<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 18, 1996
REGISTRATION NO. 333-06241
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
YOUNG BROADCASTING INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3339681
(I.R.S. Employer Identification
(State or other jurisdiction of Number)
incorporation or organization)
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
(212) 754-7070
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
VINCENT J. YOUNG
CHAIRMAN
YOUNG BROADCASTING INC.
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
(212) 754-7070
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
ROBERT L. WINIKOFF, ESQ. WILLIAM M. HARTNETT, ESQ.
COOPERMAN LEVITT WINIKOFF LESTER & CAHILL GORDON & REINDEL
NEWMAN, P.C. EIGHTY PINE STREET
800 THIRD AVENUE NEW YORK, NEW YORK 10005
NEW YORK, NEW YORK 10022 (212) 701-3000
(212) 688-7000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
---------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE
This Amendment No. 2 to Form S-3 Registration Statement contains only Item 14
and Item 16 of Part II thereof. This filing is being made solely for the
purpose of amending such Items.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses (other than underwriting
discounts and commissions) expected to be incurred by the Company in connection
with the offerings described in this Registration Statement. All amounts are
estimated except the registration, Nasdaq Stock Market listing and NASD fees.
<TABLE>
<S> <C>
Registration fee.............................................. $ 97,223
Nasdaq Stock Market listing fee............................... 17,500
NASD fee...................................................... 28,658
Printing costs for registration statement, prospectus, stock
certificates and related documents........................... 150,000
Accounting fees and expenses.................................. 200,000
Legal fees and expenses....................................... 200,000
Blue sky fees and expenses.................................... 5,000
Transfer agent and registrar fees and expenses................ 2,500
Miscellaneous................................................. 299,119
----------
Total....................................................... $1,000,000
==========
</TABLE>
ITEM 16. EXHIBITS.
The following exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTIONS
------- --------------------
<C> <S>
1.1 Form of Purchase Agreement
1.2 Form of International Purchase Agreement
2.1 Asset Purchase and Sale Agreement, dated as of July 31, 1995, between
the Company and Broad Street Television, L.P. (schedules omitted;
Registrant agrees to furnish supplementally a copy of any schedule to
the Commission upon request)**
2.2 Asset Purchase and Sale Agreement, dated as of January 11, 1996,
between the Company and Midcontinent Television of South Dakota, Inc.
(schedules omitted; Registrant agrees to furnish supplementally a copy
of any schedule to the Commission upon request)****
2.3 Acquisition Agreement, dated as of May 10, 1996, among the Company,
KCAL Broadcasting, Inc., KCAL-TV, Inc. and Disney Enterprises, Inc.
(schedules omitted; Registrant agrees to furnish supplementally a copy
of any schedule to the Commission upon request)*****
3.1(a) Restated Certificate of Incorporation of the Company*
3.1(b) Certificate of Amendment to Restated Certificate of Incorporation of
the Company**
3.2 Second Amended and Restated By-laws of the Company*
3.3 Certificate of Incorporation of Young Broadcasting of La Crosse, Inc.*
3.4 By-laws of Young Broadcasting of La Crosse, Inc.*
3.5 Certificate of Incorporation of Young Broadcasting of Lansing, Inc.*
3.6 By-laws of Young Broadcasting of Lansing, Inc.*
3.7 Certificate of Incorporation of Young Broadcasting of Albany, Inc.*
3.8 By-laws of Young Broadcasting of Albany, Inc.*
3.9 Certificate of Incorporation of Winnebago Television Corporation*
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTIONS
------- --------------------
<C> <S>
3.10 By-laws of Winnebago Television Corporation*
3.11 Certificate of Incorporation of Young Broadcasting of Nashville, Inc.*
3.12 By-laws of Young Broadcasting of Nashville, Inc.*
3.13 Certificate of Incorporation of YBT, Inc.*
3.14 By-laws of YBT, Inc.*
3.15 Certificate of Limited Partnership of WKRN, L.P.*
3.16 Agreement of Limited Partnership of WKRN, L.P.*
3.17 Certificate of Incorporation of Young Broadcasting of Louisiana, Inc.*
3.18 By-laws of Young Broadcasting of Louisiana, Inc.*
3.19 Certificate of Incorporation of LAT, Inc.*
3.20 By-laws of LAT, Inc.*
3.21 Certificate of Limited Partnership of KLFY, L.P.*
3.22 Agreement of Limited Partnership of KLFY, L.P.*
3.23 Certificate of Incorporation of Young Broadcasting of Knoxville, Inc.*
3.24 By-laws of Young Broadcasting of Knoxville, Inc.*
3.25 Certificate of Incorporation of YBK, Inc.*
3.26 By-laws of YBK, Inc.*
3.27 Certificate of Limited Partnership of WATE, L.P.*
3.28 Agreement of Limited Partnership of WATE, L.P.*
3.29 Certificate of Incorporation of Young Broadcasting of Richmond, Inc.*
3.30 By-laws of Young Broadcasting of Richmond, Inc.*
3.31 Certificate of Incorporation of Young Broadcasting of Green Bay, Inc.*
3.32 By-laws of Young Broadcasting of Green Bay, Inc.*
3.33 Certificate of Incorporation of Young Broadcasting of Davenport,
Inc.**
3.34 By-laws of Young Broadcasting of Davenport, Inc.**
4.1 Specimen Class A Common Stock certificate*
5.1 Opinion of Cooperman Levitt Winikoff Lester & Newman, P.C., including
consent
9.1(a) Voting Trust Agreement, dated July 1, 1991*
9.1(b) Amendment No. 1, dated as of July 22, 1994, to Voting Trust Agreement*
9.1(c) Amendment No. 2, dated as of April 12, 1995, to Voting Trust
Agreement**
9.1(d) Amendment No. 3, dated as of July 5, 1995, to Voting Trust Agreement**
10.1 Subscription and Shareholders Agreement, dated May 26, 1988, between
the Company and Ronald J. Kwasnick*
10.2(a) Employment Agreement, dated as of March 1, 1993, between the Company
and James A. Morgan*
10.2(b) Amendment, dated as of March 27, 1995, effective as of February 15,
1995, to Employment Agreement, dated as of March 1, 1993, between the
Company and James A. Morgan***
10.3 Operating Agreement, dated December 29, 1989, between WKRN, L.P. and
Young Broadcasting of Nashville, Inc.*
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTIONS
------- --------------------
<C> <S>
10.4 Operating Agreement, dated December 29, 1989, between KLFY, L.P. and
Young Broadcasting of Louisiana, Inc.*
10.5 Operating Agreement between WATE, L.P. and Young Broadcasting of
Knoxville, Inc.*
10.6 Sublease, dated March 30, 1990, between the Company, as Sublessor,
and Adam Young Inc.*
10.7 Agreement, dated July 1, 1991, between Adam Young Inc. and Young
Broadcasting of Albany, Inc. (Agreement filed hereunder is
representative of five other substantially similar agreements. See
Schedule to Exhibit 10.7)*
10.8 Affiliation Agreements, each dated October 10, 1994, between Young
Broadcasting of Albany, Inc. and ABC (for WTEN and WCDC)*
10.9 Affiliation Agreement, dated October 10, 1994, between WKRN, L.P. and
ABC*
10.10 Affiliation Agreement, dated September 19, 1994, between Young
Broadcasting of La Crosse, Inc. and CBS*
10.11 Affiliation Agreement, dated September 19, 1994, between KLFY, L.P.
and CBS*
10.12 Affiliation Agreement, dated May 17, 1995, between Winnebago
Television Corporation and ABC**
10.13 Affiliation Agreement, dated September 19, 1994, between Young
Broadcasting of Lansing, Inc. and CBS*
10.14 Affiliation Agreement, dated October 10, 1994, between Young
Broadcasting of Richmond, Inc. and ABC*
10.15 Affiliation Agreement, dated October 10, 1994, between WATE, L.P. and
ABC*
10.16 Affiliation Agreement, dated October 10, 1994, between Young
Broadcasting of Green Bay, Inc. and ABC*
10.17 Affiliation Agreement, dated February 3, 1995, between Broad Street
Television, L.P. and NBC**
10.18 Affiliation Agreement, dated April 3, 1996, between Young
Broadcasting of Sioux Falls, Inc. and CBS (KELO); Affiliation
Agreements (satellite), each dated April 3, 1996, between Young
Broadcasting of Sioux Falls, Inc. and CBS (KPLO and KDLO); and
Affiliation Agreement, dated April 3, 1996, between Young
Broadcasting of Rapid City, Inc. and CBS (KCLO)*****
10.19 Lease dated March 29, 1990, between Lexreal Associates, as Landlord,
and the Company*
10.20(a) Master Equipment Lease Agreement, dated May 31, 1990, between First
Chicago Leasing Corporation and Young Broadcasting of Albany, Inc.*
10.20(b) Lease Supplement No. 1, dated May 31, 1990*
10.20(c) Lease Supplement No. 2, dated August 24, 1990*
10.20(d) Guaranty of the Company*
10.21(a) Master Equipment Lease Agreement, dated May 31, 1990, between First
Chicago Leasing Corporation and Young Broadcasting of Nashville,
Inc.*
10.21(b) Supplement No. 1, dated May 31, 1990*
10.21(c) Supplement No. 2, dated August 24, 1990*
10.21(d) Guaranty of the Company*
10.22(a) Master Equipment Lease Agreement, dated May 31, 1990, between First
Chicago Leasing Corporation and Young Broadcasting of Louisiana,
Inc.*
10.22(b) Lease Supplement No. 1, dated May 31, 1990*
10.22(c) Guaranty of the Company*
10.23(a) Credit Agreement for the Senior Credit Facility ("Credit Agreement")*
10.23(b) Amendment No. 1 to Credit Agreement**
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTIONS
------- --------------------
<C> <S>
10.23(c) Amendment No. 2 to Credit Agreement**
10.23(d) Amendment No. 3 to Credit Agreement**
10.23(e) Amendment No. 4 to Credit Agreement****
10.24 Subscription Agreement, dated October 10, 1994, between Capital
Cities/ABC, Inc. and the Company, with the form of Warrant issued to
Capital Cities/ABC, Inc. and form of Registration Rights Agreement
attached thereto*
10.25 Agreement of Sale, dated as of June 3, 1994, between the Company and
Nationwide Communications Inc.*
10.26 Indenture, dated as of November 14, 1994, between the Company, the
Subsidiary Guarantors and The First National Bank of Boston, as
Trustee, relating to the November 1994 Notes*
10.27 Indenture, dated as of June 1, 1995, between the Company, the
Subsidiary Guarantors and The First National Bank of Boston, as
Trustee, relating to the June 1995 Notes**
10.28 Indenture, dated as of January 1, 1996, between the Company, the
Subsidiary Guarantors and State Street Bank and Trust Company, as
Trustee, relating to the January 1996 Notes****
10.29 Young Broadcasting Inc. 1995 Stock Option Plan***
10.30 Purchase Agreement, dated June 6, 1995, among the Company, the
Subsidiary Guarantors and BT Securities Corporation and J.P. Morgan
Securities Inc.**
10.31 Registration Rights Agreement, dated as of June 12, 1995, by and
among the Company, the Subsidiary Guarantors and BT Securities
Corporation and J.P. Morgan Securities Inc.**
10.32 Purchase Agreement, dated January 6, 1996, among the Company, the
Subsidiary Guarantors and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and J.P. Morgan Securities Inc.****
10.33 Registration Rights Agreement, dated as of January 16, 1996, by and
among the Company, the Subsidiary Guarantors and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities
Inc.****
15.1 Letter of Price Waterhouse LLP re: unaudited interim financial
information*****
18.1 Letter of Ernst & Young LLP regarding change in accounting
principles*
21.1 Subsidiaries of the Company*
23.1 Consent of Ernst & Young LLP*****
23.2 Consent of McGladrey & Pullen, LLP*****
23.3 Consent of Grant Thornton LLP*****
23.4 Consent of Price Waterhouse LLP*****
23.5 Consent of Cooperman Levitt Winikoff Lester & Newman, P.C. (included
in Exhibit 5.1)
24.1 Power of Attorney*****
</TABLE>
- --------
* Filed as an Exhibit to the Company's Registration Statement on Form S-1,
Registration No. 33-83336, under the Securities Act of 1933 and
incorporated herein by reference.
** Filed as an Exhibit to the Company's Registration Statement on Form S-4,
Registration No. 33-94192, under the Securities Act of 1933 and
incorporated herein by reference.
*** Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 1995 under the Securities Exchange
Act of 1934 and incorporated herein by reference.
**** Filed as an Exhibit to the Company's Registration Statement of Form S-4,
Registration No. 333-2466, under the Securities Act of 1933 and
incorporated herein by reference.
***** Previously filed.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW
YORK, ON JULY 18, 1996.
Young Broadcasting Inc.
/s/ James A. Morgan
By: __________________________________
JAMES A. MORGAN
EXECUTIVE VICE PRESIDENT
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES INDICATED.
SIGNATURES TITLE DATE
Chairman and
* Director
- ------------------------------------ (principal July 18, 1996
VINCENT J. YOUNG executive officer)
* President and
- ------------------------------------ Director July 18, 1996
RONALD J. KWASNICK
* Treasurer and
- ------------------------------------ Director July 18, 1996
ADAM YOUNG
/s/ James A. Morgan Executive Vice
- ------------------------------------ President July 18, 1996
JAMES A. MORGAN (principal
financial officer
and principal
accounting
officer)
* Director
- ------------------------------------ July 18, 1996
BERNARD F. CURRY
* Director
- ------------------------------------ July 18, 1996
ALFRED J. HICKEY, JR.
* Director
- ------------------------------------ July 18, 1996
LEIF LOMO
* Director
- ------------------------------------ July 18, 1996
MICHAEL S. WILLNER
*By:
/s/ James A. Morgan
--------------------------------
JAMES A. MORGAN
ATTORNEY-IN-FACT
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTIONS PAGE
------- -------------------- ----
<C> <S> <C>
1.1 Form of Purchase Agreement
1.2 Form of International Purchase Agreement
2.1 Asset Purchase and Sale Agreement, dated as of July 31, 1995,
between the Company and Broad Street Television, L.P.
(schedules omitted; Registrant agrees to furnish supplementally
a copy of any schedule to the Commission upon request)**
2.2 Asset Purchase and Sale Agreement, dated as of January 11,
1996, between the Company and Midcontinent Television of South
Dakota, Inc. (schedules omitted; Registrant agrees to furnish
supplementally a copy of any schedule to the Commission upon
request)****
2.3 Acquisition Agreement, dated as of May 10, 1996, among the
Company, KCAL Broadcasting, Inc., KCAL-TV, Inc. and Disney
Enterprises, Inc. (schedules omitted; Registrant agrees to
furnish supplementally a copy of any schedule to the Commission
upon request)*****
3.1(a) Restated Certificate of Incorporation of the Company*
3.1(b) Certificate of Amendment to Restated Certificate of
Incorporation of the Company**
3.2 Second Amended and Restated By-laws of the Company*
3.3 Certificate of Incorporation of Young Broadcasting of La
Crosse, Inc.*
3.4 By-laws of Young Broadcasting of La Crosse, Inc.*
3.5 Certificate of Incorporation of Young Broadcasting of Lansing,
Inc.*
3.6 By-laws of Young Broadcasting of Lansing, Inc.*
3.7 Certificate of Incorporation of Young Broadcasting of Albany,
Inc.*
3.8 By-laws of Young Broadcasting of Albany, Inc.*
3.9 Certificate of Incorporation of Winnebago Television
Corporation*
3.10 By-laws of Winnebago Television Corporation*
3.11 Certificate of Incorporation of Young Broadcasting of
Nashville, Inc.*
3.12 By-laws of Young Broadcasting of Nashville, Inc.*
3.13 Certificate of Incorporation of YBT, Inc.*
3.14 By-laws of YBT, Inc.*
3.15 Certificate of Limited Partnership of WKRN, L.P.*
3.16 Agreement of Limited Partnership of WKRN, L.P.*
3.17 Certificate of Incorporation of Young Broadcasting of
Louisiana, Inc.*
3.18 By-laws of Young Broadcasting of Louisiana, Inc.*
3.19 Certificate of Incorporation of LAT, Inc.*
3.20 By-laws of LAT, Inc.*
3.21 Certificate of Limited Partnership of KLFY, L.P.*
3.22 Agreement of Limited Partnership of KLFY, L.P.*
3.23 Certificate of Incorporation of Young Broadcasting of
Knoxville, Inc.*
3.24 By-laws of Young Broadcasting of Knoxville, Inc.*
3.25 Certificate of Incorporation of YBK, Inc.*
3.26 By-laws of YBK, Inc.*
3.27 Certificate of Limited Partnership of WATE, L.P.*
3.28 Agreement of Limited Partnership of WATE, L.P.*
3.29 Certificate of Incorporation of Young Broadcasting of Richmond,
Inc.*
3.30 By-laws of Young Broadcasting of Richmond, Inc.*
3.31 Certificate of Incorporation of Young Broadcasting of Green
Bay, Inc.*
3.32 By-laws of Young Broadcasting of Green Bay, Inc.*
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTIONS PAGE
------- -------------------- ----
<C> <S> <C>
3.33 Certificate of Incorporation of Young Broadcasting of
Davenport, Inc.**
3.34 By-laws of Young Broadcasting of Davenport, Inc.**
4.1 Specimen Class A Common Stock certificate*
5.1 Opinion of Cooperman Levitt Winikoff Lester & Newman, P.C.,
including consent
9.1(a) Voting Trust Agreement, dated July 1, 1991*
9.1(b) Amendment No. 1, dated as of July 22, 1994, to Voting Trust
Agreement*
9.1(c) Amendment No. 2, dated as of April 12, 1995, to Voting Trust
Agreement**
9.1(d) Amendment No. 3, dated as of July 5, 1995, to Voting Trust
Agreement**
10.1 Subscription and Shareholders Agreement, dated May 26, 1988,
between the Company and Ronald J. Kwasnick*
10.2(a) Employment Agreement, dated as of March 1, 1993, between the
Company and James A. Morgan*
10.2(b) Amendment, dated as of March 27, 1995, effective as of February
15, 1995, to Employment Agreement, dated as of March 1, 1993,
between the Company and James A. Morgan***
10.3 Operating Agreement, dated December 29, 1989, between WKRN,
L.P. and Young Broadcasting of Nashville, Inc.*
10.4 Operating Agreement, dated December 29, 1989, between KLFY,
L.P. and Young Broadcasting of Louisiana, Inc.*
10.5 Operating Agreement between WATE, L.P. and Young Broadcasting
of Knoxville, Inc.*
10.6 Sublease, dated March 30, 1990, between the Company, as
Sublessor, and Adam Young Inc.*
10.7 Agreement, dated July 1, 1991, between Adam Young Inc. and
Young Broadcasting of Albany, Inc. (Agreement filed hereunder
is representative of five other substantially similar
agreements. See Schedule to Exhibit 10.7)*
10.8 Affiliation Agreements, each dated October 10, 1994, between
Young Broadcasting of Albany, Inc. and ABC (for WTEN and WCDC)*
10.9 Affiliation Agreement, dated October 10, 1994, between WKRN,
L.P. and ABC*
10.10 Affiliation Agreement, dated September 19, 1994, between Young
Broadcasting of La Crosse, Inc. and CBS*
10.11 Affiliation Agreement, dated September 19, 1994, between KLFY,
L.P. and CBS*
10.12 Affiliation Agreement, dated May 17, 1995, between Winnebago
Television Corporation and ABC**
10.13 Affiliation Agreement, dated September 19, 1994, between Young
Broadcasting of Lansing, Inc. and CBS*
10.14 Affiliation Agreement, dated October 10, 1994, between Young
Broadcasting of Richmond, Inc. and ABC*
10.15 Affiliation Agreement, dated October 10, 1994, between WATE,
L.P. and ABC*
10.16 Affiliation Agreement, dated October 10, 1994, between Young
Broadcasting of Green Bay, Inc. and ABC*
10.17 Affiliation Agreement, dated February 3, 1995, between Broad
Street Television, L.P. and NBC**
10.18 Affiliation Agreement, dated April 3, 1996, between Young
Broadcasting of Sioux Falls, Inc. and CBS (KELO); Affiliation
Agreements (satellite), each dated April 3, 1996, between Young
Broadcasting of Sioux Falls, Inc. and CBS (KPLO and KDLO); and
Affiliation Agreement, dated April 3, 1996, between Young
Broadcasting of Rapid City, Inc. and CBS (KCLO)*****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTIONS PAGE
------- -------------------- ----
<C> <S> <C>
10.19 Lease dated March 29, 1990, between Lexreal Associates, as
Landlord, and the Company*
10.20(a) Master Equipment Lease Agreement, dated May 31, 1990, between
First Chicago Leasing Corporation and Young Broadcasting of
Albany, Inc.*
10.20(b) Lease Supplement No. 1, dated May 31, 1990*
10.20(c) Lease Supplement No. 2, dated August 24, 1990*
10.20(d) Guaranty of the Company*
10.21(a) Master Equipment Lease Agreement, dated May 31, 1990, between
First Chicago Leasing Corporation and Young Broadcasting of
Nashville, Inc.*
10.21(b) Supplement No. 1, dated May 31, 1990*
10.21(c) Supplement No. 2, dated August 24, 1990*
10.21(d) Guaranty of the Company*
10.22(a) Master Equipment Lease Agreement, dated May 31, 1990, between
First Chicago Leasing Corporation and Young Broadcasting of
Louisiana, Inc.*
10.22(b) Lease Supplement No. 1, dated May 31, 1990*
10.22(c) Guaranty of the Company*
10.23(a) Credit Agreement for the Senior Credit Facility ("Credit
Agreement")*
10.23(b) Amendment No. 1 to Credit Agreement**
10.23(c) Amendment No. 2 to Credit Agreement**
10.23(d) Amendment No. 3 to Credit Agreement**
10.23(e) Amendment No. 4 to Credit Agreement****
10.24 Subscription Agreement, dated October 10, 1994, between
Capital Cities/ABC, Inc. and the Company, with the form of
Warrant issued to Capital Cities/ABC, Inc. and form of
Registration Rights Agreement attached thereto*
10.25 Agreement of Sale, dated as of June 3, 1994, between the
Company and Nationwide Communications Inc.*
10.26 Indenture, dated as of November 14, 1994, between the Company,
the Subsidiary Guarantors and The First National Bank of
Boston, as Trustee, relating to the November 1994 Notes*
10.27 Indenture, dated as of June 1, 1995, between the Company, the
Subsidiary Guarantors and The First National Bank of Boston,
as Trustee, relating to the June 1995 Notes**
10.28 Indenture, dated as of January 1, 1996, between the Company,
the Subsidiary Guarantors and State Street Bank and Trust
Company, as Trustee, relating to the January 1996 Notes****
10.29 Young Broadcasting Inc. 1995 Stock Option Plan***
10.30 Purchase Agreement, dated June 6, 1995, among the Company, the
Subsidiary Guarantors and BT Securities Corporation and J.P.
Morgan Securities Inc.**
10.31 Registration Rights Agreement, dated as of June 12, 1995, by
and among the Company, the Subsidiary Guarantors and BT
Securities Corporation and J.P. Morgan Securities Inc.**
10.32 Purchase Agreement, dated January 6, 1996, among the Company,
the Subsidiary Guarantors and Merrill Lynch, Pierce, Fenner &
Smith Incorporated and J.P. Morgan Securities Inc.****
10.33 Registration Rights Agreement, dated as of January 16, 1996,
by and among the Company, the Subsidiary Guarantors and
Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P.
Morgan Securities Inc.****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTIONS PAGE
------- -------------------- ----
<C> <S> <C>
15.1 Letter of Price Waterhouse LLP re: unaudited interim financial
information*****
18.1 Letter of Ernst & Young LLP regarding change in accounting
principles*
21.1 Subsidiaries of the Company*
23.1 Consent of Ernst & Young LLP*****
23.2 Consent of McGladrey & Pullen, LLP*****
23.3 Consent of Grant Thornton LLP*****
23.4 Consent of Price Waterhouse LLP*****
23.5 Consent of Cooperman Levitt Winikoff Lester & Newman, P.C.
(included in Exhibit 5.1)
24.1 Power of Attorney*****
</TABLE>
- -------
* Filed as an Exhibit to the Company's Registration Statement on Form S-1,
Registration No. 33-83336, under the Securities Act of 1933 and
incorporated herein by reference.
** Filed as an Exhibit to the Company's Registration Statement on Form S-4,
Registration No. 33-94192, under the Securities Act of 1933 and
incorporated herein by reference.
*** Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 1995 under the Securities Exchange
Act of 1934 and incorporated herein by reference.
**** Filed as an Exhibit to the Company's Registration Statement of Form S-4,
Registration No. 333-2466, under the Securities Act of 1933 and
incorporated herein by reference.
***** Previously filed.
<PAGE>
EXHIBIT 1.1
5,296,713 Shares
YOUNG BROADCASTING INC.
(a Delaware corporation)
Class A Common Stock
(Par Value $.001 Per Share)
PURCHASE AGREEMENT
------------------
July , 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
ALEX. BROWN & SONS INCORPORATED
BT SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
J.P. Morgan Securities Inc.
as U.S. Representatives of the several U.S. Underwriters
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Young Broadcasting Inc., a Delaware corporation (the "Company"), and each
of the stockholders of the Company named in Schedule C hereto (the "Selling
----------
Stockholders"), severally confirm their respective agreements with Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Alex. Brown & Sons
Incorporated ("Alex. Brown"), BT Securities Corporation ("BT"), Goldman, Sachs &
Co. ("Goldman"), J.P. Morgan Securities Inc. ("J.P. Morgan") and each of the
other Underwriters
<PAGE>
-2-
named in Schedule A hereto (collectively, the "U.S. Underwriters," which term
----------
shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom Merrill Lynch, Alex. Brown, BT, Goldman and J.P.
Morgan are acting as representatives (in such capacity, Merrill Lynch, Alex.
Brown, BT, Goldman and J.P. Morgan shall hereinafter be referred to as the "U.S.
