EXHIBIT 1.1
SALEM COMMUNICATIONS HOLDING CORPORATION
$100,000,000
7 3/4% SENIOR SUBORDINATED NOTES DUE 2010
UNDERWRITING AGREEMENT
December 13, 2002
DEUTSCHE BANK SECURITIES INC.
BNY CAPITAL MARKETS, INC.
c/o Deutsche Bank Securities Inc.
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Ladies and Gentlemen:
Salem Communications Holding Corporation, a Delaware corporation (the
"Company"), and each of the Guarantors (as defined below) hereby confirm their
agreement with you (the "Underwriters"), as set forth below.
1. The Securities. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the several Underwriters $100,000,000
aggregate principal amount of its 7 3/4% Senior Subordinated Notes due 2010 (the
"Notes"). The respective amounts of the Notes to be so purchased by the
Underwriters, acting severally and not jointly, are set forth opposite their
names on Schedule 1 hereto. The Notes are to be issued under an indenture (the
"Indenture") to be dated as of December 23, 2002 by and among the Company, the
Guarantors (as defined below) and The Bank of New York, as Trustee (the
"Trustee"). The Notes will be guaranteed on a senior subordinated basis (the
"Guarantees" and, together with the Notes, the "Securities"), jointly and
severally, by Salem Communications Corporation, a Delaware corporation
("Parent"), and all of Parent's subsidiaries (other than the Company) signatory
hereto (each a "Guarantor" and collectively, the "Guarantors").
In connection with the sale of the Securities, the Company has prepared a
prospectus supplement dated as of today (the "Prospectus Supplement") setting
forth or including a description of the terms of the Securities, the terms of
the offering of the Securities, a description of the Company and the Guarantors
and any material developments relating to the Company or the Guarantors
occurring after the date of the most recent historical financial statements
included therein.
2. Representations and Warranties. The Company and the Guarantors, jointly
and severally, represent and warrant to and agree with each of the Underwriters
that:
(a) A registration statement on Form S-3 (File No. 333-86580) with
respect to the Securities and the offering thereof from time to time in
accordance with Rule 415 of the Rules and Regulations (as defined herein)
has been prepared by the Company in conformity with the requirements of
the Securities Act of 1933, as amended (the "Act"), and the rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder and has been filed with the
Commission. Parent, the Company and the transactions contemplated by this
Agreement meet the requirements and comply with the conditions for the use
of Form S-3. Copies of such registration statement, including any
amendments thereto, the base prospectus contained therein and the
exhibits, financial statements and schedules, as finally amended and
revised, have heretofore been delivered by the Company to you. Such
registration statement, herein referred to as the "Registration
Statement," has become effective under the Act and no post-effective
amendment to the Registration Statement has been filed as of the date of
this Agreement. No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission. "Prospectus" means the
Prospectus Supplement and the base prospectus relating to the Securities
in the form first filed with the Commission pursuant to Rule 424(b). Any
reference herein to the Registration Statement, the Prospectus Supplement,
the Prospectus or any amendment or supplement to any of the foregoing
documents shall be deemed to refer to and include any documents
incorporated by reference therein, and, in the case of any reference
herein to the Prospectus, also shall be deemed to include any documents
incorporated by reference therein, and any supplements or amendments
thereto, filed with the Commission after the date of filing of the
Prospectus under Rule 424(b).
(b) The Commission has not issued an order preventing or suspending
the use of any prospectus relating to the proposed offering of the
Securities nor instituted proceedings for that purpose. The Registration
Statement contains, and the Prospectus and any amendments or supplements
thereto will contain, all statements which are required to be stated
therein by, and will conform to, the requirements of the Act and the Rules
and Regulations. The documents incorporated, or to be incorporated, by
reference in the Registration Statement and the Prospectus, at the time
filed with the Commission, conformed, or will conform, in all respects to
the requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or the Act, as applicable, and the rules and regulations
of the Commission thereunder, and none of such documents (as of their
respective filing dates) contained or will contain an untrue statement of
a material fact or omitted or will omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading. The Registration Statement, as of the date the Registration
Statement became effective, and any amendment or supplement thereto, as of
its date, do not contain, and will not contain, any untrue statement of a
material fact and, do not omit, and will not omit, to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus, as of the date thereof and as of
the Closing Date (as defined herein), and any
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amendments and supplements thereto, as of the date thereof and as of the
Closing Date, do not contain, and will not contain, any untrue statement
of material fact and, do not omit, and will not omit, to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or omitted
from the Prospectus, or any such amendment or supplement, in reliance
upon, and in conformity with, written information furnished to the Company
by any Underwriter through Deutsche Bank Securities Inc. specifically for
use in the preparation thereof.
(c) As of the Closing Date, the Company will have the authorized,
issued and outstanding capitalization set forth in the Prospectus; all of
the subsidiaries of the Company (collectively, the "Company Subsidiaries")
and of Parent (other than the Company and the Company Subsidiaries)
(collectively, the "Parent Subsidiaries" and, together with the Company
Subsidiaries, the "Subsidiaries") are listed in Schedule 2 attached
hereto; all of the outstanding shares of capital stock of Parent, the
Company and the Subsidiaries have been, and as of the Closing Date will
be, duly authorized and validly issued, are fully paid and nonassessable
and were not issued in violation of any preemptive or similar rights; all
of the outstanding shares of capital stock (x) of the Company and of each
of the Subsidiaries are owned, directly or indirectly, by Parent and (y)
of the Company Subsidiaries are owned, directly or indirectly, by the
Company, in each case, except as set forth in the Registration Statement
and the Prospectus, free and clear of all liens, encumbrances, equities
and claims or restrictions on transferability (other than those imposed by
the Act and the securities or "Blue Sky" laws of certain jurisdictions) or
voting; except as set forth in the Registration Statement and the
Prospectus, there are no (i) options, warrants or other rights to
purchase, (ii) agreements or other obligations to issue or (iii) other
rights to convert any obligation into, or exchange any securities for,
shares of capital stock of or ownership interests in Parent, the Company
or any of the Subsidiaries outstanding. Except for the Company and the
Subsidiaries or as disclosed in the Registration Statement and the
Prospectus, Parent does not own, directly or indirectly, any shares of
capital stock or any other equity or long-term debt securities or have any
equity interest in any firm, partnership, joint venture or other entity.
(d) Each of Parent and the Company is duly incorporated, validly
existing and in good standing under the laws of its respective
jurisdiction of incorporation and has all requisite corporate power and
authority to own its properties and conduct its business as now conducted
and as described in the Registration Statement, as of the date the
Registration Statement became effective, and the Prospectus; each of the
Subsidiaries is or, as of the Closing Date, will be duly incorporated,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation and has all requisite corporate power and
authority to own its properties and conduct its business as now conducted
and as described in the Registration Statement, as of the date the
Registration Statement became effective, and the Prospectus; each of
Parent, the Company and the
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Subsidiaries is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions where the ownership or leasing of
its properties or the conduct of its business requires such qualification,
except where the failure to be so qualified would not, individually or in
the aggregate, have a material adverse effect on the general affairs,
management, business, condition (financial or otherwise), prospects or
results of operations of the Company and the Company Subsidiaries, taken
as a whole (any such event, a "Material Adverse Effect").
