SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest Commission File Number 0-26076
event reported) April 7, 1998
SINCLAIR BROADCAST GROUP, INC.
(Exact name of registrant)
Maryland 52-1494660
(State of organization) (I.R.S. Employer Identification Number)
2000 West 41st Street
Baltimore, Maryland 21211
(Address of principal executive offices and zip code)
(410) 467-5005
(Registrant's telephone Number)
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ITEM 5. OTHER EVENTS
On September 16, 1997, the Securities and Exchange Commission (the
"Commission") declared effective a Registration Statement (File No. 333-12257)
on Form S-3 (the "Company Registration Statement") filed by Sinclair Broadcast
Group, Inc. (the "Company") relating to the public offering, pursuant to Rule
415 under the Securities Act of 1933, as amended (the "Securities Act"), of up
to an aggregate of $1,000,000,000 in securities of the Company. On April 7,
1998, the Company filed a Registration Statement (File No. 333-49543, on Form
S-3, (the "462(b) Registration Statement") which was immediately declared
effective pursuant to Rule 462(b) under the Securities Act increasing the amount
of securities registered under the Company Registration Statement to
$1,071,202,500. (The Company Registration Statement, the 462(b) Registration
Statement and prospectus contained therein are collectively referred to as the
"Company Prospectus.")
On November 7, 1996, the Commission declared effective a Registration
Statement (File No. 333-12255) on form S-3 (the "Stockholder Registration
Statement") filed by the Company relating to the public offering, pursuant to
Rule 415 under the Securities Act, of up to an aggregate of 5,564,253 shares of
Class A Common Stock of the Company. (The Stockholder Registration Statement and
prospectus contained therein are collectively referred to as the "Stockholder
Prospectus.")
On April 9, 1998, the Company filed with the Commission supplements
dated April 9, 1998 to the Company Prospectus and the Stockholder Prospectus
relating to the issuance and sale of 8,030,187 shares of Class A Common Stock of
the Company (the "Common Stock Supplements"). In connection with the filing of
the Common Stock Supplements with the Commission, the Company is filing certain
exhibits as part of this Form 8-K. See "Item 7. Financial Statements and
Exhibits."
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
The following exhibits are filed with this report on Form 8-K:
1.1 Underwriting Agreement dated as of April 7, 1998 by and among
the Company, the several Selling Stockholders named therein and
the several Underwriters named therein
5.1 Opinion of Wilmer, Cutler & Pickering
5.2 Opinion of Thomas & Libowitz, P.A.
23.1 Consent of Wilmer, Cutler & Pickering (included as part of
Exhibit 5.1)
23.2 Consent of Thomas & Libowitz, P.A. (included as part of Exhibit
5.2)
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SIGNATURE
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.
SINCLAIR BROADCAST GROUP, INC.
By: /s/ David B. Amy
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Name: David B. Amy
Title: Chief Financial Officer
Dated: April 9, 1998
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EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT
1.1 Underwriting Agreement dated as of April 7, 1998 by and among the
Company, the several Selling Stockholders named therein and the
several Underwriters named therein
5.1 Opinion of Wilmer, Cutler & Pickering
5.2 Opinion of Thomas & Libowitz, P.A.
23.1 Consent of Wilmer, Cutler & Pickering (included as part of Exhibit
5.1)
23.2 Consent of Thomas & Libowitz, P.A. (included as part of Exhibit 5.2)
EXHIBIT 1.1
8,030,187 Shares
SINCLAIR BROADCAST GROUP, INC.
Class A Common Stock
UNDERWRITING AGREEMENT
April 7, 1998
SALOMON SMITH BARNEY
SMITH BARNEY INC.
BT ALEX. BROWN INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
BEAR, STEARNS & CO. INC.
FURMAN SELZ LLC
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
As Representatives of the Several Underwriters
c/o SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
Sinclair Broadcast Group, Inc., a Maryland corporation (the "Company"),
proposes to issue and sell an aggregate of 6,000,000 shares of its Class A
Common Stock, par value $0.01 per share (the "Class A Common Stock" and,
together with the Company's Class B Common Stock, par value $0.01 per share, the
"Common Stock"), to the several Underwriters named in Schedule II hereto (the
"Underwriters") for whom Smith Barney Inc., BT Alex. Brown Incorporated, Credit
Suisse First Boston Corporation, Bear, Stearns & Co. Inc., Furman Selz LLC,
Goldman, Sachs & Co., Lehman Brothers Inc., and NationsBanc Montgomery
Securities LLC are acting as representatives (the "Representatives") and the
persons named in Schedule I hereto (the "Selling Stockholders") propose to sell
to the several Underwriters an aggregate of 2,030,187 shares of Class A Common
Stock. The Company and the Selling Stockholders are hereinafter sometimes
referred to as the "Sellers." The 6,000,000 shares of Class A Common Stock to be
issued and sold to the Underwriters by the Company and the 2,030,187 shares of
Class A Common Stock to be sold to the Underwriters by the Selling Stockholders
are hereinafter referred to as the "Firm Shares." The Company and the Selling
Stockholders also propose to sell to the Underwriters, upon the terms and
conditions set forth in Section 2 hereof, up to an additional 900,000 and
304,528 shares of Class A Common Stock, respectively (all of such shares, the
"Additional Shares"). The
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Firm Shares and the Additional Shares are hereinafter collectively referred to
as the "Shares."
The Company and the Selling Stockholders wish to confirm as follows
their respective agreements with you and the other several Underwriters on whose
behalf you are acting, in connection with the several purchases of the Shares by
the Underwriters.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Commission in accordance with the provisions of the Securities
Act of 1933, as amended (the "Act"), a registration statement on Form S-3 under
the Act (the "Company registration statement"), including a prospectus, and a
prospectus supplement subject to completion, relating to the Shares to be sold
by the Company hereunder and a registration statement on Form S-3 under the Act
(the "selling stockholder registration statement" and together with the Company
registration statement, the "registration statements"). The term "Registration
Statement" as used in this Agreement means the registration statements
(including all financial schedules and exhibits), as amended at the time they
become effective, or, if the registration statements became effective prior to
the execution of this Agreement, as supplemented or amended prior to the
execution of this Agreement and shall include in any such case the information,
if any, deemed to be a part of such registration statements pursuant to Rule
430A(b) under the Act. If it is contemplated, at the time this Agreement is
executed, that post-effective amendments to the registration statements will be
filed and must be declared effective before the offering of the Shares may
commence, the term "Registration Statement" as used in this Agreement means the
registration statements as amended by said post-effective amendments and
including the information, if any, deemed to be a part thereof pursuant to Rule
430A(b), under the Act. If the Company files a registration statement to
register a portion of the Shares pursuant to Rule 462(b) under the Act (the
"Rule 462(b) Registration Statement"), then after such filing the term
"Registration Statement" in this Agreement shall be deemed to include the Rule
462(b) Registration Statement at the time it became effective. The term
"Prospectus" as used in this Agreement means the prospectuses, including any
prospectus supplement relating to the offering of the Shares, in the forms
included in the Registration Statement, or, if the prospectuses included in the
Registration Statement omits information in reliance on Rule 430A under the Act
and such information is included in prospectuses filed with the Commission
pursuant to Rule 424(b) under the Act, the term "Prospectus" as used in this
Agreement means the prospectuses in the form included in the Registration
Statement as supplemented by the addition of the Rule 430A information contained
in the prospectuses filed with the Commission pursuant to Rule 424(b). The term
"Prepricing Prospectus" as used in this Agreement means the prospectuses
(including any preliminary prospectus supplement relating to the offering of the
Shares) subject to completion in the form included in the Registration Statement
at the time of the filing of any preliminary prospectus supplement as part of
the Registration Statement with the Commission, and as such prospectuses shall
have been amended from time to time prior to the date of the Prospectus. Any
reference in this Agreement to the registration statements, the Registration
Statement, any Prepricing Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Act, as of the date of the registration statements, the
Registration Statement, such Prepricing Prospectus or the Prospectus, as the
case may be, and any reference to any amendment or Prepricing Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed after
such date under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") which, upon filing, are incorporated by reference therein, as required by
paragraph (b) of Item 12 of Form S-3. As used herein, the term "Incorporated
Documents" means the documents which at the time are incorporated by reference
in the registration statements, the Registration Statement, any
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Prepricing Prospectus, the Prospectus, or any amendment or supplement thereto;
"Rules and Regulations" means the rules and regulations adopted by the
Commission under either the Act or the Exchange Act, as applicable; and "Person"
means any individual, partnership, joint venture, corporation, limited liability
company, trust, unincorporated organization or government or department or
agency thereof.
2. Agreements to Sell and Purchase. Subject to such adjustments as you
may determine in order to avoid fractional shares, the Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis of the representations, warranties and
agreements of the Company and the Selling Stockholders herein contained and
subject to all the terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of $56.07 per Share (the "Purchase Price Per Share"), the number of Firm
Shares which bears the same proportion to the total number of Firm Shares being
sold by the Company (6,000,000) as the number of Firm Shares set forth opposite
the name of such Underwriter in Schedule II hereto (or such number of Firm
Shares increased as set forth in Section 12 hereof) bears to the aggregate
number of Firm Shares to be sold by the Company and the Selling Stockholders
(8,030,187).
Subject to such adjustments as you may determine in order to avoid
fractional shares, each Selling Stockholder severally agrees, subject to all the
terms and conditions set forth herein, to sell to each Underwriter and, upon the
basis of the representations, warranties and agreements of the Company and the
Selling Stockholders herein contained and subject to all the terms and
conditions set forth herein, each Underwriter, severally and not jointly, agrees
to purchase from each Selling Stockholder at the Purchase Price Per Share the
number of Firm Shares which bears the same proportion to the number of Firm
Shares set forth opposite the name of such Selling Stockholder in Schedule I
hereto as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule II hereto (or such number of Firm Shares increased as
set forth in Section 12 hereof) bears to the aggregate number of Firm Shares to
be sold by the Company and the Selling Stockholders (8,030,187).
The Company and the Selling Stockholders also severally agree, subject
to all the terms and conditions set forth herein, to sell to the Underwriters,
and, upon the basis of
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the representations, warranties and agreements of the Company and the Selling
Stockholders herein contained and subject to all the terms and conditions set
forth herein, the Underwriters shall have the right to purchase from the Company
and the Selling Stockholders, at the Purchase Price Per Share, pursuant to an
option (the "over-allotment option") which may be exercised at any time and from
time to time prior to 9:00 P.M., New York City time, on the 30th day after the
date of the prospectus supplement relating to the offering of the Shares (or, if
such 30th day shall be a Saturday or Sunday or a holiday, on the next business
day thereafter when the New York Stock Exchange and the Nasdaq National Market
are open for trading), up to 900,000 Additional Shares of Class A Common Stock
from the Company and an aggregate of 304,528 Additional Shares of Class A Common
Stock from the Selling Stockholders as set forth on Schedule I. Additional
Shares may be purchased only for the purpose of covering over-allotments made in
connection with the offering of the Shares. Upon any exercise of the
over-allotment option, subject to such adjustments as you may determine in order
to avoid fractional shares, each Underwriter, severally and not jointly, agrees
first to purchase from each of the Selling Stockholders, in proportions equal to
those of the maximum numbers of Additional Shares made available by the Selling
Stockholders for the over-allotment option, at the Purchase Price Per Share,
that number of Additional Shares which bears the same proportion to the total
number of Additional Shares being sold by such party pursuant to the
over-allotment option as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule II hereto (or such number of Firm Shares
increased as set forth in Section 12 hereof) bears to the aggregate number of
Firm Shares to be sold by the Company and the Selling Stockholders (8,030,187)
and second, to purchase from the Company, in proportions equal to those of the
maximum number of Additional Shares made available by the Company for the
over-allotment option, at the Purchase Price Per Share, that number of
Additional Shares which bears the same proportion to the total number of
Additional Shares being sold by the Company pursuant to the over-allotment
option as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule II hereto (or such number of Firm Shares increased as
set forth in Section 12 hereof) bears to the aggregate number of Firm Shares to
be sold by the Company and the Selling Stockholders (8,030,187).
Certificates in transferable form for the Shares which each of the
Selling Stockholders agrees to sell pursuant to this Agreement have been placed
in custody with BankBoston, N.A. (the "Custodian") for delivery under this
Agreement pursuant to one or more Custody Agreements and Powers of Attorney (the
"Custody Agreement") executed by each of the Selling Stockholders appointing
Anthony J. Bolland, Roy F. Coppedge, III and Richard Wallace as agents and
attorneys-in-fact (the "Attorneys-in-Fact"). Each Selling Stockholder agrees
that (i) the Shares represented by the certificates held in custody pursuant to
the Custody Agreement are subject to the interests of the Underwriters, the
Company and each other Selling Stockholder, (ii) the arrangements made by the
Selling Stockholders for such custody are, except as specifically provided in
the Custody Agreement, irrevocable, and (iii) the obligations of the Selling
Stockholders
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hereunder and under the Custody Agreement shall not be terminated by any act of
such Selling Stockholder or by operation of law, whether by the death or
incapacity of any Selling Stockholder or the occurrence of any other event. If
any Selling Stockholder shall die or be incapacitated or if any other event,
shall occur before the delivery of the Shares hereunder, certificates for the
Shares of such Selling Stockholder shall be delivered to the Underwriters by the
Attorneys-in-Fact in accordance with the terms and conditions of this Agreement
and the Custody Agreement as if such death or incapacity or other event had not
occurred, regardless of whether or not the Attorneys-in-Fact or any Underwriter
shall have received notice of such death, incapacity or other event. Each
Attorney-in-Fact is authorized, on behalf of each of the Selling Stockholders,
to execute this Agreement and any other documents necessary or desirable in
connection with the sale of the Shares to be sold hereunder by such Selling
Stockholder, to make delivery of the certificates for such Shares, to receive
the proceeds of the sale of such Shares, to give receipts for such proceeds, to
pay therefrom any expenses to be borne by such Selling Stockholder in connection
with the sale and public offering of such Shares, to distribute the balance
thereof to such Selling Stockholder, and to take such other action as may be
necessary or desirable in connection with the transactions contemplated by this
Agreement. Each Attorney-in-Fact agrees to perform his duties under the Custody
Agreement.