Representatives"), with respect to the sale by the Company and each of the
Selling Stockholders, acting severally and not jointly, and the purchase by the
U.S. Underwriters, acting severally and not jointly, of the respective aggregate
numbers of shares of Class A Common Stock, par value $.001 per share, of the
Company (the "Common Stock") set forth in said Schedule A (after giving effect
----------
to the conversion of convertible Class C Common Stock, par value $.001 per
share, of the Company (the "Class C Common Stock") into Common Stock,
concurrently with such sale and purchase, by certain Selling Stockholders owning
such convertible Class C Common Stock), and with respect to the grant by the
Selling Stockholders, acting severally and not jointly, to the U.S.
Underwriters, acting severally and not jointly, of the options described in
Section 2(b) hereof to purchase all or any part of an aggregate of 794,507
additional shares of Common Stock to cover over-allotments, in each case except
as may otherwise be provided in the U.S. Pricing Agreement, as hereinafter
defined. The aforesaid aggregate of 5,296,713 shares of Common Stock (the
"Initial U.S. Securities") to be purchased by the U.S. Underwriters and all or
any part of the aggregate of 794,507 shares of Common Stock subject to the
options described in Section 2(b) hereof (the "U.S. Option Securities") are
collectively hereinafter called the "U.S. Securities." The number of Initial
U.S. Securities to be sold by the Company and the Selling Stockholders is
3,200,000 and 2,096,713, respectively.
It is understood and agreed by all parties that the Company and each of the
Selling Stockholders are concurrently entering into an agreement dated the date
hereof (the "International Purchase Agreement") providing for the sale by the
Company and the Selling Stockholders of up to an aggregate of 1,324,178 shares
of Common Stock (the "Initial International Securities") through arrangements
with certain managing underwriters outside the United States and Canada (the
"Managers"; and together with the U.S. Underwriters, the "Underwriters") for
whom Merrill Lynch International, Alex. Brown, Bankers Trust International plc,
Goldman Sachs International and J.P. Morgan Securities Ltd. are acting as lead
managers (the "Lead Managers") and the grant by the Selling Stockholders to the
Managers of an option to purchase all or any part of an
<PAGE>
-3-
aggregate of 198,627 additional shares of Common Stock (the "International
Option Securities") to cover over-allotments of the Initial International
Securities. The Initial International Securities and the International Option
Securities are hereinafter called the "International Securities." The U.S.
Securities and the International Securities, collectively, are hereinafter
called the "Securities." It is understood that the Company and the Selling
Stockholders are not obligated to sell, and the U.S. Underwriters are not
obligated to purchase, any Initial U.S. Securities unless all of the Initial
International Securities are contemporaneously purchased by the International
Managers.
The U.S. Underwriters and the Managers are concurrently entering into an
Intersyndicate Agreement of even date herewith (the "Intersyndicate Agreement")
providing for the coordination of certain transactions among the U.S.
Underwriters and the Managers under the direction of Merrill Lynch.
Prior to the purchase and public offering of the U.S. Securities by the
several U.S. Underwriters, the Company, the Selling Stockholders and the U.S.
Representatives, acting on behalf of the several U.S. Underwriters, shall enter
into an agreement substantially in the form of Exhibit A hereto (the "U.S.
---------
Pricing Agreement"). The U.S. Pricing Agreement may take the form of an
exchange of any standard form of written telecommunication between the Company,
each of the Selling Stockholders and the U.S. Representatives and shall specify
such applicable information as is indicated in Exhibit A hereto. The offering
---------
of the U.S. Securities will be governed by this U.S. Purchase Agreement (this
"Agreement"), as supplemented by the U.S. Pricing Agreement. From and after the
date of the execution and delivery of the U.S. Pricing Agreement, this Agreement
shall be deemed to incorporate the U.S. Pricing Agreement.
The initial public offering price and the purchase price with respect to
the International Securities shall be set forth in a separate instrument (the
"International Pricing Agreement"), the form of which is attached to the
International Purchase Agreement. The price per security for the International
Securities to be purchased by the Managers pursuant to the International
Purchase Agreement shall be identical to the price per security for the U.S.
Securities to be purchased by the U.S. Underwriters hereunder.
<PAGE>
-4-
Two forms of prospectus are to be used in connection with the offering and
sale of the Securities, one relating to the International Securities (the
"International Form of Prospectus") and the other relating to the U.S.
Securities (the "U.S. Form of Prospectus"). The U.S. Form of Prospectus is
identical to the International Form of Prospectus, except for the front cover
page, the "Underwriting" section and the back cover page.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-06241) and a related
preliminary prospectus for the registration of the Securities under the
Securities Act of 1933, as amended (the "1933 Act"), has filed such amendments
thereto and such amended preliminary prospectuses as may have been required to
the date hereof, and will file such additional amendments thereto and such
amended prospectuses as may hereafter be required. Such registration statement
(as amended, if applicable), including any exhibits and schedules included
therein and any documents incorporated by reference therein, and the U.S. Form
of Prospectus and the International Form of Prospectus constituting parts
thereof (including in each case the information, if any, deemed to be part
thereof pursuant to Rule 430A(b) (the "Rule 430A Information") or Rule 434 (the
"Rule 434 Information") of the rules and regulations of the Commission under the
1933 Act (the "1933 Act Regulations")), as from time to time amended or
supplemented pursuant to the 1933 Act or otherwise, are hereinafter referred to
as the "Registration Statement," the "U.S. Prospectus," and the "International
Prospectus," respectively, and the U.S. Prospectus and the International
Prospectus are hereinafter called, collectively, the "Prospectuses," and, each
individually, a "Prospectus," except that if any revised U.S. Prospectus or
revised International Prospectus shall be provided to the U.S. Underwriters or
the Managers, respectively, by the Company for use in connection with the
offering of the Securities which differs from the form of such prospectus on
file at the Commission at the time the Registration Statement becomes effective
(whether or not such revised prospectus is required to be filed by the Company
pursuant to Rule 424(b) of the 1933 Act Regulations), the terms "U.S.
Prospectus," "International Prospectus," "Prospectuses" and "Prospectus" shall
refer to such revised prospectuses from and after the time they are first
provided to the U.S. Underwriters and the Managers, respectively, for such use.
If the Company elects to rely on Rule 434 of the 1933 Act Regulations, all
references to the Prospectuses shall be deemed to include, without limitation,
the form
<PAGE>
-5-
of Prospectuses and the term sheets taken together, provided to the Underwriters
by the Company in reliance on Rule 434 of the 1933 Act Regulations (the "Rule
434 Prospectus"). If the Company files a registration statement to register a
portion of the Securities and relies on Rule 462(b) of the 1933 Act Regulations
for such registration statement to become effective upon filing with the
Commission (the "Rule 462 Registration Statement"), then any reference to the
Registration Statement herein shall be deemed to refer to both the registration
statement referred to above and the Rule 462 Registration Statement, as each
such registration statement may be amended pursuant to the 1933 Act.
The Company and the Underwriters agree that up to 331,044 shares of the
Securities to be purchased by the Underwriters (the "Reserved Securities") shall
be reserved for sale by the Underwriters to certain eligible employees and
persons having business relationships with the Company, as part of the
distribution of the Securities by the Underwriters, subject to the terms of this
Agreement, the applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. (the "NASD") and all other applicable
laws, rules and regulations. To the extent that such Reserved Securities are
not orally confirmed for purchase by such eligible employees and persons having
business relationships with the Company by the end of the first business day
after the date of this Agreement, such Reserved Securities may be offered to the
public as part of the public offering contemplated hereby.
The Company and the Selling Stockholders understand that the U.S.
Underwriters propose to make a public offering of the U.S. Securities as soon as
the U.S. Representatives deem advisable after the Registration Statement becomes
effective and the U.S. Pricing Agreement has been executed and delivered.
The Company has entered into an Acquisition Agreement (the "Acquisition
Agreement") with KCAL Broadcasting, Inc. (the "Seller"), KCAL-TV, Inc. ("TV
Inc."), and Disney Enterprises, Inc. ("Enterprises", and together with the
Seller, TV Inc. and Fidelity (as defined below), "Disney"), dated as of May 10,
1996, pursuant to which the Company has agreed to acquire (the "KCAL
Acquisition") from the Seller all of the operations, assets, goodwill and
business of the Seller used in the business and operation of television station
KCAL, Channel 9, Los Angeles, California ("KCAL") and the capital stock of
Fidelity Television, Inc. ("Fidelity"), which holds the licenses issued
<PAGE>
-6-
by the Federal Communications Commission ("FCC") under which KCAL operates.
SECTION 1. Representations and Warranties.
------------------------------
(a) The Company represents and warrants to each U.S. Underwriter as of the
date hereof and as of the date of the U.S. Pricing Agreement (such latter date
being hereinafter referred to as the "Representation Date") as follows:
(i) At the time the Registration Statement becomes effective and at
the Representation Date, the Registration Statement, including the
information deemed to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) or Rule 434, will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and, to the Company's knowledge,
the Prospectuses and any preliminary prospectuses comply or will comply in
all material respects with any applicable laws or regulations of foreign
jurisdictions in which the Prospectuses and such preliminary prospectuses,
as amended or supplemented, if applicable, are distributed in connection
with the offer and sale of Reserved Securities. The Prospectuses, at the
Representation Date (unless the term "Prospectuses" refers to prospectuses
which have been provided to the U.S. Underwriters or the Managers by the
Company for use in connection with the offering of the Securities which
differ from the Prospectuses on file at the Commission at the time the
Registration Statement becomes effective, in which case at the time they
are first provided to the U.S. Underwriters or the Managers for such use)
and at Closing Time referred to in Section 2 hereof, will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
--------
however, that the representations and warranties in this subsection shall
-------
not apply to statements in or omissions from the Registration Statement or
Prospectuses contained under the caption "Underwriting" in the Prospectuses
made in reliance upon and in conformity with information relating to a U.S.
Underwriter or Manager furnished to the Company in writing by such U.S.
Underwriter or Manager through the
<PAGE>
-7-
U.S. Representatives, or the Lead Managers, respectively, expressly for use
in the Registration Statement or Prospectuses.
(ii) The documents incorporated by reference in the Registration
Statement or the Prospectuses, when they became effective or were filed
with the Commission, conformed in all material respects to the requirements
of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
none of such documents 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 under
which they were made, not misleading, and any further documents so filed
and incorporated by reference in the Prospectuses, when such documents are
filed by the Company with the Commission, will conform in all material
respects to the requirements of the 1934 Act, and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(iii) There are no contracts or documents which are required to be
described in or incorporated by reference in the Prospectuses or to be
filed as exhibits to the Registration Statement which have not been so
described or filed as required.
(iv) Each of Ernst & Young LLP ("E&Y"), the accountants who certified
the consolidated financial statements and supporting schedules of the
Company and its subsidiaries included in the Registration Statement, Price
Waterhouse LLP ("PW"), the accountants who certified the financial
statements and supporting schedules of KCAL Broadcasting Group (a
broadcasting group of The Walt Disney Company) ("KCAL Group") included in
the Registration Statement, McGladrey & Pullen, LLP ("M&P"), the
accountants who certified the financial statements and supporting schedules
of KWQC-TV (a division of Broad Street Television, L.P.) ("KWQC") included
in the Registration Statement and Grant Thornton LLP ("GT"), the
accountants who certified the combined financial statements and supporting
schedules of Midcontinent Television of South Dakota, Inc. ("Midcontinent")
included in the
<PAGE>
-8-
Registration Statement, are independent public accountants as required by
the 1933 Act and 1933 Act Regulations.
(v) The financial statements included in the Registration Statement
and the Prospectuses present fairly in all material respects the financial
position of each of the Company and its consolidated subsidiaries and, to
the best of the Company's knowledge, the KCAL Group, as and at the dates
indicated and the results of their operations for the periods specified;
except as otherwise stated in the Registration Statement, said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis; and the supporting
schedule to such financial statements included in the Registration
Statement present fairly the information required to be stated therein.
(vi) The pro forma financial statements (including the notes thereto)
and the other pro forma financial information included in the Prospectuses
(i) comply as to form in all material respects with the applicable
requirements of Regulation S-X promulgated under the 1934 Act, (ii) have
been prepared in accordance with the Commissions's rules and guidelines
with respect to pro forma financial statements, and (iii) have been
properly computed on the bases described therein; the assumptions used in
the preparation of the pro forma financial data and other pro forma
financial information included in the Prospectuses are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
or circumstances referred to therein.
(vii) Since the respective dates as of which information is given in
the Registration Statement and the Prospectuses, except as otherwise stated
therein, (A) there has been no material adverse change in the condition
(financial or otherwise), earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise (a
"Material Adverse Change"), whether or not arising in the ordinary course
of business, (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those in the ordinary course
of business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
<PAGE>
-9-
(viii) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware
with corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectuses and to enter
into and perform its obligations under this Agreement and the U.S. Pricing
Agreement, the International Purchase Agreement and the International
Pricing Agreement, including the issuance, sale and delivery of the
Securities to be sold by the Company under the Agreements; and the Company
is duly qualified to transact business as a foreign corporation and is in
good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify could not reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise (a "Material Adverse
Effect").
(ix) Each corporate subsidiary of the Company listed in Schedule B-1
------------
hereto (each, a "Corporate Subsidiary" and collectively, the "Corporate
Subsidiaries") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectuses
and is duly qualified to transact business as a foreign corporation and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify could not
reasonably be expected to have a Material Adverse Effect; each partnership
subsidiary of the Company listed in Schedule B-2 hereto (each, a
------------
"Partnership Subsidiary", collectively, the "Partnership Subsidiaries", and
together with the Corporate Subsidiaries, the "Subsidiaries") has been duly
formed, is validly existing and is in good standing as a limited
partnership under the laws of the jurisdiction of its organization, has all
requisite partnership power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectuses and
is duly qualified to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing
<PAGE>
-10-
of property or the conduct of business, except where the failure to so
qualify could not reasonably be expected to have a Material Adverse Effect;
except as described in the Registration Statement and Prospectuses, all of
the issued and outstanding capital stock of each Corporate Subsidiary has
been duly authorized and validly issued, is fully paid and nonassessable
and are owned by the Company, directly or through subsidiaries, free and
clear of any security interest, lien, claim or other encumbrance; except as
described in the Registration Statement and Prospectuses, all of the issued
and outstanding partnership interests of each Partnership Subsidiary have
been duly authorized and validly issued and are owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
lien, claim or other encumbrance.
(x) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses under "Capitalization" under
the column "Actual," and at the Closing Time will be as set forth under the
column "As Adjusted," which gives effect to the issuance of shares of
Common Stock pursuant to this Agreement and the International Purchase
Agreement but does not give effect to the issuance of any U.S. Option
Securities or International Option Securities; the shares of issued and
outstanding Common Stock, including the Securities to be purchased by the
Underwriters from the Selling Stockholders, have been duly authorized and
validly issued and are fully paid and non-assessable; the Securities to be
issued and sold by the Company pursuant to this Agreement and the
International Purchase Agreement have been duly authorized and, when issued
and delivered by the Company pursuant to this Agreement and the
International Purchase Agreement against payment of the consideration set
forth in the U.S. Pricing Agreement and the International Pricing
Agreement, respectively, will be validly issued and fully paid and
nonassessable; the Common Stock conforms to all statements relating thereto
contained in the Prospectuses under the caption "Description of Capital
Stock"; and the issuance of the Securities is not subject to preemptive or
other similar rights.
(xi) The Company has full right, power and authority to issue, sell
and deliver the Securities to be sold by the Company hereunder; and upon
delivery of the Securities to be sold by the Company hereunder and payment
of the purchase price therefor as herein contemplated, each of
<PAGE>
-11-
the U.S. Underwriters and Managers will receive good and marketable title
to its ratable share of the Securities purchased by it from the Company,
free and clear of any security interest, lien, option, claim or other
encumbrance.
(xii) Neither the Company nor any of the Subsidiaries is (A) in
violation of its certificate of incorporation or bylaws (or similar
organizational document (including any partnership agreement or certificate
of limited partnership)), (B) in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any Subsidiary is a party or by which it
or any of them may be bound, or to which any of the property or assets of
the Company or any Subsidiary is subject, or (C) in violation of any
applicable law, rule or regulation (including, without limitation, the
Communications Act of 1934, as amended (the "Communications Act") and the
rules and regulations of the FCC thereunder), or any judgment, order or
decree of any court with jurisdiction over the Company or any Subsidiary,
or other governmental or regulatory authority with jurisdiction over the
Company or any Subsidiary, except as disclosed in the Registration
Statement and the Prospectuses and except, in the case of clauses (B) and
(C) above, for such defaults or violations that could not reasonably be
expected to have a Material Adverse Effect; and the execution, delivery and
performance of this Agreement (and the U.S. Pricing Agreement) and
International Purchase Agreement (and the International Pricing Agreement)
and the consummation of the transactions contemplated herein and therein
and compliance by the Company with its obligations hereunder and thereunder
have been duly authorized by all necessary corporate action and will not
conflict with or constitute a breach of, or a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any Subsidiary pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any Subsidiary is a party or by which it
or any of them may be bound, or to which any of the property or assets of
the Company or any Subsidiary is subject, nor will such action result in
any violation of or conflict with the provisions of the charter or by-laws
of the Company or any applicable law, rule or regulation, or any judgment,
order
<PAGE>
-12-
or decree of any court with jurisdiction over the Company or any
Subsidiary, or other governmental or regulatory authority with jurisdiction
over the Company or any Subsidiary.
(xiii) Except as described in the Registration Statement and the
Prospectuses, no labor dispute with the employees of the Company or any
Subsidiary exists or, to the knowledge of the Company or any Subsidiary, is
imminent.
(xiv) Except as described in the Registration Statement and the
Prospectuses, there is no action, suit or proceeding before or by any court
or governmental agency or body (including, without limitation, the FCC),
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any of the Subsidiaries,
or, to the knowledge of the Company, Disney, with respect to KCAL, which is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or which otherwise, if adversely determined, could
reasonably be expected to result in any Material Adverse Change, or which
could reasonably be expected to materially and adversely affect the
properties or assets of the Company and its Subsidiaries taken as one
enterprise or which could reasonably be expected to materially and
adversely affect the consummation of the transactions contemplated by this
Agreement or the International Purchase Agreement.
(xv) Each of the Company and the Subsidiaries and, to the knowledge
of the Company, Disney, with respect to KCAL, possesses all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal, state,
local and other governmental authorities (including, without limitation,
the FCC), all self-regulatory organizations and all courts and other
tribunals, presently required or necessary to own or lease, as the case may
be, and to operate its respective properties and to carry on its respective
businesses as now or proposed to be conducted as set forth in the
Registration Statement and the Prospectuses, except where the failure to
obtain such licenses, permits, certificates, consents, orders, approvals
and other authorizations, or to make all declarations and filings, would
not, individually or in the aggregate, have a Material Adverse Effect, and
none of the
<PAGE>
-13-
Company or the Subsidiaries or, to the knowledge of the Company, Disney,
with respect to KCAL, has received any notice of any proceeding relating to
revocation or modification of any such license, permit, certificate,
consent, order, approval or other authorization, except as described in the
Registration Statement and the Prospectuses and except where such
revocation or modification would not, individually or in the aggregate,
have a Material Adverse Effect. The licenses issued to the Company and the
Subsidiaries and, to the knowledge of the Company, Disney, with respect to
KCAL, by the FCC (the "Licenses") are valid and in full force and effect
with no restrictions or qualifications which would have a Material Adverse
Effect. No event has occurred which permits, or with notice or lapse of
time or both would permit, and no legal governmental proceeding has been
instituted or threatened which could cause, the revocation or termination
of any of the Licenses or which might result in any other impairment or
modification of the rights of the Company or any Subsidiary therein which
in any such case would have a Material Adverse Effect. Except as described
in the Registration Statement and the Prospectuses, the Company has no
reason to believe that any License issued by the FCC will not be renewed in
the ordinary course.
(xvi) No authorization, approval or consent of any court or
governmental authority or agency (including, without limitation, the FCC)
is necessary in connection with the offering, issuance or sale of the
Securities being sold by the Company hereunder or under the International
Purchase Agreement, except (i) such as have been obtained or as may be
required under the 1933 Act, the 1933 Act Regulations, the 1934 Act, the
rules and regulations of the Commission under the 1934 Act, state or
foreign securities laws or by the rules and regulations of the NASD and
(ii) such as have been obtained, to the Company's knowledge, under the
securities laws and regulations of foreign jurisdictions in which the
Reserved Securities are offered outside the United States.
(xvii) The Company had (at the time of its authorization and
execution) and has all requisite corporate power and authority to execute,
deliver and perform each of its obligations under the Acquisition
Agreement. The Acquisition Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and legally binding
obligation of the Company enforceable in
<PAGE>
-14-
accordance with its terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought. All
representations and warranties of the Company set forth in the Acquisition
Agreement are true and correct in all material respects as of the date
hereof and will be true and correct in all material respects at and as of
the Closing Time as if made at and as of such date (other than to the
extent any such representation or warranty is expressly made as to only a
certain date).
(xviii) The network affiliation agreements between each of the
broadcast television stations of the Company and the Subsidiaries, as
applicable, and CBS Inc., National Broadcasting Company, Inc. and Capital
Cities/ABC, Inc. ("ABC"), as applicable, have been duly authorized,
executed and delivered by the Company and the Subsidiaries, as applicable,
and are the valid and legally binding obligations of the respective parties
thereto and the description of such network affiliation agreements in the
Registration Statement and the Prospectuses under the caption "Business --
Network Affiliation Agreements" is a fair and accurate summary thereof.
(xix) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under each of this
Agreement and the U.S. Pricing Agreement. Each of this Agreement and the
U.S. Pricing Agreement has been duly and validly authorized by the Company
and, when executed and delivered by the Company, will constitute a valid
and legally binding obligation of the Company enforceable against the
Company in accordance with its terms, except that (A) the enforcement
thereof may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be brought
and (B) any rights to indemnity or contribution thereunder may be limited
by federal and state securities laws and public policy considerations.
This Agreement has been, and at the Representation Date, the U.S. Pricing
Agreement will have been, duly executed and delivered by the Company.
<PAGE>
-15-
(xx) The Company and each of the Subsidiaries are in compliance in
all material respects with all applicable laws, statutes, ordinances, rules
or regulations of any applicable jurisdiction the enforcement of which
could reasonably be expected to have a Material Adverse Effect.
(xxi) The Company is not, and upon the issuance and sale by the
Company of the Securities as herein contemplated and the application of the
net proceeds therefrom as described in the Prospectuses under the caption
"Use of Proceeds" will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(xxii) Except as disclosed in the Registration Statement and the
Prospectuses, and except as could not reasonably be expected to
individually or in the aggregate have a Material Adverse Effect, (A) each
of the Company and the Subsidiaries is in compliance in all material
respects with all applicable Environmental Laws (as defined), (B) each of
the Company and the Subsidiaries has all permits, authorizations and
approvals required under any applicable Environmental Laws and is in
compliance in all material respects with their requirements, (C) there are
no pending or, to the knowledge of the Company, threatened Environmental
Claims (as defined) against the Company or any Subsidiary, and (D) the
Company has no knowledge of any circumstances with respect to any property
or operations of the Company or any Subsidiary that could reasonably be
anticipated to form the basis of any Environmental Claim against the
Company or any Subsidiary.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any federal, state, local or
municipal statute, law, rule, regulation, ordinance, code, policy or rule
of common law and any published judicial or administrative interpretation
thereof including any judicial or administrative order, consent decree or
judgment binding on the Company or any Subsidiary, relating to the
environment, health, safety or any chemical, material or substance,
exposure to which is prohibited, limited or regulated by any such
governmental authority. "Environmental Claims" means any and all
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens,
<PAGE>
-16-
notices of noncompliance or violation, investigations or proceedings
relating in any way to any Environmental Law.
(xxiii) The Company and each Subsidiary has filed all federal or
state income and franchise tax returns required to be filed, except where
the failure to so file such returns would not have a Material Adverse
Effect, and has paid all taxes shown thereon as due, and there is no tax
deficiency which has been or is reasonably likely to be asserted against
the Company or any Subsidiary which could reasonably be expected to have a
Material Adverse Effect; all material tax liabilities of the Company and
each Subsidiary are adequately provided for on the books of the Company and
the Subsidiaries.
(xxiv) The Company has obtained the written agreements of each of the
Selling Stockholders, Vincent J. Young, Adam Young, Margaret Young, Adam
Young Inc., Vincent J. Young, as trustee under The Young Family Trust,
Ronald J. Kwasnick, James A. Morgan, Deborah A. McDermott, Bernard F.
Curry, Alfred J. Hickey, Jr., Leif Lomo and Michael S. Willner, in the
forms previously furnished to you, that for a period of 90 days after the
date of the Prospectuses such parties will not sell or grant any option for
the sale of, or otherwise dispose of, any Common Stock, or any securities
convertible into or exchangeable or exercisable for shares of Common Stock,
other than the shares of Common Stock that may be offered by the Company
and the Selling Stockholders pursuant to this Agreement and the
International Purchase Agreement and, with respect to Goldman, the other
exceptions set forth in clauses (ii) and (iii) of Section 1(c)(v) hereof,
and not to file or request to be filed, as the case may be, any
registration statement with respect to Common Stock without the prior
written consent of Merrill Lynch.
(xxv) Except as set forth in the Prospectuses and except as disclosed
on Schedule D hereto, there are no holders of securities (debt or equity)
----------
of the Company, or holders of rights (including, without limitation,
preemptive rights), warrants or options to obtain securities of the
Company or any Subsidiary, who have the right to request the Company or any
Subsidiary to register securities held by them under the 1933 Act.
(xxvi) The Company has delivered to the U.S. Representatives a true
and correct copy of the Acquisition
<PAGE>
-17-
Agreement, together with all related agreements and all schedules and
exhibits thereto, and there shall have been no material amendments,
alterations, modifications or waivers of any of the provisions of the
Acquisition Agreement, since its date of execution, other than any such
amendments, alterations, modifications and waivers (x) which are described
in or contemplated by the Prospectuses and (y) as to which the Underwriters
have been advised in writing and which would not be required to be
disclosed in the Prospectuses; and to the best knowledge of the Company
there exists no event or condition which would constitute a default or an
event of default under the Acquisition Agreement which would result in a
Material Adverse Effect. Assuming consummation of the transactions
contemplated by the Acquisition Agreement as of the date hereof, each of
the representations of the Company therein would still be true.
