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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): October 26, 1999
EMMIS COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
Indiana 0-23264 35-1542018
(State or jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
40 Monument Circle, Suite 700
Indianapolis, Indiana 46204
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (317) 266-0100
Not applicable
(Former name or former address, if changed since last report)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following exhibits are filed with this Report pursuant to Regulation S-K
Item 601 in lieu of filing the otherwise required exhibits to certain
registration statements on Form S-3 of the Registrant, file nos. 333-88219 and
333-88221, under the Securities Act of 1933, as amended (the "Registration
Statements"), and which, as this Form 8-K filing is incorporated by reference in
the Registration Statements, are set forth in full in the Registration
Statements.
Exhibit
Number Exhibit
- ------- -------
1.1 Underwriting Agreement dated October 26, 1999 (Common Stock)
1.2 Underwriting Agreement dated October 26, 1999 (Preferred Stock)
3 Amendment to Articles of Incorporation designating the 6.25%
Series A Cumulative Convertible Preferred Stock
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EMMIS COMMUNICATIONS CORPORATION
Date: November 3, 1999 By: /s/ J. Scott Enright
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J. Scott Enright
Vice President and
Associate General Counsel
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Exhibit 1.1
3,680,000 Shares
EMMIS COMMUNICATIONS, INC.
Class A Common Stock
UNDERWRITING AGREEMENT
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN SACHS & CO.
As representatives of the several Underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Ladies and Gentleman:
Emmis Communications Corporation, an Indiana corporation (the
"COMPANY"), proposes to issue and sell to the several underwriters named in
Schedule I hereto (the "UNDERWRITERS"), and Jeffrey H. Smulyan (the "SELLING
STOCKHOLDER") severally proposes to sell to the several Underwriters, an
aggregate of 3,680,000 shares of the Class A Common Stock, par value $.01, of
the Company (the "FIRM SHARES"), of which 3,440,000 shares are to be issued and
sold by the Company and 240,000 shares are to be sold by the Selling
Stockholder. The Company also proposes to issue and sell to the several
Underwriters not more than an additional 552,000 shares of its Class A Common
Stock, par value $.01 (the "ADDITIONAL SHARES"), if requested by the
Underwriters as provided in Section 2 hereof. The Firm Shares and the Additional
Shares are hereinafter referred to collectively as the "SHARES". The shares of
common stock of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "COMMON STOCK". The
Company and the Selling Stockholder are hereinafter sometimes referred to
collectively as the "SELLERS."
SECTION 1. Registration Statement and Prospectus. The Company
has prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement on Form S-3, including a
prospectus, relating to the Shares. The registration statement, as amended or
supplemented at the time it became effective, including the information (if any)
deemed to be
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part of the registration statement at the time of effectiveness pursuant to Rule
430A under the Act and including all documents incorporated by reference in such
registration statement, is hereinafter referred to as the "REGISTRATION
STATEMENT"; and the prospectus in the form first used to confirm sales of
Shares, including all documents incorporated by reference therein, is
hereinafter referred to as the "PROSPECTUS" (including, in the case of all
references to the Registration Statement or the Prospectus, documents
incorporated therein by reference). If the Company has filed or is required
pursuant to the terms hereof to file a registration statement pursuant to Rule
462(b) under the Act registering additional shares of Common Stock (a "RULE
462(b) REGISTRATION STATEMENT"), then, unless otherwise specified, any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462(b) Registration Statement.
SECTION 2. Agreements to Sell and Purchase and Lock-Up
Agreements. On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) the Company agrees to
issue and sell 3,440,000 Firm Shares, (ii) the Selling Stockholder agrees to
sell 240,000 Firm Shares and (iii) each Underwriter agrees, severally and not
jointly, to purchase from the Company at a price per Share of $59.844 (the
"PURCHASE PRICE") the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, the Company agrees
to issue and sell the Additional Shares and the Underwriters shall have the
right to purchase, severally and not jointly, up to 690,000 Additional Shares
from the Company at the Purchase Price. Additional Shares may be purchased
solely for the purpose of covering over-allotments made in connection with the
offering of the Firm Shares. The Underwriters may exercise their right to
purchase Additional Shares in whole or in part from time to time by giving
written notice thereof to the Company within 30 days after the date of this
Agreement. You shall give any such notice on behalf of the Underwriters and such
notice shall specify the aggregate number of Additional Shares to be purchased
pursuant to such exercise and the date for payment and delivery thereof, which
date shall be a business day (i) no earlier than two business days after such
notice has been given (and, in any event, no earlier than the Closing Date (as
hereinafter defined)) and (ii) no later than ten business days after such notice
has been given. If any Additional Shares are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase from the Company the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
you may determine) which bears the same proportion to the total number of
Additional Shares to be purchased from the Company as the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule I bears to the total
number of Firm Shares.
Each Seller hereby agrees not to (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (ii) enter into any swap or other arrangement that transfers all
or a portion of the economic consequences associated with the ownership of any
Common Stock (regardless of whether any of the transactions described in clause
(i) or (ii) is to be settled by the delivery of Common Stock, or such other
securities, in cash or otherwise), except to the Underwriters
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pursuant to this Agreement, for a period of 90 days after the date of the
Prospectus without the prior written consent of Donaldson, Lufkin & Jenrette
Securities Corporation. Notwithstanding the foregoing, during such period (i)
the Company may grant stock options or issue restricted stock or other awards
pursuant to the Company's existing stock option or employee benefit plans, (ii)
the Company may issue shares of Common Stock upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof, (iii)
the Selling Stockholder may make bona fide gifts of Common Stock and (iv) the
Company may sell up to 2.7 million shares of its Class A Common Stock to Liberty
Media Corporation or its affiliates. The Company also agrees not to file any
registration statement with respect to any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock for
a period of 90 days after the date of the Prospectus without the prior written
consent of Donaldson, Lufkin & Jenrette Securities Corporation. In addition, the
Selling Stockholder agrees that, for a period of 90 days after the date of the
Prospectus without the prior written consent of Donaldson, Lufkin & Jenrette
Securities Corporation, it will not make any demand for, or exercise any right
with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock. The
Company shall, prior to or concurrently with the execution of this Agreement,
deliver an agreement executed by (i) the Selling Stockholder and (ii) each
stockholder listed on Schedule II hereto to the effect that such person will
not, during the period commencing on the date such person signs such agreement
and ending 90 days after the date of the Prospectus, without the prior written
consent of Donaldson, Lufkin & Jenrette Securities Corporation, (A) engage in
any of the transactions described in the first sentence of this paragraph or (B)
make any demand for, or exercise any right with respect to, the registration of
any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock.
SECTION 3. Terms of Public Offering. The Sellers are advised
by you that the Underwriters propose (i) to make a public offering of their
respective portions of the Shares as soon after the execution and delivery of
this Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
SECTION 4. Delivery and Payment. The Shares shall be
represented by definitive certificates and shall be issued in such authorized
denominations and registered in such names as Donaldson, Lufkin & Jenrette
Securities Corporation shall request no later than two business days prior to
the Closing Date or the applicable Option Closing Date (as defined below), as
the case may be. The Shares shall be delivered by or on behalf of the Sellers,
with any transfer taxes thereon duly paid by the respective Sellers, to
Donaldson, Lufkin & Jenrette Securities Corporation through the facilities of
The Depository Trust Company ("DTC"), for the respective accounts of the several
Underwriters, against payment to the Sellers of the Purchase Price therefor by
wire transfer of Federal or other funds immediately available in New York City.
The certificates representing the Shares shall be made available for inspection
not later than 9:30 A.M., New York City time, on the business day prior to the
Closing Date or the applicable Option Closing Date (as defined below), as the
case may be, at the office of DTC or its designated custodian (the "DESIGNATED
OFFICE"). The time and date of delivery and payment for the Firm Shares shall be
9:00 A.M., New York City time, on October 29, 1999 or such other time on the
same or such other date as Donaldson, Lufkin & Jenrette Securities Corporation
and the Company shall agree in writing. The time and date of delivery and
payment for the Firm Shares are hereinafter referred to as the "CLOSING DATE".
The time and date of delivery for any
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Additional Shares to be purchased by the Underwriters shall be 9:00 A.M., New
York City time, on the date specified in the applicable exercise notice given by
you pursuant to Section 2 or such other time on the same or such other date as
Donaldson, Lufkin & Jenrette Securities Corporation and the Company shall agree
in writing. The time and date of delivery for any Additional Shares are
hereinafter referred to as an "OPTION CLOSING DATE".
The documents to be delivered on the Closing Date or any
Option Closing Date on behalf of the parties hereto pursuant to Section 8 of
this Agreement shall be delivered at the offices of Latham & Watkins and the
Shares shall be delivered at the Designated Office, all on the Closing Date or
such Option Closing Date, as the case may be.
SECTION 5. Agreements of the Company. The Company agrees with
you:
(a) To advise you promptly and, if requested by you, to
confirm such advice in writing, (i) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to the
Prospectus or for additional information, (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
of the suspension of qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purposes, (iii) when
any amendment to the Registration Statement becomes effective, (iv) if the
Company is required to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, when the Rule 462(b) Registration Statement has
become effective and (v) of the happening of any event during the period
referred to in Section 5(d) below which makes any statement of a material fact
made in the Registration Statement or the Prospectus untrue or which requires
any additions to or changes in the Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(b) To furnish to you three (3) signed copies of the
Registration Statement as first filed with the Commission and of each amendment
to it, including all exhibits and documents incorporated therein by reference,
and to furnish to you and each Underwriter designated by you such number of
conformed copies of the Registration Statement as so filed and of each amendment
to it, without exhibits but including documents incorporated therein by
reference, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which
shall be satisfactory to you, and to file the Prospectus in such form with the
Commission within the applicable period specified in Rule 424(b) under the Act;
during the period specified in Section 5(d) below, not to file any further
amendment to the Registration Statement and not to make any amendment or
supplement to the Prospectus of which you shall not previously have been advised
or to which you shall reasonably object after being so advised; and, during such
period, to prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or amendment or supplement
to the Prospectus which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its best efforts to cause any such
amendment to the Registration Statement to become promptly effective.
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(d) Prior to 10:00 A.M., New York City time, on the first
business day after the date of this Agreement and from time to time thereafter
for such period as in the opinion of counsel for the Underwriters a prospectus
is required by law to be delivered in connection with sales by an Underwriter or
a dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
and any documents incorporated therein by reference as such Underwriter or
dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event
shall occur or condition shall exist as a result of which, in the opinion of
counsel for the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Underwriters, it is necessary to amend
or supplement the Prospectus to comply with applicable law, forthwith to prepare
and file with the Commission an appropriate amendment or supplement to the
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with applicable
law, and to furnish to each Underwriter and to any dealer as many copies thereof
as such Underwriter or dealer may reasonably request.
(f) Prior to any public offering of the Shares, to cooperate
with you and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such registration or qualification in effect so
long as required for distribution of the Shares and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other than
as to matters and transactions relating to the Prospectus, the Registration
Statement, any preliminary prospectus or the offering or sale of the Shares, in
any jurisdiction in which it is not now so subject.
(g) To make generally available to its stockholders as soon as
practicable an earnings statement covering the twelve-month period ending
November 30, 2000 that shall satisfy the provisions of Section 11(a) of the Act,
and to advise you in writing when such statement has been so made available.
(h) During the period of three years after the date of this
Agreement, to furnish to you as soon as available copies of all reports or other
communications furnished to the record holders of Common Stock or furnished to
or filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed and such other publicly available
information concerning the Company and its subsidiaries as you may reasonably
request.
(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to
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the performance of the Sellers' obligations under this Agreement, including: (i)
the fees, disbursements and expenses of the Company's counsel, the Company's
accountants and the Selling Stockholder's counsel in addition to the Company's
counsel (if applicable) in connection with the registration and delivery of the
Shares under the Act and all other fees and expenses in connection with the
preparation, printing, filing and distribution of the Registration Statement
(including financial statements and exhibits), any preliminary prospectus, the
Prospectus and all amendments and supplements to any of the foregoing, including
the mailing and delivering of copies thereof to the Underwriters and dealers in
the quantities specified herein, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) all reasonable costs of printing or
producing this Agreement and any other agreements or documents in connection
with the offering, purchase, sale or delivery of the Shares, (iv) all expenses
in connection with the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of the several states and all
reasonable costs of printing or producing any Preliminary and Supplemental Blue
Sky Memoranda in connection therewith (including the filing fees and reasonable
fees and disbursements of counsel for the Underwriters in connection with such
registration or qualification and memoranda relating thereto), (v) the filing
fees and reasonable disbursements of counsel for the Underwriters in connection
with the review and clearance of the offering of the Shares by the National
Association of Securities Dealers, Inc., (vi) all costs and expenses incident to
the listing of the Shares on the Nasdaq National Market, (vii) the cost of
printing certificates representing the Shares, (viii) the costs and charges of
any transfer agent, registrar and/or depositary, and (ix) all other costs and
expenses incident to the performance of the obligations of the Company and the
Selling Stockholder hereunder for which provision is not otherwise made in this
Section. The provisions of this section 5(i) shall not supersede or otherwise
affect any agreement that the Company and the Selling Stockholder may otherwise
have for allocation of such expenses among themselves.
(j) To use its best efforts to list for quotation the Shares
on the Nasdaq National Market and to maintain the listing of the Shares on the
Nasdaq National Market for a period of three years after the date of this
Agreement.
(k) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the Closing Date or any Option Closing Date, as the case may
be, and to satisfy all conditions precedent to the delivery of the Shares.
(l) If the Registration Statement at the time of the
effectiveness of this Agreement does not cover all of the Shares, to file a Rule
462(b) Registration Statement with the Commission registering the Shares not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time, on the
date of this Agreement and to pay to the Commission the filing fee for such Rule
462(b) Registration Statement at the time of the filing thereof or to give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
SECTION 6. Representations and Warranties of the Sellers. Each
of the Company and the Selling Stockholder represents and warrants to each
Underwriter that:
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(a) The Registration Statement has become effective (other
than any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement filed
after the effectiveness of this Agreement will become effective no later than
10:00 P.M., New York City time, on the date of this Agreement; and no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Act and the Exchange
Act; (ii) the Registration Statement (other than any Rule 462(b) Registration
Statement to be filed by the Company after the effectiveness of this Agreement),
when it became effective, did not contain and, as amended, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (iii) the Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement) and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Act, (iv) if the
Company is required to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, such Rule 462(b) Registration Statement and any
amendments thereto, when they become effective (A) will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(B) will comply in all material respects with the Act and (v) the Prospectus
does not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in the Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein. The parties hereto acknowledge that for
purposes of this Agreement, including this Section 6(b) and Section 8 hereof,
the only written information furnished to the Company by any Underwriter
expressly for use in the Registration Statement or any preliminary prospectus or
the Prospectus is the information contained under the caption "Underwriting" in
the Prospectus in the table in the first paragraph, and in the third, fourth and
eleventh paragraphs of such section.
(c) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the Act, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in any preliminary prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
(d) Each of the Company and its subsidiaries has been duly
incorporated or organized, is validly existing as a corporation, partnership or
limited liability company in good
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standing under the laws of its jurisdiction of incorporation or organization and
has the corporate, partnership or limited liability company power and authority
to carry on its business as described in the Prospectus and to own, lease and
operate its properties, and each is duly qualified and is in good standing as a
foreign corporation, partnership or limited liability company authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT").
(e) The entities listed on Schedule III are the only
subsidiaries, direct or indirect, of the Company. All of the outstanding equity
interests of each of the Company's subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable and, except as set forth on
Schedule III hereto, are owned by the Company, directly or indirectly through
one or more subsidiaries, free and clear of any security interest, claim, lien,
encumbrance, or adverse interest of any nature (each, a "LIEN").
(f) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens granted or
issued by the Company or any of its subsidiaries relating to or entitling any
person to purchase or otherwise to acquire any shares of the capital stock of
the Company or any of its subsidiaries, except as otherwise disclosed in the
Registration Statement or pursuant to the Company's employee benefit plans.
(g) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholder) have been duly
authorized and validly issued and are fully paid, non-assessable and not subject
to any preemptive or similar rights; and the Shares to be issued and sold by the
Company have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor as provided by this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such Shares
will not be subject to any preemptive or similar rights.
(h) All of the outstanding shares of capital stock or other
equity interests of each of the Company's subsidiaries have been duly authorized
and validly issued and are fully paid and non-assessable, and, except as set
forth on Schedule III hereto, are owned by the Company, directly or indirectly
through one or more subsidiaries, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature.
(i) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(j) Neither the Company nor any of its subsidiaries is in
violation of its respective charter, by-laws or equivalent organizational
document or in default in the performance of any obligation, agreement, covenant
or condition contained in any indenture, loan agreement, mortgage, lease or
other agreement or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries or their respective
property is bound, except for defaults that are not material to the Company and
its subsidiaries, taken as a whole,
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(k) The execution, delivery and performance of this Agreement
by the Company, the compliance by the Company with all the provisions hereof and
the consummation of the transactions contemplated hereby will not (i) require
any consent, approval, authorization or other order of, or qualification with,
any court or governmental body or agency (except such as may be required under
the securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company or any of its subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound, (iii) violate or
conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
the Company, any of its subsidiaries or their respective property, (iv) result
in the imposition or creation of (or the obligation to create or impose) a Lien
under, any agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
their respective property is bound or (v) result in the suspension, termination
or revocation of any Authorization (as defined below) of the Company or any of
its subsidiaries or any other impairment of the rights of the holder of any such
Authorization.
(l) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is or could be a
party or to which any of their respective property is or could be subject that
are required to be described in the Registration Statement or the Prospectus and
are not so described; nor are there any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement that
are not so described or filed as required.
(m) Neither the Company nor any of its subsidiaries has
violated any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS."), any
provisions of the Employee Retirement Income Security Act of 1974, as amended,
or any provisions of the Foreign Corrupt Practices Act or the rules and
regulations promulgated thereunder, except for such violations which, singly or
in the aggregate, would not have a Material Adverse Effect.
(n) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a Material Adverse Effect.
(o) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such
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Authorization or to make any such filing or notice would not, singly or in the
aggregate, have a Material Adverse Effect. Each such Authorization is valid and
in full force and effect and each of the Company and its subsidiaries is in
compliance with all the terms and conditions thereof and with the rules and
regulations of the authorities and governing bodies having jurisdiction with
respect thereto; and no event has occurred (including, without limitation, the
receipt of any notice from any authority or governing body) which allows or,
after notice or lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or results or, after notice or lapse of
time or both, would result in any other impairment of the rights of the holder
of any such Authorization; and such Authorizations contain no restrictions that
are burdensome to the Company or any of its subsidiaries; except where such
failure to be valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction would not,
singly or in the aggregate, have a Material Adverse Effect.
(p) This Agreement has been duly authorized, executed and
delivered by each of the Company and the Selling Stockholder.
(q) Arthur Andersen LLP are independent public accountants
with respect to the Company and its subsidiaries as required by the Act.
(r) The consolidated financial statements included or
incorporated by reference in the Registration Statement and the Prospectus (and
any amendment or supplement thereto), together with related schedules and notes,
present fairly in all material respects the consolidated financial position,
results of operations and changes in financial position of the Company and its
subsidiaries on the basis stated therein at the respective dates or for the
respective periods to which they apply; such statements and related schedules
and notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; the supporting schedules, if any, included in the
Registration Statement present fairly in all material respects in accordance
with generally accepted accounting principles the information required to be
stated therein; and the other financial and statistical information and data set
forth in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company.
(s) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be, an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended.
(t) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company or to require the Company to include such securities
with the Shares registered pursuant to the Registration Statement.
