Exhibit 10.8
$75,000,000
SPANISH BROADCASTING SYSTEM, INC.
10 3/4% SERIES A CUMULATIVE EXCHANGEABLE REDEEMABLE PREFERRED STOCK
PURCHASE AGREEMENT
October 15, 2003
XXXXXX BROTHERS INC.,
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
DEUTSCHE BANK SECURITIES INC.
As the Initial Purchasers,
c/x Xxxxxx Brothers, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Spanish Broadcasting System Inc., a Delaware corporation (the
"Company"), proposes, upon the terms and conditions set forth herein, to issue
and sell to you, as the initial purchasers (the "Initial Purchasers"), 75,000
shares of its 10 3/4% Series A Cumulative Exchangeable Redeemable Preferred
Stock, par value $.01 per share, liquidation preference $1,000 per share (the
"Series A Preferred Stock"). The rights and preferences of the Series A
Preferred Stock will be established by or pursuant to a certificate of
designations (the "Certificate of Designations") to be filed by the Company with
the Secretary of State of the State of Delaware on or prior to the Closing Date
(as defined herein). Under certain circumstances set forth in the Certificate of
Designations, the Series A Preferred Stock may be exchanged for the Company's 10
3/4% Subordinated Exchange Notes due 2013 (the "Exchange Notes"). The Company's
obligations under the Exchange Notes, including the due and punctual payment of
interest on the Exchange Notes will be unconditionally guaranteed (the
"Subsidiary Guarantees") by certain of the Company's subsidiaries (the
"Subsidiary Guarantors") specified in the indenture pursuant to which the
Exchange Notes will be issued (the "Exchange Notes Indenture"). As used herein,
the term "Exchange Notes" shall include the Subsidiary Guarantees, unless the
context otherwise requires. The Series A Preferred Stock and the Exchange Notes
will (i) have terms and provisions which are summarized in the Offering
Memorandum dated as of the date hereof and (ii) be issued pursuant to the
Certificate of Designations or the Exchange Notes Indenture, as the case may be.
This is to confirm the agreement concerning the purchase of the Series A
Preferred Stock from the Company by the Initial Purchasers.
1. Offering Memorandum. The Series A Preferred Stock will be
offered and sold to the Initial Purchasers without registration under 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, in reliance on an exemption pursuant to Section 4(2)
under the Act. The Company and the Subsidiary Guarantors have prepared an
offering memorandum, dated as of the date hereof (the "Offering Memorandum"),
setting forth information regarding the Company, the Subsidiary Guarantors, the
Series A Preferred Stock, the Registered Preferred Stock (as defined herein)
and the Exchange Notes. Any reference to the Offering Memorandum means, with
respect to any date or time
referred to in this Agreement, the most recent Offering Memorandum, as it may be
amended or supplemented, including exhibits thereto and any documents
incorporated therein by reference. All references in this Agreement to financial
statements and schedules and other information which is "contained," "included"
or "stated" in the Offering Memorandum (or other references of like import)
shall be deemed to mean and include all such financial statements and schedules
and other information which are incorporated by reference in the Offering
Memorandum. The Company and the Subsidiary Guarantors hereby confirm that they
have authorized the use of the Offering Memorandum in connection with the
offering and resale of the Series A Preferred Stock by the Initial Purchasers.
It is understood and acknowledged that upon original issuance thereof,
and until such time as the same is no longer required under the applicable
requirements of the Act, the Series A Preferred Stock (and all securities issued
in exchange therefor or in substitution thereof) shall bear the following
legend:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
(A)(1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN
OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF
REGULATIONS UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL
ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (5) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS) OR (6) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
(B) IN ACCORDANCE WITH ALL APPLICABLE BLUE SKY LAWS OF THE
STATES OF THE UNITED STATES, AND THE HOLDER OF THIS SERIES A
PREFERRED STOCK AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS SERIES A PREFERRED STOCK OR AN INTEREST HEREIN IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND."
You have advised the Company that you will make offers (the "Exempt
Resales") of the Series A Preferred Stock purchased by you hereunder on the
terms set forth in the Offering Memorandum, as amended or supplemented, solely
to (i) persons (each, a "144A Purchaser") whom you reasonably believe to be
"qualified institutional buyers" as defined in Rule 144A under the Act ("QIBs"),
and (ii) outside the United States to certain persons in offshore transactions
in reliance on Regulation S under the Act (the purchasers specified in clauses
(i) and (ii) being referred to herein as the "Eligible Purchasers").
2
Holders (including subsequent transferees) of the Series A Preferred
Stock will have the registration rights set forth in the registration rights
agreement (the "Registration Rights Agreement"), to be dated the Closing Date
(as defined below), in a form reasonably acceptable to the Company and the
Initial Purchasers and in conformity with the description of registration rights
in the Offering Memorandum under the heading "Description of Series A Preferred
Stock and Exchange Notes" -- "Registration Rights; Additional Dividends," for so
long as such Series A Preferred Stock constitute "Transfer Restricted
Securities" (as defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Company will agree to file with the
Commission under the circumstances set forth therein, a registration statement
under the Act (the "Exchange Offer Registration Statement") relating to the
Company's Series A Preferred Stock (the "Registered Series A Preferred Stock")
to be offered in exchange for the Series A Preferred Stock.
2. Representations, Warranties and Agreements of the Company and
the Subsidiary Guarantors. The Company and each of the Subsidiary Guarantors
represent, warrant and agree that:
(a) Assuming (i) that your representations and warranties
in Section 3 are true, (ii) compliance by you with your covenants set forth in
Section 5 and (iii) that each of the Eligible Purchasers is a QIB, an Accredited
Institution or a person who acquires the Series A Preferred Stock in an
"offshore transaction" and is not a "U.S. Person" (within the meaning of
Regulation S under the Act), the purchase and resale of the Series A Preferred
Stock pursuant hereto (including pursuant to the Exempt Resales) is exempt from
the registration requirements of the Act. No form of general solicitation or
general advertising was used by the Company or any of its representatives (other
than you, as to whom the Company makes no representation) in connection with the
offer and sale of the Series A Preferred Stock, including, but not limited to,
articles, notices or other communications published in any newspaper, magazine,
or similar medium or broadcast over television or radio or any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising. No securities of the same class as the Series A Preferred Stock
have been issued and sold by the Company within the six-month period
immediately prior to the date hereof.
(b) The Company is not required to deliver the
information specified in Rule 144A(d)(4) in connection with the Exempt Resales.
(c) The Offering Memorandum with respect to the Series A
Preferred Stock has been prepared by the Company and the Subsidiary Guarantors
for use by the Initial Purchasers in connection with the Exempt Resales. No
order or decree preventing the use of the Offering Memorandum, or any order
asserting that the transactions contemplated by this Agreement are subject to
the registration requirements of the Act, has been issued and no proceeding for
that purpose has commenced or is pending or, to the knowledge of the Company and
the Subsidiary Guarantors, is contemplated.
(d) The Offering Memorandum, as of its date and the
Closing Date, did not or will not at any time contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided that no
representation and warranty is made as to information contained in or omitted
from the Offering Memorandum made in reliance upon and in conformity with
written information relating to the Initial Purchasers furnished to the Company
in writing by or on behalf of the Initial Purchasers expressly for inclusion
therein.
(e) The documents incorporated or deemed to be
incorporated by reference in the Offering Memorandum at the time they were or
hereafter are filed with the Commission (after giving
3
effect to any amendments thereof) complied and will comply in all material
respects with the requirements of the Securities Exchange Act of 1934, as
amended the ("Exchange Act") and the rules and regulations thereunder, and when
read together with the other information in the Offering Memorandum, at the date
of the Offering Memorandum and at the Closing Date did not and will not include
an untrue statement of material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(f) The Company believes that the market-related and
other statistical data and estimates included in the Offering Memorandum and the
Company's filings under the Exchange Act incorporated by reference into the
Offering Memorandum are accurate in all material respects and are based on or
derived from reliable sources.
(g) The Company and each of its subsidiaries (as defined
in Section 15 of this Agreement) have been duly incorporated and are validly
existing as corporations in good standing under the laws of their respective
jurisdictions of incorporation, are duly qualified to do business and are in
good standing as foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of their respective
businesses requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the general affairs,
management, consolidated financial position, stockholders' equity or results of
operation of the Company and its subsidiaries taken as whole (a "Material
Adverse Effect"). The Company and its subsidiaries have all power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged; and none of the subsidiaries of the
Company other than the subsidiaries listed on Exhibit A hereto is a "significant
subsidiary," as such term is defined in Rule 405 of the Rules and Regulations
("Significant Subsidiary").
