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EXHIBIT 1.1
NATIONSBANC XXXXXXXXXX SECURITIES LLC
UNDERWRITING AGREEMENT
$75,000,000 IN ___% SENIOR SECURED NOTES DUE 2005
SHOP AT HOME, INC.
____% SENIOR SECURED NOTES DUE 2005
UNDERWRITING AGREEMENT
DATED MARCH __, 1998
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TABLE OF CONTENTS
PAGE
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Section 1. Representations and Warranties...................................................................... 2
(a) Compliance with Registration Requirements..................................................... 2
(b) Offering Materials Furnished to Underwriters.................................................. 2
(c) Distribution of Offering Material By the Company.............................................. 2
(d) The Underwriting Agreement.................................................................... 2
(e) The Notes..................................................................................... 2
(f) The Indenture and Asset Purchase Agreement.................................................... 2
(g) No Applicable Registration or Other Similar Rights............................................ 3
(h) No Material Adverse Change.................................................................... 3
(i) Independent Accountants....................................................................... 3
(j) Preparation of the Financial Statements....................................................... 3
(k) Incorporation and Good Standing of the Company and its Subsidiaries........................... 3
(l) Notes and Indenture........................................................................... 4
(m) Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required............................................................................ 4
(n) No Material Actions or Proceedings............................................................ 4
(o) Intellectual Property Rights.................................................................. 4
(p) All Necessary Permits, etc.................................................................... 4
(q) Title to Properties........................................................................... 5
(r) Tax Law Compliance............................................................................ 5
(s) Company Not an "Investment Company"........................................................... 5
(t) Insurance..................................................................................... 5
(u) Related Party Transactions.................................................................... 5
(v) Certificates.................................................................................. 5
(w) No Unlawful Contributions or Other Payments................................................... 5
(x) Company's Accounting System................................................................... 5
(y) Compliance with Environmental Laws............................................................ 6
(z) Periodic Review of Costs of Environmental Compliance.......................................... 6
(aa) ERISA Compliance.............................................................................. 6
(bb) Conditions Precedent.......................................................................... 7
Section 2. Purchase, Sale and Delivery of the Notes............................................................ 7
The Notes.............................................................................................. 7
The Closing Date....................................................................................... 7
Public Offering of the Notes........................................................................... 7
Payment for the Notes.................................................................................. 7
Delivery of the Notes.................................................................................. 7
Delivery of Prospectus to the Underwriters............................................................. 7
Section 3. Additional Covenants................................................................................ 7
(a) Representatives' Review of Proposed Amendments and Supplements................................ 7
(b) Securities Act Compliance..................................................................... 8
(c) Amendments and Supplements to the Prospectus and Other Securities Act Matters................. 8
(d) Copies of any Amendments and Supplements to the Prospectus.................................... 8
(e) Blue Sky Compliance........................................................................... 8
(f) Use of Proceeds............................................................................... 8
(g) Earnings Statement............................................................................ 8
(h) Periodic Reporting Obligations................................................................ 9
(i) Future Reports to the Representatives......................................................... 9
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Section 4. Payment of Expenses.................................................................................. 9
Section 5. Conditions of the Obligations of the Underwriters.................................................... 9
(a) Accountants' Comfort Letter.................................................................... 9
(b) Compliance with Registration Requirements; No Stop Order; No Objection from NASD............... 9
(c) No Material Adverse Change or Ratings Agency Change............................................ 10
(d) Opinion of Counsel for the Company............................................................. 10
(e) Opinion of Counsel for the Underwriters........................................................ 10
(f) Officers' Certificate.......................................................................... 10
(g) Bring-down Comfort Letter...................................................................... 10
(h) Additional Documents........................................................................... 11
(i) The Firm Common Shares......................................................................... 11
(j) Consummation of Other Transactions............................................................. 11
Section 6. Reimbursement of Underwriters' Expenses.............................................................. 11
Section 7. Effectiveness of this Agreement...................................................................... 11
Section 8. Indemnification...................................................................................... 12
(a) Indemnification of the Underwriters............................................................ 12
(b) Indemnification of the Company, its Directors and Officers..................................... 12
(c) Notifications and Other Indemnification Procedures............................................. 13
(d) Settlements.................................................................................... 13
Section 9. Contribution......................................................................................... 14
Section 10. Default of One or More of the Several Underwriters.................................................. 14
Section 11. Termination of this Agreement....................................................................... 15
Section 12. Representations and Indemnities to Survive Delivery................................................. 15
Section 13. Notices............................................................................................. 15
Section 14. Successors.......................................................................................... 16
Section 15. Partial Unenforceability............................................................................ 16
Section 16. Governing Law Provisions............................................................................ 16
(a) Governing Law.................................................................................. 16
(b) Consent to Jurisdiction........................................................................ 16
Section 17. General Provisions.................................................................................. 17
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UNDERWRITING AGREEMENT
March __, 1998
NATIONSBANC XXXXXXXXXX SECURITIES LLC
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
As Representatives of the several Underwriters
c/o NATIONSBANC XXXXXXXXXX SECURITIES LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTORY. Shop at Home, Inc., a Tennessee corporation (the
"Company"), proposes to issue and sell to the several underwriters named in
Schedule A (the "Underwriters") an aggregate of $75,000,000 in total principal
amount of ____% Senior Secured Notes due 2005 of the Company (the "Notes"). The
Notes will be issued pursuant to an Indenture (the "Indenture") dated as of
_____________, 1998 between the Company and PNC Bank, National Association, as
trustee (the "Trustee"). NationsBanc Xxxxxxxxxx Securities LLC ("NMS") and
Friedman, Billings, Xxxxxx & Co., Inc. ("FBR") have agreed to act as
representatives of the several Underwriters (in such capacity, the
"Representatives") in connection with the offering and sale of the Notes.
Concurrent with the public offering of the Notes, the
Representatives and certain other underwriters, including some of the
Underwriters, propose to make a public offering of 10,000,000 shares (the "Firm
Common Shares") and up to 1,500,000 additional shares pursuant to the
underwriters' over-allotment option (the "Optional Common Shares") of Common
Stock, par value $0.0025 per share of the Company (the "Common Stock"), pursuant
to the terms of an underwriting agreement of even date between the Company and
the Representatives (the "Shares Underwriting Agreement"). The Firm Common
Shares and, if and to the extent such option is exercised, the Optional Common
Shares are collectively called the "Common Shares".
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-1
(File No. 333-44251), which contains a form of prospectus to be used in
connection with the public offering and sale of the Notes. Such registration
statement, as amended, including the financial statements, exhibits and
schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933 and the rules and regulations
promulgated thereunder (collectively, the "Securities Act"), including any
information deemed to be a part thereof at the time of effectiveness pursuant to
Rule 430A or Rule 434 under the Securities Act, is called the "Registration
Statement". Any registration statement filed by the Company pursuant to Rule
462(b) under the Securities Act is called the "Rule 462(b) Registration
Statement", and from and after the date and time of filing of the Rule 462(b)
Registration Statement the term "Registration Statement" shall include the Rule
462(b) Registration Statement. Such prospectus, in the form first used by the
Underwriters to confirm sales of the Notes, is called the "Prospectus";
provided, however, if the Company has, with the consent of NMS, elected to rely
upon Rule 434 under the Securities Act, the term "Prospectus" shall mean the
Company's prospectus subject to completion (each, a "preliminary prospectus")
dated March 2, 1998 (such preliminary prospectus is called the "Rule 434
preliminary prospectus"), together with the applicable term sheet (the "Term
Sheet") prepared and filed by the Company with the Commission under Rules 434
and 424(b) under the Securities Act and all references in this Agreement to the
date of the Prospectus shall mean the date of the Term Sheet. All references in
this Agreement to the Registration Statement, the Rule 462(b) Registration
Statement, a preliminary prospectus, the Prospectus or the Term Sheet, or any
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amendments or supplements to any of the foregoing, shall include any copy
thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("XXXXX").
