EXHIBIT 1.1
$405,000,000
GRANITE BROADCASTING CORPORATION
9 3 / 4 %
Senior Secured Notes due 2010
Purchase Agreement
December 8, 2003
J.P. Morgan
Securities Inc.
As Representative of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
Granite
Broadcasting Corporation, a Delaware corporation (the "
Company "), proposes to issue and sell to the several
Initial Purchasers listed in Schedule 1 hereto (the "
Initial Purchasers "), for whom you are acting as
representative (the " Representative "), $405,000,000
principal amount of its 9 3 / 4 % Senior
Secured Notes due 2010 (the " Notes "). The Notes will be
issued pursuant to an Indenture to be dated as of December 22,
2003 (the " Indenture ") among the Company, the guarantors
listed in Schedule 2 hereto (the " Guarantors ")
and The Bank of New York, as trustee (the " Trustee "), and
will be guaranteed on a senior secured basis by each of the
Guarantors (the " Guarantees ," and together with the Notes,
the " Securities ").
The
Securities will be sold to the Initial Purchasers without being
registered under the Securities Act of 1933, as amended (the "
Securities Act "), in reliance upon an exemption therefrom.
The Company has prepared a preliminary offering memorandum dated
November 24, 2003 (the " Preliminary Offering
Memorandum ") and will prepare an offering memorandum dated the
date hereof (the " Offering Memorandum ") setting forth
information concerning the Company, the Securities and the
collateral securing the Notes. Copies of the Preliminary Offering
Memorandum have been, and copies of the Offering Memorandum will
be, delivered by the Company to the Initial Purchasers pursuant to
the terms of this Agreement. The Company hereby confirms that it
has authorized the use of the Preliminary Offering Memorandum and
the Offering Memorandum in connection with the offering and resale
of the Securities by the Initial Purchasers in the manner
contemplated by this Agreement. Capitalized terms used but not
defined herein shall have the meanings given to such terms in the
Offering Memorandum.
Holders
of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits
of a Registration Rights Agreement, to be dated the Closing Date
(as defined below) and substantially in the form attached hereto as
Exhibit I (the " Registration Rights Agreement
"), pursuant to which the Company and the Guarantors will agree to
file one or more registration statements with the Securities and
Exchange Commission (the " Commission ") providing for the
registration under the Securities Act of the Securities or the
Exchange Securities referred to (and as defined) in the
Registration Rights Agreement.
Except
as otherwise provided herein, the Securities will be secured by
liens on certain real property of the Company and the Guarantors
set forth on Schedule 3 (each, a " Mortgaged
Property " and together, the " Mortgaged Properties ")
and certain other assets of the Company as described in the
Offering Memorandum (the " Pledged Collateral "), and
documented by the mortgages, deeds of trust or deeds to secure debt
(or assignments of certain existing mortgages and deeds of trust to
the Trustee and amendments, modifications or restatements thereof)
(the " Mortgages ") evidencing the liens on the Mortgaged
Properties and by the other documents set forth on
Schedule 4 evidencing and/or relating to
the liens on the Pledged
Collateral (together with the Mortgages, the " Collateral
Documents "). Except as otherwise provided herein, the
collateral pledged to secure the Securities will consist of
substantially all of the assets of the Company and its
subsidiaries, subject to limitations imposed by the Federal
Communications Commission (the " FCC ") or any other
applicable law; in any event, the collateral will include all of
the assets of the Company and its subsidiaries securing the Credit
Agreement (as defined below). The issuance and sale of the
Securities, the use of proceeds thereof and the securing of the
Securities pursuant to the Collateral Documents are sometimes
collectively referred to herein as the " Transactions
."