(h) The Company has an authorized capitalization as set
forth in or incorporated by reference in the Offering Memorandum, and on
June 30, 2003 after giving pro forma effect to the issuance and sale of the
Series A Preferred Stock and the other transactions described therein, the
Company would have had an authorized and outstanding capitalization as set forth
in the Offering Memorandum, subject to the notes and assumptions included
therein. All of the issued shares of capital stock of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable and conform
to the description thereof contained or incorporated by reference in the
Offering Memorandum; and all of the issued shares of capital stock of each
subsidiary (other than JuJu Media, Inc.) of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable and (except
for directors' qualifying shares) are owned directly or indirectly by the
Company, or its subsidiaries free and clear of all liens, encumbrances, equities
or claims and none of such shares of the Company's or its subsidiaries' capital
stock was issued in violation of preemptive or other similar rights arising by
operation of law, under the charter and by-laws of the Company or under any
agreement to which the Company or any subsidiary is a party or otherwise.
(i) Except for the warrants issued in connection with the
asset purchase agreement, as amended, with the International Church of the
FourSquare Gospel as described in the Offering Memorandum (the "Church
Warrants"), there are not currently any outstanding subscriptions, rights,
warrants, calls, commitments of sale or options to acquire, or instruments
convertible or exchangeable or capital stock or other equity interests of the
Company or any of its subsidiaries.
(j) This Agreement has been duly authorized, executed and
delivered by the Company and the Significant Subsidiaries, and each of the other
documents relating to this Agreement to which the Company or any of its
subsidiaries is a party has been duly authorized, executed and delivered by the
Company and each such subsidiary as the case may be.
4
(k) The Certificate of Designations will be duly
authorized by all necessary corporate and stockholder action prior to the
Closing Date, and on or prior to the Closing Date will have been duly executed
by the Company and filed with the Secretary of State of the State of Delaware
(the Delaware Secretary of State").
(l) The shares of Series A Preferred Stock have been duly
and validly authorized by the Company and, when issued and delivered by the
Company in accordance with the provisions of the Certificate of Designations
pursuant to this Agreement against payment of the consideration set forth herein
will be validly issued and fully paid and non-assessable; the terms of the
Series A Preferred Stock conform to all statements relating thereto contained in
the Offering Memorandum and such description will conform to the rights set
forth in the Certificate of Designations; no holder of the Series A Preferred
Stock will be subject to personal liability by reason of being such a holder;
and the issuance of the Series A Preferred Stock is not subject to preemptive or
other similar rights arising by operation of law, under the charter and bylaws
of the Company, or under any agreement to which the Company is a party.
(m) The Registered Preferred Stock has been duly and
validly authorized by the Company and, when issued and delivered by the Company
in accordance with the provisions of the Certificate of Designations will be
validly issued and fully paid and non-assessable; the terms of the Registered
Preferred Stock conform to all statements relating thereto contained in the
Offering Memorandum and such description will conform to the rights set forth in
the Certificate of Designations; no holder of the Registered Preferred Stock
will be subject to personal liability by reason of being such a holder; and the
issuance of the Registered Preferred Stock is not subject to preemptive or other
similar rights arising by operation of law, under the charter and bylaws of the
Company, or under any agreement to which the Company is a party.
(n) The Exchange Notes Indenture has been duly authorized
by the Company and the Subsidiary Guarantors and, if and when executed and
delivered by the Company and the Subsidiary Warrantors, will be a valid and
legally binding agreement of the Company and the Subsidiary Guarantors,
enforceable against them in accordance with their respective terms except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditor's rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. The Exchange Notes Indenture
conforms to the requirements of the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act").
(o) The Exchange Notes and the Subsidiary Guarantees have
been duly and validly authorized by the Company and the Subsidiary Guarantors
and, if and when executed, authenticated and issued in accordance with the
provisions of the Exchange Notes Indenture, will be in the form contemplated by
and will be entitled to the benefits of the Exchange Notes Indenture and will be
validly issued and free and clear of all liens and restrictions on transfer
(other than restrictions on transfer contemplated hereby and in the Offering
Memorandum) and will constitute valid and legally binding obligations of the
Company and the Subsidiary Guarantors, enforceable against them in accordance
with their respective terms except as (i) enforceability thereof may be limited
by bankruptcy, insolvency or similar laws affecting creditors' rights generally
and (ii) rights of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability.
(p) When the shares of Series A Preferred Stock are
issued and delivered pursuant to this Agreement, such shares of Series A
Preferred Stock will not be of the same class (within the meaning of Rule 144A
under the Act) as securities of the Company that are listed on a national
securities exchange registered under Section 6 of the Exchange Act or that are
quoted in a United States automated inter-dealer quotation system.
5
(q) The execution, delivery and performance by the
Company and the Subsidiary Guarantors of this Agreement, the Certificate of
Designations, the Registration Rights Agreement, the Exchange Notes Indenture
(if and when executed), the Exchange Notes (if issued) and the Subsidiary
Guarantees and the consummation of the transactions contemplated hereby, thereby
and in the Offering Memorandum (including the issuance and sale of the Series A
Preferred Stock and the use of proceeds from the sale of the Series A Preferred
Stock as described under the caption "Use of Proceeds") and the Exchange Offer
Registration Statement 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, loan agreement or other agreement, license
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, except
for such defaults which, individually or in the aggregate, would not result in a
Material Adverse Effect, nor will such actions result in any violation of the
provisions of the charter, certificate of incorporation, certificate of
designation, by-laws or similar governing document of the Company or any of its
subsidiaries 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 or assets; and except for the filing of
the Certificate of Designations with the Delaware Secretary of State and except
for the registration of the Registered Preferred Stock under the Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Series A Preferred Stock by
the Initial Purchasers, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement, the
Certificate of Designations, the Registration Rights Agreement, the Exchange
Notes Indenture (if and when executed), the Exchange Notes (if issued) and the
Subsidiary Guarantees and the consummation of the transactions contemplated
hereby or thereby, including the issuance, sale and delivery of the Series A
Preferred Stock to be issued, sold and delivered by the Company hereunder and
the issuance of the Registered Preferred Stock pursuant to the Exchange Offer.
(r) The Company has all requisite corporate power and
authority to enter into the Registration Rights Agreement. The Registration
Rights Agreement has been duly authorized by the Company and, when executed and
delivered by the Company in accordance with the terms hereof, will be validly
executed and delivered and (assuming the due execution and delivery thereof by
you) will be the legally valid and binding obligation of the Company in
accordance with the terms hereof, enforceable against the Company in accordance
with its terms, except as (i) enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally,
(ii) rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability, and (iii) as to rights
of indemnification and contribution, by principles of public policy.
(s) Except as to the shares of the Company's common stock
issuable upon exercise of the Church Warrants, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right (other than rights which have been waived or satisfied) to
require the Company to file a registration statement under the Act with respect
to any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities registered
pursuant to the Exchange Offer Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the Company
under the Act.
(t) Except as described (including by incorporation by
reference) in the Offering Memorandum, the Company has not sold or issued any
securities, or securities that are convertible into other securities, with terms
that are substantially similar to the Series A Preferred Stock during the six-
6
month period preceding the date of the Offering Memorandum, including any sales
pursuant to Rule 144A under, or Regulations D or S of, the Act.
(u) The Company has not taken and will not take, directly
or indirectly, any action designed to cause or result in, or which constitutes
or which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the Series A Preferred Stock to facilitate the sale
or resale of the Series A Preferred Stock.
(v) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements included or
incorporated by reference in the Offering Memorandum, 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
Memorandum that would result in a Material Adverse Effect; and, since such date,
there has not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
general affairs, management, consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Offering
Memorandum.
(w) The financial statements (including the related notes
and supporting schedules) included or incorporated by reference in the Offering
Memorandum present fairly, in all material respects, the financial condition and
results of operations of the entities purported to be shown thereby, at the
dates and for the periods indicated, and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved ("GAAP"). The other financial data or
information included or incorporated by reference in the Offering Memorandum
present fairly the information shown therein and have been compiled on a basis
consistent with that of the financial statements included or incorporated by
reference in the Offering Memorandum. The other financial data or information
included or incorporated by reference in the Offering Memorandum complies with
the requirements of Regulation G of the Commission.
(x) No default or event of default with respect to any
Indebtedness (as such term is defined in the Offering Memorandum under
"Description of Series A Preferred Stock and Exchange Notes") exists or will
exist as a result of the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby and each of the Company and
its subsidiaries has duly performed or observed all material obligations,
agreements, covenants or conditions contained in any contract, indenture,
mortgage, agreement or instrument relating to any Indebtedness, including
without limitation the indenture relating to the Company's 9 5/8% existing
senior subordinated notes due 2009.
(y) None of the Company or its subsidiaries, or any agent
acting on their behalf, has taken or will take any action that might cause this
Agreement or the sale of the Series A Preferred Stock 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.
(z) The Series A Preferred Stock, the Registered Series A
Preferred Stock, the Certificate of Designations, the Exchange Notes and the
Exchange Notes Indenture conform, in all material respects, to the descriptions
thereof in the Offering Memorandum.