(xxvii) Each of the Company and the Subsidiaries has good, sufficient
and legal title to all property and good title to all personal property
described in the Registration Statement as being owned by it and good,
sufficient and legal title to a leasehold estate in the real and personal
property described in the Registration Statement as being leased by it free
and clear of all liens, charges, encumbrances or restrictions, except as
described in the Registration Statement or to the extent the failure to
have such title or the existence of such liens, charges, encumbrances or
restrictions would not, individually or in the aggregate, have a Material
Adverse Effect. All leases, contracts and agreements to which the Company
or any of the Subsidiaries is a party or by which any of them is bound are
valid and enforceable against the Company or such Subsidiary, and are valid
and enforceable against the other party or parties thereto and are in full
force and effect with only such exceptions as would not, individually or in
the aggregate, have a Material Adverse Effect.
(xxviii) The Company and the Subsidiaries have complied and are in
compliance with all provisions of Section 517.075, Florida Statutes
(Chapter 92-198, Laws of Florida) related to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
(b) The Company hereby agrees with the U.S. Underwriters that, for
all purposes of this Agreement, the only
<PAGE>
-18-
information furnished to the Company by any U.S. Underwriter or Manager
expressly for use in the Registration Statement, the Prospectuses, or any
amendment or supplement thereto, or any related preliminary prospectus, are the
last paragraph of the cover page of each of the Prospectuses, the statements
with respect to stabilization on the inside front cover page of each of the
Prospectuses, and the fourth and seventh paragraphs under the heading
"Underwriting" in the U.S. Prospectus and any related preliminary prospectus and
the fourth, seventh and ninth paragraph under the heading "Underwriting" in the
International Prospectus and any related preliminary prospectus.
(c) Each Selling Stockholder, severally and not jointly and only as
to such Selling Stockholder, represents and warrants to, and agrees with, each
U.S. Underwriter as of the date hereof and as of the Representation Date and as
of the Closing Time as follows:
(i) To the extent that any statements or omissions made in the
Registration Statement or the Prospectuses are made in reliance upon and in
conformity with information furnished in writing to the Company by such
Selling Stockholder specifically referring to such Selling Stockholder
(acting in its capacity as a Selling Stockholder) expressly for use
therein, such Registration Statement or the Prospectuses do not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and such Selling
Stockholder is not prompted to sell the Securities to be sold by such
Selling Stockholder by any information concerning the Company or any
subsidiary that is not set forth in the Registration Statement or the
Prospectuses.
(ii) The execution, delivery and performance of this Agreement, the
International Purchase Agreement, the U.S. Pricing Agreement and the
International Pricing Agreement and the consummation of the transactions
contemplated herein and therein and compliance with such Selling
Stockholder's obligations hereunder and thereunder by such Selling
Stockholder will not conflict with or constitute a breach of or a default
under any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder may be bound.
<PAGE>
-19-
(iii) Such Selling Stockholder has and will have at the Closing Time
referred to in Section 2(c) good and marketable title to the Securities to
be sold by such Selling Stockholder hereunder and under the International
Purchase Agreement, free and clear of any security interest, lien, option,
claim, equity or other encumbrance other than pursuant to this Agreement or
the International Purchase Agreement; such Selling Stockholder has full
right, power and authority or capacity, as the case may be, to enter into
this Agreement, the International Purchase Agreement, the U.S. Pricing
Agreement, the International Pricing Agreement and the Power of Attorney
and Custody Agreement (as defined) and to sell, transfer and deliver the
Securities to be sold by such Selling Stockholder hereunder and under the
International Purchase Agreement; and upon delivery of the Securities to be
sold by such Selling Stockholder hereunder and under the International
Purchase Agreement and payment of the purchase price therefor as herein and
therein contemplated, each of the U.S. Underwriters and Managers who has
purchased such Securities in good faith and without notice of any "adverse
claim" (as such term is defined in Section 8-302 of the New York Uniform
Commercial Code) will acquire such Securities free of any adverse claim and
will receive good and marketable title to its ratable share of the
Securities purchased by it from such Selling Stockholder, free and clear of
any security interest, lien, option, claim or other encumbrance.
(iv) All authorizations, approvals and consents necessary for the
execution and delivery by such Selling Stockholder of the Power of Attorney
and Custody Agreement, the execution and delivery by or on behalf of such
Selling Stockholder of this Agreement and the International Purchase
Agreement, and the sale and delivery of the Securities to be sold by the
Selling Stockholder hereunder (except such as may be required under the
1933 Act, the 1933 Act Regulations, the 1934 Act, the rules and regulations
of the Commission under the 1934 Act, state or foreign securities laws or
by the rules and regulations of the NASD) have been obtained and are in
full force and effect.
(v) For a period of 90 days after the date of the Prospectus, such
Selling Stockholder has agreed not to sell or grant any option for the sale
of, or otherwise dispose of, any Common Stock, or any securities
<PAGE>
-20-
convertible into or exchangeable or exercisable for shares of Common Stock,
other than (i) the shares of Common Stock that may be offered by such
Selling Stockholder pursuant to this Agreement and the International
Purchase Agreement, (ii) the Securities to be sold by Goldman in its
capacity as an Underwriter in the offering and (iii) shares of Common Stock
sold by Goldman in the ordinary course of its business, consistent with
past practice on behalf of its clients, and not to file or request to be
filed, as the case may be, any registration statement with respect to
Common Stock without the prior written consent of Merrill Lynch.
(vi) Such Selling Stockholder, other than Goldman, has not taken, and
will not take, directly or indirectly, any action which is designed to or
which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities. Goldman has
not taken and will not take, directly or indirectly, any of the foregoing
actions except in compliance with the 1933 Act, the 1934 Act and the rules
and regulations promulgated thereunder.
(vii) Each Selling Stockholder, if a corporation or a partnership,
has been duly incorporated or formed, as the case may be, and is validly
existing as a corporation or partnership, as the case may be, in good
standing under the laws of its respective state of incorporation or
formation, as the case may be.
(viii) Such Selling Stockholder has duly executed and delivered in
the form heretofore furnished to the Underwriters a Power of Attorney with
Vincent J. Young or James A. Morgan or Stephen Baker, as attorney-in-fact
(each, an "Attorney-in-Fact"), and a Custody Agreement (together, the
"Power of Attorney and Custody Agreement") with Young Broadcasting Inc.,
as custodian (the "Custodian"); the Attorneys-in-Fact, or any of them, are
authorized to execute and deliver this Agreement on behalf of such Selling
Stockholder, to determine the purchase price to be paid by the Underwriters
to such Selling Stockholder, as provided in Section 2(a) hereof, to
authorize the delivery of the Securities to be sold by such Selling
Stockholder hereunder, to accept payment therefor, and otherwise to act on
behalf of such Selling Stockholder in connection with this Agreement and
the International Purchase Agreement.
<PAGE>
-21-
(ix) Certificates in negotiable form for all Securities to be sold
hereunder have been placed in custody with the Custodian for the purpose of
effecting delivery hereunder.
(d) Any certificate signed by any officer of the Company and delivered
pursuant to this Agreement and the International Purchase Agreement shall be
deemed a representation and warranty by the Company to each U.S. Underwriter and
Manager as to the matters covered thereby; and any certificate signed by or on
behalf of any Selling Stockholder and delivered, pursuant to this Agreement and
the International Purchase Agreement or in connection with the payment of the
purchase price and delivery of the certificates for the Initial Securities or
the Option Securities, to the U.S. Underwriters or Managers or counsel for the
U.S. Underwriters or Managers shall be deemed a representation and warranty by
such Selling Stockholder to each U.S. Underwriter and Manager as to the matters
covered thereby.
SECTION 2. Sale and Delivery to the U.S. Underwriters; Closing.
---------------------------------------------------
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
and each Selling Stockholder agree to sell to each U.S. Underwriter, severally
and not jointly, and each U.S. Underwriter, severally and not jointly, agrees to
purchase from the Company and each Selling Stockholder, at the price per share
set forth in the U.S. Pricing Agreement, the number of Initial U.S. Securities
set forth in Schedule A opposite the name of such U.S. Underwriter in the same
----------
proportion from the Company and each Selling Stockholder as the number of
Initial U.S. Securities being sold by the Company and each Selling Stockholder
bears to the total number of Initial U.S. Securities (except as otherwise
provided in the U.S. Pricing Agreement), plus any additional number of Initial
U.S. Securities which such U.S. Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
(1) If the Company has elected not to rely upon Rule 430A under the
1933 Act Regulations, the initial public offering price and the purchase
price per share to be paid by the several U.S. Underwriters for the U.S.
Securities have each been determined and set forth in the U.S. Pricing
Agreement, dated the date hereof, and an amendment to
<PAGE>
-22-
the Registration Statement and the Prospectuses containing such information
will be filed before the Registration Statement becomes effective.
(2) If the Company has elected to rely upon Rule 430A under the 1933
Act Regulations, the purchase price per share to be paid by the several
U.S. Underwriters for the U.S. Securities shall be an amount equal to the
initial public offering price, less an amount per share to be determined by
agreement among the U.S. Representatives, the Company and the Selling
Stockholders. The initial public offering price per share of the U.S.
Securities shall be a fixed price to be determined by agreement between the
U.S. Representatives, the Company and the Selling Stockholders. The
initial public offering price and the purchase price, when so determined,
shall be set forth in the U.S. Pricing Agreement. In the event that such
prices have not been agreed upon and the U.S. Pricing Agreement has not
been executed and delivered by all parties thereto by the close of business
on the fourteenth business day following the date of this Agreement, this
Agreement shall terminate forthwith, without liability of any party to any
other party, unless otherwise agreed to by the Company, the Selling
Stockholders and the U.S. Representatives, except that Sections 6 and 7
shall remain in effect. For purposes of this Agreement, the term "business
day" means a day on which the Nasdaq National Market ("Nasdaq") is open for
business and the trading of securities is permitted thereon.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Selling Stockholders hereby grant options to the U.S. Underwriters, severally
and not jointly, to purchase up to an additional 794,507 shares in the
aggregate, at the price per share set forth in the U.S. Pricing Agreement. The
maximum number of shares pursuant to which said option may be exercised with
respect to a Selling Stockholder shall be the number set forth across from the
name of such Selling Stockholder in column 2 of Schedule C hereto. The options
----------
hereby granted will expire 30 days after (i) the date the Registration Statement
becomes effective, if the Company has elected not to rely on Rule 430A under the
1933 Act Regulations, or (ii) the Representation Date, if the Company has
elected to rely on Rule 430A under the 1933 Act Regulations, and may be
exercised in whole or in part only for the purpose of covering over-allotments
which may be made in connection
<PAGE>
-23-
with the offering and distribution of the Initial U.S. Securities upon notice by
the U.S. Representatives to each of the Selling Stockholders setting forth the
number of U.S. Option Securities as to which the several U.S. Underwriters are
then exercising the options and the time and date of payment and delivery for
such U.S. Option Securities. Such time and date of delivery (the "Date of
Delivery"), if any, shall be determined by the U.S. Representatives, but shall
not be later than seven full business days after the exercise of said options,
nor in any event prior to the Closing Time, as hereinafter defined, unless
otherwise agreed by the U.S. Representatives and the Selling Stockholders. If
the options are exercised as to all or any portion of the U.S. Option
Securities, each of the U.S. Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of U.S. Option Securities
which the number of Initial U.S. Securities set forth in Schedule A hereto
----------
opposite the name of such U.S. Underwriter bears to the total number of Initial
U.S. Securities (except as otherwise provided in the U.S. Pricing Agreement),
subject in each case to such adjustments as the U.S. Representatives in their
discretion shall make to eliminate any sales or purchases of fractional shares;
provided, however, that if the options are exercised on any Date of Delivery as
- -------- -------
to less than all of the U.S. Option Securities, the number of U.S. Option
Securities to be purchased from each Selling Stockholder shall be that
proportion of the total number of U.S. Option Securities to be purchased on such
Date of Delivery which the number of Initial U.S. Securities to be sold by such
Selling Stockholder set forth in column 1 of Schedule C hereto opposite the name
----------
of such Selling Stockholder bears to the total number of Initial U.S. Securities
(except as otherwise provided in the U.S. Pricing Agreement), subject in each
case to such adjustments as the U.S. Representatives in their discretion shall
make to eliminate any sales or purchases of fractional shares.
(c) Payment of the purchase price for, and delivery of certificates
for, the Initial U.S. Securities shall be made at the offices of Cahill Gordon &
Reindel, 80 Pine Street, New York, New York 10005, or at such other place as
shall be agreed upon by the U.S. Representatives and the Company, at 9:00 A.M.
on the third business day (unless postponed in accordance with the provisions of
Section 10) following the date the Registration Statement becomes effective (or,
if the Company has elected to rely upon Rule 430A of the 1933 Act Regulations,
the third business day after execution of the U.S. Pricing Agreement), or such
other time not later than ten business days after such date as shall be agreed
upon by the U.S.
<PAGE>
-24-
Representatives, the Company and the Selling Stockholders (such time and date of
payment and delivery being herein called "Closing Time"). In addition, in the
event that any or all of the U.S. Option Securities are purchased by the U.S.
Underwriters, payment of the purchase price for, and delivery of certificates
for, such U.S. Option Securities shall be made at the above-mentioned offices of
Cahill Gordon & Reindel, 80 Pine Street, New York, New York 10005, or at such
other place as shall be agreed upon by the U.S. Representatives and the Selling
Stockholders on the Date of Delivery specified in the notice from the U.S.
Representatives to the Company. Payment shall be made to the Company and each of
the Selling Stockholders, respectively, by wire transfer of immediately
available funds to any account designated in writing by the Company and each of
the Selling Stockholders, respectively, against delivery to the U.S.
Representatives for the respective accounts of the U.S. Underwriters of
certificates for the U.S. Securities to be purchased by them. Certificates for
the Initial U.S. Securities and the U.S. Option Securities, if any, shall be in
such denominations and registered in such names as the U.S. Representatives may
request in writing at least two business days before Closing Time or the
relevant Date of Delivery, as the case may be. It is understood that each U.S.
Underwriter has authorized the U.S. Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial U.S. Securities and the U.S. Option Securities, if any, which it has
agreed to purchase. Merrill Lynch, individually and not as representative of the
U.S. Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Initial U.S. Securities or the U.S. Option Securities, if
any, to be purchased by any U.S. Underwriter whose check has not been received
by Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such U.S. Underwriter from its obligations hereunder.
The certificates for the Initial U.S. Securities and the U.S. Option Securities,
if any, will be made available for examination and packaging by the U.S.
Representatives not later than 10:00 A.M. on the last business day prior to
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
U.S. Underwriter as follows:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective (as and when requested by the U.S.
Representatives) and, if the
<PAGE>
-25-
Company elects to rely upon Rule 430A of the 1933 Act Regulations and
subject to Section 3(b), will comply with the requirements of Rule 430A of
the 1933 Act Regulations and will notify the U.S. Representatives
immediately, and confirm the notice in writing, (i) of the effectiveness of
the Registration Statement or any amendment thereto or of the filing of any
Supplement to the Prospectuses or amended Prospectuses, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectuses or for additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose, and (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or the initiation or threatening of
any proceedings for any such purpose. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest
possible moment. If the Company elects to rely on Rule 434 of the 1933 Act
Regulations, the Company will prepare a term sheet that complies with the
requirements of Rule 434 of the 1933 Act Regulations. If the Company elects
not to rely on Rule 434 of the 1933 Act Regulations, the Company will
provide the U.S. Underwriters with copies of the form of Prospectuses, in
such number as the U.S. Underwriters may reasonably request, and file with
the Commission such Prospectuses in accordance with Rule 424(b) of the 1933
Act Regulations by the close of business in New York on the business day
immediately succeeding the date of the U.S. Pricing Agreement. If the
Company elects to rely on Rule 434 of the 1933 Act Regulations, the Company
will provide the U.S. Underwriters with copies of the Rule 434 Prospectus
in such number as the U.S. Underwriters may reasonably request by the close
of business in New York on the business day immediately succeeding the date
of the U.S. Pricing Agreement.
(b) The Company will give the U.S. Representatives notice of its
intention to file or prepare any amendment to the Registration Statement
(including any post-effective amendment) or any amendment or supplement to
the Prospectuses (including (i) any revised prospectuses which the Company
proposes for use by the U.S. Underwriters in
<PAGE>
-26-
connection with the offering of the Securities which differ from the
Prospectuses on file at the Commission at the time the Registration
Statement becomes effective, whether or not such revised prospectuses are
required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations or
(ii) any term sheet prepared in reliance on Rule 434 of the 1933 Act
Regulations), will furnish the U.S. Representatives with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which the U.S. Representatives or
counsel for the U.S. Underwriters shall reasonably object.
(c) The Company will deliver to each U.S. Representative without
charge one signed copy of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and will also deliver to the U.S.
Representatives without charge a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the U.S. Underwriters.
(d) The Company will deliver to each U.S. Underwriter, without
charge, from time to time until the effective date of the Registration
Statement or, if the Company has elected to rely upon Rule 430A of the 1933
Act Regulations, until such time as the U.S. Pricing Agreement is executed
and delivered, as many copies of each preliminary prospectus as the U.S.
Underwriters may reasonably request, and the Company hereby consents to the
use of said copies for purposes permitted by the 1933 Act. The Company
will furnish to each U.S. Underwriter, from time to time during the period
when the Prospectuses are required to be delivered under the 1933 Act or
the 1934 Act, such number of copies of the Prospectuses (as amended or
supplemented) as such U.S. Underwriter may reasonably request for the
purposes contemplated by the 1933 Act or the 1934 Act or the respective
applicable rules and regulations of the Commission thereunder.
(e) If, at any time when the Prospectuses relating to the Securities
are required to be delivered under the 1933 Act, any event shall occur as a
result of which the Prospectuses would include any untrue statement of a
material fact or omit to state any material fact necessary in
<PAGE>
-27-
order to make the statements therein, in the light of the circumstances
existing at the time they are delivered to the purchaser, not misleading,
or if it shall be necessary to amend the Registration Statement or
supplement the Prospectuses to comply with the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the Commission
such amendment or supplement (in form and substance reasonably satisfactory
to counsel for the U.S. Underwriters) which will correct such statement or
omission or effect such compliance.
(f) The Company will endeavor, in cooperation with the U.S.
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions of the
United States as the U.S. Representatives may designate; provided, however,
-------- -------
that the Company shall not be obligated to qualify as a foreign corporation
or dealer in securities or file any general consent to service of process
or subject itself to taxation in any jurisdiction in which it is not
otherwise so qualified or so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements
and reports as may be required by the laws of such jurisdiction to continue
such qualification in effect for a period of not less than one year from
the effective date of the Registration Statement.
(g) The Company will make generally available to its security holders
as soon as practicable, but not later than 90 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering a twelve month
period beginning not later than the first day of the Company's fiscal
quarter next following the fiscal quarter that includes the "effective
date" (as defined in said Rule 158) of the Registration Statement.
(h) The Company will use the net proceeds received by it from the
sale of the Securities in the manner specified in the Prospectuses under
"Use of Proceeds."
(i) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in reliance
upon Rule 430A of the 1933 Act Regulations, then immediately following the
execution of the U.S. Pricing Agreement, the Company will prepare, and file
<PAGE>
-28-
or transmit for filing with the Commission in accordance with such Rule
430A or Rule 434 and Rule 424(b) of the 1933 Act Regulations, copies of
amended Prospectuses, or, if required by such Rule 430A or Rule 434, a
post-effective amendment to the Registration Statement (including amended
Prospectuses), containing all information so omitted and will use its
reasonable best efforts to cause any such post-effective amendment to be
declared effective as soon as possible.
(j) The Company will use its reasonable best efforts to effect the
listing on Nasdaq of the Securities offered by the Company and will file
with Nasdaq all documents and notices required by Nasdaq of companies that
have issued securities that are listed on Nasdaq.
(k) During a period of 90 days from the date of the U.S. Pricing
Agreement, the Company will not, without Merrill Lynch's prior written
consent, (A) directly or indirectly, sell, offer to sell, grant any option
for the sale of, or otherwise dispose of, any capital stock of the Company
or any security convertible or exchangeable into or exercisable for capital
stock of the Company except (i) to the Underwriters pursuant to this
Agreement and the International Purchase Agreement and (ii) the Company may
grant stock options, and issue shares of Common Stock upon the exercise of
any options granted, pursuant to its stock option plan or (B) file any
registration statement with respect to any of the foregoing, except that
the Company may file a registration statement on Form S-8 with respect to
its stock option plan.
(l) The Company hereby agrees that it will ensure that the Reserved
Securities will be restricted as required by the NASD or the NASD rules
from sale, transfer, assignment, pledge or hypothecation for a period of
three months following the date of the effectiveness of the Registration
Statement. The Underwriters will notify the Company as to which persons
will need to be so restricted. At the request of the Underwriters, the
Company will direct the transfer agent to place a stop transfer restriction
upon such securities for such period of time. Should the Company release,
or seek to release, from such restrictions any of the Reserved Securities,
the Company agrees to reimburse the Underwriters for any reasonable
expenses, including, without limitation, legal expenses they incur in
connection with such release.
<PAGE>
-29-
(m) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act, will file all documents
required to be filed with the Commission pursuant to the 1934 Act within
the time periods required by the 1934 Act and the rules and regulations
promulgated thereunder.
SECTION 4. Payment of Expenses. (a) The Company will pay all
-------------------
expenses incident to the performance of the obligations of the Company and the
Selling Stockholders under this Agreement, including, without limitation, (i)
the preparation, printing and filing of the Registration Statement as originally
filed and of each amendment thereto, any preliminary prospectuses, Prospectuses
and any "Blue Sky" memoranda, (ii) the preparation (including printing),
issuance and delivery of certificates for the Securities to the U.S.
Underwriters, including any security transfer or other taxes (other than
transfer taxes payable by any Selling Stockholder pursuant to Section 4(b)
hereof) or duties payable upon the delivery of the Securities to the U.S.
Underwriters, and the fees and expenses of the transfer agent for the
Securities, (iii) the printing of this Agreement, the U.S. Pricing Agreement and
the Intersyndicate Agreement, (iv) the fees and disbursements of the Company's
counsel, accountants and any other experts or advisors retained by the Company
and the fees and expenses of counsel for the Selling Stockholders in accordance
with applicable agreements, (v) the qualification of the Securities under state
or foreign securities laws in accordance with the provisions of Section 3(f),
including filing fees and the reasonable fees and disbursements of counsel for
the U.S. Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the delivery to the U.S. Underwriters
of as many copies as may reasonably be requested of the Registration Statement
as originally filed and of each amendment thereto, of the preliminary
prospectuses, and of the Prospectuses and any amendments or supplements thereto,
including any term sheet delivered by the Company pursuant to Rule 434 of the
1933 Act Regulations, (vii) the printing and/or copying and delivery to the U.S.
Underwriters of copies of the Blue Sky Survey, (viii) the fee of any filing for
review of the offering with the NASD relating to the Securities, (ix) expenses
in connection with any meetings with prospective investors in the Securities,
except to the extent that the Company and the U.S. Representatives agree in
writing otherwise, (x) all expenses and listing fees in connection with the
listing of the Securities on Nasdaq, (xi) all costs and expenses of the
Underwriters,
<PAGE>
-30-
including the fees and disbursements of counsel for the Underwriters, in
connection with matters related to the Reserved Securities which are designated
by the Company for sale to employees and others having a business relationship
with the Company and (xii) stamp duties or any other foreign taxes or duties, if
any, incurred by the Underwriters in connection with the offer and sale of the
Reserved Securities.
(b) Each Selling Stockholder will pay any transfer taxes attributable
to the sale by such Selling Stockholder of the Securities it sells hereunder and
under the International Purchase Agreement and any fees and disbursements of
such Selling Stockholder's counsel, if any, not paid or payable by the Company
pursuant to Section 4(a) or otherwise.
(c) If this Agreement is terminated by the U.S. Representatives in
accordance with the provisions of Section 5 or Section 9(a)(i) or Section 11
hereof, the Company shall reimburse the U.S. Underwriters for all of their out-
of-pocket expenses, including the reasonable fees and disbursements of counsel
for the U.S. Underwriters. The Company shall not be liable to the Underwriters
for loss of contemplated profits from the transactions covered by this
Agreement.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The
--------------------------------------------
obligations of the U.S. Underwriters hereunder are subject to the accuracy of
the representations and warranties of the Company and each Selling Stockholder,
respectively, herein contained, to the performance in all material respects by
the Company and each Selling Stockholder of their respective obligations
hereunder, and to the following further conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M. on the date hereof, or with the consent of the U.S.
Representatives, which shall not be unreasonably withheld at a later time
and date, not later, however, than 5:30 P.M. on the first business day
following the date hereof, or at such later time and date as may be
approved by a majority in interest of the U.S. Underwriters and a majority
in interest of the Managers; and at Closing Time no stop order suspending
the effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by the
Commission. If the Company has elected to rely upon Rule 430A or Rule 434
of the 1933 Act Regulations, the price of the Securities and any price-
related information previously omitted from the
<PAGE>
-31-
effective Registration Statement pursuant to such Rule 430A or Rule 434
shall have been transmitted to the Commission for filing pursuant to Rule
424(b) of the 1933 Act Regulations within the prescribed time period and
prior to Closing Time the Company shall have provided evidence satisfactory
to the U.S. Representatives of such timely filing, or a post-effective
amendment providing such information shall have been promptly filed and
declared effective in accordance with the requirements of Rule 430A of the
1933 Act Regulations.
(b) (1) At the Closing Time, you shall have received the signed
opinion of Cooperman Levitt Winikoff Lester & Newman, P.C., counsel for the
Company and the Subsidiaries, dated as of the Closing Time, in the form
attached hereto as Exhibit B, together with reproduced copies of such
---------
opinions for each of the U.S. Underwriters, and in form and substance
satisfactory to counsel for the U.S. Underwriters.