3. Terms of Public Offering. The Company has been advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office of
Smith Barney Inc., 388 Greenwich Street, New York, NY 10013, at 9:00 A.M., New
York City time, on April 14, 1998 (the "Closing Date"). The place of closing for
the Firm Shares and the Closing Date may be varied by agreement between you and
the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the aforementioned office
of Smith Barney Inc. at such time on such date (the "Option Closing Date"),
which may be the same as the Closing Date but shall in no event be earlier than
the Closing Date nor earlier than two nor later than ten business days after the
giving of the notice hereinafter referred to, as shall be specified in a written
notice from you on behalf of the Underwriters to the Company of the
Underwriters' determination to purchase a number, specified in such notice, of
Additional Shares. The place of closing for any Additional Shares and the Option
Closing Date for such Shares may be varied by agreement between you and the
Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall
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request by written notice (it being understood that a facsimile transmission
shall be deemed written notice) prior to 9:30 A.M., New York City time, on the
second business day preceding the Closing Date or any Option Closing Date, as
the case may be. Such certificates shall be made available to you in New York
City for inspection and packaging not later than 9:30 A.M., New York City time,
on the business day next preceding the Closing Date or the Option Closing Date,
as the case may be. The certificates evidencing the Firm Shares and any
Additional Shares to be purchased hereunder shall be delivered to you on the
Closing Date or the Option Closing Date, as the case may be, against payment of
the purchase price therefor in immediately available funds to the order of the
Company and the Attorneys-in-Fact.
5. Agreements of the Company. The Company agrees with the several
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may commence,
the Company will endeavor to cause the Registration Statement or such
post-effective amendment to become effective as soon as possible and will advise
you promptly and, if requested by you, will confirm such advice in writing, when
the Registration Statement or such post-effective amendment has become
effective.
(b) The Company will advise you promptly and, if requested by
you, will confirm such advice in writing: (i) of any request by the Commission
for amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or 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 purpose; and (iii) within the period of time referred to in paragraph (f)
below, of any change in the Company's condition (financial or otherwise),
business, prospects, properties, net worth or results of operations, or of the
happening of any event, including the filing of any information, documents or
reports pursuant to the Exchange Act, which makes any statement of a material
fact made in the Registration Statement or the Prospectus (as then amended or
supplemented) untrue or which requires the making of any additions to or changes
in the Registration Statement or the Prospectus (as then amended or
supplemented) in order to state a material fact required by the Act or the Rules
and Regulations thereunder to be stated therein or necessary in order to make
the statements therein not misleading, or of the necessity to amend or
supplement the Prospectus (as then amended or supplemented) to comply with the
Act or any other law. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will
make every reasonable effort to obtain the withdrawal of such order at the
earliest possible time.
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(c) The Company will furnish to you, without charge (i) seven
signed copies of the Registration Statement as originally filed with the
Commission and of each amendment thereto, including financial statements and all
exhibits thereto, (ii) such number of conformed copies of the Registration
Statement as originally filed and of each amendment thereto, but without
exhibits, as you may reasonably request, (iii) such number of copies of the
Incorporated Documents, without exhibits, as you may request, and (iv) seven
copies of the exhibits to the Incorporated Documents.
(d) So long as, in the opinion of counsel for the
Underwriters, a Prospectus is required to be delivered in connection with sales
by any Underwriter or dealer, the Company will not (i) file any amendment to the
Registration Statement, make any amendment or supplement to the Prospectus or
file any document which, upon filing becomes an Incorporated Document, of which
you shall not previously have been advised or to which you shall reasonably
object after being so advised or (ii) file any information, documents or reports
pursuant to the Exchange Act without delivering a copy of such information,
documents or reports to you, as Representatives of the Underwriters, prior to
such filing.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered to you, without charge, in such quantities as you have
reasonably requested, copies of each form of the Prepricing Prospectus. The
Company consents to the use, in accordance with the provisions of the Act and
with the securities or blue sky laws of the jurisdictions in which the Shares
are offered, by the several Underwriters and by dealers, prior to the date of
the Prospectus, of each Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement
as possible and thereafter from time to time for such period as in the opinion
of counsel for the Underwriters a Prospectus is required by the Act to be
delivered in connection with sales by any Selling Stockholder, Underwriter or
dealer, the Company will expeditiously deliver to each Underwriter and each
dealer, without charge, as many copies of the Prospectus (and of any amendment
or supplement thereto) as you may reasonably request. The Company consents to
the use of the Prospectus (and of any amendment or supplement thereto), in
accordance with the provisions of the Act and with the securities or blue sky
laws of the jurisdictions in which the Shares are offered, by the several
Underwriters and by all dealers to whom Shares may be sold, both in connection
with the offering and sale of the Shares and for such period of time thereafter
as the Prospectus is required by the Act to be delivered in connection with
sales by any Underwriter or dealer. If during such period of time any event
shall occur that in the judgment of the Company or in the opinion of counsel for
the Underwriters is required to be set forth in the Prospectus (as then amended
or supplemented) or should be set forth therein in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary to supplement or amend the Prospectus (or to
file under the Exchange Act any document which, upon filing, becomes an
Incorporated
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Document) to comply with the Act or any other law, the Company will forthwith
prepare and, subject to the provisions of paragraph (d) above, file with the
Commission an appropriate supplement or amendment thereto or file an
Incorporated Document, and will expeditiously furnish to the Underwriters and
dealers a reasonable number of copies thereof. In the event that the Company and
you, as Representatives of the several Underwriters, agree that the Prospectus
should be amended or supplemented, the Company, if requested by you, will
promptly issue a press release announcing or disclosing the matters to be
covered by the proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel for
the Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers under
the securities or blue sky laws of such jurisdictions as you may reasonably
designate and will file such consents to service of process or other documents
necessary or appropriate in order to effect such registration or qualification;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to service of process in suits, other than those
arising out of the offering or sale of the Shares, in any jurisdiction where it
is not now so subject.
(h) The Company will make generally available to its security
holders an earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than fifteen months thereafter, as soon as
practicable after the end of such period, which earnings statement shall satisfy
the provisions of Section 11(a) of the Act and the Rules and Regulations
(including, at the option of the Company, Rule 158).
(i) During the period of five years after the date of this
Agreement, the Company will furnish to you (i) as soon as available, a copy of
each report of the Company mailed to stockholders or filed with any stock
exchange or regulatory body and (ii) from time to time such other information
concerning the Company as you may reasonably request.
(j) If this Agreement shall terminate or shall be terminated
after execution and delivery pursuant to any provisions hereof (otherwise than
pursuant to the second paragraph of Section 12 hereof or by notice given by you
terminating this Agreement pursuant to Section 12 or Section 13 hereof) or if
this Agreement shall be terminated by the Underwriters because of any failure or
refusal on the part of the Company or the Selling Stockholders to comply with
the terms or fulfill any of the conditions of this Agreement, the Company agrees
to reimburse the Representatives for all out-of-pocket expenses (including fees
and expenses of counsel for the Underwriters) incurred by you in connection
herewith.
(k) The Company will apply the net proceeds from the sale of
the Shares substantially in accordance with the description set forth in the
Prospectus.
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(l) If Rule 430A of the Act is employed, the Company will
timely file the Prospectus in the proper manner pursuant to Rule 424(b) under
the Act and will advise you of the time and manner of such filing.
(m) Except for the issuance of shares of Class A Common Stock
pursuant to acquisition agreements in existence on the date of this Agreement
and except as provided in this Agreement, the Company will not offer to sell,
sell, contract to sell or otherwise dispose of any Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, or
grant any options or warrants to purchase Common Stock or such securities, for a
period of 90 days after the date of the Prospectus, without the prior written
consent of Smith Barney Inc.
(n) The Company has furnished or will furnish to you "lock-up"
letters, in form and substance satisfactory to you, signed by each of its
current officers and directors and each of its stockholders designated by you.
(o) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, the Company has not taken, nor will it take, directly
or indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
(p) The Company will use its reasonable and diligent efforts
to have the Shares listed, subject to notice of issuance of Shares, on the
Nasdaq National Market concurrently with the execution of this Agreement.
6. Agreements of the Selling Stockholders. Each of the Selling
Stockholders severally agrees with the several Underwriters as follows:
(a) Such Selling Stockholder will cooperate to the extent
necessary to cause the registration statements or any post-effective amendment
thereto to become effective at the earliest possible time.
(b) Such Selling Stockholder will pay all federal and other
taxes, if any on the transfer or sale of the Shares being sold by such Selling
Stockholder to the Underwriters.
(c) Such Selling Stockholder will do or perform all things
required to be done or performed by such Selling Stockholder prior to the
Closing Date or any Option Closing Date, as the case may be, to satisfy all
conditions precedent to the delivery of the Shares pursuant to this Agreement or
as otherwise reasonably requested by the Underwriters.
(d) Except as stated in this Agreement and in the Prepricing
Prospectus and the Prospectus, such Selling Stockholder will not take, directly
or indirectly, any
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action designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate the
sale or resale of the Shares. For purposes of this Section 6(d), any actions
taken by BT Alex. Brown Incorporated will not be deemed to have been taken,
directly or indirectly, by Pyramid Ventures, Inc.
(e) Such Selling Stockholder will advise you promptly and, if
requested by you, will confirm such advice in writing, within the period of time
referred to in Section 5(f) hereof, of any change of any information provided in
writing to the Company or the Underwriters by such Selling Stockholder.
7. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the
Registration Statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the Act. The Commission
has not issued any order preventing or suspending the use of any Prepricing
Prospectus.
(b) The Company and the transactions contemplated by this
Agreement meet the requirements for using Form S-3 under the Act. The
Registration Statement in the form in which it became or becomes effective, and
also in such form as it may be when any post-effective amendment thereto shall
become effective, and the Prospectus and any supplement or amendment thereto
when filed with the Commission under Rule 424(b) under the Act, complied or will
comply in all material respects with the provisions of the Act and did not or
will not at any such times 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; except that this representation and
warranty does not apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein.
(c) The Incorporated Documents heretofore filed, when they
were filed (or, if any amendment with respect to any such document was filed,
when such amendment was filed), conformed in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder, any
further Incorporated Documents so filed will, when they are filed, conform in
all material respects with the requirements of the Exchange Act and the rules
and regulations thereunder; no such document when it was filed (or, if an
amendment with respect to any such document was filed, when such amendment was
filed), contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and no such further document, when it is
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filed, will contain an untrue statement of a material fact or will omit to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading.
(d) All the outstanding shares of the capital stock of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights; 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 in accordance with the
terms hereof, will be validly issued, fully paid and nonassessable and free of
any preemptive or similar rights; the shares of Class A Common Stock which may
be issued upon conversion of the Company's Class B Common Stock and Series B
Preferred Stock, par value $.01 per share, will be validly issued, fully paid
and nonassessable and free of any preemptive or similar rights and the capital
stock of the Company conforms to the description thereof in the Registration
Statement and the Prospectus.
(e) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus, and is duly registered and qualified to conduct its business and is
in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify would not have
a material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and the
Subsidiaries (as hereinafter defined) taken as a whole (a "Material Adverse
Effect").
(f) All of the Company's subsidiaries (collectively, the
"Subsidiaries") are listed on Exhibit A hereto. Each Subsidiary is a corporation
or a trust duly organized, validly existing and in good standing in the
jurisdiction of its incorporation or organization, as the case may be, with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus, and is duly registered and qualified to conduct its business and is
in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not have
a Material Adverse Effect; all the outstanding shares of capital stock or other
ownership interests of each of the Subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable, and are owned by the Company
directly, or indirectly through one of the other Subsidiaries, free and clear of
any lien, adverse claim, security interest, equity or other encumbrance except
as described in the Prospectus.
(g) The Company has full legal right, power and authority to
enter into this Agreement and to issue, sell and deliver the Shares to be sold
by it as provided
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herein. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is required
for the execution, delivery or performance of this Agreement by the Company or
the consummation by the Company or any Subsidiary, as the case may be, of the
transactions contemplated hereby, except such as may be required under the Act,
the Exchange Act and state securities or blue sky laws or by the National
Association of Securities Dealers, Inc. (the "NASD"). The execution, delivery
and performance of this Agreement by the Company and the consummation by the
Company or any Subsidiary, as the case may be, of the transactions contemplated
hereby does not and will not conflict with or result in a breach or violation by
the Company of any of the terms or provisions of, constitute a default by the
Company under, or result in the creation or imposition of any lien, charge,
security interest or encumbrance upon any of the assets of the Company or any
Subsidiary pursuant to the terms of any (A) indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which the Company or
any of the Subsidiaries, as the case may be, is a party or to which any of them
or any of their respective properties is subject, (B) the charter or bylaws or
other organizational documents of the Company or any of the Subsidiaries, as the
case may be, or (C) any statute, judgment, decree, order, rule or regulation of
any court or governmental agency or body applicable to the Company or any of the
Subsidiaries or any of their respective properties.