(aa) Immediately after the consummation of the
transactions contemplated by this Agreement, and the transactions described in
the Offering Memorandum under "Description of
7
Business--Recent Developments," the fair value and present fair saleable value
of the assets of the Company will exceed the sum of its stated liabilities and
identified contingent liabilities; the Company is not, nor will the Company be,
after giving effect to the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby and the
transactions described in the Offering Memorandum, (i) left with unreasonably
small capital with which to carry on its business as it is proposed to be
conducted, (ii) unable to pay its debts (contingent and otherwise) as they
mature or (iii) otherwise insolvent.
(bb) To the best knowledge of the Company, KPMG LLP, who
have certified certain financial statements of the Company, whose report is
incorporated by reference in the Offering Memorandum and who has delivered the
initial letter referred to in Section 7(e) hereof, are independent public
accountants as required by the Act and the Rules and Regulations.
(cc) The Company and each of its subsidiaries have good
and marketable title to all real property and good and valid title to all
material personal property owned by them, in each case free and clear of all
liens, encumbrances and defects, except such as are described (including by
incorporation by reference) in the Offering Memorandum or such as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and
its subsidiaries; and all assets 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.
(dd) The Company and its subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as are reasonably
adequate for the conduct of their respective businesses and the value of their
respective properties and as are customary for companies of similar size,
engaged in similar businesses in similar industries.
(ee) The Company and each of its subsidiaries own, license
or possess adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service xxxx
registrations, copyrights and licenses necessary for the conduct of their
respective businesses and have no reason to believe that the conduct of their
respective businesses will conflict with, and have not received any notice of
any claim or conflict with, any such rights of others, except as disclosed in
the Offering Memorandum or where the failure to so own, license or possess such
rights would not, individually or in the aggregate, have a Material Adverse
Effect.
(ff) 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 or assets of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries, might
have a Material Adverse Effect; and to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(gg) The Company has filed all forms, reports and
documents required to be filed by it with the Commission since June 8, 2001
(collectively, as amended, the "Company's SEC Reports"). The Company's SEC
Reports have complied in all material respects with all applicable requirements
of the Securities Act and the Exchange Act, including without limitation the
applicable requirements of Rule 3-05 and Article 11 of Regulation S-X. As of
their respective dates, none of the Company's SEC Reports, including any
financial statements or schedules included or incorporated by reference herein,
contained any untrue statements of a material fact or omitted to state a
material fact required to be stated or incorporated
8
by reference therein or necessary in order to make the statement therein, in
light of the circumstances under which they were made, not misleading.
(hh) There are no contracts, arrangements or other
documents which are required to be described in or filed as exhibits to the
Company's SEC Reports which have not been described or filed.
(ii) No relationship, direct or indirect, exists between
or among the Company on the one hand, and any of its former or present
directors, officers, stockholders, customers or suppliers on the other hand,
which is required to be described in the Company's SEC Reports which is not so
described. There are no outstanding loans, advances (except normal advances for
business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or its subsidiaries or any of their respective family
members, except as described in the Company's SEC Reports. Neither the Company
nor any of its subsidiaries has, in violation of the Xxxxxxxx-Xxxxx Act of 2002,
directly or indirectly, extended or maintained credit, arranged for the
extension of credit, or renewed an extension of credit, in the form of a
personal loan to or for any director or executive officer of the Company or any
of its subsidiaries.
(jj) No labor disturbance by the employees of the Company
exists or, to the knowledge of the Company, is imminent, which might be expected
to have a Material Adverse Effect.
(kk) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), that relate to any employee benefit
plans (within the meaning of Section 3(3) of ERISA) presently maintained by the
Company; no "reportable event" (as defined in Section 4043 of ERISA) has
occurred with respect to any "defined benefit plan" (as defined in Section 3(35)
of ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA with
respect to the termination of any defined benefit plan or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended (the "Code"); and each
defined benefit plan which the Company maintains that is intended to be
qualified under Section 401(a) of the Code is so qualified and, to the Company's
knowledge, nothing has occurred which would cause the loss of such
qualification.
(ll) The Company has filed all material federal, state and
local income and franchise tax returns required to be filed through the date
hereof and has paid all taxes shown as due thereon, except where failure to so
file or pay would not have a Material Adverse Effect, and no tax deficiency has
been determined adversely to the Company or any of its subsidiaries which has
had (nor does the Company have any knowledge of any tax deficiency which, if
determined adversely to the Company or any of its subsidiaries, might have) a
Material Adverse Effect. There are no tax audits presently being conducted
which, if determined adversely to the Company or any of its subsidiaries, could
have a Material Adverse Effect.
(mm) Since June 30, 2002 through the date hereof, and
except as may otherwise be disclosed (including by incorporation by reference)
in the Offering Memorandum, none of the Company nor any of its subsidiaries has
(i) issued or granted any securities (other than the warrants of the Company
issued to the International Church of the FourSquare Gospel on September 30,
2003), (ii) incurred any material liability or obligation, direct or contingent,
other than liabilities and obligations which were incurred in the ordinary
course of business, (iii) entered into any transaction not in the ordinary
course of business, or (iv) declared or paid any dividend on its capital stock.
9
(nn) The Company (i) makes and keeps accurate books and
records, and (ii) maintain internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with management's
general or specific authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements in conformity with GAAP and to
maintain accountability for its assets, (C) access to its assets is permitted
only in accordance with management's general or specific authorization and
(D) the reported accountability for its assets is compared with existing assets
at reasonable intervals. Based on an evaluation of its disclosure controls and
procedures, the Company is not aware of (i) any significant deficiency in the
design or operation of internal controls which could adversely affect the
Company's ability to record, process, summarize and report financial data or any
material weakness in internal controls; or (ii) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the Company's internal controls. Since the date of the most recent
evaluation of such disclosure controls and procedures, there have been no
significant changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective actions with
regard to significant deficiencies and material weaknesses.
(oo) Neither the Company nor any of its subsidiaries
(i) is in violation of its charter, certificate of incorporation, certificate of
designation, by-laws or similar governing document, (ii) is in default in any
material respect, and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a party or
by which it is bound or to which any of its properties or assets is subject or
(iii) is in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its property or
assets may be subject.
(pp) Each of the radio stations owned, operated,
programmed, or to which sales and marketing services are provided, by the
Company and its subsidiaries is validly licensed by the Federal Communications
Commission (the "FCC") and no administrative or judicial proceedings are pending
before or, to the knowledge of the Company or its subsidiaries, threatened by
the FCC with respect to such licenses; the Company and its subsidiaries possess
adequate certificates, authorizations, consents, contract rights, orders,
approvals, licenses or permits which are in full force and effect issued by all
appropriate governmental agencies or bodies necessary to the ownership of their
respective properties and the conduct of the businesses now operated by them and
have not received any notice of proceedings relating to the revocation or
modification of any such certificate, authority, consent, order, approval,
license or permit and the Company and its subsidiaries are in compliance in all
material respects with the Communications Act of 1934, as amended, and the
rules, regulations and policies of the FCC.
(qq) Neither the Company nor any of its subsidiaries, nor
any director, officer, agent, employee or other person associated with or acting
on behalf of the Company or any of its subsidiaries, has used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(rr) Except as described in the Offering Memorandum, there
has been no storage, disposal, generation, manufacture, refinement,
transportation, handling or treatment of toxic wastes, medical wastes, hazardous
wastes or hazardous substances by the Company or any of its subsidiaries (or, to
the knowledge of the Company, any of their predecessors in interest) at, upon or
from any of the property now or previously owned or leased by the Company or its
subsidiaries in violation of any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit or which would require
10
remedial action under any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit, except for any violation or remedial action which
would not have, or could not be reasonably likely to have, singularly or in the
aggregate with all such violations and remedial actions, a Material Adverse
Effect; except as described in the Offering Memorandum, there has been no
material spill, discharge, leak, emission, injection, escape, dumping or release
of any kind onto such property or into the environment surrounding such property
of any toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or any of its subsidiaries or with
respect to which the Company or any of its subsidiaries have knowledge, except
for any such spill, discharge, leak, emission, injection, escape, dumping or
release which would not have or would not be reasonably likely to have,
singularly or in the aggregate with all such spills, discharges, leaks,
emissions, injections, escapes, dumpings and releases, a Material Adverse
Effect; and the terms "hazardous wastes", "toxic wastes", "hazardous substances"
and "medical wastes" shall have the meanings specified in any applicable local,
state, federal and foreign laws or regulations with respect to environmental
protection.
(ss) Neither the Company nor any subsidiary is, or, as of
the Closing Date after giving effect to the application of the net proceeds as
described in the Offering Memorandum, will be, an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(tt) The Company has complied with, and is and will be in
compliance with, the provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section 517.075 of the
Florida statutes, and the rules and regulations thereunder or is exempt
therefrom.
(uu) The Company has no reason to believe that, after
giving effect to the completion of its pending acquisition of radio station
KXOL-FM, its pending sale of its radio stations KLEY-FM, KSAH-AM and KPTI-FM,
the new senior secured credit facilities, all as described in the Offering
Memorandum, under "Description of Business -- Recent Developments," any of the
representations and warranties contained in this Section 2 would not be true and
correct.