On
the Closing Date (as defined herein), the Company will use the
proceeds from the sale of the Securities to (i) repay all
borrowings under the Amended and Restated Credit Agreement, dated
as of April 30, 2002, among the Company, Goldman Sachs Credit
Partners L.P., as administrative agent and collateral agent, and
the lenders party thereto (as amended, the " Credit
Agreement "), (ii) to redeem the Company's 10 3
/ 8 % senior subordinated notes due May 15,
2005 and its 9 3 / 8 % senior
subordinated notes due December 1, 2005 (collectively, the "
Redeemed Notes "), (iii) to make payments pursuant to a
tender offer for all of its outstanding 8 7 /
8 % senior subordinated notes due May 15,
2008 (the " 8 7 / 8 %
Notes ") and
(iv) for any other purpose described in the "Use of Proceeds"
in the Offering Memorandum.
The
Company hereby confirms its agreement with the several Initial
Purchasers concerning the purchase and resale of the Securities, as
follows:
1.
Purchase and Resale of the
Securities. (a) The Company agrees
to issue and sell the Notes to the several Initial Purchasers as
provided in this Agreement, and each Initial Purchaser, on the
basis of the representations, warranties and agreements set forth
herein and subject to the conditions set forth herein, agrees,
severally and not jointly, to purchase from the Company the
respective principal amount of Notes set forth opposite such
Initial Purchaser's name in Schedule 1 hereto at a
price equal to 97.25% of the gross proceeds thereof set forth
opposite such Initial Purchaser's name on Schedule 1
hereto plus accrued interest, if any, from December 22, 2003
to the Closing Date. The Company will not be obligated to deliver
any of the Notes except upon payment for all the Notes to be
purchased as provided herein.
(b) The
Company understands that the Initial Purchasers intend to offer the
Securities for resale on the terms set forth in the Offering
Memorandum. Each Initial Purchaser, severally and not jointly,
represents, warrants and agrees that:
(i) it
is a qualified institutional buyer within the meaning of
Rule 144A under the Securities Act (a " QIB ") and an
accredited investor within the meaning of Rule 501(a) under
the Securities Act;
(ii) it
has not solicited offers for, or offered or sold, and will not
solicit offers for, or offer or sell, the Securities by means of
any form of general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D under the
Securities Act (" Regulation D ") or in any manner
involving a public offering within the meaning of Section 4(2)
of the Securities Act; and
(iii) it
has not solicited offers for, or offered or sold, and will not
solicit offers for, or offer or sell, the Securities as part of
their initial offering except:
(A) within
the United States to persons whom it reasonably believes to be QIBs
in transactions pursuant to Rule 144A under the Securities Act
(" Rule 144A ") and in connection with each such sale,
it has taken or will take reasonable steps to ensure that the
purchaser of the Securities is aware that such sale is being made
in reliance on Rule 144A; or
(B) in
accordance with the restrictions set forth in Annex A
hereto.
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(c) Each
Initial Purchaser acknowledges and agrees that the Company and, for
purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Sections 5(f) and 5(g), counsel for the Company and
counsel for the Initial Purchasers, respectively, may rely upon the
accuracy of the representations and warranties of the Initial
Purchasers, and compliance by the Initial Purchasers with their
agreements, contained in paragraph (b) above (including
Annex A hereto), and each Initial Purchaser hereby consents
to such reliance.
(d) The
Company acknowledges and agrees that the Initial Purchasers may
offer and sell Securities to or through any affiliate of an Initial
Purchaser and that any such affiliate may offer and sell Securities
purchased by it to or through any Initial Purchaser.
2.
Payment and Delivery.
(i) Payment for and delivery of the
Securities will be made at the offices of Cahill Gordon &
Reindel llp at 10:00 A.M., New York City time, on
December 22, 2003, or at such other time or place on the same
or such other date, not later than the fifth business day
thereafter, as the Representative and the Company may agree upon in
writing. The time and date of such payment and delivery is referred
to herein as the " Closing Date ".