The Company hereby confirms its agreements with the
Underwriters as follows:
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SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company hereby
represents, warrants and covenants to each Underwriter as follows:
(a) Compliance with Registration Requirements. The
Registration Statement and any Rule 462(b) Registration Statement have
been declared effective by the Commission under the Securities Act. The
Company has complied to the Commission's satisfaction with all requests
of the Commission for additional or supplemental information. No stop
order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement is in effect and no proceedings for
such purpose have been instituted or are pending or, to the best
knowledge of the Company, are contemplated or threatened by the
Commission.
Each preliminary prospectus and the Prospectus when filed
complied in all material respects with the Securities Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act") and the
rules and regulations thereunder, and, if filed by electronic
transmission pursuant to XXXXX (except as may be permitted by
Regulation S-T under the Securities Act), was identical to the copy
thereof delivered to the Underwriters for use in connection with the
offer and sale of the Notes. Each of the Registration Statement, any
Rule 462(b) Registration Statement and any post-effective amendment
thereto, at the time it became effective and at all subsequent times,
complied and will comply in all material respects with the Securities
Act and the Trust Indenture Act and did not and will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus, as amended or supplemented, as
of its date and at all subsequent times, did not and will not contain
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
representations and warranties set forth in the two immediately
preceding sentences do not apply to statements in or omissions from the
Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments
or supplements thereto, made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in
writing by the Representatives expressly for use therein. There are no
contracts or other documents required to be described in the Prospectus
or to be filed as exhibits to the Registration Statement which have not
been described or filed as required.
(b) Offering Materials Furnished to Underwriters. The Company
has delivered to each Representative one complete manually signed copy
of the Registration Statement and of each consent and certificate of
experts filed as a part thereof, and conformed copies of the
Registration Statement (without exhibits) and preliminary prospectuses
and the Prospectus, as amended or supplemented, in such quantities and
at such places as the Representatives have reasonably requested for
each of the Underwriters.
(c) Distribution of Offering Material By the Company. The
Company has not distributed and will not distribute, prior to the later
of the Closing Date (as defined below) and the completion of the
Underwriters' distribution of the Notes, any offering material in
connection with the offering and sale of the Notes other than a
preliminary prospectus, the Prospectus or the Registration Statement.
(d) The Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable in accordance with its terms,
except as rights to indemnification hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or
by general equitable principles.
(e) The Notes. The issuance of the Notes has been duly
authorized by the Company, and when executed by the Company,
authenticated by the Trustee and delivered against payment
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therefor as contemplated by this Agreement, the Notes will constitute
valid and binding obligations of the Company enforceable in accordance
with their terms and entitled to the benefits of the Indenture, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting the rights and remedies
of creditors or by general equitable principles.
(f) The Indenture and Asset Purchase Agreement. The Indenture
and that certain asset purchase agreement, dated September 23, 1997,
between the Company's subsidiary and Global Broadcasting Systems, Inc.
and its affiliate (the "Asset Purchase Agreement"), have been duly
authorized, executed and delivered by, and are valid and binding
agreements of the Company, enforceable in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights and remedies of creditors or by general
equitable principles.
(g) No Applicable Registration or Other Similar Rights. There
are no persons with registration or other similar rights to have any
equity or debt securities registered for sale under the Registration
Statement or included in the offering contemplated by this Agreement
except for such rights as have been duly waived.
(h) No Material Adverse Change. Except as otherwise disclosed
in the Prospectus, subsequent to the respective dates as of which
information is given in the Prospectus: (i) there has been no material
adverse change, or any development that could reasonably be expected to
result in a material adverse change, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects,
whether or not arising from transactions in the ordinary course of
business, of the Company and its subsidiaries, considered as one entity
(any such change is called a "Material Adverse Change"); (ii) the
Company and its subsidiaries, considered as one entity, have not
incurred any material liability or obligation, indirect, direct or
contingent, not in the ordinary course of business nor entered into any
material transaction or agreement not in the ordinary course of
business; and (iii) there has been no dividend or distribution of any
kind declared, paid or made by the Company or, except for dividends
paid to the Company or other subsidiaries, any of its subsidiaries on
any class of capital stock or repurchase or redemption by the Company
or any of its subsidiaries of any class of capital stock.
(i) Independent Accountants. Coopers & Xxxxxxx L.L.P., who
have expressed their opinion with respect to the financial statements
(which term as used in this Agreement includes the related notes
thereto) filed with the Commission as a part of the Registration
Statement and included in the Prospectus, are independent public or
certified public accountants as required by the Securities Act.
(j) Preparation of the Financial Statements. The financial
statements filed with the Commission as a part of the Registration
Statement and included in the Prospectus present fairly the
consolidated financial position of the Company and its subsidiaries as
of and at the dates indicated and the results of their operations and
cash flows for the periods specified. Such financial statements have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes
thereto. No other financial statements or supporting schedules are
required to be included in the Registration Statement. The financial
data set forth in the Prospectus under the captions "Prospectus Summary
-- Summary Financial Data", "Selected Historical and Pro Forma
Financial Data" and "Capitalization" fairly present the information set
forth therein on a basis consistent with that of the audited financial
statements contained in the Registration Statement. The pro forma
consolidated financial statements of the Company and its subsidiaries
and the related notes thereto included under the caption "Prospectus
Summary -- Summary Financial Data", "Selected Historical and Pro Forma
Financial Data" and elsewhere in the Prospectus and in the Registration
Statement present fairly the information contained therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly
presented on the bases described therein, and the assumptions
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used in the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and
circumstances referred to therein. The Company's ratios of earnings to
fixed charges set forth in the Prospectus under the caption "Selected
Historical and Pro Forma Financial Data" and in Exhibit 12 to the
Registration Statement have been calculated in compliance with Item
503(d) of Regulation S-K under the Securities Act.
(k) Incorporation and Good Standing of the Company and its
Subsidiaries. Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and has
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and, in the
case of the Company, to enter into and perform its obligations under
this Agreement, the Indenture and the other agreements described in the
Prospectus, and the material contracts of the Company, including but
not limited to the Asset Purchase Agreement, and to consummate the
transactions described in each such agreement. Each of the Company and
each subsidiary is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, result in a Material
Adverse Change. All of the issued and outstanding capital stock of each
subsidiary has been duly authorized and validly issued, is fully paid
and nonassessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance or claim (other than liens being released on
the First Closing Date (as defined below) or liens permitted pursuant
to the Indenture). The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 21 to the Registration Statement.
(l) Notes and Indenture. The Notes and the Indenture conform
in all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(m) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor any of
its subsidiaries is in violation of its charter or by-laws or is in
default (or, with the giving of notice or lapse of time, would be in
default) ("Default") under any indenture, mortgage, loan or credit
agreement, note, contract, franchise, lease or other instrument to
which the Company or any of its subsidiaries is a party or by which it
or any of them may be bound, or to which any of the property or assets
of the Company or any of its subsidiaries is subject (each, an
"Existing Instrument"), except for such Defaults as would not,
individually or in the aggregate, result in a Material Adverse Change.