(vv) Each of (i) the asset purchase agreement dated
November 2, 2000 and as amended on March 13, 2002 and February 8, 2002 between
the Company and the International Church of the FourSquare Gospel relating to
the acquisition of radio station KXOL-FM, (ii) the asset purchase agreement
dated September 18, 2003 between the Company and Border Media Partners LLC
relating to the Company's sale of assets of its radio stations KLEY-FM and
KSAH-AM, (iii) the asset purchase agreement dated October 2, 2003 between the
Company and 3 Point Media - San Francisco, LLC relating to the Company's sale of
assets of its radio station KPTI-FM, and (iv) the commitment letter dated
October 8, 2003 among the Company and the other parties thereto relating to the
senior secured credit facilities (each being a "Transaction Agreement") has not
been amended or modified since its date, is in full force and effect and
constitutes a legal, valid and binding agreement, enforceable in accordance with
its terms, of the Company and, to the Company's knowledge, of each other party
thereto, and neither the Company nor, to the Company's knowledge, any other
party to such Transaction Agreement is in violation or breach of or default
thereunder (or with notice or lapse of time or both, would constitute such a
violation, breach or default). To the Company's knowledge, there is no condition
to the completion of the transactions contemplated by the Transaction Agreements
that is required under such Transaction Agreement to be satisfied at or prior to
closing and which cannot or will not be satisfied.
3. Purchase of the Series A Preferred Stock by the Initial
Purchasers; Agreements to Sell, Purchase and Resell.
(a) The Company hereby agrees, on the basis of the
representations, warranties and agreements of the Initial Purchasers contained
herein and subject to all the terms and conditions set forth
11
herein, to issue and sell to the Initial Purchasers and, upon the basis of the
representations, warranties and agreements of the Company and the Subsidiary
Guarantors herein contained and subject to all the terms and conditions set
forth herein, the Initial Purchasers, severally and not jointly, agree to
purchase from the Company, at the purchase price set forth in Schedule I hereto,
the number of shares of Series A Preferred Stock set forth opposite the
respective names of the Initial Purchasers in Schedule I hereto. The Company
shall not be obligated to deliver any of the securities to be delivered
hereunder except upon payment for all of the securities to be purchased as
provided herein.
(b) Each Initial Purchaser hereby represents and warrants
to the Company that it will offer the Series A Preferred Stock for sale upon the
terms and conditions set forth in this Agreement and in the Offering Memorandum.
Each Initial Purchaser hereby represents and warrants to, and agrees with, the
Company that such Initial Purchaser (i) is a QIB with such knowledge and
experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the Series A Preferred Stock;
(ii) is purchasing the Series A Preferred Stock pursuant to a private sale
exempt from registration under the Act; (iii) in connection with the Exempt
Resales, will solicit offers to buy the Series A Preferred Stock only from, and
will offer to sell the Series A Preferred Stock only to, the Eligible Purchasers
in accordance with this Agreement and on the terms contemplated by the Offering
Memorandum; and (iv) will not offer or sell the Series A Preferred Stock, nor
has it offered or sold the Series A Preferred Stock by, or otherwise engaged in,
any form of general solicitation or general advertising (within the meaning of
Regulation D; including, but not limited to, advertisements, articles, notices
or other communications published in any newspaper, magazine, or similar medium
or broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising) in
connection with the offering of the Series A Preferred Stock. Such price may be
changed by the Initial Purchasers at any time thereafter without notice.
(c) The Initial Purchasers understand that the Company
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Sections 7(c) and 7(d) hereof, counsel to the Company and counsel to
the Initial Purchasers, will rely upon the accuracy and truth of the foregoing
representations, warranties and agreements and the Initial Purchasers hereby
consent to such reliance.
4. Delivery of the Series A Preferred Stock and Payment Therefor.
Delivery to the Initial Purchasers of and payment for the Series A Preferred
Stock shall be made at the office of Xxxxxxxx Chance US LLP, 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York City time, on October 30, 2003
(the "Closing Date"). The place of closing for the Series A Preferred Stock and
the Closing Date may be varied by agreement between the Initial Purchasers and
the Company.
The Company will deliver the Series A Preferred Stock with transfer
taxes thereon duly paid to the Initial Purchasers (or the respective accounts of
the Initial Purchasers) in book entry form through the facilities of The
Depositary Trust Company ("DTC") for the accounts of the Initial Purchasers
against payment of the purchase price therefor by certified or official bank
check or checks payable in or wire transfer in immediately available funds;
provided, that the amount of such payment shall be reduced by one day's interest
on the amount of gross proceeds at the Initial Purchasers' cost of borrowing
such funds plus any expenses associated with such payment of immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition to the
obligation of the Initial Purchasers hereunder. The Series A Preferred Stock
will be evidenced by one or more global certificates in definitive form (the
"Global Series A Preferred Stock") and/or by additional definitive securities,
and will be registered, in the case of the Global Series A Preferred Stock, in
the name of Cede & Co. as nominee of DTC, and in the other cases, in such names
and in such denominations as the Initial Purchasers shall request prior to 9:30
A. M., New York City time, on the second business day preceding the Closing
Date. The Series A Preferred Stock to be delivered to the
12
Initial Purchasers shall be made available to the Initial Purchasers in New York
City for inspection and packaging not later than 9:30 A.M., New York City time,
on the business day preceding the Closing Date.
5. Agreements of the Company. The Company agrees with each
Initial Purchaser as follows:
(a) The Company will furnish to the Initial Purchasers,
without charge, such number of copies of the Offering Memorandum as may then be
amended or supplemented as the Initial Purchasers may reasonably request.
(b) The Company will not make any amendment or supplement
to the Offering Memorandum of which the Initial Purchasers shall not previously
have been advised or to which the Initial Purchasers shall reasonably object
after being so advised.
(c) The Company and each of the Subsidiary Guarantors
consent to the use of the Offering Memorandum in accordance with the securities
or Blue Sky laws of the jurisdictions in which the Series A Preferred Stock are
offered by the Initial Purchasers and by all dealers to whom the Series A
Preferred Stock may be sold, in connection with the offering and sale of the
Series A Preferred Stock.
(d) If, at any time prior to completion of the
distribution of the Series A Preferred Stock by the Initial Purchasers to
Eligible Purchasers, any event shall occur that in the judgment of the Company,
any of the Subsidiary Guarantors or in the opinion of counsel for the Initial
Purchasers should be set forth in the Offering Memorandum in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary to supplement or amend the Offering
Memorandum in order to comply with any law, the Company will forthwith prepare
an appropriate supplement or amendment thereto or such document, and will
expeditiously furnish to the Initial Purchasers and dealers a reasonable number
of copies thereof.
(e) The Company and each of the Subsidiary Guarantors
will cooperate with the Initial Purchasers and with their counsel in connection
with the qualification of the Series A Preferred Stock for offering and sale by
the Initial Purchasers and by dealers under the securities or Blue Sky laws of
such jurisdictions as the Initial Purchasers may designate and will file such
consents to service of process or other documents necessary or appropriate in
order to effect such qualification; provided, that in no event shall the Company
or any of the Subsidiary Guarantors be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to take any action which
would subject it to service of process in suits, other than those arising out of
the offering or sale of the Series A Preferred Stock, in any jurisdiction where
it is not now so subject.
(f) For a period of 180 days from the date of the
Offering Memorandum, not to, directly or indirectly, sell, contract to sell,
grant any option to purchase, issue any instrument convertible into or
exchangeable for, or otherwise transfer or dispose of, the Series A Preferred
Stock or any debt securities of the Company or any of its subsidiaries, except
(i) for the Registered Preferred Stock in connection with the Exchange Offer or
(ii) with the prior consent of Xxxxxx Brothers Inc.
(g) So long as any of the Series A Preferred Stock, the
Registered Preferred Stock or Exchange Notes, as the case may be, are
outstanding, the Company will furnish to the Initial Purchasers (i) as soon as
available, a copy of each report of the Company furnished to stockholders
generally or to holders of the Series A Preferred Stock, the Registered
Preferred Stock or Exchange Notes, as the case may be, or filed with or
furnished to any stock exchange, regulatory body or the Commission and
13
(ii) from time to time such other information concerning the Company or the
Subsidiary Guarantors as the Initial Purchasers may reasonably request.
(h) The Company will apply the net proceeds from the sale
of the Series A Preferred Stock to be sold by it hereunder in accordance with
the description set forth in the Offering Memorandum under the caption "Use of
Proceeds."
(i) Except as stated in this Agreement and in the
Offering Memorandum, the Company has not taken, nor will it take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Series A
Preferred Stock to facilitate the sale or resale of the Series A Preferred
Stock. Except as permitted by the Act, the Company will not distribute any
offering material in connection with the Exempt Resales.
(j) The Company will use its best efforts to permit the
Series A Preferred Stock to be designated Private Offerings, Resales and Trading
through Automated Linkages ("PORTAL") market securities in accordance with the
rules and regulations adopted by the National Association of Securities Dealers,
Inc. relating to trading in the PORTAL Market and to permit the Series A
Preferred Stock to be eligible for clearance and settlement through DTC.
