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Exhibit 1.1
22,227,400 SHARES
SPANISH BROADCASTING SYSTEM, INC.
CLASS A COMMON STOCK
FORM OF
UNDERWRITING AGREEMENT
October [28], 1999
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
CIBC WORLD MARKETS CORP.
As Representatives of the several
Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Subject to the conditions hereinafter stated, Spanish Broadcasting
System, Inc., a Delaware corporation (the "Company"), and certain stockholders
of the Company named in Schedule 2 hereto (the "Selling Stockholders") propose
to sell an aggregate of 22,227,400 shares (the "Firm Stock") of the Company's
Class A Common Stock, par value $.0001 per share (the "Common Stock") to the
several Underwriters named in Schedule 1 hereto (collectively, the
"Underwriters") for whom ▇▇▇▇▇▇ Brothers Inc., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated and CIBC World Markets Corp. shall act as representatives
(collectively, the "Representatives"). Of the 22,227,400 shares of the Firm
Stock, 17,500,000 are being sold by the Company and 4,727,400 by the Selling
Stockholders. In addition, the Company proposes to grant to the Underwriters an
option to purchase up to an additional 3,353,280 shares of the Common Stock on
the terms and for the purposes set forth in Section 3 (the "Option Stock"). The
Firm Stock and the Option Stock, if purchased, are hereinafter collectively
called the "Stock." This is to confirm the agreement concerning the purchase of
the Stock from the Company and the Selling Stockholders by the Underwriters.
It is further understood that 1,111,760 shares of the Firm Stock (the
"Directed Stock") will initially be reserved by the several Underwriters for
offer and sale, upon the terms and conditions set forth in the Prospectus and in
accordance with the rules and regulations of the National Association of
Securities Dealers, Inc. (the "Directed Stock Program"), to employees and
persons having business relationships with the Company and its subsidiaries
(collectively, "Participants") who have heretofore delivered to the
Representatives offers or indications of interest to purchase shares of Directed
Stock in form reasonably satisfactory to the Representatives, and that any
allocation of such Directed Stock among such persons will be made in accordance
with timely directions received by the Representatives from the Company;
provided, that under no circumstances will the Representatives or any
Underwriter be liable to the Company or to any such person for any action taken
or omitted in good faith in connection with such offering to any Participant. It
is further understood that any shares of Directed Stock which are not purchased
by Participants will be offered by the Underwriters to the public upon the terms
and conditions set forth in the Prospectus.
Section 1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
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(a) A registration statement on Form S-1 with respect to the
Stock has (i) been prepared by the Company in conformity with the requirements
of the Securities Act of 1933, as amended (the "Securities Act"), and the rules
and regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder, (ii) been filed with the Commission
under the Securities Act, and (iii) become effective under the Securities Act
(other than any Rule 462 Registration Statement to be filed after the execution
of this Agreement which will become effective no later than the day after the
execution of this Agreement). Copies of such registration statement and each of
the amendments thereto have been delivered by the Company to you. As used in
this Agreement, "Effective Time" means the date and the time as of which such
registration statement, or the most recent post-effective amendment thereto, if
any, was declared effective by the Commission; "Effective Date" means the date
of the Effective Time; "Preliminary Prospectus" means each prospectus included
in such registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with the Commission
by the Company with the consent of the Representatives pursuant to Rule 424(a)
of the Rules and Regulations; "Registration Statement" means such registration
statement, including all material incorporated by reference therein, as amended
at the Effective Time, including all information contained in the final
prospectus filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations and deemed to be a part of the registration statement as of the
Effective Time pursuant to Rule 430A of the Rules and Regulations; and
"Prospectus" means the prospectus in the form first used to confirm sales of
Stock. If the Company has filed an abbreviated registration statement to
register additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462 Registration Statement. The Commission has not issued any order preventing
or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all respects to the requirements of the Securities
Act and the Rules and Regulations and do not and will not, as of the applicable
effective date (as to the Registration Statement and any amendment thereto) and
as of the applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that no representation or warranty
is made as to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein.
(c) The Company and each of its subsidiaries (as defined in
Section 17) have been duly incorporated and are validly existing as corporations
in good standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good standing as
foreign corporations in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the general affairs, management, consolidated
financial position, stockholders' equity or results of operation of the Company
and its subsidiaries taken as a whole (a "Material Adverse Effect"). The Company
and each of its subsidiaries have all power and authority necessary to own or
hold their respective properties and to conduct the businesses in which they are
engaged; and none of the subsidiaries of the Company other than [ ] is a
"significant subsidiary," as such term is defined in Rule 405 of the Rules and
Regulations.
(d) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus; and all
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of the issued shares of capital stock of each subsidiary of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable and (except for directors' qualifying shares) are owned directly
or indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims and none of such shares of capital stock was issued in
violation of preemptive or other similar rights arising by operation of law,
under the charter and by-laws of the Company or under any agreement to which the
Company or any subsidiary is a party or otherwise.
(e) The shares of the Stock to be issued and sold by the
Company to the Underwriters hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor in accordance with this
Agreement, will be duly and validly issued, fully paid and non-assessable; and
the Stock and the Common Stock will conform to the descriptions thereof
contained in the Prospectus.
(f) This Agreement has been duly authorized, executed and
delivered by the Company and each of the other documents relating to this
Agreement to which the Company is a party has been duly authorized, executed and
delivered by the Company.
(g) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby and in the
Registration Statement and the Prospectus (including the issuance and sale of
the Stock and the use of proceeds from the sale of the Stock as described under
the caption "Use of Proceeds") will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, except
for such defaults which, individually or in the aggregate, would not result in a
Material Adverse Effect, nor will such actions result in any violation of the
provisions of the charter, certificate of designation, by-laws or similar
governing document of the Company or any of its subsidiaries or any statute or
any order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets; and except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act of 1934, as amended
(the "Exchange Act") and applicable state securities laws in connection with the
purchase and distribution of the Stock by the Underwriters no consent, approval,
authorization or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby.
(h) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the Company
owned or to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration Statement
or in any securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act.
(i) Except as described in the Prospectus, the Company has not
sold or issued any shares of Common Stock, or Securities that are convertible
into Common Stock, during the six-month period preceding the date of the
Prospectus, including any sales pursuant to Rule 144A under, or Regulations D or
S of, the Securities Act.
(j) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements included in
the Prospectus, any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in
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the Prospectus that would result in a Material Adverse Effect; and, since such
date, there has not been any change in the capital stock or long-term debt of
the Company or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
general affairs, management, consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus.
