-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GPsjd5Mgz4LvgYACyaJTwW7EjDXcSKbtLbEno2ElimhGk8cRRpS3r+Kkn3Nt9LM7 uizijTYgq6E4Ddfgg0b6wg== 0001005150-97-000761.txt : 19970923 0001005150-97-000761.hdr.sgml : 19970923 ACCESSION NUMBER: 0001005150-97-000761 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19970916 ITEM INFORMATION: FILED AS OF DATE: 19970922 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SINCLAIR BROADCAST GROUP INC CENTRAL INDEX KEY: 0000912752 STANDARD INDUSTRIAL CLASSIFICATION: TELEVISION BROADCASTING STATIONS [4833] IRS NUMBER: 521494660 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-26076 FILM NUMBER: 97683842 BUSINESS ADDRESS: STREET 1: 2000 WEST 41ST ST CITY: BALTIMORE STATE: MD ZIP: 21211 BUSINESS PHONE: 4104675005 MAIL ADDRESS: STREET 1: 2000 W 41ST ST CITY: BALTIMORE STATE: MD ZIP: 21211 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 ----------------- Date of Report (Date of earliest Commission File Number 0-26076 event reported) September 16, 1997 SINCLAIR BROADCAST GROUP, INC. (Exact name of registrant) Maryland 52-1494660 (State of organization) (I.R.S. Employer Identification Number) 2000 West 41st Street Baltimore, Maryland 21211 (Address of principal executive offices and zip code) (410) 467-5005 (Registrant's telephone Number) ITEM 5. OTHER EVENTS On September 16, 1997, the Securities and Exchange Commission (the "Commission") declared effective a Registration Statement (File No. 333-12257) on Form S-3 (the "Registration Statement") filed by Sinclair Broadcast Group, Inc. (the "Company") relating to the public offering, pursuant to Rule 415 under the Securities Act of 1933, as amended, of up to an aggregate of $1,000,000,000 in securities of the Company. (The Registration Statement and prospectus contained therein are collectively referred to as the "Prospectus.") On September 19, 1997, the Company filed with the Commission (i) a supplement dated September 17, 1997 to the Prospectus relating to the issuance and sale of 5,300,000 shares of Class A Common Stock of the Company (the "Common Stock Supplement") and (ii) a supplement dated September 17, 1997 to the Prospectus relating to the issuance and sale of 3,000,000 shares of $3.00 Series D Convertible Exchangeable Preferred Stock of the Company (the "Preferred Stock Supplement"). In connection with the filing of the Common Stock Supplement and the Preferred Stock Supplement with the Commission, the Company is filing certain exhibits as part of this Form 8-K. See "Item 7. Financial Statements and Exhibits." ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. The following exhibits are filed with this report on Form 8-K: 1.1 Underwriting Agreement dated as of September 17, 1997 by and among the Company, the several Selling Stockholders named therein and the several Underwriters named therein 1.2 Underwriting Agreement dated as of September 17, 1997 by and among the Company and the several Underwriters named therein 4.1 Articles Supplementary to the Amended and Restated Articles of Incorporation of the Company governing the $3.00 Series D Convertible Exchangeable Preferred Stock, including the form of the First Supplemental Indenture relating to the 6% Convertible Subordinated Exchange Debentures due September 15, 2012 4.2 Specimen certificate representing the $3.00 Series D Convertible Exchangeable Preferred Stock 5.1 Opinion of Wilmer, Cutler & Pickering 5.2 Opinion of Thomas & Libowitz, P.A. 23.1 Consent of Wilmer, Cutler & Pickering (included as part of Exhibit 5.1) 23.2 Consent of Thomas & Libowitz, P.A. (included as part of Exhibit 5.2) SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SINCLAIR BROADCAST GROUP, INC. By: /s/ David B. Amy ------------------------------------- Name: David B. Amy Title: Chief Financial Officer Dated: September 22, 1997 EXHIBIT INDEX EXHIBIT NUMBER EXHIBIT 1.1 Underwriting Agreement dated as of September 17, 1997 by and among the Company, the several Selling Stockholders named therein and the several Underwriters named therein 1.2 Underwriting Agreement dated as of September 17, 1997 by and among the Company and the several Underwriters named therein 4.1 Articles Supplementary to the Amended and Restated Articles of Incorporation of the Company governing the $3.00 Series D Convertible Exchangeable Preferred Stock, including the form of the First Supplemental Indenture relating to the 6% Convertible Subordinated Exchange Debentures due September 15, 2012 4.2 Specimen certificate representing $3.00 Series D Convertible Exchangeable Preferred Stock 5.1 Opinion of Wilmer, Cutler & Pickering 5.2 Opinion of Thomas & Libowitz, P.A. 23.1 Consent of Wilmer, Cutler & Pickering (included as part of Exhibit 5.1) 23.2 Consent of Thomas & Libowitz, P.A. (included as part of Exhibit 5.2) EX-1.1 2 EXHIBIT 1.1 5,300,000 Shares SINCLAIR BROADCAST GROUP, INC. Class A Common Stock UNDERWRITING AGREEMENT September 17, 1997 SMITH BARNEY INC. BT ALEX. BROWN INCORPORATED CREDIT SUISSE FIRST BOSTON CORPORATION SALOMON BROTHERS INC CHASE SECURITIES INC. FURMAN SELZ LLC As Representatives of the Several Underwriters c/o SMITH BARNEY INC. 388 Greenwich Street New York, New York 10013 Dear Sirs: Sinclair Broadcast Group, Inc., a Maryland corporation (the "Company"), proposes to issue and sell an aggregate of 4,000,000 shares of its Class A Common Stock, par value $0.01 per share (the "Class A Common Stock"), to the several Underwriters named in Schedule II hereto (the "Underwriters") for whom Smith Barney Inc., BT Alex. Brown Incorporated, Credit Suisse First Boston Corporation, Salomon Brothers Inc, Chase Securities Inc. and Furman Selz LLC are acting as representatives (the "Representatives") and the persons named in Schedule I hereto (the "Selling Stockholders") propose to sell to the several Underwriters an aggregate of 1,300,000 shares of Class B Common Stock, par value $0.01 per share (the "Class B Common Stock", and collectively with the Class A Common Stock, the "Common Stock") of the Company, which shares of Class B Common Stock will be converted to shares of Class A Common Stock upon such sale. The Company and the Selling Stockholders are hereinafter sometimes referred to as the "Sellers." The 4,000,000 shares of Class A Common Stock to be issued and sold to the Underwriters by the Company and the 1,300,000 shares of Class B Common Stock to be sold to the Underwriters by the Selling Stockholders are hereinafter referred to as the "Firm Shares." The Company and certain of the Selling Stockholders also propose to sell to the Underwriters, upon the terms and conditions set forth in Section 2 hereof, up to an additional 345,000 shares of Class A Common Stock and 450,000 shares of Class B Common Stock, which shares of Class B Common Stock will be converted to shares of Class A Common Stock upon such sale, respectively (all of such shares, the "Additional Shares"). The Firm Shares and the Additional Shares are hereinafter collectively referred to as the "Shares." -1- The Company and the Selling Stockholders wish to confirm as follows its respective agreements with you and the other several Underwriters on whose behalf you are acting, in connection with the several purchases of the Shares by the Underwriters. 1. Registration Statement and Prospectus. The Company has prepared and filed with the Commission in accordance with the provisions of the Securities Act of 1933, as amended (the "Act"), a registration statement on Form S-3 under the Act (the "registration statement"), including a prospectus, and a prospectus supplement subject to completion, relating to the Shares. The term "Registration Statement" as used in this Agreement means the registration statement (including all financial schedules and exhibits), as amended at the time it becomes effective, or, if the registration statement became effective prior to the execution of this Agreement, as supplemented or amended prior to the execution of this Agreement and shall include in any such case the information, if any, deemed to be a part of such registration statement pursuant to Rule 430A(b) under the Act. If it is contemplated, at the time this Agreement is executed, that a post-effective amendment to the registration statement will be filed and must be declared effective before the offering of the Shares may commence, the term "Registration Statement" as used in this Agreement means the registration statement as amended by said post-effective amendment and including the information, if any, deemed to be a part thereof pursuant to Rule 430A(b), under the Act. If the Company files a registration statement to register a portion of the Shares pursuant to Rule 462(b) under the Act (the "Rule 462(b) Registration Statement"), then after such filing the term "Registration Statement" in this Agreement shall be deemed to include the Rule 462(b) Registration Statement at the time it became effective. The term "Prospectus" as used in this Agreement means the prospectus, including any prospectus supplement relating to the offering of the Shares, in the forms included in the Registration Statement, or, if the prospectus included in the Registration Statement omits information in reliance on Rule 430A under the Act and such information is included in prospectuses filed with the Commission pursuant to Rule 424(b) under the Act, the term "Prospectus" as used in this Agreement means the prospectus in the form included in the Registration Statement as supplemented by the addition of the Rule 430A information contained in the prospectuses filed with the Commission pursuant to Rule 424(b). The term "Prepricing Prospectus" as used in this Agreement means the prospectus (including any preliminary prospectus supplement relating to the offering of the Shares) subject to completion in the form included in the Registration Statement at the time of the filing of any preliminary prospectus supplement as part of the Registration Statement with the Commission, and as such prospectus shall have been amended from time to time prior to the date of the Prospectus. Any reference in this Agreement to the registration statement, the Registration Statement, any Prepricing Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date of the registration statement, the Registration Statement, such Prepricing Prospectus or the Prospectus, as the case may be, and any reference to any amendment or Prepricing Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after such date under the Securities Exchange -2- Act of 1934, as amended (the "Exchange Act") which, upon filing, are incorporated by reference therein, as required by paragraph (b) of Item 12 of Form S-3. As used herein, the term "Incorporated Documents" means the documents which at the time are incorporated by reference in the registration statement, the Registration Statement, any Prepricing Prospectus, the Prospectus, or any amendment or supplement thereto; "Rules and Regulations" means the rules and regulations adopted by the Commission under either the Act or the Exchange Act, as applicable; and "Person" means any individual, partnership, joint venture, corporation, limited liability company, trust, unincorporated organization or government or department or agency thereof. 2. Agreements to Sell and Purchase. Subject to such adjustments as you may determine in order to avoid fractional shares, the Company hereby agrees, subject to all the terms and conditions set forth herein, to issue and sell to each Underwriter and, upon the basis of the representations, warranties and agreements of the Company and the Selling Stockholders herein contained and subject to all the terms and conditions set forth herein, each Underwriter agrees, severally and not jointly, to purchase from the Company, at a purchase price of $34.94875 per Share (the " Purchase Price Per Share"), the number of Firm Shares which bears the same proportion to the total number of Firm Shares being sold by the Company (4,000,000) as the number of Firm Shares set forth opposite the name of such Underwriter in Schedule II hereto (or such number of Firm Shares increased as set forth in Section 12 hereof) bears to the aggregate number of Firm Shares to be sold by the Company and the Selling Stockholders (5,300,000). Subject to such adjustments as you may determine in order to avoid fractional shares, each Selling Stockholder agrees, subject to all the terms and conditions set forth herein, to sell to each Underwriter and, upon the basis of the representations, warranties and agreements of the Company and the Selling Stockholders herein contained and subject to all the terms and conditions set forth herein, each Underwriter, severally and not jointly, agrees to purchase from each Selling Stockholder at the Purchase Price Per Share the number of Firm Shares which bears the same proportion to the number of Firm Shares set forth opposite the name of such Selling Stockholder in Schedule I hereto as the number of Firm Shares set forth opposite the name of such Underwriter in Schedule II hereto (or such number of Firm Shares increased as set forth in Section 12 hereof) bears to the aggregate number of Firm Shares to be sold by the Company and the Selling Stockholders (5,300,000). The Company and certain of the Selling Stockholders also agree, subject to all the terms and conditions set forth herein, to sell to the Underwriters, and, upon the basis of the representations, warranties and agreements of the Company and the Selling Stockholders herein contained and subject to all the terms and conditions set forth herein, the Underwriters shall have the right to purchase from the Company and such Selling Stockholders, at the Purchase Price Per Share, pursuant to an option (the "over-allotment option") which may be exercised at any time and from time to time prior to 9:00 P.M., New York City time, on the 30th day after the date of the Prospectus (or, if such 30th day -3- shall be a Saturday or Sunday or a holiday, on the next business day thereafter when the New York Stock Exchange is open for trading), up to 345,000 Additional Shares of Class A Common Stock from the Company and an aggregate of 450,000 Additional Shares of Class B Common Stock from such Selling Stockholders as set forth on Schedule I. Additional Shares may be purchased only for the purpose of covering over-allotments made in connection with the offering of the Shares. Upon any exercise of the over-allotment option, subject to such adjustments as you may determine in order to avoid fractional shares, each Underwriter, severally and not jointly, agrees to purchase from each of the Company and such Selling Stockholders, in proportions equal to those of the maximum numbers of Additional Shares made available by the selling parties for the over-allotment option, at the Purchase Price Per Share, that number of Additional Shares which bears the same proportion to the total number of Additional Shares being sold by such party pursuant to the over-allotment option as the number of Firm Shares set forth opposite the name of such Underwriter in Schedule II hereto (or such number of Firm Shares increased as set forth in Section 12 hereof) bears to the aggregate number of Firm Shares to be sold by the Company and the Selling Stockholders (5,300,000). Certificates in transferable form for the Shares which each of the Selling Stockholders agrees to sell pursuant to this Agreement have been placed in custody with BankBoston, N.A. (the "Custodian") for delivery under this Agreement pursuant to a Custody Agreement and Power of Attorney (the "Custody Agreement") executed by each of the Selling Stockholders appointing David B. Amy, C. Wayne Davis and John B. Watkins as agents and attorneys-in-fact (the "Attorneys-in-Fact"). Each Selling Stockholder agrees that (i) the Shares represented by the certificates held in custody pursuant to the Custody Agreement are subject to the interests of the Underwriters, the Company and each other Selling Stockholder, (ii) the arrangements made by the Selling Stockholders for such custody are, except as specifically provided in the Custody Agreement, irrevocable, and (iii) the obligations of the Selling Stockholders hereunder and under the Custody Agreement shall not be terminated by any act of such Selling Stockholder or by operation of law, whether by the death or incapacity of any Selling Stockholder or the occurrence of any other event. If any Selling Stockholder shall die or be incapacitated or if any other event, shall occur before the delivery of the Shares hereunder, certificates for the Shares of such Selling Stockholder shall be delivered to the Underwriters by the Attorneys-in-Fact in accordance with the terms and conditions of this Agreement and the Custody Agreement as if such death or incapacity or other event had not occurred, regardless of whether or not the Attorneys-in-Fact or any Underwriter shall have received notice of such death, incapacity or other event. Each Attorney-in-Fact is authorized, on behalf of each of the Selling Stockholders, to execute this Agreement and any other documents necessary or desirable in connection with the sale of the Shares to be sold hereunder by such Selling Stockholder, to make delivery of the certificates for such Shares, to receive the proceeds of the sale of such Shares, to give receipts for such proceeds, to pay therefrom any expenses to be borne by such Selling Stockholder in connection with the sale and public offering of such Shares, to distribute the balance thereof to such Selling Stockholder, and to take such other action as may be necessary or -4- desirable in connection with the transactions contemplated by this Agreement. Each Attorney-in-Fact agrees to perform his duties under the Custody Agreement. 3. Terms of Public Offering. The Company has been advised by you that the Underwriters propose to make a public offering of their respective portions of the Shares as soon after the Registration Statement and this Agreement have become effective as in your judgment is advisable and initially to offer the Shares upon the terms set forth in the Prospectus. 