(k) From and after the Closing Date, so long as any of
the Series A Preferred Stock or Exchange Notes are outstanding and are
"restricted securities" within the meaning of the Rule 144(a)(3) under the Act
or, if earlier, until three years after the Closing Date, and during any period
in which the Company is not subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Company and the
Subsidiary Guarantors will furnish to holders of the Series A Preferred Stock
and prospective purchasers of Series A Preferred Stock designated by such
holders, upon request of such holders or such prospective purchasers, the
information required to be delivered pursuant to Rule 144A(d)(4) under the Act
to permit compliance with Rule 144A in connection with resale of the Series A
Preferred Stock.
(l) The Company and the Subsidiary Guarantors have
complied and will comply with all provisions of Florida Statutes Section 517.075
relating to issuers doing business with Cuba.
(m) The Company and the Subsidiary Guarantors agree not
to sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in the Act) that would be integrated with
the sale of the Series A Preferred Stock in a manner that would require the
registration under the Act of the sale to the Initial Purchasers or the Eligible
Purchasers of the Series A Preferred Stock.
(n) The Company and the Subsidiary Guarantors agree to
comply with all the terms and conditions of the Registration Rights Agreement
and all agreements set forth in the representation letters of the Company to DTC
relating to the approval of the Series A Preferred Stock by DTC for "book entry"
transfer.
(o) The Company and the Subsidiary Guarantors agree to
cause the Exchange Offer, if available, to be made in the appropriate form, as
contemplated by the Registration Rights Agreement, to permit registration of the
Registered Preferred Stock to be offered in exchange for the Series A Preferred
Stock (including registration of the Exchange Notes and the Subsidiary
Guarantees) and to comply with all applicable federal and state securities laws
in connection with the Registered Exchange Offer.
14
(p) The Company and the Subsidiary Guarantors agree that
prior to any registration of the Exchange Notes pursuant to the Registration
Rights Agreement, or at such earlier time as may be required, the Indenture
shall be qualified under the Trust Indenture Act and any necessary supplemental
indentures will be entered into in connection therewith.
(q) The Company and the Subsidiary Guarantors will not
voluntarily claim, and will resist actively all attempts to claim, the benefit
of any usury laws against holders of the Exchange Notes, if Exchange Notes are
issued.
(r) The Company will take such steps as shall be
necessary to ensure that neither the Company nor any subsidiary shall become an
"Investment Company" within the meaning of the Investment Company Act of 1940,
as amended.
(s) The Company shall execute the Certificate of
Designations and file it with the Delaware Secretary of State prior to the
Closing Date.
(t) The Company and the Subsidiary Guarantors will do and
perform all things required or necessary to be done and performed under this
Agreement by them prior to the Closing Date, and to satisfy all conditions
precedent to the Initial Purchasers' obligations hereunder to purchase the
Series A Preferred Stock.
6. Expenses. The Company agrees: whether or not the transactions
contemplated by this Agreement are consummated or this Agreement becomes
effective or is terminated, to pay all costs, expenses, fees and taxes incident
to and in connection with: (i) the preparation, printing, filing and
distribution of the Offering Memorandum (including, without limitation,
financial statements and exhibits) and all amendments and supplements thereto,
(ii) the preparation, printing (including, without limitation, word processing
and duplication costs) and delivery of this Agreement, the Certificate of
Designations, the Registration Rights Agreement, the Exchange Notes Indenture,
all Blue Sky Memoranda and all other agreements, memoranda, correspondence and
other documents printed and delivered in connection therewith and with the
Exempt Resales (including fees of such counsel plus reasonable disbursements
incurred in connection with the preparation, printing and delivery of such Blue
Sky Memoranda), (iii) the issuance, sale and delivery by the Company of the
Series A Preferred Stock, including any transfer or other taxes payable thereon,
(iv) the costs and charges of the transfer agent and registrar for the Series A
preferred stock and the indenture trustee for the Exchange Notes, (v) the
qualification of the Series A Preferred Stock for offer and sale under the
securities or Blue Sky laws of the several states (including, without
limitation, the reasonable fees and disbursements of your counsel relating to
such registration or qualification), (vi) furnishing such copies of the Offering
Memorandum, and all amendments and supplements thereto, as may be reasonably
requested for use in connection with the Exempt Resales, (vii) the preparation
of certificates for the Series A Preferred Stock (including, without limitation,
printing and engraving thereof), (viii) the fees, disbursements and expenses and
listing fees in connection with the application for quotation of the Series A
Preferred Stock in the PORTAL Market, (ix) all fees and expenses (including fees
and expenses of counsel) of the Company in connection with approval of the
Series A Preferred Stock by DTC for "book-entry" transfer, (x) the costs and
expenses of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Series A
Preferred Stock, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show and (xi) the
performance by the Company and the Subsidiary Guarantors of their other
obligations under this
15
Agreement; provided that, except as provided in this Section 6 and in Section
10, each Initial Purchaser shall pay its own costs and expenses, including the
costs and expenses of its counsel and any transfer taxes on the Series A
Preferred Stock which it may sell.
7. Conditions of Initial Purchasers' Obligations. The respective
obligations of the Initial Purchasers hereunder are subject to the accuracy,
when made and on the Closing Date, of the representations and warranties of the
Company contained herein, to the performance by the Company and the Subsidiary
Guarantors of their respective obligations hereunder, and to each of the
following additional terms and conditions:
(a) The Initial Purchasers shall not have discovered and
disclosed to the Company on or prior to the Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of Xxxxxxxx Chance US LLP, counsel for the
Initial Purchasers, is material or omits to state a fact which, in the opinion
of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(b) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the Series A
Preferred Stock, the Registration Rights Agreement and the Offering Memorandum,
and all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material respects to
counsel for the Initial Purchasers, and the Company and the Subsidiary
Guarantors shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such matters.
(c) Xxxx Xxxxxxx LLP shall have furnished to the Initial
Purchasers its written opinion, as counsel to the Company, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, to the effect that:
(i) The Company and each of its Significant
Subsidiaries are validly existing in good standing under the laws of their
respective jurisdictions of incorporation, each is duly qualified to do business
and are in good standing as a foreign corporation in each jurisdiction set forth
in an attachment to such opinion;
(ii) The Company has an authorized capitalization
as set forth in or incorporated by reference in the Offering Memorandum, and all
of the issued shares of capital stock of the Company have been duly and validly
authorized and issued, are fully paid and nonassessable and conform to the
description thereof contained or incorporated by reference in the Offering
Memorandum; and all of the issued shares of capital stock of each subsidiary of
the Company have been duly and validly authorized and issued and are fully paid,
non-assessable and (except for directors' qualifying shares) are owned directly
or indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims and none of such shares of capital stock was issued in
violation of preemptive or other similar rights arising by operation of the
Delaware General Corporation Law, under the charter and bylaws of the Company or
under any agreement known to such counsel to which the Company or any subsidiary
is a party, as set forth in an attachment to such opinion;
(iii) The shares of Series A Preferred Stock to be
delivered on the Closing Date and the Registered Preferred Stock to be issued
pursuant to the Exchange Offer have been duly and validly authorized, and the
shares of Series A Preferred Stock to be delivered on the Closing Date have been
duly and validly issued, fully paid and nonassessable, have not been issued in
violation of or subject to any preemptive or similar rights arising under the
charter or bylaws of the Company or under any agreement known to such counsel to
which the Company or any subsidiary is a party, and will constitute
16
valid and legally binding obligations of the Company enforceable against the
Company in accordance with its terms, except as enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law) and except that certain of the remedies therein contained may
not be enforceable or be subject to available defenses and procedural
requirements which are not necessarily reflected therein. The form of stock
certificate used to represent the shares of Series A Preferred Stock is in due
and proper form and complies with the Delaware General Corporation Law;
(iv) When the shares of Series A Preferred Stock
are issued and delivered pursuant to the Agreement, such Series A Preferred
Stock will not be of the same class (within the meaning of Rule 144A under the
Act) as securities of the Company that are listed on a national securities
exchange registered under Section 6 of the Exchange Act or that are quoted in a
United States automated inter-dealer quotation system;
(v) No registration under the Act of the Series
A Preferred Stock is required for the sale of the Series A Preferred Stock to
you as contemplated hereby or for the Exempt Resales (assuming (i) that the
Eligible Purchasers who buy the Series A Preferred Stock in the Exempt Resales
are QIBs or persons who acquire the Series A Preferred Stock in an "offshore
transaction" and is not a "U.S. Person" (within the meaning of Regulation S
under the Act) and (ii) the accuracy of your representations and those of the
Company regarding the absence of general solicitation in connection with the
Exempt Resales contained herein;
(vi) The Series A Preferred Stock conforms in all
material respects to the descriptions thereof contained in the Offering
Memorandum and the Certificate of Designations. The Certificate of Designations
and the Registration Rights Agreement conform in all material respects to the
respective description thereof contained in the Offering Memorandum. The forms
of Exchange Notes and Subsidiary Guarantees conform in all material respects to
the descriptions thereof contained in the Offering Memorandum and the Exchange
Notes Indenture. The Exchange Notes Indenture conforms in all material respects
to the description thereof contained in the Offering Memorandum;
(vii) The Certificate of Designations has been