(k) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or included in
the Prospectus present fairly the financial condition and results of operations
of the entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved.
(l) To the best knowledge of the Company, KPMG LLP, who have
certified certain financial statements of the Company, whose report appears in
the Prospectus and who have delivered the initial letter referred to in Section
9(f) hereof, are independent public accountants as required by the Securities
Act and the Rules and Regulations.
(m) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good and valid title to
all material personal property owned by them, in each case free and clear of all
liens, encumbrances and defects, except such as are described in the Prospectus
or such as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property
by the Company and its subsidiaries; and all assets held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries.
(n) The Company and each of its subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is reasonably
adequate for the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in similar
businesses in similar industries.
(o) The Company and each of its subsidiaries own, license or
possess adequate rights to use all patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service ▇▇▇▇ registrations,
copyrights and licenses necessary for the conduct of their respective businesses
and have no reason to believe that the conduct of their respective businesses
will conflict with, and have not received any notice of any claim of conflict
with, any such rights of others, except as disclosed in the Prospectus or where
the failure to so own, license or possess such rights would not, individually or
in the aggregate, have a Material Adverse Effect.
(p) There are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any property
or assets of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, might have a
Material Adverse Effect; and to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(q) There are no contracts, arrangements or other documents
which are required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and Regulations
which have not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated by reference therein as permitted by the
Rules and Regulations.
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(r) No relationship, direct or indirect, exists between or
among the Company on the one hand, and any of its former or present directors,
officers, stockholders, customers or suppliers on the other hand, which is
required to be described in the Prospectus which is not so described.
(s) No labor disturbance by the employees of the Company
exists or, to the knowledge of the Company, is imminent, which might be expected
to have a Material Adverse Effect.
(t) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in Section 4043 of
ERISA) has occurred with respect to any "defined benefit plan" (as defined in
Section 3(35) of ERISA) for which the Company would have any liability; the
Company has not incurred and does not expect to incur liability under (i) Title
IV of ERISA with respect to termination of, or withdrawal from, any "defined
benefit plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986,
as amended, including the regulations and published interpretations thereunder
(the "Code"); and each "defined benefit plan" for which the Company has any
liability or to which it makes contributions that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
(u) The Company has filed all federal, state and local income
and franchise tax returns required to be filed through the date hereof and has
paid all shown as taxes due thereon, and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had (nor does the
Company have any knowledge of any tax deficiency which, if determined adversely
to the Company or any of its subsidiaries, might have) a Material Adverse
Effect. The are no tax audits presently being conducted which, if determined
adversely to the Company or any of its subsidiaries, could have a Material
Adverse Effect.
(v) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be disclosed in
the Prospectus, the Company has not (i) issued or granted any securities, (ii)
incurred any material liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary course of
business, or (iv) declared or paid any dividend on its capital stock.
(w) The Company (i) makes and keeps accurate books and
records, and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance with
management's general or specific authorization, (B) transactions are recorded as
necessary to permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted only in
accordance with management's general or specific authorization and (D) the
reported accountability for its assets is compared with existing assets at
reasonable intervals.
(x) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter, certificate of designation, by-laws or similar
governing document, (ii) is in default in any material respect, and no event has
occurred which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound or to
which any of its properties or assets is subject or (iii) is in violation in any
material respect of any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject.
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(y) Each of the radio stations owned, operated, programmed, or
to which sales and marketing services are provided, by the Company and its
subsidiaries is validly licensed by the Federal Communications Commission (the
"FCC") and no administrative or judicial proceedings are pending before or, to
the knowledge of the Company or its subsidiaries, threatened by the FCC with
respect to such licenses; the Company and its subsidiaries possess adequate
certificates, authorizations, consents, orders, approvals, licenses or permits
which are in full force and effect issued by all appropriate governmental
agencies or bodies necessary to the ownership of their respective properties and
the conduct of the businesses now operated by them and have not received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority, consent, order, approval, license or permit and the
Company and its subsidiaries are in compliance in all material respects with the
Communications Act of 1934, as amended, and the rules, regulations and policies
of the FCC.
(z) The Company believes the statistical and market-related
data included in the Prospectus are accurate and are based on or derived from
reliable sources.
(aa) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic wastes,
medical wastes, hazardous wastes or hazardous substances by the Company or any
of its subsidiaries (or, to the knowledge of the Company, any of their
predecessors in interest) at, upon or from any of the property now or previously
owned or leased by the Company or its subsidiaries in violation of any
applicable law, ordinance, rule, regulation, order, judgment, decree or permit
or which would require remedial action under any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit, except for any violation or
remedial action which would not have, or could not be reasonably likely to have,
singularly or in the aggregate with all such violations and remedial actions, a
Material Adverse Effect; there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind onto such property
or into the environment surrounding such property of any toxic wastes, medical
wastes, solid wastes, hazardous wastes or hazardous substances due to or caused
by the Company or any of its subsidiaries or with respect to which the Company
or any of its subsidiaries have knowledge, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would not have or
would not be reasonably likely to have, singularly or in the aggregate with all
such spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect; and the terms "hazardous wastes", "toxic
wastes", "hazardous substances" and "medical wastes" shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(bb) Neither the Company nor any subsidiary is, or, as of the
Closing Date after giving effect to the application of the net proceeds as
described in the Prospectus, will be, an "investment company" as defined in the
Investment Company Act of 1940, as amended.
(cc) None of the Directed Stock distributed in connection with
the Directed Stock Program will be offered or sold outside of the United States.
(dd) The Company has complied with, and is and will be in
compliance with, the provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section 517.075 of the
Florida statutes, and the rules and regulations thereunder or is exempt
therefrom.
Section 2. Representations, Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder severally represents, warrants and agrees
that:
(a) Each Selling Stockholder has, and immediately prior to the
First Delivery Date (as defined in Section 5 hereof) each Selling Stockholder
will have good and valid title to the shares of Stock to be sold by such Selling
Stockholder hereunder on such date, free and clear of all liens,
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encumbrances, equities or claims; and upon delivery of such shares and payment
therefor pursuant hereto, good and valid title to such shares, free and clear of
all liens, encumbrances, equities or claims, will pass to the several
Underwriters.
(b) Each Selling Stockholder has placed in custody under a
custody agreement (the "Custody Agreement") with [insert name of custodian], as
custodian (the "Custodian"), for delivery under this Agreement, certificates in
negotiable form (with signature guaranteed by a commercial bank or trust company
having an office or correspondent in the United States or a member firm of the
New York or American Stock Exchanges) representing the shares of Stock to be
sold by such Selling Stockholder hereunder.
