Exhibit 1
Granite Broadcasting Corporation
$175,000,000 8 7/8% Senior Subordinated Notes
due May 15, 2008
Purchase Agreement
May 6, 1998
Xxxxxxx, Xxxxx & Co.,
Bear, Xxxxxxx & Co. Inc.,
Salomon Brothers Inc,
c/o Goldman, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
Granite Broadcasting Corporation, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$175,000,000 principal amount of the Senior Subordinated Notes specified above
(the "Securities").
The Purchasers and their direct and indirect transferees of the Securities
will be entitled to the benefits of the Exchange and Registration Rights
Agreement, to be dated as of the First Time of Delivery (as defined below) (the
"Registration Rights Agreement"), among the Company and the Purchasers (in the
form attached hereto as Exhibit A), pursuant to which the Company has agreed,
among other things, to file a registration statement (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission")
registering the Exchange Securities (as defined in the Registration Rights
Agreement) under the Securities Act of 1933, as amended (the "Act").
1. The Company represents and warrants to, and agrees with, each of the
Purchasers that:
(a) A preliminary offering circular, dated May 1, 1998 (the
"Preliminary Offering Circular"), and an offering circular, dated May 6,
1998 (the "Offering Circular"), in each case including the international
supplement thereto, and the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 ("1997 10-K") and Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 1998 ("1998 First
Quarter 10-Q"), which have been filed with the Commission, and are
incorporated by reference into the Preliminary Offering Circular and the
Offering Circular, have been prepared in connection with the offering of
the Securities. Any reference to the Preliminary Offering Circular or the
Offering Circular shall be deemed to refer to and include the Company's
1997 10-K, 1998 First Quarter 10-Q and
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all subsequent documents filed with the United States Securities and
Exchange Commission (the "Commission") pursuant to Section 13(a), 13(c) or
15(d) of the United States Securities Exchange Act of 1934, as amended
(the "Exchange Act") on or prior to the date of the Preliminary Offering
Circular or the Offering Circular, as the case may be, and any reference
to the Preliminary Offering Circular or the Offering Circular, as the case
may be, as amended or supplemented, as of any specified date, shall be
deemed to include (i) any documents filed with the Commission pursuant to
Section 13(a), 13(c) or 15(d) of the Exchange Act after the date of the
Preliminary Offering Circular or the Offering Circular, as the case may
be, and prior to the completion of the distribution of the Securities and
(ii) any Additional Issuer Information (as defined in Section 5(f))
furnished by the Company prior to the completion of the distribution of
the Securities; and all documents filed under the Exchange Act and so
deemed to be included in the Preliminary Offering Circular or the Offering
Circular, as the case may be, or any amendment or supplement thereto are
hereinafter called the "Exchange Act Reports". The Exchange Act Reports,
when they were or are filed with the Commission, conformed or will conform
in all material respects to the applicable requirements of the Exchange
Act and the applicable rules and regulations of the Commission thereunder.
The Preliminary Offering Circular or the Offering Circular and any
amendments or supplements thereto and the Exchange Act Reports did not and
will not, as of their respective dates, contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the
Company by a Purchaser through Xxxxxxx, Sachs & Co. expressly for use
therein;
(b) The Company and its subsidiaries, taken as a whole, have not
sustained since the date of the latest audited financial statements
incorporated by reference in the Offering Circular any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Offering Circular; and, since the respective
dates as of which information is given in the Offering Circular, there has
not been any change in the capital stock (other than an increase of not
more than $1,000,000 or other than conversion of preferred stock into
Common Stock (Nonvoting) and the exercise of certain employee stock
options and awards) or any increase in the short-term debt (other than
trade payables), long-term debt (other than an increase of not more than
$1,000,000) or redeemable stock of the Company and its subsidiaries or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole, otherwise than as set
forth or contemplated in the Offering Circular;
(c) The Company and its subsidiaries have good and marketable (or,
with respect to property in the State of Texas, indefeasible) title in fee
simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Offering
Circular or such as do not materially affect the value of such property
and do not interfere with the use
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made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries;
(d) 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 its jurisdiction of incorporation, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Offering Circular, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to require such
qualification, except where the failure to be so qualified would not have
a material adverse effect on the Company and its subsidiaries, taken as a
whole, or is subject to no material liability or disability by reason of
the failure to be so qualified in any such jurisdiction;
(e) The Company has an authorized capitalization at March 31, 1998
as set forth in the Offering Circular, and all of the issued shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable; and all of the issued shares
of capital stock of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares and except as otherwise set forth
in the Offering Circular) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims;
(f) The Securities have been duly authorized and, when issued and
delivered against payment therefor pursuant to this Agreement, will have
been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company entitled
to the benefits provided by the Indenture to be dated as of May 11, 1998
(the "Indenture") between the Company and The Bank of New York, a trustee
(the "Trustee"), under which they are to be issued; the Indenture has been
duly authorized and, when executed and delivered by the Company and the
Trustee, the Indenture will constitute a valid and legally binding
instrument of the Company, enforceable against the Company in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; the
Indenture will be in a form which would meet the requirements for
qualification under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"); and the Securities and the Indenture will conform
in all material respects to the descriptions thereof in the Offering
Circular and will be in substantially the form delivered to the Purchasers
prior to or at the Time of Delivery.