4. Delivery of the Shares and Payment Therefor. Delivery to the Underwriters of and payment for the Firm Shares shall be made at the office of Smith Barney Inc., 388 Greenwich Street, New York, NY 10013, at 9:00 A.M., New York City time, on September 23, 1997 (the "Closing Date"). The place of closing for the Firm Shares and the Closing Date may be varied by agreement between you and the Company. Delivery to the Underwriters of and payment for any Additional Shares to be purchased by the Underwriters shall be made at the aforementioned office of Smith Barney Inc. at such time on such date (the "Option Closing Date"), which may be the same as the Closing Date but shall in no event be earlier than the Closing Date nor earlier than two nor later than ten business days after the giving of the notice hereinafter referred to, as shall be specified in a written notice from you on behalf of the Underwriters to the Company of the Underwriters' determination to purchase a number, specified in such notice, of Additional Shares. The place of closing for any Additional Shares and the Option Closing Date for such Shares may be varied by agreement between you and the Company. Certificates for the Firm Shares and for any Additional Shares to be purchased hereunder shall be registered in such names and in such denominations as you shall request by written notice (it being understood that a facsimile transmission shall be deemed written notice) prior to 9:30 A.M., New York City time, on the second business day preceding the Closing Date or any Option Closing Date, as the case may be. Such certificates shall be made available to you in New York City for inspection and packaging not later than 9:30 A.M., New York City time, on the business day next preceding the Closing Date or the Option Closing Date, as the case may be. The certificates evidencing the Firm Shares and any Additional Shares to be purchased hereunder shall be delivered to you on the Closing Date or the Option Closing Date, as the case may be, against payment of the purchase price therefor in immediately available funds to the order of the Company and the Attorneys-in-Fact. 5. Agreements of the Company. The Company agrees with the several Underwriters as follows: (a) If, at the time this Agreement is executed and delivered, it is necessary for the Registration Statement or a post-effective amendment thereto to be declared effective before the offering of the Shares may commence, the Company will -5- endeavor to cause the Registration Statement or such post-effective amendment to become effective as soon as possible and will advise you promptly and, if requested by you, will confirm such advice in writing, when the Registration Statement or such post-effective amendment has become effective. (b) The Company will advise you promptly and, if requested by you, will confirm such advice in writing: (i) of any request by the Commission for amendment of or a supplement to the Registration Statement, any Prepricing Prospectus or the Prospectus or for additional information; (ii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of the suspension of qualification of the Shares for offering or sale in any jurisdiction or the initiation of any proceeding for such purpose; and (iii) within the period of time referred to in paragraph (f) below, of any change in the Company's condition (financial or otherwise), business, prospects, properties, net worth or results of operations, or of the happening of any event, including the filing of any information, documents or reports pursuant to the Exchange Act, which makes any statement of a material fact made in the Registration Statement or the Prospectus (as then amended or supplemented) untrue or which requires the making of any additions to or changes in the Registration Statement or the Prospectus (as then amended or supplemented) in order to state a material fact required by the Act or the regulations thereunder to be stated therein or necessary in order to make the statements therein not misleading, or of the necessity to amend or supplement the Prospectus (as then amended or supplemented) to comply with the Act or any other law. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, the Company will make every reasonable effort to obtain the withdrawal of such order at the earliest possible time. (c) The Company will furnish to you, without charge (i) six signed copies of the Registration Statement as originally filed with the Commission and of each amendment thereto, including financial statements and all exhibits thereto, (ii) such number of conformed copies of the Registration Statement as originally filed and of each amendment thereto, but without exhibits, as you may reasonably request, (iii) such number of copies of the Incorporated Documents, without exhibits, as you may request, and (iv) six copies of the exhibits to the Incorporated Documents. (d) So long as, in the opinion of counsel for the Underwriters, a Prospectus is required to be delivered in connection with sales by any Underwriter or dealer, the Company will not (i) file any amendment to the Registration Statement, make any amendment or supplement to the Prospectus or file any document which, upon filing becomes an Incorporated Document, of which you shall not previously have been advised or to which you shall reasonably object after being so advised or (ii) file any information, documents or reports pursuant to the Exchange Act without delivering a copy of such information, documents or reports to you, as Representatives of the Underwriters, prior to such filing. -6- (e) Prior to the execution and delivery of this Agreement, the Company has delivered to you, without charge, in such quantities as you have reasonably requested, copies of each form of the Prepricing Prospectus. The Company consents to the use, in accordance with the provisions of the Act and with the securities or Blue Sky laws of the jurisdictions in which the Shares are offered, by the several Underwriters and by dealers, prior to the date of the Prospectus, of each Prepricing Prospectus so furnished by the Company. (f) As soon after the execution and delivery of this Agreement as possible and thereafter from time to time for such period as in the opinion of counsel for the Underwriters a Prospectus is required by the Act to be delivered in connection with sales by any Selling Stockholder, Underwriter or dealer, the Company will expeditiously deliver to each Underwriter and each dealer, without charge, as many copies of the Prospectus (and of any amendment or supplement thereto) as you may reasonably request. The Company consents to the use of the Prospectus (and of any amendment or supplement thereto), in accordance with the provisions of the Act and with the securities or Blue Sky laws of the jurisdictions in which the Shares are offered, by the several Underwriters and by all dealers to whom Shares may be sold, both in connection with the offering and sale of the Shares and for such period of time thereafter as the Prospectus is required by the Act to be delivered in connection with sales by any Underwriter or dealer. If during such period of time any event shall occur that in the judgment of the Company or in the opinion of counsel for the Underwriters is required to be set forth in the Prospectus (as then amended or supplemented) or should be set forth therein in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary to supplement or amend the Prospectus (or to file under the Exchange Act any document which, upon filing, becomes an Incorporated Document) to comply with the Act or any other law, the Company will forthwith prepare and, subject to the provisions of paragraph (d) above, file with the Commission an appropriate supplement or amendment thereto or file an Incorporated Document, and will expeditiously furnish to the Underwriters and dealers a reasonable number of copies thereof. In the event that the Company and you, as Representatives of the several Underwriters, agree that the Prospectus should be amended or supplemented, the Company, if requested by you, will promptly issue a press release announcing or disclosing the matters to be covered by the proposed amendment or supplement. (g) The Company will cooperate with you and with counsel for the Underwriters in connection with the registration or qualification of the Shares for offering and sale by the several Underwriters and by dealers under the securities or Blue Sky laws of such jurisdictions as you may reasonably designate and will file such consents to service of process or other documents necessary or appropriate in order to effect such registration or qualification; provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action which would subject it to service of process in suits, other than those arising out of the offering or sale of the Shares, in any jurisdiction where it is not now so subject. -7- (h) The Company will make generally available to its security holders a consolidated earnings statement, which need not be audited, covering a twelve-month period commencing after the effective date of the Registration Statement and ending not later than fifteen months thereafter, as soon as practicable after the end of such period, which consolidated earnings statement shall satisfy the provisions of Section 11(a) of the Act and the Rules and Regulations (including, at the option of the Company, Rule 158). (i) During the period of five years after the date of this Agreement, the Company will furnish to you (i) as soon as available, a copy of each report of the Company mailed to stockholders or filed with any stock exchange or regulatory body and (ii) from time to time such other information concerning the Company as you may reasonably request. (j) If this Agreement shall terminate or shall be terminated after execution pursuant to any provisions hereof (otherwise than pursuant to the second paragraph of Section 12 hereof or by notice given by you terminating this Agreement pursuant to Section 12 or Section 13 hereof) or if this Agreement shall be terminated by the Underwriters because of any failure or refusal on the part of the Company or the Selling Stockholders to comply with the terms or fulfill any of the conditions of this Agreement, the Company agrees to reimburse the Representatives for all out-of-pocket expenses (including fees and expenses of counsel for the Underwriters) incurred by you in connection herewith. (k) The Company will apply the net proceeds from the sale of the Shares substantially in accordance with the description set forth in the Prospectus. (l) If Rule 430A of the Act is employed, the Company will timely file the Prospectus in the proper manner pursuant to Rule 424(b) under the Act and will advise you of the time and manner of such filing. (m) Except as provided in this Agreement, the Company will not offer to sell, sell, contract to sell or otherwise dispose of any Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, or grant any options or warrants to purchase Common Stock or such securities, for a period of 90 days after the date of the Prospectus, without the prior written consent of Smith Barney Inc. (n) The Company has furnished or will furnish to you "lock-up" letters, in form and substance satisfactory to you, signed by each of its current officers and directors and each of its stockholders designated by you. (o) Except as stated in this Agreement and in the Prepricing Prospectus and Prospectus, the Company has not taken, nor will it take, directly or indirectly, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Shares. -8- (p) The Company will use its reasonable and diligent efforts to have the Shares listed, subject to notice of issuance of Shares, on the Nasdaq National Market concurrently with the execution of this Agreement. 6. Agreements of the Selling Stockholders. Each of the Selling Stockholders agrees with the several Underwriters as follows: (a) Such Selling Stockholder will cooperate to the extent necessary to cause the registration statement or any post-effective amendment thereto to become effective at the earliest possible time. (b) Such Selling Stockholder will pay all federal and other taxes, if any on the transfer or sale of the Shares being sold by such Selling Stockholder to the Underwriters. (c) Such Selling Stockholder will do or perform all things required to be done or performed by such Selling Stockholder prior to the Closing Date or any Option Closing Date, as the case may be, to satisfy all conditions precedent to the delivery of the Shares pursuant to this Agreement or as otherwise reasonably requested by the Underwriters. (d) Except as stated in this Agreement and in the Prepricing Prospectus and the Prospectus, such Selling Stockholder will not take, directly or indirectly, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Shares. (e) Except as provided in this Agreement, such Selling Stockholder will not offer to sell, sell, contract to sell or otherwise dispose of any Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, or grant any options or warrants to purchase Common Stock or such securities, for a period of 90 days after the date of the Prospectus, without the prior written consent of Smith Barney Inc. (f) Such Selling Stockholder will advise you promptly and, if requested by you, will confirm such advice in writing, within the period of time referred to in Section 5(f) hereof, of any change in the Company's condition (financial or otherwise), business, prospects, properties, net worth or results of operations, or of the happening of any event, including the filing of any information, documents or reports pursuant to the Exchange Act, or of any change in information relating to such Selling Stockholder or the Company or any new information relating to the Company or relating to any matter stated in the Prospectus or any amendment or supplement thereto which comes to the attention of such Selling Stockholder, which makes any statement of a material fact made in the Registration Statement or the Prospectus (as then amended or supplemented) untrue or which requires the making of any additions to or changes in the Registration Statement or -9- Prospectus (as then amended or supplemented) in order to state a material fact required by the Act or the regulations thereunder to be stated therein or necessary in order to make the statements therein not misleading, or of the necessity to amend or supplement the Prospectus (as then amended or supplemented) to comply with the Act or any other law. 7. Representations and Warranties of the Company. The Company represents and warrants to each Underwriter that: (a) Each Prepricing Prospectus included as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto, or filed pursuant to Rule 424 under the Act, complied when so filed in all material respects with the provisions of the Act. The Commission has not issued any order preventing or suspending the use of any Prepricing Prospectus. (b) The Company and the transactions contemplated by this Agreement meet the requirements for using Form S-3 under the Act. The Registration Statement in the form in which it became or becomes effective, and also in such form as it may be when any post-effective amendment thereto shall become effective, and the Prospectus and any supplement or amendment thereto when filed with the Commission under Rule 424(b) under the Act, complied or will comply in all material respects with the provisions of the Act and did not or will not at any such times contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; except that this representation and warranty does not apply to statements in or omissions from the Registration Statement or the Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by or on behalf of any Underwriter through you expressly for use therein. (c) The Incorporated Documents heretofore filed, when they were filed (or, if any amendment with respect to any such document was filed, when such amendment was filed), conformed in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder, any further Incorporated Documents so filed will, when they are filed, conform in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder; no such document when it was filed (or, if an amendment with respect to any such document was filed, when such amendment was filed), contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; and no such further document, when it is filed, will contain an untrue statement of a material fact or will omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading. (d) All the outstanding shares of the capital stock of the Company have been duly authorized and validly issued, are fully paid and nonassessable and are free of any preemptive or similar rights; the Shares to be issued and sold by the Company have -10- been duly authorized and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms hereof, will be validly issued, fully paid and nonassessable and free of any preemptive or similar rights; the shares of Class A Common Stock which may be issued upon conversion of the Company's Class B Common Stock will be validly issued, fully paid and nonassessable and free of any preemptive or similar rights and the capital stock of the Company conforms to the description thereof in the Registration Statement and the Prospectus. (e) The Company is a corporation duly organized and validly existing in good standing under the laws of the State of Maryland with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify would not have a material adverse effect on the condition (financial or other), business, properties, net worth or results of operations of the Company and the Subsidiaries (as hereinafter defined) taken as a whole (a "Material Adverse Effect"). (f) All the Company's subsidiaries (collectively, the "Subsidiaries") are listed on Exhibit A hereto. Each Subsidiary is a corporation or a trust duly organized, validly existing and in good standing in the jurisdiction of its incorporation or organization, as the case may be, with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify does not have a Material Adverse Effect; all the outstanding shares of capital stock of each of the Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable, and are owned by the Company directly, or indirectly through one of the other Subsidiaries, free and clear of any lien, adverse claim, security interest, equity or other encumbrance except as described in the Prospectus. (g) The Company has full legal right, power and authority to enter into this Agreement and to issue, sell and deliver the Shares to be sold by it as provided herein. No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the execution, delivery or performance of this Agreement by the Company or the consummation by the Company or any Subsidiary, as the case may be, of the transactions contemplated hereby, except such as may be required under the Act, the Exchange Act and state securities or blue sky laws or by the National Association of Securities Dealers, Inc. