EXHIBIT 1.1
GRAY TELEVISION, INC.
$100,000,000
9 1/4% Senior Subordinated Notes Due 2011
[FORM OF UNDERWRITING AGREEMENT]
September -, 2002
WACHOVIA SECURITIES, INC.
BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.
ALLEN & COMPANY LLC
c/o Wachovia Securities, Inc.
One Wachovia Center
301 South College Street, TW-6
Charlotte, North Carolina 28288-0602
Ladies and Gentlemen:
Gray Television, Inc. (f/k/a Gray Communications Systems,
Inc.), a Georgia corporation (the "Company"), and the Guarantors (as defined
below) hereby confirm their respective agreements with Wachovia Securities,
Inc., Banc of America Securities LLC, Deutsche Bank Securities Inc. and Allen &
Company LLC (collectively, the "Underwriters") as set forth below.
1. Securities. The Company proposes to issue and sell to
the Underwriters $100,000,000 principal amount of its 9 1/4% Senior Subordinated
Notes Due 2011 (the "Notes"). The Notes are to be issued under an indenture (the
"Base Indenture"), dated as of December 15, 2001, by and among the Company, the
Guarantors and Bankers Trust Company, which has since changed its name to
Deutsche Bank Trust Company Americas, as trustee (the "Trustee"), to be
supplemented by a supplemental indenture (the "Supplemental Indenture", and
together with the Base Indenture, the "Indenture"). The Notes will, pursuant to
the Indenture, be guaranteed (the "Guarantees", together with the Notes, the
"Securities"), jointly and severally, on an unsecured senior subordinated basis
initially by the subsidiaries of the Company listed on Schedule 2 hereto (each,
a "Guarantor" and, collectively, the "Guarantors"). This Agreement and the
Indenture are hereinafter collectively referred to as the "Transaction
Documents".
The Company and Stations Holding Company, Inc. ("Stations"), a
Delaware corporation and parent company of Benedek Broadcasting Corporation
("Benedek"), have entered into an Agreement and Plan of Merger, dated as of June
4, 2002 (the "Merger Agreement"), pursuant to which the Company will acquire
Stations by merging Gray MidAmerica Television, Inc., a newly formed
wholly-owned subsidiary of the Company, into Stations for consideration of
approximately $502.5 million in cash (the "Pending Merger"). A substantial
portion of the cash consideration paid to Stations by the Company will be used
to satisfy, in full, certain outstanding indebtedness of Stations. Prior to
completion of the Pending Merger, Benedek is expected to have sold a total of
nine television stations to other parties. Stations and its subsidiaries that
are being acquired by the Company are hereinafter collectively referred to as
the "Acquired Companies". In connection with the Pending Merger, each share of
Stations senior preferred stock issued and outstanding immediately prior to the
effective time of the Pending Merger and each share of Stations junior preferred
stock issued and outstanding immediately prior to the effective time of the
Pending Merger will be converted into the right to receive a cash payment. Each
share of Stations class A common stock and Stations class B common stock and any
options or warrants to acquire such shares issued and outstanding immediately
prior to the effective time of the Pending Merger will be cancelled without any
consideration paid. The net proceeds to the Company from the issuance of the
Securities will be used to repay a portion of the borrowings under the Company's
Third Amended and Restated Loan Agreement, dated as of September 25, 2001, by
and among the Company and the various lenders and agents named therein. The
foregoing transactions, together with the offering of the Securities and other
transactions contemplated by this Agreement and the other Transaction Documents,
are collectively referred to herein as the "Transactions". With respect to the
representations, warranties and agreements made by each of the Company and the
Guarantors in this Agreement concerning any or all of the Acquired Companies,
such representations, warranties and agreements shall be limited to the
knowledge, after an independent investigation, of each of the Company and the
Guarantors in all cases.
2. Representations and Warranties and Agreements of the
Company and the Guarantors. The Company and the Guarantors, jointly and
severally, represent and warrant to, and agree with, each of the several
Underwriters on and as of the date hereof and the Closing Date (as defined in
Section 3) (both before and after giving effect to the Transactions) that:
(a) A Registration Statement on Form S-3 (Registration
No. 333-88694), including a prospectus and a preliminary prospectus supplement,
with respect to the Securities has 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 of the Securities and Exchange Commission
(the "SEC") thereunder and has become effective. Copies of such registration
statement have been delivered by the Company to you as the Underwriters. As used
in this Agreement, (i) "Registration Statement" means such registration
statement, as amended and supplemented to the date hereof; (ii) "Preliminary
Prospectus" means the preliminary prospectus supplement together with the
prospectus included in the Registration Statement or filed with the SEC pursuant
to Rule 424 under the Securities Act; and (iii) "Prospectus" means the final
prospectus included in the Registration Statement, together with any amendment
or supplement (including in the case of each of (i)-(iii) all documents
incorporated therein by reference) specifically relating to the Securities, as
filed with the SEC pursuant to Rule 424(b) under the Securities Act.
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the SEC, and each Preliminary
Prospectus filed as part of the Registration Statement as originally filed or as
part of any amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material respects with the
Securities Act, and did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by such
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Underwriter expressly for use therein, it being understood and agreed that the
only such information is that described as such in Section 11 hereof.
(c) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been instituted or, to the knowledge of the Company, threatened by the SEC; and
the Registration Statement and Prospectus (as amended or supplemented) comply,
or will comply, as the case may be, in all material respects with the Securities
Act 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 date of the
Prospectus and any amendment or supplement thereto, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and the
Prospectus, as amended or supplemented, if applicable, at the Closing Date will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that the foregoing
representations and warranties shall not apply to statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by such Underwriter expressly for use therein, it being understood and agreed
that the only such information is that described as such in Section 11 hereof.
(d) The documents incorporated by reference in the
Prospectus, when they become effective or were filed with the SEC, as the case
may be, conformed in all material respects to the requirements of the Securities
Act or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
applicable, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; any further documents so filed and incorporated by reference in
the Prospectus, when such documents are filed with the SEC, will conform in all
material respects to the requirements of the Exchange Act, and will not contain
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and the Indenture, with any amendments and
supplements thereto, will conform with the requirements of the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act") and the rules and
regulations of the SEC thereunder.
(e) As of the date of this Agreement, the Company has no
direct or indirect subsidiaries other than those subsidiaries (the
"Subsidiaries") listed on Schedule 2 hereto and all of the Subsidiaries are
Guarantors. WEAU-TV, Inc., WVLT-TV, Inc., WRDW-TV, Inc., WITN-TV, Inc., Gray
Kentucky Television, Inc., Gray Communications of Texas, Inc., Gray
Communications of Texas - Sherman, Inc., KOLN-KGIN, Inc., Gray Florida Holdings,
Inc., Gray Television Management, Inc., Gray MidAmerica Holdings, Inc., Gray
Digital, Inc., KWTX-KBTX LP Corp., KXII L.P. Corp., KXII L.P., KWTX - KBTX L.P.
and Lynqx Communications, Inc. ("Lynqx") are collectively referred to herein as
the "Broadcast Subsidiaries". For purposes of this Section 2 only,
"Subsidiaries" and "Broadcast Subsidiaries" shall hereinafter include the
Acquired Companies, in each case, for representations, warranties and agreements
of the Company and the Guarantors made after giving effect to the Acquisition.
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(f) The Company and the Subsidiaries have been each duly
incorporated or formed, and each is validly existing as a corporation or
partnership, as the case may be, in good standing under the laws of the
jurisdiction in which it is chartered or organized, is duly qualified to do
business as a foreign corporation or foreign partnership, as the case may be,
and is in good standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or conducts material
business, except in such jurisdictions in which the failure to so qualify, in
the aggregate, would not have a Material Adverse Effect. "Material Adverse
Effect" shall mean a material adverse effect on (i) the business, operations,
properties, assets, liabilities, net worth, earnings, condition (financial or
otherwise) or prospects of the Company and the Subsidiaries, taken as a whole,
or (ii) the ability of the Company or any Guarantor to perform any of its
respective obligations under the Transaction Documents, the Notes or the
Guarantees or to consummate the Transactions.
(g) Neither the Company nor any of the Subsidiaries is
(i) in violation of its charter, by-laws or partnership agreement or (ii) in
breach or violation of any of the terms or provisions of, or with the giving of
notice or lapse of time, or both, would be in default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of the Subsidiaries is a party or by which it or any of
them or any of their respective properties is bound, or any applicable law or
statute or any order, rule or regulation of any court or governmental agency or
body (including, without limitation, the Federal Communications Commission (the
"FCC")) having jurisdiction over the Company, the Subsidiaries or any of their
respective properties, except for violations and defaults which individually or
in the aggregate would not have a Material Adverse Effect.
(h) Each of the Company and the Subsidiaries owns,
possesses or has obtained all licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all declarations and
filings with, all federal, state, local and other governmental authorities
(including, without limitation, the FCC), all self-regulatory organizations and
all courts and other tribunals, domestic or foreign, necessary to own or lease,
as the case may be, and to operate the properties and to carry on the business
of the Company and its Subsidiaries as will be described in the Prospectus and
each of them is in full force and effect, except in each case as otherwise shall
be disclosed in the Prospectus or where the failure to obtain licenses, permits,
certificates, consents, orders, approvals and other authorizations, or to make
all declarations and filings, would not, individually or in the aggregate, have
a Material Adverse Effect, and none of the Company or the Subsidiaries has
received any notice relating to revocation or modification of any such license,
permit, certificate, consent, order, approval or other authorization, except
where such revocation or modification would not, individually or in the
aggregate, have a Material Adverse Effect.
(i) The Company has an authorized, issued and outstanding
capitalization as will be set forth in the Prospectus. All of the issued shares
of capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable.
(j) The issued shares of capital stock or partnership
interests, as the case may be, of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable and, except as
otherwise shall be set forth in the Prospectus, are owned of record and
beneficially by the Company, either directly or through wholly owned
subsidiaries, free and
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clear of any pledge, lien, encumbrance, security interest, restriction on voting
or transfer, preemptive rights or other defect in title or any claim of any
third party.
