecting or, to the best knowledge of the Company and the Subsidiaries,
threatened against, the Company or any of the Subsidiaries before any court or
arbitrator or any governmental body, agency or official that, if adversely
determined, could reasonably be expected to result in a Material Adverse
Effect; and no stop order shall have been issued by the Commission or any
governmental agency of any jurisdiction referred to in Section 5(b) preventing
the use of the Prospectus, or any amendment or supplement thereto, or which
could reasonably be expected to have a Material Adverse Effect.
(e) Since the dates as of which information is given in the
Prospectus and other than as set forth in the Prospectus, (i) there has not
been, singly or in the aggregate, any material adverse change, or any
development involving or which may reasonably be expected to involve, a
prospective material adverse change, in the assets, liabilities, results of
operation, management, condition (financial or other), prospects, properties,
business or net worth of the Company, the Subsidiaries and the Acquisition
Entities, taken as a whole (each a "Material Adverse Change"), or any material
change in the long-term debt, or material increase in the short-term debt,
from that set forth in the Prospectus; (ii) no dividend or distribution of any
kind shall have been declared, paid or made by the Company on any class of its
capital stock; (iii) the Company, the Subsidiaries and the Acquisition
Entities shall not have incurred any liabilities or obligations, direct or
contingent, that are material, individually or in the aggregate, to the
Company, the Subsidiaries and the Acquisition Entities, taken as a whole, and
that are required to be disclosed on a balance sheet or notes thereto in
accordance with generally accepted accounting principles and are not disclosed
on the latest balance sheet or notes thereto included in the Prospectus.
(f) The Underwriters shall have received a certificate, dated the
Time of Delivery, signed on behalf of the Company by (i) Xxxxxx X.X.
Xxxxxxxxx, Executive Chairman, (ii) Xxxxxx X. Xxxxx, Executive Vice President,
and (iii) D. Xxxxxxxx Xxxxxxxxx, Executive Vice President, Chief Financial
Officer and Treasurer, confirming that (A) such officers, have participated in
conferences with other officers and representatives of the Company and the
Subsidiaries, representatives of the independent public accountants of the
Company and the Subsidiaries and representatives of counsel to the Company and
the Subsidiaries at which the contents of the Prospectus and related matters
were discussed and (B) the matters set forth in paragraphs (b), (d) and (e)
and the second sentence of paragraph (c) of this Section 7 are true and
correct at the Time of Delivery.
(g) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Shares, the Exchange
Debentures, the Exchange Indenture, the other Transaction Documents, the
Prospectus and all other legal matters relating to this Agreement and the
transactions contemplated hereby including, without limitation, the Pending
Acquisitions and the New Credit Agreement, shall be satisfactory in all
material respects to counsel for the Underwriters, and the Company and the
Subsidiaries shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon such
matters.
(h) Xxxxx & XxXxxxxx, counsel for the Company and the Subsidiaries,
shall have furnished to the Underwriters its written opinion, as counsel to
the Company and the Subsidiaries, addressed to the
16
Underwriters and dated the Time of Delivery, in form and substance reasonably
satisfactory to the Underwriters.
(i) Xxxxxx Xxxxxxx Xxxxxx Leader & Xxxxxxxx, L.L.P., special
communications counsel for the Company and the Subsidiaries, shall have
furnished to the Underwriters its written opinion, as special communications
counsel to the Company and the Subsidiaries, addressed to the Underwriters and
dated the Time of Delivery, in form and substance reasonably satisfactory to
the Underwriters.
(j) The Underwriters shall have received at the Time of Delivery an
opinion of Xxxxxx & Xxxxxxx, counsel for the Underwriters, dated the Time of
Delivery, and addressed to the Underwriters, in form and substance reasonably
satisfactory to the Underwriters.
(k) The Company shall have delivered to the Underwriters letters of
each of Ernst & Young LLP, KPMG Peat Marwick LLP, Coopers & Xxxxxxx LLP,
Deloitte & Touche LLP, Xxxxxx Xxxxxxxx LLP, Xxxxx, Xxxxx, Xxxx, Xxxxxx &
Xxxxxxx, LLP and Xxxxxx Xxxxxxx Xxxxxx Rokenbrod & Xxxxxxx, and such other
letters as the Underwriters may reasonably request, addressed to the
Underwriters and dated the Time of Delivery (i) confirming that they are
independent public accountants under the guidelines of the American Institute
of Certified Public Accountants and (ii) stating the conclusions and findings
of such firm with respect to the financial information and other related
matters presented in the Registration Statement. Such letters shall be in form
and substance reasonably satisfactory to the Underwriters and their counsel.