(u) Since the respective dates as of which information is
given in the Prospectus other than as set forth in the Prospectus (exclusive of
any amendments or
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supplements thereto subsequent to the date of this Agreement), (i) there has not
occurred any material adverse change or any development involving a prospective
material adverse change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Company or any of its subsidiaries
and (iii) neither the Company nor any of its subsidiaries has incurred any
material liability or obligation, direct or contingent.
(v) No consent or approval of the Federal Communications
Commission (the "FCC") is required under the Communications Act of 1934, as
amended, and the regulations promulgated thereunder (the "COMMUNICATIONS LAWS")
for the issuance and sale of the Shares. The execution, delivery and performance
of this Agreement in accordance with the terms hereof does not violate the
Communications Laws.
(w) The subsidiaries of the Company identified on Schedule IV
hereto (the "LICENSE SUBSIDIARIES") hold all necessary authorizations,
approvals, consents, orders, licenses, certificates and permits issued by the
FCC to own and operate each of the respective radio or television broadcast
stations (the "STATIONS") as identified on Schedule IV hereto (all such FCC
authorizations, approvals, consents, order, licenses, certificates and permits
of the License Subsidiaries collectively the "FCC LICENSES").
(x) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its subsidiaries, taken as a whole, in each case free and clear of all
liens, encumbrances and defects except such as do not materially affect the
value of such property and do not interfere with the use made and proposed to be
made of such property by the Company and its subsidiaries; and any real property
and buildings held under lease by the Company and its subsidiaries are held by
them under valid, subsisting and enforceable leases with such exceptions as are
not material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries.
(y) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names ("INTELLECTUAL PROPERTY") currently
employed by them in connection with the businesses now operated by them, and
those to be acquired pursuant to the Purchase Agreement dated June 3, 1999,
between the Company and Press Communications LLC, except where the failure to
own or possess or otherwise acquire such intellectual property would not, singly
or in the aggregate, have a Material Adverse Effect; and neither the Company nor
any of its subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of such intellectual property
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect.
(z) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are
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prudent and customary in the businesses in which they are engaged; and neither
the Company nor any of its subsidiaries (i) has received notice from any insurer
or agent of such insurer that substantial capital improvements or other material
expenditures will have to be made in order to continue such insurance or (ii)
has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers at a cost that would not have a Material Adverse
Effect.
(aa) Except as disclosed or incorporated by reference in the
Prospectus, no relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company or any of its subsidiaries
on the other hand, which is required by the Act to be described in the
Registration Statement or the Prospectus which is not so described.
(bb) There is no (i) significant unfair labor practice
complaint, grievance or arbitration proceeding pending or threatened against the
Company or any of its subsidiaries before the National Labor Relations Board or
any state or local labor relations board, (ii) strike, labor dispute, slowdown
or stoppage pending or threatened against the Company or any of its subsidiaries
or (iii) union representation question existing with respect to the employees of
the Company and its subsidiaries, except for such actions specified in clause
(i), (ii) or (iii) above, which, singly or in the aggregate, would not have a
Material Adverse Effect. To the best of the Company's knowledge, no collective
bargaining organizing activities are taking place with respect to the Company or
any of its subsidiaries.
(cc) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(dd) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been filed, other
than those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees and other
charges due pursuant to such returns or pursuant to any assessment received by
the Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
(ee) The Company has reviewed its operations and the
operations of its subsidiaries and any third parties with which the Company or
any of its subsidiaries has a material relationship to evaluate the extent to
which the business or operations of the Company or any of its subsidiaries will
be affected by the Year 2000 Problem (as defined below). As a result of such
review, the Company has no reason to believe, and does not believe, that the
Year 2000 Problem will have a Material Adverse Effect. The "YEAR 2000 PROBLEM"
as used herein means any risk that the computer hardware or software used in the
receipt, transmission, storage, retrieval, retransmission or other utilization
of data or in the operation of mechanical or electrical
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systems of any kind will not, in the case of dates or time periods occurring
after December 31, 1999, function at least as effectively as in the case of
dates or time periods occurring prior to January 1, 2000.
(ff) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Act has indicated to the Company that it is considering (i) the downgrading,
suspension or withdrawal of, or any review for a possible change that does not
indicate the direction of the possible change in, any rating assigned to the
Company or any securities of the Company or (ii) any change in the outlook for
any rating of the Company or any securities of the Company.
(gg) Any documents which at the date hereof are incorporated
by reference in the Registration Statement, the Prospectus or any amendment or
supplement thereto, or any preliminary prospectus (the "INCORPORATED DOCUMENTS")
were filed in a timely manner and, when they were filed (or, if any amendment
with respect to any such document was filed, when such amendment was filed),
conformed with the requirements of the Exchange Act and did not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
(hh) The Common Stock (excluding the Company's Class B common
stock) is registered pursuant to Section 12(g) of the Exchange Act and is listed
on The Nasdaq National Market, and the Company has taken no action designed to,
or likely to have the effect of, terminating the registration of the Common
Stock (excluding the Company's Class B common stock) under the Exchange Act or
delisting the Common Stock (excluding the Company's Class B common stock) from
The Nasdaq National Market, nor has the Company received any notification that
the Commission or the National Association of Securities Dealers, Inc. ("NASD")
is contemplating terminating such registration or listing.
(ii) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be deemed to
be a representation and warranty by the Company to the Underwriters as to the
matters covered thereby.
(jj) The Company has not distributed and, prior to the later
of (i) the Closing Date and (ii) the completion of the distribution of the
Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement or any
amendment thereto, any preliminary prospectus or the Prospectus or any amendment
or supplement thereto, or other materials, if any, permitted by the Act.
SECTION 7. Representations and Warranties of the Selling
Stockholder. The Selling Stockholder represents and warrants to each Underwriter
that:
(a) Such Selling Stockholder is the lawful owner of the Shares
to be sold by such Selling Stockholder pursuant to this Agreement and has, and
on the Closing Date will have, good and clear title to such Shares, free of all
restrictions on transfer, liens, encumbrances, security interests, equities and
claims whatsoever.
(b) The Shares to be sold by such Selling Stockholder have
been duly authorized and are validly issued, fully paid and non-assessable.
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(c) Such Selling Stockholder has, and on the Closing Date will
have, full legal right, power and authority, and all authorization and approval
required by law, to enter into this Agreement, the Custody Agreement signed by
such Selling Stockholder and First Union, as Custodian, relating to the deposit
of the Shares to be sold by such Selling Stockholder (the "CUSTODY AGREEMENT")
and the Power of Attorney of such Selling Stockholder appointing certain
individuals as such Selling Stockholder's attorneys-in-fact (the "ATTORNEYS") to
the extent set forth therein, relating to the transactions contemplated hereby
and by the Registration Statement and the Custody Agreement (the "POWER OF
ATTORNEY") and to sell, assign, transfer and deliver the Shares to be sold by
such Selling Stockholder in the manner provided herein and therein.
(d) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder.
(e) The Custody Agreement of such Selling Stockholder has been
duly authorized, executed and delivered by such Selling Stockholder and is a
valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms.
(f) The Power of Attorney of such Selling Stockholder has been
duly authorized, executed and delivered by such Selling Stockholder and is a
valid and binding instrument of such Selling Stockholder, enforceable in
accordance with its terms, and, pursuant to such Power of Attorney, such Selling
Stockholder has, among other things, authorized the Attorneys, or any one of
them, to execute and deliver on such Selling Stockholder's behalf this Agreement
and any other document that they, or any one of them, may deem necessary or
desirable in connection with the transactions contemplated hereby and thereby
and to deliver the Shares to be sold by such Selling Stockholder pursuant to
this Agreement.
(g) Upon delivery of and payment for the Shares to be sold by
such Selling Stockholder pursuant to this Agreement, good and clear title to
such Shares will pass to the Underwriters, free of all restrictions on transfer,
liens, encumbrances, security interests, equities and claims whatsoever.
(h) The execution, delivery and performance of this Agreement
and the Custody Agreement and Power of Attorney of such Selling Stockholder by
or on behalf of such Selling Stockholder, the compliance by such Selling
Stockholder with all the provisions hereof and thereof and the consummation of
the transactions contemplated hereby and thereby will not (i) require any
consent, approval, authorization or other order of, or qualification with, any
court or governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under any
indenture, loan agreement, mortgage, lease or other agreement or instrument to
which such Selling Stockholder is a party or by which such Selling Stockholder
or any property of such Selling Stockholder is bound or (iii) violate or
conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
such Selling Stockholder or any property of such Selling Stockholder.
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(i) The information in the Registration Statement under the
caption "Principal and Selling Stockholders" which specifically relates to such
Selling Stockholder does not, and will not on the Closing Date, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(j) At any time during the period described in Section 5(d),
if there is any change in the information referred to in Section 7(i), such
Selling Stockholder will immediately notify you of such change.
(k) Such Selling Stockholder has not taken, and will not take,
directly or indirectly, any action designed to, or which might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares
pursuant to the distribution contemplated by the Underwriting Agreement, and
other than as permitted by the Act, the Selling Stockholder has not distributed
and will not distribute any prospectus or other offering material in connection
with the offering and sale of the Shares.
(l) Each certificate signed by or on behalf of such Selling
Stockholder and delivered to the Underwriters or counsel for the Underwriters
shall be deemed to be a representation and warranty by such Selling Stockholder
to the Underwriters as to the matters covered thereby.
SECTION 8. Indemnification. (a) The Sellers, jointly and
severally, agree to indemnify and hold harmless each Underwriter, its directors,
its officers and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter furnished in writing to the Company by such Underwriter
through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, the
Selling Stockholder and each person, if any, who controls such Selling
Stockholder within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, to the same extent as the foregoing indemnity from the Sellers to
such Underwriter but only with reference to information relating to such
Underwriter furnished in writing to the Company by such Underwriter through you
expressly for use in the Registration Statement (or any
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amendment thereto), the Prospectus (or any amendment or supplement thereto) or
any preliminary prospectus.
(c) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
(the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), the Underwriter shall not be
required to assume the defense of such action pursuant to this Section 8(c), but
may employ separate counsel and participate in the defense thereof, but the fees
and expenses of such counsel, except as provided below, shall be at the expense
of such Underwriter). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for (i) the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all Underwriters, their officers and
directors and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act, (ii)
the fees and expenses of more than one separate firm of attorneys (in addition
to any local counsel) for the Company, its directors, its officers who sign the
Registration Statement and all persons, if any, who control the Company within
the meaning of either such Section and (iii) the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for the
Selling Stockholder and all persons, if any, who control such Selling
Stockholder within the meaning of either such Section, and all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters, their officers and directors and such
control persons of any Underwriters, such firm shall be designated in writing by
Donaldson, Lufkin & Jenrette Securities Corporation. In the case of any such
separate firm for the Company and such directors, officers and control persons
of the Company, such firm shall be designated in writing by the Company. In the
case of any such separate firm for the Selling Stockholder and such control
persons of the Selling Stockholder, such firm shall be designated in writing by
the Selling Stockholder. The indemnifying party shall indemnify and hold
harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written consent
if the settlement is entered into more than twenty business days after the
indemnifying party shall have received a request from the indemnified party for
reimbursement for the fees and expenses of counsel (in any case where such fees
and expenses
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are at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this
Section 8 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Sellers on the one hand and the Underwriters on the other hand from the offering
of the Shares or (ii) if the allocation provided by clause 8(d)(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 8(d)(i) above but also the
relative fault of the Sellers on the one hand and the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Sellers on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions, but before deducting expenses) received
by the Sellers, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Shares, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Sellers on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or
Selling Stockholder on the one hand or the Underwriters on the other hand and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Sellers and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the
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amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 8(d) are several in
proportion to the respective number of Shares purchased by each of the
Underwriters hereunder and not joint.
(e) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) The Selling Stockholder hereby designates Emmis
Broadcasting Corporation of New York, care of Judith Ellis, as its authorized
agent, upon which process may be served in any action which may be instituted in
any state or federal court in the State of New York by any Underwriter, any
director or officer of any Underwriter or any person controlling any Underwriter
asserting a claim for indemnification or contribution under or pursuant to this
Section 8, and such Selling Stockholder will accept the jurisdiction of such
court in such action, and waives, to the fullest extent permitted by applicable
law, any defense based upon lack of personal jurisdiction or venue. A copy of
any such process shall be sent or given to such Selling Stockholder, at the
address for notices specified in Section 12 hereof.
SECTION 9. Conditions of Underwriters' Obligations. The
several obligations of the Underwriters to purchase the Firm Shares under this
Agreement are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date. The Company
shall have performed or complied with all of the agreements contained in this
Agreement and required to be performed or complied with by it at or prior to the
Closing Date.
(b) If the Company is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, such Rule
462(b) Registration Statement shall have become effective by 10:00 P.M., New
York City time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c) You shall have received on the Closing Date (1) a
certificate dated the Closing Date, signed by Jeffrey H. Smulyan, in his
capacity as Chairman, President and Chief Executive Officer of the Company, and
Walter Z. Berger, in his capacity as Executive Vice President, Chief Financial
Officer and Treasurer of the Company, confirming the matters set forth in
Sections 6(u), 6(ff), 9(a) and 9(b) and that the Company has complied with all
of the agreements and satisfied all of the conditions herein contained and
required to be complied with or satisfied by the Company on or prior to the
Closing Date and (2) a certificate, dated the Closing Date, signed by the
Company's Secretary, in form and substance reasonably satisfactory to the
Underwriters.
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(d) Since the respective dates as of which information is
given in the Prospectus other than as set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of this Agreement),
(i) there shall not have occurred any change or any development which would be
reasonably likely to result in a prospective change in the condition, financial
or otherwise, or the earnings, business, management or operations of the Company
and its subsidiaries, taken as a whole, (ii) there shall not have been any
change or any development which would be reasonably likely to result in a
prospective change in the capital stock or in the long-term debt of the Company
or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 9(d)(i),
9(d)(ii) or 9(d)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(e) All the representations and warranties of the Selling
Stockholder contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing Date and
you shall have received on the Closing Date a certificate dated the Closing Date
from the Selling Stockholder to such effect and to the effect that such Selling
Stockholder has complied with all of the agreements and satisfied all of the
conditions herein contained and required to be complied with or satisfied by
such Selling Stockholder on or prior to the Closing Date.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Bose McKinney & Evans LLP, counsel for the Company, to the effect that:
(i) each of the Company and its subsidiaries has been duly
incorporated or organized, is validly existing as a corporation,
partnership or limited liability company in good standing under the
laws of its jurisdiction of incorporation or organization, as
applicable, and has the corporate, partnership or limited liability
company power and authority to carry on its business as described in
the Prospectus and to own, lease and operate its properties;
(ii) each of the Company and its subsidiaries is duly
qualified and is in good standing as a foreign corporation or
partnership authorized to do business in each jurisdiction in which
the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect;
(iii) the Shares to be issued and sold by the Company pursuant
to the Underwriting Agreement have been duly authorized and, when
issued to and paid for by you and the other Underwriters in accordance
with the terms of the Underwriting Agreement, will be validly issued,
fully paid and non-assessable and free of preemptive, or to the
knowledge of such counsel, other similar rights that entitle or will
entitle any person to acquire any Shares from the Company upon
issuance thereof by the Company;
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<PAGE> 20
(iv) this Agreement has been duly authorized, executed and
delivered by the Company and the Selling Stockholder;
(v) the authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus;
(vi) the Registration Statement has become effective under the
Act and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued under the Act and no proceedings for that purpose are, to the
best knowledge of such counsel, pending before or contemplated by the
Commission and any required filing of the Prospectus pursuant to Rule
424(b) under the Act has been made in accordance with Rules 424(b) and
430A under the Act;
(vii) neither the Company nor any of its subsidiaries is in
violation of its respective charter, by-laws, partnership agreement or
other organizational document and, to such counsel's actual knowledge,
neither the Company nor any of its subsidiaries is in default in the
performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound;
(viii) the issuance and sale of the Shares by the Company
pursuant to the Underwriting Agreement will not result in the
violation by the Company of its articles of incorporation or bylaws or
any federal or Indiana statute, rule or regulation known to such
counsel to be applicable to the Company (other than federal or state
securities laws) or in the breach of or a default under any indenture,
loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, or court and
administrative orders, writs, judgments and decrees specifically
identified to such counsel by an officer of the Company as being
material to the Company; and to the best of such counsel's knowledge,
no consent, approval, authorization or order of, or filing with, any
federal or Indiana court or governmental agency or body is required
for the consummation of the issuance and sale of the Shares by the
Company pursuant to the Underwriting Agreement, except such as have
been obtained under the Act and such as may be required under state
securities laws in connection with the purchase and distribution of
such Shares by the Underwriters;
(ix) the statements set forth under the captions
"Summary--Recent Developments--St. Louis Acquisition," "Risk
Factors--We are obligated to purchase Sinclair's St. Louis stations,
but the actual purchase price and other material terms of the
acquisition have not yet been determined. The purchase price could be
higher and the other material terms of the acquisition could be less
favorable than we believe is appropriate," "Recent Developments,"
"Business--Litigation," "Principal and Selling Stockholders,"
"Description of Capital Stock," "Description of Certain Indebtedness"
and "Underwriting" in the Prospectus, insofar as such statements
constitute a summary of the
20
<PAGE> 21
legal matters, documents or proceedings referred to therein, fairly
present in all material respects such legal matters, documents and
proceedings;
(x) the execution, delivery and performance of this Agreement
by the Company, the compliance by the Company with all the provisions
hereof, and the consummation of the transactions contemplated hereby
will not (i) require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body or
agency (except such as may be required by the Commission in connection
with the Registration Statement or under the securities or Blue Sky
laws of the various states), (ii) conflict with or constitute a breach
of any of the terms or provisions of, or a default under, the charter,
bylaws or equivalent organizational documents of the Company or any
indenture, loan agreement, mortgage, lease, or other agreement or
instrument that is material to the Company and its subsidiaries, taken
as a whole, to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or their respective
property is bound, (iii) violate or conflict with any applicable law
or any rule, regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the Company or
its subsidiaries or their respective property, (iv) result in the
imposition or creation of (or the obligation to create or impose) a
Lien under, any agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound, or (v) result in
the termination, suspension or revocation of any Authorization of the
Company or any of its subsidiaries or result in any other impairment
of the rights of the holder of any such Authorization.