The Company's execution, delivery and performance of this Agreement,
the Indenture and the Asset Purchase Agreement, the issuance of the
Notes and consummation of the transactions contemplated hereby and
thereby and by the Prospectus (i) have been duly authorized by all
necessary corporate action and will not result in any violation of the
provisions of the charter or by-laws of the Company or any subsidiary,
(ii) will not conflict with or constitute a breach of, or Default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or require the consent of any other party to,
any Existing Instrument, except for such conflicts, breaches, Defaults,
liens, charges or encumbrances as would not, individually or in the
aggregate, result in a Material Adverse Change and (iii) will not
result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company or any
subsidiary. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or
regulatory authority or agency, is required for the Company's
execution, delivery and performance of this Agreement, the Indenture
and the Asset Purchase Agreement and consummation of the transactions
contemplated hereby and thereby and by the Prospectus, except such as
have been obtained or made by the Company and are in full force and
effect under the Securities Act, the Trust Indenture Act, applicable
state securities or blue sky laws and from the National Association of
Securities Dealers, Inc. (the "NASD").
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(n) No Material Actions or Proceedings. There are no legal or
governmental actions, suits or proceedings pending or, to the best of
the Company's knowledge, threatened (i) against or affecting the
Company or any of its subsidiaries, (ii) which has as the subject
thereof any officer or director of, or property owned or leased by, the
Company or any of its subsidiaries or (iii) relating to environmental
or discrimination matters, where in any such case (A) there is a
reasonable possibility that such action, suit or proceeding might be
determined adversely to the Company or such subsidiary and (B) any such
action, suit or proceeding, if so determined adversely, would
reasonably be expected to result in a Material Adverse Change or
adversely affect the consummation of the transactions contemplated by
this Agreement. No material labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the best of the
Company's knowledge, is threatened or imminent.
(o) Intellectual Property Rights. The Company and its
subsidiaries own or possess sufficient trademarks, trade names, patent
rights, copyrights, licenses, approvals, trade secrets and other
similar rights (collectively, "Intellectual Property Rights")
reasonably necessary to conduct their businesses as now conducted; and
the expected expiration of any of such Intellectual Property Rights
would not result in a Material Adverse Change. Neither the Company nor
any of its subsidiaries has received any notice of infringement or
conflict with asserted Intellectual Property Rights of others, which
infringement or conflict, if the subject of an unfavorable decision,
would result in a Material Adverse Change.
(p) All Necessary Permits, etc. The Company and each
subsidiary possess such valid and current certificates, authorizations
or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct their respective
businesses, and neither the Company nor any subsidiary has received any
notice of proceedings relating to the revocation or modification of, or
non-compliance with, any such certificate, authorization or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could result in a Material Adverse Change.
(q) Title to Properties. Except as otherwise disclosed in the
Prospectus, the Company and each of its subsidiaries has good and
marketable title to all the properties and assets reflected as owned in
the financial statements referred to in Section 1(j) above (or
elsewhere in the Prospectus), in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims
and other defects, except such as do not materially and adversely
affect the value of such property or the security for the Notes and do
not materially interfere with the use made or proposed to be made of
such property by the Company or such subsidiary and except for liens
being released on the First Closing Date or liens permitted pursuant to
the Indenture. The real property, improvements, equipment and personal
property held under lease by the Company or any subsidiary are held
under valid and enforceable leases, with such exceptions as are not
material and do not materially interfere with the use made or proposed
to be made of such real property, improvements, equipment or personal
property by the Company or such subsidiary.
(r) Tax Law Compliance. The Company and its consolidated
subsidiaries have filed all necessary federal, state and foreign income
and franchise tax returns and have paid all taxes required to be paid
by any of them and, if due and payable, any related or similar
assessment, fine or penalty levied against any of them; provided, that
the Company may have certain unpaid tax liability to the State of
Massachusetts, as described in the Prospectus. The Company has made
adequate charges, accruals and reserves in the applicable financial
statements referred to in Section 1(j) above in respect of all federal,
state and foreign income and franchise taxes for all periods as to
which the tax liability of the Company or any of its consolidated
subsidiaries has not been finally determined.
(s) Company Not an "Investment Company". The Company has been
advised of the rules and requirements under the Investment Company Act
of 1940, as amended (the "Investment Company Act"). The Company is not,
and after receipt of payment for the Notes will not be, an
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"investment company" within the meaning of the Investment Company Act
and will conduct its business in a manner so that it will not become
subject to the Investment Company Act.
(t) Insurance. Each of the Company and its subsidiaries are
insured by recognized, financially sound and reputable institutions
with policies in such amounts and with such deductibles and covering
such risks as are generally deemed adequate and customary for their
businesses including, but not limited to, policies covering real and
personal property owned or leased by the Company and its subsidiaries
against theft, damage, destruction, acts of vandalism and earthquakes.
The Company has no reason to believe that it or any subsidiary will not
be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business
as now conducted and at a cost that would not result in a Material
Adverse Change. Neither the Company nor any subsidiary has been denied
any insurance coverage which it has sought or for which it has applied.
(u) Related Party Transactions. There are no business
relationships or related-party transactions involving the Company or
any subsidiary or any other person required to be described in the
Prospectus which have not been described as required.
(v) Certificates. Any certificate signed by an officer of the
Company and delivered to the Representatives or to counsel for the
Underwriters shall be deemed to be a representation and warranty by the
Company to each Underwriter as to the matters set forth therein.
(w) No Unlawful Contributions or Other Payments. Neither the
Company nor any of its subsidiaries nor, to the best of the Company's
knowledge, any employee or agent of the Company or any subsidiary, has
made any contribution or other payment to any official of, or candidate
for, any federal, state or foreign office in violation of any law or of
the character required to be disclosed in the Prospectus.
(x) Company's Accounting System. The Company maintains a
system of 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 assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(y) Compliance with Environmental Laws. Except as would not,
individually or in the aggregate, result in a Material Adverse Change
(i) neither the Company nor any of its subsidiaries is in violation of
any federal, state, local or foreign law or regulation relating to
pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum and petroleum
products (collectively, "Materials of Environmental Concern"), or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Materials of
Environment Concern (collectively, "Environmental Laws"), which
violation includes, but is not limited to, noncompliance with any
permits or other governmental authorizations required for the operation
of the business of the Company or its subsidiaries under applicable
Environmental Laws, or noncompliance with the terms and conditions
thereof, nor has the Company or any of its subsidiaries received any
written communication, whether from a governmental authority, citizens
group, employee or otherwise, that alleges that the Company or any of
its subsidiaries is in violation of any Environmental Law; (ii) there
is no claim, action or cause of action filed with a court or
governmental authority, no investigation with respect to which the
Company has received written
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notice, and no written notice by any person or entity alleging
potential liability for investigatory costs, cleanup costs,
governmental responses costs, natural resources damages, property
damages, personal injuries, attorneys' fees or penalties arising out
of, based on or resulting from the presence, or release into the
environment, of any Material of Environmental Concern at any location
owned, leased or operated by the Company or any of its subsidiaries,
now or in the past (collectively, "Environmental Claims"), pending or,
to the best of the Company's knowledge, threatened against the Company
or any of its subsidiaries or any person or entity whose liability for
any Environmental Claim the Company or any of its subsidiaries has
retained or assumed either contractually or by operation of law; and
(iii) to the best of the Company's knowledge, there are no past or
present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission,
discharge, presence or disposal of any Material of Environmental
Concern, that reasonably could result in a violation of any
Environmental Law or form the basis of a potential Environmental Claim
against the Company or any of its subsidiaries or against any person or
entity whose liability for any Environmental Claim the Company or any
of its subsidiaries has retained or assumed either contractually or by
operation of law.