(l) The Company shall have caused the Certificate of Designations to
be filed with the appropriate authorities and the Underwriters shall have
received a certified copy thereof.
(m) The Company shall have received the consent of the lenders under
the New Credit Facility to the transactions contemplated hereby and shall have
delivered to the Underwriters evidence thereof in form and substance
reasonably satisfactory to the Underwriters.
(n) The Company shall have entered into each of the Transaction
Documents, the form and substance of each of which shall be reasonably
acceptable to the Underwriters (provided that any Transaction Document which
was entered into prior to the date of this Agreement shall be deemed
acceptable to the Underwriters in form and substance for purposes of this
Section 7), and the Underwriters shall have received counterparts, conformed
as executed, thereof and of all other documents and agreements entered into in
connection therewith. There shall exist at and as of the Time of Delivery,
after giving effect to the transactions contemplated by this Agreement and the
other Transaction Documents, no conditions that would constitute a default (or
an event that with notice or the lapse of time, or both, would constitute a
default) under any of the other Transaction Documents or that would have a
Material Adverse Effect on the Company's ability to consummate the Pending
Acquisitions as described in the Prospectus. Each Transaction Document shall
be in full force and effect.
(o) The Company shall have furnished to the Underwriters a
certificate, dated the Time of Delivery, of its Executive Vice President,
Chief Financial Officer and Treasurer as to the solvency of the Company and
the Subsidiaries following consummation of the transactions contemplated
hereby.
17
(p) (i) None of the Company, any of the Subsidiaries or any of the
Acquisition Entities shall have sustained since the date of the latest audited
financial statements included in the Prospectus losses or interferences with
their businesses, taken as a whole, from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (ii) since the respective dates as of which
information is given or incorporated by reference in the Registration
Statement and the Prospectus, there shall not have been any change in the
capital stock or long-term debt of the Company, any of the Subsidiaries or any
of the Acquisition Entities or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company, the
Subsidiaries and the Acquisition Entities, taken as a whole, otherwise than as
set forth or contemplated in the Prospectus, the effect of which, in any such
case described in clause (i) or (ii), is, in the reasonable judgment of the
Underwriters, so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of the Shares being
delivered at the Time of Delivery on the terms and in the manner contemplated
herein and in the Prospectus.
(q) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or The Nasdaq Stock Market's National
Market or in the over-the-counter market shall have been suspended or
materially limited, or minimum prices shall have been established on such
exchange by the Commission, or by such exchange or by any other regulatory
body or governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by federal or state authorities, (iii) the United
States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have been
a declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international conditions
on the financial markets in the United States shall be such) as, in each case,
to make it, in the reasonable judgment of the Underwriters, impracticable or
inadvisable to proceed with the offering or delivery of the Shares being
delivered at the Time of Delivery on the terms and in the manner contemplated
herein and in the Prospectus.
(r) Subsequent to the execution and delivery of this Agreement, (i)
no downgrading shall have occurred in the rating accorded the Shares or any
other security of the Company by a nationally recognized statistical rating
organization, as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Securities Act, and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Shares or any other security
of the Company.
(s) There shall exist at and as of the Time of Delivery no conditions
that would constitute a default (or an event that with notice or the lapse of
time, or both, would constitute a default) under the New Credit Agreement. At
the Time of Delivery, the New Credit Agreement shall be in full force and
effect and shall not have been modified.
(t) The Company shall have entered into an amendment to that certain
Asset Purchase Agreement (as so amended, the "Secret Agreement"), dated as of
October 15, 1996, between the
18
Company and Secret Communications Limited Partnership ("Secret"), which
amendment shall reflect in all material respects the agreement in principle
described in the Prospectus under the caption "Agreements Related to the
Pending Acquisitions and the Pending Dispositions--Secret Communications
Acquisition."