(g) The Registration Rights Agreement has been duly authorized, and,
when executed and delivered by the Company, will constitute a valid and
legally binding agreement of the Company enforceable against the Company
in accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Registration
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Rights Agreement will conform in all material respects to the description
thereof in the Offering Circular;
(h) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of the
Exchange Act, or any regulation promulgated thereunder, including, without
limitation, Regulations T, U, and X of the Board of Governors of the
Federal Reserve System;
(i) Prior to the date hereof, neither the Company nor any of its
affiliates has taken any action which is designed to or which has
constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the Company
in connection with the offering of the Securities;
(j) Other than as set forth in the Offering Circular, the issue and
sale of the Securities and the compliance by the Company with all of the
provisions of the Securities, the Indenture, the Registration Rights
Agreement and this Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, sale/leaseback
agreement, loan agreement or other similar financing agreement or
instrument or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action result
in any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties, except, in
each case, for such conflicts, breaches, violations or defaults as would
not have a material adverse effect on the Company and its subsidiaries,
taken as a whole; and, assuming the accuracy of the representations and
warranties of the Purchasers in Section 3, no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Securities or the consummation by the Company of the transactions
contemplated by this Agreement, the Indenture or the Registration Rights
Agreement, except such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities by
the Purchasers, and such consents, approvals, authorizations,
registrations and qualifications as may be required under the Act, the
Trust Indenture Act of 1939 and state or foreign securities or Blue Sky
laws in connection with the exchange offer or resale registration
statement contemplated in the Offering Circular and described in the
Registration Rights Agreement;
(k) Neither the Company nor any of its subsidiaries is in violation
of its Certificate of Incorporation or By-laws or in default in the
performance or observance of any obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which it is a party or by which it or
any of its
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properties may be bound, except for such violations or non-compliances as
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(l) The statements set forth in the Offering Circular under the
caption "Description of the Notes" insofar as they purport to constitute a
summary of the terms of the Securities, and under the caption "Plan of
Distribution", insofar as they purport to describe the provisions of the
laws and documents referred to therein (other than any agreement among
Purchasers), are accurate and fair in all material respects;
(m) Other than as set forth in the Offering Circular, there are no
legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the current or future consolidated
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole; and, other than as set
forth in the Offering Circular and to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(n) The Company and each of its subsidiaries holds all material
licenses, certificates, permits, consents, orders, authorizations and
approvals for the Existing Stations (as defined below) (collectively,
"Licenses") from governmental authorities which are necessary to the
conduct of their businesses in the manner and to the full extent now
operated or proposed to be operated as described in the Offering Circular;
such Licenses are in full force and effect and no proceeding has been
instituted or pending or, to the knowledge of the Company, is contemplated
or threatened which in any manner affects or draws into question the
validity or effectiveness thereof; such Licenses contain no materially
burdensome restrictions not customarily imposed by the Federal
Communications Commission (the "FCC") on television stations of the same
class and type; the operation of the television stations identified in the
Offering Circular under the caption "Summary of Offering Circular -- the
Company" (excluding KOFY) and in the Company's 1997 10-K under the caption
"Item 1. Business -- The Company's Stations" (collectively, the "Existing
Stations") in the manner and to the full extent now operated or proposed
to be operated as described in the Offering Circular is in accordance with
the Communications Act of 1934, as amended (the "Communications Act"), the
Telecommunications Act of 1996, and all orders, rules and regulations of
the FCC, except for such noncompliance as would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole; no
event has occurred which permits (nor has an event occurred which with
notice or lapse of time or both would permit) the revocation or
termination of such Licenses or which might result in any other material
impairment of the rights of the Company or its subsidiaries therein; the