(k) No Subsidiary is prohibited, directly or indirectly,
from paying any dividends to the Company, from making any other distribution on
such Subsidiary's capital stock, from repaying to the Company any loans or
advances to such Subsidiary from the Company or from transferring any of such
Subsidiary's property or assets to the Company or any other Subsidiary, except
as will be described in or contemplated by the Prospectus.
(l) Except as will be described in the Prospectus, there
are no outstanding (i) securities or obligations of the Company convertible into
or exchangeable for any capital stock of the Company, (ii) warrants, rights or
options to subscribe for or purchase from the Company any such capital stock or
any such convertible or exchangeable securities or obligations or (iii)
obligations of the Company to issue such shares, any such convertible or
exchangeable securities or obligations, or any such warrants, rights or options.
(m) Other than the Company's class A common stock, no par
value per share, class B common stock, no par value per share, there are no
securities of the Company registered under the Exchange Act or listed on a
national securities exchange or quoted in a U.S. automated inter-dealer
quotation system. (n) Each of (i) Ernst & Young LLP and PricewaterhouseCoopers
LLP, who shall separately certify certain financial statements of the Company
and delivered their respective reports with respect to the audited consolidated
financial statements and schedules of the Company in the Prospectus, and (ii)
McGladrey & Pullen, LLP, who shall certify certain financial statements of
Stations and delivered its reports with respect to the audited consolidated
financial statements and schedules of Stations in the Prospectus, is and was,
with respect to the Company and the Subsidiaries or Stations and its
subsidiaries, as applicable, independent public accountants within the meaning
of the Securities Act and the applicable rules and regulations thereunder.
(o) The consolidated financial statements (including the
notes thereto) and schedules as shall be included or incorporated by reference
in the Registration Statement and Prospectus will comply as to form in all
material respects with the requirements applicable to registration statements on
Form S-3 under the Securities Act and the applicable rules and regulations
thereunder and will fairly present the financial position and the results of
operations of the Company and the other entities purported to be covered thereby
as of the dates and for the periods specified therein; since the date of the
latest of such financial statements, there shall have been no change nor any
development or event involving a prospective change which will have or could
reasonably be expected to have a Material Adverse Effect; such financial
statements and schedules shall have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved (except as shall otherwise be expressly noted in the notes thereto or
elsewhere in the Prospectus); the summary or selected or other financial
information and data that shall be included or incorporated by reference in the
Registration Statement and Prospectus, historical and pro forma, shall have been
fairly extracted from the financial statements of the Company and the other
entities purported to be covered thereby and shall fairly present, on the basis
that shall be stated in the Prospectus, the
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information included therein; the pro forma balance sheet and statement of
income data in the Prospectus have been prepared in accordance with the
applicable rules and regulations under the Securities Act and include all
adjustments necessary for a fair presentation of the pro forma financial
position and results of operations of the Company and the Subsidiaries as of the
dates and for the periods to which they apply.
(p) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act) contained
in the Prospectus shall have been made or reaffirmed without a reasonable basis
or shall have been disclosed other than in good faith.
(q) Subsequent to the respective dates as of which
information shall be given in the Prospectus, (i) the Company and each of the
Subsidiaries shall not have incurred any material liability or obligation,
direct or contingent, nor shall either the Company or any Subsidiary have
entered into any material transaction not in the ordinary course of business;
(ii) the Company shall not have purchased any of its outstanding capital stock,
nor declared, paid or otherwise made any dividend or distribution of any kind on
its capital stock; and (iii) there shall have not been any material change in
the capital stock, short-term debt or long-term debt of the Company and each of
the Subsidiaries, except in each case as will be described in or contemplated by
the Prospectus.
(r) The Company and each of the Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(s) Each of the Company and the Guarantors has all
requisite corporate power or partnership power, as the case may be, and
authority to execute, deliver and perform its obligations under this Agreement
and the Indenture and to consummate the Transactions. The Transaction Documents
have been duly authorized by all necessary corporate action or partnership
action, as the case may be, of the Company and the Guarantors and, when duly
executed and delivered by the Company and the Guarantors and, as the case may
be, by the Trustee, will constitute legal, valid and binding obligations of the
Company and the Guarantors, enforceable against the Company and the Guarantors
in accordance with their respective terms, subject, as to the enforcement of
remedies, to general equity principles and to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect, and except as rights to indemnity and
contribution may be limited by federal or state securities laws.
(t) The Notes have been duly authorized by all necessary
corporate action for issuance and sale pursuant to this Agreement and, when
executed, authenticated, issued and delivered in the manner provided for in the
Indenture and sold and paid for as provided in this Agreement, the Notes will
constitute legal, valid and binding obligations of the Company
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entitled to the benefits of the Indenture and enforceable against the Company in
accordance with their terms and the terms of the Indenture, subject, as to the
enforcement of remedies, to general equity principles and to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect.
(u) The Guarantees have each been duly authorized by each
of the Guarantors and, when the Notes are executed by the Company and
authenticated by the Trustee in accordance with the provisions of the Indenture
and delivered to and paid for by the Underwriters in accordance with the terms
of this Agreement, the Guarantees will be entitled to the benefits of the
Indenture and will constitute the valid and legally binding obligations of the
Guarantors, enforceable against each of the Guarantors in accordance with their
terms and the terms of the Indenture, subject, as to the enforcement of
remedies, to general equity principles and to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect.
(v) The issuance, offering and sale of the Notes to the
Underwriters by the Company and the making of the Guarantees by the Guarantors,
pursuant to this Agreement, the compliance by the Company and the Subsidiaries
(to the extent a party thereto) with the other provisions of the Transaction
Documents herein and therein set forth and the consummation by the Company and
the Subsidiaries, as applicable, of the transactions contemplated by this
Agreement and the other Transactions do not and will not (i) require the
consent, approval, authorization, order, registration or qualification of, or
filing with, any governmental authority (including, without limitation, the FCC)
or court, or body or arbitrator having jurisdiction over the Company or any
Subsidiary, (ii) conflict with, result in a breach or violation of, or
constitute a default under, (A) any indenture, mortgage, deed of trust, lease or
other agreement or instrument to which the Company or any Subsidiary is a party
or by which the Company or any Subsidiary or any of their respective properties
is bound, (B) the charter or by-laws of the Company or of any Subsidiary, (C)
any statute, rule or regulation of any governmental authority applicable to the
Company or any Subsidiary or any of their respective properties or assets
(including, without limitation, the Communications Act of 1934, as amended (the
"Communications Act"), the Telecommunications Act of 1996 (the
"Telecommunications Act"), the Cable Television Consumer Protection Act of 1992
(the "1992 Cable Act") and the rules and regulations of the FCC) or (D) any
judgment, order or decree of any government, government instrumentality, agency,
body or court having jurisdiction over the Company or any such Subsidiary (to
the extent a party thereto) or any of their respective properties or assets, or
(iii) result in the termination or revocation of any of the permits, licenses,
approvals, orders, certificates, franchises or authorizations, including those
relating to the Communications Act, the Telecommunications Act, the 1992 Cable
Act or the rules and regulations of the FCC, owned or held by the Company or any
of the Subsidiaries (collectively, the "FCC Licenses") or result in any other
material impairment of the rights of the holder of such FCC License.
(w) No legal or governmental proceedings or
investigations are pending to which the Company or any of the Subsidiaries is a
party or to which the property of the Company or any of the Subsidiaries is
subject that will not be described in the Prospectus, and no such proceedings or
investigations have been threatened against the Company and any of the
Subsidiaries or with respect to any of their respective properties, except in
each case for such
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proceedings or investigations that, if the subject of an unfavorable decision,
ruling or finding, would not, singly or in the aggregate, result in a Material
Adverse Effect.
(x) Neither the Company, any of the Guarantors, nor, to
the best knowledge of the Company and each of the Guarantors, any director,
officer, agent, employee or other person associated with or acting on behalf of
the Company or any of the Subsidiaries has (i) used corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(y) Neither the Company nor any of the Subsidiaries owns
any "margin securities" as that term is defined in Regulation U of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"), and none
of the proceeds of the sale of the Securities will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin security, for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any margin security or for any other purpose which
might cause any of the Securities to be considered a "purpose credit" within the
meanings of Regulation T, U or X of the Federal Reserve Board.
(z) No relationship, direct or indirect, exists between
or among the Company or any of the Subsidiaries, on the one hand, and the
directors, officers, shareholders, customers or suppliers of the Company or any
of the Subsidiaries on the other hand, that relates to the transactions and that
would be required by the Securities Act to be described in a prospectus were the
Securities being issued and sold in a public offering, that is not set forth in
either (x) the Prospectus or (y) the Company's filings with the SEC pursuant to
the Exchange Act.
(aa) The fair salable value of the assets of each of the
Company and Guarantors exceeds the amount that will be required to be paid on or
in respect of its existing debts and other liabilities (including contingent
liabilities) as they mature; the assets of each of the Company and Guarantors do
not constitute unreasonably small capital to carry out its business as conducted
or as proposed to be conducted; the Company and the Guarantors do not intend to,
and do not believe that they will, incur debts beyond their respective ability
to pay such debts as they mature; upon the issuance of the Securities, the fair
salable value of the assets of each of the Company and the Guarantors will
exceed the amount that will be required to be paid on or in respect of its
existing debts and other liabilities (including contingent liabilities) as they
mature; and upon the issuance of the Securities, the assets of each of the
Company and the Guarantors will not constitute unreasonably small capital to
carry out its business as now conducted or as proposed to be conducted.
(bb) The Company has not distributed and, prior to the
later of (i) the Closing Date and (ii) the completion of the distribution of the
Securities, will not distribute any offering material in connection with the
offering and sale of the Securities other than the Prospectus, including any
amendment thereto or any supplement thereto.
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(cc) Subsequent to the date as of which information shall
be given in the Prospectus, neither the Company nor any of the Subsidiaries
shall have sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding and there shall not have been any material
adverse change, or any development involving a prospective material adverse
change, in the business, operations, properties, assets, liabilities, net worth,
condition (financial or otherwise) or prospects of the Company and the
Subsidiaries, taken as a whole, except in each case as shall be described in or
contemplated by the Prospectus.