(h) The execution and delivery of, and the performance by the
Company of its obligations under, this Agreement has been duly and validly
authorized by all necessary corporate action on the part of the Company, and
this Agreement has been duly executed and delivered by the Company.
(i) Except as described or referred to in the Prospectus,
there is not pending or, to the knowledge of the Company, threatened, any
action, suit, proceeding, inquiry or investigation, to which the Company or any
of the Subsidiaries is a party, or to which the property of the Company or any
of the Subsidiaries is subject, before or brought by any court or governmental
agency or body, which, if determined adversely to the Company or any of the
Subsidiaries would individually or in the aggregate result in a Material Adverse
Effect or might materially adversely affect the consummation of the transactions
contemplated by this Agreement; and all pending legal or governmental
proceedings to which the Company or any of the Subsidiaries is a party or that
affect any of their respective properties, that are not described in the
Prospectus or the Incorporated Documents, including ordinary routine litigation
incidental to the business, would not, if determined adversely to the Company or
any of the Subsidiaries, individually or in the aggregate, result in a Material
Adverse Effect.
(j) Neither the Company nor any of the Subsidiaries is in
violation of its certificate or articles of incorporation or bylaws, or other
organizational documents, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of the
Subsidiaries or of any decree of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries, or in default in
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any material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any agreement, indenture, lease or other instrument to which
the Company or any of the Subsidiaries is a party or by which any of them or any
of their respective properties may be bound and no condition or state of facts
exists, with which the passage of time or the giving of notice or both would
constitute such a default, except in each case where such violation or default
would not, singly or in the aggregate, have a Material Adverse Effect.
(k) There are no agreements, contracts, indentures, leases or
other instruments that are required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement that are not described or filed as required by the Act.
(l) The accountants, Arthur Andersen LLP, KPMG Peat Marwick
LLP and Price Waterhouse LLP, who have certified or shall certify the financial
statements included in or incorporated by reference in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), are
independent public accountants as required by the Act.
(m) The consolidated financial statements, together with the
related schedules and notes included in or incorporated by reference in the
Registration Statement and the Prospectus as of the date thereof, as of the date
hereof and as of the Closing Date present or will present fairly the
consolidated financial position, results of operations and changes in financial
position of the entities purported to be shown thereby at the dates and for the
periods indicated and have been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis, except as
otherwise stated therein. The selected financial data and summary financial data
included in or incorporated by reference in the Registration Statement and the
Prospectus present fairly the information shown therein as of the date thereof,
as of the date hereof and as of the Closing Date and have been compiled on a
basis consistent with that of the audited consolidated financial statements
included in or incorporated by reference in the Registration Statement and the
Prospectus. The pro forma financial statements and other pro forma financial
information included in or incorporated by reference in the Registration
Statement and the Prospectus present fairly the information shown therein in
accordance with the adjustments and assumptions described therein as of the date
thereof, as of the date hereof and as of the Closing Date, have been prepared in
accordance with the Commission's rules and guidelines with respect to pro forma
financial statements, have been properly compiled on the pro forma basis
described therein and in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein.
(n) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which
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<PAGE>
such information is given in the Registration Statement and the Prospectus (or
any amendment or supplement thereto), neither the Company nor any of the
Subsidiaries has incurred any liability or obligation, direct or contingent, or
entered into any transaction, not in the ordinary course of business, that is
material to the Company and the Subsidiaries taken as a whole, and there has not
been any change in the capital stock, or material increase in the short-term
debt or long-term debt, of the Company or any of the Subsidiaries, or any
material adverse change, or any development involving or which may reasonably be
expected to involve, a prospective material adverse change, in the condition
(financial or other), business, net worth or results of operations of the
Company and the Subsidiaries taken as a whole.
(o) Each of the Company and the Subsidiaries has good and
marketable title to all property (real and personal) described in the Prospectus
as being owned by it, free and clear of all liens, claims, security interests or
other encumbrances, except such as are described in the Registration Statement
and the Prospectus or with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such properties by the
Company and the Subsidiaries and could not reasonably be expected individually
or in the aggregate to result in a Material Adverse Effect; and all of the
leases and subleases material to the business of the Company and the
Subsidiaries taken as a whole, and under which the Company or any of the
Subsidiaries holds properties whether or not described in the Registration
Statement and the Prospectus, are in full force and effect and neither the
Company nor any of the Subsidiaries has any notice of any claim of any sort that
has been asserted by anyone adverse to the rights of the Company or any of the
Subsidiaries under any of the leases or subleases mentioned above, or affecting
or questioning the rights of the Company or any of the Subsidiaries to the
continued possession of the leased or subleased premises under any such lease or
sublease, which claim could reasonably be expected individually or in the
aggregate to result in a Material Adverse Effect.
(p) Each of the Company and the Subsidiaries owns or
possesses, or can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, trademarks, service marks, trade names and
know-how (including trade secrets and other patentable and/or unpatentable
proprietary or confidential information or procedures) (collectively,
"intellectual property") necessary to carry on its business as presently
operated by it, except where the failure to own or possess or have the ability
to acquire any such intellectual property would not individually or in the
aggregate result in a Material Adverse Effect; and none of the Company or any of
the Subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to any
intellectual property or of any facts which would render any intellectual
property invalid or inadequate to protect the interest of the Company or any of
the Subsidiaries therein and which infringement or conflict could reasonably be
expected in the aggregate to result in a Material Adverse Effect.
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<PAGE>
(q) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) 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, the
Prepricing Prospectus, the Prospectus or other materials, if any, permitted by
the Act. None of the Company or any of the Subsidiaries has taken, or will take,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
the Shares or any shares of capital stock of the Company.
(r) Except as described in or contemplated by the Prospectus,
each of the Company and the Subsidiaries owns or possesses all governmental
licenses, permits, certificates, consents, orders, approvals and other
authorizations necessary to own its properties and to conduct its business in
the manner described in the Prospectus, except where the failure to own or
possess such licenses, permits, certificates, consents, orders, approvals and
other authorizations (collectively, "Material Licenses") would not individually
or in the aggregate result in a Material Adverse Effect; all of the Material
Licenses are valid and in full force and effect; and no event, including receipt
of notice of proceedings relating to revocation or modification of any Material
License, has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or result in any other material
impairment of the rights of any holder of any such Material License, subject in
each case to such qualifications as may be set forth in the Prospectus.
(s) The Company and its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(t) To the best of the Company's knowledge, neither the
Company nor any of its Subsidiaries nor any employee or agent of the Company or
any Subsidiary has made any payment of funds of the Company or any Subsidiary or
received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
(u) Except as disclosed in the Prospectus, all United States
federal income tax returns of the Company and the Subsidiaries required by law
to be filed have been filed (taking into account extensions granted by the
applicable federal governmental agency) and all taxes shown by such returns or
otherwise assessed, which are due and payable, have been paid, except for such
taxes, if any, as are being contested in good faith
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<PAGE>
and as to which adequate reserves have been provided and except for such taxes
the payment of which would not individually or in the aggregate result in a
Material Adverse Effect. All other corporate franchise and income tax returns of
the Company and the Subsidiaries required to be filed pursuant to applicable
foreign, state or local law have been filed except insofar as the failure to
file such returns would not individually or in the aggregate result in a
Material Adverse Effect, and all taxes shown on such returns or otherwise
assessed which are due and payable have been paid, except for such taxes, if
any, as are being contested in good faith and as to which adequate reserves have
been provided and except for such taxes the payment of which would not
individually or in the aggregate result in a Material Adverse Effect.
(v) Except for rights which have been waived, no holder of any
security of the Company or any Subsidiary has any right to require registration
of any debt or equity security of the Company because of consummation of the
transactions contemplated by this Agreement or otherwise. Except as described or
incorporated by reference in or contemplated by the Prospectus, there are no
outstanding options, warrants or other rights calling for the issuance of, and
there are no commitments, plans or arrangements to issue any debt or equity
security of the Company or any security convertible into or exchangeable or
exercisable for any debt or equity security of the Company.
(w) Each of the Company and the Subsidiaries is not now, and
after sale of the Shares as contemplated hereunder and application of the net
proceeds from such sale as described in the Prospectus under the caption "Use of
Proceeds" will not be, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
(x) The Company has filed in a timely manner each document or
report required to be filed by it pursuant to the Exchange Act and the rules and
regulations thereunder; each such document or report (including any financial
statements) and any amendment thereto at the time it was filed conformed to the
requirements of the Exchange Act and the rules and regulations thereunder; and
none of such documents or reports contained an untrue statement of any material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(y) Except as described in the Prospectus, the Company and the
Subsidiaries comply in all material respects with all Environmental Laws (as
defined below), except to the extent that failure to comply with such
Environmental Laws would not individually or in the aggregate result in a
Material Adverse Effect. To the knowledge of the Company, none of the Company or
any of the Subsidiaries is the subject of any pending or, to the knowledge of
the Company, threatened federal, state or local investigation evaluating whether
any remedial action by the Company or any of the Subsidiaries is needed to
respond to a release of any Hazardous Materials (as defined
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below) into the environment, resulting from the Company's or any of the
Subsidiaries' business operations or ownership or possession of any of their
properties or assets or is in contravention of any Environmental Law that could
reasonably be expected individually or in the aggregate to result in a Material
Adverse Effect. None of the Company or any of the Subsidiaries have received any
notice or claim, nor are there pending or, to the knowledge of the Company,
threatened lawsuits against them, with respect to violations of an Environmental
Law or in connection with any release of any Hazardous Material into the
environment that could reasonably be expected in the aggregate to result in a
Material Adverse Effect. As used herein, "Environmental Laws" means any federal,
state or local law or regulation applicable to the Company's or any of the
Subsidiaries' business operation or ownership or possession of any of their
properties or assets relating to environmental matters, and "Hazardous
Materials" means those substances that are regulated by or form the basis of
liability under any Environmental Laws.
(z) No labor problem exists with the employees of the Company
or any of the Subsidiaries or, to the knowledge of the Company, is imminent
that, in either case, could reasonably be expected individually or in the
aggregate to result in a Material Adverse Effect.
(aa) The Company and each of the Subsidiaries maintain
insurance of the types and in the amounts that are reasonable for the businesses
operated by them, including, but not limited to, insurance covering real and
personal property owned or leased by the Company and the Subsidiaries against
theft, damage, destruction, acts of vandalism, liability and malpractice, all of
which insurance is in full force and effect.
(bb) The Company and each of the Subsidiaries is in compliance
with, and each such entity has not received any notice of any outstanding
violation of, all laws, regulations, ordinances and rules applicable to it and
its operations, except, in either case, where any failure by the Company or any
of the Subsidiaries to comply with any such law, regulation, ordinance or rule
would not individually or in the aggregate result in a Material Adverse Effect.
(cc) There are no business relationships or related-party
transactions of the nature described in Item 404 of Regulation S-K involving the
Company or any of its Subsidiaries and any person described in such Item that
are required to be disclosed in the Prospectus and which have not been so
disclosed.
(dd) To the best of the Company's knowledge, each of Baltimore
(WNUV-TV) Licensee, Inc. as the licensee of WNUV-TV, Baltimore, Maryland; WVTV
Licensee, Inc. as the licensee of WVTV(TV), Milwaukee, Wisconsin; WPTT, Inc. as
the licensee of WCWB(TV), Pittsburgh, Pennsylvania; Raleigh (WRDC-TV) Licensee,
Inc. as the licensee of WRDC(TV), Durham, North Carolina; River City License
Partnership as the licensee of WTTV(TV), Bloomington, Indiana and WTTK(TV),
Kokomo, Indiana; Anderson (WFBC-TV) Licensee, Inc. as the licensee of WFBC-TV,
Anderson, South
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Carolina; San Antonio (KRRT-TV) Licensee, Inc. as the licensee of KRRT(TV),
Kerrville, Texas; Tiab Communications Corporation as the licensee of WILT(AM),
Mt. Pocono, Pennsylvania; WDBB-TV, Inc. as the licensee of WDBB(TV), Tuscaloosa,
Alabama; Birmingham (WABM-TV) Licensee, Inc. as the licensee of WABM(TV),
Birmingham, Alabama; Phase II Broadcasting, Inc. as the licensee of WLTS-FM,
Slidell, Louisiana and WTKL(FM), New Orleans, Louisiana; Television Fit for
Life, Inc. as the licensee of WFGX(TV), Ft. Walton Beach, Florida; and Champlain
Valley Telecasting, Inc. as the permittee of WFFF(TV), Burlington, Vermont (each
individually an "LMA Station" and together the "LMA Stations") owns or possesses
all governmental licenses, permits, certificates, consents, orders, approvals
and other authorizations necessary to own its properties (collectively, the "LMA
Material Licenses"), and to conduct its business in the manner described in the
Prospectus, except where the failure to own or possess such licenses, permits,
certificates, consents, orders, approvals and other authorizations would not
individually or in the aggregate result in any Material Adverse Effect; all of
the LMA Material Licenses are valid and in full force and effect; and no event,
including receipt of notice of proceedings relating to revocation or
modification of any LMA Material License, has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or result
in any other material impairment of the rights of any holder of any such permit,
subject in each case to such qualifications as may be set forth in the
Prospectus; and, except as described in the Prospectus, none of such permits
contains any restriction that is materially burdensome to the LMA Station or the
Company and the Subsidiaries; and there is in full force and effect with each
LMA Station a contract, enforceable in accordance with its terms against the
Company and against the LMA Station pursuant to which the Company provides
programming services to the LMA Station as described or except as described in
the Incorporated Documents.