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company or any Subsidiary, as the case may be, of the transactions contemplated hereby does not -11- and will not conflict with or result in a breach or violation by the Company of any of the terms or provisions of, constitute a default by the Company under, or result in the creation or imposition of any lien, charge, security interest or encumbrance upon any of the assets of the Company or any Subsidiary pursuant to the terms of any (A) indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which the Company or any of the Subsidiaries, as the case may be, is a party or to which any of them or any of their respective properties is subject, (B) the charter or bylaws of the Company or any of the Subsidiaries, as the case may be, or (C) any statute, judgment, decree, order, rule or regulation of any court or governmental agency or body applicable to the Company or any of the Subsidiaries or any of their respective properties. (h) The execution and delivery of, and the performance by the Company of its obligations under, this Agreement has been duly and validly authorized by all necessary corporate action on the part of the Company, and this Agreement has been duly executed and delivered by the Company. (i) Except as described or referred to in the Prospectus, there is not pending or to the knowledge of the Company threatened, any action, suit, proceeding, inquiry or investigation, to which the Company or any of the Subsidiaries is a party, or to which the property of the Company or any of the Subsidiaries is subject, before or brought by any court or governmental agency or body, which, if determined adversely to the Company or any of the Subsidiaries would individually or in the aggregate result in a Material Adverse Effect or might materially adversely affect the consummation of the transactions contemplated by this Agreement; and all pending legal or governmental proceedings to which the Company or any of the Subsidiaries is a party or that affect any of their respective properties, that are not described in the Prospectus or the Incorporated Documents, including ordinary routine litigation incidental to the business, would not, if determined adversely to the Company or any of the Subsidiaries, individually or in the aggregate, result in a Material Adverse Effect. (j) Neither the Company nor any of the Subsidiaries is in violation of its certificate or articles of incorporation or bylaws, or other organizational documents, or of any law, ordinance, administrative or governmental rule or regulation applicable to the Company or any of the Subsidiaries or of any decree of any court or governmental agency or body having jurisdiction over the Company or any of the Subsidiaries, or in default in any material respect in the performance of any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any agreement, indenture, lease or other instrument to which the Company or any of the Subsidiaries is a party or by which any of them or any of their respective properties may be bound and no condition or state of facts exists, with which the passage of time or the giving of notice or both would constitute such a default, except in each case where such violation or default would not, singly or in the aggregate, have a Material Adverse Effect. -12- (k) There are no agreements, contracts, indentures, leases or other instruments that are required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement that are not described or filed as required by the Act. (l) The accountants, Arthur Andersen LLP, Ernst & Young LLP, KPMG Peat Marwick LLP and Price Waterhouse LLP, who have certified or shall certify the financial statements included in or incorporated by reference in the Registration Statement and the Prospectus (or any amendment or supplement thereto), are independent public accountants as required by the Act. (m) The consolidated financial statements, together with the related schedules and notes included in or incorporated by reference in the Registration Statement and the Prospectus present fairly the consolidated financial position, results of operations and changes in financial position of the entities purported to be shown thereby at the dates and for the periods indicated and have been prepared in accordance with generally accepted accounting principles ("GAAP") applied on a consistent basis, except as otherwise stated therein. The selected financial data and summary financial data included in or incorporated by reference in the Registration Statement and the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited consolidated financial statements included in the Registration Statement and the Prospectus. The pro forma financial statements and other pro forma financial information included in or incorporated by reference in the Registration Statement and the Prospectus present fairly the information shown therein in accordance with the adjustments and assumptions described therein, have been prepared in accordance with the Commission's rules and guidelines with respect to pro forma financial statements, have been properly compiled on the pro forma basis described therein and in the opinion of the Company, the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions or circumstances referred to therein. (n) Except as disclosed in the Registration Statement and the Prospectus (or any amendment or supplement thereto), subsequent to the respective dates as of which such information is given in the Registration Statement and the Prospectus (or any amendment or supplement thereto), neither the Company nor any of the Subsidiaries has incurred any liability or obligation, direct or contingent, or entered into any transaction, not in the ordinary course of business, that is material to the Company and the Subsidiaries taken as a whole, and there has not been any change in the capital stock, or material increase in the short-term debt or long-term debt, of the Company or any of the Subsidiaries, or any material adverse change, or any development involving or which may reasonably be expected to involve, a prospective material adverse change, in the condition (financial or other), business, net worth or results of operations of the Company and the Subsidiaries taken as a whole. -13- (o) Each of the Company and the Subsidiaries has good and marketable title to all property (real and personal) described in the Prospectus as being owned by it, free and clear of all liens, claims, security interests or other encumbrances, except such as are described in the Registration Statement and the Prospectus or with such exceptions as are not material and do not interfere with the use made and proposed to be made of such properties by the Company and the Subsidiaries and could not reasonably be expected individually or in the aggregate to result in a Material Adverse Effect; and all of the leases and subleases material to the business of the Company and the Subsidiaries taken as a whole, and under which the Company or any of the Subsidiaries holds properties whether or not described in the Registration Statement and the Prospectus, are in full force and effect and neither the Company nor any of the Subsidiaries has any notice of any claim of any sort that has been asserted by anyone adverse to the rights of the Company or any of the Subsidiaries under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or any of the Subsidiaries to the continued possession of the leased or subleased premises under any such lease or sublease, which claim could reasonably be expected individually or in the aggregate to result in a Material Adverse Effect. (p) Each of the Company and the Subsidiaries owns or possesses, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, trademarks, service marks, trade names and know-how (including trade secrets and other patentable and/or unpatentable proprietary or confidential information or procedures) (collectively, "intellectual property") necessary to carry on its business as presently operated by it, except where the failure to own or possess or have the ability to acquire any such intellectual property would not individually or in the aggregate result in a Material Adverse Effect; and none of the Company or any of the Subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any intellectual property or of any facts which would render any intellectual property invalid or inadequate to protect the interest of the Company or any of the Subsidiaries therein and which infringement or conflict could reasonably be expected in the aggregate to result in a Material Adverse Effect. (q) The Company has not distributed and, prior to the later to occur of (i) the Closing Date and (ii) completion of the distribution of the Shares, will not distribute any offering material in connection with the offering and sale of the Shares other than the Registration Statement, the Prepricing Prospectus, the Prospectus or other materials, if any, permitted by the Act. None of the Company or any of the Subsidiaries has taken, or will take, directly or indirectly, any action designed to, or that might reasonably be expected to, cause or result in stabilization or manipulation of the price of the Shares or any shares of capital stock of the Company. (r) Except as described in or contemplated by the Prospectus, each of the Company and the Subsidiaries owns or possesses all governmental licenses, permits, certificates, consents, orders, approvals and other authorizations necessary to own its -14- properties and to conduct its business in the manner described in the Prospectus, except where the failure to own or possess such licenses, permits, certificates, consents, orders, approvals and other authorizations (collectively, "Material Licenses") would not individually or in the aggregate result in a Material Adverse Effect; all of the Material Licenses are valid and in full force and effect; and no event, including receipt of notice of proceedings relating to revocation or modification of any Material Licenses, has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or result in any other material impairment of the rights of any holder of any such Material License, subject in each case to such qualifications as may be set forth in the Prospectus. (s) The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (t) To the best of the Company's knowledge, neither the Company nor any of its Subsidiaries nor any employee or agent of the Company or any Subsidiary has made any payment of funds of the Company or any Subsidiary or received or retained any funds in violation of any law, rule or regulation, which payment, receipt or retention of funds is of a character required to be disclosed in the Prospectus. (u) Except as disclosed in the Prospectus, all United States federal income tax returns of the Company and the Subsidiaries required by law to be filed have been filed (taking into account extensions granted by the applicable federal governmental agency) and all taxes shown by such returns or otherwise assessed, which are due and payable, have been paid, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided and except for such taxes the payment of which would not individually or in the aggregate result in a Material Adverse Effect. All other corporate franchise and income tax returns of the Company and the Subsidiaries required to be filed pursuant to applicable foreign, state or local law have been filed except insofar as the failure to file such returns would not individually or in the aggregate result in a Material Adverse Effect, and all taxes shown on such returns or otherwise assessed which are due and payable have been paid, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided and except for such taxes the payment of which would not individually or in the aggregate result in a Material Adverse Effect. -15- (v) Except for rights which have been waived, no holder of any security of the Company or any Subsidiary has any right to require registration of shares of capital stock or any other security of the Company because of consummation of the transactions contemplated by this Agreement or otherwise. Except as described or incorporated by reference in or contemplated by the Prospectus, there are no outstanding options, warrants or other rights calling for the issuance of, and there are no commitments, plans or arrangements to issue, any shares of capital stock or debt securities of the Company or any security convertible into or exchangeable or exercisable for capital stock or debt securities of the Company. (w) Each of the Company and the Subsidiaries is not now, and after sale of the Shares as contemplated hereunder and application of the net proceeds from such sale as described in the Prospectus under the caption "Use of Proceeds" will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "1940 Act"). (x) The Company has filed in a timely manner each document or report required to be filed by it pursuant to the Exchange Act and the rules and regulations thereunder; each such document or report (including any financial statements) and any amendment thereto at the time it was filed conformed to the requirements of the Exchange Act and the rules and regulations thereunder; and none of such documents or reports contained an untrue statement of any material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading. (y) Except as described in the Prospectus, the Company and the Subsidiaries comply in all material respects with all Environmental Laws (as defined below), except to the extent that failure to comply with such Environmental Laws would not individually or in the aggregate result in a Material Adverse Effect. To the knowledge of the Company, none of the Company or any of the Subsidiaries is the subject of any pending or, to the knowledge of the Company, threatened federal, state or local investigation evaluating whether any remedial action by the Company or any of the Subsidiaries is needed to respond to a release of any Hazardous Materials (as defined below) into the environment, resulting from the Company's or any of the Subsidiaries' business operations or ownership or possession of any of their properties or assets or is in contravention of any Environmental Law that could reasonably be expected individually or in the aggregate to result in a Material Adverse Effect. None of the Company or any of the Subsidiaries have received any notice or claim, nor are there pending or, to the knowledge of the Company, threatened lawsuits against them, with respect to violations of an Environmental Law or in connection with any release of any Hazardous Material into the environment that could reasonably be expected in the aggregate to result in a Material Adverse Effect. As used herein, "Environmental Laws" means any federal, state or local law or regulation applicable to the Company's or any of the Subsidiaries' business operation or ownership or possession of any of their properties or assets relating -16- to environmental matters, and "Hazardous Materials" means those substances that are regulated by or form the basis of liability under any Environmental Laws. (z) No labor problem exists with the employees of the Company or any of the Subsidiaries or, to the knowledge of the Company, is imminent that, in either case, could reasonably be expected individually or in the aggregate to result in a Material Adverse Effect. (aa) The Company and each of the Subsidiaries maintain insurance of the types and in the amounts that are reasonable for the businesses operated by them, including, but not limited to, insurance covering real and personal property owned or leased by the Company and the Subsidiaries against theft, damage, destruction, acts of vandalism, liability and malpractice, all of which insurance is in full force and effect. (bb) The Company and each of the Subsidiaries is in compliance with, and each such entity has not received any notice of any outstanding violation of, all laws, regulations, ordinances and rules applicable to it and its operations, except, in either case, where any failure by the Company or any of the Subsidiaries to comply with any such law, regulation, ordinance or rule would not individually or in the aggregate result in a Material Adverse Effect. (cc) There are no business relationships or related-party transactions of the nature described in Item 404 of Regulation S-K involving the Company or any of its Subsidiaries and any person described in such Item that are required to be disclosed in the Prospectus and which have not been so disclosed. (dd) To the best of the Company's knowledge, each of Baltimore (WNUV-TV) Licensee, Inc. as the licensee of WNUV-TV, Baltimore, Maryland; WVTV Licensee, Inc. as the licensee of WVTV(TV), Milwaukee, Wisconsin; WPTT, Inc. as the licensee of WPTT(TV), Pittsburgh, Pennsylvania; Raleigh (WRDC-TV) Licensee, Inc. as the licensee of WRDC(TV), Durham, North Carolina; River City License Partnership as the licensee of WTTV(TV), Bloomington, Indiana and WTTK(TV), Kokomo, Indiana; Anderson (WFBC-TV) Licensee, Inc. as the licensee of WFBC-TV, Anderson, South Carolina; San Antonio (KRRT-TV) Licensee, Inc. as the licensee of KRRT(TV), Kerrville, Texas; Tiab Communications Corporation as the licensee of WILT(AM), Mt. Pocono, Pennsylvania; WDBB-TV, Inc. as the licensee of WDBB(TV), Tuscaloosa, Alabama; and Birmingham (WABM-TV) Licensee, Inc. as the licensee of WABM(TV), Birmingham, Alabama (each individually an "LMA Station" and together the "LMA Stations") owns or possesses all governmental licenses, permits, certificates, consents, orders, approvals and other authorizations necessary to own its properties (collectively, the "LMA Material Licenses"), and to conduct its business in the manner described in the Prospectus, except where the failure to own or possess such licenses, permits, certificates, consents, orders, approvals and other authorizations would not individually or in the aggregate result in any Material Adverse Effect; all of the LMA Material Licenses are valid and in full force and effect; and no event, including receipt of notice of proceedings -17- relating to revocation or modification of any LMA Material License, has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or result in any other material impairment of the rights of any holder of any such permit, subject in each case to such qualifications as may be set forth in the Prospectus; and, except as described in the Prospectus, none of such permits contains any restriction that is materially burdensome to the LMA Station or the Company and the Subsidiaries; and there is in full force and effect with each LMA Station a contract, enforceable in accordance with its terms against the Company and against the LMA Station pursuant to which the Company provides programming services to the LMA Station as described or except as described in the Incorporated Documents. (ee) The execution and delivery of the Heritage Acquisition Agreements (as defined in the Prospectus) by the Company have been duly authorized by all necessary corporate action. The Heritage Acquisition Agreements have been duly executed and delivered by the Company and after execution and delivery by the other parties thereto are the legal, valid, binding and enforceable obligations of the parties thereto. There have been no amendments to the Heritage Acquisition Agreements subsequent to the date thereof. (ff) The execution and delivery of the Underwriting Agreement, dated September 17, 1997 (the "Preferred Underwriting Agreement") among the Company and certain underwriters, relating to the issuance and sale of 3,000,000 shares of $3.00 Convertible Exchangeable Preferred Stock, by the Company have been duly authorized by all necessary corporate action. The Preferred Underwriting Agreement has been duly executed and delivered by the Company and when executed and delivered by the Underwriters will be the legal, valid, binding and enforceable obligation of the Company. No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the execution, delivery or performance of the Preferred Underwriting Agreement by the Company or the consummation by the Company of the transactions contemplated thereby, except such as may be required under the Act, the Exchange Act and state securities or blue sky laws or by the National Association of Securities Dealers, Inc. (the "NASD") The execution, delivery and performance of the Preferred Underwriting Agreement by the Company and the consummation by the Company or any Subsidiary, as the case may be, of the transactions contemplated thereby does not and will not conflict with or result in a breach or violation by the Company of any of the terms or provisions of, constitute a default by the Company under, or result in the creation or imposition of any lien, charge, security interest or encumbrance upon any of the assets of the Company or any Subsidiary pursuant to the terms of any (A) indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which the Company or any of the Subsidiaries, as the case may be, is a party or to which any of them or any of their respective properties is subject, (B) the charter or bylaws of the Company or any of the Subsidiaries, as the case may be, or (C) any statute, judgment, decree, order, rule or regulation of any court or governmental agency or body applicable to the Company or any of the Subsidiaries or -18- any of their respective properties. The representations and warranties made by the Company in the Preferred Underwriting Agreement are true, complete and correct. 