Company and its subsidiaries are in compliance with all statutes, orders,
rules or regulations of the FCC relating to or affecting the broadcasting
operations of any of the Existing Stations, except for such noncompliance
as would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
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(o) To the best of the Company's knowledge, neither the Company nor
any of its subsidiaries has infringed any patents, patent rights, trade
names, trademarks or copyrights, which infringement might have a material
adverse effect on the general affairs, management financial position,
stockholders' equity or results of operations or the Company and its
subsidiaries, taken as a whole;
(p) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the
meaning of Rule 144A under the Act) as securities which are listed on a
national securities exchange registered under Section 6 of the Exchange
Act or quoted in a U.S. automated inter-dealer quotation system;
(q) The Company is subject to Section 13 or 15(d) of the Exchange
Act;
(r) The Company is not, and after giving effect to the offering and
sale of the Securities, will not be an "investment company", or an entity
"controlled" by an "investment company", as such terms are defined in the
United States Investment Company Act of 1940, as amended (the "Investment
Company Act");
(s) Assuming the accuracy of the representations and warranties of
the Purchasers in Section 3, neither the Company, nor any person acting on
its or their behalf has offered or sold the Securities by means of any
general solicitation or general advertising within the meaning of Rule
502(c) under the Act;
(t) Other than the conversion of preferred stock into Common Stock
(Nonvoting) and the exercise of certain employee stock options and awards,
within the preceding six months, neither the Company nor any other person
acting on behalf of the Company has offered or sold to any person any
Securities, or any securities of the same or a similar class as the
Securities, other than Securities offered or sold to the Purchasers
hereunder. The Company will take reasonable precautions designed to insure
that any offer or sale, direct or indirect, in the United States or to any
U.S. person (as defined in Rule 902 under the Act) of any Securities or
any substantially similar security issued by the Company, within six
months subsequent to the date on which the distribution of the Securities
has been completed (as notified to the Company by Xxxxxxx, Xxxxx & Co.),
is made under restrictions and other circumstances reasonably designed not
to affect the status of the offer and sale of the Securities in the United
States and to U.S. persons contemplated by this Agreement as transactions
exempt from the registration provisions of the Act; and
(u) Ernst & Young LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
2. Subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to each of the Purchasers, and each of the Purchasers agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
96.829% of the principal amount thereof, plus accrued interest, if any, from May
11, 1998 to the Time of Delivery hereunder, the principal amount of Securities
set forth opposite the name of such Purchaser in Schedule I hereto.
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3. Upon the authorization by you of the release of the Securities, the several
Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company that:
(a) It has offered or sold and will offer and sell the Securities
only (i) to persons who it reasonably believes are "qualified
institutional buyers" ("QIBs") within the meaning of Rule 144A under the
Act in transactions meeting the requirements of Rule 144A or, (ii) upon
the terms and conditions set forth in Annex II to this Agreement;
(b) It is an "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act ("Institutional
Accredited Investor"); and
(c) It has not offered or sold and will not offer or sell the
Securities by any form of general solicitation or general advertising,
including but not limited to the methods described in Rule 502(c) under
the Act.
4. (a) Except as set forth in the next paragraph, the Securities to be purchased
by each Purchaser hereunder will be represented by one or more definitive global
certificate for the Securities in book-entry form, which will be deposited by or
on behalf of the Company with The Depository Trust Company ("DTC") or its
designated custodian. The Company will deliver the Securities to Xxxxxxx, Xxxxx
& Co., for the account of each Purchaser, against payment by or on behalf of
such Purchaser of the purchase price therefor by certified or official bank
check or checks, payable to the order of the Company in, or by wire transfer to
an account specified by the Company of, Federal (same day) funds, by causing DTC
to credit the Securities to the account of Xxxxxxx, Sachs & Co. at DTC. The
Company will cause the certificate representing the Securities to be made
available to Xxxxxxx, Xxxxx & Co. for checking at least twenty-four hours prior
to the Time of Delivery (as defined below) at the office of DTC or its
designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be 9:30 a.m., New York City time, on May 11, 1998 or
such other time and date as Xxxxxxx, Sachs & Co. and the Company may agree upon
in writing. Such time and date are herein called the "Time of Delivery".