(a) Payment
for the Securities shall be made by wire transfer in immediately
available funds to the account(s) specified by the Company to the
Representative against delivery to the nominee of The Depository
Trust Company, for the account of the Initial Purchasers, of one or
more global notes representing the Securities (collectively, the "
Global Note "), with any transfer taxes payable in
connection with the sale of the Securities duly paid by the
Company. The Global Note will be made available for inspection by
the Representative not later than 1:00 P.M., New York City
time, on the business day prior to the Closing Date.
3.
Representations and Warranties of the
Company and the Guarantors. The Company
and the Guarantors jointly and severally represent and warrant to
each Initial Purchaser that:
(a)
Offering Memorandum.
The Preliminary Offering Memorandum, as of
its date, did not, and the Offering Memorandum, in the form first
used by the Initial Purchasers to confirm sales of the Securities
and as of the Closing Date, will not, contain any untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided that the Company and the Guarantors make no
representation or warranty with respect to any statements or
omissions made in reliance upon and in conformity with information
relating to any Initial Purchaser furnished to the Company in
writing by such Initial Purchaser through the Representative
expressly for use in the Preliminary Offering Memorandum and the
Offering Memorandum.
(b)
Financial Statements.
The financial statements and the related
notes thereto included in the Preliminary Offering Memorandum and
the Offering Memorandum present fairly the financial position of
the Company and its subsidiaries as of the dates indicated and the
results of their operations and the changes in their cash flows for
the periods specified; such financial statements have been prepared
in conformity with generally accepted accounting principles applied
on a consistent basis throughout the periods covered thereby,
except as otherwise disclosed in the notes to such financial
statements; and the other financial information included in the
Preliminary Offering Memorandum and the Offering Memorandum has
been derived from the accounting records of the Company and its
subsidiaries and presents fairly the information shown
thereby.
(c)
No Material Adverse Change.
Since the date of the most recent financial
statements of the Company included in the Preliminary Offering
Memorandum and the Offering Memorandum, (i) there has not been
any change in the capital stock or long-term debt of the Company or
any of its subsidiaries, or any dividend or distribution of any
kind declared, set aside for payment, paid or made by the Company
on any class of capital stock, (other than the Company's
October 30, 2003 borrowing of the remaining $25 million
under its senior credit agreement, the October 1, 2003 accrual
of a
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semiannual dividend on the
outstanding shares of the Company's Preferred Stock and the
exercise of certain employee stock options and awards) or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the business, properties,
management, financial position, results of operations or prospects
of the Company and its subsidiaries taken as a whole;
(ii) neither the Company nor any of its subsidiaries has
entered into any transaction or agreement that is material to the
Company and its subsidiaries taken as a whole or incurred any
liability or obligation, direct or contingent, that is material to
the Company and its subsidiaries taken as a whole; and
(iii) neither the Company nor any of its subsidiaries has
sustained any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor disturbance or dispute or any action,
order or decree of any court or arbitrator or governmental or
regulatory authority, except in each case as otherwise specifically
disclosed in the Preliminary Offering Memorandum and the Offering
Memorandum.
(d)
Organization and Good Standing.
The Company and each of its subsidiaries
have been duly organized and are validly existing and in good
standing under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in good
standing 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 to conduct
the businesses in which they are engaged, except where the failure
to be so qualified or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on
the business, properties, management, financial position, results
of operations or prospects of the Company and its subsidiaries
taken as a whole or on the performance by the Company and the
Guarantors of their obligations under the Securities and the
Guarantees (a " Material Adverse Effect "). For the
avoidance of doubt and without limiting the foregoing, for the
purposes of this Agreement, any default, termination or violation
(or receipt of notice of any such default, termination or
violation) of any network affiliation agreement, FCC License (as
defined herein) or material programming agreement shall constitute
a Material Adverse Effect. The Company does not own or control,
directly or indirectly, any corporation, association or other
entity other than the subsidiaries listed in Schedule 2
to this Agreement.
(e)
Capitalization.