(ee) The execution and delivery of the Heritage Acquisition
Agreements (as defined in the Prospectus), the agreements (the "Lakeland
Acquisition Agreements") relating to the Lakeland Acquisition (as defined in the
Prospectus), the agreements (the "Max Media Acquisition Agreements") relating to
the Max Media Acquisition (as defined in the Prospectus) and the agreements (the
"Sullivan Acquisition Agreements") relating to the Sullivan Acquisition (as
defined in the Prospectus) by the Company have been duly authorized by all
necessary corporate action. The Heritage Acquisition Agreements, the Lakeland
Acquisition Agreements, the Max Media Acquisition Agreements and the Sullivan
Acquisition Agreements have been duly executed and delivered by the Company and
after execution and delivery by the other parties thereto are the legal, valid,
binding and enforceable obligations of the parties thereto. The representations
and warranties of the Company contained in the Heritage Acquisition Agreements,
the Lakeland Acquisition Agreements, the Max Media Acquisition Agreements and
the Sullivan Acquisition Agreements are true and correct on and as of the date
hereof and on and as of the Closing Date. There have been no amendments to the
Heritage Acquisition Agreements, the Lakeland Acquisition Agreements, the Max
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Media Acquisition Agreements or the Sullivan Acquisition Agreements subsequent
to the date thereof.
8. Representations and Warranties of the Selling Stockholders. Each
Selling Stockholder, severally and not jointly, represents and warrants to each
Underwriter that:
(a) Such Selling Stockholder now has, and on the Closing Date
will have, valid and marketable title to the Shares to be sold by such Selling
Stockholder, free and clear of any lien, claim, security interest or other
encumbrance, including, without limitation, any restriction on transfer.
(b) Such Selling Stockholder now has, and on the Closing Date
will have, full legal right, power and authorization, and any approval required
by law, to sell, assign, transfer and deliver such Shares in the manner provided
in this Agreement, and upon delivery of and payment for such Shares hereunder,
the several Underwriters will acquire valid and marketable title to such Shares
free and clear of any lien, claim, security interest, or other encumbrance.
(c) Each of this Agreement and the Custody Agreement has been
duly authorized, executed and delivered by or on behalf of such Selling
Stockholder and is a valid and binding agreement of such Selling Stockholder
enforceable against such Selling Stockholder in accordance with its terms. By
law no spousal consents are needed and no agreement, indenture or other
instrument exists which would require spousal consents to effectuate the
transactions contemplated by this Agreement or the Custody Agreement.
(d) Neither the execution and delivery of this Agreement or
the Custody Agreement by or on behalf of such Selling Stockholder nor the
consummation of the transactions herein or therein contemplated by or on behalf
of such Selling Stockholder requires any consent, approval, authorization or
order of, or filing or registration with, any court, regulatory body,
administrative agency or other governmental body, agency or official (except
such as may be required under the Act or such as may be required under state
securities or blue sky laws governing the purchase and distribution of the
Shares) or conflicts or will conflict with or constitutes or will constitute a
breach of, or default under, or violates or will violate, any agreement,
indenture or other instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder is or may be bound or to which any of such
Selling Stockholder's property or assets is subject, or any statute, law, rule,
regulation, ruling, judgment, injunction, order or decree applicable to such
Selling Stockholder or to any property or assets of such Selling Stockholder.
(e) The representations and warranties of such Selling
Stockholder in the Custody Agreement are, and on the Closing Date and any Option
Closing Date will be, true and correct.
(f) Such Selling Stockholder has not taken, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization
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or manipulation of the price of the Common Stock to facilitate the sale or
resale of the Shares, except for the lock-up arrangements described in the
Prepricing Prospectus or the Prospectus. For purposes of this section 8(f), any
actions taken by BT Alex. Brown Incorporated will not be deemed to have been
taken, directly or indirectly, by Pyramid Ventures, Inc.
9. Indemnification and Contribution.
(a) Each of the Company and the Selling Stockholders severally
and not jointly agrees to indemnify and hold harmless each of you and each other
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act from and
against any and all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prepricing Prospectus or the Prospectus or in any
amendment or supplement thereto, or arising out of or based upon 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 expenses arise out of or are based
upon any untrue statement or omission or alleged untrue statement or omission
which has been made therein or omitted therefrom in reliance upon and in
conformity with the information furnished in writing to the Company by or on
behalf of any Underwriter through you expressly for use in connection therewith;
provided, that no Selling Stockholder shall be liable hereunder for any untrue
statement or alleged untrue statement or omission or alleged omission in the
Registration Statement, the Prepricing Prospectus or the Prospectus or in any
amendment or supplement thereto unless based upon any untrue statement or
omission or alleged untrue statement or omission which has been made therein or
omitted therein in reliance upon and in conformity with the information
furnished in writing to the Company by or on behalf of such Selling Stockholder
expressly for use therein; and provided, further, however, that the
indemnification contained in this paragraph (a) with respect to any Prepricing
Prospectus shall not inure to the benefit of any Underwriter (or to the benefit
of any person controlling such Underwriter) on account of any such loss, claim,
damage, liability or expense arising from the sale of the Shares by such
Underwriter to any person if a copy of the Prospectus shall not have been
delivered or sent to such person within the time required by the Act and the
regulations thereunder, and the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in such Prepricing
Prospectus was corrected in the Prospectus, provided that the Company has
delivered the Prospectus to the several Underwriters in requisite quantity on a
timely basis to permit such delivery or sending. The foregoing indemnity
agreement shall be in addition to any liability which the Company or any of the
Selling Stockholders may otherwise have. Notwithstanding anything in this
Agreement to the contrary, no Selling Stockholder shall be liable under this
Section 9(a), or under any other provision of this Agreement, for any amount in
excess of the aggregate public offering price of the Shares sold by such Selling
Stockholder.
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(b) If any action, suit or proceeding shall be brought against
any Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company or any Selling Stockholder, such
Underwriter or such controlling person shall promptly notify the parties against
whom indemnification is being sought (the "indemnifying parties"), and such
indemnifying parties shall assume the defense thereof, including the employment
of counsel and payment of all fees and expenses. Such Underwriter or any such
controlling person shall have the right to employ separate counsel in any such
action, suit or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Underwriter or
such controlling person unless (i) the indemnifying parties have agreed in
writing to pay such fees and expenses, (ii) the indemnifying parties have failed
to assume the defense and employ counsel or (iii) the named parties to any such
action, suit or proceeding (including any impleaded parties) include both such
Underwriter or such controlling person and the indemnifying parties and such
Underwriter or such controlling person shall have been advised by its counsel
that representation of such indemnified party and any indemnifying party by the
same counsel would be inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them (in which
case the indemnifying party shall not have the right to assume the defense of
such action, suit or proceeding on behalf of such Underwriter or such
controlling person). It is understood, however, that the indemnifying parties
shall, in connection with any one such action, suit or proceeding or separate
but substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Underwriters and controlling persons not having actual or potential differing
interests with you or among themselves, which firm shall be designated in
writing by Smith Barney Inc., and that all such reasonable fees and expenses
shall be reimbursed as they are incurred. The indemnifying parties shall not be
liable for any settlement of any such action, suit or proceeding effected
without their written consent, but if settled with such written consent, or if
there be a final judgment for the plaintiff in any such action, suit or
proceeding, the indemnifying parties agree to indemnify and hold harmless any
Underwriter, to the extent provided in paragraph (a) above, and any such
controlling person from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
(c) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement, any person who controls the Company within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act and each Selling Stockholder to
the same extent as the foregoing indemnity from the Company and the Selling
Stockholders to each Underwriter, but only with respect to information relating
to such Underwriter furnished in writing by or on behalf of such Underwriter
through you expressly for use in the Registration Statement,
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the Prospectus or any Prepricing Prospectus, or any amendment or supplement
thereto. If any action, suit or proceeding shall be brought against the Company,
any of its directors, any of its officers who sign the Registration Statement,
any person who controls the Company within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act or any Selling Stockholder based on the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto, and in respect of which indemnity may be sought
against any Underwriter pursuant to this paragraph (c), such Underwriter shall
have the rights and duties given to the Company by paragraph (b) above (except
that if the Company shall have assumed the defense thereof such Underwriter
shall not be required to do so, but may employ separate counsel therein and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at such Underwriter's expense), and the Company, its directors, any of
its officers who sign the Registration Statement, any person who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act or any Selling Stockholder shall have the rights and duties given
to the Underwriters by paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under paragraph (a) or (c) hereof in respect
of any losses, claims, damages, liabilities or expenses referred to therein,
then an 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 or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders 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 (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 Selling Stockholders on
the one hand and the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Stockholders 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 of the Shares
(before deducting expenses) received by the Company and the Selling Stockholders
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus; provided that, in the event that the Underwriters shall have
purchased any Additional Shares hereunder, any determination of the relative
benefits received by the Company, the Selling Stockholders or the Underwriters
from the offering of the Shares shall include the net proceeds (before deducting
expenses) received by the Company and the Selling Stockholders and the
underwriting discounts and commissions received by the Underwriters, from the
sale of such Additional Shares, in each case computed on the basis of the
respective amounts set
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forth in the notes to the table on the cover page of the Prospectus. The
relative fault of the Company and the Selling Stockholders 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 and the Selling Stockholders on the one hand
or by 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.
(e) The Company the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by a pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in paragraph (d) above. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, liabilities and expenses referred to in
paragraph (d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating any claim or defending any such action,
suit or proceeding, but in no event shall the contribution obligation of any
Selling Stockholder exceed the aggregate public offering price of the Shares
sold by such Selling Stockholder. Notwithstanding the provisions of this Section
9, no Underwriter shall be required to contribute any amount in excess of the
amount by which the total fees received (and not reimbursed to the Company) by
such Underwriter with respect to the Shares underwritten by it and distributed
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 9 are several in proportion to the respective numbers of Firm Shares set
forth opposite their names in Schedule I hereto (or such numbers of Firm Shares
increased as set forth in Section 12 hereof) and not joint.
(f) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement (i) includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of any indemnified party.
(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 9 shall
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be paid by the indemnifying party to the indemnified party as such losses,
claims, damages, liabilities or expenses are incurred. The indemnity and
contribution agreements contained in this Section 9 and the representations and
warranties of the Company and the Selling Stockholders set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or officers, the Selling
Stockholders or any person controlling the Company, (ii) acceptance of any
Shares and payment therefor hereunder and (iii) any termination of this
Agreement. A successor to any Underwriter or any person controlling any
Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, or a Selling Stockholder shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained
in this Section 9.
10. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may commence,
the Registration Statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rules 424 and 430A under the Act shall have been
timely made; no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or, to the knowledge of the Company or any Underwriter,
threatened by the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth or results of operations of the Company or the
Subsidiaries not contemplated by the Prospectus, which in your opinion, as
Representatives of the several Underwriters, would materially, adversely affect
the market for the Shares, or (ii) any event or development relating to or
involving the Company or any officer or director of the Company or any Selling
Stockholder which makes any statement made in the Prospectus untrue or which, in
the opinion of the Company and its counsel or the Underwriters and their
counsel, requires the making of any addition to or change in the Prospectus in
order to state a material fact required by the Act or any other law to be stated
therein or necessary in order to make the statements therein not misleading, if
amending or supplementing the Prospectus to reflect such event or development
would, in your opinion, as Representatives of the several Underwriters,
materially adversely affect the market for the Shares.