Such Securities, if any, as Xxxxxxx, Xxxxx & Co. may request upon at least
forty-eight hours' prior notice to the Company (such request to include the
authorized denominations and the names in which they are to be registered),
shall be delivered in definitive certificated form, by or on behalf of the
Company to Xxxxxxx, Sachs & Co. for the account of certain of the Purchasers,
against payment by or on behalf of such Purchaser of the purchase price therefor
by certified or official bank check or checks, payable to the order of the
Company in, or by wire transfer to an account specified by the Company of,
Federal (same day) funds. The Company will cause the certificate representing
the Securities to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at the office of Xxxxxxx, Xxxxx
& Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(b) The documents to be delivered at the Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Securities and any additional documents requested by the Purchasers
pursuant to Section 7(i) hereof, will be delivered at such
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time and date at the offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 (the "Closing Location"), and the Securities will be delivered at
the Designated Office, all at the Time of Delivery. A meeting will be held at
the Closing Location at 3:00 p.m., New York City time, on the New York Business
Day next preceding the Time of Delivery, at which meeting the final drafts of
the documents to be delivered pursuant to the preceding sentence will be
available for review by the parties hereto. For the purposes of this Section 4,
"New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to
make no amendment or any supplement to the Offering Circular which shall
be disapproved by you promptly after reasonable notice thereof; and to
furnish you with copies thereof;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under
the securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete
the distribution of the Securities, provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or
to file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to
time, to furnish the Purchasers with four copies of the Offering Circular
and each amendment or supplement thereto, signed by an authorized officer
of the Company, and any amendment or supplement containing amendments to
the financial statements covered by such report, signed by the
accountants, and additional copies thereof in New York City in such
quantities as you may reasonably request and, if at any time prior to the
earlier of (i) nine months after the date of the Offering Circular and
(ii) the consummation of the exchange offer registered with the Commission
as contemplated by the Registration Rights Agreement, any event shall have
occurred as a result of which the Offering Circular as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Offering Circular is delivered, not misleading or, if for any other
reason it shall be necessary or desirable during such same period to amend
or supplement the Offering Circular, to notify you and upon your request
to prepare and furnish without charge to each Purchaser and to any dealer
in securities as many copies as you may from time to time reasonably
request of an amended Offering Circular or a supplement to the Offering
Circular which will correct such statement or omission or effect such
compliance;
(d) During the period beginning from the date hereof and continuing
until the date 180 days after the Time of Delivery, not to offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder,
any securities of the Company that are substantially similar to the
Securities without the prior written consent of Xxxxxxx, Sachs & Co.;
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(e) Not to be or become, at any time prior to the expiration of two
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or
15(d) of the Exchange Act, for the benefit of holders from time to time of
Securities, to furnish at its expense, upon request, to holders of
Securities and prospective purchasers of securities information (the
"Additional Issuer Information") satisfying the requirements of subsection
(d)(4)(i) of Rule 144A under the Act;
(g) If reasonably requested by you at any time when any of the
Securities are (i) restricted securities, as defined in Rule 144(a)(3)
under the Act or (ii) securities that can only be sold pursuant to
Regulation S under the Act, Rule 144A under the Act or Rule 144 under the
Act or in a transaction exempt from the registration requirements under
the Act pursuant to Section 4 of the Act and not involving a public
offering, to use its reasonable best efforts to cause such Securities to
be eligible for the PORTAL trading system of the National Association of
Securities Dealers, Inc.;
(h) During a period of five years from the date of the Offering
Circular, to furnish to you copies of all reports or other communications
(financial or other) furnished to stockholders of the Company, and to
deliver to you (i) as soon as they are available, copies of any reports
and financial statements furnished to or filed with the Commission or any
securities exchange on which the Securities or any class of securities of
the Company is listed; and (ii) such additional information concerning the
business and financial condition of the Company as you may from time to
time reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its stockholders generally or to the
Commission);
(i) During the period of two years (or such lesser period required
by Rule 144(k) in the event Rule 144(k) under the Act is amended) after
the Time of Delivery, the Company will not, and will not permit any of its
"affiliates" (as defined in Rule 144 under the Act) to, resell any of the
Securities which constitute "restricted securities" under Rule 144 that
have been reacquired by any of them;
(j) The Company will comply with the Registration Rights Agreement;
and
(k) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the
Offering Circular under the caption "Use of Proceeds".