The Company has an authorized
capitalization as set forth in the Preliminary Offering Memorandum
and the Offering Memorandum under the heading "Capitalization"; and
all the outstanding shares of capital stock or other equity
interests of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable
and are owned directly or indirectly by the Company, free and clear
of any lien, charge, encumbrance, security interest, restriction on
voting or transfer or any other claim of any third party (other
than liens and security interests created in connection with the
Credit Agreement, all of which shall be released as of the Closing
Date, restrictions under the 8 7 / 8 %
indenture, restrictions under the 10 3 /
8 % indenture, restrictions under the 9
3 / 8
% indenture and restrictions on
transfer imposed by FCC requirements).
(f)
Due Authorization.
The Company and each of the Guarantors have
full right, power and authority to execute and deliver this
Agreement, the Securities, the Indenture (including each Guarantee
set forth therein), the Exchange Securities, the Registration
Rights Agreement and each of the Collateral Documents
(collectively, the " Transaction Documents ") and to perform
their respective obligations hereunder and thereunder; and all
action required to be taken for the due and proper authorization,
execution and delivery of each of the Transaction Documents by the
Company and each of the Guarantors signatory thereto and the
consummation of the transactions contemplated thereby by such
parties has been duly and validly taken.
(g)
The Indenture.
The Indenture has been duly authorized by
the Company and each of the Guarantors and, when duly executed and
delivered in accordance with its terms by each of the parties
thereto, will constitute a valid and legally binding agreement of
the Company and each of the Guarantors enforceable against the
Company and each of the Guarantors in accordance with its
terms,
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except as enforceability may be
limited by applicable bankruptcy, fraudulent conveyance or
transfer, insolvency or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating to
enforceability (collectively, the " Enforceability
Exceptions "); and on the Closing Date, the Indenture will
conform in all material respects to the requirements of the Trust
Indenture Act of 1939, as amended (the " Trust Indenture Act
"), and the rules and regulations of the Commission applicable to
an indenture that is qualified thereunder.
(h)
The Notes and the Guarantees.
The Notes have been duly authorized by the
Company and, when duly executed, authenticated, issued and
delivered as provided in the Indenture and paid for as provided
herein, will be duly and validly issued and outstanding and will
constitute valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms,
subject to the Enforceability Exceptions, and will be entitled to
the benefits of the Indenture; and the Guarantees have been duly
authorized by each of the Guarantors and, when the Notes have been
duly executed, authenticated, issued and delivered by the Company
as provided in the Indenture and paid for as provided herein, will
be valid and legally binding obligations of each of the Guarantors,
enforceable against each of the Guarantors in accordance with their
terms, subject to the Enforceability Exceptions, and will be
entitled to the benefits of the Indenture.
(i)
The Exchange Securities.
On the Closing Date, the Exchange
Securities (including the related guarantees) will have been duly
authorized by the Company and each of the Guarantors and, when duly
executed, authenticated, issued and delivered by the Company as
contemplated by the Registration Rights Agreement, will be duly and
validly issued and outstanding and will constitute valid and
legally binding obligations of the Company, as issuer, and each of
the Guarantors, as guarantor, enforceable against the Company and
each of the Guarantors in accordance with their terms, subject to
the Enforceability Exceptions, and will be entitled to the benefits
of the Indenture and Collateral Documents.
(j)
Purchase and Registration Rights
Agreements. This Agreement has been
duly authorized, executed and delivered by the Company and each of
the Guarantors; and the Registration Rights Agreement has been duly
authorized by the Company and each of the Guarantors and, when duly
executed and delivered in accordance with its terms by each of the
parties thereto, will constitute a valid and legally binding
agreement of the Company and each of the Guarantors enforceable
against the Company and each of the Guarantors in accordance with
its terms, subject to the Enforceability Exceptions, and except
that rights to indemnity and contribution thereunder may be limited
by applicable law and public policy.
(k)
The Collateral Documents.