(dd) The Company and each of the Subsidiaries have good
and marketable title in fee simple to all items of real property and marketable
title to all personal property owned by each of them, in each case except as
shall be set forth in the Prospectus, free and clear of any pledge, lien,
encumbrance, security interest or other defect or claim of any third party,
except such as do not materially and adversely affect the value of such property
and do not interfere with the use made or proposed to be made of such property
by the Company or such Subsidiaries, and any real property and buildings leased
by the Company or such Subsidiaries are held under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not
interfere with the use made or proposed to be made of such property and
buildings by the Company or such Subsidiaries.
(ee) Except as shall be set forth in the Prospectus, the
affiliation agreement between each of the Broadcast Subsidiaries, on the one
hand, and NBC, CBS, ABC and/or UPN, as the case may be, on the other hand, has
been duly authorized, executed and delivered by each of the Broadcast
Subsidiaries and constitutes the valid and legally binding obligations of the
respective parties thereto; the description of the affiliation agreements in the
Prospectus shall fairly summarize in all material respects such agreements.
(ff) ERISA:
(i) Definitions:
"Code" means the United States Internal Revenue Code of 1986,
as amended, and the regulations promulgated and the rulings issued
thereunder.
"ERISA" means the United States Employee Retirement Income
Security Act of 1974, as amended, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" means each trade or business (whether or not
incorporated) that would be treated together with the Company as a
single employer under Title IV or Section 302 of ERISA or Section 412
of the Code.
"ERISA Event" means (i) the occurrence of a "reportable event"
described in Section 4043 of ERISA (other than an event with respect to
which the 30 day notice requirement has been waived), or (ii) the
provision or filing of a notice of intent to terminate a Plan (other
than in a standard termination within the meaning of Section 4041 of
ERISA) or the treatment of a Plan amendment as a distress termination
under Section 4041 of ERISA, or (iii) the institution of proceedings to
terminate a Plan by the
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PBGC, or (iv) the existence of any "accumulated funding deficiency" or
"liquidity shortfall" (within the meaning of Section 302 of ERISA or
Section 412 of the Code), whether or not waived, or the filing of an
application pursuant to Section 412(e) of the Code or Section 304 of
ERISA for any extension of an amortization period, or (v) the receipt
of notice by the Company or any ERISA Affiliate that any Multiemployer
Plan to which it is or has been obligated to contribute may be
terminated, partitioned or reorganized or that any Multiple Employer
Plan may be terminated, or (vi) the occurrence of any transaction or
event which might reasonably be expected to constitute grounds for the
imposition of liability under ERISA.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA.
"Multiple Employer Plan" means an employee benefit plan
described in Section 4063 of ERISA.
"Plan" means an employee benefit plan (within the meaning of
Section 3(3) of ERISA) other than a Multiemployer Plan, sponsored or
maintained by the Company or any of its ERISA Affiliates, or with
respect to which the Company or any of its ERISA Affiliates could be
subject to any liability under Title IV or Section 302 of ERISA or
Section 412 of the Code.
"Underfunding" means, with respect to any Plan subject to
Title IV of ERISA, the excess, if any, of the "projected benefit
obligations" (within the meaning of Statement of Financial Accounting
Standards 87) under such Plan (determined using the actuarial
assumptions used for purposes of calculating funding requirements in
the most recent actuarial report for such plan) over the fair market
value of the assets held under the Plan.
(ii) No "prohibited transaction" (as defined in Section
406 of ERISA or Section 4975 of the Code) or ERISA Event has occurred
or is reasonably expected to occur with respect to any Plan or
Multiemployer Plan which could reasonably be expected to have a
Material Adverse Effect; the Company, its ERISA Affiliates and each
Plan is in compliance in all material respects with applicable law,
including ERISA and the Code; the Company and each of its ERISA
Affiliates have not incurred and do not expect to incur liability under
Title IV of ERISA with respect to the termination, or withdrawal from,
any Plan or Multiemployer Plan for which the Company or any of the
Subsidiaries would have any liability; and each Plan that is intended
to be qualified under Section 401(a) of the Code has filed for or
received a favorable determination letter from the Internal Revenue
Service and has not been amended in any way that could reasonably be
expected to cause the loss of such qualification. No Underfunding
exists with respect to any Plan.
(iii) None of the Company or any of its ERISA Affiliates
contributes to or has any obligation to contribute to any Multiemployer
Plans and Multiple Employer Plans.
-10-
(iv) No labor dispute with the employees of the Company
and any of the Subsidiaries exists or is threatened or imminent which
could result in a Material Adverse Effect.
(gg) The Company and each of the Subsidiaries own or
otherwise possess the right to use all patents, trademarks, service marks, trade
names and copyrights, all applications and registrations for each of the
foregoing, and all other proprietary rights and confidential information used in
the conduct of their respective businesses as currently conducted; and neither
the Company nor any of the Subsidiaries has received any notice, or is otherwise
aware, of any infringement of or conflict with the rights of any third party
with respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(hh) The Company and each of the Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts and with such deductibles as are prudent and customary in
the businesses in which they are engaged; neither the Company nor any such
Subsidiary has been refused any insurance coverage sought or applied for; and
neither the Company nor any such Subsidiary has any reason to believe that it
will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a Material
Adverse Effect.
(ii) Environmental Matters:
(i) The Company and each of the Subsidiaries are and have
been in compliance with all applicable laws, statutes, ordinances,
rules, regulations, orders, judgments, decisions, decrees, standards,
and requirements ("Legal Requirements") relating to: human health and
safety; pollution; management, disposal or release of any chemical
substance, product or waste; and protection, cleanup, remediation or
corrective action relating to the environment or natural resources
("Environmental Law");
(ii) The Company and each of the Subsidiaries have
obtained and are in compliance with the conditions of all permits,
authorizations, licenses, approvals, authorizations, and variances
necessary under any Environmental Law for the continued conduct in the
manner now conducted of the business of the Company and each of such
Subsidiaries ("Environmental Permits");
(iii) There are no past or present conditions or
circumstances, including but not limited to pending changes in any
Environmental Law or Environmental Permit, that are likely to interfere
with the conduct of the business of the Company and each of the
Subsidiaries in the manner now conducted or which would interfere with
compliance with any Environmental Law or Environmental Permit; and
(iv) There are no past or present conditions or
circumstances at, or arising out of, the business, assets and
properties the Company and each of the Subsidiaries or any formerly
leased, operated or owned businesses, assets or properties of the
Company and any of the Subsidiaries, including but not limited to
on-site or off-site disposal or release
-11-
of any chemical substance, product or waste, which may give rise to:
(i) liabilities or obligations for any cleanup, remediation or
corrective action under any Environmental Law, (ii) claims arising
under any Environmental Law for personal injury, property damage, or
damage to natural resources, (iii) liabilities or obligations incurred
by the Company and the Subsidiaries to comply with any Environmental
Law, or (iv) fines or penalties arising under any Environmental Law;
except for any noncompliance or conditions or circumstances that, singly or in
the aggregate, would not result in a Material Adverse Effect.
(jj) The Company and each of the Subsidiaries have filed
all foreign, federal, state and local tax returns that are required to be filed
or have requested extensions thereof and have paid all taxes required to be paid
by them and any other assessment, fine or penalty levied against them, to the
extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith and
for which the Company retains adequate reserves.
(kk) Neither the Company nor any of the Subsidiaries is,
or immediately after the sale of the Securities and the application of the
proceeds from such sale (as shall be described in the Prospectus) will be, an
"investment company" or a company "controlled by" an "investment company",
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and the rules and regulations of the SEC thereunder,
without taking account of any exemption under the Investment Company Act arising
out of the number of holders of the securities of the Company.
(ll) Neither the Company nor any of the Subsidiaries is a
"holding company" or a "subsidiary company" of a holding company or its
"affiliate" within the meaning of the Public Utility Holding Company Act of
1935, as amended.
(mm) Neither the Company nor any of its Affiliates has
taken, directly or indirectly, any action designed to cause or result in, or
which has constituted or which might reasonably be expected to cause or result
in, stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities; nor has the Company or any
Affiliate of the Company paid or agreed to pay to any person any compensation
for soliciting another to purchase any securities of the Company (except as
contemplated by this Agreement). As used in this Agreement, "Affiliate" means,
with respect to any specified person, any other person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such specified person. For purposes of this definition, control of a person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such person whether by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
(nn) The Company (i) has been subject to the requirements
of Section 12 or 15(d) of the Exchange Act and has filed all the material
required to be filed pursuant to Sections 13, 14 and 15(d) of the Exchange Act,
as applicable, for a period of at least 36 calendar months immediately preceding
the date hereof, and (ii) has filed in a timely manner all reports required
-12-
to be filed pursuant to Sections 13, 14 and 15(d) of the Exchange Act, as
applicable, during the 12 calendar months and any portion of a month immediately
preceding the date hereof.
(oo) Neither the Company nor any of the Subsidiaries has,
since the end of the last fiscal year for which certified financial statements
of the Company and its consolidated subsidiaries were included in a report filed
pursuant to Section 13(a) or 15(d) of the Exchange Act, (i) failed to pay any
dividend or sinking fund installment on preferred stock, or (ii) defaulted (A)
on any installment or installments on indebtedness for borrowed money, or (B) on
any rental on one or more long term leases, which defaults in the aggregate are
material to the financial position of the Company and the Subsidiaries, taken as
a whole.
(pp) Based upon the price at which the voting stock of the
Company was last sold, or the average of the bid and asked prices of such stock
as of a date within 58 days prior to the date hereof, (i) the aggregate market
value of the voting stock of the Company held by non-Affiliates of the Company
is $150 million or more or (ii) the aggregate market value of the voting stock
of the Company held by non-Affiliates of the Company is $100 million or more and
the Company has had an annual trading volume of such stock of three million
shares or more based upon the volume of the voting stock of the Company traded
in any continuous 12 month period ended within 58 days prior to the date hereof.
(qq) There are no contracts or documents which are
required to be described in the Registration Statement, the Prospectus or the
documents to be filed as exhibits to any of the foregoing that have not been so
described and filed as required.