6. The Company covenants and agrees with the several Purchasers that the Company
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the issue
of the Securities and all other expenses in connection with the preparation,
printing and filing of the Preliminary Offering Circular and the Offering
Circular and any amendments and supplements thereto and the mailing and
delivering of
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copies thereof to the Purchasers and dealers; (ii) the cost of printing or
producing any Agreement among Purchasers, this Agreement, the Indenture, any
Blue Sky and Legal Investment Memoranda, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Securities, excluding (except as provided in
clause (iii)) fees and expenses for legal services of counsel for the
Purchasers; (iii) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Purchasers in connection with such qualification and in connection with the Blue
Sky and legal investment surveys; (iv) any fees charged by securities rating
services for rating the Securities; (v) the cost of preparing the Securities;
(vi) the fees and expenses of the Trustee and any agent of the Trustee and the
fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Securities; (vii) any cost incurred in connection with the
designation of the Securities for trading in PORTAL; and (viii) all other costs
and expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, and Sections 8 and 11 hereof,
the Purchasers will pay all of their own costs and expenses, including the fees
of their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Purchasers hereunder shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company herein are, at and as of the Time of Delivery, true
and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) Xxxxxxxx & Xxxxxxxx, counsel for the Purchasers, shall have
furnished to you such opinion or opinions, dated the Time of Delivery,
with respect to the incorporation of the Company, the validity of the
Indenture and the Securities, the Offering Circular and other related
matters as you may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(b) Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., counsel for the
Company, shall have furnished to you their written opinion (substantially
in the form attached hereto as Exhibit B), dated the Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) The Company and each of its subsidiaries is duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
power and authority (corporate and other) to own its properties and
conduct its business as described in the Offering Circular;
(ii) The Company has an authorized capitalization as set forth
in the Offering Circular, and all of the issued shares of capital
stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable;
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(iii) The Company and each of its subsidiaries has been duly
qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties or conducts any business so as to
require such qualification, except where the failure to be so
qualified would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole, or is subject to no material
liability or disability by reason of the failure to be so qualified
in any such jurisdiction (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local counsel
and in respect of matters of fact upon certificates of officers of
the Company, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such
opinions and certificates);
(iv) All of the issued shares of capital stock of each such
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable, and (except for
directors' qualifying shares and except as otherwise set forth in
the Offering Circular) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or
claims (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect
of matters of fact upon certificates of officers of the Company or
its subsidiaries, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such
opinions and certificates);
(v) To the best of such counsel's knowledge and other than as
set forth or contemplated in the Offering Circular, there are no
legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a material adverse
effect on the current or future consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries; and, other than as set forth in the Offering Circular
and to the best of such counsel's knowledge, no such proceedings are
threatened by governmental authorities or threatened by others;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company;
(vii) The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Company entitled to the benefits of the
Indenture, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
(viii) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
instrument, enforceable against the Company in accordance with its
terms, subject, as to enforcement, to bankruptcy,
-11-
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(ix) The Registration Rights Agreement has been duly
authorized, executed and delivered, and constitutes a valid and
legally binding obligation of the Company enforceable in accordance
with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles, except as rights to indemnification and contribution
thereunder may be limited by applicable law;
(x) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the
Indenture, the Registration Rights Agreement and this Agreement and
the consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, sale/leaseback agreement, loan
agreement or other financing agreement or any other agreement or
instrument that has been or, to the knowledge of such counsel, is
required to be filed by the Company with the Commission, nor will
such actions result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any
statute, rule or regulation of any governmental agency or body of
the United States or the State of New York or Texas having
jurisdiction over the Company or any of its subsidiaries or any of
their properties or any court order identified by the Company to
such counsel as potentially relevant to such transaction, except, in
each case, for such conflicts, breaches, violations or defaults as
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(xi) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body
of the United States or the State of New York or Texas having
jurisdiction over the Company or any of its subsidiaries or any of
their properties is required for the issue and sale of the
Securities or the consummation by the Company of the transactions
contemplated by this Agreement or the Indenture, except such
consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Securities by
the Purchasers and such consents, approvals, authorizations,
registrations and qualifications as may be required under the Act,
the Trust Indenture Act and state or foreign securities or Blue Sky
laws in connection with the exchange offer or resale registration
statement contemplated in the Offering Circular and described in the
Registration Rights Agreement;
(xii) To the knowledge of such counsel after reasonable
investigation, neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws or in
default in the performance or observance of any obligation, covenant
or condition contained in any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument that has been
or is required to be filed by the
-12-
Company with the Commission, except for such violations or
non-compliances as would not have a material adverse effect on the
Company and its subsidiaries taken as a whole;
(xiii) The statements set forth in the Company's 1997 10-K
under the captions, "Item 1. Business--FCC Licenses;" "--The Cable
Television Consumer Protection and Competition Act," "--Digital