(u) The Company shall have delivered to the Underwriters audited
financial statements of the radio stations of Secret to be acquired by the
Company from Secret pursuant to the Secret Agreement which audited financial
statements shall meet the requirements of Regulation S-X of the Act, which
audited financial statements of Secret shall not be materially different in
form or substance from the unaudited financial statements of Secret utilized
in preparing the pro forma financial statements of the Company included in the
Prospectus. The Company shall have filed with the Commission such audited
financial statements of Secret on Form 8-K in the form required by Regulation
S-X of the Act.
(v) The Company and the Trustee named therein shall have executed a
supplemental indenture, substantially in the form and substance previously
delivered to the Underwriters and their counsel, amending Section 4.09 of that
certain Indenture, between the Company and Chemical Bank, as trustee, dated as
of May 31, 1996, relating to the Company's 10 3/4% Senior Subordinated Notes
due 2006 and such amendment shall have become effective.
(w) Xxxxxx & Xxxxxxx shall have been furnished with such documents,
in addition to those set forth above, as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in
this Section 7 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations,
warranties or conditions herein contained.
(x) Prior to the Time of Delivery, the Company and the Subsidiaries
shall have furnished to the Underwriters such further information,
certificates and documents as the Underwriters may reasonably request.
All such opinions, certificates, letters, schedules, documents or
instruments delivered pursuant to this Agreement will comply with the
provisions hereof only if they are reasonably satisfactory in all material
respects to the Underwriters and counsel for the Underwriters.
8. (a) The Company agrees to indemnify and hold harmless each
Underwriter, and each person, if any, who controls each Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become subject under the Act, the
Exchange Act or otherwise, insofar as any such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement
of any material fact contained in (A) the Registration Statement
originally filed with respect to the Shares or any amendment thereto
or any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto or (B) any application or other document, or any
amendment or supplement thereto, executed by the Company or based
upon written information furnished by or on behalf
19
of the Company filed in any jurisdiction in order to qualify the
Shares under the securities or "Blue Sky" laws thereof or filed with
the Commission or any securities association or securities exchange
(each an "Application"); or
(ii) the omission or alleged omission to state, in such
Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto,
or any Application, a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by any Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, the Company will not be liable
in any such case to the extent that any such loss, claim, damage, or liability
is finally judicially determined to arise out of or be based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or any
Application in reliance upon and in conformity with written information
relating to the Underwriters furnished to the Company by the Underwriters
specifically for use therein; and provided, further, that the Company will
not be liable to the Underwriters or any person controlling the Underwriters
with respect to any such untrue statement or omission made in any Preliminary
Prospectus which is completely corrected in the Prospectus or any amendment
or supplement thereto if (x) it is finally judicially determined that the
person asserting any such loss, claim, damage or liability purchased Shares
from the Underwriters in reliance upon the Preliminary Prospectus but was not
sent or given a copy of the Prospectus (as amended or supplemented) at or
prior to the written confirmation of the sale of such Shares to such person
and (y) the Company notified the Underwriters to send the Prospectus to such
person, unless such failure to deliver the Prospectus was a result of
noncompliance by the Company with Section 5 of this Agreement. This indemnity
agreement will be in addition to any liability that the Company may otherwise
have to the indemnified parties. The Company shall not be liable under this
Section 8 for any settlement of any claim or action effected without its
consent, which shall not be unreasonably withheld.