(e) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Notes. The
Notes, when issued, will be in the form contemplated by the Indenture. The
Notes have been duly and validly authorized by the Company and, when
executed by the Company and authenticated by the Trustee in accordance
with the provisions of the Indenture and, when delivered to and paid for
by the Underwriters in accordance with the terms of this Agreement, will
constitute valid and legally binding obligations of the Company, entitled
to the benefits of the Indenture, and enforceable against the Company in
accordance with their terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought.
(f) Each Guarantor has all requisite corporate power and authority
to execute, deliver and perform each of its obligations under its
Guarantee. The Guarantees, when issued, will be in the form contemplated
by the Indenture. Each Guarantee has been duly and validly authorized by
each Guarantor and, when executed by the relevant Guarantor in accordance
with the provisions of the Indenture, will constitute valid and legally
binding obligations of such Guarantor, entitled to the benefits of the
Indenture, and enforceable against such Guarantor in accordance with its
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and
(ii) general principles of equity and the discretion of the court before
which any proceeding therefor may be brought.
(g) Each of the Company and the Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under the Indenture. The Indenture meets the requirements for
qualification under the Trust Indenture Act of 1939, as amended (the
"TIA"). The Indenture has been duly and validly authorized by the Company
and each Guarantor and, when executed and delivered by the Company
(assuming the due authorization, execution and delivery by the Trustee),
will constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, and, when
executed and delivered by any Guarantor (assuming the due authorization,
execution and delivery by the Trustee), will constitute a valid and
legally binding agreement of such Guarantor, enforceable against such
Guarantor in accordance with its terms, except that the enforcement
thereof may be subject to
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(i) bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally
and (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought.
(h) Each of the Company and the Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby. This Agreement and the consummation by the Company
and each Guarantor of the transactions contemplated hereby have been duly
and validly authorized by the Company and each Guarantor. This Agreement
has been duly and validly authorized, executed and delivered by the
Company and each Guarantor.
(i) At the Closing Date, Amendment No. 3 (the "Amendment") to the
Fourth Amended and Restated Credit Agreement dated as of June 15, 2001, by
and among the Company, The Bank of New York, Bank of America, N.A., Fleet
National Bank, Union Bank of California N.A., The Bank of Nova Scotia and
the Lenders party thereto, as amended (the "Credit Agreement"), will have
been duly and validly authorized by the Company and, when duly executed
and delivered by each of the parties thereto, will constitute a valid and
legally binding agreement of the Company, enforceable against the Company
in accordance with its terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought.
(j) Subject to the effectiveness of the Amendment, no consent,
approval, authorization or order of any court or governmental agency or
body, or third party is required for the issuance and sale by the Company
of the Notes or by the Guarantors of the Guarantees, to the Underwriters
or the consummation by the Company or the Guarantors of the other
transactions contemplated hereby, except such as have been obtained and
such as may be required under state securities or "Blue Sky" laws. Subject
to the effectiveness of the Amendment, none of the Company or the
Guarantors is (i) in violation of its certificate of incorporation or
bylaws (or similar organizational document), (ii) in breach or violation
of any statute, judgment, decree, order, rule or regulation applicable to
any of them or any of their respective properties or assets, except for
any such breach or violation which would not, individually or in the
aggregate, have a Material Adverse Effect, or (iii) in breach of or
default under (nor has any event occurred which, with notice or passage of
time or both, would constitute a default under) or in violation of any of
the terms or provisions of any indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, permit, certificate,
contract or other agreement or instrument to which any of them is a party
or to which any of them or their respective properties or assets is
subject (collectively, "Contracts"), except for any such breach, default,
violation or event which would not, individually or in the aggregate, have
a Material Adverse Effect.
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(k) Subject to the effectiveness of the Amendment, the execution,
delivery and performance by each of the Company and the Guarantors of this
Agreement and the Indenture and the consummation by each of the Company
and the Guarantors of the transactions contemplated hereby and thereby
(including, without limitation, the issuance and sale of the Securities to
the Underwriters) will not conflict with or constitute or result in a
breach of or a default under (or an event which with notice or passage of
time or both would constitute a default under) or violation of any of (i)
the terms or provisions of any Contract, except for any such conflict,
breach, violation, default or event which would not, individually or in
the aggregate, have a Material Adverse Effect, (ii) the certificate of
incorporation or bylaws (or similar organizational document) of the
Company or any of the Guarantors, or (iii) (assuming compliance with all
applicable state securities or "Blue Sky" laws) any statute, judgment,
decree, order, rule or regulation applicable to the Company or any of the
Guarantors or any of their respective properties or assets, except for any
such conflict, breach or violation which would not, individually or in the
aggregate, have a Material Adverse Effect.
(l) The audited consolidated financial statements of Parent and its
subsidiaries included or incorporated by reference in the Registration
Statement, as of the date the Registration Statement became effective, and
the Prospectus present fairly in all material respects the financial
position, results of operations and cash flows of Parent and its
subsidiaries at the dates and for the periods to which they relate and
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as otherwise stated
therein. The summary and selected financial and statistical data included
or incorporated by reference in the Registration Statement, as of the date
the Registration Statement became effective, and the Prospectus present
fairly in all material respects the information shown therein and have
been prepared and compiled on a basis consistent with the audited
financial statements included or incorporated by reference in the
Registration Statement and the Prospectus, except as otherwise stated
therein. Ernst & Young LLP (the "Independent Accountants") is an
independent public accounting firm with respect to Parent and its
subsidiaries within the meaning of the Act and the Rules and Regulations.
(m) The pro forma financial statements and data included in the
Registration Statement, as of the date the Registration Statement became
effective, and the Prospectus (i) comply as to form in all material
respects with the applicable requirements of Regulation S-X promulgated
under the Exchange Act, (ii) have been prepared in all material respects
in accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and (iii) have been properly computed on
the bases described therein; the assumptions used in the preparation of
the pro forma financial statements and data included in the Registration
Statement and the Prospectus are reasonable and the adjustments used
therein are appropriate to give effect to the transactions or
circumstances referred to therein.