(rr) Neither the Company nor any of the Subsidiaries
conducts business with the government of Cuba or any person or Affiliate located
in Cuba. In the event the Company or any of the Subsidiaries commences engaging
in business with the government of Cuba or with any person or Affiliate located
in Cuba, the Company will provide the Florida Department of Banking and Finance
notice of such business in a form acceptable to such Department.
Each certificate signed by any officer of the Company or any
Guarantor and delivered to the Underwriters or their counsel shall be deemed to
be a representation and warranty by the Company and each Guarantor to the
Underwriters as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Securities. On the
basis of the representations, warranties, agreements and covenants herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell $100,000,000 aggregate principal amount of Securities,
and each of the Underwriters, severally and not jointly, agrees to purchase from
the Company the principal amount of Securities set forth opposite the name of
such Underwriters in Schedule 1 hereto at a purchase price equal to - % of the
principal amount thereof. One or more certificates in definitive form as
instructed by the Underwriters for the Securities that the several Underwriters
have agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Underwriters request upon notice to the
Company at least 48 hours prior to the Closing Date, shall be delivered by or on
behalf of the Company to the Underwriters for the respective accounts of the
Underwriters, against payment by or on behalf of the Underwriters of the
purchase price therefor
-13-
by wire transfer in same-day funds (the "Wired Funds") to the account of the
Company. Such delivery of and payment for the Securities shall be made at the
offices Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New York at
10:00 A.M., New York time, on September - , 2002, or at such other place, time
or date as the Underwriters and the Company may agree upon or as the
Underwriters may determine pursuant to Section 12 hereof, such time and date of
delivery against payment being herein referred to as the "Closing Date". The
Company will make such certificate or certificates for the Securities available
for checking and packaging by the Underwriters at the offices in New York, New
York of Cadwalader, Wickersham & Taft at least 24 hours prior to the Closing
Date.
4. Covenants of the Company and the Guarantors. The
Company and the Guarantors, jointly and severally, covenant and agree with each
of the Underwriters that:
(a) The Company will furnish to the Underwriters and to
Cadwalader, Wickersham & Taft, counsel for the Underwriters, as soon as
reasonably possible, without charge, during the period referred to in paragraph
(c) below, as many copies as they may reasonably request of the Registration
Statement and any amendments and supplements thereto filed prior to the date
hereof or relating to or covering the Securities and of the Prospectus filed
with the SEC, including all documents incorporated therein by reference and all
consents and exhibits filed therewith, and will file with the SEC pursuant to
Rule 424 a prospectus supplement, in form and substance satisfactory to the
Underwriters and their counsel, relating to the offering contemplated hereby no
later than the close of business on September - , 2002. The Company will pay the
expenses of printing or other production of all documents relating to the
offering of the Securities.
(b) The Company will not amend or supplement the
Registration Statement or Prospectus or file any document incorporated by
reference in any of the foregoing or any amendment or supplement to any such
incorporated document during the period referred to in paragraph (c) of this
Section 4 without the prior written consent of the Underwriters.
(c) During the period following the date hereof as, in
the opinion of Cadwalader, Wickersham & Taft, counsel for the Underwriters, the
Prospectus is required by law to be delivered, to comply with the Securities
Act, the Exchange Act, the Trust Indenture Act and the rules and regulations
under each thereof, so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement and in the Prospectus. If at any
time when a prospectus is required by the Securities Act to be delivered in
connection with sales of the Securities, any event occurs or condition exists as
a result of which, in the reasonable opinion of Cadwalader, Wickersham & Taft,
counsel for the Underwriters, or Proskauer Rose LLP, special counsel for the
Company, the Prospectus will include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made when such Prospectus is
delivered to a purchaser, not misleading, or if it should otherwise be
necessary, in the opinion of such counsel, at any time to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with the
requirements of the Securities Act or the rules and regulations thereunder, the
Company will promptly (i) notify the Underwriters of the same; (ii) subject to
the requirements of paragraph (b) of this Section 4, will prepare and file with
the SEC, an amendment or supplement that will correct such statement or omission
or effect such compliance of the
-14-
Registration Statement or the Prospectus with such requirements; and (iii) will
supply any supplemented or amended Prospectus to the several Underwriters and
counsel for the Underwriters in accordance with paragraph (a) of this Section 4.
The Company will not take any action on or prior to the Closing Date that would
require the Prospectus to be amended or supplemented pursuant to this Section
4(c).
(d) The Company shall advise the Underwriters promptly
(i) when any post-effective amendment to the Registration Statement relating to
or covering the Securities becomes effective or any supplement to the Prospectus
shall have been filed, (ii) of any comments from the SEC or any request or
proposed request by the SEC for an amendment or supplement to the Registration
Statement (insofar as the amendment or supplement relates to or covers the
Securities), to the Prospectus to any document incorporated by reference in any
of the foregoing or for any additional information, (iii) of the issuance by the
SEC of any stop order suspending the effectiveness of the Registration Statement
or any order directed to the Prospectus or any document incorporated therein by
reference or the initiation or threat of any stop order proceeding or of any
challenge to the accuracy or adequacy of any document incorporated by reference
in any Prospectus and (iv) of the happening of any event which makes untrue any
statement of a material fact made in the Registration Statement or the
Prospectus or which requires the making of a change in the Registration
Statement or the Prospectus in order to make any material statement therein not
misleading.
(e) If, during the period referred to in paragraph (c) of
this Section 4, the SEC shall issue a stop order suspending the effectiveness of
the Registration Statement, the Company shall make every reasonable effort to
obtain the lifting of that order at the earliest possible time.
(f) The Company shall file promptly all reports and any
definitive proxy or information statements required to be filed by the Company
with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the delivery of a
Prospectus is required in connection with the offering and sale of the
Securities.
(g) The Company shall furnish to the Underwriters
promptly upon written request, copies of any annual reports, quarterly reports
and current reports filed by the Company with the SEC and such other documents,
reports and information as shall be furnished by the Company to the Trustee or
to the holders of the Securities pursuant to the Indenture or the Exchange Act
or any rule or regulation of the SEC thereunder.
(h) The Company shall make generally available to its
security holders and to the Underwriters as soon as practicable an earnings
statement covering a period of at least twelve months beginning with the first
fiscal quarter of the Company occurring after the effective date of the
Registration Statement, which shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder.
(i) The Company will from time to time take such actions
to arrange for the qualification of the Securities for offering and sale under
the laws of such jurisdictions as the Underwriters may designate and will
maintain such qualifications in effect so long as required for the resale of the
Securities; provided, however, that the Company will not be required to
-15-
qualify to do business in any jurisdiction in which it is not then so qualified,
to file any general consent to service of process or to take any other action
which would subject it to general service of process or to taxation in any such
jurisdiction where it is not then so subject. The Company will promptly advise
the Underwriters of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
(j) The Company, whenever it or any of the Subsidiaries
publishes or makes available to the public (by filing with any regulatory
authority or securities exchange or by publishing a press release or otherwise)
any information that would reasonably be expected to be material in the context
of the issue of the Securities under this Agreement, shall promptly notify the
Underwriters as to the nature of such information or event; provided, however
that prior to the Closing Date, the Company shall obtain the written consent of
the Underwriters prior to such publication or other communication of such
information to the public, unless in the judgment of the Company and its
counsel, and after notification to the Underwriters, such publication or
communication is required by law. The Company will likewise notify the
Underwriters of (i) any decrease in the rating of the Securities or any other
debt securities of the Company by any nationally recognized statistical rating
organization (as defined in Rule 436(g)(2) under the Securities Act) or (ii) any
notice given of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the direction of the
possible change, as soon as the Company becomes aware of any such decrease or
notice. The Company will also deliver to the Underwriters, as soon as available
and without request, copies of its latest yearly and quarterly financial
statements and any report of its auditors thereon.
(k) The Company and the Guarantors (to the extent a party
thereto) will do and perform all things required to be done and performed by
them under this Agreement and the Transaction Documents prior to or after the
Closing Date and to satisfy all conditions precedent on their part to the
obligations of the Underwriters to purchase and accept delivery of the
Securities.
(l) In connection with the offering of the Securities,
the Company shall make its officers, employees, independent accountants and
legal counsel reasonably available upon request by the Underwriters and to
cooperate with the Underwriters and Underwriters' counsel with their due
diligence review through the Closing Date;
(m) The Company will cooperate with the Underwriters and
use its best efforts to permit the Securities to be eligible for clearance and
settlement as described under "Book-Entry; Delivery and Form" in the Prospectus.
(n) The Company will apply the net proceeds from the sale
of the Securities as set forth under "Use of Proceeds" in the Prospectus.
(o) Without the prior written consent of Wachovia
Securities, Inc. on behalf of the Underwriters, neither the Company nor any of
the Subsidiaries will, for a period of 180 days following the date hereof,
offer, sell, contract to sell, pledge or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected to, result in
the disposition (whether by actual disposition or effective economic disposition
due to cash
-16-
settlement or otherwise) by the Company or any Affiliate of the Company or any
person in privity with the Company or any Affiliate of the Company), directly or
indirectly, or file a registration statement for, or announce the offer, sale,
contract for sale or other disposition of, any debt securities issued or
guaranteed by the Company or any of the Subsidiaries (other than the
Securities).
(p) Neither the Company nor any of its Affiliates will
take, directly or indirectly, any action designed to cause or result in, or
which has constituted or which might reasonably be expected to cause or result
in, stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(q) The Company and the Subsidiaries will conduct its or
their operations in a manner that will not subject the Company or any of the
Subsidiaries to registration as an investment company under the Investment
Company Act.