(c) Each Selling Stockholder has duly and irrevocably executed
and delivered a power of attorney (the "Power of Attorney") appointing the
Custodian and one or more other persons, as attorneys-in-fact, with full power
of substitution, and with full authority (exercisable by any one or more of
them) to execute and deliver this Agreement and to take such other action as may
be necessary or desirable to carry out the provisions hereof on behalf of such
Selling Stockholder.
(d) Each Selling Stockholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the Custody
Agreement. The execution, delivery and performance of this Agreement, the Power
of Attorney and the Custody Agreement by such Selling Stockholder and the
consummation by such Selling Stockholder of the transactions contemplated hereby
and thereby will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, (i) any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which such Selling Stockholder is a party or by which such Selling Stockholder
is bound or to which any of the property or assets of such Selling Stockholder
is subject, (ii) if such Selling Stockholder is not a natural person, the
provisions of the charter, by-laws, articles of partnership, deed of trust or
similar governing document of such Selling Stockholder, and (iii) any statute or
any order, rule or regulation of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or the property or assets of such
Selling Stockholder. Except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable state or
foreign securities laws in connection with the purchase and distribution of the
Stock by the Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement, the
Power of Attorney or the Custody Agreement by such Selling Stockholder and the
consummation by such Selling Stockholder of the transactions contemplated hereby
and thereby.
(e) All information relating to each Selling Stockholder in
the Registration Statement and the Prospectus and any further amendments or
supplements to the Registration Statement or the Prospectus will, when they
become effective or are filed with the Commission, as the case may be, does not
and will not, as of the applicable effective date (as to the Registration
Statement and any amendment thereto) and as of the applicable filing date (as to
the Prospectus and any amendment or supplement thereto) contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided that no representation or warranty is made as to information contained
in or omitted from the Registration Statement or the Prospectus in reliance upon
and in conformity with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein.
(f) The Selling Stockholder is not prompted to sell shares of
Stock by any information concerning the Company which is not set forth in the
Registration Statement and the Prospectus.
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(g) Each Selling Stockholder 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 the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the shares of the Stock.
Section 3. Purchase of the Stock by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, (i) the Company agrees to sell 17,500,000 shares
of the Firm Stock, (ii) each Selling Stockholder hereby agrees, severally and
not jointly, to sell the number of shares of Firm Stock set forth opposite its
name on Schedule 2 hereto to the several Underwriters, and (iii) each of the
Underwriters, severally and not jointly, agrees to purchase the number of shares
of the Firm Stock set forth opposite that Underwriter's name in Schedule 1
hereto. The respective purchase obligations of the Underwriters with respect to
the Firm Stock shall be rounded among the Underwriters to avoid fractional
shares, as the Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 3,343,905 shares of Option Stock. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Stock and is exercisable
as provided in Section 5 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set forth opposite the name of such Underwriters in
Schedules 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts.
The price of both the Firm Stock and any Option Stock shall be $[ ] per
share.
The Company and Selling Stockholders shall not be obligated to deliver
any of the Stock to be delivered on any Delivery Date (as hereinafter defined),
except upon payment for all the Stock to be purchased on such Delivery Date as
provided herein.
Section 4. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of the Firm
Stock, the several Underwriters propose to offer the Firm Stock for sale upon
the terms and conditions set forth in the Prospectus.
Section 5. Delivery of and Payment for the Stock. Delivery of and
payment for the Firm Stock shall be made at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M., New York City time, on
the third full business day following the date of this Agreement or at such
other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to as
the "First Delivery Date." On the First Delivery Date, the Company and the
Selling Stockholders shall deliver or cause to be delivered certificates
representing the Firm Stock to the Representatives for the account of each
Underwriter against payment to or upon the order of the Company and the Selling
Stockholders of the purchase price by certified or official bank check or checks
payable in or wire transfer in immediately available funds provided, that the
amount of such payment shall be reduced by one days' interest on the amount of
gross proceeds at the Underwriters' cost of borrowing such funds plus any other
expenses associated with such payment of immediately available funds. Time shall
be of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Firm Stock shall be registered in such names and
in such denominations as the Representatives shall request in writing not less
than two full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
the Company and the Selling Stockholders shall make the certificates
representing the Firm Stock available
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for inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "Second Delivery Date" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "Delivery
Date."
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 5 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on such Second Delivery
Date. On such Second Delivery Date, the Company shall deliver or cause to be
delivered the certificates representing the Option Stock to the Representatives
for the account of each Underwriter against payment to or upon the order of the
Company of the purchase price by wire transfer in immediately available funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Option Stock shall be registered in
such names and in such denominations as the Representatives shall request in the
aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Stock, the Company shall make the
certificates representing the Option Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to such Second Delivery Date.
Section 6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than Commission's close of business on the second
business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under the
Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted herein; to
advise the Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed and to furnish the Representatives with copies thereof; to advise the
Representatives, promptly after it receives notice thereof, of the issuance by
the Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the event of
the issuance of any stop order or of any order preventing or suspending the use
of any Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
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(c) To deliver promptly to the Representatives such number of
the following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits other
than this Agreement) and (ii) each Preliminary Prospectus, the Prospectus and
any amended or supplemented Prospectus; and, if the delivery of a prospectus is
required at any time after the Effective Time in connection with the offering or
sale of the Stock or any other securities relating thereto and if at such time
any events shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus in order to comply with the
Securities Act, to notify the Representatives and, upon their request, to
prepare and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended or supplemented Prospectus which will correct
such statement or omission or effect such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representatives, be required by
the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Representatives and counsel for the Underwriters and obtain the consent of
the Representatives to the filing;
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date,
to furnish to the Representatives copies of all materials furnished by the
Company to its shareholders and all public reports and all reports and financial
statements furnished by the Company to the principal national securities
exchange upon which the Common Stock may be listed pursuant to requirements of
or agreements with such exchange or to the Commission pursuant to the Exchange
Act or any rule or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock; provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction;
(i) For a period of 180 days from the date of the Prospectus,
not to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the Stock and shares issued pursuant
to employee benefit plans, qualified stock option plans or other employee
compensation plans existing on the date hereof or pursuant to currently
outstanding options, warrants or rights), or sell or grant options, rights or
warrants with respect to any shares of Common
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Stock or securities convertible into or exchangeable for Common Stock (other
than the grant of options pursuant to option plans existing on the date hereof),
or (2) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership
of such shares of Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, in each case without the prior written consent
of ▇▇▇▇▇▇ Brothers Inc. on behalf of the Underwriters; and to use its reasonable
best efforts to cause each stockholder listed on Exhibit A hereto and each
officer and director of the Company to furnish to the Representatives, prior to
the First Delivery Date, a letter or letters, substantially in the form of
Exhibit B hereto, pursuant to which each such person shall agree not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any shares of Common Stock or securities convertible into or exchangeable
for Common Stock or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, in each case for a period of
180 days from the date of the Prospectus, without the prior written consent of
▇▇▇▇▇▇ Brothers Inc. on behalf of the Underwriters;
(j) To apply for the listing of the Stock on The Nasdaq Stock
Market's National Market, and to use its best efforts to complete that listing,
subject only to official notice of issuance, prior to the First Delivery Date;
(k) To apply the net proceeds from the sale of the Stock as
set forth in the Prospectus;
(l) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment company" as
defined in the Investment Company Act of 1940, as amended; and
(m) In connection with the Directed Stock Program, to ensure
that the Directed Stock will be restricted to the extent required by the
National Association of Securities Dealers, Inc. or the rules of such
association from sale, transfer, assignment, pledge or hypothecation for a
period of three months following the date of the effectiveness of the
Registration Statement, and ▇▇▇▇▇▇ Brothers Inc. will notify the Company as to
which Participants will need to be so restricted. At the request of ▇▇▇▇▇▇
Brothers Inc., the Company will direct the transfer agent to place stop transfer
restrictions upon such securities for such period of time.