(z) Periodic Review of Costs of Environmental Compliance. In
the ordinary course of its business, the Company conducts a periodic
review of the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties). On the basis of such review and the amount of its
established reserves, the Company has reasonably concluded that such
associated costs and liabilities would not, individually or in the
aggregate, result in a Material Adverse Change.
(aa) ERISA Compliance. The Company and its subsidiaries and
any "employee benefit plan" (as defined under the Employee Retirement
Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder (collectively, "ERISA"))
established or maintained by the Company, its subsidiaries or their
"ERISA Affiliates" (as defined below) are in compliance in all material
respects with ERISA. "ERISA Affiliate" means, with respect to the
Company or a subsidiary, any member of any group of organizations
described in Sections 414(b),(c),(m) or (o) of the Internal Revenue
Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "Code") of which the Company or such
subsidiary is a member. No "reportable event" (as defined under ERISA)
has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates. No "employee benefit
plan" established or maintained by the Company, its subsidiaries or any
of their ERISA Affiliates, if such "employee benefit plan" were
terminated, would have any "amount of unfunded benefit liabilities" (as
defined under ERISA). Neither the Company, its subsidiaries nor any of
their ERISA Affiliates has incurred or reasonably expects to incur any
liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any "employee benefit plan" or (ii) Sections 412,
4971, 4975 or 4980B of the Code. Each "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of
their ERISA Affiliates that is intended to be qualified under Section
401(a) of the Code is so qualified and nothing has occurred, whether by
action or failure to act, which would cause the loss of such
qualification.
(bb) Conditions Precedent. All conditions precedent to the
closings of the Asset Purchase Agreement and the Executory Contract as
defined in Section 5(j) have been satisfied to the satisfaction of the
Representatives and the Company has no knowledge of any default by any
party in respect of the Asset Purchase Agreement or the Executory
Contract.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE NOTES.
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The Notes. The Company agrees to issue and sell to the several
Underwriters the Notes upon the terms herein set forth. On the basis of the
representations, warranties and agreements herein contained, and upon the terms
but subject to the conditions herein set forth, the Underwriters agree,
severally and not jointly, to purchase from the Company the respective aggregate
amount of Notes set forth opposite their names on Schedule A, in each case at a
purchase price of ____% of the principal amount thereof plus accrued interest,
if any, from __________, 1998 to the Closing Date (as defined below).
The Closing Date. Delivery of certificates for the Notes to be
purchased by the Underwriters and payment therefor shall be made at the offices
of NMS, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (or such other place as
may be agreed to by the Company and the Representatives) at 6:00 a.m. San
Francisco time, on [___], or such other time and date not later than 10:30 a.m.
San Francisco time, on [___] as the Representatives shall designate by notice to
the Company (the time and date of such closing are called the "Closing Date").
Public Offering of the Notes. The Representatives hereby
advise the Company that the Underwriters intend to offer for sale to the public,
as described in the Prospectus, their respective portions of the Notes as soon
after this Agreement has been executed and the Registration Statement has been
declared effective as the Representatives, in their sole judgment, have
determined is advisable and practicable.
Payment for the Notes. Payment for the Notes shall be made at
the Closing Date by wire transfer of immediately available funds to the order of
the Company.
It is understood that NMS has been authorized, for its own
account and the accounts of the several Underwriters, to accept delivery of and
receipt for, and make payment of the purchase price for, the Notes the
Underwriters have agreed to purchase. NMS, individually and not as the
Representative of the Underwriters, may (but shall not be obligated to) make
payment for any Notes to be purchased by any Underwriter whose funds shall not
have been received by NMS by the Closing Date for the account of such
Underwriter, but any such payment shall not relieve such Underwriter from any of
its obligations under this Agreement.
Delivery of the Notes. The Company shall deliver, or cause to
be delivered, to the Representatives for the accounts of the several
Underwriters certificates for the Notes at the Closing Date, against the
irrevocable release of a wire transfer of immediately available funds for the
amount of the purchase price therefor. The certificates for the Notes shall be
in definitive form and registered in such names and denominations as the
Representatives shall have requested at least two full business days prior to
the Closing Date and shall be made available for inspection on the business day
preceding the Closing Date at a location in New York City as the Representatives
may designate. Time shall be of the essence, and delivery at the time and place
specified in this Agreement is a further condition to the obligations of the
Underwriters.
Delivery of Prospectus to the Underwriters. Not later than
12:00 p.m. on the second business day following the date the Notes are released
by the Underwriters for sale to the public, the Company shall deliver or cause
to be delivered copies of the Prospectus in such quantities and at such places
as the Representatives shall request.
SECTION 3. ADDITIONAL COVENANTS. The Company further covenants
and agrees with each Underwriter as follows:
(a) Representatives' Review of Proposed Amendments and
Supplements. During such period beginning on the date hereof and ending
on the later of the Closing Date or such date, as in the opinion of
counsel for the Underwriters, the Prospectus is no longer required by
law to be delivered in connection with sales by an Underwriter or
dealer (the "Prospectus Delivery Period"), prior to amending or
supplementing the Registration Statement (including any registration
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statement filed under Rule 462(b) under the Securities Act) or the
Prospectus, including any amendment or supplement through incorporation
by reference of any report filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the Company shall furnish to the
Representatives for review a copy of each such proposed amendment or
supplement, and the Company shall not file any such proposed amendment
or supplement to which the Representatives reasonably object.
(b) Securities Act Compliance. After the date of this
Agreement, the Company shall promptly advise the Representatives in
writing (i) of the receipt of any comments of, or requests for
additional or supplemental information from, the Commission, (ii) of
the time and date of any filing of any post-effective amendment to the
Registration Statement or any amendment or supplement to any
preliminary prospectus or the Prospectus, (iii) of the time and date
that any post-effective amendment to the Registration Statement becomes
effective and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus, or
of any proceedings to remove, suspend or terminate from listing or
quotation the Common Stock from any securities exchange upon which it
is listed for trading or included or designated for quotation, or of
the threatening or initiation of any proceedings for any of such
purposes. If the Commission shall enter any such stop order at any
time, the Company will use its best efforts to obtain the lifting of
such order at the earliest possible moment. Additionally, the Company
agrees that it shall comply with the provisions of Rules 424(b), 430A
and 434, as applicable, under the Securities Act and will use its
reasonable efforts to confirm that any filings made by the Company
under such Rule 424(b) were received in a timely manner by the
Commission.
(c) Amendments and Supplements to the Prospectus and Other
Securities Act Matters. If, during the Prospectus Delivery Period, any
event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if in the
opinion of the Representatives or counsel for the Underwriters it is
otherwise necessary to amend or supplement the Prospectus to comply
with law, the Company agrees to promptly prepare (subject to Section
3(a) hereof), file with the Commission and furnish at its own expense
to the Underwriters and to dealers, amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) Copies of any Amendments and Supplements to the
Prospectus. The Company agrees to furnish the Representatives, without
charge, during the Prospectus Delivery Period, as many copies of the
Prospectus and any amendments and supplements thereto as the
Representatives may request.