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(n) There is not pending (or in the case of the Federal
Communications Commission (the "FCC"), of which the Company has knowledge)
or, to the knowledge of the Company or any Guarantor, threatened any
action, suit, proceeding, inquiry or investigation to which the Company or
any of the Guarantors is a party, or to which the property or assets of
the Company or any of the Guarantors is subject, before or brought by any
court, arbitrator or governmental agency or body, including, but not
limited to, the FCC, which, if determined adversely to the Company or any
of the Guarantors, would, individually or in the aggregate, have a
Material Adverse Effect or which seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the
Securities to be sold hereunder or the consummation of the other
transactions described in the Registration Statement and the Prospectus.
(o) Each of the Company and the Guarantors possesses all licenses,
permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities (including, but
not limited to, the FCC), all self-regulatory organizations and all courts
and other tribunals, presently required or necessary to own or lease, as
the case may be, and to operate its respective properties and to carry on
its respective businesses as now conducted as set forth in the Prospectus
("Permits"), except where the failure to obtain such Permits would not,
individually or in the aggregate, have a Material Adverse Effect; each of
the Company and the Guarantors has fulfilled and performed all of its
obligations with respect to such Permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such Permit, except where the failure to
fulfill or perform such obligations or the occurrence of any such event
would not, individually and in the aggregate, have a Material Adverse
Effect; and none of the Company or the Guarantors has received any notice
of any proceeding relating to revocation or modification of any such
Permit, except as described in the Registration Statement and the
Prospectus and except where such revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect.
(p) Since the date of the most recent financial statements included
or incorporated by reference in the Registration Statement and the
Prospectus, except as described therein, (i) there has not been any
material adverse change or any development involving a prospective
material adverse change in or effecting the general affairs, management,
business, condition (financial or otherwise), prospects or results of
operations of the Company and the Guarantors taken as a whole, whether or
not occurring in the ordinary course of business, (ii) none of the Company
or the Guarantors has incurred any liabilities or obligations, direct or
contingent, or entered into or agreed to enter into any transactions or
contracts (written or oral) not in the ordinary course of business which
liabilities, obligations, transactions or contracts would, individually or
in the aggregate, be material to the general affairs, management,
business, condition (financial or otherwise), prospects or results of
operations of the Company and the Company Subsidiaries, taken as a whole,
(iii) none of the Company or the Guarantors has
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purchased any of its outstanding capital stock, nor declared, paid or
otherwise made any dividend or distribution of any kind on its capital
stock and (iv) there shall not have been any material change in the
capital stock or long-term indebtedness of the Company or the Guarantors.
The Company and the Guarantors have no material contingent obligations
which are not disclosed in the Company's financial statements which are
included in the Registration Statement and the Prospectus.
(q) Each of the Company and the Guarantors has filed all necessary
federal, state and foreign income and franchise tax returns, except where
the failure to so file such returns would not, individually or in the
aggregate, have a Material Adverse Effect, and has paid all taxes shown as
due thereon; and other than tax deficiencies which the Company or any
Guarantor is contesting in good faith and for which the Company or such
Guarantor has provided adequate reserves, there is no tax deficiency that
has been asserted against the Company or any of the Guarantors that would
have, individually or in the aggregate, a Material Adverse Effect.
(r) The statistical and market-related data included or incorporated
by reference in the Prospectus are based on or derived from sources which
the Company and the Guarantors believe to be reliable and accurate.
(s) None of the Company, the Guarantors or any agent acting on their
behalf has taken or will take any action that might cause this Agreement
or the sale of the Securities to violate Regulation T, U or X of the Board
of Governors of the Federal Reserve System, in each case as in effect, or
as the same may hereafter be in effect, on the Closing Date.
(t) Each of the Company and the Guarantors has good and marketable
title to all real property and good title to all personal property
described in the Registration Statement, as of the date the Registration
Statement became effective, and the Prospectus as being owned by it and
good and marketable title to a leasehold estate in the real and personal
property described in the Registration Statement, as of the date the
Registration Statement became effective, and the Prospectus as being
leased by it free and clear of all liens, charges, encumbrances or
restrictions, except as described in the Registration Statement, as of the
date the Registration Statement became effective, and the Prospectus or to
the extent the failure to have such title or the existence of such liens,
charges, encumbrances or restrictions would not, individually or in the
aggregate, have a Material Adverse Effect. All leases, contracts and
agreements to which the Company or any of the Guarantors is a party or by
which any of them is bound are valid and enforceable against the Company
or such Guarantor, and are valid and enforceable against the other party
or parties thereto and are in full force and effect with only such
exceptions as would not, individually or in the aggregate, have a Material
Adverse Effect. The Company and the Guarantors own or possess adequate
licenses or other rights to use all patents, trademarks, service marks,
trade names, copyrights and know-how necessary to conduct the businesses
now operated by them as described in the Registration Statement, as of the
date the Registration Statement
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became effective, and the Prospectus, and none of the Company or any
Guarantor has received any notice of infringement of or conflict with (or
knows of any such infringement of or conflict with) asserted rights of
others with respect to any patents, trademarks, service marks, trade
names, copyrights or know-how which, if such assertion of infringement or
conflict were sustained, would have a Material Adverse Effect.
(u) There are no legal or governmental proceedings (or in the case
of the FCC, of which the Company has knowledge) involving or affecting the
Company or any Guarantor or any of their respective properties or assets
which would be required to be described in the Registration Statement, as
of the date the Registration Statement became effective, and the
Prospectus pursuant to the Act that are not so described therein, nor are
there any material contracts or other documents required to be described
in the Registration Statement, as of the date the Registration Statement
became effective, and the Prospectus pursuant to the Act that are not so
described therein.
(v) Except as would not, individually or in the aggregate, have a
Material Adverse Effect (A) each of the Company and the Guarantors is in
compliance with and not subject to liability under applicable
Environmental Laws (as defined below), (B) each of the Company and the
Guarantors has made all filings and provided all notices required under
any applicable Environmental Law, and has and is in compliance with all
Permits required under any applicable Environmental Laws and each of them
is in full force and effect, (C) there is no civil, criminal or
administrative action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter or request for
information pending or, to the knowledge of the Company or any of the
Guarantors, threatened against the Company or any of the Guarantors under
any Environmental Law, (D) no lien, charge, encumbrance or restriction has
been recorded under any Environmental Law with respect to any assets,
facility or property owned, operated, leased or controlled by the Company
or any of the Guarantors, (E) none of the Company or the Guarantors has
received notice that it has been identified as a potentially responsible
party under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA") or any comparable state law,
and (F) no property or facility of the Company or any of the Guarantors is
(i) listed or proposed for listing on the National Priorities List under
CERCLA or is (ii) listed in the Comprehensive Environmental Response,
Compensation, Liability Information System List promulgated pursuant to
CERCLA, or on any comparable list maintained by any state or local
governmental authority.