Section 7. Further Agreements of the Selling Stockholders. Each Selling
Stockholder agrees:
(a) For a period of 180 days from the date of the Prospectus,
not to, directly or indirectly,(1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the Stock) or (2) enter into any swap
or other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of ▇▇▇▇▇▇ Brothers
Inc.
(b) That the Stock to be sold by such Selling Stockholder
hereunder, which is represented by the certificates held in custody for such
Selling Stockholder, is subject to the interest of the Underwriters and the
other Selling Stockholders thereunder, that the arrangements made by such
Selling
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Stockholder for such custody are to that extent irrevocable, and that the
obligations of such Selling Stockholder hereunder shall not be terminated by any
act of such Selling Stockholder, by operation of law, by the death or incapacity
of any individual Selling Stockholder or, in the case of a trust, by the death
or incapacity of any executor or trustee or the termination of such trust, or
the occurrence of any other event.
(c) To deliver to the Representatives prior to the First
Delivery Date a properly completed and executed United States Treasury
Department Form W-8 (if such Selling Stockholder is a non-United States person)
or Form W-9 (if such Selling Stockholder is a United States person.)
Section 8. Expenses. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as provided in this Agreement; (d) the costs of producing and distributing
this Agreement, and any other related documents in connection with the offering,
purchase, sale and delivery of the stock; (e) the filing fees incident to
securing the review by the National Association of Securities Dealers, Inc. of
the terms of sale of the Stock; (f) any applicable listing or other fees; (g)
the fees and expenses (not in excess, in the aggregate, of $10,000) of
qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 6(h) and of preparing, printing and distributing a Blue Sky
Memorandum (including related fees and expenses of counsel to the Underwriters);
(h) all costs and expenses of the Underwriters, including the fees and
disbursements of counsel for the Underwriters, incident to the Directed Stock
Program; (i) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the marketing of
the offering of the Stock, including, without limitation, expenses associated
with the production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show (i) and (j) all
other costs and expenses incident to the performance of the obligations of the
Company under this Agreement; provided that, except as provided in this Section
8 and in Section 13 the Underwriters shall pay their own costs and expenses,
including the costs and expenses of their counsel, any transfer taxes on the
Stock which they may sell and the expenses of advertising any offering of the
Stock made by the Underwriters and the Selling Stockholders shall pay the fees
and expenses of counsel to the Selling Stockholders, the Custodian (and any
other attorney-in-fact) and any transfer taxes payable in connection with their
respective sales of stock to the Underwriters and reimburse the Company for
their pro rata share of the fees and expenses paid by the Company in connection
with the offering of the Stock.
Section 9. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
and the Selling Stockholders contained herein, to the performance by the Company
and the Selling Stockholders of their respective obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
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(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to each Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue statement
of fact which, in the opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for the
Underwriters, is material or omits to state a fact which, in the opinion of such
counsel, is material and is required to be stated therein or is necessary to
make the statements therein not misleading
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Custody
Agreements, the Powers of Attorney, the Stock, the Registration Statement and
the Prospectus, and all other legal matters relating to this Agreement, and the
transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Underwriters, and the Company and the
Selling Stockholders shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon such
matters.