Television Service," "--Proposed Legislation and Regulations"
incorporated by reference in the Offering Circular and the
statements set forth in the Offering Circular under the caption
"Underwriting," insofar as they purport to constitute a summary of
the legal documents referred to therein or matters of law and under
the caption "Description of Notes", insofar as they purport to
constitute a summary of the terms of the Securities, in each case,
are accurate summaries and fairly and correctly present, in all
material respects, the information called for with respect to such
legal documents and matters;
(xiv) Other than as set forth in the Offering Circular, the
Company and its subsidiaries have such Licenses from the FCC, as are
necessary for the lawful operation of the Existing Stations in the
manner and to the full extent now operated or proposed to be
operated as described in the Offering Circular; such Licenses are in
full force and effect and, to the best of such counsel's knowledge,
no proceeding has been instituted or is threatened, pending or
contemplated which in any manner affects or draws into question the
validity or effectiveness thereof; such Licenses contain no
materially burdensome restrictions not customarily imposed by the
FCC on television stations of the same class and type;
(xv) To the best of such counsel's knowledge, the operation of
the Existing Stations in the manner and to the full extent now
operated or proposed to be operated as described in the Offering
Circular is in accordance with the Licenses, the Communications Act,
the Telecommunications Act of 1996 and all orders, rules and
regulations of the FCC, except for such noncompliance as would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(xvi) To the best of such counsel's knowledge, no event has
occurred which permits (nor has an event occurred which with notice
or lapse of time or both would permit) the revocation or termination
of the Licenses from the FCC or which would reasonably be expected
to result in any other material impairment of the rights of the
Company or its subsidiaries to such Licenses, taken as a whole;
(xvii) To the best of such counsel's knowledge, the Company
and its subsidiaries are in compliance with all statutes, orders,
rules or regulations of the FCC relating to or affecting the
broadcasting operations of any of the Existing Stations, except for
such noncompliance as would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole;
(xviii) The Exchange Act Reports (other than the financial
statements and related schedules therein and other financial
information, as to which such counsel need
-13-
express no opinion), when they were filed with the Commission,
complied as to form in all material respects with the requirements
of the Exchange Act, and the rules and regulations of the Commission
thereunder;
(xix) Assuming the accuracy of the representations and
warranties of the Purchasers in Section 3, compliance with the
resale limitations contained in the Offering Circular under the
caption "Notice to Investors" and that the Purchasers have not
resold the Securities in any Regulation S transactions, no
registration of the Securities under the Act, and no qualification
of an indenture under the Trust Indenture Act with respect thereto,
is required for the offer, sale and initial resale of the Securities
by the Purchasers in the manner contemplated by this Agreement; and
(xx) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined
in the Investment Company Act.
In addition, such counsel shall also state that such
counsel has no reason to believe that the Offering Circular
(including all Exchange Act Reports incorporated by reference
therein) and any further amendments or supplements thereto made by
the Company prior to the Time of Delivery (other than the financial
statements therein and other financial information, as to which such
counsel need express no opinion) contained as of its date or
contains as of the Time of Delivery an untrue statement of a
material fact or omitted or omits, as the case may be, to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P. may limit their opinion to the
laws of the United States, the District of Columbia, New York and Texas
and Delaware corporate law.
(c) On the date of the Offering Circular prior to the
execution of this Agreement and also at the Time of Delivery, Ernst
& Young LLP shall have furnished to you a letter or letters, dated
the respective dates of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex II hereto;
(d) (i) The Company and its subsidiaries, taken as a whole,
shall not have sustained since the date of the latest audited
financial statements incorporated by reference in the Offering
Circular any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated
in the Offering Circular, and (ii) since the respective dates as of
which information is given in the Offering Circular there shall not
have been any change in the capital stock (other than an increase of
not more than $1,000,000 or other than conversion of preferred stock
into Common Stock (Nonvoting) and the exercise of certain employee
stock options and awards) or any increase in the short-term debt
(other than trade payables) or long-term debt (other than an
increase of not more than $1,000,000) of the Company and its
subsidiaries, taken as a whole, or any
-14-
change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Offering Circular, the effect of which, in any
such case described in Clause (i) or (ii), is in your judgment so
material and adverse as to make it impracticable or inadvisable to
proceed with the offering or the delivery of the Securities on the
terms and in the manner contemplated in this Agreement and in the
Offering Circular;
(e) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that
term is defined by the Commission for purposes of Rule 436(g)(2)
under the Act, and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt
securities;
(f) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange or on
the Nasdaq National Market; (ii) a suspension or material limitation
in trading in the Company's securities on the Nasdaq National
Market; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities; (iv) the
outbreak or escalation of hostilities involving the United States or
the declaration by the United States of a national emergency or war,
if the effect of any such event specified in this Clause (iv) in
your judgment makes it impracticable or inadvisable to proceed with
the offering or the delivery of the Securities on the terms and in
the manner contemplated in the Offering Circular; or (v) the
occurrence of any material adverse change in the existing,
financial, political or economic conditions in the United States or
elsewhere which, in your judgment, would materially and adversely
affect the financial markets or the markets for the Securities and
other equity or debt securities;
(g) The Securities shall have been designated for trading on
PORTAL;
(h) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of Offering
Circulars, amendments and supplements on the New York Business Day
next succeeding the date of this Agreement; and
(i) The Company shall have furnished or caused to be furnished
to you at the Time of Delivery certificates of officers of the
Company satisfactory to you as to the accuracy of the
representations and warranties of the Company herein at and as of
such Time of Delivery, as to the performance by the Company of all
of its obligations hereunder to be performed at or prior to such
Time of Delivery, as to the matters set forth in subsection (e) of
this Section and as to such other matters as you may reasonably
request.