For purposes of this Agreement, "Environmental Laws" means the
common law and all applicable federal, state and local laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or
protection of public or employee health and safety or the environment,
including, without limitation, laws relating to (i) emissions, discharges,
releases or threatened releases of hazardous materials into the
environment (including, without limitation, ambient air, surface water,
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ground water, land surface or subsurface strata), (ii) the manufacture,
processing, distribution, use, generation, treatment, storage, disposal,
transport or handling of hazardous materials and (iii) underground and
above ground storage tanks and related piping, and emissions, discharges,
releases or threatened releases therefrom.
(w) There is no strike, labor dispute, slowdown or work stoppage
with the employees of the Company or any of the Guarantors which is
pending or, to the knowledge of the Company or any of the Guarantors,
threatened that would, individually or in the aggregate, result in a
Material Adverse Effect.
(x) Each of the Company and the Guarantors carries insurance in such
amounts and covering such risks as is adequate for the conduct of its
business and the value of its properties in accordance with customary
practice in the radio broadcasting industry.
(y) None of the Company or the Guarantors has any liability for any
prohibited transaction or funding deficiency or any complete or partial
withdrawal liability with respect to any pension, profit sharing or other
plan which is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), to which the Company or any of the Guarantors
makes or ever has made a contribution and in which any employee of the
Company or of any Guarantor is or has ever been a participant. With
respect to such plans, each of the Company and the Guarantors is in
compliance in all material respects with all applicable provisions of
ERISA.
(z) Each of the Company and the Guarantors (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls
which provide reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions are recorded
as necessary to permit preparation of its financial statements in
accordance with generally accepted accounting principles and to maintain
accountability for its assets, (C) access to its assets is permitted only
in accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(aa) None of the Company or the Guarantors is an "investment
company" or "promoter" or "principal underwriter" for an "investment
company," as such terms are defined in the Investment Company Act of 1940,
as amended (the "1940 Act"), and the rules and regulations thereunder.
(bb) The Notes, the Guarantees and the Indenture will conform in all
material respects to the descriptions thereof in the Prospectus.
(cc) No holder of securities of the Company or any Guarantor is
entitled to have such securities registered under the Registration
Statement.
(dd) Immediately after the consummation of the transactions
contemplated by this Agreement, the fair value and present fair saleable
value of
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the assets of each of the Company and the Guarantors (each on a
consolidated basis) will exceed the sum of its stated liabilities and
identified contingent liabilities; none of the Company or the Guarantors
(each on a consolidated basis) is, nor will any of the Company or the
Guarantors (each on a consolidated basis) be, after giving effect to the
execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, (a) left with
unreasonably small capital with which to carry on its business as it is
proposed to be conducted, (b) unable to pay its debts (contingent or
otherwise) as they mature or (c) otherwise insolvent.
(ee) None of the Company or the Guarantors has taken, nor will any
of them take, directly or indirectly, any action designed to, or that
might be reasonably expected to, cause or result in stabilization or
manipulation of the price of the Securities.
(ff) To the Company's knowledge, there are no affiliations or
associations between any member of the National Association of Securities
Dealers, Inc. and any of the Company's officers, directors or 5% or
greater security holders.
Any certificate signed by any officer of the Company or any Guarantor and
delivered to any Underwriter or to counsel for the Underwriters shall be deemed
a joint and several representation and warranty by the Company and each of the
Guarantors to each Underwriter as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Notes. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Underwriters, and the Underwriters, acting severally and
not jointly, agree to purchase the Notes in the respective amounts set forth on
Schedule 1 hereto from the Company at 99.75% of their principal amount. One or
more certificates in definitive form for the Notes that the Underwriters have
agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Underwriters request upon notice to the
Company at least 36 hours prior to the Closing Date, shall be delivered by or on
behalf of the Company to the Underwriters, against payment by or on behalf of
the Underwriters of the purchase price therefor by wire transfer (same day
funds), to such account or accounts as the Company shall specify prior to the
Closing Date, or by such means as the parties hereto shall agree prior to the
Closing Date. Such delivery of and payment for the Notes shall be made at the
offices of Debevoise & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00
A.M., New York time, on December 23, 2002 or at such other place, time or date
as the Underwriters, on the one hand, and the Company, on the other hand, may
agree upon, such time and date of delivery against payment being herein referred
to as the "Closing Date." The Company will make such certificate or certificates
for the Notes available for checking and packaging by the Underwriters at the
offices of Deutsche Bank Securities Inc. in New York, New York, or at such other
place as Deutsche Bank Securities Inc. may designate, at least 24 hours prior to
the Closing Date.
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4. Offering by the Underwriters. It is understood that the several
Underwriters are to make a public offering of the Notes as soon as they deem it
advisable to do so. The Notes are to be initially offered to the public at the
initial public offering price set forth in the Prospectus Supplement. The
Underwriters may from time to time thereafter change the public offering price
and other selling terms.
5. Covenants of the Company. The Company and the Guarantors, jointly and
severally, covenant and agree with each of the Underwriters that:
(a) The Company will (A) prepare and timely file with the Commission
under Rule 424(b) of the Rules and Regulations a Prospectus in a form
approved by the Underwriters, (B) prior to the later of the Closing Date
and the completion of the distribution of the Securities by the
Underwriters, not file any amendment to the Registration Statement or
supplement to the Prospectus or any document incorporated by reference
therein of which the Underwriters shall not previously have been advised
and furnished with a copy or to which the Underwriters shall have
reasonably objected in writing or which is not in compliance with the
Rules and Regulations and (C) file on a timely basis all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission subsequent to the date of the Prospectus and
prior to the termination of the offering of the Securities by the
Underwriters.
(b) Prior to the later of the Closing Date and the completion of the
distribution of the Securities by the Underwriters, the Company will
advise the Underwriters promptly (A) at the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus has been filed and to furnish you with copies
thereof, (B) of receipt of any comments from the Commission, (C) of any
request of the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information and (D)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the use of the Prospectus
or of the institution of any proceedings for that purpose. The Company
will use its best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to obtain as soon
as possible the lifting thereof, if issued.
(c) The Company and the Guarantors will cooperate with the
Underwriters in arranging for the qualification of the Securities for
offering and sale under the securities or "Blue Sky" laws of such
jurisdictions as the Underwriters may designate and will make such
applications, file such documents, and furnish such information as may be
reasonably required for that purpose, provided, however, that in
connection therewith, the Company and the Guarantors shall not be required
to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction or subject itself to taxation in
excess of a nominal dollar amount in any such jurisdiction where it is not
then so qualified or required to file such a consent. The Company will,
from time to time, prepare and file such statements, reports, and other
documents, as are or may be required to continue such qualifications in
effect for so long a
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period as the Underwriters may reasonably request for distribution of the
Securities.