5. Expenses. The Company and the Guarantors, jointly and
severally, hereby agree to pay all costs and expenses incident to the
performance of the obligations of the Company under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 10 hereof, including all costs and expenses
incident to (i) the printing or other production of documents with respect to
the transactions, including any costs of printing the Registration Statement,
Prospectus and any amendment or supplement thereto, this Agreement and any blue
sky memoranda, (ii) all arrangements relating to the delivery to the
Underwriters of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, the accountants, the Trustee and any other experts
or advisors retained by the Company, (iv) preparation, issuance and delivery to
the Underwriters of any certificates evidencing the Securities, (v) the
qualification of the Securities under state securities and blue sky laws,
including filing fees and fees and disbursements of counsel for the Underwriters
relating thereto, (vi) the fees of any agency that rates the Securities, (vii)
any meetings with prospective investors in the Securities (other than as shall
have been specifically approved by the Underwriters to be paid for by the
Underwriters) and [(viii) preparation and filing by the Underwriters and their
counsel of a filing in respect of the Registration Statement, Prospectus and any
amendment or supplement thereto with NASD Regulation, Inc. under NASD Conduct
Rule 2710]. If the sale of the Securities provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 6 hereof is not satisfied, because this Agreement is terminated pursuant
to Section 10 hereof or because of any failure, refusal or inability on the part
of the Company or any Guarantor to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder other than by
reason of a default by any of the Underwriters, the Company and the Guarantors,
jointly and severally, hereby agree to reimburse the Underwriters upon demand
for all out-of-pocket expenses (including counsel fees and disbursements) that
shall have reasonably been incurred by them in connection with the proposed
purchase and sale of the Securities. In addition, the Company and the Guarantors
shall pay any and all stamp, transfer and other similar taxes payable or
determined to be payable in connection with the execution and delivery of this
Agreement, any Transaction Document or the issuance of the Securities, and shall
save and hold each Underwriters harmless from and against any and all
liabilities with respect to or resulting from any delay in paying, or omission
to pay, such taxes.
-17-
6. Conditions to the Underwriters' Obligations. The
obligations of the several Underwriters to purchase and pay for the Securities
shall be subject, in the Underwriters' sole discretion, to the accuracy of the
representations and warranties of the Company and the Guarantors in Section 2
hereof, in each case as of the date hereof and as of the Closing Date, as if
made on and as of the Closing Date, to the accuracy of the statements of the
Company's officers made pursuant to the provisions hereof, to the performance by
the Company of its covenants and agreements hereunder and to the following
additional conditions:
(a) The Prospectus and supplement referred to in Section
4(a) of this Agreement shall have been timely filed with the SEC in accordance
with Section 4(a) of this Agreement. Prior to the Closing Date, 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 SEC; and any request of the SEC for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with to the reasonable satisfaction of the
Underwriters.
(b) The Prospectus (including amendments and supplements
thereto) shall have been printed and copies distributed to the Underwriters as
promptly as practicable on or following the date of this Agreement or at such
other date and time as to which the Underwriters may agree.
(c) The Underwriters shall have received opinions, dated
the Closing Date, of (i) Troutman Sanders LLP, Georgia counsel for the Company,
to the effect set forth in Exhibit A-1 hereto, which shall be accompanied by an
opinion, dated the Closing Date, of Sher Garner Cahill Richter Klein McAlister &
Hilbert, L.L.C., special Louisiana counsel for Lynqx, upon which Troutman
Sanders LLP shall rely in rendering its opinion as to Lynqx and as to matters of
Louisiana law, (ii) Proskauer Rose LLP, special counsel for the Company, to the
effect set forth in Exhibit A-2 hereto, and (iii) Robert A. Beizer, Esq., Vice
President - Law and Development of the Company, to the effect set forth in
Exhibit A-3 hereto, and, in each case, otherwise in form and substance
satisfactory to the Underwriters.
(d) The Underwriters shall have received an opinion,
dated the Closing Date, of Cadwalader, Wickersham & Taft, counsel for the
Underwriters, with respect to the issuance and sale of the Securities and such
other related matters as the Underwriters may reasonably require, and the
Company shall have furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.
In rendering such opinion, such counsel may rely as to certain matters of law
upon the opinion of each counsel referred to in paragraph (c) above.
(e) The Underwriters shall have received from Ernst &
Young LLP and PricewaterhouseCoopers LLP ("PwC"), each with respect to the
Company and the Subsidiaries, and McGladrey & Pullen, LLP ("McGladrey"), with
respect to Stations and its subsidiaries, letters dated the date of the
Prospectus and the Closing Date, in form and substance satisfactory to the
Underwriters, to the effect that:
(i) they are independent accountants with respect to the
Company and its consolidated subsidiaries or Stations and its
consolidated subsidiaries, as applicable,
-18-
within the meaning of the Securities Act and the applicable rules and
regulations thereunder;
(ii) in their opinion, the audited and unaudited
consolidated financial statements and schedules examined by them and
included in the Prospectus (including the notes thereto) comply as to
form in all material respects with the applicable accounting
requirements of the Securities Act and the related published rules and
regulations thereunder;
(iii) with respect to the letters delivered by PwC and
McGladrey only, on the basis of carrying out certain specified
procedures (which do not constitute an examination made in accordance
with generally accepted auditing standards) that would not necessarily
reveal matters of significance with respect to the comments set forth
in this paragraph (iii), a reading of the minute books of the
shareholders, the board of directors and any committees thereof of the
Company and the Subsidiaries or of Stations and its subsidiaries, as
applicable, and inquiries of certain officials of the Company or
Stations, as applicable, who have responsibility for financial and
accounting matters, nothing came to their attention that caused them to
believe that, (a) at a specific date not more than three business days
prior to the date of such letter, there were any changes in the
consolidated capital stock, increase in total debt or long-term debt or
any decreases in consolidated net current assets or stockholders'
equity of the Company or Stations, as applicable, in each case,
compared with amounts shown on June 30, 2002; or (b) for the period
from June 30, 2002 to a specific date not more than three business days
prior to the date of such letter, there were any decreases, as compared
to the corresponding period in the preceding year, in sales and other
operating revenues, operating income, and net income;
(iv) with respect to the letters delivered by PwC and
McGladrey only, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting
records of the Company and its consolidated subsidiaries or of Stations
and its consolidated subsidiaries, as applicable, and included in the
Prospectus and have compared such amounts, percentages and financial
information with such records of the Company and its consolidated
subsidiaries or of Stations and its consolidated subsidiaries, as
applicable, and with information derived from such records and have
found them to be in agreement, excluding any questions of legal
interpretation; and
(v) with respect to the letter delivered by PwC only, on
the basis of carrying out certain specified procedures (which do not
constitute an examination made in accordance with generally accepted
auditing standards) that would not necessarily reveal matters of
significance with respect to the comments set forth in this paragraph
(v) and inquiries of certain officials of the Company and Stations who
have responsibility for financial and accounting matters, nothing came
to their attention that caused them to believe that the unaudited pro
forma combined condensed financial statements included in the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X and
that the pro forma
-19-
adjustments have not been properly applied to the historical amounts in
the compilation of those statements.
In the event that a letter referred to above sets forth any
such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letter shall be accompanied by a
written explanation from the Company or Stations, as applicable, as to the
significance thereof, unless the Underwriters deem such explanation unnecessary,
and (B) such changes, decreases or increases do not, in the sole judgment of the
Underwriters, make it impractical or inadvisable to proceed with the purchase
and delivery of the Securities as contemplated by this Agreement and the
Prospectus, as amended as of the date hereof.
References to the Prospectus in this paragraph (e) with
respect to either letter referred to above shall include any amendment or
supplement thereto at the date of such letter.
(f) The Underwriters shall have received a certificate,
dated the Closing Date, of the Chief Executive Officer and the Chief Financial
Officer of the Company certifying: (i) that the representations and warranties
of the Company in this Agreement are true and correct as if made on and as of
the Closing Date; the Prospectus, as amended or supplemented as of the Closing
Date, does not include any 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, not misleading; and the
Company has performed all covenants and agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to the Closing Date; and
(ii) as to the statements made in paragraph (g) of this section.
(g) Subsequent to the execution and delivery of this
Agreement, or, if earlier, the date as of which information is given in the
Prospectus (exclusive of any amendment or supplement thereto), there shall not
have been (i) any change in the capital stock or long-term debt, (ii) any
material loss or interference sustained by the Company or any of the
Subsidiaries with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding or (iii) any
material adverse change, or any development involving a prospective material
adverse change, in the business, operations, properties, condition (financial or
otherwise), management, prospects, assets, liabilities, net worth, earnings or
results of operations of the Company or any of the Subsidiaries, except in each
case as described in or contemplated by the Prospectus (exclusive of any
amendment or supplement thereto filed on or after the date of this Agreement).
(h) As of the date hereof, the Securities shall have been
assigned a rating of at least (1) B3 by Moody's Investors Service, Inc. and its
successors, and (2) B- by Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies Inc., and its successors. Subsequent to the date hereof,
there shall not have been any decrease in the rating of any of the Company's
debt securities (including the Securities) by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Securities Act) or any notice given of any intended or potential decrease in
any such rating or of a possible change in any such rating that does not
indicate the direction of the possible change.
-20-
(i) There shall not have occurred any withdrawal or
proposed withdrawal of any rule or regulation under the Securities Act or the
Exchange Act by the SEC or any amendment or proposed amendment thereof by the
SEC which in the reasonable judgment of the Underwriters would materially impair
the ability of the Underwriters to purchase, hold or effect resales of the
Securities as contemplated hereby.
(j) No action shall have been taken and no statute, rule,
regulation or order (including, without limitation, Regulation T, U or X of the
Federal Reserve Board) shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date, prevent the
issuance or sale of the Securities; and no injunction, restraining order or
order of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would prevent
the issuance or sale of the Securities.
(k) Subsequent to the execution and delivery of this
Agreement, (i) trading in the Company's common stock shall not have been
suspended or materially limited by the SEC nor shall trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market have been suspended nor materially limited nor minimum
nor maximum prices have been established on such exchange, nor has a material
disruption occurred in commercial banking or securities settlement or clearance
services in the United States; (ii) a banking moratorium shall not have been
declared by New York or United States authorities; and (iii) there shall not
have been (A) an outbreak or escalation of hostilities between the United States
and any foreign power, (B) an outbreak or escalation of any other insurrection
or armed conflict involving the United States or (C) any other calamity or
crisis or material adverse change or development involving a prospective change
in national or international general economic, political or financial conditions
having an effect on the U.S. financial markets that, in the sole judgment of the
Underwriters, makes it impractical or inadvisable to proceed with the offer,
sale and delivery of the Securities or to enforce contracts for sale of the
Securities as of the date thereof or as contemplated by the Prospectus.