-15-
8. (a) The Company will indemnify and hold harmless each Purchaser against any
losses, claims, damages or liabilities, joint or several, to which such
Purchaser may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Offering Circular or the Offering
Circular or any Exchange Act Report, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and will reimburse
each Purchaser for any legal or other expenses reasonably incurred by such
Purchaser in connection with investigating or defending any such action or claim
as such expenses are incurred; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Offering
Circular or the Offering Circular or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Purchaser through Xxxxxxx, Xxxxx & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Circular or the Offering Circular, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact or necessary to make the statements
therein, in the light of the circumstances under which they were made, 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 any Preliminary Offering Circular or the Offering Circular or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Purchaser through Xxxxxxx, Sachs &
Co. expressly for use therein; and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
-16-
reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Purchasers on the other from the offering
of the Securities. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Purchasers on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Purchasers on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
Purchasers' discounts and commissions received by the Purchasers, in each case
as set forth in the Offering Circular. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the Purchasers
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Purchasers 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 above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities purchased by it and distributed to investors
were offered to investors exceeds the amount of any damages which such Purchaser
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The Purchasers' obligations in this
subsection (d) to contribute are several in proportion to their respective
purchase obligations and not joint.
-17-
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Act; and the obligations of the Purchasers
under this Section 8 shall be in addition to any liability which the respective
Purchasers may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Offering Circular,
or in any other documents or arrangements, and the Company agrees to prepare
promptly any amendments to the Offering Circular which in your opinion may
thereby be made necessary. The term "Purchaser" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of a defaulting Purchaser or Purchasers, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Purchaser or the Company, except for the expenses to be borne by the Company and
the Purchasers as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Purchaser from liability for its default.
-18-
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Purchasers, as set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Purchaser or any controlling person of any Purchaser, or the Company, or
any officer or director or controlling person of the Company, and shall survive
delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof, the
Company shall not then be under any liability to any Purchaser except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Purchasers through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Purchasers in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Purchaser except as provided in Sections 6 and
8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or given
by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Sachs &
Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the Offering
Circular, Attention: Secretary; provided, however, that any notice to a
Purchaser pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Purchaser at its address set forth in
its Purchasers' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit of,
the Purchasers, the Company and, to the extent provided in Sections 8 and 10
hereof, the officers and directors of the Company and each person who controls
the Company or any Purchaser, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Purchaser shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties hereto in
any number of counterparts, each of which shall be deemed to be an original, but
all such respective counterparts shall together constitute one and the same
instrument.
-19-
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Purchasers, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Purchasers and the Company.
Very truly yours,
Granite Broadcasting Corporation
By:
----------------------------------
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Bear, Xxxxxxx & Co. Inc.
Salomon Brothers Inc
/s/ Xxxxxxx, Xxxxx & Co.
------------------------------------
(Xxxxxxx, Sachs & Co.)
-20-
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Purchasers, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Purchasers and the Company.
Very truly yours,
Granite Broadcasting Corporation
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President-Finance and
Controller
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Bear, Xxxxxxx & Co. Inc.
Salomon Brothers Inc
------------------------------------
(Xxxxxxx, Xxxxx & Co.)
-20-
SCHEDULE I
Number of
Securities
to be
Purchaser Purchased
--------- ---------
Xxxxxxx, Sachs & Co. .................................. 122,500,000
Bear, Xxxxxxx & Co. Inc. .............................. 26,250,000
Salomon Brothers Inc. ................................. 26,250,000
------------
Total .................................. $175,000,000
============
-21-
ANNEX I
(1) The Securities have not been and will not be registered under the Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S under
the Act or pursuant to an exemption from the registration requirements of the
Act. Each Purchaser represents that it has offered and sold the Securities, and
will offer and sell the Securities (i) as part of their distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of the
offering and the Time of Delivery, only in accordance with Rule 903 of
Regulation S or, Rule 144A under the Act. Accordingly, each Purchaser agrees
that neither it, its affiliates nor any persons acting on its or their behalf
has engaged or will engage in any directed selling efforts with respect to the
Securities, and it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Purchaser agrees that, at or
prior to confirmation of sale of Securities (other than a sale pursuant to Rule
144A), it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
during the restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Securities Act") and may not be offered
and sold within the United States or to, or for the account or benefit of,
U.S. persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of the
offering and the closing date, except in either case in accordance with
Regulation S (or Rule 144A if available) under the Securities Act. Terms
used above have the meaning given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
Each Purchaser further agrees that it has not entered and will not enter
into any contractual arrangement with respect to the distribution or delivery of
the Securities, except with its affiliates or with the prior written consent of
the Company.
(2) Notwithstanding the foregoing, Securities in registered form may be
offered, sold and delivered by the Purchasers in the United States and to U.S.
persons pursuant to Section 3 of this Agreement without delivery of the written
statement required by paragraph (1) above.