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(c) You shall have received on the Closing Date, an opinion of
Thomas & Libowitz, P.A., counsel for the Company, dated the Closing Date and
addressed to you, as Representatives of the several Underwriters, to the effect
that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Maryland, with full power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and is duly
qualified to transact business as a foreign corporation in good standing under
the laws of each jurisdiction where the ownership or leasing of its properties
or the conduct of its business requires such qualification except where the
failure to so qualify would not have a Material Adverse Effect;
(ii) All of the outstanding shares of capital stock
of the Company have been duly authorized and validly issued and are fully paid
and non-assessable and were not issued in violation of any preemptive or similar
rights of stockholders of the Company arising under the corporation laws of the
State of Maryland, under the charter or bylaws of the Company or, to the best of
such counsel's knowledge, under any agreement to which the Company is a party;
(iii) Each of the Subsidiaries has been duly
incorporated and is validly existing as a corporation or trust in good standing
under the laws of its respective jurisdiction of incorporation or organization,
as the case may be, with full power and authority (corporate or other) to own
its properties and conduct its business as described in the Prospectus, and is
duly qualified to transact business as a foreign corporation or trust in good
standing under the laws of each jurisdiction where the ownership or leasing of
its properties or the conduct of its business requires such qualification; and
all of the outstanding shares of capital stock or other ownership interests of
each of the Subsidiaries have been duly authorized and validly issued, are fully
paid and non-assessable and were not issued in violation of any preemptive or
similar rights of stockholders of such Subsidiary arising under the laws of its
respective jurisdiction of incorporation or organization, as the case may be,
its charter or bylaws or other organizational documents or, to the best of such
counsel's knowledge, under any agreement to which such Subsidiary is a party,
and all of the outstanding shares of capital stock or other ownership interests
of each of the Subsidiaries are owned beneficially by the Company free and clear
of all liens, encumbrances, equities and claims except as described in the
Prospectus;
(iv) To the best knowledge of such counsel, except as
described or referred to in the Prospectus, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the Company or
any of the Subsidiaries is a party, or to which the property of the Company or
any of the Subsidiaries is subject, before or brought by any court or
governmental agency or body which, if determined adversely to the Company or any
of the Subsidiaries, would individually or in the aggregate result in any
material adverse change in the business, financial position, net
25
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worth, results of operations or prospects, or materially adversely affect the
properties and assets collectively of the Company and the Subsidiaries taken as
a whole or might materially adversely affect the consummation of the
transactions contemplated by the Registration Statement; and all pending legal
or governmental proceedings to which the Company or any of the Subsidiaries is a
party or that affect any of their respective properties that are not described
in the Prospectus, including ordinary routine litigation incidental to the
business, are considered in the aggregate not to result in a material adverse
change in the business, financial position, net worth, results of operation or
prospects, or materially adversely affect the properties and assets collectively
of the Company and the Subsidiaries taken as a whole;
(v) The execution, delivery and performance of this
Agreement, and the consummation by the Company of the transactions contemplated
hereby and compliance by the Company with the terms hereof does not and will not
conflict with or result in a breach or violation by the Company or any
Subsidiary, as the case may be, of any of the terms or provisions of, constitute
a default by the Company or any Subsidiary, as the case may be, under, or result
in the creation or imposition of any lien, charge, security interest or
encumbrance upon any of the assets of the Company or any Subsidiary, as the case
may be, pursuant to the terms of (a) any material indenture, mortgage, deed of
trust, loan or credit agreement, bond, debenture, note, lease or other agreement
or instrument to which the Company or any of the Subsidiaries, as the case may
be, is a party or to which any of them or any of their respective properties is
subject; (b) the charter or bylaws or other organizational documents of the
Company or any Subsidiary, as the case may be; or (c) any statute, rule or
regulation or, to the best of such counsel's knowledge, any judgment, decree or
order of any court or governmental agency or court or body applicable to the
Company or any of the Subsidiaries or any of their respective properties;
(vi) Neither the Company nor any of the Subsidiaries
is in violation of its respective certificate or articles of incorporation or
bylaws, or other organizational documents, or to the knowledge of such counsel
after reasonable inquiry, is in default in the performance of any material
obligation, agreement or condition contained in any bond, debenture, note or
other evidence of indebtedness, except as may be disclosed in the Prospectus;
(vii) Except as described or incorporated by
reference in the Prospectus, there are no outstanding options, warrants or other
rights calling for the issuance of, and such counsel does not know of any
commitment, plan or arrangement to issue, any shares of capital stock of the
Company or any security convertible into or exchangeable or exercisable for
capital stock of the Company;
(viii) Except for rights which have been waived with
respect to the offering of Class A Common Stock contemplated by the Prospectus,
there is no holder of any debt or equity security of the Company or any
Subsidiary or any other person who has
26
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the right, contractual or otherwise, to cause the Company to sell or otherwise
issue to them, or to permit them to underwrite the sale of, the Shares or the
right to have any debt or equity securities of the Company included in the
registration statements or the right, as a result of the filing of the
registration statements, to require registration under the Act of any debt or
equity securities of the Company;
(ix) The Company has corporate power and authority to
enter into this Agreement and to issue, sell and deliver the Shares to be sold
by it to the Underwriters as provided herein, and this Agreement has been duly
authorized, executed and delivered by the Company; and
(x) The execution and delivery of the Heritage
Acquisition Agreements, the Lakeland Acquisition Agreements, the Max Media
Acquisition Agreements and the Sullivan Acquisition Agreements by the Company
have been duly authorized by all necessary corporate action, and the Heritage
Acquisition Agreements, the Lakeland Acquisition Agreements, the Max Media
Acquisition Agreements and the Sullivan Acquisition Agreements have been duly
executed and delivered by the Company and after execution and delivery by the
other parties thereto are the legal, valid, binding and enforceable obligations
of the Company. To the best knowledge of such counsel, all of the
representations and warranties of the Company contained in the Heritage
Acquisition Agreements, the Lakeland Acquisition Agreements, the Max Media
Acquisition Agreements and the Sullivan Acquisition Agreements are true and
correct on and as of the date of this Agreement and on and as of the Closing
Date. To the best knowledge of such counsel, there have been no amendments to
the Heritage Acquisition Agreements, the Lakeland Acquisition Agreements, the
Max Media Acquisition Agreements or the Sullivan Acquisition Agreements
subsequent to the date thereof.
In addition, such opinion shall state that such counsel has not
independently verified the accuracy, completeness or fairness of the statements
made or the information contained in or incorporated by reference in the
Registration Statement or the Prospectus including the Incorporated Documents
and such counsel is not passing upon and does not assume any responsibility
therefor. In the course of the preparation by the Company and the Subsidiaries
of the Registration Statement and the Prospectus including the Incorporated
Documents, such counsel has participated in discussions with representatives of
the Underwriters and those of the Company and the Subsidiaries and their
independent accountants, in which the business and affairs of the Company and
the Subsidiaries and the contents of the Registration Statement and the
Prospectus (including the Incorporated Documents) were discussed. Based upon the
information such counsel gained in the course of such counsel's representation
of the Company and the Subsidiaries in connection with their preparation of the
Registration Statement and the Prospectus and such counsel's participation in
the discussions referred to above, such counsel has no reason to believe that
(i) as of its effective date, the Registration Statement (including the Rule
430A Information, if applicable, and any amendment thereto) or any of the
Incorporated Documents contained any untrue statement of a material fact or
27
<PAGE>
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or (ii) the Prospectus, or any
amendment or supplement thereto, at the time the Prospectus was issued, at the
time any such amended or supplemented prospectus was issued or at the Closing
Date, contains any untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such counsel need
express no opinion, however, as to the financial statements, including the notes
and schedules thereto, or any other financial data included in the Registration
Statement, the Prospectus or the Incorporated Documents.
In giving such opinion, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the federal law of the United
States and the law of the State of Maryland, upon the opinions of counsel
satisfactory to the Underwriters. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers or other appropriate representatives of
the Company and the Subsidiaries and certificates of public officials.
Furthermore, such counsel may insofar as the opinion relates to any laws other
than the laws of the United States of America and the State of Maryland assume,
without any independent investigation, that such laws are identical to the laws
of the United States of America and the State of Maryland.
(d) You shall have received on the Closing Date, an opinion of
Wilmer, Cutler & Pickering, securities counsel for the Company, dated the
Closing Date and addressed to you, as Representatives of the several
Underwriters, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Maryland, with full power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and is duly
qualified to transact business as a foreign corporation in good standing under
the laws of each jurisdiction where the ownership or leasing of its properties
or the conduct of its business requires such qualification except where the
failure to so qualify would not have a material adverse effect upon its business
taken as a whole;
(ii) The Company has corporate power and authority to
enter into this Agreement and to issue, sell and deliver the Shares to be sold
by it to the Underwriters as provided herein, and this Agreement has been duly
authorized, executed and delivered by the Company;
(iii) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency or
body is required for the execution, delivery or performance of this Agreement by
the Company or the consummation by the Company of the transactions contemplated
by this Agreement, except (i) such as have been obtained under the Act and the
Exchange Act and (ii) such as
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<PAGE>
may be required under state securities or blue sky laws in connection with the
purchase and distribution of the Shares by the several Underwriters or as may be
required by the NASD, as to each of which in clause (ii) such counsel expresses
no opinion. The execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby (including, without limitation, the transactions described in the
Prospectus under the caption "Use of Proceeds") and compliance by the Company
with the terms of the foregoing does not and will not conflict with or result in
a breach or violation by the Company of any of the terms or provisions of,
constitute a default by the Company under, or result in the creation or
imposition of any lien, charge, security interest or encumbrance upon any of the
assets of the Company or any of the Subsidiaries, as the case may be, pursuant
to the terms of, any (x) material indenture, mortgage, deed of trust, loan or
credit agreement, bond, debenture, note, lease or other agreement or instrument
to which the Company or any of the Subsidiaries, as the case may be, is a party
or to which any of them or any of their respective properties is subject, (y)
the charter, bylaws or other organizational documents of the Company or any of
the Subsidiaries, as the case may be, or (z) any statute, rule or regulation or,
to the best of such counsel's knowledge, any judgment, decree or order of any
court or governmental agency or court or body applicable to the Company or any
of the Subsidiaries or any of their respective properties;
(iv) To the best knowledge of such counsel, except as
described or referred to in the Prospectus, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the Company or
any of the Subsidiaries is a party, or to which the property of the Company or
any of the Subsidiaries is subject, before or brought by any court or
governmental agency or body, which, if determined adversely to the Company or
any of the Subsidiaries, would individually or in the aggregate result in any
material adverse change in the business, financial position, net worth, results
of operations or prospects, or materially adversely affect the properties or
assets, of the Company and the Subsidiaries taken as a whole or might materially
adversely affect the consummation of the transactions contemplated by the
Prospectus; and all pending legal or governmental proceedings to which the
Company or any of the Subsidiaries is a party or that affect any of their
respective properties that are not described in the Prospectus, including
ordinary routine litigation incidental to the business, are, considered in the
aggregate not to result in a material adverse change in the business, financial
position, net worth, results of operations or prospects, or materially adversely
affect the properties or assets, of the Company and the Subsidiaries taken as a
whole;
(v) The descriptions in the Registration Statement
and Prospectus of statutes, legal and governmental proceedings, and contracts
and other documents present fairly in all material respects the information
required to be shown; and such counsel does not know of any statutes or
regulations or any pending or threatened legal or governmental proceedings
required to be
29
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described in the Prospectus which are not described as required, nor of any
contracts or documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement which are not described or filed as required. Such
counsel need express no opinion as to the description of any statute, regulation
or proceedings with respect to the regulation of the Company and the
Subsidiaries by the Federal Communications Commission;
(vi) The authorized and outstanding capital stock of
the Company is as set forth under the caption "Capitalization" in the
Prospectus; and the authorized capital stock of the Company conforms in all
material respects as to legal matters to the description thereof contained in
the Prospectus under the caption "Description of Capital Stock;"
(vii) All the shares of capital stock of the Company
outstanding prior to the issuance of the Shares to be issued and sold by the
Company pursuant to this Agreement have been duly authorized and validly issued,
are fully paid and nonassessable and are free of any preemptive or similar
right, except as described in the Prospectus;
(viii) The Shares to be issued and sold to the
Underwriters by the Company hereunder have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor in accordance with
the terms hereof, will be validly issued, fully paid and nonassessable and free
of any preemptive or similar rights that entitle or will entitle any person to
acquire any Shares upon the issuance thereof by the Company;
(ix) The form of certificates for the Shares conforms
to the requirements of the corporation law of the State of Maryland;
(x) The Registration Statement and the Prospectus and
any supplements or amendments thereto as of their respective dates of filing
with the Commission, comply as to form in all material respects to the
requirements of the Act as applicable to registration statements on Form S-3,
except that such counsel, however, need express no opinion as to the financial
statements, schedules and other financial data included in the Registration
Statement or the Prospectus;
(xi) The Registration Statement has become effective
under the Act, any required filing of the Prospectus or any supplement thereto
has been made with the Commission pursuant to Rule 424(b), in the manner and
within the time period required by Rule 424(b), and, to the best knowledge of
such counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are threatened, pending or contemplated under the Act;
(xii) Upon delivery of the Shares to be sold by the
Company pursuant to the Underwriting Agreement and payment therefor as
contemplated therein, assuming that the Underwriters are bona fide purchasers
within the meaning of the New
30
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York Uniform Commercial Code, the Underwriters will acquire good and marketable
title to the Shares to be sold by the Company free and clear of any lien, claim,
security interest, or other encumbrance, restriction on transfer or other defect
in title;
(xiii) As of the date and time hereof and after
application of the net proceeds of sale of the Shares as described in the
Prospectus, the Company and each of the Subsidiaries, is not and will not be an
"investment company" and is not and will not be controlled by an investment
company as the term "investment company" is defined under the Investment Company
Act of 1940, as amended (the "1940 Act"); and
(xiv) All Incorporated Documents, when they were
filed with the Commission, complied as to form in all material respects with the
requirements of the Exchange Act; and such counsel has no reason to believe that
any of such documents, when they were so filed, contained an untrue statement of
a material fact or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when such documents were so filed, not misleading (except for the financial
statements, schedules or other financial data contained in any such document as
to which counsel need express no opinion).