8. Representations and Warranties of the Selling Stockholders. Each Selling Stockholder represents and warrants to each Underwriter that: (a) Such Selling Stockholder now has, and on the Closing Date will have, valid and marketable title to the Shares to be sold by such Selling Stockholder, free and clear of any lien, claim, security interest or other encumbrance, including, without limitation, any restriction on transfer. (b) Such Selling Stockholder now has, and on the Closing Date will have, full legal right, power and authorization, and any approval required by law, to sell, assign, transfer and deliver such Shares in the manner provided in this Agreement, and upon delivery of and payment for such Shares hereunder, the several Underwriters will acquire valid and marketable title to such Shares free and clear of any lien, claim, security interest, or other encumbrance. (c) Each of this Agreement and the Custody Agreement has been duly authorized, executed and delivered by or on behalf of such Selling Stockholder and is a valid and binding agreement of such Selling Stockholder enforceable against such Selling Stockholder in accordance with its terms. By law no spousal consents are needed and no agreement, indenture or other instrument exists which would require spousal consents to effectuate the transactions contemplated by this Agreement or the Custody Agreement. (d) Neither the execution and delivery of this Agreement or the Custody Agreement by or on behalf of such Selling Stockholder nor the consummation of the transactions herein or therein contemplated by or on behalf of such Selling Stockholder requires any consent, approval, authorization or order of, or filing or registration with, any court, regulatory body, administrative agency or other governmental body, agency or official (except such as may be required under the Act or such as may be required under state securities or Blue Sky laws governing the purchase and distribution of the Shares) or conflicts or will conflict with or constitutes or will constitute a breach of, or default under, or violates or will violate, any agreement, indenture or other instrument to which such Selling Stockholder is a party or by which such Selling Stockholder is or may be bound or to which any of such Selling Stockholder's property or assets is subject, or any statute, law, rule, regulation, ruling, judgment, injunction, order or decree applicable to such Selling Stockholder or to any property or assets of such Selling Stockholder. (e) Such Selling Stockholder does not have any knowledge or any reason to believe that the Registration Statement, Prepricing Prospectus or the Prospectus (or any amendment or supplement thereto) contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading. -19- (f) The representations and warranties of such Selling Stockholder in the Custody Agreement are, and on the Closing Date and any Option Closing Date will be, true and correct. (g) Such Selling Stockholder has not taken, directly or indirectly, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Shares, except for the lock-up arrangements described in the Prepricing Prospectus or the Prospectus. 9. Indemnification and Contribution. (a) Each of the Company and the Selling Stockholders jointly and severally agrees to indemnify and hold harmless each of you and each other Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act from and against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Prepricing Prospectus or the Prospectus or in any amendment or supplement thereto, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon any untrue statement or omission or alleged untrue statement or omission which has been made therein or omitted therefrom in reliance upon and in conformity with the information furnished in writing to the Company by or on behalf of any Underwriter through you expressly for use in connection therewith; provided, however, that the indemnification contained in this paragraph (a) with respect to any Prepricing Prospectus shall not inure to the benefit of any Underwriter (or to the benefit of any person controlling such Underwriter) on account of any such loss, claim, damage, liability or expense arising from the sale of the Shares by such Underwriter to any person if a copy of the Prospectus shall not have been delivered or sent to such person within the time required by the Act and the regulations thereunder, and the untrue statement or alleged untrue statement or omission or alleged omission of a material fact contained in such Prepricing Prospectus was corrected in the Prospectus, provided that the Company has delivered the Prospectus to the several Underwriters in requisite quantity on a timely basis to permit such delivery or sending. The foregoing indemnity agreement shall be in addition to any liability which the Company or any of the Selling Stockholders may otherwise have. (b) If any action, suit or proceeding shall be brought against any Underwriter or any person controlling any Underwriter in respect of which indemnity may be sought against the Company or any Selling Stockholder, such Underwriter or such controlling person shall promptly notify the party against whom indemnification is being sought (the "indemnifying parties"), and such indemnifying parties shall assume the -20- defense thereof, including the employment of counsel and payment of all fees and expenses. Such Underwriter or any such controlling person shall have the right to employ separate counsel in any such action, suit or proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Underwriter or such controlling person unless (i) the indemnifying parties have agreed in writing to pay such fees and expenses, (ii) the indemnifying parties have failed to assume the defense and employ counsel or (iii) the named parties to any such action, suit or proceeding (including any impleaded parties) include both such Underwriter or such controlling person and the indemnifying parties and such Underwriter or such controlling person shall have been advised by its counsel that representation of such indemnified party and any indemnifying party by the same counsel would be inappropriate under applicable standards of professional conduct (whether or not such representation by the same counsel has been proposed) due to actual or potential differing interests between them (in which case the indemnifying party shall not have the right to assume the defense of such action, suit or proceeding on behalf of such Underwriter or such controlling person). It is understood, however, that the indemnifying parties shall, in connection with any one such action, suit or proceeding or separate but substantially similar or related actions, suits or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of only one separate firm of attorneys (in addition to any local counsel) at any time for all such Underwriters and controlling persons not having actual or potential differing interests with you or among themselves, which firm shall be designated in writing by Smith Barney Inc., and that all such reasonable fees and expenses shall be reimbursed as they are incurred. The indemnifying parties shall not be liable for any settlement of any such action, suit or proceeding effected without their written consent, but if settled with such written consent, or if there be a final judgment for the plaintiff in any such action, suit or proceeding, the indemnifying parties agree to indemnify and hold harmless any Underwriter, to the extent provided in the preceding paragraph, and any such controlling person from and against any loss, claim, damage, liability or expense by reason of such settlement or judgment. (c) Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement, each Selling Stockholder, and any person who controls the Company within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act to the same extent as the foregoing indemnity from the Company and the Selling Stockholders to each Underwriter, but only with respect to information relating to such Underwriter furnished in writing by or on behalf of such Underwriter through you expressly for use in the Registration Statement, the Prospectus or any Prepricing Prospectus, or any amendment or supplement thereto. If any action, suit or proceeding shall be brought against the Company, any of its directors, any such officer, any Selling Stockholder or any such controlling person based on the Registration Statement, the Prospectus or any Prepricing Prospectus, or any amendment or supplement thereto, and in respect of which indemnity may be sought against any Underwriter pursuant to this paragraph (c), such Underwriter shall have the rights and -21- duties given to the Company by paragraph (b) above (except that if the Company shall have assumed the defense thereof such Underwriter shall not be required to do so, but may employ separate counsel therein and participate in the defense thereof, but the fees and expenses of such counsel shall be at such Underwriter's expense), and the Company, its directors, any of such officers, the Selling Stockholders and any such controlling persons shall have the rights and duties given to the Underwriters by paragraph (b) above. The foregoing indemnity agreement shall be in addition to any liability which the Underwriters may otherwise have. (d) If the indemnification provided for in this Section 9 is unavailable to an indemnified party under paragraphs (a) or (c) hereof in respect of any losses, claims, damages, liabilities or expenses referred to therein, then an indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Selling Stockholders on the one hand and the Underwriters on the other hand from the offering of the Shares or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Selling Stockholders on the one hand and the Underwriters on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Selling Stockholders on the one hand and the Underwriters on the other hand shall be deemed to be in the same proportion as the total net proceeds from the offering of the Shares (before deducting expenses) received by the Company and the Selling Stockholders bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus; provided that, in the event that the Underwriters shall have purchased any Additional Shares hereunder, any determination of the relative benefits received by the Company, the Selling Stockholders or the Underwriters from the offering of the Shares shall include the net proceeds (before deducting expenses) received by the Company and the Selling Stockholders and the underwriting discounts and commissions received by the Underwriters, from the sale of such Additional Shares, in each case computed on the basis of the respective amounts set forth in the notes to the table on the cover page of the Prospectus. The relative fault of the Company and the Selling Stockholders on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Selling Stockholders on the one hand or by the Underwriters on the other hand and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. -22- (e) The Company the Selling Stockholders and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by a pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities and expenses referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating any claim or defending any such action, suit or proceeding. Notwithstanding the provisions of this Section 9, no Underwriter shall be required to contribute any amount in excess of the amount by which the total fees received (and not reimbursed to the Company) by such Underwriter with respect to the Shares underwritten by it and distributed to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Section 9 are several in proportion to the respective numbers of Firm Shares set forth opposite their names in Schedule I hereto (or such numbers of Firm Shares increased as set forth in Section 12 hereof) and not joint. (f) No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement (i) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of any indemnified party. (g) Any losses, claims, damages, liabilities or expenses for which an indemnified party is entitled to indemnification or contribution under this Section 9 shall be paid by the indemnifying party to the indemnified party as such losses, claims, damages, liabilities or expenses are incurred. The indemnity and contribution agreements contained in this Section 9 and the representations and warranties of the Company and the Selling Stockholders set forth in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter, the Company, its directors or officers, the Selling Stockholders or any person controlling the Company, (ii) acceptance of any Shares and payment therefor hereunder and (iii) any termination of this Agreement. A successor to any Underwriter or any person controlling any Underwriter, or to the Company, its directors or officers, or any person controlling the Company, or a Selling Stockholder -23- shall be entitled to the benefits of the indemnity, contribution and reimbursement agreements contained in this Section 9. 10. Conditions of Underwriters' Obligations. The several obligations of the Underwriters to purchase the Firm Shares hereunder are subject to the following conditions: (a) If, at the time this Agreement is executed and delivered, it is necessary for the Registration Statement or a post-effective amendment thereto to be declared effective before the offering of the Shares may commence, the Registration Statement or such post-effective amendment shall have become effective not later than 5:30 P.M., New York City time, on the date hereof, or at such later date and time as shall be consented to in writing by you, and all filings, if any, required by Rules 424 and 430A under the Act shall have been timely made; no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Company or any Underwriter, threatened by the Commission, and any request of the Commission for additional information (to be included in the Registration Statement or the Prospectus or otherwise) shall have been complied with to your satisfaction. (b) Subsequent to the effective date of this Agreement, there shall not have occurred (i) any change, or any development involving a prospective change, in or affecting the condition (financial or other), business, properties, net worth or results of operations of the Company or the Subsidiaries not contemplated by the Prospectus, which in your opinion, as Representatives of the several Underwriters, would materially, adversely affect the market for the Shares, or (ii) any event or development relating to or involving the Company or any officer or director of the Company or any Selling Stockholder which makes any statement made in the Prospectus untrue or which, in the opinion of the Company and its counsel or the Underwriters and their counsel, requires the making of any addition to or change in the Prospectus in order to state a material fact required by the Act or any other law to be stated therein or necessary in order to make the statements therein not misleading, if amending or supplementing the Prospectus to reflect such event or development would, in your opinion, as Representatives of the several Underwriters, materially adversely affect the market for the Shares. (c) You shall have received on the Closing Date, an opinion of Thomas & Libowitz, P.A., counsel for the Company and the Selling Stockholders, dated the Closing Date and addressed to you, as Representatives of the several Underwriters, to the effect that: (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland, with full power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus, and is duly qualified to transact business as a foreign corporation in good standing under the laws of each jurisdiction where the -24- ownership or leasing of its properties or the conduct of its business requires such qualification except where the failure to so qualify would not have a material adverse effect upon its business taken as a whole; (ii) All of the outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable and were not issued in violation of any preemptive or similar rights of stockholders of the Company arising under the corporation laws of the State of Maryland, under the charter or bylaws of the Company or, to the best of such counsel's knowledge, under any agreement to which the Company is a party; (iii) Each of the Subsidiaries has been duly incorporated and is validly existing as a corporation in good standing under the laws of its respective jurisdiction of incorporation, with full power and authority to own its properties and conduct its business as described in the Prospectus, and is duly qualified to transact business as a foreign corporation in good standing under the laws of each jurisdiction where the ownership or leasing of its properties or the conduct of its business requires such qualification; and all of the outstanding shares of capital stock of each of the Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and were not issued in violation of any preemptive or similar rights of stockholders of such Subsidiary arising under the corporation law of its respective jurisdiction of incorporation, its charter or bylaws or, to the best of such counsel's knowledge, under any agreement to which such Subsidiary is a party, and all of the outstanding shares of capital stock of each of the Subsidiaries are owned beneficially by the Company free and clear of all liens, encumbrances, equities and claims except as described in the Prospectus; (iv) To the knowledge of such counsel, except as described or referred to in the Prospectus, there is not pending or threatened any action, suit, proceeding, inquiry or investigation, to which the Company or any of the Subsidiaries is a party, or to which the property of the Company or any of the Subsidiaries is subject, before or brought by any court or governmental agency or body which, if determined adversely to the Company or any of the Subsidiaries, would individually or in the aggregate result in any material adverse change in the business, financial position, net worth, results of operation or prospects, or materially adversely affect the properties and assets collectively of the Company and the Subsidiaries taken as a whole or might materially adversely affect the consummation of the transactions contemplated by the Registration Statement; and all pending legal or governmental proceedings to which the Company or any of the Subsidiaries is a party or that affect any of their respective properties that are not described in the Prospectus, including ordinary routine litigation incidental to the business, are considered in the aggregate not to result in a material adverse change in the business, financial position, net worth, results of operation or prospects, or materially adversely affect the properties and assets collectively of the Company and the Subsidiaries taken as a whole; -25- (v) The execution, delivery and performance of this Agreement, and the consummation by the Company of the transactions contemplated hereby and compliance by the Company with the terms hereof does not and will not conflict with or result in a breach or violation by the Company or any Subsidiary, as the case may be, of any of the terms or provisions of, constitute a default by the Company or any Subsidiary, as the case may be, under, or result in the creation or imposition of any lien, charge, security interest or encumbrance upon any of the assets of the Company or any Subsidiary, as the case may be, pursuant to the terms of (a) any material indenture, mortgage, deed of trust, loan or credit agreement, bond, debenture, note, lease or other agreement or instrument to which the Company or any Subsidiary, as the case may be, is a party or to which any of them or any of their respective properties is subject; (b) the charter or bylaws of the Company or any Subsidiary, as the case may be; or (c) any statute, rule or regulation or, to the best of such counsel's knowledge, any judgment, decree or order of any court or governmental agency or court or body applicable to the Company or any of the Subsidiaries or any of their respective properties; (vi) Neither the Company nor any of the Subsidiaries is in violation of its respective certificate or articles of incorporation or bylaws, or other organizational documents, or to the knowledge of such counsel after reasonable inquiry, is in default in the performance of any material obligation, agreement or condition contained in any bond, debenture, note or other evidence of indebtedness, except as may be disclosed in the Prospectus; (vii) Except as described or incorporated by reference in the Prospectus, there are no outstanding options, warrants or other rights calling for the issuance of, and such counsel does not know of any commitment, plan or arrangement to issue, any shares of capital stock of the Company or any security convertible into or exchangeable or exercisable for capital stock of the Company; (viii) Except for rights which have been waived, there is no holder of any security of the Company or any other person who has the right, contractual or otherwise, to cause the Company to sell or otherwise issue to them, or to permit