Each Collateral Document has been duly
authorized, executed and delivered, to the extent a party thereto,
by the Company and each of the Guarantors and each such Collateral
Document constitutes a valid and legally binding agreement of such
parties enforceable against such parties in accordance with its
terms, subject to the Enforceability Exceptions. The Mortgages,
once executed and delivered in connection with the sale of the
Securities and when properly recorded and indexed with the proper
governmental authorities (together with payment of the appropriate
filing or recording fees and any applicable taxes) and the fixture
filings when delivered and filed as required by law to perfect a
security interest with respect to fixtures in the real property
subject to each such Mortgage, will create, in favor of the Trustee
for the benefit of the Secured Parties (as defined in the
Collateral Documents), including the Trustee on behalf of the
holders of the Notes, (i) valid and enforceable mortgage liens
on such real property (subject to the Enforceability Exceptions)
and (ii) perfected security interests in such fixtures or
other personal property subject only to the Permitted Collateral
Liens (as defined under the caption "Description of notes" in the
Preliminary Offering Memorandum and the Offering Memorandum). The
other Collateral Documents, once executed and delivered in
connection with the sale of the Securities, will create in favor of
the Trustee for the benefit of the Secured Parties, including the
Trustee on behalf of the holders of the Securities, valid and
enforceable security interests in the rights of the Company in the
personal
5
property in which a security
interest is purported to be granted under the Collateral Documents
and, upon the filing of appropriate Uniform Commercial Code
financing statements and the taking of the other actions described
in the Collateral Documents, the security interests in the rights
of the Company in such personal property will be perfected subject
only to Permitted Liens (as defined under the caption "Description
of notes" in the Preliminary Offering Memorandum and the Offering
Memorandum).
(l)
Transfer of Collateral.
The Company and the Guarantors collectively
own, have rights in or have the power to transfer rights in the
Collateral, free and clear of any Liens other than (i) the
security interests granted pursuant to the Collateral Documents and
(ii) Liens expressly permitted to exist on the Collateral
under the Indenture.
(m)
Pledged Stock.
All of the Pledged Stock (as defined in the
Collateral Documents) is certificated and exists as of the date
hereof.
(n)
Descriptions of the Transaction
Documents. Each Transaction Document
conforms in all material respects to the description thereof, if
any, contained in the Preliminary Offering Memorandum and the
Offering Memorandum.
(o)
No Violation or Default.
Neither the Company nor any of its
subsidiaries is (i) in violation of its charter or by-laws or
similar organizational documents; (ii) in default, and no
event has occurred that, 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, FCC License,
network affiliation agreement, programming 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; or (iii) in
violation of any law or statute or any judgment, order, rule or
regulation (including, without limitation, the Communications Act
of 1934, as amended by the Telecommunications Act of 1996 (the "
Communications Act "), and the rules and regulations of the
FCC thereunder) of any court or arbitrator or governmental or
regulatory authority, except, in the case of clauses (ii) and
(iii) above, for any such default or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.
To the knowledge of the Company or any Guarantor, none of the
facilities used in connection with the Company's or any of its
subsidiaries' television broadcasting operations (including,
without limitation, the transmitter and tower sites owned or used
by the Company or any subsidiary thereof) violates in any material
respect the provisions of any applicable building codes, fire
regulations, building restrictions or other governmental
ordinances, orders or regulations and each such facility is zoned
so as to permit the commercial uses intended by the owner or
occupier thereof and there are no outstanding variances or special
use permits materially affecting any of the present uses thereof by
the Company or its subsidiaries.
(p)
No Conflicts.