In addition, such opinion shall state that such counsel has not
independently verified the accuracy, completeness or fairness of the statements
made or the information contained in the Registration Statement or the
Prospectus (including the Incorporated Documents) and, except with respect to
the descriptions referred to in paragraphs (v) and (vi) above, such counsel is
not passing upon and does not assume any responsibility therefor. In the course
of the preparation by the Company of the Registration Statement and the
Prospectus (including the Incorporated Documents), such counsel has participated
in discussions with representatives of the Underwriters and those of the Company
and their independent accountants, in which the business and affairs of the
Company and the Subsidiaries and the contents of the Registration Statement and
the Prospectus (including the Incorporated Documents) were discussed. Based upon
the information such counsel gained in the course of such counsel's
representation of the Company in connection with its preparation of the
Registration Statement and the Prospectus and such counsel's participation in
the discussions referred to above, nothing has come to such counsel's attention
that leads them to believe that (i) as of its effective date, the Registration
Statement (including the Rule 430A Information, if applicable, and any amendment
thereto) or any of the Incorporated Documents 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 (ii) the
Prospectus, or any amendment or supplement thereto, at the time the Prospectus
was issued, at the time any such amended or supplemented prospectus was issued
or at the Closing Date, contains any untrue statement of a material fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. Such
counsel need express no opinion, however, as to the financial
31
<PAGE>
statements, including the notes and schedules thereto, or any other financial
information included in the Registration Statement, the Prospectus or the
Incorporated Documents.
In giving such opinion, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the federal law of the United
States, the law of the State of New York, the law of the State of Maryland and
the General Corporation Law of the State of Delaware, upon the opinions of
counsel satisfactory to the Underwriters. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers or other appropriate
representatives of the Company and the Subsidiaries and certificates of public
officials.
(e) You shall have received on the Closing Date one or more
opinions of counsel (who may be in-house counsel) for all of the Selling
Stockholders, dated the Closing Date and addressed to you, as Representatives of
the several Underwriters, to the effect that:
(i) Each of this Agreement and the Custody Agreement
has been duly authorized, executed and delivered by or on behalf of each of the
Selling Stockholders, and assuming due authorization, execution and delivery of
the Custody Agreement by each of the other parties thereto, the Custody
Agreement is a valid and binding agreement of each Selling Stockholder
enforceable against such Selling Stockholder in accordance with its terms (x)
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and, as to enforceability, to general principles of
equity, and (y) except to the extent that rights to indemnity or contribution
under the Custody Agreement may be limited by federal and state securities laws
or the public policy underlying such laws. By law no spousal consents are needed
and to the knowledge of such counsel no agreement, indenture or other instrument
exists which would require spousal consents to effectuate the transactions
contemplated by this Agreement or the Custody Agreement;
(ii) To the knowledge of such counsel, each Selling
Stockholder has full legal right, power and authorization, and has obtained any
approval required by law, to sell, assign, transfer and deliver good and
marketable title to the Shares which such Selling Stockholder has agreed to sell
pursuant to this Agreement. Upon delivery and payment for such Shares to be sold
by such Selling Stockholder hereunder in accordance with this Agreement, the
Underwriters (assuming that they have provided such Shares in good faith and
without notice of any adverse claim, and assuming that there are no events or
circumstances peculiar to any individual Underwriter which might result in any
adverse claim) will acquire good and marketable title to such Shares so sold;
and
(iii) Neither the execution and delivery of this
Agreement or the Custody Agreement by or on behalf of such Selling Stockholder
nor the consummation of the transactions herein or therein contemplated by or on
behalf of such Selling
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<PAGE>
Stockholder requires any consent, approval, authorization or order of, or filing
or registration with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be required under the
Act or such as may be required under state securities or blue sky laws governing
the purchase and distribution of the Shares or with the NASD) or conflicts or
will conflict with or constitutes or will constitute a breach of, or default
under, or violates or will violate, any agreement, indenture or other instrument
to which such Selling Stockholder is a party or by which such Selling
Stockholder is or may be bound or to which any of such Selling Stockholder's
property or assets is subject, or any statute, law, rule, regulation, ruling,
judgment, injunction, order or decree applicable to such Selling Stockholder or
to any property or assets of such Selling Stockholder.
(f) You shall have received on the Closing Date an opinion of
Fisher Wayland Cooper Leader & Zaragoza L.L.P., regulatory counsel for the
Company, dated the Closing Date and addressed to you, as Representatives of the
several Underwriters, in form and substance satisfactory to you to the effect
that:
(i) Except for such Federal Communications Commission
(the "FCC") approvals that have already been obtained, which approvals, to such
counsel's knowledge, are in full force and effect, no FCC approval,
authorization, consent or license is required under the Communications Act of
1934, as amended, and the rules and regulations promulgated thereunder (the
"Communications Laws") for the consummation of the transactions contemplated by
this Agreement and the issuance and sale under this Agreement of the Shares. The
execution, delivery and performance in accordance with the terms of this
Agreement by the Company will not violate the Communications Laws. It should be
noted that, under the Communications Laws, FCC approval is required prior to the
transfer of control of the Company or any of the Subsidiaries which hold
broadcast licenses or the assignment of any FCC licenses or authorizations or
prior to the exercise of any voting rights or management authority over the
Company or any of the Subsidiaries which hold broadcast licenses to the extent
that such exercise constitutes a transfer of control of the Company or any of
such Subsidiaries or an assignment of any FCC licenses or authorizations.
(ii) The following Subsidiaries are the licensees of
the respective stations as identified below, and, except as disclosed in the
Prospectus, are authorized to own and operate their respective stations:
<TABLE>
<CAPTION>
Subsidiary Station
- ---------- -------
<S> <C>
Chesapeake Television WBFF(TV)
Licensee, Inc. Baltimore, MD
WTTE, Channel 28 Licensee, WTTE(TV)
Inc. Columbus, OH
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
Subsidiary Station
- ---------- -------
<S> <C>
WPGH Licensee, Inc. WPGH-TV
Pittsburgh, PA
WCGV Licensee, Inc. WCGV-TV
Milwaukee, Wisconsin
WTTO Licensee, Inc. WTTO(TV)
Birmingham, Alabama
WLFL Licensee, Inc. WLFL(TV)
Raleigh, North Carolina
WTVZ Licensee, Inc. WTVZ-TV
Norfolk, Virginia
WSTR Licensee, Inc. WSTR-TV
Cincinnati, Ohio
KSMO Licensee, Inc. KSMO-TV
Kansas City, MO
WYZZ Licensee Inc. WYZZ(TV)
Bloomington, Illinois
Superior OK License Corp. KOCB(TV)
Oklahoma City, OK
Superior KY License Corp. WDKY-TV
Danville, KY
WSMH Licensee, Inc. WSMH(TV)
Flint, MI
SCI-Sacramento Licensee, Inc. KOVR(TV)
Stockton, CA
KDSM Licensee, Inc. KDSM-TV
Des Moines, IA
KDNL Licensee, Inc. KDNL-TV
St. Louis, MO
KUPN Licensee, Inc. KUPN(TV)
Las Vegas, NV
KABB Licensee, Inc. KABB(TV)
San Antonio, TX
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
Subsidiary Station
- ---------- -------
<S> <C>
WLOS Licensee, Inc. WLOS(TV)
Asheville, NC
WEAR Licensee, Inc. WEAR(TV), Pensacola, FL
WNNE Licensee, Inc. WNNE(TV), Hartford, Vermont
WPTZ Licensee, Inc. WPTZ(TV), North Pole, NY
WCHS Licensee, Inc. WCHS(TV), Charleston, West Virginia
Sinclair Radio of Los Angeles Licensee, Inc. KBLA(AM)
Santa Monica, CA
Sinclair Radio of New Orleans Licensee, Inc. WWL(AM), New Orleans, Louisiana
WSMB(AM), New Orleans, Louisiana
WLMG(FM), New Orleans, Louisiana
KMEZ(FM), Belle Chasse, Louisiana
Sinclair Radio of Buffalo Licensee, Inc. WBEN(AM), Buffalo, New York
WWKB(AM), Buffalo, New York
WMJQ(FM), Buffalo, New York
WKSE(FM), Niagara Falls, New York
WGR(AM), Buffalo, New York
WWWS (AM), Buffalo, New York
Sinclair Radio of Memphis Licensee, Inc. WJCE(AM), Memphis, Tennessee
WRVR-FM, Memphis, Tennessee
WOGY-FM, Germantown, Tennessee
Sinclair Radio of Nashville Licensee, Inc. WLAC(AM), Nashville, Tennessee
WLAC-FM, Nashville, Tennessee
WJZC(FM), Russellville, Kentucky
Sinclair Radio of Wilkes-Barre Licensee, Inc. WGBI(AM), Scranton, Pennsylvania
WILK(AM), Wilkes-Barre, Pennsylvania
WGGY(FM), Scranton, Pennsylvania
WKRZ(FM), Wilkes-Barre, Pennsylvania
WILP(AM), West Hazelton, Pennsylvania
WWFH(FM), Freeland, Pennsylvania
WKRF(FM), Tobyhanna, Pennsylvania
WWSH(FM), Pittston, Pennsylvania
WGGI(FM) Benton, Pennsylvania
Sinclair Radio of St. Louis Licensee, Inc. WVRV(FM), East St. Louis, Illinois
KPNT(FM), St. Genevieve, Missouri
WRTH(AM), St. Louis, MO
WIL-FM, St. Louis, MO
KIHT(FM), St. Louis, MO
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
Subsidiary Station
- ---------- -------
<S> <C>
Sinclair Radio of Kansas City Licensee, Inc. KXTR(FM), Kansas City, MO
KCFX-FM, Harrisonville, MO
KCIY (FM), Liberty, MO
KCAZ (AM), Mission, KS
KQRC (FM), Leavenworth, KS
Sinclair Radio of Milwaukee Licensee, Inc. WEMP(AM), Milwaukee, WI
WMYX(FM), Milwaukee, WI
WAMG(FM), Wauwatosa, WI
Sinclair Radio of Norfolk Licensee, Inc. WGH(FM), Newport News, VA
WGH(AM), Newport News, VA
WVCL(FM), Norfolk, VA
Sinclair Radio of Portland Licensee, Inc. KFXX (AM), Vancouver, WA
KKSN-FM, Portland, OR
KKRH(FM), Salem, OR
Sinclair Radio of Rochester Licensee, Inc. WBBF(AM), Rochester, NY
WBEE-FM, Rochester, NY
WKLX (FM), Rochester, NY
WQRV(FM), Avon, NY
</TABLE>
To such counsel's knowledge, all of the licenses held by the subsidiaries
identified in this paragraph (ii) necessary to operate their respective stations
(the "FCC Material Licenses") are valid and in full force and effect. The
stations identified in this paragraph (ii) are collectively referred to as the
"Stations."
(iii) To the best of such counsel's knowledge,
Baltimore (WNUV-TV) Licensee, Inc. is the licensee of WNUV-TV, Baltimore,
Maryland; WVTV Licensee, Inc. is the licensee of WVTV(TV), Milwaukee, Wisconsin;
WPTT, Inc. is the licensee of WCWB(TV), Pittsburgh, Pennsylvania; Raleigh
(WRDC-TV) Licensee, Inc. is the licensee of WRDC(TV), Durham, North Carolina;
River City License Partnership is the licensee of WTTV(TV), Bloomington, Indiana
and WTTK(TV), Kokomo, Indiana; Anderson (WFBC-TV) Licensee, Inc. is the licensee
of WFBC-TV, Anderson, South Carolina; San Antonio (KRRT-TV) Licensee, Inc. is
the licensee of KRRT(TV), Kerrville, Texas; Tiab Communications Corporation is
the licensee of WILT(AM), Mt. Pocono, Pennsylvania; WDBB-TV, Inc. is the
licensee of WDBB(TV), Tuscaloosa, Alabama; Birmingham (WABM-TV) Licensee, Inc.,
is the licensee of WABM(TV), Birmingham, Alabama; Phase II Broadcasting, Inc. is
the licensee of WLTS-FM, Slidell, Louisiana and WTKL(FM), New Orleans, Louisiana
and Television Fit for Life, Inc. is the licensee of WFGX(TV), Ft. Walton Beach,
Florida; and Champlain Valley Telecasting, Inc. is the permittee of WFFF(TV),
Burlington, Vermont. To the best of such counsel's knowledge, Baltimore
(WNUV-TV) Licensee, Inc., WVTV Licensee, Inc., WPTT, Inc., Raleigh (WRDC-TV)
Licensee, Inc., River City License Partnership,
36
<PAGE>
Anderson (WFBC-TV) Licensee, Inc., San Antonio (KRRT-TV) Licensee, Inc., Tiab
Communications Corporation, WDBB-TV, Inc., Birmingham (WABM-TV) Licensee, Inc.,
Phase II Broadcasting, Inc., Television Fit for Life, Inc. and Champlain Valley
Telecasting, Inc. (collectively the "LMA Station Licensees"), except as
disclosed in the Prospectus, are authorized to own and operate their respective
LMA stations identified in this Paragraph (iii) (each individually a "LMA
Station" and collectively the "LMA Stations". To such counsel's knowledge, the
licenses or permits held by the LMA Station Licensees to own and operate their
respective LMA Stations are valid and in full force and effect.
(iv) Except as set forth in the Prospectus, to such
counsel's knowledge, there are no proceedings pending or threatened in writing
under the Communications Laws that are specifically directed against the
Company, the 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 modification of any FCC Material Licenses,
wherein an unfavorable ruling, decision, or finding would materially and
adversely change the financial condition, business or properties of the Company
and the Subsidiaries individually or taken as a whole. To such counsel's
knowledge, based solely upon such counsel's examination of records available for
public inspection at the FCC in Washington, D.C., the Stations are operating in
compliance with their FCC Material Licenses, except possibly for noncompliance
that would not have a material adverse effect on the financial condition,
business or properties of the Company and the Subsidiaries individually or taken
as a whole.