them to underwrite the sale of, the Shares or the right to have any shares of capital stock or other securities of the Company included in the registration statement or the right, as a result of the filing of the registration statement, to require registration under the Act of any shares of capital stock or other securities of the Company; (ix) The Company has corporate power and authority to enter into this Agreement and to issue, sell and deliver the Shares to be sold by it to the Underwriters as provided herein, and this Agreement has been duly authorized, executed and delivered by the Company; (x) The execution and delivery of the Heritage Acquisition Agreements by the Company have been duly authorized by all necessary corporate action, and the Heritage Acquisition Agreements have been duly executed and delivered by the -26- Company and after execution and delivery by the other parties thereto are the legal, valid, binding and enforceable obligations of the Company. To the best knowledge of such counsel, there have been no amendments to the Heritage Acquisition Agreements subsequent to the date thereof; (xi) Each of this Agreement and the Custody Agreement has been duly authorized, executed and delivered by or on behalf of each of the Selling Stockholders, and the Custody Agreement is a valid and binding agreement of each Selling Stockholder enforceable against such Selling Stockholder in accordance with its terms. By law no spousal consents are needed and to the knowledge of such counsel no agreement, indenture or other instrument exists which would require spousal consents to effectuate the transactions contemplated by this Agreement or the Custody Agreement; (xii) To the knowledge of such counsel, each Selling Stockholder has full legal right, power and authorization, and has obtained any approval required by law, to sell, assign, transfer and deliver good and marketable title to the Shares which such Selling Stockholder has agreed to sell pursuant to this Agreement. Upon delivery and payment for such Shares to be sold by such Selling Stockholder hereunder in accordance with this Agreement, the Underwriters (whom counsel may assume to be bona fide purchasers) will acquire good and marketable title to such Shares so sold; and (xiii) Neither the execution and delivery of this Agreement or the Custody Agreement by or on behalf of such Selling Stockholder nor the consummation of the transactions herein or therein contemplated by or on behalf of such Selling Stockholder requires any consent, approval, authorization or order of, or filing or registration with, any court, regulatory body, administrative agency or other governmental body, agency or official (except such as may be required under the Act or such as may be required under state securities or Blue Sky laws governing the purchase and distribution of the Shares or with the NASD) or conflicts or will conflict with or constitutes or will constitute a breach of, or default under, or violates or will violate, any agreement, indenture or other instrument to which such Selling Stockholder is a party or by which such Selling Stockholder is or may be bound or to which any of such Selling Stockholder's property or assets is subject, or any statute, law, rule, regulation, ruling, judgment, injunction, order or decree applicable to such Selling Stockholder or to any property or assets of such Selling Stockholder. In addition, such opinion shall state that such counsel has not independently verified the accuracy, completeness or fairness of the statements made or the information contained in or incorporated by reference in the Registration Statement or the Prospectus and such counsel is not passing upon and does not assume any responsibility therefor. In the course of the preparation by the Company and the Subsidiaries of the Registration Statement and the Prospectus, such counsel has participated in discussions with representatives of the Underwriters and those of the Company and the -27- Subsidiaries and their independent accountants, in which the business and affairs of the Company and the Subsidiaries and the contents of the Registration Statement and the Prospectus (including the Incorporated Documents) were discussed. Based upon the information such counsel gained in the course of such counsel's representation of the Company and the Subsidiaries in connection with their preparation of the Registration Statement and the Prospectus and such counsel's participation in the discussions referred to above, such counsel has no reason to believe that (i) as of its effective date, the Registration Statement (including the Rule 430A Information, if applicable, and any amendment thereto) or any of the Incorporated Documents contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) the Prospectus, or any amendment or supplement thereto, at the time the Prospectus was issued, at the time any such amended or supplemented prospectus was issued or at the Closing Date, contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such counsel need express no opinion, however, as to the financial statements, including the notes and schedules thereto, or any other financial data included in the Registration Statement, the Prospectus or the Incorporated Documents. In giving such opinion, such counsel may rely, as to all matters governed by the laws of jurisdictions other than the federal law of the United States and the law of the State of Maryland, upon the opinions of counsel satisfactory to the Underwriters. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers or other appropriate representatives of the Company and the Subsidiaries and certificates of public officials and the Selling Stockholders. (d) You shall have received on the Closing Date, an opinion of Wilmer, Cutler & Pickering, securities counsel for the Company, dated the Closing Date and addressed to you, as Representatives of the several Underwriters, to the effect that: (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland, with full power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus, and is duly qualified to transact business as a foreign corporation in good standing under the laws of each jurisdiction where the ownership or leasing of its properties or the conduct of its business requires such qualification except where the failure to so qualify would not have a material adverse effect upon its business taken as a whole; (ii) The Company has corporate power and authority to enter into this Agreement and to issue, sell and deliver the Shares to be sold by it to the Underwriters as provided herein, and this Agreement has been duly authorized, executed and delivered by the Company; -28- (iii) No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the execution, delivery or performance of this Agreement by the Company or the consummation by the Company of the transactions contemplated by this Agreement, except (i) such as have been obtained under the Act and the Exchange Act and (ii) such as may be required under state securities or blue sky laws in connection with the purchase and distribution of the Shares by the several Underwriters or as may be required by the NASD, as to each of which in clause (ii) such counsel expresses no opinion; (iv) The descriptions in the Registration Statement and Prospectus of statutes, legal and governmental proceedings, and contracts and other documents present fairly in all material respects the information required to be shown; and such counsel does not know of any statutes or regulations or any pending or threatened legal or governmental proceedings required to be described in the Prospectus which are not described as required, nor of any contracts or documents of a character required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement which are not described or filed as required. Such counsel need express no opinion as to the description of any statute, regulation or proceedings with respect to the regulation of the Company and the Subsidiaries by the Federal Communications Commission. (v) The authorized and outstanding capital stock of the Company is as set forth under the caption "Capitalization" in the Prospectus; and the authorized capital stock of the Company conforms in all material respects as to legal matters to the description thereof contained in the Prospectus under the caption "Description of Capital Stock;" (vi) All the shares of capital stock of the Company outstanding prior to the issuance of the Shares to be issued and sold by the Company pursuant to this Agreement have been duly authorized and validly issued, and are fully paid and nonassessable; (vii) The Shares to be issued and sold to the Underwriters by the Company hereunder have been duly authorized and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms hereof, will be validly issued, fully paid and nonassessable and free of any preemptive or similar rights that entitle or will entitle any person to acquire any Shares upon the issuance thereof by the Company; (viii) The form of certificates for the Shares conforms to the requirements of the corporation law of the State of Maryland; (ix) The Registration Statement and the Prospectus and any supplements or amendments thereto as of their respective dates of filing with the Commission, comply as to form in all material respects to the requirements of the Act as -29- applicable to registration statements on Form S-3, except that such counsel, however, need express no opinion as to the financial statements, schedules and other financial data included in the Registration Statement or the Prospectus; (x) The Registration Statement has become effective under the Act, any required filing of the Prospectus or any supplement thereto has been made with the Commission pursuant to Rule 424(b), in the manner and within the time period required by Rule 424(b), and, to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are threatened, pending or contemplated under the Act; (xi) Upon delivery of the Shares pursuant to the Underwriting Agreement and payment therefor as contemplated therein, assuming that the Underwriters are bona fide purchasers within the meaning of the New York Uniform Commercial Code, the Underwriters will acquire good and marketable title to the Shares free and clear of any lien, claim, security interest, or other encumbrance, restriction on transfer or other defect in title; (xii) Neither the Company nor any Subsidiary is an investment company within the meaning of the Investment Company Act of 1940, as amended; and (xiii) All Incorporated Documents, when they were filed with the Commission, complied as to form in all material respects with the requirements of the Exchange Act; and such counsel has no reason to believe that any of such documents, when they were so filed, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such documents were so filed, not misleading (except for the financial statements, schedules or other financial data contained in any such document as to which counsel need express no opinion). In addition, such opinion shall state that such counsel has not independently verified the accuracy, completeness or fairness of the statements made or the information contained in the Registration Statement or the Prospectus (including the Incorporated Documents) and, except with respect to the descriptions referred to in paragraphs (iv) and (v) above, such counsel is not passing upon and does not assume any responsibility therefor. In the course of the preparation by the Company of the Registration Statement and the Prospectus (including the Incorporated Documents), such counsel has participated in discussions with representatives of the Underwriters and those of the Company and their independent accountants, in which the business and affairs of the Company and the Subsidiaries and the contents of the Registration Statement and the Prospectus (including the Incorporated Documents) were discussed. Based upon the information such counsel gained in the course of such counsel's representation of the Company in connection with its preparation of the Registration Statement and the Prospectus and such counsel's participation in the discussions referred to above, nothing has come to such counsel's -30- attention that leads them to believe that (i) as of its effective date, the Registration Statement (including the Rule 430A Information, if applicable, and any amendment thereto) or any of the Incorporated Documents contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) the Prospectus, or any amendment or supplement thereto, at the time the Prospectus were issued, at the time any such amended or supplemented prospectus was issued or at the Closing Date, contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such counsel need express no opinion, however, as to the financial statements, including the notes and schedules thereto, or any other financial information included in the Registration Statement, the Prospectus or the Incorporated Documents. In giving such opinion, such counsel may rely, as to all matters governed by the laws of jurisdictions other than the federal law of the United States, the law of the State of New York, the law of the State of Maryland and the General Corporation Law of the State of Delaware, upon the opinions of counsel satisfactory to the Underwriters. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers or other appropriate representatives of the Company and the Subsidiaries and certificates of public officials. (e) The Underwriters shall have received an Opinion, dated the Closing Date of Fisher, Wayland, Cooper, Leader & Zaragoza, L.L.P., regulatory counsel for the Company, in form and substance satisfactory to the Underwriters to the effect that: (i) Except for such Federal Communications Commission (the "FCC") approvals that have already been obtained, which approvals, to such counsel's knowledge, are in full force and effect, no FCC approval, authorization, consent or license is required under the Communications Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Communications Laws") for the consummation of the transactions contemplated by this Agreement and the issuance and sale under this Agreement of the Shares. The execution, delivery and performance in accordance with the terms of this Agreement by the Company will not violate the Communications Laws. It should be noted that, under the Communications Laws, FCC approval is required prior to the transfer of control of the Company or any of the Subsidiaries which hold broadcast licenses or the assignment of any FCC licenses or authorizations or prior to the exercise of any voting rights or management authority over the Company or any of the Subsidiaries which hold broadcast licenses to the extent that such exercise constitutes a transfer of control of the Company or any of such Subsidiaries or an assignment of any FCC licenses or authorizations. (ii) The following Subsidiaries are the licensees of the respective stations as identified below, and, except as disclosed in the Prospectus, are authorized to own and operate their respective stations: -31- Subsidiary Station - ---------- ------- Chesapeake Television WBFF(TV) Licensee, Inc. Baltimore, MD WTTE, Channel 28 Licensee, WTTE(TV) Inc. Columbus, OH WPGH Licensee, Inc. WPGH-TV Pittsburgh, PA WCGV Licensee, Inc. WCGV-TV Milwaukee, Wisconsin WTTO Licensee, Inc. WTTO(TV) Birmingham, Alabama WLFL Licensee, Inc. WLFL(TV) Raleigh, North Carolina WTVZ Licensee, Inc. WTVZ-TV Norfolk, Virginia WSTR Licensee, Inc. WSTR-TV Cincinnati, Ohio KSMO Licensee, Inc. KSMO-TV Kansas City, MO WYZZ Licensee Inc. WYZZ(TV) Bloomington, Illinois Superior OK License Corp. KOCB(TV) Oklahoma City, OK Superior KY License Corp. WDKY-TV Danville, KY WSMH Licensee, Inc. WSMH(TV) Flint, MI KOVR Licensee, Inc. KOVR(TV) Stockton, CA KDSM Licensee, Inc. KDSM-TV Des Moines, IA KDNL Licensee, Inc. KDNL-TV St. Louis, MO KUPN Licensee, Inc. KUPN(TV) Las Vegas, NV -32-
KABB Licensee, Inc. KABB(TV) San Antonio, TX WLOS Licensee, Inc. WLOS(TV) Asheville, NC Sinclair Radio of Los Angeles Licensee, Inc. KBLA(AM) Santa Monica, CA Sinclair Radio of New Orleans Licensee, Inc. WWL(AM), New Orleans, Louisiana WSMB(AM), New Orleans, Louisiana WLMG(FM), New Orleans, Louisiana KMEZ(FM), Belle Chasse, Louisiana Sinclair Radio of Buffalo Licensee, Inc. WBEN(AM), Buffalo, New York WWKB(AM), Buffalo, New York WMJQ(FM), Buffalo, New York WKSE(FM), Niagara Falls, New York WGR(AM), Buffalo, New York WWWS (AM), Buffalo, New York Sinclair Radio of Memphis Licensee, Inc. WJCE(AM), Memphis, Tennessee WRVR-FM, Memphis, Tennessee WOGY-FM, Germantown, Tennessee Sinclair Radio of Nashville Licensee, Inc. WLAC(AM), Nashville, Tennessee WLAC-FM, Nashville, Tennessee WJZC(FM), Russellville, Kentucky Sinclair Radio of Wilkes-Barre Licensee, Inc. WGBI(AM), Scranton, Pennsylvania WILK(AM), Wilkes-Barre, Pennsylvania WGGY(FM), Scranton, Pennsylvania WKRZ(FM), Wilkes-Barre, Pennsylvania WILP(AM), West Hazelton, Pennsylvania WWFH(FM), Freeland, Pennsylvania WKRF(FM), Tobyhanna, Pennsylvania WWSH(FM), Pittston, Pennsylvania Sinclair Radio of St. Louis Licensee, Inc. WVRV(FM), East St. Louis, Illinois KPNT(FM), St. Genevieve, Missouri