(xi) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is or could be a party or to which
any of their respective property is or could be subject, which might
result, singly or in the aggregate, in a Material Adverse Effect;
(xii) to such counsel's actual knowledge, neither the Company
nor any of its subsidiaries has violated any Environmental Law or any
provision of ERISA, any provision of the Foreign Corrupt Practices Act
or the rules and regulations promulgated thereunder, except for such
violations which, singly or in the aggregate, would not have a
Material Adverse Effect;
(xiii) to such counsel's actual knowledge, each of the Company
and the Guarantors has such Authorizations (other than Authorizations
required or issued by the FCC) of, and has made all filings with and
notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals,
including without limitation, under any applicable Environmental Laws,
as are necessary to own, lease, license and operate its respective
properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would
not, singly or in the aggregate, have a Material Adverse Effect. To
such counsel's actual knowledge, each such Authorization is valid and
in full force and effect and each of the Company and its subsidiaries
is in compliance with all the terms and conditions thereof and with
the rules and regulations of the authorities and governing bodies
having
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<PAGE> 22
jurisdiction with respect thereto; and to such counsel's actual
knowledge, no event has occurred (including the receipt of any notice
from any authority or governing body) which allows or, after notice or
lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or results or, after notice or
lapse of time or both, would result in any other impairment of the
rights of the holder of any such Authorization; and to such counsel's
actual knowledge, such Authorizations contain no restrictions that are
burdensome to the Company or any of its subsidiaries; except where
such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any
such restriction would not, singly or in the aggregate, have a
Material Adverse Effect;
(xiv) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be, an "investment
company" as such term is defined in the Investment Company Act of
1940, as amended;
(xv) to such counsel's actual knowledge, there are no
contracts, agreements or understandings between the Company or any
subsidiary and any person granting such person the right to require
the Company or such subsidiary to file a registration statement under
the Act with respect to any securities of the Company or such
subsidiary or to require the Company or such subsidiary to include
such securities with the Common Stock registered pursuant to the
Registration Statement;
(xvi) to such counsel's actual knowledge, there are no
statutes or legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or is threatened to be
made a party or to which any of their respective property is subject
that are required to be described in the Prospectus that are not
described as required, or contracts or documents of a character
required to be described in the Registration Statement or Prospectus
or to be filed as exhibits to the Registration Statement that are not
described or filed as required;
(xvii) the Registration Statement and the Prospectus comply as
to form in all material respects with the requirements for
registration statements on Form S-3 under the Act and the rules and
regulations of the Commission thereunder; it being understood,
however, that such counsel need not express any opinion with respect
to the financial statements, schedules or other financial data
included or incorporated by reference in, or omitted from, the
Registration Statement or the Prospectus. Each document filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus
(except for financial statements and other financial data included
therein as to which no opinion need be expressed) complied when so
filed as to form in all material respects with the Act and the
Exchange Act. In passing upon the compliance as to form of the
Registration Statement and the Prospectus, such counsel may assume
that the statements made and incorporated by reference therein are
correct and complete;
(xviii) in addition, such counsel shall state that it has
participated in conferences with officers and other representatives of
the Company, representatives of the independent public accountants for
the Company, and representatives of the underwriters,
22
<PAGE> 23
at which the contents of the Registration Statement and the Prospectus
and related matters were discussed and, although such counsel does not
pass upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained or incorporated
by reference in the Registration Statement and the Prospectus and has
not made any independent check or verification thereof, during the
course of such participation, no facts came to such counsel's
attention that cause such counsel to believe that the Registration
Statement (including the documents incorporated by reference therein),
at the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or that the Prospectus (including the documents
incorporated by reference therein), as of its date or as of the date
hereof contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
except that such counsel need express no belief with respect to the
financial statements, schedules and other financial data included or
incorporated by reference in, or omitted from, the Registration
Statement or the Prospectus.
(xix) the Selling Stockholder is the lawful owner of the
Shares to be sold by such Selling Stockholder pursuant to this
Agreement and has good and clear title to such Shares, free of all
restrictions on transfer, liens, encumbrances, security interests,
equities and claims whatsoever;
(xx) the Selling Stockholder has full legal right, power and
authority, and all authorization and approval required by law, to
enter into this Agreement and the Custody Agreement and the Power of
Attorney of such Selling Stockholder and to sell, assign, transfer and
deliver the Shares to be sold by such Selling Stockholder in the
manner provided herein and therein;
(xxi) the Custody Agreement of the Selling Stockholder has
been duly authorized, executed and delivered by such Selling
Stockholder and is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms;
(xxii) the Power of Attorney of the Selling Stockholder has
been duly authorized, executed and delivered by such Selling
Stockholder and is a valid and binding instrument of such Selling
Stockholder, enforceable in accordance with its terms, and, pursuant
to such Power of Attorney, such Selling Stockholder has, among other
things, authorized the Attorneys, or any one of them, to execute and
deliver on such Selling Stockholder's behalf this Agreement and any
other document they, or any one of them, may deem necessary or
desirable in connection with the transactions contemplated hereby and
thereby and to deliver the Shares to be sold by such Selling
Stockholder pursuant to this Agreement;
(xxiii) upon delivery of and payment for the Shares to be sold
by the Selling Stockholder pursuant to this Agreement, good and clear
title to such Shares will pass to the Underwriters, free of all
restrictions on transfer, liens, encumbrances, security interests,
equities and claims whatsoever; and
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<PAGE> 24
(xxiv) the execution, delivery and performance of this
Agreement and the Custody Agreement and Power of Attorney of the
Selling Stockholder by such Selling Stockholder, the compliance by
such Selling Stockholder with all the provisions hereof and thereof
and the consummation of the transactions contemplated hereby and
thereby will not (A) require any consent, approval, authorization or
other order of, or qualification with, any court or governmental body
or agency (except such as may be required under the securities or Blue
Sky laws of the various states), (B) to such counsel's actual
knowledge, conflict with or constitute a breach of any of the terms or
provisions of, or a default under any indenture, loan agreement,
mortgage, lease or other agreement or instrument to which such Selling
Stockholder is a party or by which any property of such Selling
Stockholder is bound or (C) violate or conflict with any applicable
law, rule or regulation or to such counsel's actual knowledge any
judgment, order or decree of any court or any governmental body or
agency having jurisdiction over such Selling Stockholder or any
property of such Selling Stockholder.
The opinion of Bose McKinney & Evans LLP described in Section
9(f) above shall be rendered to you at the request of the Company and the
Selling Stockholder and shall so state therein.
(g) The Underwriters shall have received an opinion, dated
the Closing Date, of Gardner, Carton & Douglas, special regulatory counsel for
the Company, to the effect that:
(i) Except for such FCC consents and approvals that have
already been obtained and are currently in effect, no consent or
approval of the FCC is required under the Communications Laws for the
issuance and sale under this Agreement by the Company or the Selling
Stockholder of the Shares. The execution, delivery and performance of
this Agreement in accordance with the terms hereof by the Company and
the Selling Stockholder does not violate the Communications Laws;
(ii) The Company and the License Subsidiaries identified on
Schedule IV hereto hold all necessary authorizations, approvals,
consents, orders, licenses, certificates and permits issued by the FCC
to own and operate the respective Stations identified on Schedule IV
hereto. Each of the FCC Licenses is currently in effect in accordance
with its terms and held by the Company or one of its subsidiaries, as
identified in such counsel's opinion.
(iii) Such counsel knows of no proceedings pending or
threatened in writing under the Communications Laws against the
Company, the License Subsidiaries or the Stations before or by the FCC
or any court having jurisdiction over matters arising under the
Communications Laws, relating to any invalidity, revocation or adverse
modification of any FCC Licenses, the violation of the Communications
Laws, or the reconsideration or rescission of the issuance, or consent
to the transfer or assignment, of any of the FCC Licenses, that if
determined adversely to the Company, would reasonably be expected to
have a Material Adverse Effect;
(iv) The statements (x) in the Prospectus under the captions
"Risk Factors--If our stations cannot keep or increase their current
audience ratings or market share, it
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<PAGE> 25
would adversely affect our cash flow and, consequently, our ability to
fund our operations," "Risk Factors--If the cost of equipping our
television stations with digital television capabilities is too great,
it could adversely affect our cash flow and, consequently, our ability
to fund our operations," "Risk Factors--Our need to comply with
comprehensive, complex and sometimes unpredictable federal regulations
could have an adverse effect on our business," and
"Business--Regulatory Developments," and (y) in the Company's Annual
Report on Form 10-K for the fiscal year ended February 28, 1999 under
the captions "Business--Federal Regulation" and
"Business--Competition," insofar as such statements constitute a
summary of Communications Laws and material proceedings thereunder and
FCC matters and legal conclusions with respect to FCC matters, fairly
present such information contained under such captions in light of the
circumstances under which such statements are made.
(v) Such counsel has no reason to believe that any part of the
Registration Statement or any amendment thereto, as of its date or as
of the Closing Date, contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Registration Statement or any amendment or supplement thereto, as of
its date or as of the Closing Date, contained any untrue statement of
a material fact or omitted to state any material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided that, in
rendering the opinion in this subparagraph (v), counsel may qualify
its opinion based on the scope of its engagement as FCC counsel for
the Company.
(h) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Latham & Watkins, counsel for the Underwriters, in
form and substance reasonably satisfactory to you.
(i) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to you, from Arthur Andersen
LLP, independent public accountants, containing the information and statements
of the type ordinarily included in accountants' "comfort letters" to
Underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(j) The Company shall have delivered to you the agreements
specified in Section 2 hereof which agreements shall be in full force and effect
on the Closing Date.
(k) The Shares shall have been duly listed for quotation on
the Nasdaq National Market.
(l) Each of (1) the Purchase Agreement dated June 3, 1999,
between the Company and Press Communications LLC and (2) the Agreement, dated
June 24, 1999, between Barry Baker and the Company, shall be in full force and
effect, and no party to any such agreement shall have given any notice of
termination or amendment of any material provision thereof, or of any intention
to terminate or amend any material provision thereof, to any other
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<PAGE> 26
party, and no event shall have occurred which would prevent any party from
substantially performing its obligations under such agreements.
(m) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or withdrawal
of, or of any review (or of any potential or intended review) for a possible
change that does not indicate the direction of the possible change in, any
rating of the Company or any securities of the Company (including, without
limitation, the placing of any of the foregoing ratings on credit watch with
negative or developing implications or under review with an uncertain direction)
by any "nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Act and (ii) there shall not
have occurred any change, nor shall any notice have been given of any potential
or intended change, in the outlook for any rating of the Company or any
securities of the Company by any such rating organization..
(n) The Company and the Selling Stockholder shall not have
failed on or prior to the Closing Date to perform or comply with any of the
agreements herein contained and required to be performed or complied with by the
Company or the Selling Stockholder, as the case may be, on or prior to the
Closing Date.
The several obligations of the Underwriters to purchase any
Additional Shares hereunder are subject to the delivery to you on the applicable
Option Closing Date of such documents as you may reasonably request with respect
to the good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares.
SECTION 10. Effectiveness of Agreement and Termination. This
Agreement shall become effective upon the execution and delivery of this
Agreement by the parties hereto.
This Agreement may be terminated at any time on or prior to
the Closing Date by you by written notice to the Company if any of the following
has occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action by
any federal, state or local government or agency in respect of its
26
<PAGE> 27
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase the Firm Shares or Additional Shares, as the case may be, which it has
or they have agreed to purchase hereunder on such date and the aggregate number
of Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion which
the number of Firm Shares set forth opposite its name in Schedule I bears to the
total number of Firm Shares which all the non-defaulting Underwriters have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Firm Shares or Additional
Shares, as the case may be, which any Underwriter has agreed to purchase
pursuant to Section 2 hereof be increased pursuant to this Section 10 by an
amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased by all Underwriters and arrangements satisfactory to you,
the Company and the Selling Stockholder for purchase of such Firm Shares are not
made within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter, the Company or the
Selling Stockholder. In any such case which does not result in termination of
this Agreement, either you or the Sellers shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. If, on an Option Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased on such date, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
such Additional Shares or (ii) purchase not less than the number of Additional
Shares that such non-defaulting Underwriters would have been obligated to
purchase on such date in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of any such Underwriter under this Agreement.
SECTION 11. Agreements of the Selling Stockholder. The Selling
Stockholder agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes payable
in connection with the transfer of the Shares to be sold by such Selling
Stockholder to the Underwriters.
(b) To do and perform all things to be done and performed by
such Selling Stockholder under this Agreement prior to the Closing Date and to
satisfy all conditions
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<PAGE> 28
precedent to the delivery of the Shares to be sold by such Selling Stockholder
pursuant to this Agreement.
SECTION 12. Miscellaneous. Notices given pursuant to any
provision of this Agreement shall be addressed as follows: (i) if to the
Company, to Emmis Communications Corporation, 40 Monument Circle, 7th Floor,
Indianapolis, Indiana 46204, Attention: Scott Enright, (ii) if to the Selling
Stockholder, to Jeffrey H. Smulyan, care of Emmis Communications Corporation, 40
Monument Circle, 7th Floor, Indianapolis, Indiana 46204 and (iii) if to any
Underwriter or to you, to you c/o Donaldson, Lufkin & Jenrette Securities
Corporation, 277 Park Avenue, New York, New York 10172, Attention: Syndicate
Department, or in any case to such other address as the person to be notified
may have requested in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company and the several
Underwriters set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Shares, regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, the officers or
directors of any Underwriter, any person controlling any Underwriter, the
Company, the officers or directors of the Company or any person controlling the
Company, (ii) acceptance of the Shares and payment for them hereunder and (iii)
termination of this Agreement.
If for any reason the Shares are not delivered by or on
behalf of any Seller as provided herein, the Sellers agree, jointly and
severally, to reimburse the several Underwriters for all reasonable
out-of-pocket expenses (including the reasonable fees and disbursements of
counsel) incurred by them. Notwithstanding any termination of this Agreement,
the Sellers shall be liable for all expenses which they have agreed to pay
pursuant to Section 5(i) hereof. The Sellers also agree, jointly and severally,
to reimburse the several Underwriters, their directors and officers and any
persons controlling any of the Underwriters for any and all fees and expenses
(including, without limitation, the fees and disbursements of counsel) incurred
by them in connection with enforcing their rights hereunder (including, without
limitation, pursuant to Section 8 hereof).
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Selling Stockholder, the Underwriters, the Underwriters' directors and officers,
any controlling persons referred to herein, the Company's directors and the
Company's officers who sign the Registration Statement and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
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<PAGE> 29
Please confirm that the foregoing correctly sets forth the
agreement among the Company and the several Underwriters.
Very truly yours,
EMMIS COMMUNICATIONS CORPORATION
By: /s/ Norman H. Gurwitz
-------------------------------------
Name:
Title:
JEFFREY H. SMULYAN
By: /s/ Norman H. Gurwitz
--------------------------------------
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN SACHS & CO.
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By /s/ Janine Shelffo
--------------------------------------
Name: Janine Shelffo
Title: Vice President
By GOLDMAN SACHS & CO.
By /s/ Goldman Sachs & Co.
--------------------------------------
Name:
Title:
29
<PAGE> 30
SCHEDULE I
<TABLE>
<CAPTION>
Number of Firm Shares
Underwriters to be Purchased
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation..... 530,400
Goldman Sachs & Co...................................... 530,400
Credit Suisse First Boston Corporation.................. 405,600
Deutsche Bank Securities Inc............................ 405,600
Morgan Stanley & Co. Incorporated....................... 405,600
Banc of America Securities LLC.......................... 187,200
First Union Securities, Inc............................. 187,200
BancBoston Robertson Stephens Inc....................... 187,200
A.G. Edwards & Sons, Inc................................ 93,600
PaineWebber Incorporated................................ 93,600
Schroder & Co. Inc...................................... 93,600
CIBC World Markets Corp................................. 80,000
Credit Lyonnais Securities (USA) Inc.................... 80,000
Lehman Brothers Inc..................................... 80,000
J.P. Morgan Securities Inc.............................. 80,000
Prudential Securities Incorporated...................... 80,000
SG Cowen Securities Corporation......................... 80,000
Barrington Research Associates.......................... 80,000
----------
Total........ 3,680,000
</TABLE>
<PAGE> 31
SCHEDULE II
STOCKHOLDERS SUBJECT TO LOCK-UP AGREEMENT
Susan B. Bayh
Walter Z. Berger
Randall D. Bongarten
Richard F. Cummings
Norman H. Guwirtz
Gary L. Kaseff
Richard A. Leventhal
Greg A. Nathanson
Doyle L. Rose
Frank V. Sica
Lawrence B. Sorrel
<PAGE> 32
SCHEDULE III
SUBSIDIARIES
Corporations
Emmis DAR, Inc.
Emmis International Corporation
Emmis License Corporation
Emmis International Broadcasting Corporation
Emmis Television License Corporation of Honolulu
KPWR, Inc.
KPWR License, Inc.
Emmis FM Broadcasting Corporation of St. Louis
Emmis FM License Corporation of St. Louis
Emmis Meadowlands Corporation
Mediatex Communications Corporation
Mediatex Development Corporation
Emmis Pledge Corporation
Emmis Publishing Corporation
Radio Hungaria Co., Ltd. (54% equity interest only)
Emmis 1380 AM Radio Corporation of St. Louis
Texas Monthly, Inc.
Emmis Television License Corporation of Mobile
Emmis 104.1 FM Radio Corporation of St. Louis
Emmis 104.1 FM Radio License Corporation of St. Louis
Emmis FM Broadcasting Corporation of Indianapolis
Emmis FM License Corporation of Indianapolis
Emmis Television License Corporation of Cape Coral
Emmis AM Radio Corporation of Indianapolis
Emmis AM Radio License Corporation of Indianapolis
Emmis 106.5 FM Broadcasting Corporation of St. Louis
Emmis 106.5 FM License Corporation of St. Louis
Emmis FM Broadcasting Corporation of Chicago
Emmis FM License Corporation of Chicago
Emmis Television License Corporation of Green Bay
Emmis FM Radio Corporation of Indianapolis
Emmis FM Radio License Corporation of Indianapolis
Emmis FM Holding Corporation of New York
Emmis 101.9 FM Radio Corporation of New York
Emmis Broadcasting Corporation of New York
Emmis License Corporation of New York
Emmis Radio Corporation of New York
Emmis Radio License Corporation of New York
Emmis 1480 AM Radio License Corporation of Terre Haute
Emmis Television License Corporation of Terre Haute
<PAGE> 33
Emmis 99.9 FM Radio License Corporation of Terre Haute
Emmis 1310 AM Radio Corporation of Indianapolis
Emmis 1310 AM Radio License Corporation of Indianapolis
Emmis 105.7 FM Radio Corporation of Indianapolis
Emmis 105.7 FM Radio License Corporation of Indianapolis
Emmis Television License Corporation of New Orleans
Emmis 105.5 FM Radio License Corporation of Terre Haute
Big Hit Marketing, Inc.
Emmis Television License Corporation of Orlando
Emmis Latin America Broadcasting Corporation
Emmis South America Broadcasting Corporation
Emmis Argentina Broadcasting, S.A.
Emmis Buenos Aires Broadcasting, S.A.
Partnerships and Limited Liability Companies
Emmis Indiana Broadcasting, L.P.
Emmis Publishing, L.P.
Emmis Television Broadcasting, L.P.
1050, L.P. (Emmis Meadowlands is a 50% limited partner)
Duncan American Radio, LLC (40% equity interest only)
Country Sampler Stores, LLC (51% equity interest only)
<PAGE> 34
SCHEDULE IV
LICENSE SUBSIDIARIES AND STATIONS
- --------------------------------------------------------------------------------
Corporation Station
- --------------------------------------------------------------------------------
KPWR License, Inc. KPWR-FM
- --------------------------------------------------------------------------------
Emmis FM License Corporation of St. Louis KSHE-FM
- --------------------------------------------------------------------------------
Emmis 104.1 FM Radio License Corporation of St. Louis WXTM-FM
- --------------------------------------------------------------------------------
Emmis FM License Corporation of Indianapolis WENS-FM
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Emmis AM License Corporation of Indianapolis WIBC-AM
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Emmis 106.5 FM License Corporation of St. Louis WKKX-FM
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Emmis FM License Corporation of Chicago WKQX-FM
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Emmis FM Radio License Corporation of Indianapolis WNAP-FM
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Emmis 101.9 FM Radio Corporation of New York WQCD-FM
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Emmis License Corporation of New York WQHT-FM
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Emmis Radio License Corporation of New York WRKS-FM
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Emmis 1480 AM Radio License Corporation of Terre Haute WTHI-AM
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Emmis 99.9 FM Radio License Corporation of Terre Haute WTHI-FM
- --------------------------------------------------------------------------------
Emmis 1310 AM Radio License Corporation of Indianapolis WTLC-AM
- --------------------------------------------------------------------------------
Emmis 105.7 FM Radio License Corporation of Indianapolis WTLC-FM
- --------------------------------------------------------------------------------
Emmis 105.5 FM Radio License Corporation of Terre Haute WWVF-FM
- --------------------------------------------------------------------------------
Emmis Television License Corporation of Honolulu KHON-TV
KHAW-TV
KAII-TV
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Emmis Television License Corporation of Mobile WALA-TV
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Emmis Television License Corporation of Cape Coral WFTX-TV
- --------------------------------------------------------------------------------
Emmis Television License Corporation of Green Bay WLUK-TV
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Emmis Television License Corporation of Terre Haute WTHI-TV
- --------------------------------------------------------------------------------
Emmis Television License Corporation of New Orleans WVUE-TV
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<PAGE> 1
Exhibit 1.2
2,500,000 SHARES
EMMIS COMMUNICATIONS, INC.