(v) The statements in the Prospectus under the
captions (a) "RISK FACTORS--Competition" "--Impact of New Technologies,"
"--Governmental Regulations; Necessity of Maintaining FCC Licenses," "--Multiple
Ownership Rules and Effect on LMAs," and "--LMAs - Rights of Preemption and
Termination" and (b) "BUSINESS OF SINCLAIR-- Federal Regulation of Television
and Radio Broadcasting" insofar as such statements constitute a summary of
material Communications Laws and material proceedings, fairly and in all
material respects present the information contained under such captions in light
of the circumstances in which such statements are made, and to the extent they
constitute matters of law and legal conclusions under the Communications Laws,
fairly and in all material respects accurately present the information contained
under such captions in light of the circumstances in which such statements are
made.
Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers or other appropriate representatives of the Company and
the Subsidiaries and certificates of public officials.
(g) You shall have received on the Closing Date an opinion of
Fried, Frank, Harris, Shriver & Jacobson, counsel for the Underwriters, dated
the Closing Date
37
<PAGE>
and addressed to you, as Representatives of the several Underwriters, with
respect to the matters agreed upon. In addition, such opinion shall also state
the following: In the course of the preparation by the Company of the
Registration Statement and the Prospectus, such counsel participated in
conferences with certain of the officers and representatives of, and the
independent public accountants for, the Company, at which the Registration
Statement and the Prospectus were discussed. Between the date of effectiveness
of the Registration Statement and the time of delivery of such opinion, such
counsel attended additional conferences with certain of the officers and
representatives of the Company, at which the contents of the Prospectus were
discussed to a limited extent. Given the limitations inherent in the independent
verification of factual matters and the character of determinations involved in
the registration process, such counsel is not passing upon or assuming any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and has not made any
independent check or verification thereof. Subject to the foregoing and on the
basis of the information gained in the performance of the services referred to
above, including information obtained from officers and other representatives
of, and the independent public accountants for, the Company, no facts have come
to such counsel's attention that cause such counsel to believe that the
Registration Statement, as of its effective date, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading or
that the Prospectus as of its effective date contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein in light of the
circumstances under which they were made not misleading. Also, subject to the
foregoing, no facts have come to such counsel's attention in the course of
proceedings described in the second sentence of this paragraph that cause such
counsel to believe that the Prospectus, at the Closing Date, 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, in the light of the
circumstances in which they were made, not misleading. Such counsel express no
view or belief, however, with respect to financial statements, notes or
schedules thereto or other financial information included in or omitted from the
Registration Statement or Prospectus.
In giving such opinion, such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the federal law of the
United States, the law of the State of New York, and the General Corporation Law
of the State of Delaware, upon the opinions of counsel satisfactory to the
Underwriters. Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers or other appropriate representatives of the Company and
the Subsidiaries and certificates of public officials.
(h) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and the
Closing Date from Arthur
38
<PAGE>
Andersen LLP, KPMG Peat Marwick and Price Waterhouse LLP, independent certified
public accountants, substantially in the forms heretofore approved by you.
(i) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any change in the capital stock of the Company nor any material
increase in the short-term or long-term debt of the Company (other than in the
ordinary course of business) from that set forth or contemplated in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto); (iii) there shall not have been, since the respective dates as of
which information is given in the Registration Statement and the Prospectus (or
any amendment or supplement thereto), except as may otherwise be stated in the
Registration Statement and Prospectus (or any amendment or supplement thereto),
any material adverse change in the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole; (iv) the Company and the Subsidiaries shall not
have any liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), that are material to the Company and the
Subsidiaries, taken as a whole, other than those reflected in the Registration
Statement or the Prospectus (or any amendment or supplement thereto); and (v)
all the representations and warranties of the Company contained in this
Agreement shall be true and correct on and as of the date hereof and on and as
of the Closing Date as if made on and as of the Closing Date, and you shall have
received a certificate, dated the Closing Date and signed by the chief executive
officer and the chief financial officer of the Company (or such other officers
as are acceptable to you), to the effect set forth in this Section 10(i) and in
Sections 10(j) and 10(p) hereof.
(j) The Company shall not have failed at or prior to the
Closing Date to have performed or complied with any of its agreements contained
in this Agreement and required to be performed or complied with by it hereunder
at or prior to the Closing Date.
(k) All the representations and warranties of the Selling
Stockholders contained in this Agreement shall be true and correct on and as of
the date hereof and on and as of the Closing Date as if made on and as of the
Closing Date, and you shall have received certificates, dated the Closing Date
and signed by or on behalf of each Selling Stockholder to the effect set forth
in this Section 10(k) and in Section 10(l) hereof.
(l) The Selling Stockholders shall not have failed at or prior
to the Closing Date to have performed or complied with any of their agreements
herein contained and required to be performed or complied with by them hereunder
at or prior to the Closing Date.
(m) The Shares shall have been listed or approved for listing
upon notice of issuance on the Nasdaq National Market.
39
<PAGE>
(n) The Company shall have furnished to you "lock-up" letters,
in form and substance satisfactory to you, signed by each of its current
officers and directors and each of its stockholders designated by you; provided
that no Selling Stockholder shall be required to provide a lock-up letter.
(o) There shall not have been any announcement by any
"nationally recognized statistical rating organization," as defined for purposes
of Rule 436(g) under the Act, that (i) it is downgrading its rating assigned to
any class of securities of the Company or any of its Subsidiaries, or (ii) it is
reviewing its ratings assigned to any class of securities of the Company with a
view to possible downgrading, or with negative implications, or direction not
determined.
(p) The Company shall have furnished or caused to be furnished
to the Underwriters such further certificates and documents as the Underwriters
shall have requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and your counsel.
Any certificate or document signed by any officer of the Company or any
Attorney-in-Fact or any Selling Stockholder and delivered to you, as
Representatives of the Underwriters, or to counsel for the Underwriters, shall
be deemed a representation and warranty by the Company, such Attorney-in-Fact or
such Selling Stockholder, as the case may be, to each Underwriter as to the
statements made therein.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of any Option Closing
Date of the conditions set forth in this Section 10, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in Sections 10(c) through 10(h) and Sections 10(k) and 10(p)
shall be dated the Option Closing Date in question and the opinions called for
by Sections 10(c), 10(d), 10(e) and 10(g) shall be revised to reflect the sale
of Additional Shares.
11. Expenses. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Prepricing Prospectus, the Prospectus, and
each amendment or supplement to any of them and this Agreement; (ii) the
printing (or reproduction) and delivery (including postage, air freight charges
and charges for counting and packaging) of such copies of the Registration
Statement, the Prepricing Prospectus, the Prospectus, and all amendments or
supplements to any of them as may be reasonably requested for use in connection
with the offering and sale of the Shares; (iii) the preparation, printing,
authentication, issuance and
40
<PAGE>
delivery of certificates for the Shares, including any stamp taxes in connection
with the original issuance and sale of the Shares; (iv) the printing (or
reproduction) and delivery of this Agreement, the preliminary and supplemental
Blue Sky Memoranda and all other agreements or documents printed (or reproduced)
and delivered in connection with the offering of the Shares; (v) the listing of
the Shares on the Nasdaq National Market; (vi) the lodging, meals and expenses
incurred by or on behalf of the Company's officers in connection with
presentations to prospective purchasers of the Shares; (vii) the registration or
qualification of the Shares for offer and sale under the securities or blue sky
laws of the several states as provided in Section 5(g) hereof (including the
reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); and (viii) the fees and expenses of the Company's accountants
and the fees and expenses of counsel (including local and special counsel) for
the Company and the Selling Stockholders.
12. Effective Date of Agreement. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
registration statements or a post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, when notification of
the effectiveness of the Registration Statement or such post-effective amendment
has been released by the Commission. Until such time as this Agreement shall
have become effective, it may be terminated by the Company, by notifying you, or
may be terminated by you, as Representatives of the several Underwriters, by
notifying the Company and the Selling Stockholders.
If any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they are obligated to purchase hereunder on the Closing Date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters are obligated but fail or refuse to purchase is not more than
one-tenth of the aggregate number of Shares which the Underwriters are obligated
to purchase on the Closing Date, each non-defaulting Underwriter shall be
obligated, severally, in the proportion which the number of Firm Shares set
forth opposite its name in Schedule II hereto bears to the aggregate number of
Firm Shares set forth opposite the names of all non-defaulting Underwriters or
in such other proportion as you may specify in accordance with Section 20 of the
Master Agreement Among Underwriters of Smith Barney Inc. to purchase the Shares
which such defaulting Underwriter or Underwriters are obligated, but fail or
refuse, to purchase. If any one or more of the Underwriters shall fail or refuse
to purchase Shares which it or they are obligated to purchase on the Closing
Date and the aggregate number of Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares which the
Underwriters are obligated to purchase on the Closing Date and arrangements
satisfactory to you, the Company and the Selling Stockholders for the purchase
of such Shares by one or more non-defaulting Underwriters or other party or
parties approved by you and the Company are not made within 36 hours after such
default, this Agreement will terminate without liability on the
41
<PAGE>
part of any non-defaulting Underwriter, the Company or any Selling Stockholder.
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. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any such default
of any such Underwriter under this Agreement. The term "Underwriter" as used in
this Agreement includes, for all purposes of this Agreement, any party not
listed in Schedule II hereto who, with your approval and the approval of the
Company, purchases Shares which a defaulting Underwriter is obligated, but fails
or refuses, to purchase.
Any notice under this Section 12 may be given by fax, telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
13. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company or any Selling Stockholder, if prior to the Closing
Date or any Option Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, (i) trading in securities
generally on the New York Stock Exchange, American Stock Exchange or the Nasdaq
National Market shall have been suspended or materially limited, (ii) trading in
the Class A Common Stock on the Nasdaq National Market shall have been suspended
or materially limited, (iii) a general moratorium on commercial banking
activities in New York or Maryland shall have been declared by either federal or
state authorities, or (iv) there shall have occurred any outbreak or escalation
of hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to commence or continue the offering of the Shares
at the offering price to the public set forth on the cover page of the
Prospectus or to enforce contracts for the resale of the Shares by the
Underwriters. Notice of such termination may be given to the Company by fax,
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
14. Information Furnished by the Underwriters. The statements set forth
in the last paragraph on the cover page, the stabilization legend on the inside
cover page, and the statements in the first, third and seventh paragraphs under
the caption "Underwriting" in the prospectus supplement relating to the offering
of the Shares included in any Prepricing Prospectus and in the Prospectus
constitute the only information furnished by or on behalf of the Underwriters
through you as such information is referred to in Sections 7(b) and 9 hereof.
15. Miscellaneous. Except as otherwise provided in Sections 5, 12 and
13 hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at 2000 West 41st
42
<PAGE>
Street, Baltimore, Maryland 21211, Attention: David D. Smith, President, with a
copy to Sinclair Communications, Inc. 2000 West 41st Street, Baltimore, MD
21211, Attention: General Counsel and a copy to Thomas & Libowitz, P.A., 100
Light Street, Suite 1100, Baltimore, Maryland 21202, Attention: Steven A.
Thomas, Esq., with a copy to Wilmer, Cutler & Pickering, 2445 M Street,
Washington, D.C. 20037, Attention: John B. Watkins, Esq.; (ii) if to the Selling
Stockholders, to the addresses set forth on Schedule III hereto with a copy to
Edwards & Angell, 101 Federal Street, Boston, MA 02110, Attention: Nicholas S.
Hodge, Esq.; or (iii) if to you, as Representatives of the several Underwriters,
c/o Smith Barney Inc., 388 Greenwich Street, New York, New York 10013,
Attention: Manager, Investment Banking Division, with a copy to Fried, Frank,
Harris, Shriver & Jacobson, One New York Plaza, New York, New York 10004,
Attention: Valerie Ford Jacob, Esq.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 9 hereof and the Selling Stockholders
and their respective successors and assigns, to the extent provided herein, and
no other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns" as
used in this Agreement shall include a purchaser from any Underwriter of any of
the Shares in his status as such purchaser.
16. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
43
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
SINCLAIR BROADCAST GROUP, INC.
By: /s/ David B. Amy
------------------------------------
Name: David B. Amy
Title: Chief Financial Officer
BANCBOSTON INVESTMENTS, INC.
By: /s/ Lars A. Swanson
------------------------------------
Name: Lars A. Swanson
Title: Vice President
PYRAMID VENTURES, INC.
By: /s/ Brian Talbot
------------------------------------
Name: Brian Talbot
Title: Managing Director
BOSTON VENTURES LIMITED PARTNERSHIP IV
By: /s/ Boston Ventures Company Limited Partnership IV
----------------------------------------------------,
its General Partner
By: /s/ Roy T. Coppedge
------------------------------------
Name:
Title:
BOSTON VENTURES LIMITED PARTNERSHIP IVA
By: /s/ Boston Ventures Company Limited Partnership IV
----------------------------------------------------,
its General Partner
By: /s/ Roy T. Coppedge
------------------------------------
Name:
Title:
MARCUS, MR. LARRY D.
By: /s/ Larry D. Marcus
------------------------------------
Name:
Title:
44
<PAGE>
MARCUS INVESTMENTS, L.P.
By: /s/ Larry D. Marcus
------------------------------------,
its General Partner
By:
------------------------------------
Name:
Title:
Confirmed as of the date first above
mentioned on behalf of themselves
and the other several Underwriters
named in Schedule II hereto.
SMITH BARNEY INC.,
as Representatives of the several Underwriters
By: SMITH BARNEY INC.