(2) At the Closing Time, you and the Selling Stockholders shall have
received the signed opinion of Wiley, Rein & Fielding, communications
counsel for the Company and the Subsidiaries, dated as of the Closing Time,
in the form attached hereto as Exhibit C, together with reproduced copies
---------
of such opinions for each of the U.S. Underwriters, in form and substance
satisfactory to counsel for the U.S. Underwriters.
(3) At the Closing Time, you shall have received the signed opinion of
(A) Cooperman Levitt Winikoff Lester & Newman, P.C., counsel to the Selling
Stockholders (other than ABC), and (B) counsel to ABC, as a Selling
Stockholder, each dated as of the Closing Time, in the form attached hereto
as Exhibit D, together with reproduced copies of such opinions for each of
---------
the U.S. Underwriters, and in form and substance satisfactory to counsel
for the U.S. Underwriters.
(4) The favorable opinion, dated as of Closing Time, of Cahill Gordon
& Reindel, counsel for the U.S. Underwriters, with respect to the validity
of the Securities, the Registration Statement, the U.S. Prospectus and
other related matters as the U.S. Representatives may reasonably request.
<PAGE>
-32-
(c) At Closing Time there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Prospectuses, except as otherwise stated therein, any Material Adverse
Change, whether or not arising in the ordinary course of business, and the
U.S. Representatives shall have received a certificate of the Chairman,
President or any Vice President of the Company and of the Chief Financial
Officer of the Company, dated as of Closing Time, to the effect that (i)
there has been no such Material Adverse Change, (ii)(A) the representations
and warranties in Section 1 hereof that are qualified with reference to a
Material Adverse Effect or materiality are true and correct with the same
force and effect as though expressly made at and as of Closing Time and (B)
the representations and warranties in Section 1 hereof that are not
qualified with reference to a Material Adverse Effect or materiality are
true and correct in all material respects with the same force and effect as
though expressly made at and as of Closing Time, (iii) the Company has
complied in all material respects with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been initiated or threatened by the Commission. As used in this
Section 5(c), the term "Prospectuses" means the Prospectuses in the form
first used to confirm sales of the Securities.
(d) At Closing Time the U.S. Representatives shall have received a
certificate of Vincent J. Young or James A. Morgan or Stephen Baker, as
Attorney-in-Fact for each of the Selling Stockholders, dated as of Closing
Time, to the effect that (i)(A) the representations and warranties of each
Selling Stockholder contained in Section 1(c) hereof that are qualified
with reference to a Material Adverse Effect or materiality are true and
correct with the same force and effect as though expressly made at and as
of Closing Time and (B) the representations and warranties of each Selling
Stockholder contained in Section 1(c) hereof that are not qualified with
reference to a Material Adverse Effect or materiality are true and correct
in all material respects with the same force and effect as though expressly
made at and as of Closing Time, and (ii) each Selling Stockholder had
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time.
<PAGE>
-33-
(e) At the time that this Agreement is signed and at the Closing
Time, E&Y, PW, M&P and GT shall each have furnished to the Underwriters and
the Selling Stockholders a letter or letters, dated respectively as of the
date of this Agreement and as of the Closing Time, in form and substance
reasonably satisfactory to the Underwriters, containing statements and
information of the type customarily included in accountants' "comfort
letters" to underwriters with respect to certain financial information
relating to the Company, KCAL Group, KWQC and Midcontinent, respectively,
contained in the Registration Statement and the Prospectuses.
(f) At Closing Time, the Securities being issued by the Company shall
have been approved for listing on Nasdaq upon official notice of issuance.
(g) At Closing Time and at each Date of Delivery, if any, counsel for
the U.S. Underwriters shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated
and related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection
with the issuance and sale of the Securities as herein contemplated shall
be reasonably satisfactory in form and substance to the U.S.
Representatives and counsel for the U.S. Underwriters.
(h) Concurrently with the purchase and sale of the U.S. Securities
hereunder, the closing of the issuance and sale of the International
Securities pursuant to the terms and conditions of the International
Purchase Agreement and International Pricing Agreement shall have occurred.
(i) At Closing Time, the sale of the Securities hereunder shall not
be enjoined (temporarily or permanently).
(j) In the event that the U.S. Underwriters exercise their options
provided in Section 2(b) hereof to purchase all or any portion of the U.S.
Option Securities, (i) the representations and warranties of the Company
and each of the Selling Stockholders contained herein that are qualified
with reference to a Material Adverse Effect or
<PAGE>
-34-
materiality shall be true and correct as of each Date of Delivery, (ii) the
representations and warranties of the Company and each of the Selling
Stockholders contained herein that are not qualified with reference to a
Material Adverse Effect or materiality shall be true and correct in all
material respects as of each Date of Delivery, (iii) the statements in any
certificates furnished by the Company and any of the Selling Stockholders
hereunder shall be true and correct as of each Date of Delivery and (iv) at
the relevant Date of Delivery, the U.S. Representatives shall have
received:
(1) A certificate, dated such Date of Delivery, of the Chairman,
President or any Vice President of the Company and of the Chief
Financial Officer of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(c) hereof remains
true and correct as of such Date of Delivery.
(2) A certificate, dated such Date of Delivery, of Vincent J.
Young or James A. Morgan or Stephen Baker, as Attorney-in-Fact for
each of the Selling Stockholders, confirming that the certificate
delivered at the Closing Time pursuant to Section 5(d) hereof remains
true and correct as of such Date of Delivery.
(3) The favorable opinion of Cooperman Levitt Winikoff Lester &
Newman, P.C., counsel for the Company and the Subsidiaries, in form
and substance satisfactory to counsel for the U.S. Underwriters, dated
such Date of Delivery, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(b)(1) hereof.
(4) The favorable opinion of Wiley, Rein & Fielding,
communications counsel for the Company and the Subsidiaries, in form
and substance satisfactory to counsel for the U.S. Underwriters, dated
such Date of Delivery, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(b)(2) hereof.
(5) The favorable opinion of counsel for the Selling
Stockholders, in form and substance
<PAGE>
-35-
satisfactory to counsel for the U.S. Underwriters, dated such Date of
Delivery, relating to the U.S. Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b)(3) hereof.
(6) The favorable opinion of Cahill Gordon & Reindel, counsel
for the U.S. Underwriters, dated such Date of Delivery, relating to
the U.S. Option Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by Section
5(b)(4) hereof.
(7) A letter from each of E&Y, PW, M&P and GT, in form and
substance satisfactory to the U.S. Representatives and dated such Date
of Delivery, substantially the same in form and substance as the
letters furnished to the U.S. Representatives and the Selling
Stockholders pursuant to Section 5(e) hereof, except that the
"specified date" in the letter furnished pursuant to this Section
5(j)(7) shall be a date not more than three days prior to such Date of
Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the U.S. Representatives by notice to the Company and each of the Selling
Stockholders at any time at or prior to Closing Time, and such termination shall
be without liability of any party to any other party except as provided in
Section 4 hereof.
SECTION 6. Indemnification.
---------------
(a) Indemnification of U.S. Underwriters by the Company. The Company
---------------------------------------------------
agrees to indemnify and hold harmless each U.S. Underwriter and each person, if
any, who controls any U.S. Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act to the extent and in the manner set forth
in clauses (i), (ii), (iii) and (iv) below.
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact
<PAGE>
-36-
required to be stated therein or necessary to make the statements therein
not misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the supplement or
prospectus wrapper material prepared by or with the consent of the
Company for distribution in foreign jurisdictions in connection with the
reservation and sale of the Reserved Securities to eligible employees and
other persons having a business relationship with the Company or caused by
any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, when
considered in conjunction with the Prospectus or preliminary prospectus,
not misleading;
(iii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(e) below) any such settlement is effected with the written consent of the
Company; and
(iv) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i), (ii) or (iii)
above;
<PAGE>
-37-
provided, however, that (A) this indemnity agreement shall not apply to any
- -------- -------
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information relating to a U.S.
Underwriter furnished to the Company by such U.S. Underwriter through Merrill
Lynch expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectuses (or any amendment
or supplement thereto); and (B) such indemnity with respect to any preliminary
prospectus shall not inure to the benefit of any U.S. Underwriter (or any
persons controlling such U.S. Underwriter) from whom the person asserting such
loss, claim, damage or liability purchased the Securities which are the subject
thereof if such person did not receive a copy of the Prospectus (or the
Prospectus as amended or supplemented) at or prior to the confirmation of the
sale of such Securities to such person in any case where such delivery is
required by the 1933 Act and the untrue statement or omission or alleged untrue
statement or omission of a material fact contained in such preliminary
prospectus was corrected in the Prospectus (or the Prospectus as amended or
supplemented).
(b) Indemnification of U.S. Underwriters by Selling Stockholders.
------------------------------------------------------------
Each Selling Stockholder severally and not jointly agrees to indemnify and hold
harmless each U.S. Underwriter and each person, if any, who controls any U.S.
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any and all loss, liability, claim, damage and expense to
the same extent described in the indemnity contained in subsection (a) (provided
that with respect to clause (iii) thereof, such settlement is effected with the
written consent of such Selling Stockholder) of this Section 6, as incurred, but
only with respect to untrue statements or alleged untrue statements of a
material fact contained in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information, if
applicable, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus or the
<PAGE>
-38-
Prospectus (or any amendment or supplement thereto) made in reliance upon and in
conformity with information specifically referring to such Selling Stockholder
in its capacity as a Selling Stockholder furnished to the Company in writing by
such Selling Stockholder expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto). The obligations of each Selling
Stockholder pursuant to this Section 6(b) are several; provided, however, that
-------- -------
each Selling Stockholder's aggregate liability under this Section 6(b) shall be
limited to an amount equal to the gross proceeds (after deducting the
underwriting discount, but before deducting expenses) received by such Selling
Stockholder from the sale of Securities pursuant to this Agreement and the
International Purchase Agreement.
(c) Indemnification of Company, Directors and Officers. Each U.S.
--------------------------------------------------
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, and each Selling Stockholder and each
person, if any, who controls such Selling Stockholder within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto) in
reliance upon and in conformity with written information relating to a U.S.
Underwriter furnished to the Company by such U.S. Underwriter through Merrill
Lynch expressly for use in the Registration Statement (or any amendment thereto)
or such preliminary prospectus or the Prospectuses (or any amendment or
supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party
-------------------------------------
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof
<PAGE>
-39-
and in any event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. In the case of parties
indemnified pursuant to Sections 6(a) and 6(b) above, counsel to the indemnified
parties shall be selected by Merrill Lynch, and, in the case of parties
indemnified pursuant to Section 6(c) above, counsel to the indemnified parties
shall be selected by the Company. An indemnifying party may participate at its
own expense in the defense of any suchaction; provided, however, that counsel to
-------- -------
the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(e) Settlement Without Consent if Failure to Reimburse. If at any
--------------------------------------------------
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(iii) or 6(c) effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
<PAGE>
-40-
(f) The provisions of this Section shall not affect any agreement
among the Company and the Selling Stockholders with respect to indemnification.
(g) Indemnification for Reserved Securities. In connection with the
---------------------------------------
offer and sale of the Reserved Securities, the Company agrees to indemnify and
hold harmless the U.S. Underwriters from and against any and all losses,
expenses and liabilities incurred by them as a result of (i) the failure of the
designated employees or other persons to pay for and accept delivery of shares
which, immediately following the effectiveness of the Registration Statement,
were subject to a properly confirmed agreement to purchase and (ii) the
violation of any securities laws of foreign jurisdictions where Reserved
Securities have been offered.
SECTION 7. Contribution. If the indemnification provided for in
------------
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (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 U.S. Underwriters
on the other hand from the offering of the Securities pursuant to this Agreement
or (ii) if the allocation provided by clause (i) 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 of the U.S.
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages 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 U.S. Underwriters on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Selling Stockholders and the total
underwriting discount received by the U.S. Underwriters, in each case as set
forth on the cover of the Prospectus, or, if Rule 434 is used, the corresponding
<PAGE>
-41-
location on the term sheet bear to the aggregate initial public offering price
of the Securities as set forth on such cover.
The relative fault of the Company and the Selling Stockholders on the
one hand and the U.S. Underwriters on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Selling Stockholders
or by the U.S. Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the U.S. Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation (even if the U.S. Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
U.S. Underwriter has otherwise been required to pay by reason of any 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 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls a
U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall
<PAGE>
-42-
have the same rights to contribution as such U.S. Underwriter, and each director
of the Company, each officer of the Company who signed the Registration
Statement, each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act and each person who
controls a Selling Stockholder within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution as the
Company and the Selling Stockholders, respectively. The U.S. Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial U.S. Securities set forth opposite their
respective names in Schedule A hereto and not joint. The Selling Stockholders'
----------
respective obligations to contribute pursuant to this Section 7 are several and
not joint.
The provisions of this Section shall not affect any agreement among
the Company and the Selling Stockholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
- --------
Agreement and the U.S. Pricing Agreement, or contained in certificates of
officers of the Company or the Selling Stockholders submitted pursuant hereto,
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any U.S. Underwriter or controlling
person, or by or on behalf of the Company or the Selling Stockholders, and shall
survive delivery of the Securities to the U.S. Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) The U.S. Representatives may terminate this Agreement, by notice
to the Company and the Selling Stockholders, at any time at or prior to Closing
Time (i) if there has been, since the date of this Agreement or since the
respective dates as of which information is given in the Prospectuses, a
Material Adverse Change, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States, Europe or elsewhere or any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case, the effect of which
is such as to make it, in the judgment of the U.S. Representatives,
impracticable to market
<PAGE>
-43-
the U.S. Securities or to enforce contracts for the sale of the U.S. Securities,
or (iii) if trading in any securities of the Company has been suspended or
limited by the Commission or Nasdaq, or if trading generally on the American
Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or in
the over-the-counter market has been suspended or limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by order of the Commission, the NASD or
any other governmental authority, or (iv) if a banking moratorium has been
declared by either Federal or New York authorities. As used in this Section
9(a), the term "Prospectuses" means the Prospectuses in the form first used to
confirm sales of the Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof. Notwithstanding any such termination, the
provisions of Sections 1, 6 and 7 shall survive such termination and remain in
full force and effect.
SECTION 10. Default by One or More of the U.S. Underwriters. If one
-----------------------------------------------
or more of the U.S. Underwriters shall fail at Closing Time to purchase the
Initial U.S. Securities which it or they are obligated to purchase under this
Agreement and the U.S. Pricing Agreement (the "Defaulted Securities"), the U.S.
Representatives shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting U.S. Underwriters, or any
other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the U.S. Representatives shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Initial U.S. Securities, each of the non-defaulting U.S.
Underwriters shall be obligated, severally and not jointly, to purchase the
full amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all
nondefaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of Initial U.S. Securities, this
<PAGE>
-44-
Agreement shall terminate without liability on the part of any non-
defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
U.S. Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the U.S. Representatives or the Company
and the Selling Stockholders shall have the right to postpone Closing Time for a
period not exceeding seven days in order to effect any required changes in the
Registration Statement or the Prospectuses or in any other documents or
arrangements.
SECTION 11. Default by the Selling Stockholders or the Company. If
--------------------------------------------------
the Company or any Selling Stockholder shall fail at Closing Time or at the Date
of Delivery to sell and deliver the number of Securities which it is obligated
to sell hereunder, then the U.S. Underwriters may, at their option, by notice
from the U.S. Underwriters to the Company and the non-defaulting Selling
Stockholders either (a) terminate this Agreement without any liability on the
part of any non-defaulting party except to the extent provided in Section 4 and
except that the provisions of Sections 6 and 7 shall remain in effect or (b)
elect to purchase the Securities which any non-defaulting party has agreed to
sell thereunder.
No action pursuant to this Section shall relieve the Company or any
Selling Stockholder from liability in respect of such default.
SECTION 12. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives at c/o Merrill Lynch,
Merrill Lynch World Headquarters, North Tower, World Financial Center, New York,
New York 10281-1201, attention of Gregg G. Seibert, Managing Director, with a
copy to Cahill Gordon & Reindel, 80 Pine Street, New York, New York 10005,
Attention: William M. Hartnett, Esq.; notices to the Company shall be directed
to the Company at 599 Lexington Avenue, New York, New York 10022, attention of
Vincent J. Young, Chairman, with a copy to Cooperman Levitt Winikoff Lester &
Newman, P.C., 800 Third Avenue, New York, New York 10002, Attention: Robert L.
Winikoff, Esq.; notices to the Selling Stockholders
<PAGE>
-45-
shall be directed to their respective addresses as set forth in the stock
records of the Company.
SECTION 13. Parties. This Agreement and the U.S. Pricing Agreement
-------
shall each inure to the benefit of and be binding upon the U.S. Underwriters,
the Company and the Selling Stockholders and their respective successors.
Nothing expressed or mentioned in this Agreement or the U.S. Pricing Agreement
is intended or shall be construed to give any person, firm or corporation, other
than the U.S. Underwriters, the Company, the Selling Stockholders and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or the U.S. Pricing Agreement or any provision herein or therein contained. This
Agreement and the U.S. Pricing Agreement and all conditions and provisions
hereof and thereof are intended to be for the sole and exclusive benefit of the
U.S. Underwriters, the Company, the Selling Stockholders, their respective
successors and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any U.S. Underwriter shall be
deemed to be a successor by reason merely of such purchase.
SECTION 14. Governing Law and Time. This Agreement and the U.S.
----------------------
Pricing Agreement shall be governed by and construed in accordance with the laws
of the State of New York applicable to agreements made and to be performed in
said State without regard to principles of conflicts of law. Specified times of
day refer to New York City time.
<PAGE>
-46-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and each of the Selling
Stockholders a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the U.S. Underwriters, the
Company and the Selling Stockholders in accordance with its terms.
Very truly yours,
YOUNG BROADCASTING INC.
By: -------------------------------
Name:
Title:
BROAD STREET INVESTMENT FUND I, L.P.
STONE STREET FUND 1987
STONE STREET FUND 1988
STONE STREET FUND 1989
BRIDGE STREET FUND 1987
BRIDGE STREET FUND 1988
BRIDGE STREET FUND 1989
GOLDMAN, SACHS & CO.
CAPITAL CITIES/ABC, INC.
ESTATE OF HENRY KRAMER
IAI STOCK FUND
IAI VALUE FUND
DONALD McCULLOUGH
By: ______________________________
as Attorney-in-Fact, acting
on behalf of each of the
Selling Stockholders named in
Schedule C hereto
----------
<PAGE>
-47-
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
ALEX. BROWN & SONS INCORPORATED
BT SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
J.P. Morgan Securities Inc.
By: MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: ___________________________
Name:
Title:
For themselves and as U.S. Representatives
of the other U.S. Underwriters named in
Schedule A hereto.
<PAGE>
SCHEDULE A
Number of
Initial Securities
Name of Underwriter to Be Purchased
- ------------------- ------------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.............................
Alex. Brown & Sons Incorporated......................
BT Securities Corporation............................
Goldman, Sachs & Co..................................
J.P. Morgan Securities Inc...........................
Total............................... =========
5,296,713
<PAGE>
SCHEDULE B-1
Jurisdiction of
Corporate Subsidiary Incorporation
- -------------------- ---------------
Young Broadcasting of Albany, Inc. Delaware
Young Broadcasting of La Crosse, Inc. Wisconsin
Young Broadcasting of Lansing, Inc. Michigan
Winnebago Television Corporation Illinois
Young Broadcasting of Nashville, Inc. Delaware
YBT, Inc. Delaware
Young Broadcasting of Louisiana, Inc. Delaware
LAT, Inc. Delaware
Young Broadcasting of Richmond, Inc. Delaware
Young Broadcasting of Green Bay, Inc. Delaware
Young Broadcasting of Knoxville, Inc. Delaware
YBK, Inc. Delaware
Young Broadcasting of Davenport, Inc. Delaware
Young Broadcasting of Sioux Falls, Inc. Delaware
Young Broadcasting of Rapid City, Inc. Delaware
<PAGE>
SCHEDULE B-2
Jurisdiction
Partnership Subsidiary of Formation
- ---------------------- ------------
WKRN, L.P. Delaware
KLFY, L.P. Delaware
WATE, L.P. Delaware
<PAGE>
SCHEDULE C
COLUMN 1: COLUMN 2:
Number of Initial Number of U.S.
U.S. Securities Option Securities
Selling Stockholder To Be Sold To Be Sold
- ------------------- ----------------- -----------------
Broad Street Investment
Fund I, L.P.
Stone Street Fund 1987
Stone Street Fund 1988
Stone Street Fund 1989
Bridge Street Fund 1987
Bridge Street Fund 1988
Bridge Street Fund 1989
Goldman, Sachs & Co.
Capital Cities/ABC, Inc.
Estate of Henry Kramer
IAI Stock Fund
IAI Value Fund
Donald McCullough
<PAGE>
SCHEDULE D
The Goldman Sachs Group, L.P.
Broad Street Investment
Fund I, L.P.
Stone Street Fund 1987
Stone Street Fund 1988
Stone Street Fund 1989
Bridge Street Fund 1987
Bridge Street Fund 1988
Bridge Street Fund 1989
Goldman, Sachs & Co.
Capital Cities/ABC, Inc.
Estate of Henry Kramer
Pennino Broadcast Corp.
IAI Stock Fund
IAI Value Fund
Donald McCullough
Tanner Associates
<PAGE>
Exhibit A
5,296,713 Shares
YOUNG BROADCASTING INC.
(a Delaware corporation)
Class A Common Stock
(Par Value $.001 Per Share)
U.S. Pricing Agreement
----------------------
July , 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
ALEX. BROWN & SONS INCORPORATED
BT SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
J.P. Morgan Securities Inc.
as U.S. Representatives of the several U.S. Underwriters
named in the within-mentioned Purchase Agreement
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Reference is made to the U.S. Purchase Agreement dated July , 1996
(the "U.S. Purchase Agreement") among Young Broadcasting Inc., a Delaware
corporation (the "Company"), and each of the stockholders of the Company named
in Schedule C thereto (the "Selling Stockholders"), and the several U.S.
----------
Underwriters named in Schedule A thereto, (the "U.S. Underwriters"), for whom
----------
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Alex. Brown & Sons
Incorporated, BT Securities Corporation, Goldman, Sachs & Co. and J.P. Morgan
Securities Inc. are acting as representatives (the "U.S. Representatives"). The
U.S. Purchase Agreement provides for the purchase by the U.S.
A-1
<PAGE>
Underwriters from the Company and the Selling Stockholders, subject to the terms
and conditions set forth therein, of an aggregate of 5,296,713 shares of the
Company's Class A Common Stock, par value $.001 per share (the "U.S.
Securities").
Pursuant to Section 2 of the U.S. Purchase Agreement, the Company and
each Selling Stockholder agree with each U.S. Underwriter as follows:
SECTION 1. The initial public offering price per share for the U.S.
Securities, determined as provided in said Section 2, shall be $ .
SECTION 2. The purchase price per share for the U.S. Securities to be paid
by the several U.S. Underwriters shall be $ , being an amount equal to the
initial public offering price set forth above less $ per share.
A-2
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and each Selling Stockholder a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the U.S. Underwriters, the Company and the
Selling Stockholders in accordance with its terms.
Very truly yours,
YOUNG BROADCASTING INC.
By:----------------------------------
Name:
Title:
BROAD STREET INVESTMENT FUND I, L.P.
STONE STREET FUND 1987
STONE STREET FUND 1988
STONE STREET FUND 1989
BRIDGE STREET FUND 1987
BRIDGE STREET FUND 1988
BRIDGE STREET FUND 1989
GOLDMAN, SACHS & CO.
CAPITAL CITIES/ABC, INC.
ESTATE OF HENRY KRAMER
IAI STOCK FUND
IAI VALUE FUND
DONALD McCULLOUGH
By:----------------------------------
as Attorney-in-Fact, acting
on behalf of each of the
Selling Stockholders named in
Schedule C hereto
----------
A-3
<PAGE>
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
ALEX. BROWN & SONS INCORPORATED
BT SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
J.P. Morgan Securities Inc.
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: __________________________________
Name:
Title:
For themselves and as U.S. Representatives
of the other U.S. Underwriters named in the
Purchase Agreement.
A-4
<PAGE>
Exhibit B
Form of Opinion, dated as of Closing Time of Cooperman Levitt Winikoff
Lester & Newman, P.C., counsel for the Company and the Subsidiaries,
substantially to the effect that:
1. The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware.
2. The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement and the International Purchase Agreement.
3. The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect.
4. The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus in the column entitled "Actual"
under the caption "Capitalization" (except for subsequent issuances, if
any, pursuant to this Agreement and the International Purchase Agreement);
the shares of issued and outstanding capital stock of the Company,
including the Securities to be purchased by the Underwriters from the
Selling Stockholders, have been duly authorized and validly issued and are
fully paid and non-assessable; and none of the outstanding shares of
capital stock of the Company was issued in violation of the preemptive or
other similar rights of any securityholder of the Company.
5. The Securities to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale to the Underwriters
pursuant to this Agreement and the International Purchase Agreement and,
when issued and delivered by the Company pursuant to this Agreement and the
International Purchase Agreement against payment of the consideration set
forth in this Agreement and the International Purchase Agreement, will be
validly issued and fully paid and non-assessable and no holder of
B-1
<PAGE>
the Securities is or will be subject to personal liability by reason of
being such a holder.
6. The issuance and sale of the Securities by the Company and the sale
of the Securities by the Selling Stockholders is not subject to the
preemptive or other similar rights of any securityholder of the Company.
7. Each Corporate Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect; each Partnership Subsidiary has been duly formed and is validly
existing as a limited partnership in good standing under the laws of the
jurisdiction of its formation, has partnership power and authority to own,
lease and operate its properties and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing
would not result in a Material Adverse Effect; except as otherwise
disclosed in the Registration Statement, all of the issued and outstanding
capital stock of each Corporate Subsidiary, and all of the issued and
outstanding partnership interest of each Partnership Subsidiary, has been
duly authorized and validly issued, is fully paid and non-assessable and,
to the best of our knowledge, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock of any Corporate Subsidiary, or the outstanding partnership
interest of each Partnership Subsidiary, was issued in violation of the
preemptive or similar rights of any securityholder of such Subsidiary.