(e) Blue Sky Compliance. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register
the Notes for sale under (or obtain exemptions from the application of)
the state securities or blue sky laws or Canadian provincial Securities
laws of those jurisdictions designated by the Representatives, shall
comply with such laws and shall continue such qualifications,
registrations and exemptions in effect so long as required for the
distribution of the Notes. The Company shall not be required to qualify
as a foreign corporation or to take any action that would subject it to
general service of process in any such jurisdiction where it is not
presently qualified or where it would be subject to taxation as a
foreign corporation. The Company will advise the Representatives
promptly of the suspension of the qualification or registration of (or
any such exemption relating to) the Notes for offering, sale or trading
in any jurisdiction or any initiation or threat of any proceeding for
any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the Company
shall use its best efforts to obtain the withdrawal thereof at the
earliest possible moment.
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(f) Use of Proceeds. The Company shall apply the net proceeds
from the sale of the Notes sold by it in the manner described under the
caption "Use of Proceeds" in the Prospectus.
(g) Earnings Statement. As soon as practicable, the Company
will make generally available to its security holders and to the
Representatives an earnings statement (which need not be audited)
covering the twelve-month period ending June 30, 1999 that satisfies
the provisions of Section 11(a) of the Securities Act.
(h) Periodic Reporting Obligations. During the Prospectus
Delivery Period the Company shall file, on a timely basis, with the
Commission all reports and documents required to be filed under the
Exchange Act.
(i) Future Reports to the Representatives. During the period
of five years hereafter the Company will furnish to the Representatives
(i) as soon as practicable after the end of each fiscal year, copies of
the Annual Report of the Company containing the balance sheet of the
Company as of the close of such fiscal year and statements of income,
stockholders' equity and cash flows for the year then ended and the
opinion thereon of the Company's independent public or certified public
accountants; (ii) as soon as practicable after the filing thereof,
copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed
by the Company with the Commission, the NASD or any securities
exchange; and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its capital
stock.
SECTION 4. PAYMENT OF EXPENSES. The Company agrees to pay all
costs, fees and expenses incurred in connection with the performance of its
obligations hereunder and under the Indenture and in connection with the
transactions contemplated hereby, including without limitation (i) all expenses
incident to the issuance and delivery of the Notes (including all printing and
engraving costs), (ii) all fees and expenses of the Trustee of the Notes, (iii)
all necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Notes to the Underwriters, (iv) all fees and expenses
of the Company's counsel, independent public or certified public accountants and
other advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and
certificates of experts), each preliminary prospectus and the Prospectus, and
all amendments and supplements thereto, and this Agreement, (vi) all filing
fees, attorneys' fees and expenses incurred by the Company or the Underwriters
in connection with the offering of the Notes, including, without limitation, in
connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Notes for offer and
sale under the state securities or blue sky laws or the provincial securities
laws of Canada, and, if requested by the Representatives, preparing and printing
a "Blue Sky Survey" or memorandum, and any supplements thereto, advising the
Underwriters of such qualifications, registrations and exemptions, (vii) the
filing fees incident to, and the reasonable fees and expenses of counsel for the
Underwriters in connection with, the NASD's review and approval of the
Underwriters' participation in the offering and distribution of the Notes, and
(viii) all other fees, costs and expenses referred to in Item 13 of Part II of
the Registration Statement.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.
The obligations of the several Underwriters to purchase and pay for the Notes as
provided herein on the Closing Date shall be subject to the accuracy of the
representations and warranties on the part of the Company set forth in Section 1
hereof as of the date hereof and as of the Closing Date as though then made, to
the timely performance by the Company of its covenants and other obligations
under this Agreement and the Indenture, and to each of the following additional
conditions:
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(a) Accountants' Comfort Letter. On the date hereof, the
Representatives shall have received from Coopers & Xxxxxxx L.L.P.,
independent public or certified public accountants for the Company, a
letter dated the date hereof addressed to the Underwriters, in form and
substance satisfactory to the Representatives, containing statements
and information of the type ordinarily included in accountant's
"comfort letters" to underwriters, delivered according to Statement of
Auditing Standards No. 72 (or any successor bulletin), with respect to
the audited and unaudited financial statements and certain financial
information contained in the Registration Statement and the Prospectus
(and the Representatives shall have received a sufficient number of
additional conformed copies of such accountants' letter for each of the
several Underwriters).
(b) Compliance with Registration Requirements; No Stop Order;
No Objection from NASD. For the period from and after effectiveness of
this Agreement and prior to the Closing Date:
(i) the Company shall have filed the Prospectus
with the Commission (including the information required by
Rule 430A under the Securities Act) in the manner and within
the time period required by Rule 424(b) under the Securities
Act; or the Company shall have filed a post-effective
amendment to the Registration Statement containing the
information required by such Rule 430A, and such
post-effective amendment shall have become effective; or, if
the Company elected to rely upon Rule 434 under the Securities
Act and obtained the Representatives' consent thereto, the
Company shall have filed a Term Sheet with the Commission in
the manner and within the time period required by such Rule
424(b);
(ii) no stop order suspending the effectiveness of
the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective amendment to the Registration
Statement, shall be in effect and no proceedings for such
purpose shall have been instituted or threatened by the
Commission; and
(iii) the NASD shall have raised no objection to the
fairness and reasonableness of the underwriting terms and
arrangements.
(c) No Material Adverse Change or Ratings Agency Change. For
the period from and after the date of this Agreement and prior to the
Closing Date:
(i) in the judgment of the Representatives there
shall not have occurred any Material Adverse Change; and
(ii) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any securities of the Company or any of
its subsidiaries by any "nationally recognized statistical
rating organization" as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act.
(d) Opinion of Counsel for the Company. On the Closing Date
the Representatives shall have received the favorable opinion of Xxxxx,
Tarrant & Xxxxx, counsel for the Company, dated as of the Closing Date,
the form of which is attached as Exhibit A (and the Representatives
shall have received a sufficient number of additional conformed copies
of such counsel's legal opinion for each of the several Underwriters).
(e) Opinion of Counsel for the Underwriters. On the Closing
Date the Representatives shall have received the favorable opinion of
Jenkens & Xxxxxxxxx, a Professional Corporation, counsel for the
Underwriters, dated as of the Closing Date, as to customary matters and
in form satisfactory to the Representatives (and the Representatives
shall have received a sufficient number of additional conformed copies
of such counsel's legal opinion for each of the several Underwriters).
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(f) Officers' Certificate. On the Closing Date the
Representatives shall have received a written certificate executed by
the Chairman of the Board, Chief Executive Officer or President of the
Company and the Chief Financial Officer or Chief Accounting Officer of
the Company, dated as of the Closing Date, to the effect set forth in
subsections (b)(ii) and (c)(ii) of this Section 5, and further to the
effect that:
(i) for the period from and after the date of this
Agreement and prior to the Closing Date, there has not
occurred any Material Adverse Change;
(ii) the representations, warranties and covenants
of the Company set forth in Section 1 of this Agreement are
true and correct with the same force and effect as though
expressly made on and as of the Closing Date; and
(iii) the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date.
(g) Bring-down Comfort Letter. On the Closing Date the
Representatives shall have received from Coopers & Xxxxxxx L.L.P.,
independent public or certified public accountants for the Company, a
letter dated such date, in form and substance satisfactory to the
Representatives, to the effect that they reaffirm the statements made
in the letter furnished by them pursuant to subsection (a) of this
Section 5, except that the specified date referred to therein for the
carrying out of procedures shall be no more than three business days
prior to the Closing Date (and the Representatives shall have received
a sufficient number of additional conformed copies of such accountants'
letter for each of the several Underwriters).