(d) The Company will, without charge, deliver to, or upon the order
of, the Underwriters, from time to time, as many copies of the Prospectus
as the Underwriters may reasonably request. The Company will deliver in
final form, or as thereafter amended or supplemented, to the Underwriters
at or before the Closing Date, four signed copies of the Registration
Statement and all amendments thereto including all exhibits filed
therewith, and will deliver to the Underwriters such number of copies of
the Registration Statement (including such number of copies of the
exhibits filed therewith that may reasonably be requested), including
documents incorporated by reference therein, and of all amendments
thereto, as the Underwriters may reasonably request.
(e) The Company will comply with the Act and the Rules and
Regulations, and the Exchange Act, and the rules and regulations of the
Commission thereunder, so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement and the Prospectus. If
during the period in which a prospectus is required by law to be delivered
by an Underwriter or dealer, any event shall occur as a result of which,
in the judgment of the Company or in the reasonable opinion of the
Underwriters, it becomes necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the circumstances
existing at the time the Prospectus is delivered to a purchaser, not
misleading, or, if it is necessary at any time to amend or supplement the
Prospectus to comply with applicable law, the Company promptly will either
(i) prepare and file with the Commission an appropriate amendment to the
Registration Statement or supplement to the Prospectus or (ii) prepare and
file with the Commission an appropriate filing under the Exchange Act
which shall be incorporated by reference in the Prospectus so that the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so that the
Prospectus will comply with the law.
(f) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not later
than 15 months after the effective date of the Registration Statement, an
earning statement (which need not be audited) in reasonable detail,
covering a period of at least 12 consecutive months beginning after the
effective date of the Registration Statement, which earnings statement
shall satisfy the requirements of Section 11(a) of the Act and Rule 158 of
the Rules and Regulations and will advise you in writing when such
statement has been so made available.
(g) The Company will apply the net proceeds from the sale of the
Notes as set forth under "Use of Proceeds" in the Prospectus.
(h) For so long as any of the Notes remain outstanding, the Company
will furnish to the Underwriters, at their reasonable request, copies of
all reports and other communications (financial or otherwise) furnished by
the Company to the Trustee or to the holders of the Notes and, as soon as
available, copies of any
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reports or financial statements furnished to or filed by the Company or
any Guarantor with the Commission or any national securities exchange on
which any class of securities of the Company or any Guarantor may be
listed.
(i) Prior to the Closing Date, the Company will furnish to the
Underwriters, as soon as they have been prepared, a copy of any unaudited
interim financial statements of the Company and Parent for any period
subsequent to the period covered by the most recent financial statements
appearing in the Prospectus.
(j) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any securities of the Company.
6. Expenses. The Company and the Guarantors, jointly and severally, agree
to pay all costs and expenses incident to the performance of its obligations
under this Agreement, whether or not the transactions contemplated herein are
consummated or this Agreement is terminated pursuant to Section 10 hereof,
including all costs and expenses incident to (i) the printing, word processing
or other production of documents with respect to the transactions contemplated
hereby, including any costs of printing the Registration Statement and the
Prospectus and any amendment or supplement thereto, and any "Blue Sky"
memoranda, (ii) all arrangements relating to the delivery to the Underwriters of
copies of the foregoing documents, (iii) the fees and disbursements of the
counsel, the accountants and any other experts or advisors retained by the
Company or any Guarantor, (iv) preparation (including printing), issuance and
delivery to the Underwriters of the Securities, (v) the qualification of the
Securities under state securities and "Blue Sky" laws, including filing fees and
reasonable fees and disbursements of counsel for the Underwriters relating
thereto, (vi) expenses in connection with the "roadshow" and any other meetings
with prospective investors in the Securities, excluding travel expenses on
commercial airlines and lodging expenses of representatives of the Underwriters,
it being understood that the Company and the Guarantors shall pay all fees,
costs and expenses relating to aircraft of Atsinger Aviation LLC used in
connection with the roadshow and any such meetings, (vii) fees and expenses of
the Trustee including reasonable fees and expenses of counsel and (viii) any
fees charged by investment rating agencies for the rating of the Notes. If the
sale of the Securities provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth in Section 7 hereof
is not satisfied, because this Agreement is terminated or because of any
failure, refusal or inability on the part of the Company or any Guarantor to
perform all obligations and satisfy all conditions on their part to be performed
or satisfied hereunder (other than solely by reason of a default by the
Underwriters of their obligations hereunder after all conditions hereunder have
been satisfied in accordance herewith), the Company agrees to promptly reimburse
the Underwriters upon demand for all reasonable out-of-pocket expenses
(including reasonable fees, disbursements and charges of Debevoise & ▇▇▇▇▇▇▇▇,
counsel for the Underwriters) that shall have been incurred by the Underwriters
in connection with the proposed purchase and sale of the Securities. It is
understood that, except as provided in the immediately preceding sentence and in
Section 8, the Underwriters will pay all of
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their costs and expenses, including fees and disbursements of their counsel,
transfer taxes on resale of any of the Notes by them and any advertising
expenses connected with any offers they may make.
7. Conditions of the Underwriters' Obligations. The obligation of the
Underwriters to purchase and pay for the Securities shall, in their sole
discretion, be subject to the satisfaction or waiver of the following conditions
on or prior to the Closing Date:
(a) The Registration Statement shall be effective and all
post-effective amendments to the Registration Statement shall have become
effective and any and all filings required by Rule 424 of the Act shall
have been made within the applicable time period prescribed by, and in
compliance with, the Rules and Regulations, and any request of the
Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Underwriters and
complied with to their reasonable satisfaction. No stop order suspending
the effectiveness of the Registration Statement, as amended from time to
time, shall have been issued and no proceedings for that purpose shall
have been taken or, to the knowledge of the Company, shall be contemplated
or threatened by the Commission and no injunction, restraining order or
order of any nature by a federal or state court of competent jurisdiction
shall have been issued as of the Closing Date which would prevent the
issuance of the Securities.
(b) On the Closing Date, the Underwriters shall have received the
opinions, dated as of the Closing Date and addressed to the Underwriters,
of (i) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq., General Counsel of the Company and the
Guarantors, (ii) ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, counsel for the Company and
the Guarantors and (iii) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.L.C., special
communications counsel to the Company and the Guarantors. The opinions
referred to in this Section 7(b) shall be in substantially the form and
substance of the opinions, dated June 25 2001, delivered by (i) ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Esq., (ii) ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP and (iii) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, P.L.C., in connection with the closing of the sale by the
Company of its 9% Senior Subordinated Notes due 2011, excluding paragraph
9 thereto in the case of the foregoing clause (ii), in each case with
appropriate and customary modifications for an offering registered with
the Commission, including the items set forth on Exhibit A hereto, and
with appropriate and customary deletions of 144A offering items.