8. Each of this Agreement and the International Purchase Agreement
has been duly authorized, executed and delivered by the Company.
B-2
<PAGE>
9. The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required
filing of the Prospectus pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to
the best of our knowledge, no stop order suspending the effectiveness of
the Registration Statement or any Rule 462(b) Registration Statement has
been issued under the 1933 Act and no proceedings for that purpose have
been instituted or are pending or threatened by the Commission.
10. The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
Registration Statement and Prospectus, excluding the documents incorporated
by reference therein, as of their respective effective or issue dates
(other than the financial statements and supporting schedules included
therein or omitted therefrom, as to which we need express no opinion)
complied as to form in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations.
11. The documents incorporated by reference in the Prospectus (other
than the financial statements and supporting schedules included therein or
omitted therefrom, as to which we need express no opinion), when they
became effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of the
1933 Act or the 1934 Act, as applicable, and the rules and regulations of
the Commission thereunder.
12. The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter and by-laws
of the Company and the requirements of the Nasdaq National Market.
13. To the best of our knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the
Company or any Subsidiary is a party, or to which the property of the
Company or any Subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the properties or assets
thereof
B-3
<PAGE>
or the consummation of the transactions contemplated in this Agreement and
the International Purchase Agreement or the performance by the Company of
its obligations hereunder or thereunder.
14. The information in the Prospectus under "Description of Capital
Stock--Common Stock," "Business--Properties," "Business--Network
Affiliation Agreements," "Business--Legal Proceedings," "Description of
Capital Stock--Preferred Stock" and "Certain U.S. Federal Tax
Considerations For Non-U.S. Holders of Common Stock" and in the
Registration Statement under item 15, to the extent that it constitutes
matters of law, summaries of legal matters, the Company's charter and
bylaws or legal proceedings, or legal conclusions, has been reviewed by us
and is correct in all material respects.
15. To the best of our knowledge, there are no statutes or
regulations that are required to be described in the Prospectus that are
not described as required.
16. All descriptions in the Registration Statement of contracts and
other documents to which the Company or any of the Subsidiaries are a party
are accurate in all material respects; to the best of our knowledge, there
are no franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or referred to
in the Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed or incorporated by
reference as exhibits thereto, and the descriptions thereof or references
thereto are correct in all material respects.
17. To the best of our knowledge, neither the Company nor any
Subsidiary is in violation of its charter or by-laws and no default by the
Company or any Subsidiary exists in the due performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or incorporated by
reference as an exhibit to the Registration Statement.
18. No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act
and the
B-4
<PAGE>
1933 Act Regulations, which have been obtained, or as may be required under
the securities or blue sky laws of the various states, as to which we need
express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of the Purchase Agreement or for the
offering, issuance, sale or delivery of the Securities.
19. The execution, delivery and performance of this Agreement and the
International Purchase Agreement and the consummation of the transactions
contemplated in this Agreement and the International Purchase Agreement and
in the Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectuses under the caption "Use of Proceeds") and
compliance by the Company with its obligations under this Agreement and the
International Purchase Agreement do not and will not, whether with or
without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any Subsidiary pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument, known to us, to which the Company or any
Subsidiary is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any Subsidiary is
subject (except for such conflicts, breaches or defaults or liens, charges
or encumbrances that would not have a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter or by-
laws of the Company or any Subsidiary, or any applicable law, statute,
rule, regulation, judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their
respective properties, assets or operations.
20. The Acquisition Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
obligation of the Company enforceable in accordance with its terms, except
that (A) the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any
B-5
<PAGE>
proceeding therefor may be brought and (B) any rights to indemnity or
contribution thereunder may be limited by federal and state securities laws
and public policy considerations.
21. The network affiliation agreements between each of the broadcast
television stations of the Company and the Subsidiaries, as applicable, and
CBS, NBC and ABC, as applicable, have been duly authorized, executed and
delivered by the Company and the Subsidiaries, as applicable, and are the
valid and legally binding obligations of the respective parties thereto and
the description of such network affiliation agreements in the
Registration Statement and the Prospectuses under the caption "Business --
Network Affiliation Agreements" is a fair and accurate summary thereof.
22. The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
1940 Act.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable) (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we need make no statement),
at the time such Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus or any amendment or supplement thereto
(except for financial statements and schedules and other financial data included
or incorporated by reference therein or omitted therefrom, as to which we need
make no statement), at the time the Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or at the Closing Time, included
or includes an untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it
is otherwise subject to, any treatise, written policy or other
B-6
<PAGE>
document relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991). In rendering such
opinion, counsel may state that it expresses no opinion with respect to matters
arising under the Communications Act, or the rules and regulations of the FCC.
B-7
<PAGE>
EXHIBIT C
Form of opinion, dated as of Closing Time, of Wiley, Rein & Fielding,
communications counsel for the Company and the Subsidiaries, substantially to
the effect that:
1. The execution and delivery by each of the Company and the
Subsidiaries of, and the performance by each of the Company and the
Subsidiaries of its obligations under, this Agreement, the International
Purchase Agreement and the Securities, as applicable, did not or will not
result in a violation of the Communications Act or any order, rule or
regulation of the FCC;
2. No consent, approval, authorization, order, registration or
qualification of or with any governmental agency or body is required under
the Communications Act or the rules and regulations of the FCC for the
execution and delivery by each of the Company and the Subsidiaries of, and
the performance by each of the Company and the Subsidiaries of its
obligations under, this Agreement, the International Purchase Agreement and
the Securities, as applicable;
3. The Company and the Subsidiaries are the holders of the Licenses
issued by the FCC listed in an attachment to such opinion (the "FCC
Licenses"), all of which are validly issued by the FCC and in full force
and effect, with no material restrictions or qualifications other than as
described in the Registration Statement and the Prospectuses and to the
best of such counsel's knowledge based solely on the description of the
business and properties of the Company and the Subsidiaries in the
Registration Statement and the Prospectuses and given by the Company to
such counsel, such FCC Licenses constitute all of the FCC Licenses
necessary for the Company and the Subsidiaries to own their properties and
to conduct their businesses in the manner and to the full extent now
operated or proposed to be operated as described in the Registration
Statement and the Prospectuses; Fidelity is the holder of the licenses
issued by the FCC under which KCAL operates (the "KCAL Licenses"), all of
which are validly issued by the FCC and in full force and effect, with no
material restrictions or qualifications other than as described in the
Registration Statement and the Prospectuses;
C-1
<PAGE>
4. To the best of such counsel's knowledge based solely upon a
certificate of the Company attached to such counsel's opinion in form
reasonably satisfactory to the Underwriters and a review of the publicly
available records of the FCC, the business and operations of the Company
and the Subsidiaries comply in all material respects with the
Communications Act and all published orders, rules and regulations of the
FCC;
5. Other than matters described in the Registration Statement and the
Prospectuses and except as to any other matters relating to the television
broadcast industry in general which would not have a Material Adverse
Effect, such counsel after due inquiry does not know of (A) any proceedings
threatened, pending or contemplated before the FCC against or involving the
properties, businesses or Licenses of the Company and the Subsidiaries, or
(B) any communications laws or regulations of the United States applicable
to such properties, businesses or Licenses, which in either case could have
a Material Adverse Effect;
6. To the best of such counsel's knowledge after due inquiry, no
event has occurred which permits, or with notice or lapse of time or both
would permit, the revocation or non-renewal of any of the FCC Licenses and
the KCAL Licenses, assuming the filing of timely license renewal
applications and the timely payment of all applicable filing and regulatory
fees to the FCC, or which might result in any other material impairment of
the rights of the Company or the Subsidiaries in the FCC Licenses or
Fidelity in the KCAL Licenses; and
7. The statements in the Prospectus under the caption "Risk Factors-
Government Regulation" and "Business-Federal Regulation of Television
Broadcasting" insofar as such statements constitute summaries of the legal
matters, documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein and such
counsel does not believe that such statements as of the date of the
Prospectus and at Closing Time, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
In rendering such opinion, counsel may state that it expresses no
opinion with respect to any matters other than those arising under the
Communications Act and the published
C-2
<PAGE>
rules and regulations promulgated thereunder by the FCC, and may rely as to all
matters of fact relevant to such opinion on certificates and written statements
of officers and employees of the Company; provided, however, that all such
-------- -------
certificates and statements shall be satisfactory to you in all material
respects and attached to such counsel's opinion. In addition, counsel may note
that item (ii) above is qualified by the requirement to file certain corporate
and loan instruments with the FCC within 30 days of the Closing Time.
C-3
<PAGE>
Exhibit D
Form of opinion, dated as of Closing Time, of counsel to the Selling
Stockholders, substantially to the effect that:
1. No filing with, or consent, approval, authorization, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign (other than the issuance of the order of the
Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under state securities
laws, as to which I need express no opinion), is necessary or required to be
obtained by the Selling Stockholders for the performance by each Selling
Stockholder of its obligations under this Agreement, or in connection with the
offer, sale or delivery of the Securities.
2. This Agreement has been duly authorized, executed and delivered
by each Selling Stockholder.
3. The execution, delivery and performance of this Agreement and the
sale and delivery of the Securities and the consummation of the transactions
contemplated in this Agreement and in the Registration Statement and compliance
by the Selling Stockholders with its respective obligations under this Agreement
have been duly authorized by all necessary action on the part of each of the
Selling Stockholders and do not and will not, whether with or without the giving
of notice or passage of time or both, conflict with or constitute a breach of,
or default under or result in the creation or imposition of any tax, lien,
charge or encumbrance upon the Securities or any property or assets of any
Selling Stockholder pursuant to, any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, license, lease or other instrument or
agreement to which any Selling Stockholder is a party or by which it may be
bound, or to which any of the property or assets of the Selling Stockholder may
be subject nor will such action result in any violation of the provisions of the
charter or by-laws of any Selling Stockholder, if applicable, or any law,
administrative regulation, judgment or order of any governmental agency or body
or any administrative or court decree having jurisdiction over such Selling
Stockholder or any of its properties.
4. Each Selling Stockholder is, and immediately prior to Closing
Time will be, the sole registered owner of the Securities to be sold by such
Selling Stockholder; upon consummation of the sale of the Securities pursuant
to this
D-1
<PAGE>
Agreement, each of the Underwriters will be the registered owner of the
Securities purchased by it from such Selling Stockholder and, assuming the
Underwriters purchased the Securities for value in good faith and without notice
of any adverse claim, the Underwriters will have acquired all rights of such
Selling Stockholder in the Securities free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity, and the owner of the
Securities, if other than such Selling Stockholder, is precluded from asserting
against the Underwriters the ineffectiveness of any unauthorized endorsement;
and such Selling Stockholder has the full right, power and authority (A) to
enter into this Agreement and (B) to sell, transfer and deliver the Securities
to be sold by such Selling Stockholder under this Agreement.
5. Such Selling Stockholder has duly executed and delivered in the
form heretofore furnished to the Underwriters the Power of Attorney and Custody
Agreement with the Attorneys-in-Fact as attorneys-in-fact and the Custodian as
custodian; the Attorneys-in-Fact, or any of them, are authorized to execute and
deliver this Agreement on behalf of such Selling Stockholder, to determine the
purchase price to be paid by the U.S. Underwriters to such Selling Stockholder,
as provided in Section 2(a) hereof, to authorize the delivery of the Securities
to be sold by such Selling Stockholder hereunder, to accept payment therefor,
and otherwise to act on behalf of such Selling Stockholder in connection with
this Agreement and the International Purchase Agreement.
6. Certificates in negotiable form for all Securities to be sold
hereunder have been placed in custody with the Custodian for the purpose of
effecting delivery hereunder.
D-2
<PAGE>
EXHIBIT 1.2
1,324,178 Shares
YOUNG BROADCASTING INC.
(a Delaware corporation)
Class A Common Stock
(Par Value $.001 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
--------------------------------
London, England
July , 1996
MERRILL LYNCH INTERNATIONAL
ALEX. BROWN & SONS INCORPORATED
BANKERS TRUST INTERNATIONAL PLC
GOLDMAN SACHS INTERNATIONAL
J.P. MORGAN SECURITIES LTD.
as Lead Managers of the several Managers
c/o Merrill Lynch International
20 Farringdon Road
London EC1M 3NH, England
Ladies and Gentlemen:
Young Broadcasting Inc., a Delaware corporation (the "Company"), and each
of the stockholders of the Company named in Schedule C hereto (the "Selling
----------
Stockholders"), severally confirm their respective agreements with Merrill Lynch
International ("Merrill Lynch International"), Alex. Brown & Sons Incorporated
("Alex. Brown"), Bankers Trust International plc ("BT"), Goldman Sachs
International ("Goldman International"), J.P. Morgan Securities Ltd. ("J.P.
Morgan") and each of the other Managers named in Schedule A hereto
----------
(collectively, the "Managers," which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Merrill
Lynch International, Alex. Brown, BT, Goldman International and J.P. Morgan are
acting as lead managers (in
<PAGE>
-2-
such capacity, Merrill Lynch International, Alex. Brown, BT, Goldman
International and J.P. Morgan shall hereinafter be referred to as the "Lead
Managers"), with respect to the sale by the Company and each of the Selling
Stockholders, acting severally and not jointly, and the purchase by the
Managers, acting severally and not jointly, of the respective aggregate numbers
of shares of Class A Common Stock, par value $.001 per share, of the Company
(the "Common Stock") set forth in said Schedule A (after giving effect to the
----------
conversion of convertible Class C Common Stock, par value $.001 per share, of
the Company (the "Class C Common Stock") into Common Stock, concurrently with
such sale and purchase, by certain Selling Stockholders owning such convertible
Class C Common Stock), and with respect to the grant by the Selling
Stockholders, acting severally and not jointly, to the Managers, acting
severally and not jointly, of the options described in Section 2(b) hereof to
purchase all or any part of an aggregate of 198,627 additional shares of Common
Stock to cover over-allotments, in each case except as may otherwise be provided
in the International Pricing Agreement, as hereinafter defined. The aforesaid
aggregate of 1,324,178 shares of Common Stock (the "Initial International
Securities") to be purchased by the Managers and all or any part of the
aggregate of 198,627 shares of Common Stock subject to the options described in
Section 2(b) hereof (the "International Option Securities") are collectively
hereinafter called the "International Securities." The number of Initial
International Securities to be sold by the Company and the Selling Stockholders
is 800,000 and 524,178, respectively.
It is understood and agreed by all parties that the Company and each of
the Selling Stockholders are concurrently entering into an agreement dated the
date hereof (the "U.S. Purchase Agreement") providing for the sale by the
Company and the Selling Stockholders of up to an aggregate of 5,296,713 shares
of Common Stock (the "Initial U.S. Securities") through arrangements with
certain managing Underwriters within the United States and Canada (the "U.S.
Underwriters"; and together with the Managers, the "Underwriters") for whom
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Alex.
Brown, BT Securities Corporation, Goldman, Sachs & Co. ("Goldman") and J.P.
Morgan Securities Inc. are acting as representatives (the "U.S.
Representatives") and the grant by the Selling Stockholders to the U.S.
Underwriters of an option to purchase all or any part of an aggregate of 794,507
additional shares of Common Stock (the "U.S. Option Securities") to cover over-
allotments of the Initial U.S. Securities. The Initial U.S. Securities and the
U.S. Option Securities are hereinafter
<PAGE>
-3-
called the "U.S. Securities." The International Securities and the U.S.
Securities, collectively, are hereinafter called the "Securities." It is
understood that the Company and the Selling Stockholders are not obligated to
sell, and the Managers are not obligated to purchase, any Initial International
Securities unless all of the Initial U.S. Securities are contemporaneously
purchased by the U.S. Underwriters.
The Managers and the U.S. Underwriters are concurrently entering into an
Intersyndicate Agreement of even date herewith (the "Intersyndicate Agreement")
providing for the coordination of certain transactions among the U.S.
Underwriters and the Managers under the direction of Merrill Lynch.
Prior to the purchase and public offering of the International Securities
by the several Managers, the Company, the Selling Stockholders and the Lead
Managers, acting on behalf of the several Managers, shall enter into an
agreement substantially in the form of Exhibit A hereto (the "International
---------
Pricing Agreement"). The International Pricing Agreement may take the form of
an exchange of any standard form of written telecommunication between the
Company, each of the Selling Stockholders and the Lead Managers and shall
specify such applicable information as is indicated in Exhibit A hereto. The
---------
offering of the International Securities will be governed by this International
Purchase Agreement (this "Agreement"), as supplemented by the International
Pricing Agreement. From and after the date of the execution and delivery of the
International Pricing Agreement, this Agreement shall be deemed to incorporate
the International Pricing Agreement.
The initial public offering price and the purchase price with respect to
the U.S. Securities shall be set forth in a separate instrument (the "U.S.
Pricing Agreement"), the form of which is attached to the U.S. Purchase
Agreement. The price per security for the U.S. Securities to be purchased by
the U.S. Underwriters pursuant to the U.S. Purchase Agreement shall be identical
to the price per security for the International Securities to be purchased by
the Managers hereunder.
Two forms of prospectus are to be used in connection with the offering
and sale of the Securities, one relating to the International Securities (the
"International Form of Prospectus") and the other relating to the U.S.
Securities (the "U.S. Form of Prospectus"). The U.S. Form of Prospectus is
identical to the International Form of Prospectus, except for
<PAGE>
-4-
the front cover page, the "Underwriting" section and the back cover page.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-06241) and a related
preliminary prospectus for the registration of the Securities under the
Securities Act of 1933, as amended (the "1933 Act"), has filed such amendments
thereto and such amended preliminary prospectuses as may have been required to
the date hereof, and will file such additional amendments thereto and such
amended prospectuses as may hereafter be required. Such registration statement
(as amended, if applicable), including any exhibits and schedules included
therein and any documents incorporated by reference therein, and the U.S. Form
of Prospectus and the International Form of Prospectus constituting parts
thereof (including in each case the information, if any, deemed to be part
thereof pursuant to Rule 430A(b) (the "Rule 430A Information") or Rule 434 (the
"Rule 434 Information") of the rules and regulations of the Commission under the
1933 Act (the "1933 Act Regulations")), as from time to time amended or
supplemented pursuant to the 1933 Act or otherwise, are hereinafter referred to
as the "Registration Statement," the "U.S. Prospectus," and the "International
Prospectus," respectively, and the U.S. Prospectus and the International
Prospectus are hereinafter called, collectively, the "Prospectuses," and, each
individually, a "Prospectus," except that if any revised U.S. Prospectus or
revised International Prospectus shall be provided to the U.S. Underwriters or
the Managers, respectively, by the Company for use in connection with the
offering of the Securities which differs from the form of such prospectus on
file at the Commission at the time the Registration Statement becomes effective
(whether or not such revised prospectus is required to be filed by the Company
pursuant to Rule 424(b) of the 1933 Act Regulations), the terms "U.S.
Prospectus," "International Prospectus," "Prospectuses" and "Prospectus" shall
refer to such revised prospectuses from and after the time they are first
provided to the U.S. Underwriters and the Managers, respectively, for such use.
If the Company elects to rely on Rule 434 of the 1933 Act Regulations, all
references to the Prospectuses shall be deemed to include, without limitation,
the form of Prospectuses and the term sheets taken together, provided to the
Underwriters by the Company in reliance on Rule 434 of the 1933 Act Regulations
(the "Rule 434 Prospectus"). If the Company files a registration statement to
register a portion of the Securities and relies on Rule 462(b) of the 1933 Act
Regulations for such registration statement to become effective
<PAGE>
-5-
upon filing with the Commission (the "Rule 462 Registration Statement"), then
any reference to the Registration Statement herein shall be deemed to refer to
both the registration statement referred to above and the Rule 462 Registration
Statement, as each such registration statement may be amended pursuant to the
1933 Act.
The Company and the Underwriters agree that up to 331,044 shares of the
Securities to be purchased by the Underwriters (the "Reserved Securities") shall
be reserved for sale by the Underwriters to certain eligible employees and
persons having business relationships with the Company, as part of the
distribution of the Securities by the Underwriters, subject to the terms of this
Agreement, the applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. (the "NASD") and all other applicable
laws, rules and regulations. To the extent that such Reserved Securities are
not orally confirmed for purchase by such eligible employees and persons having
business relationships with the Company by the end of the first business day
after the date of this Agreement, such Reserved Securities may be offered to the
public as part of the public offering contemplated hereby.
The Company and the Selling Stockholders understand that the Managers
propose to make a public offering of the International Securities as soon as the
Lead Managers deem advisable after the Registration Statement becomes effective
and the International Pricing Agreement has been executed and delivered.
The Company has entered into an Acquisition Agreement (the "Acquisition
Agreement") with KCAL Broadcasting, Inc. (the "Seller"), KCAL-TV, Inc. ("TV
Inc."), and Disney Enterprises, Inc. ("Enterprises", and together with the
Seller, TV Inc. and Fidelity (as defined below), "Disney"), dated as of May 10,
1996, pursuant to which the Company has agreed to acquire (the "KCAL
Acquisition") from the Seller all of the operations, assets, goodwill and
business of the Seller used in the business and operation of television station
KCAL, Channel 9, Los Angeles, California ("KCAL") and the capital stock of
Fidelity Television, Inc. ("Fidelity"), which holds the licenses issued by the
Federal Communications Commission ("FCC") under which KCAL operates.
<PAGE>
-6-
SECTION 1. Representations and Warranties.
------------------------------
(a) The Company represents and warrants to each Manager as of the date
hereof and as of the date of the International Pricing Agreement (such latter
date being hereinafter referred to as the "International Representation Date")
as follows:
(i) At the time the Registration Statement becomes effective and at
the International Representation Date, the Registration Statement,
including the information deemed to be part of the Registration Statement
at the time of effectiveness pursuant to Rule 430A(b) or Rule 434, will
comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and, to
the Company's knowledge, the Prospectuses and any preliminary prospectuses
comply or will comply in all material respects with any applicable laws or
regulations of foreign jurisdictions in which the Prospectuses and such
preliminary prospectuses, as amended or supplemented, if applicable, are
distributed in connection with the offer and sale of Reserved Securities.
The Prospectuses, at the International Representation Date (unless the term
"Prospectuses" refers to prospectuses which have been provided to the U.S.
Underwriters or the Managers by the Company for use in connection with the
offering of the Securities which differ from the Prospectuses on file at
the Commission at the time the Registration Statement becomes effective, in
which case at the time they are first provided to the U.S. Underwriters or
the Managers for such use) and at Closing Time referred to in Section 2
hereof, will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
-------- -------
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectuses contained under the caption
"Underwriting" in the Prospectuses made in reliance upon and in conformity
with information relating to a U.S. Underwriter or Manager furnished to the
Company in writing by such U.S. Underwriter or Manager through the U.S.
Representatives, or the
<PAGE>
-7-
Lead Managers, respectively, expressly for use in the Registration
Statement or Prospectuses.
(ii) The documents incorporated by reference in the Registration
Statement or the Prospectuses, when they became effective or were filed
with the Commission, conformed in all material respects to the requirements
of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
none of such documents 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 under
which they were made, not misleading, and any further documents so filed
and incorporated by reference in the Prospectuses, when such documents are
filed by the Company with the Commission, will conform in all material
respects to the requirements of the 1934 Act, and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(iii) There are no contracts or documents which are required to be
described in or incorporated by reference in the Prospectuses or to be
filed as exhibits to the Registration Statement which have not been so
described or filed as required.
(iv) Each of Ernst & Young LLP ("E&Y"), the accountants who
certified the consolidated financial statements and supporting schedules of
the Company and its subsidiaries included in the Registration Statement,
Price Waterhouse LLP ("PW"), the accountants who certified the financial
statements and supporting schedules of KCAL Broadcasting Group (a
broadcasting group of The Walt Disney Company) ("KCAL Group") included in
the Registration Statement, McGladrey & Pullen, LLP ("M&P"), the
accountants who certified the financial statements and supporting schedules
of KWQC-TV (a division of Broad Street Television, L.P.) ("KWQC") included
in the Registration Statement and Grant Thornton LLP ("GT"), the
accountants who certified the combined financial statements and supporting
schedules of Midcontinent Television of South Dakota, Inc. ("Midcontinent")
included in the Registration Statement, are independent public accountants
as required by the 1933 Act and 1933 Act Regulations.
<PAGE>
-8-
(v) The financial statements included in the Registration Statement
and the Prospectuses present fairly in all material respects the financial
position of each of the Company and its consolidated subsidiaries and, to
the best of the Company's knowledge, the KCAL Group, as and at the dates
indicated and the results of their operations for the periods specified;
except as otherwise stated in the Registration Statement, said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis; and the supporting
schedule to such financial statements included in the Registration
Statement present fairly the information required to be stated therein.
(vi) The pro forma financial statements (including the notes
thereto) and the other pro forma financial information included in the
Prospectuses (i) comply as to form in all material respects with the
applicable requirements of Regulation S-X promulgated under the 1934 Act,
(ii) have been prepared in accordance with the Commissions's rules and
guidelines with respect to pro forma financial statements, and (iii) have
been properly computed on the bases described therein; the assumptions used
in the preparation of the pro forma financial data and other pro forma
financial information included in the Prospectuses are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
or circumstances referred to therein.
(vii) Since the respective dates as of which information is given
in the Registration Statement and the Prospectuses, except as otherwise
stated therein, (A) there has been no material adverse change in the
condition (financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise
(a "Material Adverse Change"), whether or not arising in the ordinary
course of business, (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those in the ordinary course
of business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
(viii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under
<PAGE>
-9-
the laws of the State of Delaware with corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its obligations
under this Agreement and the International Pricing Agreement, the U.S.
Purchase Agreement and the U.S. Pricing Agreement, including the issuance,
sale and delivery of the Securities to be sold by the Company under the
Agreements; and the Company is duly qualified to transact business as a
foreign corporation and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify could not reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise (a "Material Adverse Effect").