6.25% SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
UNDERWRITING AGREEMENT
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN SACHS & CO.
DEUTSCHE BANK SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
As representatives of the several Underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Ladies and Gentleman:
Emmis Communications Corporation, an Indiana corporation (the
"COMPANY"), proposes to issue and sell to the several underwriters named in
Schedule I hereto (the "UNDERWRITERS") an aggregate of 2,500,000 shares of the
6.25% Series A Cumulative Convertible Preferred Stock, par value $.01, of the
Company (the "FIRM SHARES"). The Company also proposes to issue and sell to the
several Underwriters not more than an additional 375,000 shares of its Class A
Common Stock, par value $.01 (the "ADDITIONAL SHARES"), if requested by the
Underwriters as provided in Section 2 hereof. The Firm Shares and the Additional
Shares are hereinafter referred to collectively as the "SHARES". The shares of
common stock of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "COMMON STOCK".
SECTION 1. Registration Statement and Prospectus. The Company
has prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement on Form S-3, including a
prospectus, relating to the Shares. The registration statement, as amended or
supplemented at the time it became effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Act and including all documents incorporated by
reference in such registration statement, is
<PAGE> 2
hereinafter referred to as the "REGISTRATION STATEMENT"; and the prospectus in
the form first used to confirm sales of Shares, including all documents
incorporated by reference therein, is hereinafter referred to as the
"PROSPECTUS" (including, in the case of all references to the Registration
Statement or the Prospectus, documents incorporated therein by reference). If
the Company has filed or is required pursuant to the terms hereof to file a
registration statement pursuant to Rule 462(b) under the Act registering
additional shares of Common Stock (a "RULE 462(b) REGISTRATION STATEMENT"),
then, unless otherwise specified, any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462(b) Registration Statement.
SECTION 2. Agreements to Sell and Purchase and Lock-Up
Agreements. On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell 2,500,000 Firm Shares and each Underwriter agrees, severally and not
jointly, to purchase from the Company at a price per Share of $48.375 (the
"PURCHASE PRICE") the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, the Company agrees
to issue and sell the Additional Shares and the Underwriters shall have the
right to purchase, severally and not jointly, up to 375,000 Additional Shares
from the Company at the Purchase Price. Additional Shares may be purchased
solely for the purpose of covering over-allotments made in connection with the
offering of the Firm Shares. The Underwriters may exercise their right to
purchase Additional Shares in whole or in part from time to time by giving
written notice thereof to the Company within 30 days after the date of this
Agreement. You shall give any such notice on behalf of the Underwriters and such
notice shall specify the aggregate number of Additional Shares to be purchased
pursuant to such exercise and the date for payment and delivery thereof, which
date shall be a business day (i) no earlier than two business days after such
notice has been given (and, in any event, no earlier than the Closing Date (as
hereinafter defined)) and (ii) no later than ten business days after such notice
has been given. If any Additional Shares are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase from the Company the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
you may determine) which bears the same proportion to the total number of
Additional Shares to be purchased from the Company as the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule I bears to the total
number of Firm Shares.
The Company hereby agrees not to (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (ii) enter into any swap or other arrangement that transfers all
or a portion of the economic consequences associated with the ownership of any
Common Stock (regardless of whether any of the transactions described in clause
(i) or (ii) is to be settled by the delivery of Common Stock, or such other
securities, in cash or otherwise), except to the Underwriters pursuant to this
Agreement, for a period of 90 days after the date of the Prospectus without the
prior written consent of Donaldson, Lufkin & Jenrette Securities Corporation.
Notwithstanding the foregoing, during such period (i) the Company may grant
stock options or issue restricted
2
<PAGE> 3
stock or other awards pursuant to the Company's existing stock option or
employee benefit plans, (ii) the Company may issue shares of Common Stock upon
the exercise of an option or warrant or the conversion of a security outstanding
on the date hereof and (iii) the Company may sell up to 2.7 million shares of
its Class A Common Stock to Liberty Media Corporation or its affiliates. . The
Company also agrees not to file any registration statement with respect to any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock for a period of 90 days after the date of the
Prospectus without the prior written consent of Donaldson, Lufkin & Jenrette
Securities Corporation. The Company shall, prior to or concurrently with the
execution of this Agreement, deliver an agreement executed by each stockholder
listed on Schedule II hereto to the effect that such person will not, during the
period commencing on the date such person signs such agreement and ending 90
days after the date of the Prospectus, without the prior written consent of
Donaldson, Lufkin & Jenrette Securities Corporation, (A) engage in any of the
transactions described in the first sentence of this paragraph or (B) make any
demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock.
The Company hereby confirms its engagement of Donaldson,
Lufkin & Jenrette Securities Corporation as, and Donaldson, Lufkin & Jenrette
Securities Corporation hereby confirms its agreement with the Company to render
services as, a "qualified independent underwriter" within the meaning of Section
(b)(15) of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. (the "NASD") with respect to the offering and sale of
the Shares. Donaldson, Lufkin & Jenrette Securities Corporation, solely in its
capacity as qualified independent underwriter and not otherwise, is referred to
herein as the "QIU." As compensation for the services of the QIU hereunder, the
Company agrees to pay the QIU $5,000 on the Closing Date. The price at which the
Shares will be sold to the public shall not be higher than the maximum price
recommended by Donaldson, Lufkin & Jenrette Securities Corporation acting as
QIU.
SECTION 3. Terms of Public Offering. The Company is advised by
you that the Underwriters propose (i) to make a public offering of their
respective portions of the Shares as soon after the execution and delivery of
this Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
SECTION 4. Delivery and Payment. The Shares shall be
represented by definitive certificates and shall be issued in such authorized
denominations and registered in such names as Donaldson, Lufkin & Jenrette
Securities Corporation shall request no later than two business days prior to
the Closing Date or the applicable Option Closing Date (as defined below), as
the case may be. The Shares shall be delivered by or on behalf of the Company,
with any transfer taxes thereon duly paid by the Company, to Donaldson, Lufkin &
Jenrette Securities Corporation through the facilities of The Depository Trust
Company ("DTC"), for the respective accounts of the several Underwriters,
against payment to the Company of the Purchase Price therefor by wire transfer
of Federal or other funds immediately available in New York City. The
certificates representing the Shares shall be made available for inspection not
later than 9:30 A.M., New York City time, on the business day prior to the
Closing Date or the applicable Option Closing Date (as defined below), as the
case may be, at the office of DTC or its designated custodian (the "DESIGNATED
OFFICE"). The time and date of delivery and payment for
3
<PAGE> 4
the Firm Shares shall be 9:00 A.M., New York City time, on October 29, 1999 or
such other time on the same or such other date as Donaldson, Lufkin & Jenrette
Securities Corporation and the Company shall agree in writing. The time and date
of delivery and payment for the Firm Shares are hereinafter referred to as the
"CLOSING DATE". The time and date of delivery for any Additional Shares to be
purchased by the Underwriters shall be 9:00 A.M., New York City time, on the
date specified in the applicable exercise notice given by you pursuant to
Section 2 or such other time on the same or such other date as Donaldson, Lufkin
& Jenrette Securities Corporation and the Company shall agree in writing. The
time and date of delivery for any Additional Shares are hereinafter referred to
as an "OPTION CLOSING DATE".
The documents to be delivered on the Closing Date or any
Option Closing Date on behalf of the parties hereto pursuant to Section 8 of
this Agreement shall be delivered at the offices of Latham & Watkins and the
Shares shall be delivered at the Designated Office, all on the Closing Date or
such Option Closing Date, as the case may be.
SECTION 5. Agreements of the Company. The Company agrees with
you:
(a) To advise you promptly and, if requested by you, to
confirm such advice in writing, (i) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to the
Prospectus or for additional information, (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
of the suspension of qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purposes, (iii) when
any amendment to the Registration Statement becomes effective, (iv) if the
Company is required to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, when the Rule 462(b) Registration Statement has
become effective and (v) of the happening of any event during the period
referred to in Section 5(d) below which makes any statement of a material fact
made in the Registration Statement or the Prospectus untrue or which requires
any additions to or changes in the Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(b) To furnish to you three (3) signed copies of the
Registration Statement as first filed with the Commission and of each amendment
to it, including all exhibits and documents incorporated therein by reference,
and to furnish to you and each Underwriter designated by you such number of
conformed copies of the Registration Statement as so filed and of each amendment
to it, without exhibits but including documents incorporated therein by
reference, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which
shall be satisfactory to you, and to file the Prospectus in such form with the
Commission within the applicable period specified in Rule 424(b) under the Act;
during the period specified in Section 5(d) below, not to file any further
amendment to the Registration Statement and not to make any amendment or
supplement to the Prospectus of which you shall not previously have been advised
or to which you shall reasonably object after being so advised; and, during such
period, to prepare and file with the Commission, promptly upon your reasonable
request, any amendment
4
<PAGE> 5
to the Registration Statement or amendment or supplement to the Prospectus which
may be necessary or advisable in connection with the distribution of the Shares
by you, and to use its best efforts to cause any such amendment to the
Registration Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first
business day after the date of this Agreement and from time to time thereafter
for such period as in the opinion of counsel for the Underwriters a prospectus
is required by law to be delivered in connection with sales by an Underwriter or
a dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
and any documents incorporated therein by reference as such Underwriter or
dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event
shall occur or condition shall exist as a result of which, in the opinion of
counsel for the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Underwriters, it is necessary to amend
or supplement the Prospectus to comply with applicable law, forthwith to prepare
and file with the Commission an appropriate amendment or supplement to the
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with applicable
law, and to furnish to each Underwriter and to any dealer as many copies thereof
as such Underwriter or dealer may reasonably request.
(f) Prior to any public offering of the Shares, to cooperate
with you and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such registration or qualification in effect so
long as required for distribution of the Shares and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other than
as to matters and transactions relating to the Prospectus, the Registration
Statement, any preliminary prospectus or the offering or sale of the Shares, in
any jurisdiction in which it is not now so subject.
(g) To make generally available to its stockholders as soon as
practicable an earnings statement covering the twelve-month period ending
November 30, 2000 that shall satisfy the provisions of Section 11(a) of the Act,
and to advise you in writing when such statement has been so made available.
(h) During the period of three years after the date of this
Agreement, to furnish to you as soon as available copies of all reports or other
communications furnished to the record holders of Common Stock or furnished to
or filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed and such other
5
<PAGE> 6
publicly available information concerning the Company and its subsidiaries as
you may reasonably request.
(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of the Company's obligations under
this Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Act and all other fees and
expenses in connection with the preparation, printing, filing and distribution
of the Registration Statement (including financial statements and exhibits), any
preliminary prospectus, the Prospectus and all amendments and supplements to any
of the foregoing, including the mailing and delivering of copies thereof to the
Underwriters and dealers in the quantities specified herein, (ii) all reasonable
costs and expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iii) all
costs of printing or producing this Agreement and any other agreements or
documents in connection with the offering, purchase, sale or delivery of the
Shares, (iv) all expenses in connection with the registration or qualification
of the Shares for offer and sale under the securities or Blue Sky laws of the
several states and all reasonable costs of printing or producing any Preliminary
and Supplemental Blue Sky Memoranda in connection therewith (including the
filing fees and reasonable fees and disbursements of counsel for the
Underwriters in connection with such registration or qualification and memoranda
relating thereto), (v) the filing fees and reasonable disbursements of counsel
for the Underwriters in connection with the review and clearance of the offering
of the Shares by the National Association of Securities Dealers, Inc., (vi) all
costs and expenses incident to the listing of the Shares on the Nasdaq National
Market, (vii) the cost of printing certificates representing the Shares, (viii)
the costs and charges of any transfer agent, registrar and/or depositary, (ix)
the fees and expenses of the QIU (including the reasonable fees and
disbursements of counsel to the QIU) and (x) and all other costs and expenses
incident to the performance of the obligations of the Company hereunder for
which provision is not otherwise made in this Section.
(j) To use its best efforts to list for quotation the Shares
on the Nasdaq National Market and to maintain the listing of the Shares on the
Nasdaq National Market for a period of three years after the date of this
Agreement.
(k) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the Closing Date or any Option Closing Date, as the case may
be, and to satisfy all conditions precedent to the delivery of the Shares.
(l) If the Registration Statement at the time of the
effectiveness of this Agreement does not cover all of the Shares, to file a Rule
462(b) Registration Statement with the Commission registering the Shares not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time, on the
date of this Agreement and to pay to the Commission the filing fee for such Rule
462(b) Registration Statement at the time of the filing thereof or to give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
6
<PAGE> 7
SECTION 6. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other
than any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement filed
after the effectiveness of this Agreement will become effective no later than
10:00 P.M., New York City time, on the date of this Agreement; and no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Act and the Exchange
Act; (ii) the Registration Statement (other than any Rule 462(b) Registration
Statement to be filed by the Company after the effectiveness of this Agreement),
when it became effective, did not contain and, as amended, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (iii) the Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement) and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Act, (iv) if the
Company is required to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, such Rule 462(b) Registration Statement and any
amendments thereto, when they become effective (A) will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(B) will comply in all material respects with the Act and (v) the Prospectus
does not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in the Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein. The parties hereto acknowledge that for
purposes of this Agreement, including this Section 6(b) and Section 8 hereof,
the only written information furnished to the Company by any Underwriter
expressly for use in the Registration Statement or any preliminary prospectus or
the Prospectus is the information contained under the caption "Underwriting" in
the Prospectus in the table in the first paragraph, and in the third, fourth and
eleventh paragraphs of such section.
(c) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the Act, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in any preliminary prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
7
<PAGE> 8
(d) Each of the Company and its subsidiaries has been duly
incorporated or organized, is validly existing as a corporation, partnership or
limited liability company in good standing under the laws of its jurisdiction of
incorporation or organization and has the corporate, partnership or limited
liability company power and authority to carry on its business as described in
the Prospectus and to own, lease and operate its properties, and each is duly
qualified and is in good standing as a foreign corporation, partnership or
limited liability company authorized to do business in each jurisdiction in
which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole (a "MATERIAL ADVERSE EFFECT").
(e) The entities listed on Schedule III are the only
subsidiaries, direct or indirect, of the Company. All of the outstanding equity
interests of each of the Company's subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable and, except as set forth on
Schedule III hereto, are owned by the Company, directly or indirectly through
one or more subsidiaries, free and clear of any security interest, claim, lien,
encumbrance, or adverse interest of any nature (each, a "LIEN").
(f) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens granted or
issued by the Company or any of its subsidiaries relating to or entitling any
person to purchase or otherwise to acquire any shares of the capital stock of
the Company or any of its subsidiaries, except as otherwise disclosed in the
Registration Statement or pursuant to the Company's employee benefit plans.
(g) All the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights; and the Shares to be issued
and sold by the Company have been duly authorized and, when issued and delivered
to the Underwriters against payment therefor as provided by this Agreement, will
be validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights.
(h) All of the outstanding shares of capital stock or other
equity interests of each of the Company's subsidiaries have been duly authorized
and validly issued and are fully paid and non-assessable, and, except as set
forth on Schedule III hereto, are owned by the Company, directly or indirectly
through one or more subsidiaries, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature.
(i) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(j) Neither the Company nor any of its subsidiaries is in
violation of its respective charter, by-laws or equivalent organizational
document or in default in the performance of any obligation, agreement, covenant
or condition contained in any indenture, loan agreement, mortgage, lease or
other agreement or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries or their respective
property is bound, except for defaults that are not material to the Company and
its subsidiaries, taken as a whole,
8
<PAGE> 9
(k) The execution, delivery and performance of this Agreement
by the Company, the compliance by the Company with all the provisions hereof and
the consummation of the transactions contemplated hereby will not (i) require
any consent, approval, authorization or other order of, or qualification with,
any court or governmental body or agency (except such as may be required under
the securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company or any of its subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound, (iii) violate or
conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
the Company, any of its subsidiaries or their respective property, (iv) result
in the imposition or creation of (or the obligation to create or impose) a Lien
under, any agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
their respective property is bound or (v) result in the suspension, termination
or revocation of any Authorization (as defined below) of the Company or any of
its subsidiaries or any other impairment of the rights of the holder of any such
Authorization.
(l) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is or could be a
party or to which any of their respective property is or could be subject that
are required to be described in the Registration Statement or the Prospectus and
are not so described; nor are there any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement that
are not so described or filed as required.
(m) Neither the Company nor any of its subsidiaries has
violated any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), any
provisions of the Employee Retirement Income Security Act of 1974, as amended,
or any provisions of the Foreign Corrupt Practices Act or the rules and
regulations promulgated thereunder, except for such violations which, singly or
in the aggregate, would not have a Material Adverse Effect.
(n) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any AUTHORIZATION, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a Material Adverse Effect.
(o) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such
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<PAGE> 10
Authorization or to make any such filing or notice would not, singly or in the
aggregate, have a Material Adverse Effect. Each such Authorization is valid and
in full force and effect and each of the Company and its subsidiaries is in
compliance with all the terms and conditions thereof and with the rules and
regulations of the authorities and governing bodies having jurisdiction with
respect thereto; and no event has occurred (including, without limitation, the
receipt of any notice from any authority or governing body) which allows or,
after notice or lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or results or, after notice or lapse of
time or both, would result in any other impairment of the rights of the holder
of any such Authorization; and such Authorizations contain no restrictions that
are burdensome to the Company or any of its subsidiaries; except where such
failure to be valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction would not,
singly or in the aggregate, have a Material Adverse Effect.
(p) This Agreement has been duly authorized, executed and
delivered by the Company.
(q) Arthur Andersen LLP are independent public accountants
with respect to the Company and its subsidiaries as required by the Act.
(r) The consolidated financial statements included or
incorporated by reference in the Registration Statement and the Prospectus (and
any amendment or supplement thereto), together with related schedules and notes,
present fairly in all material respects the consolidated financial position,
results of operations and changes in financial position of the Company and its
subsidiaries on the basis stated therein at the respective dates or for the
respective periods to which they apply; such statements and related schedules
and notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; the supporting schedules, if any, included in the
Registration Statement present fairly in all material respects in accordance
with generally accepted accounting principles the information required to be
stated therein; and the other financial and statistical information and data set
forth in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company.
(s) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be, an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended.
(t) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company or to require the Company to include such securities
with the Shares registered pursuant to the Registration Statement.
(u) Since the respective dates as of which information is
given in the Prospectus other than as set forth in the Prospectus (exclusive of
any amendments or
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<PAGE> 11
supplements thereto subsequent to the date of this Agreement), (i) there has not
occurred any material adverse change or any development involving a prospective
material adverse change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Company or any of its subsidiaries
and (iii) neither the Company nor any of its subsidiaries has incurred any
material liability or obligation, direct or contingent.
(v) No consent or approval of the Federal Communications
Commission (the "FCC") is required under the Communications Act of 1934, as
amended, and the regulations promulgated thereunder (the "COMMUNICATIONS LAWS")
for the issuance and sale of the Shares. The execution, delivery and performance
of this Agreement in accordance with the terms hereof does not violate the
Communications Laws.