(d) ▇▇▇▇, Scholer, Fierman, ▇▇▇▇ & Handler LLP shall have
furnished to the Representatives their written opinion, as counsel to the
Company, addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to the effect that:
(i) The Company and each of its subsidiaries have been
duly incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are duly
qualified to do business and are in good standing as foreign corporations in
each jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification and have
all power and authority necessary to own or hold their respective properties and
conduct the businesses in which they are engaged;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid and
nonassessable and conform to the description thereof contained in the
Prospectus; and all of the issued shares of capital stock of each subsidiary of
the Company have been duly and validly authorized and issued and are fully paid,
non-assessable and (except for directors' qualifying shares) are owned directly
or indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims and none of such shares of capital stock was issued in
violation of preemptive or other similar rights arising by operation of law,
under the charter and by-laws of the Company or under any agreement known to
such counsel to which the Company or any subsidiary is a party or otherwise;
(iii) The shares of the Stock being delivered on such
Delivery Date to the Underwriters hereunder have been duly and validly
authorized and, when issued and delivered against payment therefor will be duly
and validly issued, fully paid and nonassessable;
(iv) There are no preemptive or other rights to subscribe
for or to purchase, nor any restriction upon the voting or transfer of, any
shares of the Stock pursuant to the Company's charter or by-laws or any
agreement or other instrument known to such counsel;
(v) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a party
or of which any property or assets of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or any of its
subsidiaries, might have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations, business or prospects of
the Company and its subsidiaries taken as a whole; and, to the best of such
counsel's
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knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(vi) The Registration Statement has been declared
effective under the Securities Act, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) of the Rules and Regulations
specified in such opinion on the date specified therein and no stop order
suspending the effectiveness of the Registration Statement has been issued and,
to the knowledge of such counsel, no proceeding for that purpose is pending or
threatened by the Commission;
(vii) The Registration Statement and the Prospectus and
any further amendments or supplements thereto made by the Company prior to such
Delivery Date (except for the financial statements and financial schedules and
other financial and statistical data included therein, as to which such counsel
need express no belief) comply as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations;
(viii) The statements contained in the Prospectus under
the captions "Risk Factors- Government Regulation," "Risk Factors- Antitrust
Matters," "Description of Capital Stock," "Description of Indebtedness,"
"Certain Federal Income Tax Considerations," "Business -- Antitrust," "Business
--Federal Regulation of Radio Broadcasting," "Business- FCC Licenses,"
"Executive Compensation- Employment Agreement and Arrangements," "Executive
Compensation- Option Plan," "Executive Compensation- Limitation on Directors'
and Officers' Liability," insofar as they describe contracts, agreements or
other legal documents or they describe federal statutes, rules and regulations,
constitute a fair summary thereof;
(ix) To the best of such counsel's knowledge, there are
no contracts, arrangements or other documents which are required to be described
in the Prospectus or filed as exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations which have not been described or
filed as exhibits to the Registration Statement or incorporated therein as
permitted by the Rules and Regulations;
(x) This Agreement has been duly authorized, executed and
delivered by the Company; and each of the other documents relating to the this
Agreement to which the Company is a party has been duly authorized, executed and
delivered by the Company;
(xi) The issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company pursuant to this Agreement and
the execution, delivery and compliance by the Company with all of the provisions
of this Agreement and each of the other documents to be entered into in
connection with and the consummation of the transactions contemplated hereby and
in the Registration Statement and the Prospectus (including the issuance and
sale of the Stock and the use of proceeds from the sale of the Stock as
described under the caption "Use of Proceeds") will not conflict with or result
in a breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement, license (including FCC Licenses (as hereinafter defined)) or
instrument known to such counsel to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, nor will such actions result in any violation of the provisions of the
charter, certificate of designation, by-laws or similar governing document of
the Company or any of its subsidiaries or any New York or federal statute, rule
or regulation (including the Federal Communications Laws (as hereinafter
defined)) or any order, judgment or decree known to such counsel; and, except
for the registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state securities laws in connection with
the purchase and distribution of the Stock by
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the Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body (including
pursuant to the Communications Act of 1934, as amended and the rules,
regulations and administrative orders promulgated thereunder (collectively, the
Federal Communications Laws")) is required for the execution, delivery and
performance of this Agreement or any of the other documents to be entered into
in connection with this Agreement by the Company and the consummation of the
transactions contemplated hereby, including the issue, sale and delivery of the
Stock to be issued, sold and delivered by the Company hereunder;
(xii) Except as described in the Prospectus, to the best
of such counsel's knowledge, there are no contracts, agreements or
understandings between the Company and any person granting such person the right
to require the Company to file a registration statement under the Securities Act
with respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the Company
under the Securities Act;
(xiii) Neither the Company nor any subsidiary is an
"investment company" as defined in the Investment Company Act of 1940, as
amended;
(xiv) The Company and its subsidiaries are the holders of
the FCC licenses listed in an attachment to such opinion (the "FCC Licenses"),
all of which are in full force and effect, for the maximum term customarily
issued, with no material conditions, restrictions or qualifications other than
as described in the Prospectus, and to such counsel's knowledge such FCC
Licenses constitute all of the commercial radio station licenses necessary for
the Company and the subsidiaries to operate their radio stations as described in
the Prospectus; and
(xv) There are no published or, to such counsel's
knowledge, unpublished FCC orders, decrees or rulings outstanding against the
Company or any of its subsidiaries or any pending or threatened actions, suits
or proceedings against the Company or any of its subsidiaries by or before the
FCC that seek to revoke, or if determined adversely to the Company or any of its
subsidiaries, would have a material adverse effect on the Company and its
subsidiaries taken as whole or would result in a revocation or nonrenewal of,
any of the FCC Licenses, other than as disclosed in the Registration Statement
or Prospectus.
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of New York and the General Corporation Law of the State
of Delaware. Such opinion shall also be to the effect that (x) such counsel has
acted as counsel to the Company in connection with the preparation of the
Registration Statement and (y) based on the foregoing, no facts have come to the
attention of such counsel which lead them to believe that the Registration
Statement (except for the financial statements and financial schedules and other
financial, statistical and market data included therein, as to which such
counsel need express no belief) as of the Effective Date, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectus (except as stated above) contains any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The foregoing
opinion and statement may be qualified by a statement to the effect that such
counsel does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus (other than as set forth in clause (viii) above).
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(e) ▇▇▇▇, Scholer, Fierman, ▇▇▇▇ & Handler LLP (with respect
to Messrs. Pablo ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇ Grimalt) and such
other counsel or counsels reasonably acceptable to the Representatives (with
respect to each other Selling Stockholder listed on Schedule 2 hereto), shall
have each furnished to the Representatives its written opinion, as counsel to
each such Selling Stockholder, addressed to the Underwriters and dated the First
Delivery Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) Such Selling Stockholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the Custody
Agreement; the execution, delivery and performance of this Agreement, the Power
of Attorney and the Custody Agreement by such Selling Stockholder and the
consummation by such Selling Stockholder of the transactions contemplated hereby
and thereby will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, (i) any New York or
Federal statute, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which such Selling Stockholder
is a party or by which such Selling Stockholder is bound or to which any of the
property or assets of such Selling Stockholder is subject, (ii) if such selling
stockholder is not a natural person, the charter or by-laws, the articles of
partnership, the deed of trust or similar governing document of such Selling
Stockholder; and (iii) any order, judgment or decree known to such counsel.
Except for the registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state or foreign securities laws
in connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement, the Power of Attorney
or the Custody Agreement by such Selling Stockholder and the consummation by
such Selling Stockholder of the transactions contemplated hereby and thereby;
(ii) This Agreement has been duly authorized (if such
Selling Stockholder is not a natural person), executed and delivered by or on
behalf of such Selling Stockholder;
(iii) A Power-of-Attorney and a Custody Agreement have
been duly authorized (if such Selling Stockholder is not a natural person),
executed and delivered by such Selling Stockholder and constitute valid and
binding agreements of such Selling Stockholder, enforceable in accordance with
their respective terms;
(iv) Immediately prior to the First Delivery Date, such
Selling Stockholder had good and valid title to the shares of Stock to be sold
by such Selling Stockholder under this Agreement, free and clear of all liens,
encumbrances, equities or claims, and full right, power and authority to sell,
assign, transfer and deliver such shares to be sold by such Selling Stockholder
hereunder; and
(v) Good and valid title to the shares of Stock to be
sold by such Selling Stockholder under this Agreement, free and clear of all
liens, encumbrances, equities or claims, has been transferred to each of the
several Underwriters.