(l) Each of the Transaction Documents shall be
satisfactory in form and substance to each of the Underwriters and shall have
been executed and delivered by all the respective parties thereto and shall be
in full force and effect.
(m) All proceedings taken in connection with the issuance
of the Securities and the transactions contemplated by this Agreement, the
Transaction Documents and all documents and papers relating thereto shall be
reasonably satisfactory to the Underwriters and counsel to the Underwriters. The
Underwriters and counsel to the Underwriters shall have received copies of such
papers and documents as they may reasonably request in connection therewith, all
in form and substance reasonably satisfactory to them.
(n) On or before the Closing Date, the Underwriters and
counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company and/or any Guarantor.
All opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if they
are reasonably satisfactory in all material respects to the Underwriters and
counsel for the Underwriters. The Company and the
-21-
Guarantors shall furnish to the Underwriters such conformed copies of such
opinions, certificates, letters and documents in such quantities as the
Underwriters and counsel for the Underwriters shall reasonably request.
7. Indemnification and Contribution. (a) The Company and
the Guarantors, jointly and severally, hereby agree to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or such controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement made by the Company in Section 2
of this Agreement;
(ii) any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement, the
Prospectus or any amendment or supplement thereto or any Preliminary
Prospectus;
(iii) the omission or alleged omission to state in the
Registration Statement, the Prospectus or any amendment or supplement
thereto or any Preliminary Prospectus, a material fact required to be
stated therein or necessary to make the statements therein not
misleading;
(iv) any untrue statement or alleged untrue statement of
any material fact made herein or in any Transaction Document; or
(v) the breach of any covenant or agreement made herein
or in any Transaction Document,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company and the
Guarantors will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company or any Guarantor by such Underwriter specifically for use therein. This
indemnity agreement will be in addition to any liability which the Company or
any Guarantor, as the case may be, may otherwise have. Neither the Company nor
any Guarantor will, without the prior written consent of each Underwriter,
settle or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which indemnification
may be sought hereunder (whether or not any such Underwriter or any person who
controls any such Underwriter within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
-22-
unconditional release of all of the Underwriter and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, the Guarantors, their respective
directors, officers, and each person, if any, who controls the Company or any
Guarantor, as the case may be, within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any losses, claims,
damages or liabilities to which the Company or any Guarantor, as the case may
be, any such director or officer of the Company or any Guarantor, as the case
may be, or any such controlling person of the Company or any Guarantor, as the
case may be, may become subject under the Securities Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, the
Prospectus or any amendment or supplement thereto or any related preliminary
prospectus, or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in the Registration Statement, the
Prospectus or any amendment or supplement thereto or any related preliminary
prospectus, necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company or any
Guarantor, as the case may be, by such Underwriter specifically for use therein,
and, subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any legal or other expenses reasonably incurred by the
Company or any Guarantor, as the case may be, or any such director or officer or
such controlling person in connection with investigating or defending any such
loss, claim, damage, liability or any action in respect thereof. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 7, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under this Section 7. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 7 for any
legal or other expenses, other than reasonable costs of investigation,
-23-
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence or (ii) the
indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the consent
of the indemnifying party.
(d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 7 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations; provided, however, that in no case shall any Underwriter (except
as may be provided in any agreement among the Underwriters relating to the
offering of the Securities) be responsible for any amount in excess of the
purchase discount or commission applicable to the Securities purchased by such
Underwriter hereunder. The relative benefits received by the Company and the
Guarantors on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault of
the parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, any Guarantor or the Underwriters, the parties' intents, relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in the
circumstances. The Company, the Guarantors and the Underwriters agree that it
would not be equitable if the amount of such contribution were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to above in this paragraph (d).
Notwithstanding any other provision of this paragraph (d), 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 hereunder are several in proportion to their respective obligations
to purchase Securities as set forth in Schedule 1 hereto and not joint. For
purposes of this paragraph (d), each person, if any, who controls an Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company and each person, if
any, who controls the
-24-
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, shall have the same rights to contribution as the Company.
8. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers, and the several Underwriters set forth in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Company, any of its officers or directors, any Underwriter or any
controlling person referred to in Section 7 hereof and (ii) delivery of and
payment for the Securities. The respective agreements, covenants, indemnities
and other statements set forth in Sections 5 and 7 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement.
9. Defaulting Underwriters. (a) If, on the Closing Date,
any Underwriter defaults in the performance of its obligations under this
Agreement, the non-defaulting Underwriters may make arrangements for the
purchase of the Securities which such defaulting Underwriter agreed but failed
to purchase by other persons satisfactory to the Company and the non-defaulting
Underwriters, but if no such arrangements are made within 36 hours after the
default, this Agreement shall terminate without liability on the part of the
non-defaulting Underwriters or the Company, except that the Company and the
Subsidiaries will continue to be liable for the payment of expenses to the
extent set forth in Section 5 and except that the provisions of Section 7 shall
not terminate and shall remain in effect. As used in this Agreement, the term
"Underwriters" includes, for all purposes of this Agreement unless the context
otherwise requires, any party not listed in Schedule 1 hereto that, pursuant to
this section, purchases Securities which a defaulting Underwriter agreed but
failed to purchase.
10. Termination. (a) This Agreement may be terminated
with respect to the Securities in the sole discretion of the Underwriters, by
notice to the Company given prior to the Closing Date in the event that (i) any
condition to the obligations of the Underwriters set forth in Section 6 hereof
has not been satisfied, (ii) the Company shall have failed, refused or been
unable to deliver the Securities or to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date, or (iii) pursuant to Section 9 hereof.
(b) Termination of this Agreement pursuant to this
Section 10 shall be without liability of any party to any other party except as
provided in Sections 5 and 7 hereof.
11. Information Supplied by Underwriters. The following
statements set forth under the heading "Underwriting" in the Prospectus
constitute the only information furnished by any Underwriter to the Company for
the purposes of Sections 2(a) and 7 hereof: the third paragraph (concerning
conditions to the offering); the fourth paragraph (concerning transfer
restrictions in the United Kingdom); the fifth and sixth paragraphs (concerning
commissions and discounts); the first and second sentences of the ninth
paragraph (concerning a trading market); and the tenth paragraph (concerning
over-allotment and stabilization). The Underwriters confirm that such statements
are correct.
-25-
12. Notices. All communications hereunder shall be in
writing and, if sent to any of the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission and confirmed in writing to Wachovia
Securities, Inc., One Wachovia Center, 301 South College Street, TW-6,
Charlotte, North Carolina 28288-0602, Attention: High Yield Origination, with a
copy to Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New York
10038, Attention: Brian Hoffmann, Esq., and if sent to the Company, shall be
delivered or sent by mail, telex or facsimile transmission and confirmed in
writing to the Company at Gray Communications Systems, Inc., 4370 Peachtree
Road, NE, Atlanta, Georgia 30319, Attention: James Ryan, Chief Financial
Officer, with a copy to Proskauer Rose LLP, 1585 Broadway, New York, New York
10036, Attention: Robert A. Cantone, Esq.
13. Successors. This Agreement shall inure to the benefit
of and shall be binding upon the several Underwriters and the Company and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company and the Guarantors contained in Section 7 of this
Agreement shall also be for the benefit of any person or persons who control any
Underwriters within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act and (ii) the indemnities of the Underwriters contained in
Section 7 of this Agreement shall also be for the benefit of the directors of
the Company, the officers of the Company and any person or persons who control
the Company within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act. No purchaser of Securities from any Underwriter shall be
deemed a successor because of such purchase.
14. GOVERNING LAW. THE VALIDITY AND INTERPRETATION OF
THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
15. Consent to Jurisdiction, Service of Process and
Waiver of Trial by Jury.
(a) All judicial proceedings arising out of or relating
to this Agreement may be brought in any state or federal court of competent
jurisdiction in the State of New York.
(b) Each party agrees that any service of process or
other legal summons in connection with any Proceeding may be served on it by
mailing a copy thereof by registered mail, or a form of mail substantially
equivalent thereto, postage prepaid, addressed to the served party at its
address as provided for in Section 12 hereof. Nothing in this section shall
affect the right of the parties to serve process in any other manner permitted
by law.
(c) EACH PARTY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
-26-
16. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
17. Amendments. No amendment or waiver of any provision
of this Agreement, nor any consent or approval to any departure therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
parties hereto.
18. 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.
-27-
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
WACHOVIA SECURITIES, INC.
BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.
ALLEN & COMPANY LLC
By: WACHOVIA SECURITIES, INC.
By:
-----------------------------
Name:
Title:
THE ALBANY HERALD PUBLISHING COMPANY, INC.
POST-CITIZEN MEDIA, INC.
GRAY COMMUNICATIONS OF INDIANA, INC.
WEAU-TV, INC.
WVLT-TV, INC.
WRDW-TV, INC.
WITN-TV, INC
GRAY KENTUCKY TELEVISION, INC.
GRAY COMMUNICATIONS OF TEXAS, INC.
GRAY COMMUNICATIONS OF TEXAS-SHERMAN, INC.
GRAY TRANSPORTATION COMPANY, INC.
GRAY REAL ESTATE AND DEVELOPMENT CO.
GRAY FLORIDA HOLDINGS, INC.
KOLN/KGIN, INC.
WEAU LICENSEE CORP.
KOLN/KGIN LICENSE, INC.
WJHG LICENSEE CORP.
WCTV LICENSEE CORP.
WVLT LICENSEE CORP.
WRDW LICENSEE CORP.
WITN LICENSEE CORP.
WKYT LICENSEE CORP.
WYMT LICENSEE CORP.
KWTX-KBTX LICENSEE CORP.
KXII LICENSEE CORP.
GRAY TELEVISION MANAGEMENT, INC.
GRAY MIDAMERICA HOLDINGS, INC.
GRAY PUBLISHING, INC.
GRAY DIGITAL, INC.
KWTX-KBTX LP CORP.
KXII LP CORP.
PORTA-PHONE PAGING LICENSEE CORP.
KXII L.P.
KWTX-KBTX L.P.