(ix) Each corporate subsidiary of the Company listed in Schedule B-
----------
1 hereto (each, a "Corporate Subsidiary" and collectively, the "Corporate
-
Subsidiaries") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectuses
and is duly qualified to transact business as a foreign corporation and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify could not
reasonably be expected to have a Material Adverse Effect; each partnership
subsidiary of the Company listed in Schedule B-2 hereto (each, a
------------
"Partnership Subsidiary", collectively, the "Partnership Subsidiaries", and
together with the Corporate Subsidiaries, the "Subsidiaries") has been duly
formed, is validly existing and is in good standing as a limited
partnership under the laws of the jurisdiction of its organization, has all
requisite partnership power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectuses and
is duly qualified to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify could not reasonably be expected to
<PAGE>
-10-
have a Material Adverse Effect; except as described in the Registration
Statement and Prospectuses, all of the issued and outstanding capital stock
of each Corporate Subsidiary has been duly authorized and validly issued,
is fully paid and nonassessable and are owned by the Company, directly or
through subsidiaries, free and clear of any security interest, lien, claim
or other encumbrance; except as described in the Registration Statement and
Prospectuses, all of the issued and outstanding partnership interests of
each Partnership Subsidiary have been duly authorized and validly issued
and are owned by the Company, directly or through subsidiaries, free and
clear of any security interest, lien, claim or other encumbrance.
(x) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses under "Capitalization" under
the column "Actual," and at the Closing Time will be as set forth under the
column "As Adjusted," which gives effect to the issuance of
shares of Common Stock pursuant to this Agreement and the U.S. Purchase
Agreement but does not give effect to the issuance of any International
Option Securities or U.S. Option Securities; the shares of issued and
outstanding Common Stock, including the Securities to be purchased by the
Underwriters from the Selling Stockholders, have been duly authorized and
validly issued and are fully paid and non-assessable; the Securities to be
issued and sold by the Company pursuant to this Agreement and the U.S.
Purchase Agreement have been duly authorized and, when issued and delivered
by the Company pursuant to this Agreement and the U.S. Purchase Agreement
against payment of the consideration set forth in the International Pricing
Agreement and the U.S. Pricing Agreement, respectively, will be validly
issued and fully paid and nonassessable; the Common Stock conforms to all
statements relating thereto contained in the Prospectuses under the caption
"Description of Capital Stock"; and the issuance of the Securities is not
subject to preemptive or other similar rights.
(xi) The Company has full right, power and authority to issue, sell
and deliver the Securities to be sold by the Company hereunder; and upon
delivery of the Securities to be sold by the Company hereunder and payment
of the purchase price therefor as herein contemplated, each of the U.S.
Underwriters and Managers will receive good and marketable title to its
ratable share of the Securities
<PAGE>
-11-
purchased by it from the Company, free and clear of any security interest,
lien, option, claim or other encumbrance.
(xii) Neither the Company nor any of the Subsidiaries is (A) in
violation of its certificate of incorporation or bylaws (or similar
organizational document (including any partnership agreement or certificate
of limited partnership)), (B) in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any Subsidiary is a party or by which it
or any of them may be bound, or to which any of the property or assets of
the Company or any Subsidiary is subject, or (C) in violation of any
applicable law, rule or regulation (including, without limitation, the
Communications Act of 1934, as amended (the "Communications Act") and the
rules and regulations of the FCC thereunder), or any judgment, order or
decree of any court with jurisdiction over the Company or any Subsidiary,
or other governmental or regulatory authority with jurisdiction over the
Company or any Subsidiary, except as disclosed in the Registration
Statement and the Prospectuses and except, in the case of clauses (B) and
(C) above, for such defaults or violations that could not reasonably be
expected to have a Material Adverse Effect; and the execution, delivery and
performance of this Agreement (and the International Pricing Agreement) and
the U.S. Purchase Agreement (and the U.S. Pricing Agreement) and the
consummation of the transactions contemplated herein and therein and
compliance by the Company with its obligations hereunder and thereunder
have been duly authorized by all necessary corporate action and will not
conflict with or constitute a breach of, or a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any Subsidiary pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any Subsidiary is a party or by which it
or any of them may be bound, or to which any of the property or assets of
the Company or any Subsidiary is subject, nor will such action result in
any violation of or conflict with the provisions of the charter or by-laws
of the Company or any applicable law, rule or regulation, or any judgment,
order or decree of any court with jurisdiction over the Company or any
Subsidiary, or other governmental or regulatory
<PAGE>
-12-
authority with jurisdiction over the Company or any Subsidiary.
(xiii) Except as described in the Registration Statement and the
Prospectuses, no labor dispute with the employees of the Company or any
Subsidiary exists or, to the knowledge of the Company or any Subsidiary, is
imminent.
(xiv) Except as described in the Registration Statement and the
Prospectuses, there is no action, suit or proceeding before or by any court
or governmental agency or body (including, without limitation, the FCC),
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any of the Subsidiaries,
or, to the knowledge of the Company, Disney, with respect to KCAL, which is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or which otherwise, if adversely determined, could
reasonably be expected to result in any Material Adverse Change, or which
could reasonably be expected to materially and adversely affect the
properties or assets of the Company and its Subsidiaries taken as one
enterprise or which could reasonably be expected to materially and
adversely affect the consummation of the transactions contemplated by this
Agreement or the U.S. Purchase Agreement.
(xv) Each of the Company and the Subsidiaries and, to the knowledge
of the Company, Disney, with respect to KCAL, possesses all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal, state,
local and other governmental authorities (including, without limitation,
the FCC), all self-regulatory organizations and all courts and other
tribunals, presently required or necessary to own or lease, as the case may
be, and to operate its respective properties and to carry on its respective
businesses as now or proposed to be conducted as set forth in the
Registration Statement and the Prospectuses, except where the failure to
obtain such licenses, permits, certificates, consents, orders, approvals
and other authorizations, or to make all declarations and filings, would
not, individually or in the aggregate, have a Material Adverse Effect, and
none of the Company or the Subsidiaries or, to the knowledge of the
Company, Disney, with respect to KCAL, has received any
<PAGE>
-13-
notice of any proceeding relating to revocation or modification of any such
license, permit, certificate, consent, order, approval or other
authorization, except as described in the Registration Statement and the
Prospectuses and except where such revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect. The
licenses issued to the Company and the Subsidiaries and, to the knowledge
of the Company, Disney, with respect to KCAL, by the FCC (the "Licenses")
are valid and in full force and effect with no restrictions or
qualifications which would have a Material Adverse Effect. No event has
occurred which permits, or with notice or lapse of time or both would
permit, and no legal governmental proceeding has been instituted or
threatened which could cause, the revocation or termination of any of the
Licenses or which might result in any other impairment or modification of
the rights of the Company or any Subsidiary therein which in any such case
would have a Material Adverse Effect. Except as described in the
Registration Statement and the Prospectuses, the Company has no reason to
believe that any License issued by the FCC will not be renewed in the
ordinary course.
(xvi) No authorization, approval or consent of any court or
governmental authority or agency (including, without limitation, the FCC)
is necessary in connection with the offering, issuance or sale of the
Securities being sold by the Company hereunder or under the U.S. Purchase
Agreement, except (i) such as have been obtained or as may be required
under the 1933 Act, the 1933 Act Regulations, the 1934 Act, the rules and
regulations of the Commission under the 1934 Act, state or foreign
securities laws or by the rules and regulations of the NASD and (ii) such
as have been obtained, to the Company's knowledge, under the securities
laws and regulations of foreign jurisdictions in which the Reserved
Securities are offered outside the United States.
(xvii) The Company had (at the time of its authorization and
execution) and has all requisite corporate power and authority to execute,
deliver and perform each of its obligations under the Acquisition
Agreement. The Acquisition Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and legally binding
obligation of the Company enforceable in accordance with its terms, except
that the enforcement thereof may be subject to (i) bankruptcy, insolvency,
<PAGE>
-14-
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor
may be brought. All representations and warranties of the Company set forth
in the Acquisition Agreement are true and correct in all material respects
as of the date hereof and will be true and correct in all material respects
at and as of the Closing Time as if made at and as of such date (other than
to the extent any such representation or warranty is expressly made as to
only a certain date).
(xviii) The network affiliation agreements between each of the
broadcast television stations of the Company and the Subsidiaries, as
applicable, and CBS Inc., National Broadcasting Company, Inc. and Capital
Cities/ABC, Inc. ("ABC"), as applicable, have been duly authorized,
executed and delivered by the Company and the Subsidiaries, as applicable,
and are the valid and legally binding obligations of the respective parties
thereto and the description of such network affiliation agreements in the
Registration Statement and the Prospectuses under the caption "Business --
Network Affiliation Agreements" is a fair and accurate summary thereof.
(xix) The Company has all requisite corporate power and authority
to execute, deliver and perform each of its obligations under each of this
Agreement and the International Pricing Agreement. Each of this Agreement
and the International Pricing Agreement has been duly and validly
authorized by the Company and, when executed and delivered by the Company,
will constitute a valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms, except that
(A) the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor
may be brought and (B) any rights to indemnity or contribution thereunder
may be limited by federal and state securities laws and public policy
considerations. This Agreement has been, and at the International
Representation Date, the International Pricing Agreement will have been,
duly executed and delivered by the Company.
<PAGE>
-15-
(xx) The Company and each of the Subsidiaries are in compliance in
all material respects with all applicable laws, statutes, ordinances, rules
or regulations of any applicable jurisdiction the enforcement of which
could reasonably be expected to have a Material Adverse Effect.
(xxi) The Company is not, and upon the issuance and sale by the
Company of the Securities as herein contemplated and the application of the
net proceeds therefrom as described in the Prospectuses under the caption
"Use of Proceeds" will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(xxii) Except as disclosed in the Registration Statement and the
Prospectuses, and except as could not reasonably be expected to
individually or in the aggregate have a Material Adverse Effect, (A) each
of the Company and the Subsidiaries is in compliance in all material
respects with all applicable Environmental Laws (as defined), (B) each of
the Company and the Subsidiaries has all permits, authorizations and
approvals required under any applicable Environmental Laws and is in
compliance in all material respects with their requirements, (C) there are
no pending or, to the knowledge of the Company, threatened Environmental
Claims (as defined) against the Company or any Subsidiary, and (D) the
Company has no knowledge of any circumstances with respect to any property
or operations of the Company or any Subsidiary that could reasonably be
anticipated to form the basis of any Environmental Claim against the
Company or any Subsidiary.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any federal, state, local or
municipal statute, law, rule, regulation, ordinance, code, policy or rule
of common law and any published judicial or administrative interpretation
thereof including any judicial or administrative order, consent decree or
judgment binding on the Company or any Subsidiary, relating to the
environment, health, safety or any chemical, material or substance,
exposure to which is prohibited, limited or regulated by any such
governmental authority. "Environmental Claims" means any and all
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens,
<PAGE>
-16-
notices of noncompliance or violation, investigations or proceedings
relating in any way to any Environmental Law.
(xxiii) The Company and each Subsidiary has filed all federal or
state income and franchise tax returns required to be filed, except where
the failure to so file such returns would not have a Material Adverse
Effect, and has paid all taxes shown thereon as due, and there is no tax
deficiency which has been or is reasonably likely to be asserted against
the Company or any Subsidiary which could reasonably be expected to have a
Material Adverse Effect; all material tax liabilities of the Company and
each Subsidiary are adequately provided for on the books of the Company and
the Subsidiaries.
(xxiv) The Company has obtained the written agreements of each of
the Selling Stockholders, Vincent J. Young, Adam Young, Margaret Young,
Adam Young Inc., Vincent J. Young, as trustee under The Young Family Trust,
Ronald J. Kwasnick, James A. Morgan, Deborah A. McDermott, Bernard F.
Curry, Alfred J. Hickey, Jr., Leif Lomo and Michael S. Willner, in the
forms previously furnished to you, that for a period of 90 days after the
date of the Prospectuses such parties will not sell or grant any option for
the sale of, or otherwise dispose of, any Common Stock, or any securities
convertible into or exchangeable or exercisable for shares of Common Stock,
other than the shares of Common Stock that may be offered by the Company
and the Selling Stockholders pursuant to this Agreement and the U.S.
Purchase Agreement and, with respect to Goldman, the other exceptions set
forth in clauses (ii) and (iii) of Section 1(c)(v) hereof, and not to file
or request to be filed, as the case may be, any registration statement with
respect to Common Stock without the prior written consent of Merrill Lynch.
(xxv) Except as set forth in the Prospectuses and except as
disclosed on Schedule D hereto, there are no holders of securities (debt or
----------
equity) of the Company, or holders of rights (including, without
limitation, preemptive rights), warrants or options to obtain securities of
the Company or any Subsidiary, who have the right to request the Company or
any Subsidiary to register securities held by them under the 1933 Act.
(xxvi) The Company has delivered to the U.S. Representatives a
true and correct copy of the Acquisition
<PAGE>
-17-
Agreement, together with all related agreements and all schedules and
exhibits thereto, and there shall have been no material amendments,
alterations, modifications or waivers of any of the provisions of the
Acquisition Agreement, since its date of execution, other than any such
amendments, alterations, modifications and waivers (x) which are described
in or contemplated by the Prospectuses and (y) as to which the Underwriters
have been advised in writing and which would not be required to be
disclosed in the Prospectuses; and to the best knowledge of the Company
there exists no event or condition which would constitute a default or an
event of default under the Acquisition Agreement which would result in a
Material Adverse Effect. Assuming consummation of the transactions
contemplated by the Acquisition Agreement as of the date hereof, each of
the representations of the Company therein would still be true.
(xxvii) Each of the Company and the Subsidiaries has good,
sufficient and legal title to all real property and good title to all
personal property described in the Registration Statement as being owned by
it and good, sufficient and legal title to a leasehold estate in the real
and personal property described in the Registration Statement as being
leased by it free and clear of all liens, charges, encumbrances or
restrictions, except as described in the Registration Statement or to the
extent the failure to have such title or the existence of such liens,
charges, encumbrances or restrictions would not, individually or in the
aggregate, have a Material Adverse Effect. All leases, contracts and
agreements to which the Company or any of the Subsidiaries is a party or by
which any of them is bound are valid and enforceable against the Company or
such Subsidiary, and are valid and enforceable against the other party or
parties thereto and are in full force and effect with only such exceptions
as would not, individually or in the aggregate, have a Material Adverse
Effect.
(xxviii) The Company and the Subsidiaries have complied and are in
compliance with all provisions of Section 517.075, Florida Statutes
(Chapter 92-198, Laws of Florida) related to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
<PAGE>
-18-
(b) The Company hereby agrees with the Managers that, for all purposes
of this Agreement, the only information furnished to the Company by any U.S.
Underwriter or Manager expressly for use in the Registration Statement, the
Prospectuses, or any amendment or supplement thereto, or any related preliminary
prospectus, are the last paragraph of the cover page of each of the
Prospectuses, the statements with respect to stabilization on the inside front
cover page of each of the Prospectuses, and the fourth and seventh paragraphs
under the heading "Underwriting" in the U.S. Prospectus and any related
preliminary prospectus and the fourth, seventh and ninth paragraph under the
heading "Underwriting" in the International Prospectus and any related
preliminary prospectus.
(c) Each Selling Stockholder, severally and not jointly and only as to
such Selling Stockholder, represents and warrants to, and agrees with, each
Manager as of the date hereof and as of the International Representation Date
and as of the Closing Time as follows:
(i) To the extent that any statements or omissions made in the
Registration Statement or the Prospectuses are made in reliance upon and in
conformity with information furnished in writing to the Company by such
Selling Stockholder specifically referring to such Selling Stockholder
(acting in its capacity as a Selling Stockholder) expressly for use
therein, such Registration Statement or the Prospectuses do not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and such Selling
Stockholder is not prompted to sell the Securities to be sold by such
Selling Stockholder by any information concerning the Company or any
subsidiary that is not set forth in the Registration Statement or the
Prospectuses.
(ii) The execution, delivery and performance of this Agreement, the
U.S. Purchase Agreement, the International Pricing Agreement and the U.S.
Pricing Agreement and the consummation of the transactions contemplated
herein and therein and compliance with such Selling Stockholder's
obligations hereunder and thereunder by such Selling Stockholder will not
conflict with or constitute a breach of or a default under any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which
<PAGE>
-19-
such Selling Stockholder is a party or by which such Selling Stockholder
may be bound.
(iii) Such Selling Stockholder has and will have at the Closing
Time referred to in Section 2(c) good and marketable title to the
Securities to be sold by such Selling Stockholder hereunder and under the
U.S. Purchase Agreement, free and clear of any security interest, lien,
option, claim, equity or other encumbrance other than pursuant to this
Agreement or the U.S. Purchase Agreement; such Selling Stockholder has full
right, power and authority or capacity, as the case may be, to enter into
this Agreement, the U.S. Purchase Agreement, the International Pricing
Agreement, the U.S. Pricing Agreement and the Power of Attorney and Custody
Agreement (as defined) and to sell, transfer and deliver the Securities to
be sold by such Selling Stockholder hereunder and under the U.S. Purchase
Agreement; and upon delivery of the Securities to be sold by such Selling
Stockholder hereunder and under the U.S. Purchase Agreement and payment of
the purchase price therefor as herein and therein contemplated, each of the
U.S. Underwriters and Managers who has purchased such Securities in good
faith and without notice of any "adverse claim" (as such term is defined in
Section 8-302 of the New York Uniform Commercial Code) will acquire such
Securities free of any adverse claim and will receive good and marketable
title to its ratable share of the Securities purchased by it from such
Selling Stockholder, free and clear of any security interest, lien, option,
claim or other encumbrance.
(iv) All authorizations, approvals and consents necessary for the
execution and delivery by such Selling Stockholder of the Power of Attorney
and Custody Agreement, the execution and delivery by or on behalf of such
Selling Stockholder of this Agreement and the U.S. Purchase Agreement, and
the sale and delivery of the Securities to be sold by the Selling
Stockholder hereunder (except such as may be required under the 1933 Act,
the 1933 Act Regulations, the 1934 Act, the rules and regulations of the
Commission under the 1934 Act, state or foreign securities laws or by the
rules and regulations of the NASD) have been obtained and are in full force
and effect.
(v) For a period of 90 days after the date of the Prospectus, such
Selling Stockholder has agreed not to
<PAGE>
-20-
sell or grant any option for the sale of, or otherwise dispose of, any
Common Stock, or any securities convertible into or exchangeable or
exercisable for shares of Common Stock, other than (i) the shares of Common
Stock that may be offered by such Selling Stockholder pursuant to this
Agreement and the U.S. Purchase Agreement, (ii) the Securities to be sold
by Goldman in its capacity as an Underwriter in the offering and (iii)
shares of Common Stock sold by Goldman in the ordinary course of its
business, consistent with past practice on behalf of its clients, and not
to file or request to be filed, as the case may be, any registration
statement with respect to Common Stock without the prior written consent of
Merrill Lynch.
(vi) Such Selling Stockholder, other than Goldman, has not taken,
and will not take, directly or indirectly, any action which is designed to
or which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities. Goldman has
not taken and will not take, directly or indirectly, any of the foregoing
actions except in compliance with the 1933 Act, the 1934 Act and the rules
and regulations promulgated thereunder.
(vii) Each Selling Stockholder, if a corporation or a partnership,
has been duly incorporated or formed, as the case may be, and is validly
existing as a corporation or partnership, as the case may be, in good
standing under the laws of its respective state of incorporation or
formation, as the case may be.
(viii) Such Selling Stockholder has duly executed and delivered in
the form heretofore furnished to the Underwriters a Power of Attorney with
Vincent J. Young or James A. Morgan or Stephen Baker, as attorney-in-fact
(each, an "Attorney-in-Fact"), and a Custody Agreement (together, the
"Power of Attorney and Custody Agreement") with Young Broadcasting Inc., as
custodian (the "Custodian"); the Attorneys-in-Fact, or any of them, are
authorized to execute and deliver this Agreement on behalf of such Selling
Stockholder, to determine the purchase price to be paid by the Underwriters
to such Selling Stockholder, as provided in Section 2(a) hereof, to
authorize the delivery of the Securities to be sold by such Selling
Stockholder hereunder, to accept payment therefor, and otherwise to act on
<PAGE>
-21-
behalf of such Selling Stockholder in connection with this Agreement and
the U.S. Purchase Agreement.
(ix) Certificates in negotiable form for all Securities to be sold
hereunder have been placed in custody with the Custodian for the purpose of
effecting delivery hereunder.
(d) Any certificate signed by any officer of the Company and delivered
pursuant to this Agreement and the International Purchase Agreement shall be
deemed a representation and warranty by the Company to each U.S. Underwriter and
Manager as to the matters covered thereby; and any certificate signed by or on
behalf of any Selling Stockholder and delivered, pursuant to this Agreement and
the U.S. Purchase Agreement or in connection with the payment of the purchase
price and delivery of the certificates for the Initial Securities or the Option
Securities, to the U.S. Underwriters or Managers or counsel for the U.S.
Underwriters or Managers shall be deemed a representation and warranty by such
Selling Stockholder to each U.S. Underwriter and Manager as to the matters
covered thereby.
SECTION 2. Sale and Delivery to the Managers; Closing.
------------------------------------------
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
and each Selling Stockholder agree to sell to each Manager, severally and not
jointly, and each Manager, severally and not jointly, agrees to purchase from
the Company and each Selling Stockholder, at the price per share set forth in
the International Pricing Agreement, the number of Initial International
Securities set forth in Schedule A opposite the name of such Manager in the same
----------
proportion from the Company and each Selling Stockholder as the number of
Initial International Securities being sold by the Company and each Selling
Stockholder bears to the total number of Initial International Securities
(except as otherwise provided in the International Pricing Agreement), plus any
additional number of Initial International Securities which such Manager may
become obligated to purchase pursuant to the provisions of Section 10 hereof.
(1) If the Company has elected not to rely upon Rule 430A under the
1933 Act Regulations, the initial public offering price and the purchase
price per share to be paid by the several Managers for the International
Securities
<PAGE>
-22-
have each been determined and set forth in the International Pricing
Agreement, dated the date hereof, and an amendment to the Registration
Statement and the Prospectuses containing such information will be filed
before the Registration Statement becomes effective.
(2) If the Company has elected to rely upon Rule 430A under the
1933 Act Regulations, the purchase price per share to be paid by the
several Managers for the International Securities shall be an amount equal
to the initial public offering price, less an amount per share to
be determined by agreement among the Lead Managers, the Company and the
Selling Stockholders. The initial public offering price per share of the
International Securities shall be a fixed price to be determined by
agreement between the Lead Managers, the Company and the Selling
Stockholders. The initial public offering price and the purchase price,
when so determined, shall be set forth in the International Pricing
Agreement. In the event that such prices have not been agreed upon and the
International Pricing Agreement has not been executed and delivered by all
parties thereto by the close of business on the fourteenth business day
following the date of this Agreement, this Agreement shall terminate
forthwith, without liability of any party to any other party, unless
otherwise agreed to by the Company, the Selling Stockholders and the Lead
Managers, except that Sections 6 and 7 shall remain in effect. For
purposes of this Agreement, the term "business day" means a day on which
the Nasdaq National Market ("Nasdaq") is open for business and the trading
of securities is permitted thereon.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Selling Stockholders hereby grant options to the Managers, severally and not
jointly, to purchase up to an additional 198,627 shares in the aggregate, at the
price per share set forth in the International Pricing Agreement. The maximum
number of shares pursuant to which said option may be exercised with respect to
a Selling Stockholder shall be the number set forth across from the name of such
Selling Stockholder in column 2 of Schedule C hereto. The options hereby
----------
granted will expire 30 days after (i) the date the Registration Statement
becomes effective, if the Company has elected not to rely on Rule 430A under the
1933 Act Regulations, or (ii) the International Representation Date, if the
Company has elected to rely on Rule 430A under the 1933 Act
<PAGE>
-23-
Regulations, and may be exercised in whole or in part only for the purpose of
covering over-allotments which may be made in connection with the offering and
distribution of the Initial International Securities upon notice by the Lead
Managers to each of the Selling Stockholders setting forth the number of
International Option Securities as to which the several Managers are then
exercising the options and the time and date of payment and delivery for such
International Option Securities. Such time and date of delivery (the "Date of
Delivery"), if any, shall be determined by the Lead Managers, but shall not be
later than seven full business days after the exercise of said options, nor in
any event prior to the Closing Time, as hereinafter defined, unless otherwise
agreed by the Lead Managers and the Selling Stockholders. If the options are
exercised as to all or any portion of the International Option Securities, each
of the Managers, acting severally and not jointly, will purchase that proportion
of the total number of International Option Securities which the number of
Initial International Securities set forth in Schedule A hereto opposite the
----------
name of such Manager bears to the total number of Initial International
Securities (except as otherwise provided in the International Pricing
Agreement), subject in each case to such adjustments as the Lead Managers in
their discretion shall make to eliminate any sales or purchases of fractional
shares; provided, however, that if the options are exercised on any Date of
-------- -------
Delivery as to less than all of the International Option Securities, the number
of International Option Securities to be purchased from each Selling Stockholder
shall be that proportion of the total number of International Option Securities
to be purchased on such Date of Delivery which the number of Initial
International Securities to be sold by such Selling Stockholder set forth in
column 1 of Schedule C hereto opposite the name of such Selling Stockholder
----------
bears to the total number of Initial International Securities (except as
otherwise provided in the International Pricing Agreement), subject in each case
to such adjustments as the Lead Managers in their discretion shall make to
eliminate any sales or purchases of fractional shares.