The execution, delivery and performance by
the Company and each of the Guarantors of each of the Transaction
Documents to which each is a party, the issuance and sale of the
Securities (including the Guarantees) and compliance by the Company
and each of the Guarantors with the terms thereof and the
consummation of the transactions contemplated by the Transaction
Documents (including, without limitation, the execution, delivery
and performance of the Collateral Documents) will not
(i) conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement, FCC License, network affiliation agreement,
material programming 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, (ii) result in any violation of the provisions of the
charter or by-laws or similar organizational documents of the
Company or any of
6
its subsidiaries or
(iii) result in the violation of any law or statute or any
judgment, order, rule or regulation (including, without limitation,
the Communications Act and the rules and regulations of the FCC
thereunder) of any court or arbitrator or governmental or
regulatory authority, except (x) in the case of clauses
(i) and (iii) above, for any such conflict, breach or
violation that would not, individually or in the aggregate, have a
Material Adverse Effect and (y) in the case of clause (i)
above, for those liens in favor of the Senior Secured Parties
pursuant to the Collateral Documents.
(q)
No Consents Required.
Assuming the accuracy of the
representations and warranties of the Initial Purchasers in
Section 1(b), no consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or
governmental or regulatory authority (including, without
limitation, the FCC) is required for the execution, delivery and
performance by the Company and each of the Guarantors of each of
the Transaction Documents to which each is a party, the issuance
and sale of the Securities (including the Guarantees) and
compliance by the Company and each of the Guarantors with the terms
thereof and the consummation of the transactions contemplated by
the Transaction Documents (including, without limitation, the
execution, delivery and performance of the Collateral Documents),
except for such consents, approvals, authorizations, orders and
registrations or qualifications as may be required (i) under
applicable state securities laws in connection with the purchase
and resale of the Securities by the Initial Purchasers,
(ii) with respect to the Exchange Securities (including the
related guarantees) under the Securities Act, the Trust Indenture
Act of 1939 and applicable state or foreign securities laws as
contemplated by the Registration Rights Agreement, (iii) the
recording, re-recording or filing of the Collateral Documents (as
appropriate under applicable law) and (iv) with respect to the
exercise of remedies under the Collateral Documents..
(r)
Legal Proceedings.
Except as described in the Preliminary
Offering Memorandum and the Offering Memorandum, there are no
legal, governmental or regulatory investigations, actions, suits or
proceedings pending to which the Company or any of its subsidiaries
is or may be a party or to which any property of the Company or any
of its subsidiaries is or may be the subject that, individually or
in the aggregate, if determined adversely to the Company or any of
its subsidiaries, would reasonably be expected to have a Material
Adverse Effect; and to the best knowledge of the Company and each
of the Guarantors, no such investigations, actions, suits or
proceedings are threatened or contemplated by any governmental or
regulatory authority or threatened by others.
(s)
Independent Accountants.
Ernst & Young LLP, who have
certified certain financial statements of the Company and its
subsidiaries are independent public accountants with respect to the
Company and its subsidiaries within the meaning of Rule 101 of
the Code of Professional Conduct of the American Institute of
Certified Public Accountants and its interpretations and rulings
thereunder.
(t)
Title to Real and Personal Property.
The Company and its subsidiaries have good
and marketable title in fee simple to, or have valid rights to
lease or otherwise use, all items of real and personal property
that are material to the respective businesses of the Company and
its subsidiaries (including, without limitation, all real property
and personal property to be mortgaged or in which a security
interest is to be granted pursuant to the Collateral Documents and
all leased real property to be mortgaged pursuant to the
Mortgages), in each case free and clear of all liens, encumbrances,
claims and defects and imperfections of title except those that
(i) do not materially interfere with the use made and proposed
to be made of such property by the Company and its subsidiaries,
(ii) could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect or (iii) exist
under the Credit Agreement (which shall be released or terminated
as of the Closing Date or substantially concurrent therewith);
provided, however , in the case of all items of real and
personal property that constitute Collateral, only those liens,
encumbrances, claims and defects and imperfections of title that
constitute Permitted Collateral Liens (as defined under the caption
"Description of notes" in the Preliminary Offering Memorandum and
the Offering Memorandum) shall be permitted against the
Collateral.