To such counsel's knowledge, all of the licenses held by the subsidiaries identified in this paragraph (ii) necessary to operate their respective stations (the "FCC Material Licenses") are valid and in full force and effect. The stations identified in this paragraph (ii) are collectively referred to as the "Stations." (iii) To the best of such counsel's knowledge, Baltimore (WNUV-TV) Licensee, Inc. is the licensee of WNUV-TV, Baltimore, Maryland; WVTV Licensee, -33- Inc. is the licensee of WVTV(TV), Milwaukee, Wisconsin; WPTT, Inc. is the licensee of WPTT(TV), Pittsburgh, Pennsylvania; Raleigh (WRDC-TV) Licensee, Inc. is the licensee of WRDC(TV), Durham, North Carolina; River City License Partnership is the licensee of WTTV(TV), Bloomington, Indiana and WTTK(TV), Kokomo, Indiana; Anderson (WFBC-TV) Licensee, Inc. is the licensee of WFBC-TV, Anderson, South Carolina; San Antonio (KRRT-TV) Licensee, Inc. is the licensee of KRRT(TV), Kerrville, Texas; Tiab Communications Corporation is the licensee of WILT(AM), Mt. Pocono, Pennsylvania; WDBB-TV, Inc. is the licensee of WDBB(TV), Tuscaloosa, Alabama; and Birmingham (WABM-TV) Licensee, Inc., is the licensee of WABM(TV), Birmingham, Alabama. To the best of such counsel's knowledge, Baltimore (WNUV-TV) Licensee, Inc., WVTV Licensee, Inc., WPTT, Inc., Raleigh (WRDC-TV) Licensee, Inc., River City License Partnership, Anderson (WFBC-TV) Licensee, Inc., San Antonio (KRRT-TV) Licensee, Inc., Tiab Communications Corporation, WDBB-TV, Inc., and Birmingham (WABM-TV) Licensee, Inc., (collectively the "LMA Station Licensees"), except as disclosed in the Prospectus, are authorized to own and operate their respective LMA stations identified in this Paragraph (iii) (each individually a "LMA Station" and collectively the "LMA Stations". To such counsel's knowledge, the licenses held by the LMA Station Licensees to own and operate their respective LMA Stations are valid and in full force and effect. (iv) Except as set forth in the Prospectus, to such counsel's knowledge, there are no proceedings pending or threatened in writing under the Communications Laws that are specifically directed against the Company, the Subsidiaries, or the Stations before or by the FCC or any court having jurisdiction over matters arising under the Communications Laws, relating to any invalidity, revocation, or modification of any FCC Material Licenses, wherein an unfavorable ruling, decision, or finding would materially and adversely change the financial condition, business or properties of the Company and the Subsidiaries individually or taken as a whole. To such counsel's knowledge, based solely upon such counsel's examination of records available for public inspection at the FCC in Washington, D.C., the Stations are operating in compliance with their FCC Material Licenses, except possibly for noncompliance that would not have a material adverse effect on the financial condition, business or properties of the Company and the Subsidiaries individually or taken as a whole. (v) The statements in the Prospectus under the captions (a) "RISK FACTORS--Competition" "--Impact of New Technologies," "--Governmental Regulations; Necessity of Maintaining FCC Licenses," "--Multiple Ownership Rules and Effect on LMAs," and "--LMAs - Rights of Preemption and Termination" and (b) "BUSINESS OF SINCLAIR-- Federal Regulation of Television and Radio Broadcasting" insofar as such statements constitute a summary of material Communications Laws and material proceedings, fairly and in all material respects present the information contained under such captions in light of the circumstances in which such statements are made, and to the extent they constitute matters of law and legal conclusions under the Communications Laws, fairly and in all material respects -34- accurately present the information contained under such captions in light of the circumstances in which such statements are made. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers or other appropriate representatives of the Company and the Subsidiaries and certificates of public officials. (f) You shall have received on the Closing Date an opinion of Fried, Frank, Harris, Shriver & Jacobson, counsel for the Underwriters, dated the Closing Date and addressed to you, as Representatives of the several Underwriters, with respect to the matters agreed upon. In addition, such opinion shall also state the following: In the course of the preparation by the Company of the Registration Statement and the Prospectus, such counsel participated in conferences with certain of the officers and representatives of, and the independent public accountants for, the Company, at which the Registration Statement and the Prospectus were discussed. Between the date of effectiveness of the Registration Statement and the time of delivery of such opinion, such counsel attended additional conferences with certain of the officers and representatives of the Company, at which the contents of the Prospectus were discussed to a limited extent. Given the limitations inherent in the independent verification of factual matters and the character of determinations involved in the registration process, such counsel is not passing upon or assuming any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus. Subject to the foregoing and on the basis of the information gained in the performance of the services referred to above, including information obtained from officers and other representatives of, and the independent public accountants for, the Company, no facts have come to such counsel's attention that cause such counsel to believe that the Registration Statement, as of its effective date, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading or that the Prospectus as of its effective date contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein in light of the circumstances under which they were made not misleading. Also, subject to the foregoing, no facts have come to such counsel's attention in the course of proceedings described in the second sentence of this paragraph that cause such counsel to believe that the Prospectus, at the Closing Date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading. Such counsel express no view or belief, however, with respect to financial statements, notes or schedules thereto or other financial information included in or omitted from the Registration Statement or Prospectus. In giving such opinion, such counsel may rely, as to all matters governed by the laws of jurisdictions other than the federal law of the United States, the law of the -35- State of New York, and the General Corporation Law of the State of Delaware, upon the opinions of counsel satisfactory to the Underwriters. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers or other appropriate representatives of the Company and the Subsidiaries and certificates of public officials. (g) You shall have received letters addressed to you, as Representatives of the several Underwriters, and dated the date hereof and the Closing Date from Arthur Andersen LLP, Ernst & Young LLP, KPMG Peat Marwick and Price Waterhouse LLP, independent certified public accountants, substantially in the forms heretofore approved by you. (h) (i) No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been taken or, to the knowledge of the Company, shall be contemplated by the Commission at or prior to the Closing Date; (ii) there shall not have been any change in the capital stock of the Company nor any material increase in the short-term or long-term debt of the Company (other than in the ordinary course of business) from that set forth or contemplated in the Registration Statement or the Prospectus (or any amendment or supplement thereto); (iii) there shall not have been, since the respective dates as of which information is given in the Registration Statement and the Prospectus (or any amendment or supplement thereto), except as may otherwise be stated in the Registration Statement and Prospectus (or any amendment or supplement thereto), any material adverse change in the condition (financial or other), business, prospects, properties, net worth or results of operations of the Company and the Subsidiaries taken as a whole; (iv) the Company and the Subsidiaries shall not have any liabilities or obligations, direct or contingent (whether or not in the ordinary course of business), that are material to the Company and the Subsidiaries, taken as a whole, other than those reflected in the Registration Statement or the Prospectus (or any amendment or supplement thereto); and (v) all the representations and warranties of the Company contained in this Agreement shall be true and correct on and as of the date hereof and on and as of the Closing Date as if made on and as of the Closing Date, and you shall have received a certificate, dated the Closing Date and signed by the chief executive officer and the chief financial officer of the Company (or such other officers as are acceptable to you), to the effect set forth in this Section 10(h) and in Section 10(i) hereof. (i) The Company shall not have failed at or prior to the Closing Date to have performed or complied with any of its agreements contained in this Agreement and required to be performed or complied with by it hereunder at or prior to the Closing Date. (j) All the representations and warranties of the Selling Stockholders contained in this Agreement shall be true and correct on and as of the date hereof and on and as of the Closing Date as if made on and as of the Closing Date, and you shall have -36- received certificates, dated the Closing Date and signed by or on behalf of each Selling Stockholder to the effect set forth in this Section 10(j) and in Section 10(k) hereof. (k) The Selling Stockholders shall not have failed at or prior to the Closing Date to have performed or complied with any of their agreements herein contained and required to be performed or complied with by them hereunder at or prior to the Closing Date. (l) The Shares shall have been listed or approved for listing upon notice of issuance on the Nasdaq National Market. (m) Each of Thomas & Libowitz, P.A. and Wilmer, Cutler & Pickering shall have delivered to you a signed copy of the opinion rendered by such counsel pursuant to the Preferred Underwriting Agreement to the underwriters party thereto, accompanied by a letter dated as of the date of such opinion stating that you may rely on such opinion as if it were addressed to you. (n) The Company shall have entered into an amendment to the Bank Credit Agreement (as defined in the Prospectus) previously submitted to the Underwriters and in form and substance satisfactory to them which permits the transactions contemplated in the Preferred Underwriting Agreement and the use of the proceeds of such transactions as described in the Prospectus. (o) The Company shall have furnished to you "lock-up" letters, in form and substance satisfactory to you, signed by each of its current officers and directors and each of its stockholders designated by you. All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof only if they are satisfactory in form and substance to you and your counsel. Any certificate or document signed by any officer of the Company or any Attorney-in-Fact or any Selling Stockholder and delivered to you, as Representatives of the Underwriters, or to counsel for the Underwriters, shall be deemed a representation and warranty by the Company to each Underwriter as to the statements made therein. The several obligations of the Underwriters to purchase Additional Shares hereunder are subject to the satisfaction on and as of any Option Closing Date of the conditions set forth in this Section 10, except that, if any Option Closing Date is other than the Closing Date, the certificates, opinions and letters referred to in paragraphs (c) through (g) shall be dated the Option Closing Date in question and the opinions called for by paragraphs (c), (d) and (f) shall be revised to reflect the sale of Additional Shares. 11. Expenses. The Company agrees to pay the following costs and expenses and all other costs and expenses incident to the performance by it of its obligations -37- hereunder: (i) the preparation, printing or reproduction, and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), the Prepricing Prospectus, the Prospectus, and each amendment or supplement to any of them; (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, the Prepricing Prospectus, the Prospectus, and all amendments or supplements to any of them as may be reasonably requested for use in connection with the offering and sale of the Shares; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Shares, including any stamp taxes in connection with the original issuance and sale of the Shares; (iv) the printing (or reproduction) and delivery of this Agreement, the Blue Sky Memorandum and all other agreements or documents printed (or reproduced) and delivered in connection with the offering of the Shares; (v) the listing of the Shares on the Nasdaq National Market; (vi) the lodging, meals and expenses incurred by or on behalf of Company officers in connection with presentations to prospective purchasers of the Shares; (vii) the registration or qualification of the Shares for offer and sale under the securities or Blue Sky laws of the several states as provided in Section 5(g) hereof (including the reasonable fees and expenses of counsel for the Underwriters relating to the preparation, printing or reproduction, and delivery of the preliminary and supplemental Blue Sky Memoranda and such registration and qualification); and (viii) the fees and expenses of the Company's accountants and the fees and expenses of counsel (including local and special counsel) for the Company and the Selling Stockholders. 12. Effective Date of Agreement. This Agreement shall become effective: (i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at the time this Agreement is executed and delivered, it is necessary for the registration statement or a post-effective amendment thereto to be declared effective before the offering of the Shares may commence, when notification of the effectiveness of the Registration Statement or such post-effective amendment has been released by the Commission. Until such time as this Agreement shall have become effective, it may be terminated by the Company, by notifying you, or by you, as Representatives of the several Underwriters, by notifying the Company and the Selling Stockholders. If any one or more of the Underwriters shall fail or refuse to purchase Shares which it or they are obligated to purchase hereunder on the Closing Date, and the aggregate number of Shares which such defaulting Underwriter or Underwriters are obligated but fail or refuse to purchase is not more than one-tenth of the aggregate number of Shares which the Underwriters are obligated to purchase on the Closing Date, each non-defaulting Underwriter shall be obligated, severally, in the proportion which the number of Firm Shares set forth opposite its name in Schedule II hereto bears to the aggregate number of Firm Shares set forth opposite the names of all non-defaulting Underwriters or in such other proportion as you may specify in accordance with Section 20 of the Master Agreement Among Underwriters of Smith Barney Inc. to purchase the Shares which such defaulting Underwriter or Underwriters are obligated, but fail or -38- refuse, to purchase. If any one or more of the Underwriters shall fail or refuse to purchase Shares which it or they are obligated to purchase on the Closing Date and the aggregate number of Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Shares which the Underwriters are obligated to purchase on the Closing Date and arrangements satisfactory to you and the Company for the purchase of such Shares by one or more non-defaulting Underwriters or other party or parties approved by you and the Company are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter or the Company. In any such case which does not result in termination of this Agreement, either you or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and the Prospectus or any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any such default of any such Underwriter under this Agreement. The term "Underwriter" as used in this Agreement includes, for all purposes of this Agreement, any party not listed in Schedule II hereto who, with your approval and the approval of the Company, purchases Shares which a defaulting Underwriter is obligated, but fails or refuses, to purchase. Any notice under this Section 12 may be given by fax, telegram, telecopy or telephone but shall be subsequently confirmed by letter. 13. Termination of Agreement. This Agreement shall be subject to termination in your absolute discretion, without liability on the part of any Underwriter to the Company or any Selling Stockholder, if prior to the Closing Date or any Option Closing Date (if different from the Closing Date and then only as to the Additional Shares), as the case may be, (i) trading in securities generally on the New York Stock Exchange, American Stock Exchange or the Nasdaq National Market shall have been suspended or materially limited, (ii) trading in the Class A Common Stock on the Nasdaq National Market shall have been suspended or materially limited, (iii) a general moratorium on commercial banking activities in New York or Maryland shall have been declared by either federal or state authorities, or (iv) there shall have occurred any outbreak or escalation of hostilities or other international or domestic calamity, crisis or change in political, financial or economic conditions, the effect of which on the financial markets of the United States is such as to make it, in your judgment, impracticable or inadvisable to commence or continue the offering of the Shares at the offering price to the public set forth on the cover page of the Prospectus or to enforce contracts for the resale of the Shares by the Underwriters. Notice of such termination may be given to the Company by fax., telegram, telecopy or telephone and shall be subsequently confirmed by letter. 14. Information Furnished by the Underwriters. The statements set forth in the last paragraph on the cover page, the stabilization legend on the inside cover page, and the statements in the first, third and seventh paragraphs under the caption "Underwriting" in any Prepricing Prospectus and in the Prospectus constitute the only information -39- furnished by or on behalf of the Underwriters through you as such information is referred to in Sections 7(b) and 9 hereof. 15. Miscellaneous. Except as otherwise provided in Sections 5, 12 and 13 hereof, notice given pursuant to any provision of this Agreement shall be in writing and shall be delivered (i) if to the Company, at the office of the Company at 2000 West 41st Street, Baltimore, Maryland 21211, Attention: David D. Smith, President, with a copy to Thomas & Libowitz, P.A., 100 Light Street, Suite 1100, Baltimore, Maryland 21202, Attention: Steven A. Thomas, Esq., with a copy to Wilmer, Cutler & Pickering, 2445 M Street, Washington, D.C. 20037, Attention: John B. Watkins, Esq.; (ii) if to the Selling Stockholders, c/o Sinclair Broadcast Group, Inc., 2000 West 41st Street, Baltimore, Maryland 21211, Attention: David D. Smith, with a copy to Thomas & Libowitz, USF&G Tower, 100 Light Street, Suite 100, Baltimore, MD 21202, Attention: Steven A. Thomas, Esq.; or (iii) if to you, as Representatives of the several Underwriters, c/o Smith Barney Inc., 388 Greenwich Street, New York, New York 10013, Attention: Manager, Investment Banking Division, with a copy to Fried, Frank, Harris, Shriver & Jacobson, One New York Plaza, New York, New York 10004, Attention: Valerie Ford Jacob, Esq. This Agreement has been and is made solely for the benefit of the several Underwriters, the Company, its directors and officers, and the other controlling persons referred to in Section 9 hereof and the Selling Stockholders and their respective successors and assigns, to the extent provided herein, and no other person shall acquire or have any right under or by virtue of this Agreement. Neither the term "successor" nor the term "successors and assigns" as used in this Agreement shall include a purchaser from any Underwriter of any of the Shares in his status as such purchaser. 16. Applicable Law; Counterparts. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York. This Agreement may be signed in various counterparts which together constitute one and the same instrument. If signed in counterparts, this Agreement shall not become effective unless at least one counterpart hereof shall have been executed and delivered on behalf of each party hereto. -40- Please confirm that the foregoing correctly sets forth the agreement between the Company, the Selling Stockholders and the several Underwriters. Very truly yours, SINCLAIR BROADCAST GROUP, INC. By: /s/ David B. Amy ------------------------------- Name: David B. Amy Title: Chief Financial Officer David D. Smith By:/s/ David B. Amy ------------------------------- Name: David B. Amy Attorney-in-Fact Robert E. Smith By:/s/ David B. Amy ------------------------------- Name: David B. Amy Attorney-in-Fact Frederick G. Smith By:/s/ David B. Amy ------------------------------- Name: David B. Amy Attorney-in-Fact J. Duncan Smith By:/s/ David B. Amy ------------------------------- Name: David B. Amy Attorney-in-Fact -41- Robert E. Smith, Trustee for the Robert & Melissa Smith Charitable Remainder Unitrust No. 2 By: /s/ David B. Amy ------------------------------- Name: David B. Amy Attorney-in-Fact Confirmed as of the date first above mentioned on behalf of themselves and the other several Underwriters named in Schedule I hereto. SMITH BARNEY INC. BT ALEX. BROWN INCORPORATED CREDIT SUISSE FIRST BOSTON CORPORATION SALOMON BROTHERS INC CHASE SECURITIES INC. FURMAN SELZ LLC As Representatives of the several Underwriters By SMITH BARNEY INC. By:/s/ Michael E. Anderson ------------------------------ -42- SCHEDULE I SINCLAIR BROADCAST GROUP, INC.
Number of Firm Shares: Selling Stockholder Class B Common Stock* David D. Smith 325,000 Frederick G. Smith 325,000 J. Duncan Smith 325,000 Robert E. Smith 255,555 Robert E. Smith and Melissa Smith 69,445 Charitable Remainder Unitrust No. 2 Total: 1,300,000 * to be converted into shares of Class A Common Stock upon sale
Number of Additional Shares: Selling Stockholder Class B Common Stock* Frederick G. Smith 225,000 Robert E. Smith 155,555 Robert E. Smith and Melissa Smith 69,445 Charitable Remainder Unitrust No. 2 Total: 450,000
* to be converted into shares of Class A Common Stock upon sale -1- SCHEDULE II SINCLAIR BROADCAST GROUP, INC.