(w) The subsidiaries of the Company identified on Schedule IV
hereto (the "LICENSE SUBSIDIARIES") hold all necessary authorizations,
approvals, consents, orders, licenses, certificates and permits issued by the
FCC to own and operate each of the respective radio or television broadcast
stations (the "STATIONS") as identified on Schedule IV hereto (all such FCC
authorizations, approvals, consents, order, licenses, certificates and permits
of the License Subsidiaries collectively the "FCC LICENSES").
(x) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its subsidiaries, taken as a whole, in each case free and clear of all
liens, encumbrances and defects except such as do not materially affect the
value of such property and do not interfere with the use made and proposed to be
made of such property by the Company and its subsidiaries; and any real property
and buildings held under lease by the Company and its subsidiaries are held by
them under valid, subsisting and enforceable leases with such exceptions as are
not material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries.
(y) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names ("INTELLECTUAL PROPERTY") currently
employed by them in connection with the businesses now operated by them, and
those to be acquired pursuant to the Purchase Agreement dated June 3, 1999,
between the Company and Press Communications LLC, except where the failure to
own or possess or otherwise acquire such intellectual property would not, singly
or in the aggregate, have a Material Adverse Effect; and neither the Company nor
any of its subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of such intellectual property
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect.
(z) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are
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<PAGE> 12
prudent and customary in the businesses in which they are engaged; and neither
the Company nor any of its subsidiaries (i) has received notice from any insurer
or agent of such insurer that substantial capital improvements or other material
expenditures will have to be made in order to continue such insurance or (ii)
has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers at a cost that would not have a Material Adverse
Effect.
(aa) Except as disclosed or incorporated by reference in the
Prospectus, no relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company or any of its subsidiaries
on the other hand, which is required by the Act to be described in the
Registration Statement or the Prospectus which is not so described.
(bb) There is no (i) significant unfair labor practice
complaint, grievance or arbitration proceeding pending or threatened against the
Company or any of its subsidiaries before the National Labor Relations Board or
any state or local labor relations board, (ii) strike, labor dispute, slowdown
or stoppage pending or threatened against the Company or any of its subsidiaries
or (iii) union representation question existing with respect to the employees of
the Company and its subsidiaries, except for such actions specified in clause
(i), (ii) or (iii) above, which, singly or in the aggregate, would not have a
Material Adverse Effect. To the best of the Company's knowledge, no collective
bargaining organizing activities are taking place with respect to the Company or
any of its subsidiaries.
(cc) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(dd) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been filed, other
than those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees and other
charges due pursuant to such returns or pursuant to any assessment received by
the Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
(ee) The Company has reviewed its operations and the
operations of its subsidiaries and any third parties with which the Company or
any of its subsidiaries has a material relationship to evaluate the extent to
which the business or operations of the Company or any of its subsidiaries will
be affected by the Year 2000 Problem (as defined below). As a result of such
review, the Company has no reason to believe, and does not believe, that the
Year 2000 Problem will have a Material Adverse Effect. The "YEAR 2000 PROBLEM"
as used herein means any risk that the computer hardware or software used in the
receipt, transmission, storage, retrieval, retransmission or other utilization
of data or in the operation of mechanical or electrical
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<PAGE> 13
systems of any kind will not, in the case of dates or time periods occurring
after December 31, 1999, function at least as effectively as in the case of
dates or time periods occurring prior to January 1, 2000.
(ff) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Act has indicated to the Company that it is considering (i) the downgrading,
suspension or withdrawal of, or any review for a possible change that does not
indicate the direction of the possible change in, any rating assigned to the
Company or any securities of the Company or (ii) any change in the outlook for
any rating of the Company or any securities of the Company.
(gg) Any documents which at the date hereof are incorporated
by reference in the Registration Statement, the Prospectus or any amendment or
supplement thereto, or any preliminary prospectus (the "INCORPORATED DOCUMENTS")
were filed in a timely manner and, when they were filed (or, if any amendment
with respect to any such document was filed, when such amendment was filed),
conformed with the requirements of the Exchange Act and did not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
(hh) The Common Stock (excluding the Company's Class B common
stock) is registered pursuant to Section 12(g) of the Exchange Act and is listed
on The Nasdaq National Market, and the Company has taken no action designed to,
or likely to have the effect of, terminating the registration of the Common
Stock (excluding the Company's Class B common stock) under the Exchange Act or
delisting the Common Stock (excluding the Company's Class B common stock) from
The Nasdaq National Market, nor has the Company received any notification that
the Commission or the National Association of Securities Dealers, Inc. ("NASD")
is contemplating terminating such registration or listing.
(ii) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be deemed to
be a representation and warranty by the Company to the Underwriters as to the
matters covered thereby.
(jj) The Company has not distributed and, prior to the later
of (i) the Closing Date and (ii) the completion of the distribution of the
Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement or any
amendment thereto, any preliminary prospectus or the Prospectus or any amendment
or supplement thereto, or other materials, if any, permitted by the Act.
SECTION 7. Indemnification. (a) The Company agrees to
indemnify and hold harmless each Underwriter, its directors, its officers and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages, liabilities and judgments (including, without
limitation, any legal or other expenses incurred in connection with
investigating or defending any matter, including any action, that could give
rise to any such losses, claims, damages, liabilities or judgments) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus, or caused by any
omission or
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<PAGE> 14
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished in writing to the Company by
such Underwriter through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
to the same extent as the foregoing indemnity from the Company to such
Underwriter but only with reference to information relating to such Underwriter
furnished in writing to the Company by such Underwriter through you expressly
for use in the Registration Statement (or any amendment thereto), the Prospectus
(or any amendment or supplement thereto) or any preliminary prospectus.
(c) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 7(a) or 7(b)
(the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 7(a) and 7(b), the Underwriter shall not be
required to assume the defense of such action pursuant to this Section 7(c), but
may employ separate counsel and participate in the defense thereof, but the fees
and expenses of such counsel, except as provided below, shall be at the expense
of such Underwriter). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for (i) the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all Underwriters, their officers and
directors and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act and
(ii) the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and all persons, if any, who control the Company
within the meaning of either such Section, and all such fees and expenses shall
be reimbursed as they are incurred. In the case of any such separate firm for
the Underwriters, their officers and directors and such control persons of any
Underwriters, such firm shall be designated in writing by Donaldson, Lufkin &
Jenrette Securities Corporation. In
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<PAGE> 15
the case of any such separate firm for the Company and such directors, officers
and control persons of the Company, such firm shall be designated in writing by
the Company. The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than twenty business days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this
Section 7 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Shares or (ii) if the allocation provided by clause 7(d)(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 7(d)(i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions, but before deducting expenses) received
by the Company, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Shares, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on the
one hand or the Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7(d) were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
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<PAGE> 16
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7(d) are several in proportion to the respective number
of Shares purchased by each of the Underwriters hereunder and not joint.
(e) The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
SECTION 8. Indemnification of QIU
(a) The Company agrees to indemnify and hold harmless the QIU,
its directors, its officers and each person, if any, who controls the QIU within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, any legal or other expenses incurred in
connection with defending or investigating any matter, including any action that
could give rise to any such losses, claims, damages, liabilities or judgments)
related to, based upon or arising out of (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or
any amendment thereto), the Prospectus (or any amendment or supplement thereto)
or any preliminary prospectus, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) the QIU's activities as QIU under its
engagement pursuant to Section 2 hereof; except in the case of this clause (ii)
insofar as any such losses, claims, damages, liabilities or judgments are found
in a final judgment by a court of competent jurisdiction, not subject to further
appeal, to have resulted solely from the willful misconduct or gross negligence
of the QIU.
(b) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to paragraph (a) of this
Section 8 (the "QIU INDEMNIFIED PARTY"), the QIU Indemnified Party shall
promptly notify the Company in writing and the Company shall assume the defense
of such action, including the employment of counsel reasonably satisfactory to
the QIU Indemnified Party and the payment of all fees and expenses of such
counsel, as incurred. Any QIU Indemnified Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the QIU
Indemnified Party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the Company, (ii) the Company shall have
failed to assume the defense of such action or employ counsel reasonably
satisfactory to the QIU Indemnified Party or (iii) the named parties to any such
action (including
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<PAGE> 17
any impleaded parties) include both the QIU Indemnified Party and the Company,
and the QIU Indemnified Party shall have been advised by such counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the Company (in which case the Company shall
not have the right to assume the defense of such action on behalf of the QIU
Indemnified Party). In any such case, the Company shall not, in connection with
any one action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all QIU Indemnified Parties, which firm
shall be designated by the QIU, and all such fees and expenses shall be
reimbursed as they are incurred. The Company shall indemnify and hold harmless
the QIU Indemnified Party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than ten business days after the Company shall
have received a request from the QIU Indemnified Party for reimbursement for the
fees and expenses of counsel (in any case where such fees and expenses are at
the expense of the Company) and, prior to the date of such settlement, the
Company shall have failed to comply with such reimbursement request. The Company
shall not, without the prior written consent of the QIU Indemnified Party,
effect any settlement or compromise of, or consent to the entry of judgment with
respect to, any pending or threatened action in respect of which the QIU
Indemnified Party is or could have been a party and indemnity or contribution
may be or could have been sought hereunder by the QIU Indemnified Party, unless
such settlement, compromise or judgment (i) includes an unconditional release of
the QIU Indemnified Party from all liability on claims that are or could have
been the subject matter of such action and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act by or on behalf of
the QIU Indemnified Party.
(c) To the extent the indemnification provided for in this
Section 8 is unavailable to a QIU Indemnified Party or insufficient in respect
of any losses, claims, damages, liabilities or judgments referred to therein,
then the Company, in lieu of indemnifying such QIU Indemnified Party, shall
contribute to the amount paid or payable by such QIU Indemnified Party as a
result of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the QIU on the other hand from the offering of the
Shares 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 QIU in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or judgments, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the QIU shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Company as set forth in the table on the cover page one the Prospectus, and the
fee received by the QIU pursuant to Section 2 hereof, bear to the sum of such
total net proceeds and such fee. The relative fault of the Company and the QIU
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
QIU and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission and whether the
QIU's activities as QIU under its
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<PAGE> 18
engagement pursuant to Section 2 hereof involved any willful misconduct or gross
negligence on the part of the QIU.
The Company and the QIU agree that it would not be just and
equitable if contribution pursuant to this Section 8(c) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by a QIU Indemnified Party as a result of
the losses, claims, damages, liabilities or judgments referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such QIU
Indemnified Party in connection with investigating or defending any matter that
could have given rise to such losses, claims, damages, liabilities or judgments.
In no event shall any QIU Indemnified Party be required to contribute in the
aggregate an amount exceeding the fee received by Donaldson, Lufkin & Jenrette
Securities Corporation pursuant to Section 2 hereof. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(d) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any QIU Indemnified Party at law or in equity.
SECTION 9. Conditions of Underwriters' Obligations. The
several obligations of the Underwriters to purchase the Firm Shares under this
Agreement are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date. The Company
shall have performed or complied with all of the agreements contained in this
Agreement and required to be performed or complied with by it at or prior to the
Closing Date.
(b) If the Company is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, such Rule
462(b) Registration Statement shall have become effective by 10:00 P.M., New
York City time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c) You shall have received on the Closing Date (1) a
certificate dated the Closing Date, signed by Jeffrey H. Smulyan, in his
capacity as Chairman, President and Chief Executive Officer of the Company, and
Walter Z. Berger, in his capacity as Executive Vice President, Chief Financial
Officer and Treasurer of the Company, confirming the matters set forth in
Sections 6(u), 6(ff), 9(a) and 9(b) and that the Company has complied with all
of the agreements and satisfied all of the conditions herein contained and
required to be complied with or satisfied by the Company on or prior to the
Closing Date and (2) a certificate, dated the Closing Date, signed by the
Company's Secretary, in form and substance reasonably satisfactory to the
Underwriters.
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<PAGE> 19
(d) Since the respective dates as of which information is
given in the Prospectus other than as set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of this Agreement),
(i) there shall not have occurred any change or any development which would be
reasonably likely to result in a prospective change in the condition, financial
or otherwise, or the earnings, business, management or operations of the Company
and its subsidiaries, taken as a whole, (ii) there shall not have been any
change or any development which would be reasonably likely to result in a
prospective change in the capital stock or in the long-term debt of the Company
or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 9(d)(i),
9(d)(ii) or 9(d)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Bose McKinney & Evans LLP, counsel for the Company, to the effect that:
(i) each of the Company and its subsidiaries has been duly
incorporated or organized, is validly existing as a corporation,
partnership or limited liability company in good standing under the
laws of its jurisdiction of incorporation or organization, as
applicable, and has the corporate, partnership or limited liability
company power and authority to carry on its business as described in
the Prospectus and to own, lease and operate its properties;
(ii) each of the Company and its subsidiaries is duly
qualified and is in good standing as a foreign corporation or
partnership authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification, except where the failure to be so qualified would
not have a Material Adverse Effect;
(iii) the Shares to be issued and sold by the Company pursuant
to the Underwriting Agreement have been duly authorized and, when
issued to and paid for by you and the other Underwriters in accordance
with the terms of the Underwriting Agreement, will be validly issued,
fully paid and non-assessable and free of preemptive, or to the
knowledge of such counsel, other similar rights that entitle or will
entitle any person to acquire any Shares from the Company upon issuance
thereof by the Company;
(iv) the authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus;
(v) the Registration Statement has become effective under the
Act and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued under the Act and no proceedings for that purpose are, to the
best knowledge of such counsel, pending before or contemplated by the
Commission and any required filing of the Prospectus pursuant to Rule
424(b) under the Act has been made in accordance with Rules 424(b) and
430A under the Act;
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<PAGE> 20
(vi) neither the Company nor any of its subsidiaries is in
violation of its respective charter, by-laws, partnership agreement or
other organizational document and, to such counsel's actual knowledge,
neither the Company nor any of its subsidiaries is in default in the
performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound;
(vii) the issuance and sale of the Shares by the Company
pursuant to the Underwriting Agreement will not result in the violation
by the Company of its articles of incorporation or bylaws or any
federal or Indiana statute, rule or regulation known to such counsel to
be applicable to the Company (other than federal or state securities
laws) or in the breach of or a default under any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, or court and
administrative orders, writs, judgments and decrees specifically
identified to such counsel by an officer of the Company as being
material to the Company; and to the best of such counsel's knowledge,
no consent, approval, authorization or order of, or filing with, any
federal or Indiana court or governmental agency or body is required for
the consummation of the issuance and sale of the Shares by the Company
pursuant to the Underwriting Agreement, except such as have been
obtained under the Act and such as may be required under state
securities laws in connection with the purchase and distribution of
such Shares by the Underwriters;
(viii) the statements set forth under the captions
"Summary--Recent Developments--St. Louis Acquisition," "Risk
Factors--We are obligated to purchase Sinclair's St. Louis stations,
but the actual purchase price and other material terms of the
acquisition have not yet been determined. The purchase price could be
higher and the other material terms of the acquisition could be less
favorable than we believe is appropriate," "Recent Developments,"
"Business--Litigation," "Principal and Selling Stockholders,"
"Description of Common Stock," "Description of the Convertible
Preferred Stock," "Certain United States Federal Tax Considerations"
"Description of Certain Indebtedness" and "Underwriting" in the
Prospectus, insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein, fairly
present in all material respects such legal matters, documents and
proceedings;
(ix) the execution, delivery and performance of this
Agreement by the Company, the compliance by the Company with all the
provisions hereof, and the consummation of the transactions
contemplated hereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required by the
Commission in connection with the Registration Statement or under the
securities or Blue Sky laws of the various states), (ii) conflict with
or constitute a breach of any of the terms or provisions of, or a
default under, the charter, bylaws or equivalent organizational
documents of the Company or any indenture, loan agreement, mortgage,
lease, or other agreement or instrument that is material to the Company
and its subsidiaries, taken as a whole, to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries or
20
<PAGE> 21
their respective property is bound, (iii) violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree of
any court or any governmental body or agency having jurisdiction over
the Company or its subsidiaries or their respective property, (iv)
result in the imposition or creation of (or the obligation to create or
impose) a Lien under, any agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound, or (v) result
in the termination, suspension or revocation of any Authorization of
the Company or any of its subsidiaries or result in any other
impairment of the rights of the holder of any such Authorization.
(x) after due inquiry, such counsel does not know of any legal
or governmental proceedings pending or threatened to which the Company
or any of its subsidiaries is or could be a party or to which any of
their respective property is or could be subject, which might result,
singly or in the aggregate, in a Material Adverse Effect;
(xi) to such counsel's actual knowledge, neither the Company
nor any of its subsidiaries has violated any Environmental Law or any
provision of ERISA, any provision of the Foreign Corrupt Practices Act
or the rules and regulations promulgated thereunder, except for such
violations which, singly or in the aggregate, would not have a Material
Adverse Effect;
(xii) to such counsel's actual knowledge, each of the Company
and the Guarantors has such Authorizations (other than Authorizations
required or issued by the FCC) of, and has made all filings with and
notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals,
including without limitation, under any applicable Environmental Laws,
as are necessary to own, lease, license and operate its respective
properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would
not, singly or in the aggregate, have a Material Adverse Effect. To
such counsel's actual knowledge, each such Authorization is valid and
in full force and effect and each of the Company and its subsidiaries
is in compliance with all the terms and conditions thereof and with the
rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and to such counsel's actual
knowledge, no event has occurred (including the receipt of any notice
from any authority or governing body) which allows or, after notice or
lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or results or, after notice or
lapse of time or both, would result in any other impairment of the
rights of the holder of any such Authorization; and to such counsel's
actual knowledge, such Authorizations contain no restrictions that are
burdensome to the Company or any of its subsidiaries; except where such
failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any
such restriction would not, singly or in the aggregate, have a Material
Adverse Effect;
(xiii) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be, an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended;
21
<PAGE> 22
(xiv) to such counsel's actual knowledge, there are no
contracts, agreements or understandings between the Company or any
subsidiary and any person granting such person the right to require the
Company or such subsidiary to file a registration statement under the
Act with respect to any securities of the Company or such subsidiary or
to require the Company or such subsidiary to include such securities
with the Common Stock registered pursuant to the Registration
Statement;
(xv) to such counsel's actual knowledge, there are no statutes
or legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or is threatened to be made a party
or to which any of their respective property is subject that are
required to be described in the Prospectus that are not described as
required, or contracts or documents of a character required to be
described in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed
as required;
(xvi) the Registration Statement and the Prospectus comply as
to form in all material respects with the requirements for registration
statements on Form S-3 under the Act and the rules and regulations of
the Commission thereunder; it being understood, however, that such
counsel need not express any opinion with respect to the financial
statements, schedules or other financial data included or incorporated
by reference in, or omitted from, the Registration Statement or the
Prospectus. Each document filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus (except for financial
statements and other financial data included therein as to which no
opinion need be expressed) complied when so filed as to form in all
material respects with the Act and the Exchange Act. In passing upon
the compliance as to form of the Registration Statement and the
Prospectus, such counsel may assume that the statements made and
incorporated by reference therein are correct and complete; and
(xvii) in addition, such counsel shall state that it has
participated in conferences with officers and other representatives of
the Company, representatives of the independent public accountants for
the Company, and representatives of the underwriters, at which the
contents of the Registration Statement and the Prospectus and related
matters were discussed and, although such counsel does not pass upon,
and does not assume any responsibility for, the accuracy, completeness
or fairness of the statements contained or incorporated by reference in
the Registration Statement and the Prospectus and has not made any
independent check or verification thereof, during the course of such
participation, no facts came to such counsel's attention that cause
such counsel to believe that the Registration Statement (including the
documents incorporated by reference therein), at the time it became
effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus
(including the documents incorporated by reference therein), as of its
date or as of the date hereof contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; except that such counsel need express no belief
with respect to the financial statements, schedules and other financial
data included or incorporated by reference in, or omitted from, the
Registration Statement or the Prospectus.