LYNQX COMMUNICATIONS, INC.
For each of the above:
By:_______________________________________
Name:
Title:
UNDERWRITING AGREEMENT
SCHEDULE 1
UNDERWRITERS
Aggregate Principal
Amount of Securities to be
Underwriters Purchased from the Company
- --------------------------------------- -------------------------------------
Wachovia Securities, Inc. $
Banc of America Securities LLC $
Deutsche Banc Securities Inc. $
Allen & Company LLC $
Total $100,000,000
SCH. 1-1
SCHEDULE 2
GUARANTORS
Company State of Incorporation
- ---------------------------------------------------- ------------------------
The Albany Herald Publishing Company, Inc. Georgia
Post-Citizen Media, Inc. Georgia
Gray Communications of Indiana, Inc. Georgia
WEAU-TV, Inc. Georgia
WVLT-TV, Inc. Georgia
WRDW-TV, Inc. Georgia
WITN-TV, Inc Georgia
Gray Kentucky Television, Inc. Georgia
Gray Communications of Texas, Inc. Georgia
Gray Communications of Texas - Sherman, Inc. Georgia
Gray Transportation Company, Inc. Georgia
Gray Real Estate and Development Co. Georgia
Gray Florida Holdings, Inc. Georgia
KOLN/KGIN, Inc. Delaware
WEAU Licensee Corp. Delaware
KOLN/KGIN License, Inc. Delaware
WJHG Licensee Corp. Delaware
WCTV Licensee Corp. Delaware
WVLT Licensee Corp. Delaware
WRDW Licensee Corp. Delaware
WITN Licensee Corp. Delaware
WKYT Licensee Corp. Delaware
WYMT Licensee Corp. Delaware
KWTX-KBTX Licensee Corp. Delaware
KXII Licensee Corp. Delaware
Gray Television Management, Inc. Delaware
Gray MidAmerica Holdings, Inc. Delaware
Gray Publishing, Inc. Delaware
Gray Digital, Inc. Delaware
KWTX-KBTX LP Corp. Delaware
KXII LP Corp. Delaware
Porta-Phone Paging Licensee Corp. Delaware
KXII L.P. Delaware
KWTX-KBTX L.P. Delaware
Gray MidAmerica Television, Inc. Delaware
Lynqx Communications, Inc. Louisiana
SCH. 2-1
Exhibit A-1
[FORM OF TROUTMAN SANDERS LLP OPINION]
(i) Each of the Company and the Subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the laws of
the jurisdiction in which it is chartered or organized, is duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or conducts
material business, except in such jurisdictions in which the failure to
so qualify, in the aggregate, would not have a Material Adverse Effect;
(ii) The Company has an authorized, issued and outstanding capitalization as
set forth in the Prospectus, and all of the issued shares of capital
stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable;
(iii) The issued shares of capital stock of each Subsidiary have been duly
authorized and validly issued, are fully paid and nonassessable, and,
except as otherwise set forth in the Prospectus, are owned of record
and beneficially by the Company, either directly or through wholly
owned subsidiaries, free and clear of any pledge, charge, lien,
encumbrance, security interest, restriction on voting or transfer,
preemptive rights or other defect in title or any claim of any third
party;
(iv) Other than as set forth in the Prospectus, to our knowledge, there are
no legal or governmental proceedings pending or threatened to which the
Company or any of the Subsidiaries is or may be a party or to which any
property of the Company or the Subsidiaries is or may be the subject
which, if determined adversely, could individually or in the aggregate
be expected to have a Material Adverse Effect;
(v) The Company, Lynqx and each of the Guarantors that is a Georgia
corporation, as listed on Schedule 2 to this opinion (collectively, the
"Georgia Guarantors"), have the corporate or partnership power, as the
case may be, and authority to execute and deliver each Transaction
Document to which they are a party and to perform their respective
obligations thereunder including, in the case of the Company, the
issuance, sale and delivery of the Securities, and in the case of the
Georgia Guarantors, the issuance of their Guarantees;
(vi) The Indenture and the Agreement have each been duly and validly
authorized, executed and delivered by the Company, Lynqx and each of
the Georgia Guarantors;
(vii) The Notes have been duly and validly authorized by the Company and the
Guarantees have been duly authorized by Lynqx and each of the Georgia
Guarantors; and
(viii) The execution and delivery by the Company, Lynqx and each of the
Georgia Guarantors of, and the performance by the Company, Lynqx and
each of the Georgia Guarantors of all of the provisions of their
respective obligations under,
1
the Agreement, the Indenture, the Notes and the Guarantees, and the
consummation by the Company, Lynqx and each of the Georgia Guarantors
of the Transactions, (i) have been duly authorized by all necessary
corporate action on the part of the Company, Lynqx and each of the
Georgia Guarantors (to the extent a party thereto), respectively, (ii)
do not and will not result in any violation of their respective
Articles of Incorporation or the By-laws and (iii) do not and will not
conflict with, or result in a breach or violation of any of the terms
or provisions of, or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
give rise to any right to accelerate the maturity or require the
prepayment of any indebtedness or the purchase of any capital stock
under, or result in the creation or imposition of any lien, charge or
encumbrance upon, any of their respective properties or assets under,
(A) any contract, indenture, mortgage, deed of trust, loan agreement,
note, lease, partnership agreement or other agreement or instrument
known to us to which the Company, Lynqx or any such Georgia Guarantor
is a party, by which any of them may be bound or to which any of their
respective properties or assets may be subject, (B) any applicable law
or statute, rule or regulation (other than the securities or Blue Sky
laws of the various states of the United States of America) or (C) any
judgment, order or decree known to us of any government, governmental
instrumentality, agency, body or court, domestic or foreign, having
jurisdiction over the Company, Lynqx or any such Georgia Guarantor or
any of their respective properties or assets.
2
Exhibit A-2
[FORM OF PROSKAUER ROSE LLP OPINION]
SPECIAL COUNSEL TO THE COMPANY
(i) Each Transaction Document has been duly and validly authorized,
executed and delivered by each Guarantor that is a Delaware
corporation, as listed on Schedule 2 to this opinion (collectively, the
"Delaware Guarantors"); the Indenture has been duly qualified under the
Trust Indenture Act; and assuming the requisite corporate power and
authority of and due authorization, execution and delivery of such
Transaction Document by the Company, Lynqx, the Georgia Guarantors and
the Trustee, each such Transaction Document is a legal, valid and
binding agreement of the Company and each of the Guarantors,
enforceable against the Company and each of the Guarantors in
accordance with its terms, except that the enforcement thereof may be
subject to (1) bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws now or hereafter in effect relating
to creditors' rights generally and (2) general principles of equity and
the discretion of the court before which any proceeding therefor may be
brought (regardless of whether enforcement is considered in a
proceeding in equity or at law);
(ii) The Guarantees have been duly authorized by the Delaware Guarantors,
and assuming due authorization of the Notes by the Company and of the
Guarantees by Lynqx and the Georgia Guarantors, when the Notes and the
Guarantees are executed and authenticated in accordance with the
respective terms of the Indenture and delivered to and paid for by the
Underwriters, (i) the Notes and the Guarantees will be validly issued
and outstanding and entitled to the benefits of the Indenture, and (ii)
the Notes will constitute legal, valid and binding obligations of the
Company and the Guarantees will constitute legal, valid and binding
obligations of each of the Guarantors, in each case enforceable in
accordance with their respective terms, except that the enforcement
thereof may be subject to (1) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or similar laws now or hereafter in
effect relating to creditors' rights generally and (2) general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought (regardless of whether enforcement
is considered in a proceeding in equity or at law);
(iii) Each of the Delaware Guarantors has the corporate or partnership power,
as the case may be, and authority to execute and deliver each
Transaction Document to which it is a party and to perform its
respective obligations thereunder, including the issuance of their
Guarantees;
(iv) The Notes, Guarantees and the Indenture conform as to legal matters in
all material respects to the descriptions thereof in the Prospectus;
(v) The Registration Statement has become effective under the Securities
Act and the Prospectus including the prospectus supplement contemplated
by Section 4(a) hereof) was filed pursuant to Rule 424(b) of the Rules
and Regulations and, to our
1
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued or proceeding for that purpose
has been instituted or threatened by the SEC;
(vi) The Registration Statement and the Prospectus, as of their dates
(except for the financial statements, including the notes thereto, and
supporting schedules and other financial, statistical and accounting
data included therein or omitted therefrom, as to which no opinion is
expressed), and each amendment or supplement thereto, as of its date,
comply as to form in all material respects with the Securities Act, the
rules and regulations thereunder and the Trust Indenture Act;
(vii) The documents incorporated by reference in the Prospectus (other than
the financial statements (and notes thereto) and related schedules
therein, as to which we need express no opinion), when they were filed
with the SEC, complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder;
(viii) The Agreement has been duly authorized, executed and delivered by each
of the Delaware Guarantors;
(ix) Other than as set forth in the Prospectus, to our knowledge, there are
no legal or governmental proceedings pending or threatened to which the
Company or any of the Subsidiaries is or may be a party or to which any
property of the Company or the Subsidiaries is or may be the subject
which, if determined adversely, could individually or in the aggregate
be expected to have a Material Adverse Effect;
(x) The execution and delivery by the Delaware Guarantors of, and the
performance by each of the Delaware Guarantors of all of the provisions
of its respective obligations under, the Agreement, the Indenture and
Guarantees and the consummation by each of the Delaware Guarantors of
the Transactions (i) have been duly authorized by all necessary
corporate action on the part of each of the Delaware Guarantors (to the
extent a party thereto), (ii) do not and will not result in any
violation of the Certificate of Incorporation or the By-laws of any
Delaware Guarantor and (iii) do not and will not conflict with, or
result in a breach or violation of any of the terms or provisions of,
or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or give rise to any
right to accelerate the maturity or require the prepayment of any
indebtedness or the purchase of any capital stock under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
properties or assets of any Delaware Guarantor under, (A) any material
contract, indenture, mortgage, deed of trust, loan agreement, note,
lease, partnership agreement or other material agreement or instrument
known to us to which any such Delaware Guarantor is a party or by which
any of them may be bound or to which any of their respective properties
or assets may be subject, (B) any applicable U.S. federal or New York
State law or statute or regulation (other than the securities or Blue
Sky laws of the various states of the United States of
2
America as to which we express no opinion) or the Delaware General
Corporation Law or (C) any judgment, order or decree known to us of any
government, governmental instrumentality, agency, body or court,
domestic or foreign, having jurisdiction over any such Delaware
Guarantor or any of their respective properties or assets;
(xi) To our knowledge, no authorization, approval, consent, order,
registration, qualification or license of, or filing with, any
government, governmental instrumentality, agency, body or court,
domestic or foreign, or third party (other than as have been obtained
under the Securities Act or the Trust Indenture Act or as may be
required under the securities or Blue Sky laws of the various states of
the United States of America as to which we express no opinion) is
required for the valid authorization, issuance, sale and delivery of
the Notes and Guarantees, or the performance by the Company and each of
the Guarantors of all of their obligations under the Agreement, the
Indenture, the Notes and Guarantees, or the consummation by the Company
and each of the Guarantors of the transactions contemplated by the
Agreement;
(xii) The Company is not, nor will it be, as a result of the consummation of
any of the Transactions, an "investment company" or a company
"controlled by" an "investment company", within the meaning of the
Investment Company Act;
(xiii) Assuming the application of the proceeds of the Notes as set forth in
the Prospectus, neither the consummation of the transactions
contemplated by the Agreement, nor the sale, issuance, execution or
delivery of the Notes, will violate Regulation T, U or X of the Federal
Reserve Board;
(xiv) The statements in the Prospectus under the heading "Description of the
Notes", insofar as such statements purport to constitute a summary of
the terms of the Securities and under the heading "Summary of Certain
United States Tax Considerations", insofar as such statements relate to
statements of law or regulations or draw legal conclusions, have been
reviewed by us and fairly summarize the matters described under such
heading; and
(xv) Except as set forth in the Prospectus, there are no holders of
securities of the Company who, by reason of the execution by the
Company of this Agreement or the consummation by the Company of the
transactions contemplated thereby, have the right to request or demand
that the Company register under the Securities Act securities held by
them.