(c) On the Closing Date, the Underwriters shall have received the
opinion, in form and substance satisfactory to the Underwriters, dated as
of the Closing Date and addressed to the Underwriters, of Debevoise &
▇▇▇▇▇▇▇▇, counsel for the Underwriters, with respect to certain legal
matters relating to this Agreement and such other related matters as the
Underwriters may reasonably require. In rendering such opinion, Debevoise
& ▇▇▇▇▇▇▇▇ shall have received and may rely upon such certificates and
other documents and information as it may reasonably request to pass upon
such matters.
-15-
(d) The Underwriters shall have received from the Independent
Accountants a comfort letter or letters dated no later than December 17,
2002 and the Closing Date, in form and substance satisfactory to counsel
for the Underwriters containing statements and information of the type
ordinarily included in accountants' comfort letters to underwriters with
respect to the financial statements and certain financial information
contained in the Registration Statement, the Prospectus and the documents
incorporated, or to be incorporated, by reference in the Registration
Statement and the Prospectus.
(e) The representations and warranties of the Company and the
Guarantors contained in this Agreement shall be true and correct on and as
of the date hereof and on and as of the Closing Date as if made on and as
of the Closing Date; the statements of the Company's or any Guarantor's
officers made pursuant to any certificate delivered in accordance with the
provisions hereof shall be true and correct on and as of the date made and
on and as of the Closing Date; each of the Company and the Guarantors
shall have performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior
to the Closing Date; and, except as described in the Registration
Statement and the Prospectus (exclusive of any amendment or supplement
thereto after the date hereof), subsequent to the date of the most recent
financial statements in such Registration Statement or Prospectus, there
shall have been no event or development, and no information shall have
become known, that, individually or in the aggregate, has or would be
reasonably likely to have a Material Adverse Effect.
(f) The sale of the Securities hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(g) Subsequent to the date of the most recent financial statements
in the Registration Statement and the Prospectus (exclusive of any
amendment or supplement thereto after the date hereof), none of the
Company or any of the Guarantors shall have sustained any loss or
interference with respect to its business or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by
insurance, or from any strike, labor dispute, slow down or work stoppage
or from any legal or governmental proceeding, order or decree, which loss
or interference, individually or in the aggregate, has or would be
reasonably likely to have a Material Adverse Effect.
(h) The Underwriters shall have received a certificate of the
Company, dated the Closing Date, signed on behalf of each of the Company
and Parent by its Chairman of the Board, President or any Senior Vice
President and the Chief Financial Officer, to the effect that:
(i) The representations and warranties of the Company and each
Guarantor contained in this Agreement are true and correct on and as
of the date hereof and on and as of the Closing Date, and each of
the Company and the Guarantors has performed all covenants and
agreements
-16-
and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date;
(ii) At the Closing Date, since the date hereof or since the
date of the most recent financial statements in the Registration
Statement and the Prospectus (exclusive of any amendment or
supplement thereto after the date hereof), no event or development
known to them has occurred, and no information has become known,
that, individually or in the aggregate, has or would be reasonably
likely to have a Material Adverse Effect;
(iii) The Registration Statement has become effective under
the Act and no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for such
purpose have been taken or are, to his or her knowledge,
contemplated or threatened by the Commission; and
(iv) He or she has carefully examined the Registration
Statement and the Prospectus and, in his or her opinion, the
Registration Statement and the Prospectus do not contain (as of
their respective filing dates) any untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading,
and since the date of the Prospectus, no event has occurred which
should have been set forth in a supplement to or an amendment of the
Prospectus which has not been so set forth in such supplement or
amendment.
(i) The Underwriters shall have received a certificate of the
Company, dated the Closing Date, signed on behalf of the Company by its
Chief Financial Officer, to the effect that the issuance and sale by the
Company of the Notes on the Closing Date complies with (x) the Indenture,
dated September 25, 1997, among Parent, the guarantors party thereto and
The Bank of New York as trustee, as supplemented, (y) the Indenture, dated
as of June 25, 2001, among the Company, the guarantors party thereto and
The Bank of New York as trustee, and (z) the Credit Agreement, in each
case setting forth in reasonable detail the calculations with respect
thereto.
(j) The Amendment shall have been entered into and shall be
effective.
On or before the Closing Date, the Underwriters and counsel for the
Underwriters shall have received such further documents, opinions, certificates,
letters and schedules or instruments relating to the business, corporate, legal
and financial affairs of the Company and the Guarantors as they shall have
heretofore reasonably requested from the Company.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Underwriters and counsel for the Underwriters. The Company shall furnish to the
Underwriters such
-17-
conformed copies of such documents, opinions, certificates, letters, schedules
and instruments in such quantities as the Underwriters shall reasonably request.
8. Indemnification and Contribution.
(a) The Company and the Guarantors, jointly and severally, agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which any Underwriter or such controlling person may become
subject under the Act, the Exchange Act or otherwise, insofar as any such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by
the Company or any Guarantor in Section 2 hereof;
(ii) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the
Prospectus, or any amendment or supplement thereto; or
(iii) the omission or alleged omission to state in the
Registration Statement, the Prospectus, or any amendment or
supplement thereto, a material fact required to be stated therein or
necessary to make the statements therein not misleading,
and will reimburse, as incurred, the Underwriters and each such controlling
person for any legal or other expenses reasonably incurred by the Underwriters
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage or liability or action; provided, however, that the Company and the
Guarantors will 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 any untrue statement
or alleged untrue statement or omission or alleged omission made in the
Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information concerning the Underwriters furnished to the
Company by the Underwriters through Deutsche Bank Securities Inc. specifically
for use therein. The indemnity provided for in this Section 8 will be in
addition to any liability that the Company or any Guarantor may otherwise have
to the indemnified parties. The Company and the Guarantors shall not be liable
under this Section 8 for any settlement of any claim or action effected without
its prior written consent, which shall not be unreasonably withheld.
(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless the Company and the Guarantors and their respective
directors and officers and each person, if any, who controls the Company
and the Guarantors within the meaning of Section 15 of the Act or Section
20 of the Exchange Act against any losses, claims, damages or liabilities
to which the Company, such Guarantor or any such director, officer or
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in
-18-
respect thereof) arise out of or are based upon (i) any untrue statement
or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus or any amendment or supplement
thereto, or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in the Registration Statement, the
Prospectus or any amendment or supplement thereto, 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 reliance upon and in
conformity with written information concerning such Underwriter, furnished
to the Company by the Underwriters through Deutsche Bank Securities Inc.
specifically for use therein; and subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses incurred by the Company, such Guarantor or any such
director, officer or controlling person in connection with investigating
or defending against or appearing as a third party witness in connection
with any such loss, claim, damage, liability or action in respect thereof.