By: /s/ Michael Levy
--------------------------------------
Name: Michael Levy
Title: Associate
45
<PAGE>
SCHEDULE I
SINCLAIR BROADCAST GROUP, INC.
<TABLE>
<CAPTION>
Number of Firm Shares:
Selling Stockholder Class A Common Stock
- ------------------- --------------------
<S> <C>
BancBoston Investments, Inc. 475,369
Pyramid Ventures, Inc. 483,778
Boston Ventures Limited Partnership IV 549,020
Boston Ventures Limited Partnership IVA 386,328
Marcus, Mr. Larry D. 92,995
Marcus Investments, L.P. 42,697
Total: 2,030,187
------
</TABLE>
<TABLE>
<CAPTION>
Number of Additional Shares:
Selling Stockholder Class A Common Stock
- ------------------- --------------------
<S> <C>
BancBoston Investments, Inc. 71,305
Pyramid Ventures, Inc. 72,567
Boston Ventures Limited Partnership IV 82,353
Boston Ventures Limited Partnership IVA 57,949
Marcus, Mr. Larry D. 13,949
Marcus Investments, L.P. 6,405
Total: 304,528
------
</TABLE>
S-1
<PAGE>
SCHEDULE II
SINCLAIR BROADCAST GROUP, INC.
Underwriter Number of Firm Shares
----------- ---------------------
Smith Barney Inc. 1,975,924
BT Alex. Brown Incorporated 1,317,500
Credit Suisse First Boston Corporation 988,200
Bear, Stearns & Co. Inc. 576,341
Furman Selz LLC 576,341
Goldman, Sachs & Co. 576,341
Lehman Brothers Inc. 289,770
NationsBanc Montgomery Securities LLC 289,770
Allen & Company Incorporated 160,000
CIBC Oppenheimer Corp. 160,000
A.G. Edwards & Sons, Inc. 160,000
Legg Mason Wood Walker, Incorporated 160,000
Prudential Securities Incorporated 160,000
Schroder & Co. Inc. 160,000
UBS Securities LLC 160,000
Wasserstein Perella Securities, Inc. 160,000
Wheat First Securities, Inc. 160,000
-------------------
Total: 8,030,187
------
S-2
<PAGE>
SCHEDULE III
SINCLAIR BROADCAST GROUP, INC.
Selling Stockholder Deliver All Notices to:
- ------------------- -----------------------
BancBoston Investments, Inc. 175 Federal Street, 10th Floor
Boston, MA 02110
Attention: Lars Swanson
Pyramid Ventures, Inc. Bankers Trust
130 Liberty Street, 25th Floor
New York, NY 10006
Attention: Ethan Falcove
Boston Ventures Limited Partnership IV 1 Federal St., 23rd Floor
Boston, MA 02110
Attention: Elizabeth Flynn
Boston Ventures Limited Partnership IVA 1 Federal St., 23rd Floor
Boston, MA 02110
Attention: Elizabeth Flynn
Marcus, Mr. Larry D. Marcus Investments, L.P.
34 West Brentmoor Park
Clayton, MO 63105
Attention: Larry Marcus
Marcus Investments, L.P. Marcus Investments, L.P.
34 West Brentmoor Park
Clayton, MO 63105
Attention: Larry Marcus
S-3
<PAGE>
EXHIBIT A
SINCLAIR BROADCAST GROUP, INC.
Chesapeake Television, Inc.
Chesapeake Television Licensee, Inc.
Cresap Enterprises, Inc.
FSF-TV, Inc.
KABB Licensee, Inc.
KDNL Licensee, Inc.
KDSM, Inc.
KDSM Licensee, Inc.
KLGT Licensee, Inc.
KSMO, Inc.
KSMO Licensee, Inc.
KUPN Licensee, Inc.
SCI-Indiana Licensee, Inc.
SCI-Sacramento Licensee, Inc.
Sinclair Acquisition I, Inc.
Sinclair Acquisition II, Inc.
Sinclair Capital (Delaware statutory trust)
Sinclair Communications, Inc.
Sinclair Radio of Albuquerque, Inc.
Sinclair Radio of Albuquerque Licensee, Inc.
Sinclair Radio of Buffalo, Inc.
Sinclair Radio of Buffalo Licensee, Inc.
Sinclair Radio of Greenville, Inc.
Sinclair Radio of Greenville Licensee, Inc.
Sinclair Radio of Kansas City Licensee, Inc.
Sinclair Radio of Los Angeles, Inc.
Sinclair Radio of Los Angeles Licensee, Inc.
Sinclair Radio of Milwaukee Licensee, Inc.
Sinclair Radio of Memphis, Inc.
Sinclair Radio of Memphis Licensee, Inc.
Sinclair Radio of Nashville, Inc.
Sinclair Radio of Nashville Licensee, Inc.
Sinclair Radio of New Orleans, Inc.
Sinclair Radio of New Orleans Licensee, Inc.
Sinclair Radio of Norfolk Licensee, Inc.
Sinclair Radio of St. Louis, Inc.
Sinclair Radio of St. Louis Licensee, Inc.
S-4
<PAGE>
Sinclair Radio of Portland Licensee, Inc.
Sinclair Radio of Rochester Licensee, Inc.
Sinclair Radio of Wilkes-Barre, Inc.
Sinclair Radio of Wilkes-Barre Licensee, Inc.
Superior Communications of Kentucky, Inc.
Superior Communications of Oklahoma, Inc.
Superior KY License Corp.
Superior OK License Corp.
Tuscaloosa Broadcasting, Inc.
Tuscaloosa Broadcasting Licensee, Inc.
WCGV, Inc.
WCGV Licensee, Inc.
WCHS Licensee, Inc.
WDBB, Inc.
WEAR Licensee, Inc.
WLFL, Inc.
WLFL Licensee, Inc.
WLOS Licensee, Inc.
WNNE Licensee, Inc.
WPGH, Inc.
WPGH Licensee, Inc.
WPTZ Licensee, Inc.
WSMH, Inc.
WSMH Licensee, Inc.
WSTR, Inc.
WSTR Licensee, Inc.
WSYX, Inc.
WTTE, Channel 28, Inc.
WTTE, Channel 28 Licensee, Inc.
WTTO, Inc.
WTTO Licensee, Inc.
WTVZ, Inc.
WTVZ Licensee, Inc.
WYZZ, Inc.
WYZZ Licensee, Inc.
S-5
EXHIBIT 5.1
April 10, 1998
Sinclair Broadcast Group, Inc.
2000 West 41st Street
Baltimore, Maryland 21211
Re: Sinclair Broadcast Group, Inc. Registration Statement on Form S-3
-----------------------------------------------------------------
Dear Ladies and Gentlemen:
We have acted as counsel to Sinclair Broadcast Group, Inc., a Maryland
corporation (the "Company"), in connection with Registration Statements (as
amended, and including prospectus supplements filed pursuant to Rule 424 of the
Securities Act of 1933, the "Registration Statements") on Form S-3 filed with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended. The Registration Statements relate to the registration
of the issuance by the Company of 6,000,000 shares of Class A Common Stock of
the Company, par value $0.01 per share (the "Class A Common Stock") and the sale
by certain Selling Stockholders identified therein of up to 2,030,187 shares of
Class A Common Stock (together with the 6,000,000 shares of Class A Common Stock
offered by the Company, the "Class A Common Shares"). The Class A Common Shares
are to be sold pursuant to an Underwriting Agreement (the "Common Stock
Underwriting Agreement") by and among the Company, certain Selling Stockholders
named therein, and Salomon Smith Barney, Smith Barney Inc., BT Alex. Brown
Incorporated, Credit Suisse First Boston Corporation, Bear, Stearns & Co. Inc.,
Furman Selz LLC, Goldman, Sachs & Co., Lehman Brothers Inc. and NationsBanc
Montgomery Securities LLC (the "Representatives"), as representatives of the
Underwriters.
For the purposes of this opinion, we have examined copies of the
following documents:
1. The Registration Statements;
2. The Amended and Restated Articles of Incorporation of the Company;
3. The Bylaws of the Company;
4. The Common Stock Underwriting Agreement;
<PAGE>
Sinclair Broadcast Group, Inc.
April 10, 1998
Page 2
5. The Resolutions of the Board of Directors of the Company dated April
7, 1998.
In our examination of the aforesaid documents, we have assumed the
legal capacity of all natural persons, the genuineness of all signatures, the
completeness and authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified,
telecopied, photostatic or reproduced copies.
This opinion is limited to the laws of the United State and the General
Corporation Law of Maryland. We are members of the Bar of the State of Maryland
and do not hold ourselves out as being experts in the laws of any other
jurisdiction. Our opinion is rendered only with respect to the laws and the
rules, regulations and orders thereunder that are currently in effect.
Based upon, subject to, and limited by the foregoing, we are of the
opinion that (i) the Class A Common Shares have been lawfully and duly
authorized (ii) the Class A Common Shares to be sold by the Company, when issued
and delivered in accordance with the terms of the Common Stock Underwriting
Agreement, will be validly issued, fully paid and nonassessable, and (iii)
assuming conversion of Series B Preferred Stock held by the Selling Stockholders
into Class A Common Stock pursuant to the terms of the Amended and Restated
Articles of the Company, the Class A Common Shares to be sold by the Selling
Stockholders, will be validly issued, fully paid and non-assessable.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion. This opinion has been prepared
solely for your use in connection with the filing of the Form 8-K on April 9,
1998 (the "Form 8-K") and incorporation by reference into the Registration
Statements, and should not be quoted in whole or in part or otherwise be
referred to, nor otherwise be filed with or furnished to any governmental agency
or other person or entity, without our express prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Form 8-K and incorporation by reference into the Registration Statements and to
the use of our name therein under the caption "Legal Matters."
Sincerely,
WILMER, CUTLER & PICKERING
By: /s/ John B. Watkins
----------------------------------------
John B. Watkins, a partner
[THOMAS & LIBOWITZ, P.A. LETTERHEAD]
April 10, 1998
Sinclair Broadcast Group, Inc.
2000 West 41st Street
Baltimore, Maryland 21211
Re: Sinclair Broadcast Group, Inc. Registration Statement on Form S-3
Dear Ladies and Gentlemen:
We have acted as counsel to Sinclair Broadcast Group, Inc., a Maryland
corporation (the "Company"), in connection with Registration Statements (as
amended, and including prospectus supplements filed pursuant to Rule 424 of the
Securities Act of 1933, the "Registration Statements") on Form S 3 filed with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended. The Registration Statements relate to the registration
of the issuance by the Company of 6,000,000 shares of Class A Common Stock of
the Company, par value $0.01 per share (the "Class A Common Stock") and the sale
by certain Selling Stockholders identified therein of up to 2,030,187 shares of
Class A Common Stock (together with the 6,000,000 shares of Class A Common Stock
offered by the Company, the "Class A Common Shares"). The Class A Common Shares
are to be sold pursuant to an Underwriting Agreement (the "Common Stock
Underwriting Agreement") by and among the Company, certain Selling Stockholders
named therein, and Salomon Smith Barney, Smith Barney Inc., BT Alex. Brown
Incorporated, Credit Suisse First Boston Corporation, Bear, Stearns & Co. Inc.,
Furman Selz LLC, Goldman, Sachs & Co., Lehman Brothers Inc. and NationsBanc
Montgomery Securities LLC (the "Representatives"), as representatives of the
Underwriters.
For the purposes of this opinion, we have examined copies of the following
documents:
1. The Registration Statements;
2. The Amended and Restated Articles of Incorporation of the Company;
The Bylaws of the Company;
4. The Common Stock Underwriting Agreement;
5. The Resolutions of the Board of Directors of the Company dated April 7,
1998.
In our examination of the aforesaid documents, we have assumed the legal
capacity of all natural persons, the genuineness of all signatures, the
completeness and authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified,
telecopied, photostatic or reproduced copies.
This opinion is limited to the laws of the United States and the General
Corporation Law of Maryland. We are members of the Bar of the State of Maryland
and do not hold ourselves out as being experts in the laws of any other
jurisdiction. Our opinion is rendered only with respect to the laws and the
rules, regulations and orders thereunder that are currently in effect.
Based upon, subject to, and limited by the foregoing, we are of the opinion that
(i) the Class A Common Shares have been lawfully and duly authorized, (ii) the
Class A Common Shares to be sold by the Company, when issued and delivered in
accordance with the terms of the Common Stock Underwriting Agreement, will be
validly issued, fully paid and nonassessable, and (iii) assuming conversion of
Series B Preferred Stock held by the Selling Stockholders into Class A Common
Stock pursuant to the terms of the Amended and Restated Articles of the Company,
the Class A Common Shares to be sold by the Selling Stockholders will be validly
issued, fully paid and non-assessable.
We assume no obligation to advise you of any changes in the foregoing subsequent
to the delivery of this opinion. This opinion has been prepared solely for your
use in connection with the filing of the Form 8-K on April 10, 1998 (the "Form
8-K") and incorporation by reference into the Registration Statements, and
should not be quoted in whole or in part or otherwise be referred to, nor
otherwise be filed with or furnished to any governmental agency or other person
or entity, without our express prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the Form 8-K
and incorporation by reference into the Registration Statement and to the use of
our name therein under the caption "Legal Matters."
Sincerely,
/s/THOMAS & LIBOWITZ, P.A.
- --------------------------
THOMAS & LIBOWITZ, P.A.