In rendering such opinion, such counsel may (i) state that its opinion
is limited to matters governed by the Federal laws of the United States of
America, the laws of the State of New York and the State of Delaware and [insert
description of law (e.g., corporate, partnership, trust, etc.) of the
jurisdiction in which the selling stockholder is organized (e.g., "the General
Corporation Law of the State of Delaware")] and (ii) in rendering the opinion in
Section 9(d)(iv) above, rely upon a certificate of such Selling Stockholder in
respect of matters of fact as to ownership of and liens, encumbrances, equities
or claims on the shares of Stock sold by such Selling Stockholder, provided that
such counsel shall
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furnish copies thereof to the Representatives and state that it believes that
both the Underwriters and it are justified in relying upon such certificate.
Such counsel shall also have furnished to the Representatives a written
statement, addressed to the Underwriters and dated the First Delivery Date, in
form and substance satisfactory to the Representatives, to the effect that (x)
such counsel has acted as counsel to such Selling Stockholder in connection with
the preparation of the Registration Statement, and (y) based on the foregoing,
no facts have come to the attention of such counsel which lead it to believe
that the Registration Statement, as of the Effective Date, contained any untrue
statement of a material fact relating to such Selling Stockholder or omitted to
state such a material fact required to be stated therein or necessary in order
to make the statements therein not misleading, or that the Prospectus contains
any untrue statement of a material fact relating to such Selling Stockholder or
omits to state such a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The foregoing opinion and statement may be
qualified by a statement to the effect that such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus.
(f) The Representatives shall have received from ▇▇▇▇▇▇ &
▇▇▇▇▇ LLP, counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(g) At the time of execution of this Agreement, the
Representatives shall have received from each of KPMG LLP and
PricewaterhouseCoopers LLP a letter, in form and substance satisfactory to the
Representatives, addressed to the Underwriters and dated the date hereof (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission and (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as of which
specified financial information is given in the Prospectus, as of a date not
more than five days prior to the date hereof), the conclusions and findings of
such firm with respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in connection with
registered public offerings.
(h) With respect to the letters of each of KPMG LLP and
PricewaterhouseCoopers LLP referred to in the preceding paragraph and delivered
to the Representatives concurrently with the execution of this Agreement (the
"initial letters"), the Company shall have furnished to the Representatives
letters (the "bring-down letters") of such accountants, addressed to the
Underwriters and dated such Delivery Date (i) confirming that they are
independent public accountants within the meaning of the Securities Act and are
in compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating,
as of the date of the bring-down letters (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more than
five days prior to the date of the bring-down letters), the conclusions and
findings of such firms with respect to the financial information and other
matters covered by the initial letters and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letters.
(i) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating that:
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(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery Date; the Company
has complied with all its agreements contained herein; and the conditions set
forth in Sections 9(a), 9(k) and 9(l) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the Effective Date,
the Registration Statement and Prospectus did not include any untrue statement
of a material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
(B) since the Effective Date no event has occurred which should have been set
forth in a supplement or amendment to the Registration Statement or the
Prospectus.
(j) Each Selling Stockholder (or the Custodian or one or more
attorneys-in-fact on behalf of the Selling Stockholders) shall have furnished to
the Representatives on the First Delivery Date a certificate, dated the First
Delivery Date, signed by, or on behalf of, such Selling Stockholder (or the
Custodian or one or more attorneys-in-fact) stating that the representations,
warranties and agreements of such Selling Stockholder contained herein are true
and correct as of the First Delivery Date and that such Selling Stockholder has
complied with all agreements contained herein to be performed by such Selling
Stockholder at or prior to the First Delivery Date.
(k) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Prospectus (A) any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus or (B) since such date there
shall not have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (A) or (B), is, in the
judgment of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(l) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating organization", as
that term is defined by the Commission for purposes of Rule 436(g)(2) of the
Rules and Regulations and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities.
(m) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange, the
Nasdaq Stock Market's National Market or in the over-the-counter market, or
trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum prices shall have
been established on any such exchange or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by Federal or
state authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving the
United States or there shall have been a declaration of a national emergency or
war by the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions (or the
effect of international conditions on the financial
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markets in the United States shall be such) as to make it, in the judgment of
the Representatives, impracticable or inadvisable to proceed with the public
offering or delivery of the Stock being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(n) The Nasdaq Stock Market's National Market shall have
approved the Stock for listing, subject only to official notice of issuance.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
Section 10. Indemnification and Contribution.
(a) The Company and Spanish Broadcasting System, Inc., a New
Jersey corporation, Spanish Broadcasting System of Greater Miami, Inc., a
Delaware corporation, Spanish Broadcasting System of Illinois, Inc., a Delaware
corporation, Spanish Broadcasting System of San Antonio, Inc., a Delaware
corporation (collectively, the "Principal Subsidiaries"), jointly and severally,
shall indemnify and hold harmless each Underwriter, its officers and employees
and each person, if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Stock), to which that Underwriter, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, (ii) the omission or alleged omission to state
in any Preliminary Prospectus, the Registration Statement or the Prospectus, or
in any amendment or supplement thereto, any material fact required to be stated
therein or necessary to make the statements therein not misleading, or (iii) any
act or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company and the Principal
Subsidiaries shall not be liable under this clause (iii) to the extent that it
is determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct), and shall reimburse each
Underwriter and each such officer, employee or controlling person promptly upon
demand for any legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company and
the Principal Subsidiaries shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or in any such amendment or supplement, in reliance upon and
in conformity with written information concerning such Underwriter furnished to
the Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein, which information consists solely of the
information specified in Section 10(f); provided, further however, that the
Company and the Principal Subsidiaries shall not be liable to any Underwriter
under the agreement in this subsection 10(a) with respect to any Prospectus to
the extent that any such loss, claim, damage or liability of such Underwriter
results from the fact that such Underwriter sold Stock to a person as to whom
there was not sent or given, at or prior to written confirmation of such sale, a
copy of the Prospectus or of the Prospectus as then amended or supplemented in
any case where such delivery is required by the Securities Act if the Company
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previously furnished copies thereof in the quantity requested in accordance with
Section 6(c) hereof to such Underwriter and the loss, claim, damage or liability
of such Underwriter results from an untrue statement or omission of a material
fact contained in the Prospectus and corrected in the Prospectus or the
Prospectus as then amended or supplemented. The foregoing indemnity agreement is
in addition to any liability which the Company and the Principal Subsidiaries
may otherwise have to any Underwriter or to any officer, employee or controlling
person of that Underwriter.