(h) Additional Documents. On or before the Closing Date, the
Representatives and counsel for the Underwriters shall have received
such information, documents and opinions as they may reasonably require
for the purposes of enabling them to pass upon the issuance and sale of
the Notes as contemplated herein, or in order to evidence the accuracy
of any of the representations and warranties, or the satisfaction of
any of the conditions or agreements, herein contained, including a
letter of Wiley, Rein & Fielding regarding the statements made with
respect to XXXX (TV) at pages [___] of the Prospectus.
(i) The Firm Common Shares. The purchase and sale of the Firm
Common Shares pursuant to the Shares Underwriting Agreement shall be
consummated contemporaneously with the consummation of the purchase and
sale of the Notes under this Agreement, and, on or before the Closing
Date, all conditions to the obligations of the underwriters under the
Shares Underwriting Agreement to purchase the Firm Common Shares shall
have been satisfied in all material respects, and the Company shall be
prepared in all respects to consummate the sale of such Firm Common
Shares.
(j) Consummation of Other Transactions. The purchase and sale
of the assets to be acquired by the Company's subsidiary, SAH
Acquisition Corporation II ("SAH"), under (i) the Asset Purchase
Agreement, including without limitation broadcast television stations
KCNS located in San Francisco, California and XXXX located in the
Raleigh-Durham, North Carolina market, and (ii) an executory purchase
contract (the "Executory Contract") to be assigned to and assumed by
SAH under the Asset Purchase Agreement to purchase broadcast television
station WOAC (TV) in the Cleveland, Ohio market, shall be consummated
contemporaneously with the consummation of the purchase and sale of the
Notes under this Agreement, and, on or before the Closing Date, all
conditions to the obligations of SAH and the sellers under the Asset
Purchase Agreement and the Executory Contract to purchase and sell such
assets shall have been satisfied or waived, and SAH and such sellers
shall be prepared in all respects to consummate such purchase and sale
transactions.
If any condition specified in this Section 5 is not satisfied
when and as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time
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on or prior to the Closing Date, which termination shall be without liability on
the part of any party to any other party, except that Section 4, Section 6,
Section 8 and Section 9 shall at all times be effective and shall survive such
termination.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. The
Company agrees to reimburse the Representatives and the other Underwriters (or
such Underwriters as have terminated this Agreement with respect to themselves),
severally, upon demand for all out-of-pocket expenses that shall have been
reasonably incurred by the Representatives and the Underwriters in connection
with the proposed purchase and the offering and sale of the Notes, including but
not limited to fees and disbursements of counsel, printing expenses, travel
expenses, postage, facsimile and telephone charges. The reimbursement obligation
set forth herein shall be in effect in the event this Agreement is terminated by
the Representatives pursuant to Section 5, Section 7, Section 10 or Section 11,
or if the sale to the Underwriters of the Notes on the Closing Date is not
consummated because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or to comply with any provision hereof.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT. This Agreement
shall not become effective until the later of (i) the execution of this
Agreement by the parties hereto and (ii) notification by the Commission to the
Company and the Representatives of the effectiveness of the Registration
Statement under the Securities Act.
Prior to such effectiveness, this Agreement may be terminated
by any party by notice to each of the other parties hereto, and any such
termination shall be without liability on the part of (a) the Company to any
Underwriter, except that the Company shall be obligated to reimburse the
expenses of the Representatives and the Underwriters pursuant to Sections 4 and
6 hereof, (b) of any Underwriter to the Company, or (c) of any party hereto to
any other party except that the provisions of Section 8 and Section 9 shall at
all times be effective and shall survive such termination.
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter, its officers and
employees, and each person, if any, who controls any Underwriter within
the meaning of the Securities Act and the Exchange Act against any
loss, claim, damage, liability or expense, as incurred, to which such
Underwriter or such controlling person may become subject, under the
Securities Act, the Exchange Act or other federal or state statutory
law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the
written consent of the Company), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based (i) upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any
information deemed to be a part thereof pursuant to Rule 430A or Rule
434 under the Securities Act, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading; or (ii) upon any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
or (iii) in whole or in part upon any inaccuracy in the representations
and warranties of the Company contained herein; or (iv) in whole or in
part upon any failure of the Company to perform its obligations
hereunder or under law; or (v) any act or failure to act or any alleged
act or failure to act by any Underwriter in connection with, or
relating in any manner to, the Common Stock or the offering
contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based
upon any matter covered by clause (i) or (ii) above, provided that the
Company shall not be liable under this clause (v) to the
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extent that a court of competent jurisdiction shall have determined by
a final judgment that such loss, claim, damage, liability or action
resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its bad faith or
willful misconduct; and to reimburse each Underwriter and each such
controlling person for any and all expenses (including the fees and
disbursements of counsel chosen by the Representatives) as such
expenses are reasonably incurred by such Underwriter or such
controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the foregoing
indemnity agreement shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, arising out
of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity
with written information furnished to the Company by the
Representatives expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); and provided, further, that with respect to any
preliminary prospectus, the foregoing indemnity agreement shall not
inure to the benefit of any Underwriter from whom the person asserting
any loss, claim, damage, liability or expense purchased Notes, or any
person controlling such Underwriter, if copies of the Prospectus were
timely delivered to the Underwriter pursuant to Section 2 and a copy of
the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or
given by or on behalf of such Underwriter to such person, if required
by law so to have been delivered, at or prior to the written
confirmation of the sale of the Notes to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage, liability or expense. The
indemnity agreement set forth in this Section 8(a) shall be in addition
to any liabilities that the Company may otherwise have.
(b) Indemnification of the Company, its Directors and
Officers. Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of its directors, each of
its officers who signed the Registration Statement and each person, if
any, who controls the Company within the meaning of the Securities Act
or the Exchange Act, against any loss, claim, damage, liability or
expense, as incurred, to which the Company, or any such director,
officer or controlling person may become subject, under the Securities
Act, the Exchange Act, or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of
any litigation, if such settlement is effected with the written consent
of such Underwriter), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises
out of or is based upon any untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto),
or arises out of or is based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
the Registration Statement, any preliminary prospectus, the Prospectus
(or any amendment or supplement thereto), in reliance upon and in
conformity with written information furnished to the Company by the
Representatives expressly for use therein; and to reimburse the
Company, or any such director, officer or controlling person for any
legal and other expense reasonably incurred by the Company, or any such
director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such
loss, claim, damage, liability, expense or action. The Company hereby
acknowledges that the only information that the Underwriters have
furnished to the Company expressly for use in the Registration
Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) are the statements set forth (A) as
the last paragraph on the inside front cover page of the Prospectus
concerning stabilization by the Underwriters and (B) in the table in
the first paragraph and in the second, third, fourth, sixth and seventh
paragraphs under the caption "Underwriting" in the Prospectus; and the
Underwriters confirm that such statements are correct. The indemnity
agreement set forth in this Section 8(b) shall be in addition to any
liabilities that each Underwriter may otherwise have.
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(c) Notifications and Other Indemnification Procedures.
Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against an indemnifying
party under this Section 8, notify the indemnifying party in writing of
the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it
is not prejudiced as a proximate result of such failure. In case any
such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with
all other indemnifying parties similarly notified, by written notice
delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that a conflict may arise between
the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying
party, the indemnified party or parties shall have the right to select
separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of such indemnifying party's election so to
assume the defense of such action and approval by the indemnified party
of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
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 next preceding
sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel
(together with local counsel), approved by the indemnifying party (the
Representatives in the case of Section 8(b) and Section 9),
representing the indemnified parties who are parties to such action) or
(ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the
action, in each of which cases the fees and expenses of counsel shall
be at the expense of the indemnifying party.