duly authorized by all necessary corporate and stockholder action and has been
duly executed by the Company, filed with and accepted for record by, the
Secretary of State of the State of Delaware;
(viii) To the best of such counsel's knowledge and
other than as set forth in the Offering Memorandum (including by incorporation
by reference), 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 or
assets of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, might have a
Material Adverse Effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company and its
subsidiaries taken as a whole; and, to the best of such counsel's knowledge, no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(ix) To the best of such counsel's knowledge, no
order or decree preventing the use of the Offering Memorandum, or any order
asserting that the transactions contemplated by this Agreement are subject to
the registration requirements of the Act, has been issued and no proceeding for
that purpose has commenced, is pending or is threatened by the Commission;
17
(x) The statements contained in the Offering
Memorandum under the captions "Risk Factors--Risks Related to the Series A
Preferred Stock, the Exchange Notes and this Offering--Actual or constructive
distributions with respect to our Series A preferred stock and exchange notes
may lead to unplanned deemed dividend income and original issue discount"; "--
Corporate holders of the Series A preferred stock will not continue to be
eligible for the dividends-received deduction after a certain time"; "--A court
could subordinate or void the subsidiary guarantees of the exchange notes in
circumstances of a fraudulent transfer under federal or state laws"; "-- A court
may void the issuance of the exchange notes in circumstances of a fraudulent
transfer under federal or state laws;" "-- Risk Factors--Risks Related to our
Business--Our business depends on maintaining our FCC licenses. We cannot assure
you that we will be able to maintain these licenses"; "--We may face regulatory
review for additional acquisitions in our existing markets and, potentially, new
markets"; "Description of Business--Antitrust"; "Description of
Business--Federal Regulation of Radio Broadcasting"; "Description of
Indebtedness"; "Description of Capital Stock"; "Description of Business--FCC
Licenses"; "Description of Business--Environmental Matters"; "Description of
Business--Legal Proceedings"; " Description of Capital Stock"; "Description of
Indebtedness"; "Description of Business--Recent Developments"; "Description of
the Series A Preferred Stock and Exchange Notes"; "Certain Material U.S. Federal
Income Tax Consequences"; "ERISA Considerations"; and the statements contained
in the Company's Annual Report on Form 10-K for the fiscal year ended
December 29, 2002 under the captions "Executive Compensation--Employment
Agreement and Arrangements"; "Executive Compensation--Stock Plans"; "Executive
Compensation--401(K) Plan"; and "Executive Compensation--Limitation on
Directors' and Officers' Liability"; insofar as they describe contracts,
agreements or other legal documents or they describe federal statutes, rules and
regulations, constitute a fair summary thereof;
(xi) The Company's SEC Reports that are
incorporated by reference into the Offering Memorandum (after giving effect to
any amendments thereof) at the time they were filed with the Commission complied
as to form in all material respects with the requirements of the Exchange Act;
provided that such counsel need not express an opinion as to financial
statements or schedules included therein or required to be included therein;
(xii) To the best of such counsel's knowledge,
there are no contracts, arrangements or other documents which are required to be
described in or filed as exhibits to the Company's SEC Reports which have not
been so described or filed;
(xiii) This Agreement has been duly authorized,
executed and delivered by the Company and the Subsidiaries identified on the
signature pages hereto, and each of the other documents relating to this
Agreement to which the Company or any of its subsidiaries is a party has been
duly authorized, executed and delivered by the Company and each such subsidiary
as the case may be;
(xiv) The Company has the requisite corporate
power and authority to enter into the Registration Rights Agreement. The
Registration Rights Agreement has been duly authorized by the Company and, when
executed and delivered by the Company in accordance with the terms hereof and
will be validly executed and delivered and (assuming the due execution and
delivery thereof by you) will be the legally valid and binding obligation of the
Company in accordance with the terms hereof, enforceable against the Company in
accordance with its terms, except as enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law) and except that certain of the remedies therein contained may not be
enforceable or be subject to available defenses and procedural requirements
which are not necessarily reflected therein;
18
(xv) The Exchange Notes Indenture, the Exchange
Notes and the Subsidiary Guarantees have been duly and validly authorized by the
Company and the Subsidiary Guarantors.
(xvi) The issue and sale of the shares of Series A
Preferred Stock being delivered on the Closing Date by the Company pursuant to
this Agreement and the execution, delivery and compliance by the Company and the
Subsidiary Guarantors with all of the provisions of this Agreement, the
Certificate of Designations, the Registration Rights Agreement, the Series A
Preferred Stock, the Registered Preferred Stock and each of the other documents
to be entered into in connection with the consummation of the transactions
contemplated hereby, thereby and in the Offering Memorandum (including the
issuance and sale of the Series A Preferred Stock and the use of proceeds from
the sale of the Series A Preferred Stock as described under the caption "Use of
Proceeds") and the Exchange Offer Registration Statement 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, loan
agreement or other agreement, license (including FCC Licenses (as hereinafter
defined)) or instrument known to such counsel (as set forth in an attachment to
such opinion) 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 actions result in any violation of the provisions of the charter,
certificate of designation, by-laws or similar governing document of the Company
or any of its subsidiaries or any New York or federal statute, rule or
regulation (including the Federal Communications Laws (as hereinafter defined))
or any order, judgment or decree known to such counsel; and, except for the
filing of the Certificate of Designations with the Secretary of State of the
State of Delaware and except for the registration of the Registered Preferred
Stock under the Act and such consents, approvals, authorizations, registrations
or qualifications as may be required under the Exchange Act and applicable state
securities laws in connection with the purchase and distribution of the Series A
Preferred Stock by the Initial Purchasers, no consent, approval, authorization
or order of, or filing or registration with, any such court or governmental
agency or body (including pursuant to the Communications Act of 1934, as amended
and the rules, regulations and administrative orders promulgated thereunder
(collectively, the "Federal Communications Laws")) is required for the
execution, delivery and performance of this Agreement, the Certificate of
Designations, the Registration Rights Agreement or any of the other documents to
be entered into in connection with this Agreement by the Company and the
Subsidiary Guarantors and the consummation of the transactions contemplated
hereby or thereby, including the issuance, sale and delivery of the Series A
Preferred Stock to be issued, sold and delivered by the Company hereunder and
the issuance of the Registered Preferred Stock pursuant to the Exchange Offer;
(xvii) Except as to the shares of the Company's
common stock issuable upon exercise of the Church Warrants and except as
otherwise described (including by incorporation by reference) in the Offering
Memorandum, to the best of such counsel's knowledge, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right (other than rights which have been waived or satisfied) to
require the Company to file a registration statement under the Act with respect
to any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities registered
pursuant to the Exchange Offer Registration Statement or in any securities being
registered pursuant to any statement filed by the Company under the Act;
(xviii) The Company and its subsidiaries are the
holders of the FCC licenses listed in an attachment to such opinion (the "FCC
Licenses"), all of which are in full force and effect, for the term specified
therein, the FCC Licenses have no material conditions, restrictions or
qualifications other than as described in the Offering Memorandum, and to such
counsel's knowledge, such FCC
19
Licenses constitute all of the licenses for the Company and the subsidiaries to
operate their radio stations as described in the Offering Memorandum;
(xix) There are no published or, to such counsel's
knowledge, unpublished FCC orders, decrees or rulings outstanding against the
Company or any of its subsidiaries or any pending or threatened actions, suits
or proceedings against the Company or any of its subsidiaries by or before the
FCC that seek to revoke, or if determined adversely to the Company or any of its
subsidiaries, would have a material adverse effect on the Company and its
subsidiaries taken as a whole or would result in a revocation or nonrenewal of,
any of the FCC Licenses, other than as disclosed in the Offering Memorandum,
including by incorporation by reference;
(xx) Neither the Company nor any subsidiary is an
"investment company" as defined in the Investment Company Act of 1940, as
amended.
(xxi) Each of (i) the asset purchase agreement
dated November 2, 2000 and as amended on March 13, 2002 and February 8, 2002
between the Company and the International Church of the FourSquare Gospel
relating to the acquisition of radio station KXOL-FM, (ii) the asset purchase
agreement dated September 18, 2003 between the Company and Border Media Partners
LLC relating to the Company's sale of assets of its radio stations KLEY-FM and
KSAH-AM, (iii) the asset purchase agreement dated October 2, 2003 between the
Company and 3 Point Media - San Francisco, LLC relating to the Company's sale of
assets of its radio station KPTI-FM, and (iv) the commitment letter dated
October 8, 2003 among the Company and the other parties thereto relating to the
senior secured credit facilities (each being a "Transaction Agreement") to such
counsel's knowledge has not been amended or modified since its date, is in full
force and effect and constitutes a legal, valid and binding agreement,
enforceable in accordance with its terms, of the Company and, to such counsel's
knowledge, of each other party thereto, and to such counsel's knowledge neither
the Company nor any other party to such Transaction Agreement is in violation or
breach of or default thereunder (or with notice or lapse of time or both, would
constitute such a violation, breach or default). To such counsel's knowledge,
there is no condition to the completion of the transactions contemplated by the
Transaction Agreements that is required under such Transaction Agreement to be
satisfied at or prior to closing and which cannot or will not be satisfied.