22
<PAGE> 23
The opinion of Bose McKinney & Evans LLP described in Section
9(e) above shall be rendered to you at the request of the Company and shall so
state therein.
(f) The Underwriters shall have received an opinion, dated the
Closing Date, of Gardner, Carton & Douglas, special regulatory counsel
for the Company, to the effect that:
(i) Except for such FCC consents and approvals that have
already been obtained and are currently in effect, no consent or
approval of the FCC is required under the Communications Laws for the
issuance and sale under this Agreement by the Company of the Shares.
The execution, delivery and performance of this Agreement in accordance
with the terms hereof by the Company does not violate the
Communications Laws;
(ii) The Company and the License Subsidiaries identified on
Schedule IV hereto hold all necessary authorizations, approvals,
consents, orders, licenses, certificates and permits issued by the FCC
to own and operate the respective Stations identified on Schedule IV
hereto. Each of the FCC Licenses is currently in effect in accordance
with its terms and held by the Company or one of its subsidiaries, as
identified in such counsel's opinion.
(iii) Such counsel knows of no proceedings pending or
threatened in writing under the Communications Laws against the
Company, the License Subsidiaries or the Stations before or by the FCC
or any court having jurisdiction over matters arising under the
Communications Laws, relating to any invalidity, revocation or adverse
modification of any FCC Licenses, the violation of the Communications
Laws, or the reconsideration or rescission of the issuance, or consent
to the transfer or assignment, of any of the FCC Licenses, that if
determined adversely to the Company, would reasonably be expected to
have a Material Adverse Effect;
(iv) The statements (x) in the Prospectus under the captions
"Risk Factors--If our stations cannot keep or increase their current
audience ratings or market share, it would adversely affect our cash
flow and, consequently, our ability to fund our operations," "Risk
Factors--If the cost of equipping our television stations with digital
television capabilities is too great, it could adversely affect our
cash flow and, consequently, our ability to fund our operations," "Risk
Factors--Our need to comply with comprehensive, complex and sometimes
unpredictable federal regulations could have an adverse effect on our
business," and "Business--Regulatory Developments," and (y) in the
Company's Annual Report on Form 10-K for the fiscal year ended February
28, 1999 under the captions "Business--Federal Regulation" and
"Business--Competition," insofar as such statements constitute a
summary of Communications Laws and material proceedings thereunder and
FCC matters and legal conclusions with respect to FCC matters, fairly
present such information contained under such captions in light of the
circumstances under which such statements are made.
(v) Such counsel has no reason to believe that any part of the
Registration Statement or any amendment thereto, as of its date or as
of the Closing Date, contained any untrue statement of a material fact
or omitted to state any material fact required to be
23
<PAGE> 24
stated therein or necessary to make the statements therein not
misleading or that the Registration Statement or any amendment or
supplement thereto, as of its date or as of the Closing Date, contained
any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided that, in rendering the opinion in this subparagraph (v),
counsel may qualify its opinion based on the scope of its engagement as
FCC counsel for the Company.
(g) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Latham & Watkins, counsel for the Underwriters, in
form and substance reasonably satisfactory to you.
(h) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to you, from Arthur Andersen
LLP, independent public accountants, containing the information and statements
of the type ordinarily included in accountants' "comfort letters" to
Underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(i) The Company shall have delivered to you the agreements
specified in Section 2 hereof which agreements shall be in full force and effect
on the Closing Date.
(j) The Shares shall have been duly listed for quotation on
the Nasdaq National Market.
(k) Each of (1) the Purchase Agreement dated June 3, 1999,
between the Company and Press Communications LLC and (2) the Agreement, dated
June 24, 1999, between Barry Baker and the Company, shall be in full force and
effect, and no party to any such agreement shall have given any notice of
termination or amendment of any material provision thereof, or of any intention
to terminate or amend any material provision thereof, to any other party, and no
event shall have occurred which would prevent any party from substantially
performing its obligations under such agreements.
(l) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or withdrawal
of, or of any review (or of any potential or intended review) for a possible
change that does not indicate the direction of the possible change in, any
rating of the Company or any securities of the Company (including, without
limitation, the placing of any of the foregoing ratings on credit watch with
negative or developing implications or under review with an uncertain direction)
by any "nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Act and (ii) there shall not
have occurred any change, nor shall any notice have been given of any potential
or intended change, in the outlook for any rating of the Company or any
securities of the Company by any such rating organization.
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<PAGE> 25
(m) The Company shall not have failed on or prior to the
Closing Date to perform or comply with any of the agreements herein contained
and required to be performed or complied with by the Company on or prior to the
Closing Date.
The several obligations of the Underwriters to purchase any
Additional Shares hereunder are subject to the delivery to you on the applicable
Option Closing Date of such documents as you may reasonably request with respect
to the good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares.
SECTION 10. Effectiveness of Agreement and Termination. This
Agreement shall become effective upon the execution and delivery of this
Agreement by the parties hereto.
This Agreement may be terminated at any time on or prior to
the Closing Date by you by written notice to the Company if any of the following
has occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action by
any federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase the Firm Shares or Additional Shares, as the case may be, which it has
or they have agreed to purchase hereunder on such date and the aggregate number
of Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion which
the number of Firm Shares set forth opposite its name in Schedule I bears to the
total number of Firm Shares which all the non-defaulting Underwriters have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Firm Shares or Additional
Shares, as the case may be, which any Underwriter has agreed to purchase
pursuant to Section 2 hereof be increased pursuant to this
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<PAGE> 26
Section 10 by an amount in excess of one-ninth of such number of Firm Shares or
Additional Shares, as the case may be, without the written consent of such
Underwriter. If on the Closing Date any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares to be purchased by all Underwriters and arrangements
satisfactory to you and the Company for purchase of such Firm Shares are not
made within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case which does not result in termination of this Agreement, either you or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. If, on an Option Closing Date, any Underwriter or Underwriters
shall fail or refuse to purchase Additional Shares and the aggregate number of
Additional Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Additional Shares to be purchased on such
date, the non-defaulting Underwriters shall have the option to (i) terminate
their obligation hereunder to purchase such Additional Shares or (ii) purchase
not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase on such date in the absence
of such default. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of any such
Underwriter under this Agreement.
SECTION 11. Miscellaneous. Notices given pursuant to any
provision of this Agreement shall be addressed as follows: (i) if to the
Company, to Emmis Communications Corporation, 40 Monument Circle, 7th Floor,
Indianapolis, Indiana 46204, Attention: Scott Enright and (ii) if to any
Underwriter or to you, to you c/o Donaldson, Lufkin & Jenrette Securities
Corporation, 277 Park Avenue, New York, New York 10172, Attention: Syndicate
Department, or in any case to such other address as the person to be notified
may have requested in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company and the several
Underwriters set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Shares, regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, any QIU Indemnified
Party, the officers or directors of any Underwriter, any person controlling any
Underwriter, the Company, the officers or directors of the Company or any person
controlling the Company, (ii) acceptance of the Shares and payment for them
hereunder and (iii) termination of this Agreement.
If for any reason the Shares are not delivered by or on behalf
of the Company as provided herein, the Company agrees to reimburse the several
Underwriters for all reasonable out-of-pocket expenses (including the reasonable
fees and disbursements of counsel) incurred by them. Notwithstanding any
termination of this Agreement, the Company shall be liable for all expenses
which they have agreed to pay pursuant to Section 5(i) hereof. The Company also
agrees to reimburse the several Underwriters, their directors and officers and
any persons controlling any of the Underwriters for any and all fees and
expenses (including, without limitation, the fees and disbursements of counsel)
incurred by them in connection with enforcing their rights hereunder (including,
without limitation, pursuant to Section 8 hereof).
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<PAGE> 27
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Underwriters, the Underwriters' directors and officers, any controlling persons
referred to herein, QIU indemnified persons, the Company's directors and the
Company's officers who sign the Registration Statement and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
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<PAGE> 28
Please confirm that the foregoing correctly sets forth the
agreement among the Company and the several Underwriters.
Very truly yours,
EMMIS COMMUNICATIONS CORPORATION
By: /s/ Norman H. Gurwitz
-------------------------------------------
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN SACHS & CO.
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Janine Shelffo
-------------------------------------
Name: Janine Shelffo
Title: Vice President
By: GOLDMAN SACHS & CO.
By: /s/ Goldman Sachs & Co.
-------------------------------------
Name:
Title:
28
<PAGE> 29
SCHEDULE I
<TABLE>
<CAPTION>
Number of Firm Shares
Underwriters to be Purchased
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation.......................... 1,375,000
Goldman Sachs & Co........................................................... 625,000
Deutsche Bank Securities Inc................................................. 250,000
Morgan Stanley & Co. Incorporated............................................ 250,000
............................................................................. ---------
Total................... 2,500,000
</TABLE>
<PAGE> 30
SCHEDULE II
STOCKHOLDERS SUBJECT TO LOCK-UP AGREEMENT
Susan B. Bayh
Walter Z. Berger
Randall D. Bongarten
Richard F. Cummings
Norman H. Guwirtz
Gary L. Kaseff
Richard A. Leventhal
Greg A. Nathanson
Doyle L. Rose
Frank V. Sica
Jeffrey H. Smulyan
Lawrence B. Sorrel
<PAGE> 31
SCHEDULE III
SUBSIDIARIES
Corporations
Emmis DAR, Inc.
Emmis International Corporation
Emmis License Corporation
Emmis International Broadcasting Corporation
Emmis Television License Corporation of Honolulu
KPWR, Inc.
KPWR License, Inc.
Emmis FM Broadcasting Corporation of St. Louis
Emmis FM License Corporation of St. Louis
Emmis Meadowlands Corporation
Mediatex Communications Corporation
Mediatex Development Corporation
Emmis Pledge Corporation
Emmis Publishing Corporation
Radio Hungaria Co., Ltd. (54% equity interest only)
Emmis 1380 AM Radio Corporation of St. Louis
Texas Monthly, Inc.
Emmis Television License Corporation of Mobile
Emmis 104.1 FM Radio Corporation of St. Louis
Emmis 104.1 FM Radio License Corporation of St. Louis
Emmis FM Broadcasting Corporation of Indianapolis
Emmis FM License Corporation of Indianapolis
Emmis Television License Corporation of Cape Coral
Emmis AM Radio Corporation of Indianapolis
Emmis AM Radio License Corporation of Indianapolis
Emmis 106.5 FM Broadcasting Corporation of St. Louis
Emmis 106.5 FM License Corporation of St. Louis
Emmis FM Broadcasting Corporation of Chicago
Emmis FM License Corporation of Chicago
Emmis Television License Corporation of Green Bay
Emmis FM Radio Corporation of Indianapolis
Emmis FM Radio License Corporation of Indianapolis
Emmis FM Holding Corporation of New York
Emmis 101.9 FM Radio Corporation of New York
Emmis Broadcasting Corporation of New York
Emmis License Corporation of New York
Emmis Radio Corporation of New York
Emmis Radio License Corporation of New York
Emmis 1480 AM Radio License Corporation of Terre Haute
Emmis Television License Corporation of Terre Haute
<PAGE> 32
Emmis 99.9 FM Radio License Corporation of Terre Haute
Emmis 1310 AM Radio Corporation of Indianapolis
Emmis 1310 AM Radio License Corporation of Indianapolis
Emmis 105.7 FM Radio Corporation of Indianapolis
Emmis 105.7 FM Radio License Corporation of Indianapolis
Emmis Television License Corporation of New Orleans
Emmis 105.5 FM Radio License Corporation of Terre Haute
Big Hit Marketing, Inc.
Emmis Television License Corporation of Orlando
Emmis Latin America Broadcasting Corporation
Emmis South America Broadcasting Corporation
Emmis Argentina Broadcasting, S.A.
Emmis Buenos Aires Broadcasting, S.A.
Partnerships and Limited Liability Companies
- --------------------------------------------
Emmis Indiana Broadcasting, L.P.
Emmis Publishing, L.P.
Emmis Television Broadcasting, L.P.
1050, L.P. (Emmis Meadowlands is a 50% limited partner)
Duncan American Radio, LLC (40% equity interest only)
Country Sampler Stores, LLC (51% equity interest
only)
2
<PAGE> 33
SCHEDULE IV
Licenses Subsidiaries and Stations
- --------------------------------------------------------------------------------
Corporation Station
- --------------------------------------------------------------------------------
KPWR License, Inc. KPWR-FM
- --------------------------------------------------------------------------------
Emmis FM License Corporation of St. Louis KSHE-FM
- --------------------------------------------------------------------------------
Emmis 104.1 FM Radio License Corporation of St. Louis WXTM-FM
- --------------------------------------------------------------------------------
Emmis FM License Corporation of Indianapolis WENS-FM
- --------------------------------------------------------------------------------
Emmis AM License Corporation of Indianapolis WIBC-AM
- --------------------------------------------------------------------------------
Emmis 106.5 FM License Corporation of St. Louis WKKX-FM
- --------------------------------------------------------------------------------
Emmis FM License Corporation of Chicago WKQX-FM
- --------------------------------------------------------------------------------
Emmis FM Radio License Corporation of Indianapolis WNAP-FM
- --------------------------------------------------------------------------------
Emmis 101.9 FM Radio Corporation of New York WQCD-FM
- --------------------------------------------------------------------------------
Emmis License Corporation of New York WQHT-FM
- --------------------------------------------------------------------------------
Emmis Radio License Corporation of New York WRKS-FM
- --------------------------------------------------------------------------------
Emmis 1480 AM Radio License Corporation of Terre Haute WTHI-AM
- --------------------------------------------------------------------------------
Emmis 99.9 FM Radio License Corporation of Terre Haute WTHI-FM
- --------------------------------------------------------------------------------
Emmis 1310 AM Radio License Corporation of Indianapolis WTLC-AM
- --------------------------------------------------------------------------------
Emmis 105.7 FM Radio License Corporation of Indianapolis WTLC-FM
- --------------------------------------------------------------------------------
Emmis 105.5 FM Radio License Corporation of Terre Haute WWVF-FM
- --------------------------------------------------------------------------------
Emmis Television License Corporation of Honolulu KHON-TV
KHAW-TV
KAII-TV
- --------------------------------------------------------------------------------
Emmis Television License Corporation of Mobile WALA-TV
- --------------------------------------------------------------------------------
Emmis Television License Corporation of Cape Coral WFTX-TV
- --------------------------------------------------------------------------------
Emmis Television License Corporation of Green Bay WLUK-TV
- --------------------------------------------------------------------------------
Emmis Television License Corporation of Terre Haute WTHI-TV
- --------------------------------------------------------------------------------
Emmis Television License Corporation of New Orleans WVUE-TV
- --------------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 3
ARTICLES OF AMENDMENT
OF THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
EMMIS COMMUNICATIONS CORPORATION
The undersigned officer of EMMIS COMMUNICATIONS CORPORATION (the "Corporation"),
existing pursuant to the provisions of the INDIANA BUSINESS CORPORATION LAW
(IND. CODE SS. 23-1 ET SEQ.), AS AMENDED (the "Act") and desiring to give notice
of corporate action effectuating amendment of certain provisions of its Amended
and Restated Articles of Incorporation, certifies the following facts:
ARTICLE I - AMENDMENT
SECTION 1: The date of incorporation of the Corporation is:
JULY 17, 1986
SECTION 2: The name of the Corporation following this amendment of its Amended
and Restated Articles of Incorporation is:
EMMIS COMMUNICATIONS CORPORATION
SECTION 3: The text of the Amended and Restated Articles of Incorporation is
amended to add Exhibit A as follows:
SEE ATTACHED EXHIBIT A
This Amendment is to be effective at 12:01 a.m., Eastern Standard Time, on
October 29, 1999.
ARTICLE II-MANNER OF ADOPTION AND VOTE
SECTION 1: Action by Directors:
The Board of Directors of the Corporation duly adopted resolutions amending the
Amended and Restated Articles of Incorporation. These resolutions were adopted
at meetings duly held on September 29, 1999 and October 26, 1999, at each of
which a quorum was present.
SECTION 2: Action by Shareholders:
Pursuant to I.C. 23-1-25-2(d), the Shareholders of the Corporation were not
required to vote with respect to this amendment to the Amended and Restated
Articles of Incorporation.
SECTION 3: Compliance with legal requirements:
The manner of the adoption of the Articles of Amendment and the vote by which
they were adopted constitute full legal compliance with the provisions of the
Act, the Amended and Restated Articles of Incorporation, and the Code of By-Laws
of the Corporation.
I hereby verify, subject to penalties for perjury, that the facts
contained herein are true this 28th day of October, 1999.
/s/ J. Scott Enright
--------------------------------------------
J. Scott Enright
Vice President and Associate General Counsel
<PAGE> 2
EXHIBIT A
EXHIBIT A
TO THE AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
EMMIS COMMUNICATIONS CORPORATION
Pursuant to the authority expressly granted to and vested in the Board of
Directors of the Corporation by the provisions of Article VIII, Section 8.01 of
the Corporation's Amended and Restated Articles of Incorporation, as amended
from time to time (the "Articles of Incorporation"), and pursuant to I.C.
23-1-25-2, the Board of Directors hereby creates a series of preferred stock of
the Corporation with the following voting powers, designations, preferences and
relative, participating, optional or other special rights, and qualifications,
limitations or restrictions thereof (in addition to the provisions set forth in
the Articles of Incorporation which are applicable to the preferred stock of all
classes and series):
1. Designation, Amount and Ranking.
1.1 There shall be created from the 10,000,000 shares of
preferred stock, par value $0.01 per share, of the Corporation authorized to be
issued pursuant to the Articles of Incorporation, a series of preferred stock,
designated as the "6.25% Series A Cumulative Convertible Preferred Stock," par
value $0.01 per share (the "Preferred Stock"), and the number of shares of such
series shall be 2,875,000. Such number of shares may be decreased by resolution
of the Board of Directors; provided that no decrease shall reduce the number of
shares of Preferred Stock to a number less than that of the shares of Preferred
Stock then outstanding plus the number of shares issuable upon exercise of
options or rights then outstanding and, if any portion of the over-allotment
option granted by the Corporation pursuant to the Purchase Agreement (as defined
in this Exhibit A) expires unexercised, the Board of Directors shall by
resolution decrease the number of authorized shares of Preferred Stock by the
number of shares subject to the expired portion of such over-allotment option.
Any shares of Preferred Stock issued after the Issue Date (as defined in this
Exhibit A) pursuant to the over-allotment option granted by the Corporation
pursuant to the Purchase Agreement shall, for all purposes, including, without
limitation, voting and dividend rights, be deemed issued as of the Issue Date.
1.2 The Preferred Stock, with respect to dividend
distributions upon the liquidation, winding-up and dissolution of the
Corporation, ranks:
(a) senior to all classes of the Corporation's common
stock and to each other class of capital stock or series of preferred stock
established after the Issue Date by the Board of Directors, the terms of which
do not expressly provide that it ranks senior to or on a parity with the
Preferred Stock as to dividend distributions and distributions upon the
liquidation, winding-up and dissolution of the Corporation;
(b) ratably with any class of capital stock or series of
preferred stock issued by the Corporation established after the Issue Date by
the Board of Directors, the terms of which expressly provide that such class or
series will rank on a parity with the Preferred Stock as to dividend
distributions and distributions upon the liquidation, winding-up and dissolution
of the Corporation; and
(c) subject to certain conditions which include the
affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding Preferred Stock, junior to each class of capital stock or series of
preferred stock issued by the Corporation established after the Issue Date by
the Board of Directors, the terms of which expressly provide that such class or
series will rank senior the Preferred Stock as to dividend distributions and
distributions upon liquidation, winding-up and dissolution of the Corporation.