The indemnity provided for in this Section 8 will be in addition to any
liability that the Underwriters may otherwise have to the indemnified
parties. The Underwriters shall not be liable under this Section 8 for any
settlement of any claim or action effected without their consent, which
shall not be unreasonably withheld. Neither the Company nor any Guarantor
shall, without the prior written consent of the Underwriters, effect any
settlement or compromise of any pending or threatened proceeding in
respect of which any Underwriter is or could have been a party, or
indemnity could have been sought hereunder by any Underwriter, unless such
settlement (A) includes an unconditional written release of the
Underwriters, in form and substance reasonably satisfactory to the
Underwriters, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission
of fault, culpability or failure to act by or on behalf of any
Underwriter.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action for which such
indemnified party is entitled to indemnification under this Section 8,
such indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party of the commencement thereof in writing; but the
omission to so notify the indemnifying party (i) will not relieve it from
any liability under paragraph (a) or (b) above unless and to the extent
such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve
the indemnifying party from any obligations to any indemnified party other
than the indemnification obligation provided in paragraphs (a) and (b)
above. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if (i) the
use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of interest,
(ii) the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have been
advised by counsel that there may be one or more legal defenses available
to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, or (iii) the
indemnifying party shall not have employed counsel
-19-
reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after receipt by the
indemnifying party of notice of the institution of such action, then, in
each such case, the indemnifying party shall not have the right to direct
the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party
or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by
such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party
shall have employed separate counsel in accordance with the proviso to the
immediately preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for
the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions
in the same jurisdiction arising out of the same general allegations or
circumstances, designated by the Underwriters in the case of paragraph (a)
of this Section 8 or the Company and the Guarantors in the case of
paragraph (b) of this Section 8, representing the indemnified parties
under such paragraph (a) or paragraph (b), as the case may be, who are
parties to such action or actions) or (ii) the indemnifying party has
authorized in writing the employment of counsel for the indemnified party
at the expense of the indemnifying party. All fees and expenses reimbursed
pursuant to this paragraph (c) shall be reimbursed as they are incurred.
After such notice from the indemnifying party to such indemnified party,
the indemnifying party will not be liable for the costs and expenses of
any settlement of such action effected by such indemnified party without
the prior written consent of the indemnifying party (which consent shall
not be unreasonably withheld), unless such indemnified party waived in
writing its rights under this Section 8, in which case the indemnified
party may effect such a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided for
in the preceding paragraphs of this Section 8 is unavailable to, or
insufficient to hold harmless, an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Securities or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law,
not only such relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative benefits
received by the Company and the Guarantors on the one hand and any
Underwriter on the other shall be deemed to be in the same proportion as
the total proceeds from the offering (before deducting expenses) received
by the Company bear to the total discounts and commissions received by
such Underwriter. The relative fault of the parties shall be determined by
reference to, among
-20-
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company or any Guarantor on the one hand,
or such Underwriter on the other, the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission or alleged statement or omission, and any other equitable
considerations appropriate in the circumstances. The Company, the
Guarantors and the Underwriters agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per capita
allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the first sentence of
this paragraph (d). Notwithstanding any other provision of this paragraph
(d), no Underwriter shall be obligated to make contributions hereunder
that in the aggregate exceed the total discounts, commissions and other
compensation received by such Underwriter under this Agreement, less the
aggregate amount of any damages that such Underwriter has otherwise been
required to pay by reason of the untrue or alleged untrue statements or
the omissions or alleged omissions to state a material fact, and no person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
paragraph (d), each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act shall
have the same rights to contribution as the Underwriters, and each
director of the Company or any Guarantor, each officer of the Company or
any Guarantor and each person, if any, who controls the Company or any
Guarantor within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, shall have the same rights to contribution as the Company.
9. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, the
Guarantors, their respective officers and the Underwriters set forth in this
Agreement or made by or on behalf of them pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of the Company or any Guarantor, any of their respective officers or
directors, the Underwriters or any controlling person referred to in Section 8
hereof and (ii) delivery of and payment for the Securities. The respective
agreements, covenants, indemnities and other statements set forth in Sections 6,
8 and 14 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
10. Termination.
(a) This Agreement may be terminated in the sole discretion of the
Underwriters by notice to the Company given prior to the Closing Date in
the event that the Company or any Guarantor shall have failed, refused or
been unable to perform all obligations and satisfy all conditions on its
part to be performed or satisfied hereunder at or prior thereto or, if at
or prior to the Closing Date:
(i) any of the Company or the Guarantors shall have sustained
any loss or interference with respect to its businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike, labor
dispute, slow down or work stoppage or any legal or governmental
-21-
proceeding, which loss or interference, in the sole judgment of the
Underwriters, has had or has a Material Adverse Effect, or there
shall have been, in the sole judgment of the Underwriters, any event
or development that, individually or in the aggregate, has or could
be reasonably likely to have a Material Adverse Effect (including
without limitation a change in control of the Company, Parent or the
Subsidiaries), except in each case as described in the Registration
Statement and the Prospectus (exclusive of any amendment or
supplement thereto after the date hereof);
(ii) trading in securities of Parent or in securities
generally on the New York Stock Exchange, American Stock Exchange or
the NASDAQ National Market shall have been suspended or materially
limited or minimum or maximum prices shall have been established on
any such exchange or market;
(iii) a banking moratorium shall have been declared by New
York or United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B)
an outbreak or escalation of any other insurrection or armed
conflict involving the United States or any other national or
international calamity or crisis or emergency, or (C) any material
change in the financial markets of the United States which, in the
case of (A), (B) or (C) above and in the sole judgment of the
Underwriters, makes it impracticable or inadvisable to proceed with
the offering or the delivery of the Securities as contemplated by
the Registration Statement and the Prospectus; or
(v) any securities of Parent or the Company shall have been
downgraded or placed on any "watch list" for possible downgrading by
any nationally recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 10 shall
be without liability of any party to any other party except as provided in
Section 9 hereof.
11. Information Supplied by the Underwriters. The statements set forth in
the first sentence of the third paragraph, the first sentence of the seventh
paragraph, the eighth paragraph, the ninth paragraph, the tenth paragraph and
the last paragraph under the heading "Underwriting" in the Prospectus Supplement
(to the extent such statements relate to the Underwriters) constitute the only
information furnished by the Underwriters to the Company and the Guarantors for
the purposes of Sections 2(a) and 8 hereof.
12. Notices. All communications hereunder shall be in writing and, if sent
to the Underwriters, shall be mailed or delivered to Deutsche Bank Securities
Inc., ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
Finance Department; if sent to the Company or the Guarantors, shall be mailed or
delivered to the Company at ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. Block, with a copy to ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
-22-
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; and one business day
after being timely delivered to a next-day air courier.
13. Successors. This Agreement shall inure to the benefit of and be
binding upon the Underwriters, the Company, the Guarantors and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained; this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company and the Guarantors contained in Section 8 of this
Agreement shall also be for the benefit of any person or persons who control the
Underwriters within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Underwriters contained in Section 8
of this Agreement shall also be for the benefit of the directors of the Company
and the Guarantors, their respective officers and any person or persons who
control the Company and the Guarantors within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act. No purchaser of Securities from the
Underwriters will be deemed a successor because of such purchase.
14. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND
THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY PROVISIONS
THEREOF RELATING TO CONFLICTS OF LAW.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-23-
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute a binding agreement among the Company, the
Guarantors and the Underwriters.
Very truly yours,
SALEM COMMUNICATIONS HOLDING CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
Title: President/CEO
SALEM COMMUNICATIONS CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
Title: President/CEO
-24-
ATEP RADIO, INC.
BISON MEDIA, INC.
▇▇▇▇▇ BROADCASTING, INC.
CCM COMMUNICATIONS, INC.
COMMON GROUND BROADCASTING, INC.
GOLDEN GATE BROADCASTING COMPANY INC.
INSPIRATION MEDIA, INC.
INSPIRATION MEDIA OF PENNSYLVANIA, LP
INSPIRATION MEDIA OF TEXAS, LLC
KINGDOM DIRECT, INC.
NEW ENGLAND CONTINENTAL MEDIA, INC.
NEW INSPIRATION BROADCASTING COMPANY, INC.
ONEPLACE, LLC
PENNSYLVANIA MEDIA ASSOCIATES, INC.
RADIO 1210, INC.
REACH SATELLITE NETWORK, INC.
SALEM COMMUNICATIONS ACQUISITION CORPORATION
SALEM MEDIA CORPORATION
SALEM MEDIA OF COLORADO, INC.
SALEM MEDIA OF GEORGIA, INC.
SALEM MEDIA OF HAWAII, INC.
SALEM MEDIA OF ILLINOIS, LLC
SALEM MEDIA OF KENTUCKY, INC.
SALEM MEDIA OF NEW YORK, LLC
SALEM MEDIA OF OHIO, INC.
SALEM MEDIA OF OREGON, INC.
SALEM MEDIA OF PENNSYLVANIA, INC.
SALEM MEDIA OF TEXAS, INC.
SALEM MEDIA OF VIRGINIA, INC.
SALEM MUSIC NETWORK, INC.
SALEM RADIO NETWORK INCORPORATED
SALEM RADIO OPERATIONS, LLC
SALEM RADIO OPERATIONS - PENNSYLVANIA, INC.
SALEM RADIO PROPERTIES, INC.
SALEM RADIO REPRESENTATIVES, INC.
SCA LICENSE CORPORATION
SOUTH TEXAS BROADCASTING, INC.
SRN NEWS NETWORK, INC.
VISTA BROADCASTING, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
Title: President/CEO
-25-
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
DEUTSCHE BANK SECURITIES INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
-26-
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
BNY CAPITAL MARKETS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
-27-
SCHEDULE 1
Underwriters Principal Amount of Notes
------------ -------------------------
Deutsche Bank Securities Inc. $ 95,000,000
BNY Capital Markets, Inc. 5,000,000
------------
Total $100,000,000
SCHEDULE 2
Company Subsidiaries
Jurisdiction of
Name Incorporation/Formation
---- -----------------------
ATEP Radio, Inc. California
Bison Media, Inc. Colorado
▇▇▇▇▇ Broadcasting, Inc. Ohio
Common Ground Broadcasting, Inc. Oregon
Golden Gate Broadcasting Company Inc. California
Inspiration Media, Inc. Washington
Inspiration Media of Pennsylvania, LP Delaware
Inspiration Media of Texas, LLC Texas
Kingdom Direct, Inc. California
New England Continental Media, Inc. Massachusetts
New Inspiration Broadcasting Company, Inc. California
Pennsylvania Media Associates, Inc. Pennsylvania
Radio 1210, Inc. California
Reach Satellite Network, Inc. Tennessee
Salem Media Corporation New York
Salem Media of Colorado, Inc. Colorado
Salem Media of Georgia, Inc. Delaware
Salem Media of Hawaii, Inc. Delaware
Salem Media of Illinois, LLC Delaware
Salem Media of Kentucky, Inc. Kentucky
Salem Media of New York, LLC Delaware
Salem Media of Ohio, Inc. Ohio
Salem Media of Oregon, Inc. Oregon
Salem Media of Pennsylvania, Inc. Pennsylvania
Salem Media of Texas, Inc. Texas
Salem Media of Virginia, Inc. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ Music Network, Inc. Texas
Salem Radio Network Incorporated Delaware
Salem Radio Operations, LLC Delaware
Salem Radio Operations - Pennsylvania, Inc. Delaware
Salem Radio Properties, Inc. Delaware
Salem Radio Representatives, Inc. Texas
SCA-Palo Alto, LLC Delaware
South Texas Broadcasting, Inc. Texas
SRN News Network, Inc. Texas
Vista Broadcasting, Inc. California
-29-
Parent Subsidiaries
Name Jurisdiction of Incorporation/Formation
---- ---------------------------------------
CCM Communications, Inc. Tennessee
OnePlace, LLC Delaware
Salem Communications Acquisition Corporation Delaware
Salem Communications Holding Corporation Delaware
SCA License Corporation Delaware
EXHIBIT A
REGISTERED OFFERING ITEMS TO BE INCLUDED IN OPINIONS OF
(I) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ESQ., (II) ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP
AND (III) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.L.C.
1. No holder of any securities of Parent, the Company or any other person has
the right, contractual or otherwise, which has not been satisfied or
effectively waived, to cause Parent or the Company to sell or otherwise
issue to them, or to permit them to underwrite the sale of, any of the
securities or the right to have any securities of Parent or the Company
included in the Registration Statement or the right, as a result of the
filing of the Registration Statement, to require registration under the
Act of any securities of Parent or the Company.
2. The Registration Statement has become effective under the Act and, to the
knowledge of such counsel, no stop order proceedings with respect thereto
have been instituted or are pending or threatened under the Act.
3. The Registration Statement, the Prospectus and each amendment or
supplement thereto appear on their face to comply as to form in all
material respects with the requirements of the Act and the applicable
rules and regulations thereunder as of their effective or issue dates
(except that such counsel need express no opinion as to the financial
statements and related schedules therein and other financial data). The
documents incorporated by reference into the Registration Statement and
the Prospectus appear on their face to comply as to form in all material
respects with the requirements of the Exchange Act and the applicable
rules and regulations thereunder as of the date when they were filed with
the Commission (except that such counsel need express no opinion as to the
financial statements and related schedules therein and other financial
data) The conditions for the use of Form S-3, set forth in the General
Instructions thereto, have been satisfied.
4. Such counsel does not know of any contracts or documents required to be
filed as exhibits to or incorporated by reference in the Registration
Statement or described in the Registration Statement or the Prospectus
which are not so filed, incorporated by reference or described as
required.
5. "10b-5" statement to cover the Registration Statement and the Prospectus.