(c) Payment of the purchase price for, and delivery of certificates
for, the Initial International Securities shall be made at the offices of Cahill
Gordon & Reindel, 80 Pine Street, New York, New York 10005, or at such other
place as shall be agreed upon by the Lead Managers and the Company, at 9:00 A.M.
on the third business day (unless postponed in accordance with the provisions of
Section 10) following the date the Registration Statement becomes effective (or,
if the Company has elected to rely upon Rule 430A of the 1933 Act Regulations,
<PAGE>
-24-
the third business day after execution of the International Pricing Agreement),
or such other time not later than ten business days after such date as shall be
agreed upon by the Lead Managers, the Company and the Selling Stockholders (such
time and date of payment and delivery being herein called "Closing Time"). In
addition, in the event that any or all of the International Option Securities
are purchased by the Managers, payment of the purchase price for, and delivery
of certificates for, such International Option Securities shall be made at the
above-mentioned offices of Cahill Gordon & Reindel, 80 Pine Street, New York,
New York 10005, or at such other place as shall be agreed upon by the Lead
Managers and the Selling Stockholders on the Date of Delivery specified in the
notice from the Lead Managers to the Company. Payment shall be made to the
Company and each of the Selling Stockholders, respectively, by wire transfer of
immediately available funds to any account designated in writing by the Company
and each of the Selling Stockholders, respectively, against delivery to the Lead
Managers for the respective accounts of the Managers of certificates for the
International Securities to be purchased by them. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least two business days before Closing Time or the
relevant Date of Delivery, as the case may be. It is understood that each
Manager has authorized the Lead Managers, for its account, to accept delivery
of, receipt for, and make payment of the purchase price for, the Initial
International Securities and the International Option Securities, if any, which
it has agreed to purchase. Merrill Lynch International, individually and not as
representative of the Managers, may (but shall not be obligated to) make payment
of the purchase price for the Initial International Securities or the
International Option Securities, if any, to be purchased by any Manager whose
check has not been received by Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such Manager from its
obligations hereunder. The certificates for the Initial International Securities
and the International Option Securities, if any, will be made available for
examination and packaging by the Lead Managers not later than 10:00 A.M. on the
last business day prior to Closing Time or the relevant Date of Delivery, as the
case may be.
SECTION 3. Covenants of the Company. The Company covenants with
------------------------
each Manager as follows:
<PAGE>
-25-
(a) The Company will use its best efforts to cause the Registration
Statement to become effective (as and when requested by the Lead Managers)
and, if the Company elects to rely upon Rule 430A of the 1933 Act
Regulations and subject to Section 3(b), will comply with the requirements
of Rule 430A of the 1933 Act Regulations and will notify the Lead Managers
immediately, and confirm the notice in writing, (i) of the effectiveness of
the Registration Statement or any amendment thereto or of the filing of any
Supplement to the Prospectuses or amended Prospectuses, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectuses or for additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose, and (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or the initiation or threatening of
any proceedings for any such purpose. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest
possible moment. If the Company elects to rely on Rule 434 of the 1933 Act
Regulations, the Company will prepare a term sheet that complies with the
requirements of Rule 434 of the 1933 Act Regulations. If the Company elects
not to rely on Rule 434 of the 1933 Act Regulations, the Company will
provide the Managers with copies of the form of Prospectuses, in such
number as the Managers may reasonably request, and file with the Commission
such Prospectuses in accordance with Rule 424(b) of the 1933 Act
Regulations by the close of business in New York on the business day
immediately succeeding the date of the International Pricing Agreement. If
the Company elects to rely on Rule 434 of the 1933 Act Regulations, the
Company will provide the Managers with copies of the Rule 434 Prospectus in
such number as the Managers may reasonably request by the close of business
in New York on the business day immediately succeeding the date of the
International Pricing Agreement.
(b) The Company will give the Lead Managers notice of its intention
to file or prepare any amendment to the Registration Statement (including
any post-effective amendment) or any amendment or supplement to the
<PAGE>
-26-
Prospectuses (including (i) any revised prospectuses which the Company
proposes for use by the Managers in connection with the offering of the
Securities which differ from the Prospectuses on file at the Commission at
the time the Registration Statement becomes effective, whether or not such
revised prospectuses are required to be filed pursuant to Rule 424(b) of
the 1933 Act Regulations or (ii) any term sheet prepared in reliance on
Rule 434 of the 1933 Act Regulations), will furnish the Lead Managers with
copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file
any such amendment or supplement or use any such prospectus to which the
Lead Managers or counsel for the Managers shall reasonably object.
(c) The Company will deliver to each Lead Manager without charge
one signed copy of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated
by reference therein) and will also deliver to the Lead Managers without
charge a conformed copy of the Registration Statement as originally filed
and of each amendment thereto (without exhibits) for each of the Managers.
(d) The Company will deliver to each Manager, without charge, from
time to time until the effective date of the Registration Statement or, if
the Company has elected to rely upon Rule 430A of the 1933 Act Regulations,
until such time as the International Pricing Agreement is executed and
delivered, as many copies of each preliminary prospectus as the Managers
may reasonably request, and the Company hereby consents to the use of said
copies for purposes permitted by the 1933 Act. The Company will furnish to
each Manager, from time to time during the period when the Prospectuses are
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the Prospectuses (as amended or supplemented) as such Manager may
reasonably request for the purposes contemplated by the 1933 Act or the
1934 Act or the respective applicable rules and regulations of the
Commission thereunder.
(e) If, at any time when the Prospectuses relating to the
Securities are required to be delivered under the 1933 Act, any event shall
occur as a result of which the Prospectuses would include any untrue
statement of a material fact or omit to state any material fact necessary
in
<PAGE>
-27-
order to make the statements therein, in the light of the circumstances
existing at the time they are delivered to the purchaser, not misleading,
or if it shall be necessary to amend the Registration Statement or
supplement the Prospectuses to comply with the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the Commission
such amendment or supplement (in form and substance reasonably satisfactory
to counsel for the Managers) which will correct such statement or omission
or effect such compliance.
(f) The Company will endeavor, in cooperation with the Managers, to
qualify the Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States
as the Lead Managers may designate; provided, however, that the Company
-------- -------
shall not be obligated to qualify as a foreign corporation or dealer in
securities or file any general consent to service of process or subject
itself to taxation in any jurisdiction in which it is not otherwise so
qualified or so subject. In each jurisdiction in which the Securities have
been so qualified, the Company will file such statements and reports as may
be required by the laws of such jurisdiction to continue such qualification
in effect for a period of not less than one year from the effective date of
the Registration Statement.
(g) The Company will make generally available to its security
holders as soon as practicable, but not later than 90 days after the close
of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 of the 1933 Act Regulations) covering a
twelve month period beginning not later than the first day of the Company's
fiscal quarter next following the fiscal quarter that includes the
"effective date" (as defined in said Rule 158) of the Registration
Statement.
(h) The Company will use the net proceeds received by it from the
sale of the Securities in the manner specified in the Prospectuses under
"Use of Proceeds."
(i) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in reliance
upon Rule 430A of the 1933 Act Regulations, then immediately following the
execution of the International Pricing Agreement, the Company will prepare,
and file or transmit for filing with the Commission in
<PAGE>
-28-
accordance with such Rule 430A or Rule 434 and Rule 424(b) of the 1933 Act
Regulations, copies of amended Prospectuses, or, if required by such Rule
430A or Rule 434, a post-effective amendment to the Registration Statement
(including amended Prospectuses), containing all information so omitted and
will use its reasonable best efforts to cause any such post-effective
amendment to be declared effective as soon as possible.
(j) The Company will use its reasonable best efforts to effect the
listing on Nasdaq of the Securities offered by the Company and will file
with Nasdaq all documents and notices required by Nasdaq of companies that
have issued securities that are listed on Nasdaq.
(k) During a period of 90 days from the date of the International
Pricing Agreement, the Company will not, without Merrill Lynch
International's prior written consent, (A) directly or indirectly, sell,
offer to sell, grant any option for the sale of, or otherwise dispose of,
any capital stock of the Company or any security convertible or
exchangeable into or exercisable for capital stock of the Company except
(i) to the Underwriters pursuant to this Agreement and the U.S. Purchase
Agreement and (ii) the Company may grant stock options, and issue shares of
Common Stock upon the exercise of any options granted, pursuant to its
stock option plan or (B) file any registration statement with respect to
any of the foregoing, except that the Company may file a registration
statement on Form S-8 with respect to its stock option plan.
(l) The Company hereby agrees that it will ensure that the Reserved
Securities will be restricted as required by the NASD or the NASD rules
from sale, transfer, assignment, pledge or hypothecation for a period of
three months following the date of the effectiveness of the Registration
Statement. The Underwriters will notify the Company as to which persons
will need to be so restricted. At the request of the Underwriters, the
Company will direct the transfer agent to place a stop transfer restriction
upon such securities for such period of time. Should the Company release,
or seek to release, from such restrictions any of the Reserved Securities,
the Company agrees to reimburse the Underwriters for any reasonable
expenses, including, without limitation, legal expenses they incur in
connection with such release.
<PAGE>
-29-
(m) The Company, during the period when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act, will file all documents
required to be filed with the Commission pursuant to the 1934 Act within
the time periods required by the 1934 Act and the rules and regulations
promulgated thereunder.
SECTION 4. Payment of Expenses. (a) The Company will pay all
-------------------
expenses incident to the performance of the obligations of the Company and the
Selling Stockholders under this Agreement, including, without limitation, (i)
the preparation, printing and filing of the Registration Statement as originally
filed and of each amendment thereto, any preliminary prospectuses, Prospectuses
and any "Blue Sky" memoranda, (ii) the preparation (including printing),
issuance and delivery of certificates for the Securities to the Managers,
including any security transfer or other taxes (other than transfer taxes
payable by any Selling Stockholder pursuant to Section 4(b) hereof) or duties
payable upon the delivery of the Securities to the Managers, and the fees and
expenses of the transfer agent for the Securities, (iii) the printing of this
Agreement, the International Pricing Agreement and the Intersyndicate Agreement,
(iv) the fees and disbursements of the Company's counsel, accountants and any
other experts or advisors retained by the Company and the fees and expenses of
counsel for the Selling Stockholders in accordance with applicable agreements,
(v) the qualification of the Securities under state or foreign securities laws
in accordance with the provisions of Section 3(f), including filing fees and the
reasonable fees and disbursements of counsel for the Managers in connection
therewith and in connection with the preparation of the Blue Sky Survey, (vi)
the delivery to the Managers of as many copies as may reasonably be requested of
the Registration Statement as originally filed and of each amendment thereto, of
the preliminary prospectuses, and of the Prospectuses and any amendments or
supplements thereto, including any term sheet delivered by the Company pursuant
to Rule 434 of the 1933 Act Regulations, (vii) the printing and/or copying and
delivery to the Managers of copies of the Blue Sky Survey, (viii) the fee of any
filing for review of the offering with the NASD relating to the Securities, (ix)
expenses in connection with any meetings with prospective investors in the
Securities, except to the extent that the Company and the U.S. Representatives
agree in writing otherwise, (x) all expenses and listing fees in connection with
the listing of the Securities on Nasdaq, (xi) all costs and expenses of the
Underwriters, including the fees and disbursements of counsel for the
Underwriters, in connection with
<PAGE>
-30-
matters related to the Reserved Securities which are designated by the Company
for sale to employees and others having a business relationship with the Company
and (xii) stamp duties or any other foreign taxes or duties, if any, incurred by
the Underwriters in connection with the offer and sale of the Reserved
Securities.
(b) Each Selling Stockholder will pay any transfer taxes attributable
to the sale by such Selling Stockholder of the Securities it sells hereunder and
under the International Purchase Agreement and any fees and disbursements of
such Selling Stockholder's counsel, if any, not paid or payable by the Company
pursuant to Section 4(a) or otherwise.
(c) If this Agreement is terminated by the Lead Managers in accordance
with the provisions of Section 5 or Section 9(a)(i) or Section 11 hereof, the
Company shall reimburse the Managers for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Managers.
The Company shall not be liable to the Underwriters for loss of contemplated
profits from the transactions covered by this Agreement.
SECTION 5. Conditions of Managers' Obligations. The obligations of
-----------------------------------
the Managers hereunder are subject to the accuracy of the representations and
warranties of the Company and each Selling Stockholder, respectively, herein
contained, to the performance in all material respects by the Company and each
Selling Stockholder of their respective obligations hereunder, and to the
following further conditions:
(a) The Registration Statement shall have become effective not
later than 5:30 P.M. on the date hereof, or with the consent of the Lead
Managers, which shall not be unreasonably withheld at a later time and
date, not later, however, than 5:30 P.M. on the first business day
following the date hereof, or at such later time and date as may be
approved by a majority in interest of the Managers and a majority in
interest of the U.S. Underwriters; and at Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened
by the Commission. If the Company has elected to rely upon Rule 430A or
Rule 434 of the 1933 Act Regulations, the price of the Securities and any
price-related information previously omitted from the effective
Registration Statement pursuant to such Rule 430A or Rule 434
<PAGE>
-31-
shall have been transmitted to the Commission for filing pursuant to Rule
424(b) of the 1933 Act Regulations within the prescribed time period and
prior to Closing Time the Company shall have provided evidence satisfactory
to the Lead Managers of such timely filing, or a post-effective amendment
providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A of the 1933 Act
Regulations.
(b) (1) At the Closing Time, you shall have received the signed
opinion of Cooperman Levitt Winikoff Lester & Newman, P.C., counsel for the
Company and the Subsidiaries, dated as of the Closing Time, in the form
attached hereto as Exhibit B, together with reproduced copies of such
---------
opinions for each of the Managers, and in form and substance satisfactory
to counsel for the Managers.
(2) At the Closing Time, you and the Selling Stockholders shall
have received the signed opinion of Wiley, Rein & Fielding, communications
counsel for the Company and the Subsidiaries, dated as of the Closing Time,
in the form attached hereto as Exhibit C, together with reproduced copies
---------
of such opinions for each of the Managers, in form and substance
satisfactory to counsel for the Managers.
(3) At the Closing Time, you shall have received the signed opinion
of (A) Cooperman Levitt Winikoff Lester & Newman, P.C., counsel to the
Selling Stockholders (other than ABC), and (B) counsel to ABC, as a Selling
Stockholder, each dated as of the Closing Time, in the form attached hereto
as Exhibit D, together with reproduced copies of such opinions for each of
---------
the Managers, and in form and substance satisfactory to counsel for the
Managers.
(4) The favorable opinion, dated as of Closing Time, of Cahill
Gordon & Reindel, counsel for the Managers, with respect to the validity of
the Securities, the Registration Statement, the International Prospectus
and other related matters as the Lead Managers may reasonably request.
(c) At Closing Time there shall not have been, since the date
hereof or since the respective dates as of which information is given in
the Prospectuses, except as
<PAGE>
-32-
otherwise stated therein, any Material Adverse Change, whether or not
arising in the ordinary course of business, and the Lead Managers shall
have received a certificate of the Chairman, President or any Vice
President of the Company and of the Chief Financial Officer of the Company,
dated as of Closing Time, to the effect that (i) there has been no such
Material Adverse Change, (ii)(A) the representations and warranties in
Section 1 hereof that are qualified with reference to a Material Adverse
Effect or materiality are true and correct with the same force and effect
as though expressly made at and as of Closing Time and (B) the
representations and warranties in Section 1 hereof that are not qualified
with reference to a Material Adverse Effect or materiality are true and
correct in all material respects with the same force and effect as though
expressly made at and as of Closing Time, (iii) the Company has complied in
all material respects with all agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to Closing Time, and (iv)
no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been initiated or
threatened by the Commission. As used in this Section 5(c), the term
"Prospectuses" means the Prospectuses in the form first used to confirm
sales of the Securities.
(d) At Closing Time the Lead Managers shall have received a
certificate of Vincent J. Young or James A. Morgan or Stephen Baker, as
Attorney-in-Fact for each of the Selling Stockholders, dated as of Closing
Time, to the effect that (i)(A) the representations and warranties of each
Selling Stockholder contained in Section 1(c) hereof that are qualified
with reference to a Material Adverse Effect or materiality are true and
correct with the same force and effect as though expressly made at and as
of Closing Time and (B) the representations and warranties of each Selling
Stockholder contained in Section 1(c) hereof that are not qualified with
reference to a Material Adverse Effect or materiality are true and correct
in all material respects with the same force and effect as though expressly
made at and as of Closing Time, and (ii) each Selling Stockholder had
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time.
(e) At the time that this Agreement is signed and at the Closing
Time, E&Y, PW, M&P and GT shall each have
<PAGE>
-33-
furnished to the Underwriters and the Selling Stockholders a letter or
letters, dated respectively as of the date of this Agreement and as of the
Closing Time, in form and substance reasonably satisfactory to the
Underwriters, containing statements and information of the type customarily
included in accountants' "comfort letters" to underwriters with respect to
certain financial information relating to the Company, KCAL Group, KWQC and
Midcontinent, respectively, contained in the Registration Statement and the
Prospectuses.
(f) At Closing Time, the Securities being issued by the Company
shall have been approved for listing on Nasdaq upon official notice of
issuance.
(g) At Closing Time and at each Date of Delivery, if any, counsel
for the Managers shall have been furnished with such documents and opinions
as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Securities as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection
with the issuance and sale of the Securities as herein contemplated shall
be reasonably satisfactory in form and substance to the Lead Managers and
counsel for the Managers.
(h) Concurrently with the purchase and sale of the International
Securities hereunder, the closing of the issuance and sale of the U.S.
Securities pursuant to the terms and conditions of the U.S. Purchase
Agreement and U.S. Pricing Agreement shall have occurred.
(i) At Closing Time, the sale of the Securities hereunder shall not
be enjoined (temporarily or permanently).
(j) In the event that the Managers exercise their options provided
in Section 2(b) hereof to purchase all or any portion of the International
Option Securities, (i) the representations and warranties of the
<PAGE>
-34-
Company and each of the Selling Stockholders contained herein that are
qualified with reference to a Material Adverse Effect or materiality shall
be true and correct as of each Date of Delivery, (ii) the representations
and warranties of the Company and each of the Selling Stockholders
contained herein that are not qualified with reference to a Material
Adverse Effect or materiality shall be true and correct in all material
respects as of each Date of Delivery, (iii) the statements in any
certificates furnished by the Company and any of the Selling Stockholders
hereunder shall be true and correct as of each Date of Delivery and (iv) at
the relevant Date of Delivery, the Lead Managers shall have received:
(1) A certificate, dated such Date of Delivery, of the Chairman,
President or any Vice President of the Company and of the Chief
Financial Officer of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(c) hereof remains
true and correct as of such Date of Delivery.
(2) A certificate, dated such Date of Delivery, of Vincent J.
Young or James A. Morgan or Stephen Baker, as Attorney-in-Fact for
each of the Selling Stockholders, confirming that the certificate
delivered at the Closing Time pursuant to Section 5(d) hereof remains
true and correct as of such Date of Delivery.
(3) The favorable opinion of Cooperman Levitt Winikoff Lester &
Newman, P.C., counsel for the Company and the Subsidiaries, in form
and substance satisfactory to counsel for the Managers, dated such
Date of Delivery, relating to the International Option Securities to
be purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(b)(1) hereof.
(4) The favorable opinion of Wiley, Rein & Fielding,
communications counsel for the Company and the Subsidiaries, in form
and substance satisfactory to counsel for the Managers, dated such
Date of Delivery, relating to the International Option Securities to
be purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(b)(2) hereof.
(5) The favorable opinion of counsel for the Selling
Stockholders, in form and substance satisfactory to counsel for the
Managers, dated such Date of Delivery, relating to the International
Option
<PAGE>
-35-
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(b)(3) hereof.
(6) The favorable opinion of Cahill Gordon & Reindel, counsel for
the Managers, dated such Date of Delivery, relating to the
International Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(b)(4) hereof.
(7) A letter from each of E&Y, PW, M&P and GT, in form and
substance satisfactory to the Lead Managers and dated such Date of
Delivery, substantially the same in form and substance as the letters
furnished to the Lead Managers and the Selling Stockholders pursuant
to Section 5(e) hereof, except that the "specified date" in the letter
furnished pursuant to this Section 5(j)(7) shall be a date not more
than three days prior to such Date of Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Lead Managers by notice to the Company and each of the Selling
Stockholders at any time at or prior to Closing Time, and such termination shall
be without liability of any party to any other party except as provided in
Section 4 hereof.
SECTION 6. Indemnification.
---------------
(a) Indemnification of Underwriters by the Company. The Company
----------------------------------------------
agrees to indemnify and hold harmless each Manager and each person, if any, who
controls any Manager within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act to the extent and in the manner set forth in clauses (i),
(ii), (iii) and (iv) below.
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any
<PAGE>
-36-
untrue statement or alleged untrue statement of a material fact contained
in any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the supplement or
prospectus wrapper material prepared by or with the consent of the
Company for distribution in foreign jurisdictions in connection with the
reservation and sale of the Reserved Securities to eligible employees and
other persons having a business relationship with the Company or caused by
any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, when
considered in conjunction with the Prospectus or preliminary prospectus,
not misleading;
(iii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(e) below) any such settlement is effected with the written consent of the
Company; and
(iv) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i), (ii) or (iii)
above;
provided, however, that (A) this indemnity agreement shall not apply to any
- -------- -------
loss, liability, claim, damage or expense to the
<PAGE>
-37-
extent arising out of any untrue statement or omission or alleged untrue
statement or omission made in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
relating to a Manager furnished to the Company by such Manager through Merrill
Lynch International expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectuses
(or any amendment or supplement thereto); and (B) such indemnity with respect to
any preliminary prospectus shall not inure to the benefit of any Manager (or any
persons controlling such Manager) from whom the person asserting such loss,
claim, damage or liability purchased the Securities which are the subject
thereof if such person did not receive a copy of the International Prospectus
(or the International Prospectus as amended or supplemented) at or prior to the
confirmation of the sale of such Securities to such person in any case where
such delivery is required by the 1933 Act and the untrue statement or omission
or alleged untrue statement or omission of a material fact contained in such
preliminary prospectus was corrected in the International Prospectus (or the
International Prospectus as amended or supplemented).
(b) Indemnification of Managers by Selling Stockholders. Each Selling
---------------------------------------------------
Stockholder severally and not jointly agrees to indemnify and hold harmless each
Manager and each person, if any, who controls any Manager within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense to the same extent described in the
indemnity contained in subsection (a) (provided that with respect to clause
(iii) thereof, such settlement is effected with the written consent of such
Selling Stockholder) of this Section 6, as incurred, but only with respect to
untrue statements or alleged untrue statements of a material fact contained in
the Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) made in reliance upon and in conformity with information specifically
referring to such
<PAGE>
-38-
Selling Stockholder in its capacity as a Selling Stockholder furnished to the
Company in writing by such Selling Stockholder expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto). The
obligations of each Selling Stockholder pursuant to this Section 6(a) are
several; provided, however, that each Selling Stockholder's aggregate liability
-------- -------
under this Section 6(b) shall be limited to an amount equal to the gross
proceeds (after deducting the underwriting discount, but before deducting
expenses) received by such Selling Stockholder from the sale of Securities
pursuant to this Agreement and the U.S. Purchase Agreement.
(c) Indemnification of Company, Directors and Officers. Each Manager
--------------------------------------------------
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, and each Selling Stockholder and each person, if
any, who controls such Selling Stockholder within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectuses (or any amendment or supplement thereto) in reliance upon and in
conformity with written information relating to a Manager furnished to the
Company by such Manager through Merrill Lynch International expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party
-------------------------------------
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity
<PAGE>
-39-
agreement. In the case of parties indemnified pursuant to Sections 6(a) and 6(b)
above, counsel to the indemnified parties shall be selected by Merrill Lynch,
and, in the case of parties indemnified pursuant to Section 6(c) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
- -------- -------
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(e) Settlement Without Consent if Failure to Reimburse. If at any
--------------------------------------------------
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(iii) or 6(c) effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
<PAGE>
-40-
(f) The provisions of this Section shall not affect any agreement
among the Company and the Selling Stockholders with respect to indemnification.
(g) Indemnification for Reserved Securities. In connection with the
---------------------------------------
offer and sale of the Reserved Securities, the Company agrees to indemnify and
hold harmless the Managers from and against any and all losses, expenses and
liabilities incurred by them as a result of (i) the failure of the designated
employees or other persons to pay for and accept delivery of shares which,
immediately following the effectiveness of the Registration Statement, were
subject to a properly confirmed agreement to purchase and (ii) the violation of
any securities laws of foreign jurisdictions where Reserved Securities have been
offered.
SECTION 7. Contribution. If the indemnification provided for in
------------
Section 6 hereof is for any reason unavailable
to or insufficient to hold harmless an indemnified party in respect of any
losses, liabilities, claims, damages or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount of such losses,
liabilities, claims, damages and expenses incurred by such indemnified party, as
incurred, (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 Managers on the other hand from the offering of the Securities pursuant
to this Agreement or (ii) if the allocation provided by clause (i) 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 of the
Managers on the other hand in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages 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 Managers on the other hand in connection
with the offering of the Securities pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Selling Stockholders and the total
underwriting discount received by the Managers, in each case as set forth on the
cover of the Prospectus, or, if Rule 434 is used, the corresponding location
<PAGE>
-41-
on the term sheet bear to the aggregate initial public offering price of the
Securities as set forth on such cover.
The relative fault of the Company and the Selling Stockholders on the
one hand and the Managers on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Selling Stockholders or by the
Managers and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the Managers agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Managers were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Manager shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such Manager
has otherwise been required to pay by reason of any 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 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls a
Manager within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as such Manager, and each
director of
<PAGE>
-42-
the Company, each officer of the Company who signed the Registration
Statement, each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act and each person who
controls a Selling Stockholder within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution as the
Company and the Selling Stockholders, respectively. The Managers' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the number of Initial Securities set forth opposite their respective names in
Schedule A hereto and not joint. The Selling Stockholders' respective
- ----------
obligations to contribute pursuant to this Section 7 are several and not joint.
The provisions of this Section shall not affect any agreement among
the Company and the Selling Stockholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
- --------
Agreement and the International Pricing Agreement, or contained in certificates
of officers of the Company or the Selling Stockholders submitted pursuant
hereto, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Manager or controlling person, or by
or on behalf of the Company or the Selling Stockholders, and shall survive
delivery of the Securities to the Managers.
SECTION 9. Termination of Agreement.
------------------------
(a) The Lead Managers may terminate this Agreement, by notice to the
Company and the Selling Stockholders, at any time at or prior to Closing Time
(i) if there has been, since the date of this Agreement or since the respective
dates as of which information is given in the Prospectuses, a Material Adverse
Change, whether or not arising in the ordinary course of business, or (ii) if
there has occurred any material adverse change in the financial markets in the
United States, Europe or elsewhere or any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case, the effect of which is such as to make it, in the
judgment of the Lead Managers, impracticable to market the International
Securities or to enforce contracts for the sale of the International Securities,
or (iii) if trading in any securities of the
<PAGE>
-43-
Company has been suspended or limited by the Commission or Nasdaq, or if trading
generally on the American Stock Exchange, the New York Stock Exchange, the
Nasdaq National Market or in the over-the-counter market has been suspended or
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by order of
the Commission, the NASD or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal or New York authorities.