In rendering such opinion, such counsel may state its opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of New York and the General Corporation Law of the State
of Delaware. In rendering such opinion, such counsel may rely as to matters
involving the application of the laws of Puerto Rico to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably satisfactory to counsel to
the Initial Purchasers) of other counsel reasonably acceptable to counsel to the
Initial Purchasers, and familiar with the applicable laws. Such opinion shall
also include a statement to the effect (but in form and substance satisfactory
to the Initial Purchasers) that (x) such counsel has acted as counsel to the
Company in connection with the preparation of the Offering Memorandum, and
(y) based on the foregoing, no facts have come to the attention of such counsel
which lead it to believe that, as of its date and as of the date of such
opinion, the Offering Memorandum (including the documents incorporated by
reference therein, but excluding the financial statements and financial
schedules and other financial data included or incorporated by reference
therein) contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Offering Memorandum (including
the documents incorporated by reference therein, but excluding the financial
statements and financial schedules and other financial data included or
incorporated by reference therein) contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
20
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The foregoing opinion and statement
may be qualified by a statement to the effect that such counsel does not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Offering Memorandum except as set forth in clause (x) above,
insofar as such statements relate to legal matters.
(d) The Initial Purchasers shall have received from
Xxxxxxxx Chance US LLP, counsel for the Initial Purchasers, such opinion or
opinions, dated the Closing Date, with respect to the issuance and sale of the
Series A Preferred Stock, the Offering Memorandum and other related matters as
the Initial Purchaser may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for the
purpose of enabling them to pass upon such matters.
(e) At the time of execution of this Agreement, the
Initial Purchasers shall have received from KPMG LLP a letter, in form and
substance satisfactory to the Initial Purchasers, addressed to the Initial
Purchasers and dated the date hereof (i) confirming that they are independent
public accountants within the meaning of the Act and are in compliance with the
applicable requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the date hereof
(or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given or
incorporated by reference in the Offering Memorandum, as of a date not more than
five days prior to the date hereof), the conclusions and findings of such firm
with respect to the financial information and other matters ordinarily covered
by accountants' "comfort letters" to underwriters in connection with registered
public offerings.
(f) With respect to the letter of KPMG LLC referred to in
the preceding paragraph and delivered to the Initial Purchasers concurrently
with the execution of this Agreement (the "initial letter"), the Company shall
have furnished to the Initial Purchasers a letter (the "bring-down letter") of
such accountants, addressed to the Initial Purchasers and dated such Closing
Date (i) confirming that they are independent public accountants within the
meaning of the Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given or incorporated by
reference in the Offering Memorandum, as of a date not more than five days prior
to the date of the bring-down letter), the conclusions and findings of such firm
with respect to the financial information and other matters covered by the
initial letter and (iii) confirming in all material respects the conclusions and
findings set forth in the initial letter.
(g) The Company shall have furnished to the Initial
Purchasers a certificate, dated the Closing Date, of its Chairman of the Board,
its President or a Vice President and its chief financial officer stating that:
(i) The representations, warranties and
agreements of the Company in Section 2 are true and correct as of the Closing
Date; the Company has complied with all its agreements contained herein; and the
conditions set forth in Section 7(h) and (i) have been fulfilled;
(ii) No default or event of default with respect
to any Indebtedness (as such term is defined in the Certificate of Designations)
exists or will exist as a result of the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby and each of the
Company and its subsidiaries has duly performed or observed all material
obligations, agreements, covenants or conditions contained in any contract,
indenture, mortgage, agreement or instrument relating to any Indebtedness,
including without limitation the indenture relating to the Existing Notes; and
21
(iii) They have carefully examined the Offering
Memorandum (including the documents incorporated by reference therein) and, in
their opinion (A) as of its date, the Offering Memorandum (including the
documents incorporated by reference therein) did not include any untrue
statement of a material fact and did not omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and (B) since its date no event has occurred which should have been set forth in
a supplement or amendment to the Offering Memorandum.
(h) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Offering Memorandum (i) 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 Memorandum or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Offering
Memorandum, the effect of which, in any such case described in clause (i) or
(ii), is, in the judgment of the Initial Purchasers, so material and adverse as
to make it impracticable or inadvisable to proceed with the offering or the
delivery of the Series A Preferred Stock being delivered on the Closing Date on
the terms and in the manner contemplated in the Offering Memorandum.
(i) Subsequent to the execution and delivery of this
Agreement (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) of the Rules and Regulations 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.
(j) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American Stock
Exchange or in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have been
suspended or minimum prices shall have been established on any such exchange or
such market by the Commission, by such exchange or by any other regulatory body
or governmental authority having jurisdiction, (ii) a banking moratorium shall
have been declared by Federal or state authorities, (iii) the United States
shall have become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment of
the Initial Purchasers, impracticable or inadvisable to proceed with the
offering or delivery of the Series A Preferred Stock being delivered on such
Closing Date on the terms and in the manner contemplated in the Offering
Memorandum.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
8. Indemnification and Contribution.
22
(a) The Company, and each of the Significant
Subsidiaries, jointly and severally, shall indemnify and hold harmless each
Initial Purchaser, its officers and employees and each person, if any, who
controls any Initial Purchaser within the meaning of the Act, from and against
any loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of the Series A Preferred Stock and the
Exempt Resales), to which that Initial Purchaser, officer, employee or
controlling person may become subject, under the Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any Offering Memorandum (including the documents incorporated
by reference therein) or in any amendment or supplement thereto; (B) in any
materials or information provided to investors by, or with the approval of, the
Company in connection with the marketing of the offering of the Series A
Preferred Stock ("Marketing Material"), including any roadshow or investor
presentations made to investors by the Company (whether in person or
electronically, or (C) in any blue sky application or other document prepared or
executed by the Company (or based upon any written information furnished by the
Company) specifically for the purpose of qualifying any or all of the Series A
Preferred Stock under the securities laws of any state or other jurisdiction
(any such application, document or information being hereinafter called a "Blue
Sky Application"), (ii) the omission or alleged omission to state in the
Offering Memorandum, (including the documents incorporated by reference therein)
or in any amendment or supplement thereto, in the Marketing Materials, or in any
Blue Sky Application, of any material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any act or
failure to act or any alleged act or failure to act by the Initial Purchasers in
connection with, or relating in any manner to, the Series A Preferred Stock or
the offering contemplated hereby, and which is included as part of or referred
to in any loss, claim, damage, liability or action arising out of or based upon
matters covered by clause (i) or (ii) above (provided that the Company and the
Significant Subsidiaries shall not be liable under this clause (iii) to the
extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by the Initial Purchasers through their gross negligence or willful misconduct),
and shall reimburse the Initial Purchasers and each such officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by each Initial Purchaser, its officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company and the Significant
Subsidiaries shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged omission
made in Offering Memorandum, or in any such amendment or supplement, or in any
Blue Sky Application, in reliance upon and in conformity with written
information concerning such Initial Purchaser furnished to the Company by or on
behalf of that Initial Purchaser specifically for inclusion therein. The
foregoing indemnity agreement is in addition to any liability which the Company
or the Significant Subsidiaries may otherwise have to any Initial Purchaser or
to any officer, employee or controlling person of that Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly,
shall indemnify and hold harmless the Company, its officers and employees, each
of its directors, and each person, if any, who controls the Company within the
meaning of the Act, from and against any loss, claim, damage or liability, joint
or several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in the Offering Memorandum or in any amendment or
supplement thereto, or (B) in any Blue Sky Application or (ii) the omission or
alleged omission to state in any Offering Memorandum or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading,
23
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Initial Purchaser furnished
to the Company by or on behalf of that Initial Purchaser specifically for
inclusion therein, and shall reimburse the Company and any such director,
officer or controlling person for any legal or other expenses reasonably
incurred by the Company or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred. The
foregoing indemnity agreement is in addition to any liability which any Initial
Purchaser may otherwise have to the Company or any such director, officer,
employee or controlling person.