(d) Settlements. The indemnifying party under this Section 8
shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
Section 8(c) hereof, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise
or consent includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
action, suit or proceeding.
SECTION 9. CONTRIBUTION. If the indemnification provided for
in Section 8 is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall
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contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, from the offering of the Notes pursuant to this
Agreement 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 or inaccuracies in the
representations and warranties herein which 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, in connection with the offering of the
Notes pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Notes pursuant to
this Agreement (before deducting expenses) received by the Company, and the
total underwriting discount received by the Underwriters, in each case as set
forth on the front cover page of the Prospectus (or, if Rule 434 under the
Securities Act is used, the corresponding location on the Term Sheet) bear to
the aggregate initial public offering price of the Notes as set forth on such
cover. 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 any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact or any such inaccurate or
alleged inaccurate representation or warranty relates to information supplied by
the Company, on the one hand, or 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.
The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 8(c), any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the
underwriting commissions received by such Underwriter in connection with the
Notes underwritten by it and distributed to the public. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 9 are several, and not joint, in proportion
to their respective underwriting commitments as set forth opposite their names
in Schedule A. For purposes of this Section 9, each officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, 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 the Securities Act and the
Exchange Act shall have the same rights to contribution as the Company.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL
UNDERWRITERS. If, on the Closing Date, any one or more of the several
Underwriters shall fail or refuse to purchase Notes that it or they have agreed
to purchase hereunder on such date, and the aggregate principal amount of Notes
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase does not exceed 10% of the aggregate principal amount of Notes to be
purchased on such date, the other Underwriters shall be obligated, severally, in
the proportions that the principal amount of Notes set forth opposite their
respective names on
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Schedule A bears to the aggregate principal amount of Notes set forth opposite
the names of all such non-defaulting Underwriters, or in such other proportions
as may be specified by the Representatives with the consent of the
non-defaulting Underwriters, to purchase the Notes which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date. If, on the Closing Date, any one or more of the Underwriters shall fail or
refuse to purchase Notes and the aggregate principal amount of Notes with
respect to which such default occurs exceeds 10% of the aggregate principal
amount of Notes to be purchased on such date, and arrangements satisfactory to
the Representatives and the Company for the purchase of such Notes are not made
within 48 hours after such default, this Agreement shall terminate without
liability of any party to any other party except that the provisions of Section
4, Section 8 and Section 9 shall at all times be effective and shall survive
such termination. In any such case either the Representatives 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, to the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected.
As used in this Agreement, the term "Underwriter" shall be
deemed to include any person substituted for a defaulting Underwriter under this
Section 10. Any action taken under this Section 10 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the
Closing Date this Agreement may be terminated by the Representatives by notice
given to the Company if at any time (i) trading or quotation in any of the
Company's securities shall have been suspended or limited by the Commission or
by the Nasdaq Stock Market, or trading in securities generally on either the
Nasdaq Stock Market or the New York Stock Exchange shall have been suspended or
limited, or minimum or maximum prices shall have been generally established on
any of such stock exchanges by the Commission or the NASD; (ii) a general
banking moratorium shall have been declared by any of federal, New York,
Delaware or California authorities; (iii) there shall have occurred any outbreak
or escalation of national or international hostilities or any crisis or
calamity, or any change in the United States or international financial markets,
or any substantial change or development involving a prospective substantial
change in United States' or international political, financial or economic
conditions, as in the judgment of the Representatives is material and adverse
and makes it impracticable to market the Notes in the manner and on the terms
described in the Prospectus or to enforce contracts for the sale of securities;
(iv) in the judgment of the Representatives there shall have occurred any
Material Adverse Change; or (v) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as
in the judgment of the Representatives may interfere materially with the conduct
of the business and operations of the Company regardless of whether or not such
loss shall have been insured. Any termination pursuant to this Section 11 shall
be without liability on the part of (a) the Company to any Underwriter, except
that the Company shall be obligated to reimburse the expenses of the
Representatives and the Underwriters pursuant to Sections 4 and 6 hereof, (b)
any Underwriter to the Company, or (c) of any party hereto to any other party
except that the provisions of Section 8 and Section 9 shall at all times be
effective and shall survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE
DELIVERY. The respective indemnities, agreements, representations, warranties
and other statements of the Company, of its officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter or the Company or any of its or their partners, officers or
directors or any controlling person, as the case may be, and will survive
delivery of and payment for the Notes sold hereunder and any termination of this
Agreement.
SECTION 13. NOTICES. All communications hereunder shall be in
writing and shall be mailed, hand delivered or telecopied and confirmed to the
parties hereto as follows:
If to NMS:
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NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxx
with a copy to:
NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
If to FBR:
Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Syndicate Department
If to the Company:
Shop at Home, Inc.
0000 Xxxx Xxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Facsimile:
-----------------
Attention:
-----------------
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 14. SUCCESSORS. This Agreement will inure to the
benefit of and be binding upon the parties hereto, including any substitute
Underwriters pursuant to Section 10 hereof, and to the benefit of the employees,
officers and directors and controlling persons referred to in Section 8 and
Section 9, and in each case their respective successors, and personal
representatives, and no other person will have any right or obligation
hereunder. The term "successors" shall not include any purchaser of the Notes as
such from any of the Underwriters merely by reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
SECTION 16. GOVERNING LAW PROVISIONS.
(a) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
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(b) Consent to Jurisdiction. Any legal suit, action or
proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby ("Related Proceedings") may be
instituted in the federal courts of the United States of America
located in the City and County of San Francisco or the courts of the
State of California in each case located in the City and County of San
Francisco (collectively, the "Specified Courts"), and each party
irrevocably submits to the exclusive jurisdiction (except for
proceedings instituted in regard to the enforcement of a judgment of
any such court (a "Related Judgment"), as to which such jurisdiction is
non-exclusive) of such courts in any such suit, action or proceeding.
Service of any process, summons, notice or document by mail to such
party's address set forth above shall be effective service of process
for any suit, action or other proceeding brought in any such court. The
parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the
Specified Courts and irrevocably and unconditionally waive and agree
not to plead or claim in any such court that any such suit, action or
other proceeding brought in any such court has been brought in an
inconvenient forum.
SECTION 17. GENERAL PROVISIONS. This Agreement constitutes the
entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof. This Agreement may be
executed in two or more counterparts, each one of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement may not be amended or modified unless in writing by
all of the parties hereto, and no condition herein (express or implied) may be
waived unless waived in writing by each party whom the condition is meant to
benefit. The Table of Contents and the Section headings herein are for the
convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a
sophisticated business person who was adequately represented by counsel during
negotiations regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
SHOP AT HOME, INC.
By:
--------------------------------
[TITLE]
The foregoing Underwriting Agreement is hereby confirmed and
accepted by the Representatives in San Francisco, California and Arlington,
Virginia, respectively, as of the date first above written.
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NATIONSBANC XXXXXXXXXX SECURITIES LLC
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By: NATIONSBANC XXXXXXXXXX SECURITIES LLC
By:
-----------------------------------------
Xxxxxxx X. Xxxxx, Managing Director
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SCHEDULE A
AGGREGATE PRINCIPAL
AMOUNT OF NOTES
UNDERWRITER TO BE PURCHASED
NationsBanc Xxxxxxxxxx Securities LLC....................... [___]
Friedman, Billings, Xxxxxx & Co., Inc....................... [___]
Total:............................................. $75,000,000
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EXHIBIT A
Opinion of counsel for the Company to be delivered pursuant to
Section 5(d) of the Underwriting Agreement.