The Company and the Principal Subsidiaries, jointly and severally,
agree to indemnify and hold harmless ▇▇▇▇▇▇ Brothers Inc. (including its
officers and employees) and each person, if any, who controls ▇▇▇▇▇▇ Brothers
Inc. within the meaning of the Securities Act ("▇▇▇▇▇▇ Brothers Entities"), from
and against any loss, claim, damage or liability or any action in respect
thereof to which any of the ▇▇▇▇▇▇ Brothers Entities may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage, liability
or action arises out of, or is based upon (i) the failure of any Participant to
pay for and accept delivery of the Directed Stock sold pursuant to the Directed
Stock Program which, immediately following the effectiveness of the Registration
Statement, were subject to a properly confirmed agreement to purchase or (ii)
the Directed Stock Program, provided that, the Company and the Principal
Subsidiaries shall not be responsible under this subparagraph (ii) for any loss,
claim, damage, liability or action that is finally judicially determined to have
resulted from the gross negligence or willful misconduct of the ▇▇▇▇▇▇ Brothers
Entities. The Company and the Principal Subsidiaries, jointly and severally,
shall reimburse the ▇▇▇▇▇▇ Brothers Entities promptly upon demand for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred.
(b) Each of the Selling Stockholders, severally and not
jointly, shall indemnify and hold harmless each Underwriter, its officers and
employees, and each person, if any, who controls any Underwriter within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Stock), to which that Underwriter, officer, employee or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, but only to the extent
that the untrue statement or alleged untrue statement was made in reliance upon
and in conformity with information furnished to the Company by such Selling
Stockholder, (ii) the omission or alleged omission to state in any Preliminary
Prospectus, Registration Statement or the Prospectus, or in any amendment or
supplement thereto, any material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that the
omission or alleged omission was made in reliance upon and in conformity with
information furnished to the Company by such Selling Stockholder, or (iii) any
act or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Selling Stockholders
shall not be liable under this clause (iii) to the extent that it is determined
in a final judgment by a court of competent jurisdiction that such loss, claim,
damage, liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter and each
such officer, employee or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by that Underwriter, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Selling Stockholders shall
not be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or
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alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or in any such amendment or supplement, in reliance upon and
in conformity with written information concerning such Underwriter furnished to
the Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein which information consists solely of the
information specified in Section 10(f); provided, however, that in no event
shall any Selling Stockholder be liable in an amount in excess of the gross
proceeds to be received by such Selling Stockholder from the sale of Stock
hereunder. The foregoing indemnity agreement is in addition to any liability
which the Selling Stockholders may otherwise have to any Underwriter or any
officer, employee or controlling person of that Underwriter.
(c) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees, each of its
directors, and each person, if any, who controls the Company within the meaning
of the Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company or any
such director, officer or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or(ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, any material fact required to be stated therein or necessary
to make the statements therein not misleading, but in each case only to the
extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of that Underwriter specifically for inclusion
therein, and shall reimburse the Company and any such director, officer or
controlling person for any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Underwriter may
otherwise have to the Company or any such director, officer, employee or
controlling person.
(d) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company, the Principal Subsidiaries or the Selling Stockholders
under this Section 10 if, in the reasonable judgment of the Representatives, it
is advisable for the Representatives and those Underwriters, officers, employees
and controlling persons to be jointly represented by separate
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counsel, and in that event the fees and expenses of such separate counsel shall
be paid by the Company, the Principal Subsidiaries or the Selling Stockholders,
as the case may be. Notwithstanding anything contained herein to the contrary,
if indemnity may be sought pursuant to Section 10(a) hereof in respect of such
claim or action, then in addition to such separate firm for the indemnified
parties, the indemnifying party shall be liable for the fees and expenses of not
more than one separate firm (in addition to any local counsel) for the ▇▇▇▇▇▇
Brothers Entities for the defense of any loss, claim, damage, liability or
action arising out of the Directed Stock Program. No indemnifying party shall
(i) without the prior written consent of the indemnified parties (which consent
shall not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(e) If the indemnification provided for in this Section 10
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 10(a), 10(b) or 10(c) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company, the Principal Subsidiaries and the Selling
Stockholders on the one hand and the Underwriters on the other from the offering
of the Stock or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, the Principal Subsidiaries and the Selling Stockholders on
the one hand and the Underwriters on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company, the Principal Subsidiaries and the
Selling Stockholders on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company, the Principal Subsidiaries
and the Selling Stockholders, on the one hand, and the total underwriting
discounts and commissions received by the Underwriters with respect to the
shares of the Stock purchased under this Agreement, on the other hand, bear to
the total gross proceeds from the offering of the shares of the Stock under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Principal Subsidiaries and the Selling Stockholders or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
For purposes of the preceding two sentences, the net proceeds deemed to be
received by the Company shall be deemed to be also for the benefit of the
Principal Subsidiaries and information supplied by the Company shall also be
deemed to have been supplied by the Principal Subsidiaries. The Company, the
Principal Subsidiaries and the Selling Stockholders and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
Section were to be determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section shall be deemed to include, for
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purposes of this Section 10(e), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 10(e), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Stock underwritten by it and distributed
to the public was offered to the public exceeds the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters' obligations
to contribute as provided in this Section 10(e) are several in proportion to
their respective underwriting obligations and not joint.
(f) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of the
Stock by the Underwriters set forth on the cover page of, the legend concerning
over-allotments on the inside front cover page of and the concession and
reallowance figures appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
Section 11. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1 or
Schedule 2 hereto bears to the total number of shares of the Firm Stock set
opposite the names of all the remaining non-defaulting Underwriters in Schedule
1 or Schedule 2 hereto; provided, however, that the remaining non-defaulting
Underwriters shall not be obligated to purchase any of the Stock on such
Delivery Date if the total number of shares of the Stock which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such date exceeds
9.09% of the total number of shares of the Stock to be purchased on such
Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of shares of the Stock which
it agreed to purchase on such Delivery Date pursuant to the terms of Section 3.
If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Stock to be purchased
on such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase the shares which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase, and of the Company to sell, the
Option Stock) shall terminate without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Stockholders, except
that the Company will continue to be liable for the payment of expenses to the
extent set forth in Sections 8 and 13. As used in this Agreement, the term
"Underwriter" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 or 2 hereto who, pursuant
to this Section 11, purchases which a defaulting Underwriter agreed but failed
to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
underwriters are obligated or agree to purchase the Stock of a defaulting or
withdrawing Underwriter, either the Representatives or the Company may postpone
the Delivery Date for up to seven full business days in order to effect any
changes that in the
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opinion of counsel for the Company or counsel for the Underwriters may be
necessary in the Registration Statement, the Prospectus or in any other document
or arrangement.