Underwriter Number of Firm Shares Smith Barney Inc. 824,000 BT Alex. Brown Incorporated 824,000 Credit Suisse First Boston Corporation 824,000 Salomon Brothers Inc 824,000 Chase Securities Inc. 302,000 Furman Selz LLC 302,000 Allen & Company Incorporated 100,000 Bear, Stearns & Co. Inc. 100,000 A.G. Edwards & Sons, Inc. 100,000 Goldman, Sachs & Co. 100,000 Legg Mason Wood Walker, Incorporated 100,000 Lehman Brothers Inc. 100,000 Merrill Lynch, Pierce, Fenner & Smith Incorporated 100,000 Montgomery Securities 100,000 Oppenheimer & Co., Inc. 100,000 Prudential Securities Incorporated 100,000 Schroeder & Co. Inc. 100,000 UBS Securities LLC 100,000 Wasserstein Perella Securities, Inc. 100,000 Wheat First Butcher Singer 100,000 ------------------------ Total: 5,300,000
-2- EXHIBIT A SINCLAIR BROADCAST GROUP, INC. Chesapeake Television, Inc. Chesapeake Television Licensee, Inc. Cresap Enterprises, Inc. FSF-TV, Inc. KABB Licensee, Inc. KDNL Licensee, Inc. KDSM, Inc. KDSM Licensee, Inc. KSMO, Inc. KSMO Licensee, Inc. KUPN Licensee, Inc. SCI-Indiana Licensee, Inc. SCI-Sacramento Licensee, Inc. Sinclair Capital (Delaware statutory trust) Sinclair Communications, Inc. Sinclair Radio of Albuquerque, Inc. Sinclair Radio of Albuquerque Licensee, Inc. Sinclair Radio of Buffalo, Inc. Sinclair Radio of Buffalo Licensee, Inc. Sinclair Radio of Greenville, Inc. Sinclair Radio of Greenville Licensee, Inc. Sinclair Radio of Los Angeles, Inc. Sinclair Radio of Los Angeles Licensee, Inc. Sinclair Radio of Memphis, Inc. Sinclair Radio of Memphis Licensee, Inc. Sinclair Radio of Nashville, Inc. Sinclair Radio of Nashville Licensee, Inc. Sinclair Radio of New Orleans, Inc. Sinclair Radio of New Orleans Licensee, Inc. Sinclair Radio of St. Louis, Inc. Sinclair Radio of St. Louis Licensee, Inc. Sinclair Radio of Wilkes-Barre, Inc. Sinclair Radio of Wilkes-Barre Licensee, Inc. Sinclair Communications of Kentucky, Inc. Sinclair Communications of Oklahoma, Inc. Superior KY License Corp. Superior OK License Corp. -3- Tuscaloosa Broadcasting, Inc. WCGV, Inc. WCGV Licensee, Inc. WDBB, Inc. WLFL, Inc. WLFL Licensee, Inc. WLOS Licensee, Inc. WPGH, Inc. WPGH Licensee, Inc. WSMH, Inc. WSMH Licensee, Inc. WSTR, Inc. WSTR Licensee, Inc. WSYX, Inc. WTTE, Channel 28, Inc. WTTE, Channel 28 Licensee, Inc. WTTO, Inc. WTTO Licensee, Inc. WTVZ, Inc. WTVZ Licensee, Inc. WYZZ, Inc. WYZZ Licensee, Inc. -4- EX-1.2 3 EXHIBIT 1.2 3,000,000 Shares SINCLAIR BROADCAST GROUP, INC. $3.00 Convertible Exchangeable Preferred Stock UNDERWRITING AGREEMENT September 17, 1997 SMITH BARNEY INC. BT ALEX. BROWN INCORPORATED CREDIT SUISSE FIRST BOSTON CORPORATION SALOMON BROTHERS INC CHASE SECURITIES INC. FURMAN SELZ LLC c/o SMITH BARNEY INC. 388 Greenwich Street New York, New York 10013 Dear Sirs: Sinclair Broadcast Group, Inc., a Maryland corporation (the "Company"), proposes to issue and sell an aggregate of 3,000,000 shares of its $3.00 Series D Convertible Exchangeable Preferred Stock, par value $0.01 per share (the "Preferred Stock"), to Smith Barney Inc., BT Alex. Brown Incorporated, Credit Suisse First Boston Corporation, Salomon Brothers Inc, Chase Securities Inc. and Furman Selz LLC (the "Underwriters"). The Preferred Stock will be convertible into shares of Class A Common Stock, par value $.01 per share, of the Company ("Class A Common Stock") as set forth in the Articles Supplementary to the Amended and Restated Articles of Incorporation of the Company as amended governing the Preferred Stock (the "Articles Supplementary"). Also, on any dividend payment date on or after December 15, 2000, the Preferred Stock will be exchangeable at the option of the Company, in whole but not in part, for 6.00% Convertible Subordinated Exchange Debentures due September 15, 2012 (the "Exchange Debentures") in a principal amount equal to $50 per share of Preferred Stock, provided that all accrued dividends (whether or not declared) have been paid. The Exchange Debentures will be issued pursuant to an indenture (the "Base Indenture" and as supplemented by a supplemental indenture, the "Indenture") between the Company and First Union National Bank, as trustee (the "Trustee"). The 3,000,000 shares of Preferred Stock to be issued and sold to the Underwriters by the Company are hereinafter referred to as the "Firm Shares." The Company also proposes to sell to the Underwriters, upon the terms and conditions set forth in Section 2 hereof, up to an additional 450,000 shares of Preferred Stock (the "Additional Shares"). The Firm Shares and the Additional Shares are hereinafter collectively referred to as the "Shares" and the Shares and the Exchange Debentures are hereinafter referred to as the "Securities." 1 The Company wishes to confirm as follows its respective agreements with you and the other several Underwriters on whose behalf you are acting, in connection with the several purchases of the Shares by the Underwriters. 1. Registration Statement and Prospectus. The Company has prepared and filed with the Commission in accordance with the provisions of the Securities Act of 1933, as amended (the "Act"), a registration statement on Form S-3 under the Act (the "registration statement"), including a prospectus, and a prospectus supplement subject to completion, relating to the Securities. The term "Registration Statement" as used in this Agreement means the registration statement (including all financial schedules and exhibits), as amended at the time it becomes effective, or, if the registration statement became effective prior to the execution of this Agreement, as supplemented or amended prior to the execution of this Agreement and shall include in any such case the information, if any, deemed to be a part of such registration statement pursuant to Rule 430A(b) under the Act. If it is contemplated, at the time this Agreement is executed, that a post-effective amendment to the registration statement will be filed and must be declared effective before the offering of the Securities may commence, the term "Registration Statement" as used in this Agreement means the registration statement as amended by said post-effective amendment and including the information, if any, deemed to be a part thereof pursuant to Rule 430A(b), under the Act. If the Company files a registration statement to register a portion of the Securities pursuant to Rule 462(b) under the Act (the "Rule 462(b) Registration Statement"), then after such filing the term "Registration Statement" in this Agreement shall be deemed to include the Rule 462(b) Registration Statement at the time it became effective. The term "Prospectus" as used in this Agreement means the prospectus, including any prospectus supplement relating to the offering of the Securities, in the forms included in the Registration Statement, or, if the prospectus included in the Registration Statement omits information in reliance on Rule 430A under the Act and such information is included in prospectuses filed with the Commission pursuant to Rule 424(b) under the Act, the term "Prospectus" as used in this Agreement means the prospectus in the form included in the Registration Statement as supplemented by the addition of the Rule 430A information contained in the prospectuses filed with the Commission pursuant to Rule 424(b). The term "Prepricing Prospectus" as used in this Agreement means the prospectus (including any preliminary prospectus supplement relating to the offering of the Securities) subject to completion in the form included in the Registration Statement at the time of the filing of any preliminary prospectus supplement as part of the Registration Statement with the Commission, and as such prospectus shall have been amended from time to time prior to the date of the Prospectus. Any reference in this Agreement to the registration statement, the Registration Statement, any Prepricing Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date of the registration statement, the Registration Statement, such Prepricing Prospectus or the Prospectus, as the case may be, and any reference to any amendment or Prepricing Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after such date under the Securities Exchange 2 Act of 1934, as amended (the "Exchange Act") which, upon filing, are incorporated by reference therein, as required by paragraph (b) of Item 12 of Form S-3. As used herein, the term "Incorporated Documents" means the documents which at the time are incorporated by referencetration statement, the Registration Statement, any Prepricing Prospectus, the Prospectus, or any amendment or supplement thereto; "Rules and Regulations" means the rules and regulations adopted by the Commission under either the Act or the Exchange Act, as applicable; and "Person" means any individual, partnership, joint venture, corporation, limited liability company, trust, unincorporated organization or government or department or agency thereof. 2. Agreements to Sell and Purchase. Subject to such adjustments as you may determine in order to avoid fractional shares, the Company hereby agrees, subject to all the terms and conditions set forth herein, to issue and sell to each Underwriter and, upon the basis of the representations, warranties and agreements of the Company herein contained and subject to all the terms and conditions set forth herein, each Underwriter agrees, severally and not jointly, to purchase from the Company, at a purchase price of $48.625 per Share (the "Purchase Price Per Share"), the number of Firm Shares set forth opposite the name of such Underwriter in Schedule I hereto (or such number of Firm Shares increased as set forth in Section 12 hereof). The Company also agrees, subject to all the terms and conditions set forth herein, to sell to the Underwriters, and, upon the basis of the representations, warranties and agreements of the Company herein contained and subject to all the terms and conditions set forth herein, the Underwriters shall have the right to purchase from the Company, pursuant to an option (the "over-allotment option") which may be exercised at any time and from time to time prior to 9:00 P.M., New York City time, on the 30th day after the date of the Prospectus (or, if such 30th day shall be a Saturday or Sunday or a holiday, on the next business day thereafter when the New York Stock Exchange is open for trading), up to 450,000 Additional Shares from the Company, at the Purchase Price Percrued dividends (whether or not declared) from the Closing Date (as defined below) to the Option Closing Date (as defined below) for such Additional Shares. Additional Shares may be purchased only for the purpose of covering over-allotments made in connection with the offering of the Shares. Upon any exercise of the over-allotment option, each Underwriter, severally and not jointly, agrees to purchase from the Company the number of Additional Shares which bears the same proportion to the total number of Additional Shares being sold by the Company pursuant to the over-allotment option as the number of Firm Shares set forth opposite the name of such Underwriter in Schedule II hereto (or such number of Firm Shares increased as set forth in Section 12 hereof) bears to the aggregate number of Firm Shares to be sold by the Company (3,000,000). 3. Terms of Public Offering. The Company has been advised by you that the Underwriters propose to make a public offering of their respective portions of the Shares as soon after the Registration Statement and this Agreement have become effective as in 3 your judgment is advisable and initially to offer the Shares upon the terms set forth in the Prospectus. 4. Delivery of the Shares and Payment Therefor. Delivery to the Underwriters of and payment for the Firm Shares shall be made at the office of Smith Barney Inc., 388 Greenwich Street, New York, NY 10013, at 9:00 A.M., New York City time, on September 23, 1997 (the "Closing Date"). The place of closing for the Firm Shares and the Closing Date may be varied by agreement between you and the Company. Delivery to the Underwriters of and payment for any Additional Shares to be purchased by the Underwriters shall be made at the aforementioned office of Smith Barney Inc. at such time on such date (the "Option Closing Date"), which may be the same as the Closing Dtwo nor later than ten business days after the giving of the notice hereinafter referred to, as shall be specified in a written notice from you on behalf of the Underwriters to the Company of the Underwriters' determination to purchase a number, specified in such notice, of Additional Shares. The place of closing for any Additional Shares and the Option Closing Date for such Shares may be varied by agreement between you and the Company. Certificates for the Firm Shares and for any Additional Shares to be purchased hereunder shall be registered in such names and in such denominations as you shall request by written notice (it being understood that a facsimile transmission shall be deemed written notice) prior to 9:30 A.M., New York City time, on the second business day preceding the Closing Date or any Option Closing Date, as the case may be. Such certificates shall be made available to you in New York City for inspection and packaging not later than 9:30 A.M., New York City time, on the business day next preceding the Closing Date or the Option Closing Date, as the case may be. The certificates evidencing the Firm Shares and any Additional Shares to be purchased hereunder shall be delivered to you on the Closing Date or the Option Closing Date, as the case may be, against payment of the purchase price therefor in immediately available funds to the order of the Company. 5. Agreements of the Company. The Company agrees with the several Underwriters as follows: (a) If, at the time this Agreement is executed and delivered, it is necessary for the Registration Statement or a post-effective amendment thereto to be declared effective before the offering of the Shares may commence, the Company will endeavor to cause the Registration Statement or such post-effective amendment to become effective as soon as possible and will advise you promptly and, if requested by you, will confirm such advice in writing, when the Registration Statement or such post-effective amendment has become effective. 4 (b) The Company will advise you promptly and, if requested by you, will confirm such advice in writing: (i) of any request by the Commission for amendment of or a supplement to the Registration Statement, any Prepricing Prospectus or the Prospectus or for additional information; (ii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of the suspension of qualification of the Shares for offering or sale in any jurisdiction or the initiation of any proceeding for such purpose; and (iii) within the period of time referred to in paragraph (f) below, of any change in the Company's condition (financial or otherwise), business, prospects, properties, net worth or results of operations, or of the happening of any event, including the filing of any information, documents or reports pursuant to the Exchange Act, which makes any statement of a material fact made in the Registration Statement or the Prospectus (as then amended or supplemented) untrue or which requires the making of any additions to or changes in the Registration Statement or the Prospectus (as then amended or supplemented) in order to state a material fact required by the Act or the regulations thereunder to be stated therein or necessary in order to make the statements therein not misleading, or of the necessity to amend or supplement the Prospectus (as then amended or supplemented) to comply with the Act or anl issue any stop order suspending the effectiveness of the Registration Statement, the Company will make every reasonable effort to obtain the withdrawal of such order at the earliest possible time. (c) The Company will furnish to you, without charge (i) six signed copies of the Registration Statement as originally filed with the Commission and of each amendment thereto, including financial statements and all exhibits thereto, (ii) such number of conformed copies of the Registration Statement as originally filed and of each amendment thereto, but without exhibits, as you may reasonably request, (iii) such number of copies of the Incorporated Documents, without exhibits, as you may request, and (iv) six copies of the exhibits to the Incorporated Documents. (d) So long as, in the opinion of counsel for the Underwriters, a Prospectus is required to be delivered in connection with sales by any Underwriter or dealer, the Company will not (i) file any amendment to the Registration Statement, make any amendment or supplement to the Prospectus or file any document which, upon filing becomes an Incorporated Document, of which you shall not previously have been advised or to which you shall reasonably object after being so advised or (ii) file any information, documents or reports pursuant to the Exchange Act without delivering a copy of such information, documents or reports to you, as the several Underwriters, prior to such filing. (e) Prior to the execution and delivery of this Agreement, the Company has delivered to you, without charge, in such quantities as you have reasonably requested, copies of each form of the Prepricing Prospectus. The Company consents to the use, in accordance with the provisions of the Act and with the securities or Blue Sky laws of the jurisdictions in which the Shares are offered, by the several Underwriters and by dealers, 5 prior to the date of the Prospectus, of each Prepricing Prospectus so furnished by the Company. (f) As soon after the execution and delivery of this Agreement as possible and thereafter from time to time for such period as in the opinion of counsel for the Underwriters a Prospectus is required by the Act to be delivered in connection with sales by any Underwriter or dealer, the Company will expeditiously deliver to each Underwriter and each dealer, without charge, as many copies of the Prospectus (and of any amendment or supplement thereto) as you may reasonably request. The Company consents to the use of the Prospectus (and of any amendment or supplement thereto), in accordance with the provisions of the Act and with the securities or Blue Sky laws of the jurisdictions in which the Shares are offered, by the several Underwriters and by all dealers to whom Shares may be sold, both in connection with the offering and sale of the Shares and for such period of time thereafter as the Prospectus is required by the Act to be delivered in connection with sales by any Underwriter or dealer. If during such period of time any event shall occur that in the judgment of the Company or in the opinion of counsel for the Underwriters is required to be set forth in the Prospectus (as then amended or supplemented) or should be set forth therein in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary to supplement or amend the Prospectus (or to file under the Exchange Act any document which, upon filing, becomes an Incorporated Document) to comply with the Act or any other law, the Company will forthwith prepare and, subject to the provisions of paragraph (d) above, file with the Commission an appropriate supplement or amendment thereto or file an Incorporated Document, and will expeditiously furnish to the Underwriters and dealers a reasonable number of copies thereof. In the event that the Company and you, as the several Underwriters, agree that the Prospectus should be amended or supplemented, the Company, if requested by you, will promptly issue a press release announcing or discmatters to be covered by the proposed amendment or supplement. (g) The Company will cooperate with you and with counsel for the Underwriters in connection with the registration or qualification of the Shares for offering and sale by the several Underwriters and by dealers under the