2. Definitions. As used in this Exhibit A, the following terms
shall have the following meanings:
A-2
<PAGE> 3
2.1 "Accrued Dividends" shall mean, with respect to any share
of Preferred Stock, as of any date, the accrued and unpaid dividends on such
share from and including the most recent Dividend Payment Date (or the Issue
Date, if such date is prior to the first Dividend Payment Date) to but not
including such date. "Accumulated Dividends" shall mean, with respect to any
share of Preferred Stock, as of any date, the aggregate accumulated and unpaid
dividends on such share from the Issue Date until the most recent Dividend
Payment Date prior to such date. There shall be no Accumulated Dividends with
respect to any share of Preferred Stock prior to the first Dividend Payment
Date.
2.2 "Business Day" shall mean any day other than a Saturday,
Sunday or other day on which commercial banks in The City of New York are
authorized or required by law or executive order to close.
2.3 "Change of Control" shall mean any of the following
events: (i) the sale, lease or transfer, in one or a series of related
transactions, of all or substantially all of the Corporation's assets to any
"person or group," as such terms are used in Section 13(d)(3) of the Exchange
Act other than to Permitted Holders; (ii) the adoption of a plan relating to the
liquidation or dissolution of the Corporation; (iii) the acquisition, directly
or indirectly, by any person or group, as such terms are used in Section
13(d)(3) of the Exchange Act as in effect on the original date of issuance of
the Preferred Stock, other than Permitted Holders, of beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act as in effect on the original date
of issuance of the convertible preferred stock, except that a person will be
deemed to have beneficial ownership of all shares that any such person has the
right to acquire, whether such right is exercisable immediately or only after
passage of time) of more than 50% of the Corporation's total outstanding voting
stock; provided, however, that the Permitted Holders beneficially own (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the
issue date), directly or indirectly, in the aggregate a lesser percentage of the
total voting power of the Corporation's voting stock than such other person and
do not have the right or ability by voting power, contract or otherwise to elect
or designate for election a majority of the Corporation's Board of Directors; or
(iv) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Corporation's Board of Directors,
together with any new directors whose election by such Board of Directors or
whose nomination for election by the Corporation's shareholders was approved by
a vote of 66 2/3% of the Corporation's Board of Directors then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority of the Corporation's Board of Directors then in office.
2.4 "Change of Control Date" shall mean the date on which the
Change of Control event occurs.
2.5 "Conversion Price" shall mean $78.125, subject to
adjustment as set forth in Section 9(c).
2.6 "Class A Common Stock" shall mean the Class A Common
Stock, par value $0.01 per share, of the Corporation, or any other class of
stock resulting from successive changes or reclassifications of such common
stock consisting solely of changes in par value, or from par value to no par
value, or as a result of a subdivision, combination, or merger, consolidation or
similar transaction in which the Corporation is a constituent corporation.
2.7 "Class B Common Stock" shall mean the Class B Common Stock
par value $0.01 per share, of the Corporation.
2.8 "Common Stock" shall mean both the Class A Common Stock
and the Class B Common Stock of the Corporation.
2.9 "Dividend Payment Date" shall mean January 15, April 15,
July 15 and October 15 of each year, commencing January 15, 2000.
A-3
<PAGE> 4
2.10 "Dividend Record Date" shall mean, with respect to each
Dividend Payment Date, a date not more than 60 days nor less than 10 days
preceding a Dividend Payment Date, as may be fixed by the Board of Directors.
2.11 "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
2.12 "Issue Date" shall mean October 26, 1999, the original
date of issuance of the Preferred Stock.
2.13 "Liquidation Preference" shall mean, with respect to each
share of Preferred Stock, $50.
2.14 "Market Capitalization" shall mean as of a given date the
product of the Market Value so of such date times the total number of shares of
Common Stock outstanding as of such date.
2.15 "Market Value" shall mean as of a given date the average
closing price of the Class A Common Stock for a ten consecutive trading day
period, ending on the last trading day immediately preceding such date, on the
Nasdaq Stock Market or any national securities exchange or authorized quotation
system on which the Corporation's Class A Common Stock is listed or authorized
for quotation, or if the Class A Common Stock is not so listed or authorized for
quotation, an amount determined in good faith by the Board of Directors to be
the fair value of the Class A Common Stock.
2.16 "Permitted Holders" means Jeffrey H. Smulyan, his spouse,
lineal descendants and ascendants, heirs, executors or other legal
representatives and any trusts or other entities established by or for the
benefit of any of the foregoing or established by any of the foregoing for
charitable purposes, or any other person or entity in which the foregoing
persons or entities exercise control.
2.17 "Person" shall mean any individual, corporation, general
partnership, limited partnership, limited liability partnership, joint venture,
association, joint-stock company, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.
2.18 "Purchase Agreement" shall mean that certain Purchase
Agreement with respect to the Preferred Stock, dated as of October 26, 1999
among the Corporation, Donaldson, Lufkin & Jenrette Securities Corporation and
Goldman, Sachs & Co.
3. Dividends.
3.1 The holders of shares of the outstanding Preferred Stock
shall be entitled, when, as and if declared by the Board of Directors out of
funds legally available therefor, to receive cumulative annual cash dividends at
a rate per annum equal to 6.25% (the "Dividend Rate") of the Liquidation
Preference, payable quarterly in arrears. Dividends payable for each full
dividend period will be computed by dividing the Dividend Rate by four and shall
be payable in arrears on each Dividend Payment Date for the quarterly period
ending immediately prior to such Dividend Payment Date, to the holders of record
of Preferred Stock at the close of business on the Dividend Record Date
applicable to such Dividend Payment Date. Such dividends shall be cumulative
from the Issue Date and shall accrue on a day-to-day basis, whether or not
earned or declared, from and after the Issue Date. Dividends on the Preferred
Stock which are not declared and paid when due will compound quarterly on each
Dividend Payment Date at the Dividend Rate. Dividends payable for any partial
dividend period shall be computed on the basis of actual days elapsed over a
360-day year consisting of twelve 30-day months. Notwithstanding anything in
this Exhibit A to the contrary, the initial Dividend Payment Date, which shall
be for dividends accrued during the period commencing on the Issue Date and
ending on January 15, 2000, will be January 15, 2000.
A-4
<PAGE> 5
3.2 Dividends paid on the Preferred Stock shall be payable in
cash.
3.3 No dividends or other distributions (other than a dividend
or distribution payable solely in stock of the Corporation ranking junior to or
ratably with the Preferred Stock as to dividends and upon liquidation,
dissolution or winding up and cash in lieu of fractional shares) may be
declared, made or paid or set apart for payment on the Common Stock or upon any
other stock of the Corporation ranking junior to or ratably with the Preferred
Stock as to dividends, and no Common Stock or any other stock of the Corporation
ranking junior to or ratably with the Preferred Stock as to dividends or upon
liquidation, dissolution or winding up, may be redeemed, purchased or otherwise
acquired for any consideration (or any money paid to or made available for a
sinking fund for the redemption of any shares of any such stock) by the
Corporation (except by conversion into or exchange for stock of the Corporation
ranking junior to or ratably with the Preferred Stock as to dividends and upon
liquidation dissolution or winding up), unless full Accumulated Dividends shall
have been or contemporaneously are paid or declared and a sum sufficient for the
payment thereof is set apart for such payment on the Preferred Stock for all
Dividend Payment Periods terminating on or prior to the date of such
declaration, payment, redemption, purchase or acquisition. Notwithstanding the
foregoing, if full dividends have not been paid to the holders of the Preferred
Stock and on any other preferred stock ranking ratably with the Preferred Stock
as to dividends, dividends may be declared and paid on the Preferred Stock and
such other ratable preferred stock, only so long as the dividends are declared
and paid pro rata so that the amounts of dividends declared per share on the
Preferred Stock and such other ratable preferred stock will in all cases bear to
each other the same ratio that, immediately prior to payment of the dividend on
such other ratable stock, Accumulated and Accrued Dividends per share of the
Preferred Stock and accrued and unpaid dividends per share of such other ratable
preferred stock bear to each other.
3.4 Holders of shares of Preferred Stock shall not be entitled
to any dividends on the Preferred Stock, whether payable in cash, property or
stock in excess of full cumulative dividends at the Dividend Rate provided in
this Exhibit A. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on the Preferred Stock
which may be in arrears.
3.5 The holders of shares of Preferred Stock at the close of
business on a Dividend Record Date will be entitled to receive the dividend
payment on those shares (except that holders of shares called for redemption on
a redemption date between the Dividend Record Date and the Dividend Payment Date
will be entitled to receive such dividend on such redemption date on the
corresponding Dividend Payment Date notwithstanding the subsequent conversion
thereof or the Corporation's default in payment of the dividend due on that
Dividend Payment Date.
A-5
<PAGE> 6
4 Optional Redemption.
4.1 The Preferred Stock is not subject to any sinking fund or
other similar provisions. From April 15, 2001 to October 15, 2002, the
Corporation may redeem Preferred Stock (the "Provisional Redemption") at a
redemption premium equal to 104.911% of the Liquidation Preference plus
Accumulated Dividends, if any, whether or not declared to the redemption date
(the "Provisional Redemption Date"), if the closing price of the Corporation's
Class A Common Stock on the Nasdaq Stock Market, or any national securities
exchange or authorized quotation system on which the Corporation's Class A
Common Stock is then listed or authorized for quotation, if not so listed, is
greater than 150% of the Conversion Price ($117.1875), as hereafter defined in
this Exhibit A, per share for 20 trading days within any 30 consecutive trading
day period. If the Corporation undertakes a Provisional Redemption, holders of
Preferred Stock that the Corporation calls for redemption will also receive a
payment (the "Additional Payment") in an amount equal to the present value of
the aggregate value of the dividends (whether or not declared) that would
thereafter have been payable on the Preferred Stock called for redemption from
the Provisional Redemption Date to October 15, 2002 (the "Additional Period").
The present value will be calculated using as the discount rate the bond
equivalent yield on U.S. Treasury notes or bills having the term nearest in
length to that of the Additional Period, calculated as of the day immediately
preceding the date on which a notice of Provisional Redemption is mailed. The
Corporation will be obligated to make the Additional Payment on all shares of
Preferred Stock that the Corporation has called for the Provisional Redemption
whether or not those shares of Preferred Stock that the Corporation has called
are converted prior to the Provisional Redemption Date.
4.2 Beginning on October 15, 2002, the Corporation may redeem
in cash the Preferred Stock, during the twelve-month periods commencing on
October 15 of the years indicated below, at the following redemption premiums
(which are expressed as a percentage of the stated liquidation preference of $50
per share), plus in each case Accrued Dividends and Accumulated Dividends, if
any, whether or not declared to the redemption date:
Year Amount
---- --------
2002................. 103.571%
2003................. 102.679%
2004................. 101.786%
2005................. 100.893%
2006................. 100.000%
5. Procedure for Redemption.
5.1 Not less than 30 nor more than 60 days previous to the
date fixed for redemption by the Board of Directors, a notice specifying the
time and place thereof shall be given to the holders of record of the Preferred
Stock to be redeemed by first class mail at their respective addresses as the
same shall appear on the books of the Corporation; provided, however, that no
failure to mail such notice, nor any defect therein, nor in the mailing thereof,
shall affect the validity of the proceedings for the redemption of any of the
Preferred Stock to be redeemed. Upon the redemption date, the Corporation shall
pay over the redemption price to the holders of the shares upon the endorsement
and surrender of the certificates for such shares by the holders of the
Preferred Stock.
A-6
<PAGE> 7
5.2 On or before any redemption date, each holder of shares of
Preferred Stock to be redeemed shall surrender the certificate or certificates
representing such shares of Preferred Stock to the Corporation, in the manner
and at the place designated in the notice of redemption and on the redemption
date, the full redemption price, payable in cash, for such shares of Preferred
Stock shall be paid or delivered to the person whose name appears on such
certificate or certificates as the owner thereof, and the shares represented by
each surrendered certificate shall be returned to authorized but unissued shares
of preferred stock of any or no series. Upon surrender (in accordance with the
notice of redemption) of the certificate or certificates representing any shares
to be so redeemed (properly endorsed or assigned for transfer, if the
Corporation shall so require and the notice of redemption shall so state), such
shares shall be redeemed by the Corporation at the redemption price. If fewer
than all the shares represented by any such certificate are to be redeemed, a
new certificate shall be issued representing the unredeemed shares, without
costs to the holder thereof, together with the amount of cash, if any, in lieu
of fractional shares.
5.3 If a notice of redemption shall have been given as
provided in Section 5.1, dividends on the shares of Preferred Stock so called
for redemption shall cease to accrue, such shares shall no longer be deemed to
be outstanding, and all rights of the holders thereof as stockholders of the
Corporation with respect to shares so called for redemption (except for the
right to receive from the Corporation the redemption price) shall cease
(including any right to receive dividends otherwise payable on any Dividend
Payment Date that would have occurred after the time and date of redemption)
either (i) from and after the time and date fixed in the notice of redemption as
the time and date of redemption (unless the Corporation shall default in the
payment of the redemption price, in which case such rights shall not terminate
at such time and date) or (ii) if the Corporation shall so elect and state in
the notice of redemption, from and after the time and date (which date shall be
the date fixed for redemption or an earlier date not less than 30 days after the
date of mailing of the redemption notice) on which the Corporation shall
irrevocably deposit in trust for the holders of the shares of Preferred Stock to
be redeemed with a designated bank or trust company doing business in the State
of New York, as paying agent, money sufficient to pay at the office of such
paying agent, on the redemption date, the redemption price. Any money so
deposited with any such paying agent which shall not be required for such
redemption shall be returned to the Corporation forthwith. Subject to applicable
escheat laws, any moneys so set aside by the Corporation and unclaimed at the
end of one year from the redemption date shall revert to the general funds of
the Corporation, after which reversion the holders of such shares so called for
redemption shall look only to the general funds of the Corporation for the
payment of the redemption price without interest. Any interest accrued on funds
so deposited shall be paid to the Corporation from time to time.
5.4 In the event that fewer than all the outstanding shares of
the Preferred Stock are to be redeemed, the shares to be redeemed will be
determined pro rata or by lot. From and after the applicable redemption date,
unless the Corporation defaults in the payment of the redemption price,
dividends on the shares of Preferred Stock to be redeemed on such redemption
date will cease to accrue, said shares will no longer be deemed to be
outstanding, and all rights of the holders thereof as the Corporation's
shareholders (except the right to receive the redemption price) will cease.
5.5 The Corporation shall not redeem any shares of Preferred
Stock if any dividends on the Preferred Stock are in arrears unless all
dividends on the Preferred Stock in arrears are paid in full.
A-7
<PAGE> 8
6. Change of Control.
6.1 Upon the occurrence of a Change of Control of the
Corporation, holders of Preferred Stock will, if the Market Value as of the
Change of Control Date is less than the Conversion Price, have a one-time option
(the "Change of Control Option") to convert all of their outstanding shares of
Preferred Stock into shares of the Corporation's Class A Common Stock at a
conversion price equal to the greater of (i) the Market Value as of the Change
of Control Date; or (ii) 66.67% of the market price per share of the
Corporation's Class A Common Stock at the close of trading on the date of
issuance of the Preferred Stock. The Change of Control Option will be
exercisable during a period of not less than 30 days nor more than 60 days
commencing on the third business day after notice of the Change of Control is
given by the Corporation. In lieu of issuing the shares of the Corporation's
Class A Common Stock issuable upon conversion in the event of a Change of
Control, the Corporation may, at its option, make a cash payment equal to the
Market Value as of the Change of Control Date of such Class A Common Stock
otherwise issuable.
6.2 In the event of a Change of Control, notice of such Change
of Control shall be given, within five Business Days of the Change of Control
Date, by the Corporation by first class mail to each record holder of shares of
Preferred Stock, at such holder's address as the same appears on the books of
the Corporation. Each such notice shall state (i) that a Change of Control has
occurred; (ii) the last day on which the Change of Control Option may be
exercised (the "Expiration Date"); (iii) the name and address of the paying
agent; and (iv) the procedures that holders must follow to exercise the Change
of Control Option.
6.3 On or before the Expiration Date, each holder of shares of
Preferred Stock wishing to exercise the Change of Control Option shall surrender
the certificate or certificates representing the shares of Preferred Stock to be
converted, in the manner and at the place designated in the notice described in
Section 6.2, and on such date the cash or shares of Class A Common Stock due to
such holder shall be delivered to the person whose name appears on such
certificate or certificates as the owner thereof and each surrendered
certificate shall be returned to authorized but unissued shares. Upon surrender
(in accordance with the notice described in Section 6.2) of the certificate or
certificates representing any shares to be so converted (properly endorsed or
assigned for transfer, if the Corporation shall so require and the notice shall
so state), such shares shall be converted by the Corporation at the Conversion
Price.
6.4 The rights of holders of Preferred Stock pursuant to this
Section 6 are in addition to, and not in lieu of, the rights of holders of
Preferred Stock provided for in Section 9 in this Exhibit A.
7. Voting.
7.1 The shares of Preferred Stock shall have no voting rights
except as required by law or as set forth in this Section 7. increase or
decrease the aggregate number of authorized shares of the class of preferred
stock;
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<PAGE> 9
7.2 If the dividends payable on the Preferred Stock are in
arrears for six consecutive quarterly periods, the holders of Preferred Stock
voting separately as a class with the shares of any other preferred stock or
preference securities having similar voting rights will be entitled at the next
regular or special meeting of the Corporation's shareholders to elect two
directors to the Corporation's Board of Directors. Such voting rights and terms
of the directors so elected continue until such time as the dividend arrearage
on the Preferred Stock has been paid in full.
7.3 The affirmative vote or consent of the holders of at least
66 2/3% of the outstanding Preferred Stock will be required for the issuance of
any class or series of stock, or security convertible into the Corporation's
stock, ranking senior to the Preferred Stock as to dividends, liquidation rights
or voting rights and for amendments to the Corporation's Articles of
Incorporation that would adversely affect the rights of holders of the Preferred
Stock; provided, however, that any issuance of shares of preferred stock which
rank ratably with the Preferred Stock (including the issuance of additional
shares of the Preferred Stock) will not, by itself, be deemed to adversely
affect the rights of the holders of the Preferred Stock. In all such cases, each
share of Preferred Stock will be entitled to one vote.
8. Liquidation Rights.
8.1 In the event of any dissolution, voluntary or involuntary
liquidation or winding-up of the Corporation, the holders of the shares of
Preferred Stock shall be entitled to receive and to be paid out of the assets of
the Corporation available for distribution to stockholders, before any payment
or distribution is made to holders of the Corporation's Common Stock or any
other class or series of stock of the Corporation ranking junior to the
Preferred Stock upon liquidation, the Liquidation Preference plus Accumulated
Dividends, if any, with respect to each share.
8.2 Neither the sale, conveyance, exchange or transfer (for
cash, shares of stock, securities or other consideration) of all or
substantially all the property and assets of the Corporation nor the merger or
consolidation of the Corporation into or with any other corporation, or the
merger or consolidation of any other corporation into or with the Corporation,
shall be deemed to be a dissolution, voluntary or involuntary liquidation or
winding up, for the purposes of this Section 8.
8.3 After the payment to the holders of the shares of
Preferred Stock of full preferential amounts provided for in this Section 8, the
holders of Preferred Stock as such shall have no right or claim to any of the
remaining assets of the Corporation.
8.4 If upon any voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, the amounts payable with respect
to the Liquidation Preference and Accumulated Dividends on the Preferred Stock
and any other shares of the Corporation's stock ranking as to any distribution
ratably with the Preferred Stock are not paid in full, the holders of the
Preferred Stock and of such other shares will share pro rata in proportion to
the Liquidation Preference plus Accumulated Dividends thereon.