As used in this Section 9(a), the term "Prospectuses" means the Prospectuses in
the form first used to confirm sales of the Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof. Notwithstanding any such termination, the
provisions of Sections 1, 6 and 7 shall survive such termination and remain in
full force and effect.
SECTION 10. Default by One or More of the Managers. If one or more
--------------------------------------
of the Managers shall fail at Closing Time to purchase the Initial International
Securities which it or they are obligated to purchase under this Agreement and
the International Pricing Agreement (the "Defaulted Securities"), the Lead
Managers shall have the right, within 24 hours thereafter, to make arrangements
for one or more of the non-defaulting Managers, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the Lead
Managers shall not have completed such arrangements within such 24-hour period,
then:
(a) if the number of Defaulted Securities does not exceed 10% of
the number of Initial International Securities, each of the non-defaulting
Managers shall be obligated, severally and not jointly, to purchase the
full amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all
nondefaulting Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of Initial International Securities, this Agreement shall terminate without
liability on the part of any non-defaulting Manager.
<PAGE>
-44-
No action taken pursuant to this Section shall relieve any defaulting
Manager from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Lead Managers or the Company and the
Selling Stockholders shall have the right to postpone Closing Time for a period
not exceeding seven days in order to effect any required changes in the
Registration Statement or the Prospectuses or in any other documents or
arrangements.
SECTION 11. Default by the Selling Stockholders or the Company. If
--------------------------------------------------
the Company or any Selling Stockholder shall fail at Closing Time or at the Date
of Delivery to sell and deliver the number of Securities which it is obligated
to sell hereunder, then the Managers may, at their option, by notice from the
Managers to the Company and the non-defaulting Selling Stockholders either (a)
terminate this Agreement without any liability on the part of any non-defaulting
party except to the extent provided in Section 4 and except that the provisions
of Sections 6 and 7 shall remain in effect or (b) elect to
purchase the Securities which any non-defaulting party has agreed to sell
thereunder.
No action pursuant to this Section shall relieve the Company or any
Selling Stockholder from liability in respect of such default.
SECTION 12. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Managers
shall be directed to the Lead Managers at c/o Merrill Lynch International, 20
Farringdon Road, London EC1M 3NH, England, with a copy to Cahill Gordon &
Reindel, 80 Pine Street, New York, New York 10005, Attention: William M.
Hartnett, Esq.; notices to the Company shall be directed to the Company at 599
Lexington Avenue, New York, New York 10022, attention of Vincent J. Young,
Chairman, with a copy to Cooperman Levitt Winikoff Lester & Newman, P.C., 800
Third Avenue, New York, New York 10002, Attention: Robert L. Winikoff, Esq.;
notices to the Selling Stockholders shall be directed to their respective
addresses as set forth in the stock records of the Company.
SECTION 13. Parties. This Agreement and the International Pricing
-------
Agreement shall each inure to the benefit of
<PAGE>
-45-
and be binding upon the Managers, the Company and the Selling Stockholders and
their respective successors. Nothing expressed or mentioned in this Agreement or
the International Pricing Agreement is intended or shall be construed to give
any person, firm or corporation, other than the Managers, the Company, the
Selling Stockholders and their respective successors and the controlling persons
and officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or the International Pricing Agreement or any
provision herein or therein contained. This Agreement and the International
Pricing Agreement and all conditions and provisions hereof and thereof are
intended to be for the sole and exclusive benefit of the Managers, the Company,
the Selling Stockholders, their respective successors and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any Manager shall be deemed to be a successor by reason merely
of such purchase.
SECTION 14. Governing Law and Time. This Agreement and the
----------------------
International Pricing Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State without regard to principles
of conflicts of law. Specified times of day refer to New York City time.
<PAGE>
-46-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and each of the Selling
Stockholders a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the Managers, the Company
and the Selling Stockholders in accordance with its terms.
Very truly yours,
YOUNG BROADCASTING INC.
By: _______________________________
Name:
Title:
BROAD STREET INVESTMENT FUND I, L.P.
STONE STREET FUND 1987
STONE STREET FUND 1988
STONE STREET FUND 1989
BRIDGE STREET FUND 1987
BRIDGE STREET FUND 1988
BRIDGE STREET FUND 1989
GOLDMAN, SACHS & CO.
CAPITAL CITIES/ABC, INC.
ESTATE OF HENRY KRAMER
IAI STOCK FUND
IAI VALUE FUND
DONALD McCULLOUGH
By: ______________________________
as Attorney-in-Fact, acting
on behalf of each of the
Selling Stockholders named in
Schedule C hereto
----------
<PAGE>
-47-
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH INTERNATIONAL
ALEX. BROWN & SONS INCORPORATED
BANKERS TRUST INTERNATIONAL PLC
GOLDMAN SACHS INTERNATIONAL
J.P. MORGAN SECURITIES LTD.
By: MERRILL LYNCH INTERNATIONAL
By: ___________________________
Name:
Title:
For themselves and as Lead Managers
of the other Managers named in
Schedule A hereto.
<PAGE>
SCHEDULE A
Number of
Initial Securities
Name of Manager to Be Purchased
- --------------- -----------------
Merrill Lynch International..................
Alex. Brown & Sons Incorporated..............
Bankers Trust International plc..............
Goldman Sachs International..................
J.P. Morgan Securities Ltd...................
Total........................
=============
1,324,178
<PAGE>
SCHEDULE B-1
Jurisdiction of
Corporate Subsidiary Incorporation
- -------------------- ---------------
Young Broadcasting of Albany, Inc. Delaware
Young Broadcasting of La Crosse, Inc. Wisconsin
Young Broadcasting of Lansing, Inc. Michigan
Winnebago Television Corporation Illinois
Young Broadcasting of Nashville, Inc. Delaware
YBT, Inc. Delaware
Young Broadcasting of Louisiana, Inc. Delaware
LAT, Inc. Delaware
Young Broadcasting of Richmond, Inc. Delaware
Young Broadcasting of Green Bay, Inc. Delaware
Young Broadcasting of Knoxville, Inc. Delaware
YBK, Inc. Delaware
Young Broadcasting of Davenport, Inc. Delaware
Young Broadcasting of Sioux Falls, Inc. Delaware
Young Broadcasting of Rapid City, Inc. Delaware
<PAGE>
SCHEDULE B-2
Jurisdiction
Partnership Subsidiary of Formation
- ---------------------- ------------
WKRN, L.P. Delaware
KLFY, L.P. Delaware
WATE, L.P. Delaware
<PAGE>
SCHEDULE C
COLUMN 1: COLUMN 2:
Number of Initial Number of
International International Option
Selling Stockholder Securities To Be Sold Securities To Be Sold
- ------------------- --------------------- ---------------------
Broad Street Investment
Fund I, L.P.
Stone Street Fund 1987
Stone Street Fund 1988
Stone Street Fund 1989
Bridge Street Fund 1987
Bridge Street Fund 1988
Bridge Street Fund 1989
Goldman, Sachs & Co.
Capital Cities/ABC, Inc.
Estate of Henry Kramer
IAI Stock Fund
IAI Value Fund
Donald McCullough
<PAGE>
SCHEDULE D
The Goldman Sachs Group, L.P.
Broad Street Investment Fund I, L.P.
Stone Street Fund 1987
Stone Street Fund 1988
Stone Street Fund 1989
Bridge Street Fund 1987
Bridge Street Fund 1988
Bridge Street Fund 1989
Goldman, Sachs & Co.
Capital Cities/ABC, Inc.
Estate of Henry Kramer
Pennino Broadcast Corp.
IAI Stock Fund
IAI Value Fund
Donald McCullough
Tanner Associates
<PAGE>
Exhibit A
1,324,178 Shares
YOUNG BROADCASTING INC.
(a Delaware corporation)
Class A Common Stock
(Par Value $.001 Per Share)
International Pricing Agreement
-------------------------------
July , 1996
MERRILL LYNCH INTERNATIONAL
ALEX. BROWN & SONS INCORPORATED
BANKERS TRUST INTERNATIONAL PLC
GOLDMAN SACHS INTERNATIONAL
J.P. MORGAN SECURITIES LTD.
as Lead Managers of the several Managers
named in the within-mentioned Purchase Agreement
c/o Merrill Lynch International
20 Farringdon Road
London EC1M 3NH, England
Ladies and Gentlemen:
Reference is made to the International Purchase Agreement dated July
, 1996 (the "International Purchase Agreement") among Young Broadcasting Inc., a
Delaware corporation (the "Company"), and each of the stockholders of the
Company named in Schedule C thereto (the "Selling Stockholders"), and the
----------
several Managers named in Schedule A thereto (the "Managers"), for whom Merrill
----------
Lynch International, Alex. Brown & Sons Incorporated, Bankers Trust
International plc, Goldman Sachs International and J.P. Morgan Securities Ltd.
are acting as representatives (the "Lead Managers"). The International Purchase
Agreement provides for the purchase by the Managers from the Company and the
Selling Stockholders, subject to the terms and conditions set forth therein, of
an aggregate of 1,324,178 shares of the Company's Class A Common Stock, par
value $.001 per share (the "International Securities").
A-1
<PAGE>
Pursuant to Section 2 of the International Purchase Agreement, the
Company and each Selling Stockholder agree with each Manager as follows:
SECTION 1. The initial public offering price per share for the
International Securities, determined as provided in said Section 2, shall
be $ .
SECTION 2. The purchase price per share for the International
Securities to be paid by the several Managers shall be $ , being an
amount equal to the initial public offering price set forth above less $
per share.
A-2
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and each Selling Stockholder a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the Managers, the Company and the Selling
Stockholders in accordance with its terms.
Very truly yours,
YOUNG BROADCASTING INC.
By: _______________________________
Name:
Title:
BROAD STREET INVESTMENT FUND I, L.P.
STONE STREET FUND 1987
STONE STREET FUND 1988
STONE STREET FUND 1989
BRIDGE STREET FUND 1987
BRIDGE STREET FUND 1988
BRIDGE STREET FUND 1989
GOLDMAN, SACHS & CO.
CAPITAL CITIES/ABC, INC.
ESTATE OF HENRY KRAMER
IAI STOCK FUND
IAI VALUE FUND
DONALD McCULLOUGH
By: ______________________________
as Attorney-in-Fact, acting
on behalf of each of the
Selling Stockholders named in
Schedule C hereto
----------
A-3
<PAGE>
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH INTERNATIONAL
ALEX. BROWN & SONS INCORPORATED
BANKERS TRUST INTERNATIONAL PLC
GOLDMAN SACHS INTERNATIONAL
J.P. MORGAN SECURITIES LTD.
By: Merrill Lynch International
By: __________________________________
Name:
Title:
For themselves and as Lead Managers
of the other Managers named in the
International Purchase Agreement.
A-4
<PAGE>
Exhibit B
Form of Opinion, dated as of Closing Time of Cooperman Levitt Winikoff
Lester & Newman, P.C., counsel for the Company and the Subsidiaries,
substantially to the effect that:
1. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware.
2. The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement and the International Purchase Agreement.
3. The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect.
4. The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus in the column entitled "Actual"
under the caption "Capitalization" (except for subsequent issuances, if
any, pursuant to this Agreement and the International Purchase Agreement);
the shares of issued and outstanding capital stock of the Company,
including the Securities to be purchased by the Underwriters from the
Selling Stockholders, have been duly authorized and validly issued and are
fully paid and non-assessable; and none of the outstanding shares of
capital stock of the Company was issued in violation of the preemptive or
other similar rights of any securityholder of the Company.
5. The Securities to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale to the Underwriters
pursuant to this Agreement and the International Purchase Agreement and,
when issued and delivered by the Company pursuant to this Agreement and the
International Purchase Agreement against payment of the consideration set
forth in this Agreement and the International Purchase Agreement, will be
validly issued and fully paid and non-assessable and no holder of
B-1
<PAGE>
the Securities is or will be subject to personal liability by reason of
being such a holder.
6. The issuance and sale of the Securities by the Company and
the sale of the Securities by the Selling Stockholders is not subject to
the preemptive or other similar rights of any securityholder of the
Company.
7. Each Corporate Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect; each Partnership Subsidiary has been duly formed and is validly
existing as a limited partnership in good standing under the laws of the
jurisdiction of its formation, has partnership power and authority to own,
lease and operate its properties and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing
would not result in a Material Adverse Effect; except as otherwise
disclosed in the Registration Statement, all of the issued and outstanding
capital stock of each Corporate Subsidiary, and all of the issued and
outstanding partnership interest of each Partnership Subsidiary, has been
duly authorized and validly issued, is fully paid and non-assessable and,
to the best of our knowledge, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock of any Corporate Subsidiary, or the outstanding partnership
interest of each Partnership Subsidiary, was issued in violation of the
preemptive or similar rights of any securityholder of such Subsidiary.
8. Each of this Agreement and the International Purchase
Agreement has been duly authorized, executed and delivered by the Company.
B-2
<PAGE>
9. The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b); and, to
the best of our knowledge, no stop order suspending the effectiveness of
the Registration Statement or any Rule 462(b) Registration Statement has
been issued under the 1933 Act and no proceedings for that purpose have
been instituted or are pending or threatened by the Commission.
10. The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
Registration Statement and Prospectus, excluding the documents incorporated
by reference therein, as of their respective effective or issue dates
(other than the financial statements and supporting schedules included
therein or omitted therefrom, as to which we need express no opinion)
complied as to form in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations.
11. The documents incorporated by reference in the Prospectus
(other than the financial statements and supporting schedules included
therein or omitted therefrom, as to which we need express no opinion), when
they became effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the requirements of
the 1933 Act or the 1934 Act, as applicable, and the rules and regulations
of the Commission thereunder.
12. The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter and by-laws
of the Company and the requirements of the Nasdaq National Market.
13. To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to which
the Company or any Subsidiary is a party, or to which the property of the
Company or any Subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the properties or assets
thereof
B-3
<PAGE>
or the consummation of the transactions contemplated in this Agreement and
the International Purchase Agreement or the performance by the Company of
its obligations hereunder or thereunder.
14. The information in the Prospectus under "Description of
Capital Stock--Common Stock," "Business--Properties," "Business--Network
Affiliation Agreements," "Business--Legal Proceedings," "Description of
Capital Stock--Preferred Stock" and "Certain U.S. Federal Tax
Considerations For Non-U.S. Holders of Common Stock" and in the
Registration Statement under item 15, to the extent that it constitutes
matters of law, summaries of legal matters, the Company's charter and
bylaws or legal proceedings, or legal conclusions, has been reviewed by us
and is correct in all material respects.
15. To the best of our knowledge, there are no statutes or
regulations that are required to be described in the Prospectus that are
not described as required.
16. All descriptions in the Registration Statement of contracts
and other documents to which the Company or any of the Subsidiaries are a
party are accurate in all material respects; to the best of our knowledge,
there are no franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or referred to
in the Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed or incorporated by
reference as exhibits thereto, and the descriptions thereof or references
thereto are correct in all material respects.
17. To the best of our knowledge, neither the Company nor any
Subsidiary is in violation of its charter or by-laws and no default by the
Company or any Subsidiary exists in the due performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or incorporated by
reference as an exhibit to the Registration Statement.
18. No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than under the
1933 Act and the
B-4
<PAGE>
1933 Act Regulations, which have been obtained, or as may be required under
the securities or blue sky laws of the various states, as to which we need
express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of the Purchase Agreement or for the
offering, issuance, sale or delivery of the Securities.
19. The execution, delivery and performance of this Agreement and
the International Purchase Agreement and the consummation of the
transactions contemplated in this Agreement and the International Purchase
Agreement and in the Registration Statement (including the issuance and
sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectuses under the caption "Use of
Proceeds") and compliance by the Company with its obligations under this
Agreement and the International Purchase Agreement do not and will not,
whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default under or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any Subsidiary pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or any other agreement or instrument, known to us, to which the Company or
any Subsidiary is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any Subsidiary is
subject (except for such conflicts, breaches or defaults or liens, charges
or encumbrances that would not have a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter or by-
laws of the Company or any Subsidiary, or any applicable law, statute,
rule, regulation, judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their
respective properties, assets or operations.
20. The Acquisition Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and legally binding
obligation of the Company enforceable in accordance with its terms, except
that (A) the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any
B-5
<PAGE>
proceeding therefor may be brought and (B) any rights to indemnity or
contribution thereunder may be limited by federal and state securities laws
and public policy considerations.
21. The network affiliation agreements between each of the
broadcast television stations of the Company and the Subsidiaries, as
applicable, and CBS, NBC and ABC, as applicable, have been duly authorized,
executed and delivered by the Company and the Subsidiaries, as applicable,
and are the valid and legally binding obligations of the respective parties
thereto and the description of such network affiliation agreements in the
Registration Statement and the Prospectuses under the caption "Business --
Network Affiliation Agreements" is a fair and accurate summary thereof.
22. The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
1940 Act.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable) (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we need make no statement),
at the time such Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus or any amendment or supplement thereto
(except for financial statements and schedules and other financial data included
or incorporated by reference therein or omitted therefrom, as to which we need
make no statement), at the time the Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or at the Closing Time, included
or includes an untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other
B-6
<PAGE>
document relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991). In rendering such
opinion, counsel may state that it expresses no opinion with respect to matters
arising under the Communications Act, or the rules and regulations of the FCC.
B-7
<PAGE>
Exhibit C
Form of opinion, dated as of Closing Time, of Wiley, Rein & Fielding,
communications counsel for the Company and the Subsidiaries, substantially to
the effect that:
1. The execution and delivery by each of the Company and the
Subsidiaries of, and the performance by each of the Company and the
Subsidiaries of its obligations under, this Agreement, the International
Purchase Agreement and the Securities, as applicable, did not or will not
result in a violation of the Communications Act or any order, rule or
regulation of the FCC;
2. No consent, approval, authorization, order, registration or
qualification of or with any governmental agency or body is required under
the Communications Act or the rules and regulations of the FCC for the
execution and delivery by each of the Company and the Subsidiaries of, and
the performance by each of the Company and the Subsidiaries of its
obligations under, this Agreement, the International Purchase Agreement and
the Securities, as applicable;
3. The Company and the Subsidiaries are the holders of the
Licenses issued by the FCC listed in an attachment to such opinion (the
"FCC Licenses"), all of which are validly issued by the FCC and in full
force and effect, with no material restrictions or qualifications other
than as described in the Registration Statement and the Prospectuses and to
the best of such counsel's knowledge based solely on the description of the
business and properties of the Company and the Subsidiaries in the
Registration Statement and the Prospectuses and given by the Company to
such counsel, such FCC Licenses constitute all of the FCC Licenses
necessary for the Company and the Subsidiaries to own their properties and
to conduct their businesses in the manner and to the full extent now
operated or proposed to be operated as described in the Registration
Statement and the Prospectuses; Fidelity is the holder of the licenses
issued by the FCC under which KCAL operates (the "KCAL Licenses"), all of
which are validly issued by the FCC and in full force and effect, with no
material restrictions or qualifications other than as described in the
Registration Statement and the Prospectuses;
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<PAGE>
4. To the best of such counsel's knowledge based solely upon a
certificate of the Company attached to such counsel's opinion in form
reasonably satisfactory to the Underwriters and a review of the publicly
available records of the FCC, the business and operations of the Company
and the Subsidiaries comply in all material respects with the
Communications Act and all published orders, rules and regulations of the
FCC;
5. Other than matters described in the Registration Statement
and the Prospectuses and except as to any other matters relating to the
television broadcast industry in general which would not have a Material
Adverse Effect, such counsel after due inquiry does not know of (A) any
proceedings threatened, pending or contemplated before the FCC against or
involving the properties, businesses or Licenses of the Company and the
Subsidiaries, or (B) any communications laws or regulations of the United
States applicable to such properties, businesses or Licenses, which in
either case could have a Material Adverse Effect;
6. To the best of such counsel's knowledge after due inquiry, no
event has occurred which permits, or with notice or lapse of time or both
would permit, the revocation or non-renewal of any of the FCC Licenses and
the KCAL Licenses, assuming the filing of timely license renewal
applications and the timely payment of all applicable filing and regulatory
fees to the FCC, or which might result in any other material impairment of
the rights of the Company or the Subsidiaries in the FCC Licenses or
Fidelity in the KCAL Licenses; and
7. The statements in the Prospectus under the caption "Risk
Factors-Government Regulation" and "Business-Federal Regulation of
Television Broadcasting" insofar as such statements constitute summaries of
the legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters referred to
therein and such counsel does not believe that such statements as of the
date of the Prospectus and at Closing Time, contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
In rendering such opinion, counsel may state that it expresses no
opinion with respect to any matters other than those arising under the
Communications Act and the published
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<PAGE>
rules and regulations promulgated thereunder by the FCC, and may rely as to all
matters of fact relevant to such opinion on certificates and written statements
of officers and employees of the Company; provided, however, that all such
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certificates and statements shall be satisfactory to you in all material
respects and attached to such counsel's opinion. In addition, counsel may note
that item (ii) above is qualified by the requirement to file certain corporate
and loan instruments with the FCC within 30 days of the Closing Time.
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<PAGE>
Exhibit D
Form of opinion, dated as of Closing Time, of counsel to the Selling
Stockholders, substantially to the effect that:
1. No filing with, or consent, approval, authorization, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign (other than the issuance of the order of the
Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under state securities
laws, as to which I need express no opinion), is necessary or required to be
obtained by the Selling Stockholders for the performance by each Selling
Stockholder of its obligations under this Agreement, or in connection with the
offer, sale or delivery of the Securities.
2. This Agreement has been duly authorized, executed and delivered by
each Selling Stockholder.
3. The execution, delivery and performance of this Agreement and the
sale and delivery of the Securities and the consummation of the transactions
contemplated in this Agreement and in the Registration Statement and compliance
by the Selling Stockholders with its respective obligations under this Agreement
have been duly authorized by all necessary action on the part of each of the
Selling Stockholders and do not and will not, whether with or without the giving
of notice or passage of time or both, conflict with or constitute a breach of,
or default under or result in the creation or imposition of any tax, lien,
charge or encumbrance upon the Securities or any property or assets of any
Selling Stockholder pursuant to, any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, license, lease or other instrument or
agreement to which any Selling Stockholder is a party or by which it may be
bound, or to which any of the property or assets of the Selling Stockholder may
be subject nor will such action result in any violation of the provisions of the
charter or by-laws of any Selling Stockholder, if applicable, or any law,
administrative regulation, judgment or order of any governmental agency or body
or any administrative or court decree having jurisdiction over such Selling
Stockholder or any of its properties.
4. Each Selling Stockholder is, and immediately prior to Closing Time
will be, the sole registered owner of the Securities to be sold by such Selling
Stockholder; upon consummation of the sale of the Securities pursuant to this
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<PAGE>
Agreement, each of the Underwriters will be the registered owner of the
Securities purchased by it from such Selling Stockholder and, assuming the
Underwriters purchased the Securities for value in good faith and without notice
of any adverse claim, the Underwriters will have acquired all rights of such
Selling Stockholder in the Securities free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity, and the owner of the
Securities, if other than such Selling Stockholder, is precluded from asserting
against the Underwriters the ineffectiveness of any unauthorized endorsement;
and such Selling Stockholder has the full right, power and authority (A) to
enter into this Agreement and (B) to sell, transfer and deliver the Securities
to be sold by such Selling Stockholder under this Agreement.
5. Such Selling Stockholder has duly executed and delivered in the
form heretofore furnished to the Underwriters the Power of Attorney and Custody
Agreement with the Attorneys-in-Fact as attorneys-in-fact and the Custodian as
custodian; the Attorneys-in-Fact, or any of them, are authorized to execute and
deliver this Agreement on behalf of such Selling Stockholder, to determine the
purchase price to be paid by the Managers to such Selling Stockholder, as
provided in Section 2(a) hereof, to authorize the delivery of the Securities to
be sold by such Selling Stockholder hereunder, to accept payment therefor, and
otherwise to act on behalf of such Selling Stockholder in connection with this
Agreement and the U.S. Purchase Agreement.
6. Certificates in negotiable form for all Securities to be sold
hereunder have been placed in custody with the Custodian for the purpose of
effecting delivery hereunder.
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<PAGE>
EXHIBIT 5.1
[COOPERMAN LEVITT WINIKOFF LESTER & NEWMAN, P.C.]
July 18, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
We have been requested by Young Broadcasting Inc. (the "Company"), a
Delaware corporation, to furnish our opinion in connection with the registration
statement (the "Registration Statement") on Form S-3 (File No. 333-06241), with
respect to the registration of up to 7,620,202 shares of the Company's Class A
Common Stock (the "Common Stock"), $.001 par value, which amount includes
4,000,000 shares of Common Stock to be sold by the Company (the "Company
Shares"), and 2,626,263 shares of Common Stock to be sold by certain of the
Company's stockholders, plus up to an additional 993,939 shares of Common Stock
to be sold by such stockholders to cover any over-allotments (the "Selling
Stockholder Shares").
We have made such examination as we have deemed necessary for the purpose
of this opinion. Based upon such examination, it is our opinion that (i) when
the Registration Statement has become effective under the Securities Act of 1933
and when the Company Shares have been issued and sold in the manner described in
the Registration Statement, the Company Shares will have been validly issued and
will be fully paid and non-assessable and (ii) the Selling Stockholder Shares
have been validly issued and are fully paid and non-assessable.
<PAGE>
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the Federal laws of the
United States of America, and the General Corporation Law of the State of
Delaware.
The opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purposes or relied upon
or furnished to any other person without our prior written consent.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to our name under the caption "Legal
Matters" in the prospectus included in the Registration Statement.
Very truly yours,
COOPERMAN LEVITT WINIKOFF
LESTER & NEWMAN, P.C.
/s/ Elliot Brecher
By_______________________________