(b) The Underwriters, severally and not jointly, will indemnify and
hold harmless each of the Company, its directors, its officers who signed the
Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
against any losses, claims, damages or liabilities to which the Company or any
such director, officer or controlling person may become subject under the Act,
the Exchange Act, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or any Application or (ii) the omission or the alleged omission to
state therein a material fact required to be stated in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Application, or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the
20
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by the Underwriters specifically for use
therein; and, subject to the limitation set forth immediately preceding this
clause, will reimburse, as incurred, any legal or other expenses incurred by
the Company or any such director, officer or controlling person in connection
with investigating or defending against or appearing as a third party witness
in connection with any such loss, claim, damage, liability or action in
respect thereof. This indemnity agreement will be in addition to any liability
that the Underwriters may otherwise have to the indemnified parties. The
Underwriters shall not be liable under this Section 8 for any settlement of
any claim or action effected without their consent, which shall not be
unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action for which such indemnified party
is entitled to indemnification under this Section 8, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party (i) will not
relieve it from any liability under paragraph (a) or (b) above unless and to
the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraphs (a) and (b) above. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if (i) the use of counsel chosen by the indemnifying party to represent
the indemnified party would present such counsel with a conflict of interest,
(ii) the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to it and/or
other indemnified parties that are different from or additional to those
available to the indemnifying party or (iii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the
institution of such action, then, in each such case, the indemnifying party
shall not have the right to direct the defense of such action on behalf of
such indemnified party or parties and such indemnified party or parties shall
have the right to select separate counsel to defend such action on behalf of
such indemnified party or parties. After notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof and
approval, not to be unreasonably withheld, by such indemnified party of
counsel appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 8 for any legal or other
expenses, other than reasonable costs of investigation, subsequently incurred
by such indemnified party in connection with the defense thereof, unless (i)
the indemnified party shall have employed separate counsel in accordance with
the proviso to the immediately preceding sentence (it being understood,
however, that in connection with such action the indemnifying party shall not
be liable for the expenses of more than one separate counsel (in addition to
local counsel) in any one action or separate but substantially similar actions
in the same jurisdiction arising out of the same general allegations or
circumstances, designated by the Underwriters in the case of paragraph (a) of
this Section 8 or the Company in the case of paragraph (b) of this
21
Section 8, representing the indemnified parties under such paragraph (a) or
paragraph (b), as the case may be, who are parties to such action or actions)
or (ii) the indemnifying party has authorized in writing the employment of
counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the
consent of the indemnifying party, unless such indemnified party waived in
writing its rights under this Section 8, in which case the indemnified party
may effect such a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 8 is unavailable or insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages
or liabilities (or actions in respect thereof), each indemnifying party, in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect (i) the relative benefits received by
the indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Shares or (ii) if the allocation provided
by the foregoing clause (i) is not permitted by applicable law, not only such
relative benefits but also the relative fault of the indemnifying party or
parties on the one hand and the indemnified party on the other in connection
with the statements or omissions or alleged statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof). The relative benefits received by the Company on the one hand and
the Underwriters on the other shall be deemed to be in the same proportion as
the total proceeds from the offering (before deducting expenses) received by
the Company bear to the total discounts and commissions received by the
Underwriters. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand,
or the Underwriters on the other, the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company and the Underwriters agree that it would not be
equitable if the amount of such contribution were determined by pro rata or
per capita allocation or by any other method of allocation that does not take
into account the equitable considerations referred to in the first sentence of
this paragraph (d). Notwithstanding any other provision of this paragraph (d),
the Underwriters shall not be obligated to make contributions hereunder that
in the aggregate exceed the total discounts and commissions received by the
Underwriters under this Agreement, less the aggregate amount of any damages
that the Underwriters have otherwise been required to pay by reason of the
untrue or alleged untrue statements or the omissions or alleged omissions to
state a material fact, and no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (d), each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as
the Underwriters, and each director of the Company, each officer of the
Company who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, shall have the same rights to contribution as the
Company.
22
9. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereon) made by or
on behalf of any Underwriter or any controlling person of any Underwriter, or
the Company, or any officer or director or controlling person of the Company,
and shall survive delivery of and payment for the Shares.
10. (a) This Agreement may be terminated in the sole discretion of
the Underwriters by notice to the Company given prior to the Time of Delivery
in the event that the Company shall have failed, refused or been unable to
perform all obligations and satisfy all conditions on its part to be performed
or satisfied hereunder at or prior thereto or, if at or prior to the Time of
Delivery:
(i) the Company or any Acquisition Entity shall have
sustained any loss or interference with respect to its businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, which loss or interference, in the
sole reasonable judgment of the Underwriters, has had or has a
Material Adverse Effect or there shall have been, in the sole
reasonable judgment of the Underwriters, any Material Adverse Change,
except in each case as described in or contemplated by the Prospectus
(exclusive of any amendment or supplement thereto);
(ii) trading in securities generally on the New York Stock
Exchange or The Nasdaq Stock Market's National Market or in the
over-the-counter market shall have been suspended or materially
limited, or minimum prices shall have been established on such
exchange by the Commission, or by such exchange or by any other
regulatory body or governmental authority having jurisdiction;
(iii) a banking moratorium shall have been declared by
federal or state authorities;
(iv) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities
involving the United States or there shall have been a declaration of
a national emergency or war by the United States;
(v) (a) a downgrading shall have occurred in the rating
accorded to any debt security of the Company by a nationally
recognized statistical rating organization, as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Act, or
(b) any such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications,
its rating of any debt security of the Company; or
(vi) there shall have occurred such a material adverse
change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the
United States shall be such) as to make it, in the reasonable
judgment of the Underwriters, impracticable or inadvisable to proceed
with the offering or delivery of the Shares being delivered at the
Time of Delivery on the terms and in the manner contemplated herein
and in the
23
Prospectus.