Section 12. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company and the Selling Stockholders prior to delivery of and payment for the
Firm Stock if, prior to that time, any of the events described in Sections 9(k),
9(l) or 9(m), shall have occurred or if the Underwriters shall decline to
purchase the Stock for any reason permitted under this Agreement.
Section 13. Reimbursement of Underwriters' Expense. If the Company or
any Selling Stockholder shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or the Selling Stockholders to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company or the Selling Stockholders is
not fulfilled, the Company and the Selling Stockholders, jointly and severally,
will reimburse the Underwriters for all reasonable out-of-pocket expenses
(including fees and disbursements of counsel) incurred by the Underwriters in
connection with this Agreement and the proposed purchase of the Stock, and upon
demand the Company and the Selling Stockholders, jointly and severally, shall
pay the full amount thereof to the Representatives. If this Agreement is
terminated pursuant to Section 11 by reason of the default of one or more
Underwriters, neither the Company nor the Selling Stockholders shall be
obligated to reimburse any defaulting Underwriter on account of those expenses.
Section 14. Notices, Etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate Department
(Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy, in the case of any notice pursuant to Section
10(d), to the Director of Litigation, Office of the General Counsel, ▇▇▇▇▇▇
Brothers Inc., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇;
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, ___________________ Attention: [ ]
(Fax: ); provided, however, that any notice to an Underwriter
pursuant to Section 10(d) shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its acceptance
telex to the Representatives, which address will be supplied to any other party
hereto by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect at the time of receipt thereof. The
Company shall be entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Underwriters by ▇▇▇▇▇▇ Brothers Inc. on
behalf of the Representatives.
(c) if to any Selling Stockholder, shall be delivered or sent
by mail, telex or facsimile transmission to such Selling Stockholder at the
address set forth on Schedule 3 hereto.
Section 15. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company,
the Selling Stockholders and their respective personal representatives and
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of the Company and the Selling Stockholders contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters
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contained in Section 8(b) of this Agreement shall be deemed to be for the
benefit of directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 13, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
Section 16. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Principal Subsidiaries, the
Selling Stockholders and the Underwriters contained in this Agreement or made by
or on behalf on them, respectively, pursuant to this Agreement, shall survive
the delivery of and payment for the Stock and shall remain in full force and
effect, regardless of any investigation made by or on behalf of any of them or
any person controlling any of them.
Section 17. Definition of the Terms "Business Day" and "subsidiary".
For purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
Section 18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
Section 19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
Section 20. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement between the
Company, the Principal Subsidiaries, the Selling Stockholders and the
Underwriters, please indicate your acceptance in the space provided for that
purpose below.
Very truly yours,
SPANISH BROADCASTING SYSTEM, INC.
By
----------------------------------------
Name:
Title:
SPANISH BROADCASTING SYSTEM, INC.
(a NEW JERSEY CORPORATION)
By
----------------------------------------
Name:
Title:
SPANISH BROADCASTING SYSTEM OF GREATER
MIAMI, INC.
By
----------------------------------------
Name:
Title:
SPANISH BROADCASTING SYSTEM OF
ILLINOIS, INC.
By
----------------------------------------
Name:
Title:
SPANISH BROADCASTING SYSTEM OF
SAN ANTONIO, INC.
By
----------------------------------------
Name:
Title:
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The Selling Stockholders names in Schedule
2 to this Agreement
By
----------------------------------------
Attorney-in-Fact
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
CIBC WORLD MARKETS CORP.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By ▇▇▇▇▇▇ BROTHERS INC.
By
-----------------------------------
Authorized Representative
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SCHEDULE 1
Number of Shares of Firm
Underwriters Stock to be Purchased
------------ ---------------------
▇▇▇▇▇▇ Brothers Inc............................................
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated...........................................
CIBC World Markets Corp........................................
[Names of other Underwriters]
Total.......................................................... 22,255,200
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SCHEDULE 2
Number of Shares of Firm
Selling Stockholder Address Stock to be Purchased
------------------- ------- ---------------------
Pablo ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. 750,000
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. 1,750,000
▇▇▇▇ Grimalt 65,000
The Mainstay Funds, on Behalf of its 1,614,400
High Yield Corporate Bond Fund Series
The Mainstay VP Series Fund, Inc., 107,950
on Behalf of its High Yield
Corporate Bond Portfolio
Northstar High Total Return Fund 250,000
Northstar Galaxy Trust High Yield 5,000
Bond Portfolio
Portfolio, Inc.
Vail 30,000
Omaha Public School Employees 30,000
Retirement System
City of New York Police Pension Fund 30,000
City of New York Employees 30,000
Retirement System
CSAM Strategic Global Income Fund 30,000
Credit Suisse Asset Management 30,000
Income Fund
▇▇▇▇▇ Intermediate Investment Grade 5,050
Bond Fund
Total................................ 4,727,400
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30
Exhibit A
STOCKHOLDERS EXECUTING LOCK-UP LETTERS
Pablo ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇-▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ Grimalt
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Exhibit B
LOCK-UP LETTER AGREEMENT
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
CIBC WORLD MARKETS CORP.
As Representatives of the several
Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
The undersigned understands that you and certain other firms propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (the "Underwriters") of shares (the
"Shares") of Class A Common Stock, par value $.0001 per share (the "Common
Stock"), of Spanish Broadcasting System, Inc., a Delaware corporation (the
"Company"), and that the Underwriters propose to reoffer the Shares to the
public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of ▇▇▇▇▇▇
Brothers Inc., on behalf of the Underwriters, the undersigned will not, directly
or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or
enter into any transaction or device that is designed to, or could be expected
to, result in the disposition by any person at any time in the future of) any
shares of Common Stock (including, without limitation, shares of Common Stock
that may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations of the Securities and Exchange Commission and
shares of Common Stock that may be issued upon exercise of any option or
warrant) or securities convertible into or exchangeable for Common Stock (other
than the Shares) owned by the undersigned on the date of execution of this
Lock-Up Letter Agreement or on the date of the completion of the Offering, or
(2) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership
of such shares of Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, for a period of 180 days after the date of the
final Prospectus relating to the Offering.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares, we will be released from our obligations
under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
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Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriters.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
By:
-----------------------------
Name:
Title:
Dated:
--------------------
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