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(u)
Title to Intellectual Property.
The Company and its subsidiaries own or
possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark
registrations, service mark registrations, copyrights, licenses for
intellectual property and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) necessary for the conduct of
their respective businesses; and the conduct of their respective
businesses does not conflict in any material respect with any such
rights of others, and the Company and its subsidiaries have not
received any notice of any claim of infringement of or conflict
with any such rights of others.
(v)
Collateral.
The collateral pledged to secure the
Securities consists of substantially all of the assets of the
Company and its subsidiaries, subject to limitations imposed by the
FCC or any other applicable law; in any event, the Collateral will
include all of the assets of the Company and its subsidiaries
securing the Credit Agreement.
(w)
FCC Licenses and Approvals.
(i) The
Company and each of its subsidiaries has all requisite power and
authority and necessary licenses, authorizations, waivers and
permits (the " FCC Licenses ") required under the
Communications Act or federal or state laws to own and operate its
properties and to carry on its businesses as now conducted and as
proposed to be conducted.
(ii) Each
such FCC License which is materially necessary to the operation of
the business of the Company or any of its subsidiaries is validly
issued and in full force and effect and constitutes, in all
material respects, all of the authorization from any communications
regulatory commission, agency, department, board or authority
(including, without limitation, the FCC) necessary for the
operation of such Person's business in the same manner as it is
presently conducted and as proposed to be conducted. The FCC
Licenses have no restrictions or qualifications (other than
standard restrictions or qualifications usually pertaining to
similar licenses) that would, singly or in the aggregate, have a
Material Adverse Effect.
(iii) Except
as disclosed in the Preliminary Offering Memorandum and the
Offering Memorandum, the Company and each of its subsidiaries has
taken all material actions and performed all of their material
obligations that are necessary to maintain such FCC Licenses
without adverse modification or impairment.
(iv) None
of the FCC Licenses requires that any present stockholder,
director, officer or employee of the Company or any subsidiary
thereof remain a stockholder or employee of such Person, or that
any transfer of control of such Person must be approved by any
public or governmental body other than the FCC.
(v) Except
as disclosed in the Preliminary Offering Memorandum and the
Offering Memorandum, neither the Company nor any of its
subsidiaries is a party to or has, nor do the Company's named
executive officers (as such term is defined under Item 402(a)(3) of
Regulation S-K) have, knowledge of any investigation, notice
of apparent liability, violation, forfeiture or other order or
complaint issued by or before any court or regulatory, including
the FCC, or of any other proceedings (other than proceedings
relating to the radio or television industries generally) which
could in any manner threaten or adversely affect the validity or
continued effectiveness of the FCC Licenses of any such
Person.
(vi) Neither
the Company nor any of its subsidiaries has any reason to believe
(other than in connection with there being no legal assurance
thereof) that the FCC Licenses held by the Company or its
subsidiaries will not be renewed in the ordinary course. The
Company and each of its subsidiaries had filed in a timely manner
all material reports, applications, documents, instruments and
information required to be filed by it pursuant to applicable rules
and regulations or requests of every regulatory body having
jurisdiction over any of its FCC Licenses and is
8
maintaining all records and information
necessary for filing such material reports, applications,
documents, instruments and information.
(vii) With
respect to any broadcast radio or television station owned by the
Company or any of its subsidiaries, each report and certification
filed with the FCC pursuant to 47 C.F.R. § 73.3615 (or any
comparable reports filed pursuant to any successor regulation)
filed by the Company or any of its subsidiaries with the FCC was
true, correct and complete in all material respects as of the date
of such filing.
(x)
Network Affiliation Agreements.