We have participated in conferences with officers and other
representatives of the Company and the Guarantors, representatives of the
independent auditors for the Company, and representatives of the Underwriters,
at which conferences the contents of the Prospectus and related matters were
discussed, and, although we are not general counsel to the Company or the
Subsidiaries and have not independently verified and are not passing upon and
assume no responsibility for the accuracy, completeness or fairness of the
statements contained in the Prospectus (except to the extent specified in
3
clause (xiii) hereof), no facts have come to our attention which lead us to
believe that the Prospectus, as of its date and as of the Closing Date,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading (it being understood that we are not expressing any
opinion with respect to the financial statements and the other financial and
statistical data included in or omitted from the Prospectus).
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Exhibit A-3
[FORM OF ROBERT BEIZER'S OPINION]
(i) The execution and delivery by each of the Company, the Licensees (as
defined below) and the Broadcast Subsidiaries of, and the performance
by each of the Company and the Broadcast Subsidiaries of its
obligations under, the Agreement, the Indenture, the Registration
Rights Agreement, the Notes and Guarantees, as applicable, did not or
will not result in a violation of the Communications Act, the
Telecommunications Act or any order, rule or regulation of the FCC, and
do not and will not cause any forfeiture or impairment by or before the
FCC of any FCC license, permit or authorization of any of the Broadcast
Subsidiaries;
(ii) Neither the Company nor any Subsidiary is (A) in violation of its
charter or by-laws or (B) in breach or violation of any of the terms or
provisions of, or with the giving of notice or lapse of time, or both,
would be in default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to us to which the
Company or such Subsidiary, respectively, is a party or by which it or
any of them or any of their respective properties is bound, or any
applicable law or statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or
such Subsidiary, respectively, or any of their respective properties,
except for violations and defaults which individually or in the
aggregate would not have a Material Adverse Effect;
(iii) No consent, approval, authorization, order, registration or
qualification of or with any governmental agency or body is required
under the Communications Act, the Telecommunications Act or the rules
and regulations of the FCC for the execution and delivery by each of
the Company and the Broadcast Subsidiaries of, and the performance by
each of the Company and the Broadcast Subsidiaries of its obligations
under, the Agreement, the Indenture, the Registration Rights Agreement,
the Notes and the Guarantees, as applicable;
(iv) Other than the Subsidiaries listed on Schedule 2 to such opinion, the
Company does not own, directly or indirectly, any capital stock or
other equity securities of any other corporation or any ownership
interest in any partnership, joint venture or other association;
(v) WEAU Licensee Corp., KOLN/KGIN License, Inc., WJHG Licensee Corp., WCTV
Licensee Corp., WVLT Licensee Corp., WRDW Licensee Corp., WITN Licensee
Corp., WKYT Licensee Corp., WYMT Licensee Corp., KWTX-KBTX Licensee
Corp., KXII Licensee Corp. and Porta-Phone Paging Licensee Corp.
(collectively, the "Licensees") are the holders of the FCC Licenses
listed in an attachment to such opinion, all of which are validly
issued by the FCC and in full force and effect with no material
restrictions or qualifications other than as described in the
Prospectus, and such FCC Licenses constitute all of the FCC Licenses
necessary for the Company and the Licensees to own their properties and
to conduct their businesses as proposed to be owned and conducted in
the
1
manner and to the full extent now operated or proposed to be operated
as described in the Prospectus;
(vi) To the best of our knowledge, the business and operations of the
Company and the Licensees comply in all material respects with the
Communications Act, the Telecommunications Act, the 1992 Cable Act and
all published orders, rules and regulations of the FCC;
(vii) We do not know of (A) any proceedings threatened, pending or
contemplated before the FCC against or involving the properties,
businesses or FCC Licenses of the Company and the Licensees, or (B) any
communications laws or regulations of the United States applicable to
such properties, businesses or FCC Licenses, which in either case could
have a Material Adverse Effect;
(viii) To the best of our knowledge, no event has occurred which permits, or
with notice or lapse of time or both would permit, the revocation or
non-renewal of any of the FCC Licenses, assuming the filing of timely
license renewal applications and the timely payment of all applicable
filing and regulatory fees to the FCC, or which might result in any
other material impairment of the rights of the Company or the Licensees
in the FCC Licenses;
(ix) The statements in the Risk Factors section of the Prospectus under the
captions "We operate in a highly competitive environment and
competition from other media entities may cause our advertising sales
to decrease or our costs to increase", "The phased introduction of
digital television will increase our capital and operating costs and
may expose us to increased competition", "Certain regulatory agencies
and the bankruptcy court must approve the merger and could delay or
refuse to approve the merger", "Federal regulation of the broadcasting
industry limits our operating flexibility", "The FCC's duopoly
restrictions limit our ability to own and operate multiple television
stations in the same market and our ability to own and operate a
television station and newspaper in the same market" and "Our paging
operations are subject to federal regulation" and the statements in the
Company's Annual Report on Form 10-K for the year ended December 31,
2001, as amended, incorporated by reference into the Prospectus, under
the captions "Competition -- Television Industry", "Competition --
Paging Industry" and "Federal Regulation of the Company's Business"
(together, the "Regulatory Sections"), insofar as such statements
constitute summaries of legal or regulatory matters, documents or
proceedings referred to therein, fairly present the information called
for with respect to such legal or regulatory matters, documents and
proceedings and fairly summarize the matters referred to therein; and
(x) Each of the agreements set forth on Schedule 1 to such opinion
(collectively, the "Reviewed Agreements") described in the Prospectus
and documents incorporated by reference therein conform in all material
respects to the description thereof contained in the Prospectus and
documents incorporated by
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reference therein, and, to my knowledge, do not differ in any material
respect from the descriptions thereof contained in the Prospectus.
We have participated in the preparation of the text included in the
Regulatory Sections in the Prospectus and have met with officers and other
representatives of the Company and the Subsidiaries and representatives of
counsel to the Company, the Underwriters and counsel to the Underwriters, and,
although we have not independently verified and are not passing upon and assume
no responsibility for the accuracy, completeness or fairness of the statements
contained in the Prospectus (except to the extent specified in clauses (ix) and
(x) above), no facts have come to our attention which lead us to believe that
the text contained in the Regulatory Sections of the Prospectus, as of its date
and as of the Closing Date, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that we are not expressing an opinion with respect to the financial statements
and the other financial and statistical data included in or omitted from the
Prospectus).
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Schedule 1 to the
Robert Beizer's Opinion
Reviewed Agreements
- - Merger Agreement among the Company, Stations and Gray MidAmerica Television,
Inc.
- - Each of the Lock Up Agreements entered into by the Company and Stations, on
the one hand, with each of certain stockholders and creditors of Stations, on
the other hand, as follows:
[LIST CERTAIN STOCKHOLDERS AND CREDITORS]
- - Other agreements relating to the Pending Merger.
- - Preferred Stock Purchase Agreement between the Company and certain investors
relating to the Series C Convertible Preferred Stock of the Company.
- - Ancillary agreements related to the above Preferred Stock Purchase Agreement.
- - Affiliation agreements between each of the Broadcast Subsidiaries, on the one
hand, and CBS or NBC, as the case may be, on the other hand. The Broadcast
Subsidiaries are as follows:
WEAU-TV, Inc., WVLT-TV, Inc., WRDW-TV, Inc., WITN-TV, Inc., Gray Kentucky
Television, Inc., Gray Communications of Texas, Inc., Gray Communications of
Texas - Sherman, Inc., KOLN-KGIN, Inc., Gray Florida Holdings, Inc., Gray
Television Management, Inc., Gray MidAmerica Holdings, Inc., Gray Digital,
Inc., KWTX-KBTX LP Corp., KXII L.P. Corp., KXII L.P., KWTX - KBTX L.P. and
Lynqx Communications, Inc.
- - Warrant Agreement between the Company and Bull Run Corporation for the
purchase of up to 100,000 shares of the Company's class B common stock.
- - Ancillary agreements related to the above Warrant Agreement.
- - Other agreements subject to continuing due diligence review.
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