(b) Termination of this Agreement pursuant to this Section 10 shall
be without liability of any party to any other party except as provided in
Section 9 hereof.
11. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made
or given by you jointly or by BT on behalf of you as the representatives.
All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to you as the representatives in care of BT
Securities Corporation, One Bankers Trust Plaza, 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Corporate Finance Department; and if to the Company
shall be delivered or sent by mail to the address of the Company set forth in
the Registration Statement, Attention: Secretary; provided, however, that any
notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at its
address set forth in its Underwriters' Questionnaire, or telex constituting
such Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
12. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Shares from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
13. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
14. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
15. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
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If the foregoing is in accordance with your understanding, please
sign and return to us counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on
behalf of each of the Underwriters is pursuant to the authority set forth in a
form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination upon request, but without warranty on your part as
to the authority of the signers thereof.
Very truly yours,
SFX BROADCASTING, INC.
By: /s/ Xxxxxx X. Xxxxx
_______________________________
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President and
Secretary
Accepted as of the date hereof on behalf of the Underwriters by:
BT SECURITIES CORPORATION
By: /s/ X. Xxxxxx XxXxxxxxx
_______________________________
Name: X. Xxxxxx XxXxxxxxx
Title: Vice President
25
SCHEDULE I
Total Number of Shares
Underwriter To be Purchased
----------- ---------------
BT Securities Corporation............................. 1,350,000
Xxxxxxx, Xxxxx & Co. ................................ 450,000
Xxxxxx Brothers Inc. ............................... 450,000
---------
Total ............................................ 2,250,000
=========
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SCHEDULE II
1. SFX Broadcasting of the Southwest, Inc., a Delaware corporation
2. SFX Broadcasting of Texas, Inc., a Delaware corporation
3. SFX Broadcasting of Texas (KRLD), Inc., a Delaware corporation
4. SFX Broadcasting of Texas (KRLD) Licensee, Inc., a Delaware corporation
5. SFX Broadcasting of Texas (TSN), Inc., a Delaware corporation
6. SFX Broadcasting of Texas (TSN) Licensee, Inc., a Delaware corporation
7. KODA-FM Licensee, Inc., a Delaware corporation
8. KJQY-FM Licensee, Inc., a Delaware corporation
9. SFX Broadcasting of Texas (KTCK), Inc., a Delaware corporation
10. SFX Broadcasting of Texas (KTCK) Licensee, Inc., a Delaware corporation
11. SFX Broadcasting of the Southeast, Inc., a Delaware corporation
12. SFX Broadcasting of South Carolina (WMYI), Inc., a Delaware corporation
13. SFX Broadcasting of South Carolina (WMYI) Licensee, Inc., a Delaware
corporation
14. SFX Broadcasting of Mississippi, Inc., a Delaware corporation
15. SFX Broadcasting of Mississippi Licensee, Inc., a Delaware corporation
16. SFX Broadcasting of South Carolina (WSSL), Inc., a Delaware corporation
17. SFX Broadcasting of South Carolina (WSSL) Licensee, Inc., a Delaware
corporation
18. SFX Broadcasting of Tennessee, Inc., a Delaware corporation
19. SFX Broadcasting of Tennessee Licensee, Inc., a Delaware corporation
20. SFX Broadcasting of Xxxxxxx, Inc., a Delaware corporation
21. SFX Broadcasting of Xxxxxxx Licensee, Inc., a Delaware corporation
22. SFX Broadcasting of North Carolina, Inc., a Delaware corporation
23. SFX Broadcasting of North Carolina Licensee, Inc., a Delaware corporation
24. SFX Broadcasting of San Diego, Inc., a Delaware corporation
25. Xxxxxx Broadcasting Company, a California corporation
26. SFX Broadcasting of San Diego Licensee, Inc., a Delaware corporation
27. SFX Acquisition Corporation
28. SFX Merger Company
27