(3) Each Purchaser further represents and agrees that (i) it has not
offered or sold and prior to the date six months after the date of issue of the
Securities will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, (b) it
has complied, and will comply, with all applicable provisions of the Financial
Services Act of 1986 of Great Britain with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom,
and (c) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issuance of
the Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Xxx 0000 (Investment Advertisements) (Exemptions) Order
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1996 of Great Britain or is a person to whom the document may otherwise lawfully
be issued or passed on.
(4) Each Purchaser agrees that it will not offer, sell or deliver any of
the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each Purchaser
understands that no action has been taken to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purpose. Each Purchaser agrees not to cause any advertisement of the Securities
to be published in any newspaper or periodical or posted in any public place and
not to issue an circular relating to the Securities, except in any such case
with Xxxxxxx, Xxxxx & Co.'s express written consent and then only at its own
risk and expense.
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ANNEX II
Pursuant to Section 7(c) of the Purchase Agreement, the accountants shall
furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of
the Securities Exchange Act of 1934 (the "Exchange Act") and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the consolidated financial statements
and financial statement schedules audited by them and included or
incorporated by reference in the Offering Circular comply as to form
in all material respects with the requirements of the Exchange Act
and the related published rules and regulations; and they have made
a review in accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma
financial information, financial forecasts and/or condensed
financial statements derived from audited financial statements of
the Company for the periods specified in such letter, as indicated
in their reports thereon, copies of which have been furnished to the
Purchasers and are attached hereto;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public
Accountants of the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in or incorporated by reference in the Offering
Circular and included in the Company's quarterly reports on Form
10-Q as indicated in their reports thereon, copies of which have
been furnished to the Purchasers and are attached hereto; and on the
basis of specified procedures including inquiries of officials of
the Company who have responsibility for financial and accounting
matters regarding whether the unaudited condensed consolidated
financial statements referred to in paragraph (v)(A)(i) below comply
as to form in all material respects with the accounting requirements
of the Exchange Act and the related published rules and regulations,
nothing came to their attention that caused them to believe that the
unaudited condensed consolidated financial statements do not comply
as to form in all material respects with the accounting requirements
of the Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of
the Company for the five most recent fiscal years included or
incorporated by reference in the Offering Circular agrees with the
corresponding amounts (after restatements where applicable) in the
audited consolidated financial statements for such five fiscal
years;
(v) On the basis of limited procedures not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and
other information referred to below, a reading of the latest
available interim financial statements of the Company and its
subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial
statements
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included or incorporated by reference in the Offering Circular,
inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements
of cash flows included or incorporated by reference in
the Offering Circular do not comply as to form in all
material respects with the accounting requirements of
the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should
be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included or
incorporated by reference in the Offering Circular for
them to be in conformity with generally accepted
accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Offering Circular do
not agree with the corresponding items in the unaudited
consolidated financial statements from which such data
and items were derived, and any such unaudited data and
items were not determined on a basis substantially
consistent with the basis for the corresponding amounts
in the audited consolidated financial statements
included or incorporated by reference in the Offering
Circular;
(C) the unaudited financial statements which were not
included in the Offering Circular but from which were
derived any unaudited condensed financial statements
referred to in Clause (A) and any unaudited income
statement data and balance sheet items included in the
Offering Circular and referred to in Clause (B) were not
determined on a basis substantially consistent with the
basis for the audited consolidated financial statements
included in the Offering Circular;
(D) any unaudited pro forma consolidated condensed
financial statements included in the Offering Circular
do not comply as to form in all material respects with
the accounting requirements of the Exchange Act and the
published rules and regulations thereunder or the pro
forma adjustments have not been properly applied to the
historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances
of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities,
in each case which were outstanding on the date of the
latest financial statements included or incorporated by
reference in the Offering Circular) or any increase in
the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net
current assets or stockholders' equity or other items
specified by the Purchasers, or any increases in any
items specified by the Purchasers, in each case as
compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Offering
Circular, except in each case for changes, increases or
decreases
-2-
which the Offering Circular discloses have occurred or
may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Offering Circular to the specified date referred to in
Clause (E) there were any decreases in consolidated net
revenues or operating profit or the total or per share
amounts of consolidated net income or other items
specified by the Purchasers, or any increases in any
items specified by the Purchasers, in each case as
compared with the comparable period of the preceding
year and with any other period of corresponding length
specified by the Purchasers, except in each case for
decreases or increases which the Offering Circular
discloses have occurred or may occur or which are
described in such letter; and
(vi) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Offering
Circular and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraphs (iii) and
(iv) above, they have carried out certain specified procedures, not
constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and
financial information specified by the Purchasers, which are derived
from the general accounting records of the Company and its
subsidiaries, which appear in the Offering Circular or in documents
incorporated by reference in the Offering Circular, and have
compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
-3-