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided farther, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Initial Purchasers shall have the right to employ counsel to represent
jointly the Initial Purchasers and the Initial Purchasers and their respective
officers, employees and controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Initial Purchasers against the Company or the Significant Subsidiaries under
this Section 8 if, in the reasonable judgment of the Initial Purchasers, it is
advisable for the Initial Purchasers and those officers, employees and
controlling persons to be jointly represented by separate counsel, and in that
event the fees and expenses of such separate counsel shall be paid by the
Company or the Significant Subsidiaries. No indemnifying party shall (i) without
the prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by
24
the Company and the Significant Subsidiaries on the one hand and the Initial
Purchasers on the other from the offering of the Series A Preferred Stock or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Significant Subsidiaries, on the one hand and the Initial
Purchasers on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company and the Significant Subsidiaries, on the one hand and
the Initial Purchasers on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Series A Preferred Stock purchased under this Agreement (before deducting
expenses) received by the Company and the Significant Subsidiaries on the one
hand, and the total underwriting discounts and commissions received by the
Initial Purchasers with respect to the Series A Preferred Stock purchased under
this Agreement, on the other hand, bear to the total gross proceeds from the
offering of the Series A Preferred Stock under this Agreement, in each case as
set forth in the Offering Memorandum. The relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company and the Significant Subsidiaries or the Initial
Purchasers, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
For purposes of the preceding two sentences, the net proceeds deemed to be
received by the Company shall be deemed to be also for the benefit of the
Significant Subsidiaries and information supplied by the Company shall also be
deemed to have been supplied by the Significant Subsidiaries. The Company and
the Significant Subsidiaries and the Initial Purchasers agree that it would not
be just and equitable if contributions pursuant to this Section 8 were to be
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation which does
not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section 8 shall be deemed to include, for purposes of this Section 8(d), 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 Section 8(d), no Initial Purchaser shall
be required to contribute any amount in excess of the amount by which the total
price at which the Series A Preferred Stock purchased by it and sold in
accordance with this Agreement exceeds the amount of any damages which such
Initial Purchaser has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 1l(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Initial Purchaser's obligations to
contribute as provided in this Section 8(d) are several in proportion to their
respective underwriting obligations and not joint.
(e) Each Initial Purchaser confirms and the Company
acknowledges that the statements with respect to the offering of the Series A
Preferred Stock by the Initial Purchaser set forth on the "Plan of Distribution"
in the Offering Memorandum are correct and constitute the only information
concerning such Initial Purchaser furnished in writing to the Company by or on
behalf of the Initial Purchaser specifically for inclusion in the Offering
Memorandum.
9. Termination. The obligations of the Initial Purchasers
hereunder may be terminated by the Initial Purchasers by notice given to and
received by the Company prior to delivery of and payment for the Series A
Preferred Stock if, prior to that time, any of the events described in Sections
7(h), 7(i) or 7(k), shall have occurred or if the Initial Purchasers shall
decline to purchase the Series A Preferred Stock for any reason permitted under
this Agreement.
25
10. Reimbursement of Initial Purchasers' Expenses. If the Company
shall fail to tender the Series A Preferred Stock for delivery to the Initial
Purchasers by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed, or because any
other condition of the obligations hereunder required to be fulfilled by the
Company is not fulfilled, the Company will reimburse the Initial Purchasers for
all reasonable out-of-pocket expenses (including fees and disbursements of
counsel) incurred by the Initial Purchasers in connection with this Agreement
and the proposed purchase of the Series A Preferred Stock, and upon demand the
Company shall pay the full amount thereof to the Initial Purchasers.
11. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or
sent by mail, telex or facsimile transmission to such Initial Purchaser c/x
Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxx Xxxxx (Fax: 000-000-0000), with a copy, in the case of any notice
pursuant to Section 8(c), to the Director of Litigation, Office of the General
Counsel, Xxxxxx Brothers Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000;
(b) 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 Memorandum, Attention: Xxxx Xxxxxxx, Xx. (Fax: (000) 000-0000) with
a copy to Xxxxxxx X. Xxxxxxx, Esq. (Fax: (000) 000-0000); provided, however,
that any notice to an Initial Purchaser pursuant to Section 8(c) shall be
delivered or sent by mail, telex or facsimile transmission to such Initial
Purchaser at its address set forth in its acceptance telex to the Initial
Purchaser, which address will be supplied to any other party hereto by the
Initial Purchaser upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Initial Purchasers by Xxxxxx Brothers Inc.
12. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Company,
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Initial Purchaser within the meaning of Section
15 of the Act and (B) the indemnity agreement of the Initial Purchasers
contained in Section 8(b) of this Agreement shall be deemed to be for the
benefit of directors of the Company and any person controlling the Company
within the meaning of Section 15 of the Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 12, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
13. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Subsidiary Guarantor, the
Significant Subsidiaries and the Initial Purchasers contained in this Agreement
or made by or on behalf on them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Series A Preferred Stock and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
14. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
26
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
16. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Remainder of this page intentionally left blank]
27
If the foregoing correctly sets forth the agreement between the Company
and the Initial Purchasers, please indicate your acceptance in the space
provided for that purpose below.
SPANISH BROADCASTING SYSTEM, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: XXXXXX X. XXXXXX
Title: EXEC. VP & CFO
SPANISH BROADCASTING SYSTEM, INC.
(a New Jersey corporation)
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: XXXXXX X. XXXXXX
Title: EXEC. VP & CFO
SPANISH BROADCASTING SYSTEM OF
GREATER MIAMI, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: XXXXXX X. XXXXXX
Title: EXEC. VP & CFO
SPANISH BROADCASTING SYSTEM OF
ILLINOIS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: XXXXXX X. XXXXXX
Title: EXEC. VP & CFO
SPANISH BROADCASTING SYSTEM
FINANCE CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: XXXXXX X. XXXXXX
Title: EXEC. VP & CFO
28
If the foregoing correctly sets forth the agreement between the Company
and the Initial Purchasers, please indicate your acceptance in the space
provided for that purpose below.
SPANISH BROADCASTING SYSTEM OF
PUERTO RICO, INC. (a Delaware corporation)
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: XXXXXX X. XXXXXX
Title: EXEC. VP & CFO
SPANISH BROADCASTING SYSTEM OF PUERTO
RICO, INC. (a Puerto Rico corporation)
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: XXXXXX X. XXXXXX
Title: EXEC. VP & CFO
SPANISH BROADCASTING SYSTEM OF
FLORIDA, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: XXXXXX X. XXXXXX
Title: EXEC. VP & CFO
SBS OF GREATER NEW YORK, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: XXXXXX X. XXXXXX
Title: EXEC. VP & CFO
WPAT LICENSING, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: XXXXXX X. XXXXXX
Title: EXEC. VP & CFO
29
If the foregoing correctly sets forth the agreement between the Company
and the Initial Purchasers, please indicate your acceptance in the space
provided for that purpose below.
SPANISH BROADCASTING SYSTEM
HOLDING COMPANY
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name:
Title:
SPANISH BROADCASTING SYSTEM
SOUTHWEST, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name:
Title:
SPANISH BROADCASTING SYSTEM OF
SAN ANTONIO, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name:
Title:
XXXXXXX HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name:
Title:
SPANISH BROADCASTING SYSTEM OF
CALIFORNIA, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name:
Title:
30
If the foregoing correctly sets forth the agreement between the Company
and the Initial Purchasers, please indicate your acceptance in the space
provided for that purpose below.
SPANISH BROADCASTING SYSTEM
NETWORK, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name:
Title:
SPANISH BROADCASTING SYSTEM-SAN
FRANCISCO, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name:
Title:
SBS FUNDING, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name:
Title:
SBS PROMOTIONS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name:
Title:
31
If the foregoing correctly sets forth the agreement between the Company
and the Initial Purchasers, please indicate your acceptance in the space
provided for that purpose below.
Accepted:
XXXXXX BROTHERS INC.
By XXXXXX BROTHERS INC.
By: /s/ Xxxxxxxxx Xxxx
-----------------------------------
Authorized Representative
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
By XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Authorized Representative
DEUTSCHE BANK SECURITIES INC.
By DEUTSCHE BANK SECURITIES INC.
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------------------
Authorized Representative
XXXXX X. XXXXXXXXX
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxx X. Xxxxxx
32
SCHEDULE I
Number of Shares
Initial Purchaser to be Purchased
----------------- ----------------
Xxxxxx Brothers Inc. ................................... 52,500
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated...... 15,000
Deutsche Bank Securities Inc. .......................... 7,500
Total................................................... 75,000
The initial offering price of the shares of Series A preferred stock shall be
$100% liquidation preference per share.
The purchase price to be paid by the Initial Purchasers for the shares of Series
A preferred stock shall be 96.75% of the liquidation preference per share.
The dividend rate on the shares of Series A preferred stock shall be 10 3/4% per
annum.
Exhibit A
Significant Subsidiaries
Spanish Broadcasting System of Greater Miami, Inc.
Spanish Broadcasting System of Illinois, Inc.
Spanish Broadcasting System, Inc. (New Jersey)
Spanish Broadcasting System of Florida, Inc.
SBS of Greater New York, Inc.
WPAT Licensing, Inc.
Spanish Broadcasting System of Puerto Rico, Inc. (Delaware)
Spanish Broadcasting System Holding Company, Inc.
Spanish Broadcasting System of Puerto Rico, Inc. (Puerto Rico)