9. Conversion.
(a) Subject to compliance with the provisions of this
Section 9, each outstanding share of the Preferred Stock shall be convertible at
any time at the option of the holder into that number of whole shares of the
Corporation's Class A Common Stock as is equal to the Liquidation Preference,
divided by an initial conversion price of $78.125, equivalent to 0.6400 shares
of Class A Common Stock per share of Preferred Stock, subject to adjustment as
described in Section 9(c). The initial conversion price and the conversion price
as adjusted are referred to in this Exhibit A as the Conversion Price. A share
of Preferred Stock called for redemption will be convertible into shares of
Class A Common Stock up to and including, but not after, the close of business
on the date fixed for redemption unless the Corporation defaults in the payment
of the amount payable upon redemption.
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To exercise the conversion right, the holder of each share of
Preferred Stock to be converted shall surrender the Certificate representing
such share, if certificated, duly endorsed or assigned to the Corporation or in
blank, at the office of the transfer agent, together with written notice of the
election to convert executed by the holder (the "Conversion Notice") specifying
the number of shares of Preferred Stock to be converted, the name in which the
shares of Class A Common Stock deliverable upon conversion shall be registered,
and the address of the named person. If the shares of Preferred Shares are not
certificated, the holder must deliver evidence of ownership satisfactory to the
Corporation and the transfer agent. Unless the shares of Class A Common Stock
deliverable upon conversion are to be issued in the same name as the name in
which the shares of Preferred Stock to be converted are registered, the holder
must also deliver to the transfer agent an instrument of transfer, in form
satisfactory to the Corporation, duly executed by the holder or the holder's
duly authorized attorney, together with an amount sufficient to pay any transfer
or similar tax in connection with the issuance and delivery of such shares of
Class A Common Stock in such name (or evidence reasonably satisfactory to the
Corporation demonstrating that such taxes have been paid).
As promptly as practicable after compliance with the
provisions of the foregoing paragraph, the Corporation shall deliver or cause to
be delivered at the office where such certificates are surrendered to or upon
the written order of the holder thereof a certificate or certificates
representing the number of shares of Class A Common Stock into which such
Preferred Stock may be converted in accordance with the provisions of this
Section 9, registered in such name or names as are duly specified in the
Conversion Notice. Such conversion shall be deemed to have been effected at the
close of business on the date the holder has complied with the provisions of the
foregoing paragraph, and the rights with respect to the shares of Preferred
Stock so converted, including the rights, if any, to receive notices, will
terminate at that time, except only (i) the rights of holders of such shares of
Preferred Stock to receive certificates for the number of shares of Class A
Common Stock into which such shares of Preferred Stock have been converted; and
(ii) the right of holders of such shares of the Preferred Stock at the close of
business on a Dividend Record Date to receive, on the corresponding Dividend
Payment Date, the dividend declared on such shares for payment on such Dividend
Payment Date.
If the last day for the exercise of the conversion right shall
not be a Business Day, then such conversion right may be exercised on the next
preceding Business Day.
(b) Upon and after conversion of shares of the Preferred
Stock, the Corporation shall have no obligation to pay any undeclared
Accumulated Dividends or Accrued Dividends.
(c) The Conversion Price shall be subject to adjustment as
follows:
(i) In case the Corporation shall at any time or from
time to time make a redemption payment or pay a dividend or make another
distribution payable in shares of the Corporation's Common Stock to all holders
of any class of the Corporation's capital stock, other than the issuance of
shares of Class A Common Stock in connection with the conversion of Preferred
Stock, then, the Conversion Price in effect immediately prior to such event
shall be adjusted (and any other appropriate actions shall be taken by the
Corporation) so that the holder of any share of Preferred Stock thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Class A Common Stock that such holder would have owned or would have been
entitled to receive upon or by reason of any of the events described above, had
such share of Preferred Stock been converted into shares of Class A Common Stock
immediately prior to the occurrence of such event. An adjustment made pursuant
to this Section 9(c)(i) shall become effective retroactively in the case of any
such dividend or distribution, to the day immediately following the close of
business on the record date for the determination of holders of Common Stock
entitled to receive such dividend or distribution.
(ii) In case the Corporation shall at any time or from
time to time issue to all holders of its Common Stock rights, options or
warrants entitling the holders thereof to subscribe for or purchase shares of
Common Stock (or securities convertible into or exchangeable for shares of
Common Stock) at a price per share less than the Market Value as of the record
date of such issuance (treating the price per share of any security
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convertible or exchangeable or exercisable into Common Stock as equal to (A) the
sum of the price paid to acquire such security convertible, exchangeable or
exercisable into Common Stock plus any additional consideration payable (without
regard to any anti-dilution adjustments) upon the conversion, exchange or
exercise of such security into Common Stock divided by (B) the number of shares
of Common Stock into which such convertible, exchangeable or exercisable
security is initially convertible, exchangeable or exercisable), other than (I)
issuances of such rights, options or warrants if the holder of Preferred Stock
would be entitled to receive such rights, options or warrants upon conversion at
any time of shares of Preferred Stock, or if such rights, options, and warrants
have expired or been redeemed by the Corporation prior to conversion and (II)
issuances that are subject to certain triggering events (until such time as such
triggering events occur), then, the Conversion Price then in effect shall be
adjusted by dividing the Conversion Price in effect on the day immediately prior
to the record date of such issuance by a fraction (y) the numerator of which
shall be the sum of the number of shares of Common Stock outstanding on such
record date plus the number of additional shares of Common Stock issued or to be
issued upon or as a result of the issuance of such rights, options or warrants
(or the maximum number into or for which such convertible or exchangeable
securities initially may convert or exchange or for which such options, warrants
or other rights initially may be exercised) and (z) the denominator of which
shall be the sum of the number of shares of Common Stock outstanding on such
record date plus the number of shares of Common Stock which the aggregate
consideration for the total number of such additional shares of Common Stock so
issued (or into or for which such convertible or exchangeable securities may
convert or exchange or for which such options, warrants or other rights may be
exercised plus the aggregate amount of any additional consideration initially
payable upon the conversion, exchange or exercise of such security) would
purchase at the Market Value as of such record date; provided, that if the
Corporation distributes rights or warrants (other than those referred to above
in this subparagraph (c)(ii)) pro rata to the holders of Common Stock, so long
as such rights or warrants have not expired or been redeemed by the Corporation,
(y) the holder of any Preferred Stock surrendered for conversion shall be
entitled to receive upon such conversion, in addition to the shares of Class A
Common Stock then issuable upon such conversion (the "Conversion Shares"), a
number of rights or warrants to be determined as follows: (i) if such conversion
occurs on or prior to the date for the distribution to the holders of rights or
warrants of separate certificates evidencing such rights or warrants (the
"Distribution Date"), the same number of rights or warrants to which a holder of
a number of shares of Class A Common Stock equal to the number of Conversion
Shares is entitled at the time of such conversion in accordance with the terms
and provisions applicable to the rights or warrants and (ii) if such conversion
occurs after the Distribution Date, the same number of rights or warrants to
which a holder of the number of shares of Class A Common Stock into which such
Preferred Stock was convertible immediately prior to such Distribution Date
would have been entitled on such Distribution Date had such Preferred Stock been
converted immediately prior to such Distribution Date in accordance with the
terms and Provisions applicable to the rights and warrants, and (z) the
Conversion Price shall not be subject to adjustment on account of any
declaration, distribution or exercise of such rights or warrants.
(iii) In case the Corporation shall at any time or
from time to time subdivide the outstanding shares of Common Stock into a larger
number of shares, combine the outstanding shares of Common Stock into a smaller
number of shares, or issue any shares of its capital stock in a reclassification
of the Common Stock, then, the Conversion Price in effect immediately prior to
such event shall be adjusted (and any other appropriate actions shall be taken
by the Corporation) so that the holder of any share of Preferred Stock
thereafter surrendered for conversion shall be entitled to receive the number of
shares of Common Stock that such holder would have owned or would have been
entitled to receive upon or by reason of any of the events described above, had
such share of Preferred Stock been converted into shares of Class A Common Stock
immediately prior to the occurrence of such event. An adjustment made pursuant
to this Section 9(c)(iii) shall become effective retroactively in the case of
any such subdivision, combination, or reclassification, to the close of business
on the date upon which such corporate action becomes effective.
(iv) In case the Corporation shall at any time or from
time to time pay a dividend or distribute to all holders of shares of the
Corporation's Common Stock (other than a dividend or distribution subject to
9(c)(ii)) pursuant to any shareholder rights plan, "poison pill" or similar
arrangement and excluding regular dividends and distributions paid exclusively
in cash and dividends payable upon the Preferred
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Stock, then, the Conversion Price in effect immediately prior to such event
shall be adjusted (and any other appropriate actions shall be taken by the
Corporation) so that the holder of any share of Preferred Stock thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Class A Common Stock that such holder would have owned or would have been
entitled to receive upon or by reason of any of the events described above, had
such share of Preferred Stock been converted into shares of Class A Common Stock
immediately prior to the occurrence of such event. An adjustment made pursuant
to this Section 9(c)(iv) shall become effective retroactively in the case of any
such dividend or distribution, to the day immediately following the close of
business on the record date for the determination of holders of Common Stock
entitled to receive such dividend or distribution.
(v) In case the Corporation shall at any time or from
time to time (A) make a distribution to all holders of shares of its Common
Stock consisting exclusively of cash (excluding any cash portion of
distributions referred to in paragraph (iv) above, or cash distributed upon a
merger or consolidation to which (B) of this paragraph below applies), that,
when combined together with (x) all other such all-cash distributions made
within the then-preceding 12 months in respect of which no adjustment has been
made and (y) any cash and the fair market value of any other consideration paid
or payable in respect of any tender offer by the Corporation or any of its
subsidiaries for shares of Common Stock concluded within the then-preceding 12
months in respect of which no adjustment pursuant to this Section 9(c) has been
made, in the aggregate exceeds 15% of the Corporation's Market Capitalization as
of the record date of such distribution; (B) complete a tender or exchange offer
which the Corporation or any of its subsidiaries makes for shares of the
Corporation's Common Stock that involves an aggregate consideration that,
together with (x) any cash and other consideration payable in a tender or
exchange offer by the Corporation or any of its subsidiaries for shares of the
Corporation's Common Stock expiring within the then preceding 12 months in
respect of which no adjustment has been made and (y) the aggregate amount of any
such all-cash distributions referred to in (A) of this paragraph to all holders
of shares of Common Stock within the then preceding 12 months in respect of
which not adjustments have been made, exceeds 15% of the Corporation's Market
Capitalization just prior to the expiration of such tender offer; or (C) make a
distribution to all holders of its Common Stock consisting of evidences of
indebtedness, shares of its capital stock other than Common Stock or assets
(including securities, but excluding those dividends, rights, options, warrants
and distributions referred to in this Section 9(c)), then, the Conversion Price
then in effect shall be adjusted by dividing the Conversion Price in effect
immediately prior to the date of such distribution or completion of such tender
or exchange offer, as the case may be, by a fraction (x) the numerator of which
shall be the Market Value as of the record date referred to below, or, if such
adjustment is made upon the completion of a tender or exchange offer, as of the
payment date for such offer, and (y) the denominator of which shall be such
Market Value less the then fair market value (as determined by the Board of
Directors of the Corporation) of the portion of the cash, evidences of
indebtedness, securities or other assets so distributed or paid in such tender
or exchange offer, applicable to one share of Common Stock (but such denominator
not to be less than one); provided, however, that no adjustment shall be made
with respect to any distribution of rights to purchase securities of the
Corporation if the holder of shares of Preferred Stock would otherwise be
entitled to receive such rights upon Conversion at any time of shares of
Preferred Stock into shares of Class A Common Stock unless such rights are
subsequently redeemed by the Corporation, in which case such redemption shall be
treated for purposes of this Section 9(c)(v) as a dividend on the Common Stock.
Such adjustment shall be made whenever any such distribution is made or tender
or exchange offer is completed, as the case may be, and shall become effective
retroactively to a date immediately following the close of business on the
record date for the determination of stockholders entitled to receive such
distribution.
(vi) In the case the Corporation at any time or from
time to time shall take any action affecting its Common Stock (it being
understood that the issuance or sale of shares of Class A Common Stock (or
securities convertible into or exchangeable for shares of Class A Common Stock,
or any options, warrants or other rights to acquire shares of Class A Common
Stock) to any Person at a price per share less than the Conversion Price then in
effect shall not be deemed such an action), other than an action described in
any of Section 9(c)(i) through Section 9(c)(v), inclusive, or Section 9(g), then
the Conversion Price shall be adjusted in such manner and at such time as the
Board of Directors of the Corporation in good faith determines to be equitable
in the
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<PAGE> 13
circumstances (such determination to be evidenced in a resolution, a certified
copy of which shall be mailed to the holders of the Preferred Stock).
(vii) Notwithstanding anything in this Exhibit A to
the contrary, no adjustment under this Section 9(c) need be made to the
Conversion Price unless such adjustment would require an increase or decrease of
at least 1% of the Conversion Price then if effect. Any lesser adjustment shall
be carried forward and shall be made at the time of and together with the next
subsequent adjustment, if any, which, together with any adjustment or
adjustments so carried forward, shall amount to an increase or decrease of at
least 1% of such Conversion Price. Notwithstanding anything to the contrary, no
Conversion Price adjustment will be made as a result of the issuance of the
Corporation's Class A Common Stock on conversion of the Preferred Stock. Each
event requiring adjustment to the Conversion Price will require only a single
adjustment even though more than one of the foregoing adjustment clauses may be
applicable to such event.
(viii) The Corporation reserves the right to make such
reductions in the Conversion Price in addition to those required in the
foregoing provisions as it considers advisable in order that any event treated
for Federal income tax purposes as a dividend of stock or stock rights will not
be taxable to the recipients. In the event the Corporation elects to make such a
reduction in the Conversion Price, the Corporation will comply with the
requirements of Rule 14e-1 under the Exchange Act, and any other securities laws
and regulations thereunder if and to the extent that such laws and regulations
are applicable in connection with the reduction of the Conversion Price.
(d) If the Corporation shall take a record of the holders
of its Common Stock for the purpose of entitling them to receive a dividend or
other distribution, and shall thereafter (and before the dividend or
distribution has been paid or delivered to stockholders) legally abandon its
plan to pay or deliver such dividend or distribution, then thereafter no
adjustment in the Conversion Price then in effect shall be required by reason of
the taking of such record.
(e) Upon any increase or decrease in the Conversion Price,
then, and in each such case, the Corporation promptly shall deliver to each
registered holder of Preferred Stock a certificate signed by an authorized
officer of the Corporation, setting forth in reasonable detail the event
requiring the adjustment and the method by which such adjustment was calculated
and specifying the increased or decreased Conversion Price then in effect
following such adjustment.
(f) No fractional shares or scrip representing fractional
shares of Class A Common Stock shall be issued upon the conversion of any shares
of Preferred Stock. If more than one share of Preferred Stock shall be
surrendered for conversion at one time by the same holder, the number of full
shares of Class A Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate Liquidation Preference of the shares of
Preferred Stock so surrendered. If the conversion of any share or shares of
Preferred Stock results in a fraction, an amount equal to such fraction
multiplied by the last reported sale price of the Class A Common Stock on the
Nasdaq Stock Market (or on such other national securities exchange or authorized
quotation system on which the Class A Common Stock is then listed for trading or
authorized for quotation or, if the Class A Common Stock is not then so listed
or authorized for quotation, an amount determined in good faith by the Board of
Directors to be the fair value of the Class A Common Stock) at the close of
business on the trading day next preceding the day of conversion shall be paid
to such holder in cash by the Corporation.
(g) In the event of any capital reorganization or
reclassification or other change of outstanding shares of Class A Common Stock
(other than a change in par value, or from par value to no par value, or from no
par value to par value), or in the event of any consolidation or merger of the
Corporation with or into another Person (other than a consolidation or merger in
which the Corporation is the resulting or surviving Person and which does not
result in any reclassification or change of outstanding Class A Common Stock),
or in the event of any sale or other disposition to another Person of all or
substantially all of the assets of the Corporation (other than any assets not
owned directly or indirectly by the Corporation and its subsidiaries) (computed
on a consolidated
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basis) (any of the foregoing, a "Transaction"), each share of Preferred Stock
then outstanding shall, without the consent of any holder of Preferred Stock,
become convertible only into the kind and amount of shares of stock or other
securities (of the Corporation or another issuer) or property or cash receivable
upon such Transaction by a holder of the number of shares of Class A Common
Stock into which such share of Preferred Stock could have been converted
immediately prior to such Transaction after giving effect to any adjustment
event. The provisions of this Section 9(g) and any equivalent thereof in any
such certificate similarly shall apply to successive Transactions. The
provisions of this Section 9(g) shall be the sole right of holders of Preferred
Stock in connection with any Transaction and such holders shall have no separate
vote thereon.
(h) In the event of any distribution by the Corporation to
its stockholders of all or substantially all of its assets (other than any
assets not owned directly or indirectly by the Corporation and its subsidiaries)
(computed on a consolidated basis), each holder of Preferred Stock will
participate pro rata in such distribution based on the number of shares of Class
A Common Stock into which such holders' shares of Preferred Stock would have
been convertible immediately prior to such distribution.
(i) The Corporation shall at all times reserve and keep
available for issuance upon the conversion of the Preferred Stock such number of
its authorized but unissued shares of Class A Common Stock as will from time to
time be sufficient to permit the conversion of all outstanding shares of
Preferred Stock, and shall take all action required to increase the authorized
number of shares of Class A Common Stock if at any time there shall be
insufficient unissued shares of Class A Common Stock to permit such reservation
or to permit the conversion of all outstanding shares of Preferred Stock.
(j) The issuance or delivery of certificates for Class A
Common Stock upon the conversion of shares of Preferred Stock shall be made
without charge to the converting holder of shares of Preferred Stock for such
certificates or for any documentary stamp or similar issue or transfer tax in
respect of the issuance or delivery of such certificates or the securities
represented thereby, and such certificates shall be issued or delivered in the
respective names of, or in such names as may be directed by, the holders of the
shares of Preferred Stock converted; provided, however, that the Corporation
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificate in a name
other than that of the holder of the shares of Preferred Stock converted, and
the Corporation shall not be required to issue or deliver such certificate
unless or until the Person or Persons requesting the issuance or delivery
thereof shall have paid to the Corporation the amount of such tax or shall have
established to the reasonable satisfaction of the Corporation that such tax has
been paid.
10. Other Provisions.
10.1 With respect to any notice to a holder of shares of
Preferred Stock required to be provided hereunder, neither failure to mail such
notice, nor any defect therein or in the mailing thereof, to any particular
holder shall affect the sufficiency of the notice or the validity of the
proceedings referred to in such notice with respect to the other holders or
affect the legality or validity of any distribution, rights, warrant,
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding-up, or the vote upon any such action. Any notice which
was mailed in the manner provided in this Exhibit A shall be conclusively
presumed to have been duly given whether or not the holder receives the notice.
10.2 Shares of Preferred Stock issued and reacquired will be
retired and canceled promptly after reacquisition thereof and, upon compliance
with the applicable requirements of Indiana law, have the status of authorized
but unissued shares of preferred stock of the Corporation undesignated as to
series and may with any and all other authorized but unissued shares of
preferred stock of the Corporation be designated or redesignated and
issued or reissued, as the case may be, as part of any series of preferred stock
of the Corporation, except that any issuance or reissuance of shares of
Preferred Stock must be in compliance with this Certificate of Designation.
10.3 The shares of Preferred Stock shall be issuable only in
whole shares.
10.4 All notices periods referred to in this Exhibit A shall
commence on the date of the mailing of the applicable notice.
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