The network affiliation agreements between
each of the broadcast television stations owned or operated by the
Company, on the one hand, and each of the Networks, on the other
hand, (the " Network Affiliation Agreements ") have been
duly authorized, executed and delivered by the Company (or a wholly
owned subsidiary thereof) and constitute valid and legally binding
agreements of the respective parties thereto and the description of
such network affiliation agreements contained in the Offering
Memorandum is a fair and accurate summary thereof. The Company has
not received any notice of (or notice alleging) default,
non-compliance or future termination with respect to any Network
Affiliation Agreement. For purposes of this Agreement, "
Network " shall mean one or more of NBC, American
Broadcasting Company, CBS, Inc., WB Television Network, Fox
Broadcasting Company or United Paramount Network, or an affiliate
of any of the preceding.
(y)
Investment Company Act.
Neither the Company nor any of its
subsidiaries is, and after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as
described in the Offering Memorandum none of them will be, an
"investment company" or an entity "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations of the Commission
thereunder (collectively, " Investment Company Act
").
(z)
Taxes. The
Company and its subsidiaries have paid all material federal, state,
local and foreign taxes and filed all material tax returns required
to be paid or filed through the date hereof; and except as
otherwise disclosed in the Preliminary Offering Memorandum and the
Offering Memorandum, there is no tax deficiency that has been, or
could reasonably be expected to be, asserted against the Company or
any of its subsidiaries or any of their respective properties or
assets, which, if determined adversely to the Company or such
subsidiary would have a Material Adverse Effect.
(aa)
Licenses and Permits.
The Company and its subsidiaries possess
all licenses, certificates, permits and other authorizations issued
by, and have made all declarations and filings with, the
appropriate federal, state, local or foreign governmental or
regulatory authorities or bodies (including, without limitation,
the FCC) that are necessary for the ownership or lease of their
respective properties or the conduct of their respective businesses
as described in the Preliminary Offering Memorandum and the
Offering Memorandum, except where the failure to possess or make
the same would not, individually or in the aggregate, have a
Material Adverse Effect; and except as specifically disclosed in
the Preliminary Offering Memorandum and the Offering Memorandum,
neither the Company nor any of its subsidiaries has received notice
of any revocation or modification of any such license, certificate,
permit or authorization or has any reason to believe that any such
license, certificate, permit or authorization will not be renewed
in the ordinary course. Except as described in the Preliminary
Offering Memorandum and the Offering Memorandum, no event has
occurred that permits, or with notice or lapse of time or both
would permit, and no legal governmental proceeding has been
instituted or threatened that could cause, and the Company has not
received notice that any person alleges any conflict that could
cause, the revocation or termination of any of the FCC Licenses or
that might result in any other impairment or modification of the
rights of the Company or any of its subsidiaries thereof that in
any such case would, singly or in the aggregate, have a Material
Adverse Effect. The Company has no reason to believe that any FCC
License will not be renewed in the ordinary course.
9
(bb)
No Labor Disputes.
No labor disturbance by or dispute with
employees of the Company or any of its subsidiaries exists or, to
the best knowledge of the Company and each of the Guarantors, is
contemplated or threatened, other than those which would not be
reasonably expected to have a Material Adverse Effect.
(cc)
Compliance With ERISA.
Each employee benefit plan, within the
meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), that is maintained,
administered or contributed to by the Company or any of its
affiliates for employees or former employees of the Company and its
affiliates has been maintained in compliance with its terms and the
requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Internal
Revenue Code of 1986, as amended (the "Code"); no prohibited
transaction, within the meaning of Section 406 of ERISA or
Section 4975 of the Code, has occurred with respect to any
such plan excluding transactions effected pursuant to a statutory
or administrative exemption; and for each such plan that is subject
to the funding rules of Section 412 of the Code or
Section 302 of ERISA, no "accumulated funding deficiency" as
defined in Section 412 of the Code has been incurred, whether
or not waived, and the fair market value of the assets of each such
plan (excluding for these purposes accrued but unpaid
contributions) exceeds the present value of all benefits accrued
under such plan determined using reasonable actuarial
assumptions.
(dd)
Accounting Controls.
The Company and its subsidiaries maintain
systems of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is co