References to the Prospectus in this Exhibit A include any
supplements thereto at the Closing Date.
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Tennessee.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under the Underwriting Agreement, the Asset Purchase
Agreement, the Indenture, to issue the Notes and to consummate the
transactions described in each such agreement.
(iii) The Company is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except for
such jurisdictions where the failure to so qualify or to be in good
standing would not, individually or in the aggregate, result in a
Material Adverse Change.
(iv) Each significant subsidiary (as defined in Rule 405
under the Securities Act) has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and, to the best knowledge of such counsel,
is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually
or in the aggregate, result in a Material Adverse Change.
(v) All of the issued and outstanding capital stock of each
such significant subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or, to the best knowledge
of such counsel, any pending or threatened claim; provided, that the
Company may have certain unpaid tax liability to the State of
Massachusetts, as described in the Prospectus.
(vi) The Notes and the Indenture conform to the descriptions
thereof set forth in the Prospectus. The form of certificate used to
evidence the Notes is in due and proper form and complies with all
applicable requirements of the Indenture, the charter and by-laws of
the Company and the General Corporation Law of the State of Tennessee.
(vii) No stockholder of the Company or any other person has
any preemptive right, right of first refusal or other similar right to
subscribe for or purchase securities of the Company arising (i) by
operation of the charter or by-laws of the Company or the General
Corporation Law of the State of Tennessee or (ii) to the best knowledge
of such counsel, otherwise.
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(viii) The Underwriting Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the
Company, enforceable in accordance with its terms, except as rights to
indemnification thereunder may be limited by applicable law and except
as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable
principles.
(ix) The Indenture and the Asset Purchase Agreement have
been duly authorized, executed and delivered by, and are valid and
binding agreements of, the Company, enforceable in accordance with
their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles.
(x) The issuance of the Notes has been duly authorized by
the Company, and when executed by the Company, authenticated by the
Trustee and delivered against payment therefor as contemplated by this
Agreement, the Notes will constitute valid and binding obligations of
the Company enforceable in accordance with their terms and entitled to
the benefits of the Indenture, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights and remedies of creditors or by general
equitable principles.
(xi) Each of the Registration Statement and the Rule 462(b)
Registration Statement, if any, has been declared effective by the
Commission under the Securities Act. To the best knowledge of such
counsel, no stop order suspending the effectiveness of either of the
Registration Statement or the Rule 462(b) Registration Statement, if
any, has been issued under the Securities Act and no proceedings for
such purpose have been instituted or are pending or are contemplated or
threatened by the Commission. Any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424(b) under the Securities Act
and has been made in the manner and within the time period required by
such Rule 424(b).
(xii) The Registration Statement, including any Rule 462(b)
Registration Statement, the Prospectus, and each amendment or
supplement to the Registration Statement and the Prospectus, as of
their respective effective or issue dates (other than the financial
statements and supporting schedules included therein or in exhibits to
or excluded from the Registration Statement, as to which no opinion
need be rendered) comply as to form in all material respects with the
applicable requirements of the Securities Act, the Trust Indenture Act
and the Exchange Act.
(xiii) The statements (i) in the Prospectus under the
captions "Risk Factors -- Control by Principal Shareholders", " --
Change in Control", " -- Litigation", "Description of Notes",
"Description of Capital Stock", "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Liquidity and
Capital Resources", "Business -- Legal Proceedings", "Certain
Relationships and Related Transactions", and "Underwriting" and (ii) in
Item 14 and Item 15 of the Registration Statement, insofar as such
statements constitute matters of law, summaries of legal matters, the
Company's charter or by-law provisions, documents or legal proceedings,
or legal conclusions, have been reviewed by such counsel and fairly
present and summarize, in all material respects, the matters referred
to therein.
(xiv) To the best knowledge of such counsel, there are no
legal or governmental actions, suits or proceedings pending or
threatened which are required to be disclosed in the Registration
Statement, other than those disclosed therein.
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(xv) To the best knowledge of such counsel, there are no
Existing Instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed or incorporated by
reference as exhibits thereto; and the descriptions thereof and
references thereto are correct in all material respects.
(xvi) No consent, approval, authorization or other order of,
or registration or filing with, any court or other governmental
authority or agency, is required for the Company's execution, delivery
and performance of the Underwriting Agreement, the Indenture and the
Asset Purchase Agreement, and consummation of the transactions
contemplated thereby and by the Prospectus, except as required under
the Securities Act, the Trust Indenture Act, applicable state
securities or blue sky laws and from the NASD.
(xvii) The execution and delivery of the Underwriting
Agreement, the Indenture, the Notes and the Asset Purchase Agreement by
the Company and the performance by the Company of its obligations
thereunder (other than performance by the Company of its obligations
under the indemnification section of the Underwriting Agreement, as to
which no opinion need be rendered) (i) have been duly authorized by all
necessary corporate action on the part of the Company; (ii) will not
result in any violation of the provisions of the charter or by-laws of
the Company or any subsidiary; (iii) will not constitute a breach of,
or Default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to the Notes or to the best knowledge of
such counsel, any other material Existing Instrument; or (iv) to the
best knowledge of such counsel, will not result in any violation of any
law, administrative regulation or administrative or court decree
applicable to the Company or any subsidiary.
(xviii) The Company is not, and after receipt of payment for
the Notes will not be, an "investment company" within the meaning of
Investment Company Act.
(xix) Except as disclosed in the Prospectus, to the best
knowledge of such counsel, there are no persons with registration or
other similar rights to have any equity or debt securities registered
for sale under the Registration Statement or included in the offering
contemplated by the Underwriting Agreement, except for such rights as
have been duly waived.
(xx) To the best knowledge of such counsel, neither the
Company nor any subsidiary is in violation of its charter or by-laws or
any law, administrative regulation or administrative or court decree
applicable to the Company or any subsidiary or is in Default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any material Existing Instrument, except in each
such case for such violations or Defaults as would not, individually or
in the aggregate, result in a Material Adverse Change; provided, that
the Company may have certain unpaid tax liability to the State of
Massachusetts, as described in the Prospectus.
In addition, such counsel shall state that they have
participated in conferences with officers and other representatives of
the Company, representatives of the independent public or certified
public accountants for the Company and with representatives of the
Underwriters at which the contents of the Registration Statement and
the Prospectus, and any supplements or amendments thereto, and related
matters were discussed and, although such counsel is not passing upon
and does not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement
or the Prospectus (other than as specified above), and any supplements
or amendments thereto, on the basis of the foregoing, nothing has come
to their attention which would lead them to believe that either the
Registration Statement or any amendments thereto, at the time the
Registration Statement or such amendments became effective,
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contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as of its
date or at the Closing Date, 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, not misleading (it being understood that such
counsel need express no belief as to the financial statements or
schedules or other financial or statistical data derived therefrom,
included in the Registration Statement or the Prospectus or any
amendments or supplements thereto).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
laws of the State of Tennessee or the federal law of the United States, to the
extent they deem proper and specified in such opinion, upon the opinion (which
shall be dated the Closing Date, shall be satisfactory in form and substance to
the Underwriters, shall expressly state that the Underwriters may rely on such
opinion as if it were addressed to them and shall be furnished to the
Representatives) of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters; provided,
however, that such counsel shall further state that they believe that they and
the Underwriters are justified in relying upon such opinion of other counsel,
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.
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