securities or Blue Sky laws of such jurisdictions as you may reasonably designate and will file such consents to service of process or other documents necessary or appropriate in order to effect such registration or qualification; provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action which would subject it to service of process in suits, other than those arising out of the offering or sale of the Shares, in any jurisdiction where it is not now so subject. (h) The Company will make generally available to its security holders a consolidated earnings statement, which need not be audited, covering a twelve-month period commencing after the effective date of the Registration Statement and ending not later than fifteen months thereafter, as soon as practicable after the end of such period, 6 which consolidated earnings statement shall satisfy the provisions of Section 11(a) of the Act and the Rules and Regulations (including, at the option of the Company, Rule 158). (i) During the period of five years after the date of this Agreement, the Company will furnish to you (i) as soon as available, a copy of each report of the Company mailed to stockholders or filed with any stock exchange or regulatory body and (ii) from time to time such other information concerning the Company as you may reasonably request. (j) If this Agreement shall terminate or shall be terminated after execution pursuant to any provisions hereof (otherwise than pursuant to the second paragraph of Section 10 hereof or by notice given by you terminating this Agreement pursuant to Section 10 or Section 1erwriters because of any failure or refusal on the part of the Company to comply with the terms or fulfill any of the conditions of this Agreement, the Company agrees to reimburse the Underwriters for all out-of-pocket expenses (including fees and expenses of counsel for the Underwriters) incurred by you in connection herewith. (k) The Company will apply the net proceeds from the sale of the Shares substantially in accordance with the description set forth in the Prospectus. (l) If Rule 430A of the Act is employed, the Company will timely file the Prospectus in the proper manner pursuant to Rule 424(b) under the Act and will advise you of the time and manner of such filing. (m) Except as provided in this Agreement, the Company will not offer to sell, sell, contract to sell or otherwise dispose of any common stock or preferred stock of the Company ("Capital Stock") or any securities convertible into or exercisable or exchangeable for Capital Stock, or grant any options or warrants to purchase Capital Stock or such securities, for a period of 90 days after the date of the Prospectus, without the prior written consent of Smith Barney Inc. (n) The Company has furnished or will furnish to you "lock-up" letters, in form and substance satisfactory to you, signed by each of its current officers and directors and each of its stockholders designated by you. (o) Except as stated in this Agreement and in the Prepricing Prospectus and Prospectus, the Company has not taken, nor will it take, directly or indirectly, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of any shares of its capital stock to facilitate the sale or resale of the Shares. (p) The Company will use its reasonable and diligent efforts to have the Shares listed, subject to notice of issuance of Shares, on the Nasdaq National Market as soon as practicable following the execution of this Agreement. 7 6. Representations and Warrant ies of the Company. The Company represents and warrants to each Underwriter that: (a) Each Prepricing Prospectus included as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto, or filed pursuant to Rule 424 under the Act, complied when so filed in all material respects with the provisions of the Act. The Commission has not issued any order preventing or suspending the use of any Prepricing Prospectus. (b) The Company and the transactions contemplated by this Agreement meet the requirements for using Form S-3 under the Act. The Registration Statement in the form in which it became or becomes effective and also in such form as it may be when any post-effective amendment thereto shall become effective and the Prospectus and any supplement or amendment thereto when filed with the Commission under Rule 424(b) under the Act, complied or will comply in all material respects with the provisions of the Act and did not or will not at any such times contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; except that this representation and warranty does not apply (i) to statements in or omissions from the Registration Statement or the Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by or on behalf of any Underwriter through you expressly for use therein and (ii) to that part of the Registration Statement that constitutes the Statement of Eligibility (Form T-1) under the Trust Indenture Act of 1939, as amended (the "Form T-1"). (c) The Incorporated Documents heretofore filed, when they were filed (or, if any amendment with respect to any such document was filed, when such amendment was filed), conformed in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder, any further Incorporatey are filed, conform in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder; no such document when it was filed (or, if an amendment with respect to any such document was filed, when such amendment was filed), contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; and no such further document, when it is filed, will contain an untrue statement of a material fact or will omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading. (d) All the outstanding shares of capital stock of the Company have been duly authorized and validly issued, are fully paid and nonassessable and are free of any preemptive or similar rights; the Shares to be issued and sold by the Company have been duly authorized and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms hereof, will be validly issued, fully paid and 8 nonassessable and free of any preemptive or similar rights, and the capital stock of the Company conforms to the description thereof in the Registration Statement and the Prospectus. The shares of Class A Common Stock issuable upon conversion of Preferred Stock or Exchange Debentures have been duly and validly authorized and reserved for issuance upon such conversion by all necessary corporate action and such shares of Class A Common Stock, when issued upon such conversion, will be duly and validly issued, fully paid and non-assessable, and the issuance of such shares upon such conversion will not be subject to preemptive or other similar rights of any stockholder of the Company arising by operation of law, under the charter or by-laws of the Company or under any agreement to which the Company or any of its Subsidiaries is a party; and the shares of Class A Common Stol material respects to the descriptions thereof contained in the Prospectus. (e)The Company is a corporation duly organized and validly existing in good standing under the laws of the State of Maryland with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify would not have a material adverse effect on the condition (financial or other), business, properties, net worth or results of operations of the Company and the Subsidiaries (as hereinafter defined) taken as a whole (a "Material Adverse Effect"). (f) All the Company's subsidiaries (collectively, the "Subsidiaries") are listed on Exhibit A hereto. Each Subsidiary is a corporation or a trust duly organized, validly existing and in good standing in the jurisdiction of its incorporation or organization, as the case may be, with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify does not have a Material Adverse Effect; all the outstanding shares of capital stock of each of the Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable, and are owned by the Company directly, or indirectly through one of the other Subsidiaries, free and clear of any lien, adverse claim, security interest, equity or other enhe Prospectus. (g) The Company has full legal right, power and authority to enter into this Agreement, the Exchange Debentures and the Indenture and to issue, sell and deliver the Shares to be sold by it as provided herein. No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the execution, delivery or performance of this Agreement, the Exchange 9 Debentures or the Indenture by the Company or the consummation by the Company or any Subsidiary, as the case may be, of the transactions contemplated hereby, in the Exchange Debentures or in the Indenture, except such as may be required under the Act, the Exchange Act and state securities or blue sky laws or by the National Association of Securities Dealers, Inc. The execution, delivery and performance of this Agreement, the Articles Supplementary, the Indenture if and when executed and, if and when issued, the Exchange Debentures by the Company and the consummation by the Company or any Subsidiary, as the case may be, of the transactions contemplated hereby and thereby does not and will not conflict with or result in a breach or violation by the Company of any of the terms or provisions of, constitute a default by the Company under, or result in the creation or imposition of any lien, charge, security interest or encumbrance upon any of the assets of the Company or any Subsidiary pursuant to the terms of any (A) indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which the Company or any of the Subsidiaries, as the case may be, is a party or to which any of them or any of their respective properties is subject, (B) the charter or bylaws of the Company or any of the Subsidiaries, as the case may be, or (C) any statute, judgment, decree, order, rule or regulation of any court or governmental agency or body applicable to the Company or any of the Subsidiaries or any of their respective properties. (h) The execution and delivery of, and the performance by the Company of its obligations under, this Agreement have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement has been duly executed and delivered by the Company. The Articles Supplementary have been duly authorized by all necessary corporate and stockholder action. The Shares have been duly authorized, and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms hereof, are validly issued, fully paid and non-assessable, and free of any preemptive or similar rights; the Preferred Stock conforms to the description thereof in the Prospectus; the Preferred Stock has the rights set forth in the Articles Supplementary, and the terms of the Preferred Stock are valid and binding on the Company. The execution and delivery of the Indenture will be duly authorized by all necessary corporate action on the part of the Company, and when executed and delivered by the Company, and assuming due authorization, execution and delivery by the Trustee, will be a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally, and subject, as to enforceability, to general principles of equity. The issuance, execution and delivery of the Exchange Debentures if and when issued will be duly authorized by all necessary corporate action of the Company and, if and when executed, issued and delivered by the Company and authenticated by the Trustee, the Exchange Debentures will be the legal, valid, binding and enforceable obligations of the Company entitled to the benefits of the Indenture, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally, and subject, as to enforceability, to general principles of equity. The Exchange Debentures and the Indenture conform to the descriptions therescribed or referred to in the Prospectus. 10 (i) Except as described or referred to in the Prospectus, there is not pending or to the knowledge of the Company threatened, any action, suit, proceeding, inquiry or investigation, to which the Company or any of the Subsidiaries is a party, or to which the property of the Company or any of the Subsidiaries is subject, before or brought by any court or governmental agency or body, which, if determined adversely to the Company or any of the Subsidiaries would individually or in the aggregate result in a Material Adverse Effect or might materially adversely affect the consummation of the transactions contemplated by this Agreement; and all pending legal or governmental proceedings to which the Company or any of the Subsidiaries is a party or that affect any of their respective properties, that are not described in the Prospectus or the Incorporated Documents, including ordinary routine litigation incidental to the business, would not, if determined adversely to the Company or any of the Subsidiaries, individually or in the aggregate, result in a Material Adverse Effect. (j) Neither the Company nor any of the Subsidiaries is in violation of its certificate or articles of incorporation or bylaws, or other organizational documents, or of any law, ordinance, administrative or governmental rule or regulation applicable to the Company or any of the Subsidiaries or of any decree of any court or governmental agency or body having jurisdiction over the Company or any of the Subsidiaries, or in default in any material respect in the performance of any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any agreement, indenture, lease or other instrument to which the Company or any of the Subsidiaries is a party or by which any of them or any of their respective properties may be bound and no condition or state of facts exists, with which the passage of time or the giving of notice or both would constitute such a would not, singly or in the aggregate, have a Material Adverse Effect. (k) There are no agreements, contracts, indentures, leases or other instruments that are required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement that are not described or filed as required by the Act. (l) The accountants, Arthur Andersen LLP, Ernst & Young LLP, KPMG Peat Marwick LLP and Price Waterhouse LLP, who have certified or shall certify the financial statements included in or incorporated by reference in the Registration Statement and the Prospectus (or any amendment or supplement thereto), are independent public accountants as required by the Act. (m) The consolidated financial statements, together with the related schedules and notes included in or incorporated by reference in the Registration Statement and the Prospectus present fairly the consolidated financial position, results of operations and changes in financial position of the entities purported to be shown thereby at the dates and for the periods indicated and have been prepared in accordance with generally accepted accounting principles ("GAAP") applied on a consistent basis, except 11 as otherwise stated therein. The selected financial data and summary financial data included in or incorporated by reference in the Registration Statement and the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited consolidated financial statements included in the Registration Statement and the Prospectus. The pro forma financial statements and other pro forma financial information included in or incorporated by reference in the Registration Statement and the Prospectus present fairly the information shown therein in accordance with the adjustments and assumptions described therein, have been prepared in accordance with the Commission's rules and guidelines with reiled on the pro forma basis described therein and in the opinion of the Company, the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions or circumstances referred to therein. (n) Except as disclosed in the Registration Statement and the Prospectus (or any amendment or supplement thereto), subsequent to the respective dates as of which such information is given in the Registration Statement and the Prospectus (or any amendment or supplement thereto), neither the Company nor any of the Subsidiaries has incurred any liability or obligation, direct or contingent, or entered into any transaction, not in the ordinary course of business, that is material to the Company and the Subsidiaries taken as a whole, and there has not been any change in the capital stock, or material increase in the short-term debt or long-term debt, of the Company or any of the Subsidiaries, or any material adverse change, or any development involving or which may reasonably be expected to involve, a prospective material adverse change, in the condition (financial or other), business, net worth or results of operations of the Company and the Subsidiaries taken as a whole. (o) Each of the Company and the Subsidiaries has good and marketable title to all property (real and personal) described in the Prospectus as being owned by it, free and clear of all liens, claims, security interests or other encumbrances, except such as are described in the Registration Statement and the Prospectus or with such exceptions as are not material and do not interfere with the use made and proposed to be made of such properties by the Company and the Subsidiaries and could not reasonably be expected individually or in the aggregate to result in a Material Adverse Effect; and all of the leases and subleases material to the business of the Company and the Subsidiaries taken as a whole, and under which the Company t described in the Registration Statement and the Prospectus, are in full force and effect and neither the Company nor any of the Subsidiaries has any notice of any claim of any sort that has been asserted by anyone adverse to the rights of the Company or any of the Subsidiaries under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or any of the Subsidiaries to the continued possession of the leased or subleased premises under any such lease or sublease, which claim could reasonably be expected individually or in the aggregate to result in a Material Adverse Effect. 12 (p) Each of the Company and the Subsidiaries owns or possesses, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, trademarks, service marks, trade names and know-how (including trade secrets and other patentable and/or unpatentable proprietary or confidential information or procedures) (collectively, "intellectual property") necessary to carry on its business as presently operated by it, except where the failure to own or possess or have the ability to acquire any such intellectual property would not individually or in the aggregate result in a Material Adverse Effect; and none of the Company or any of the Subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any intellectual property or of any facts which would render any intellectual property invalid or inadequate to protect the interest of the Company or any of the Subsidiaries therein and which infringement or conflict could reasonably be expected in the aggregate to result in a Material Adverse Effect. (q) The Company has not distributed and, prior to the later to occur of (i) the Closing Date and (ii) completion of the distribution of the Shares, will not distribute any offering material in connection with the offering and sing Prospectus, the Prospectus or other materials, if any, permitted by the Act. None of the Company or any of the Subsidiaries has taken, or will take, directly or indirectly, any action designed to, or that might reasonably be expected to, cause or result in stabilization or manipulation of the price of the Shares or any shares of capital stock of the Company. (r) Except as described in or contemplated by the Prospectus, each of the Company and the Subsidiaries owns or possesses all governmental licenses, permits, certificates, consents, orders, approvals and other authorizations necessary to own its properties and to conduct its business in the manner described in the Prospectus, except where the failure to own or possess such licenses, permits, certificates, consents, orders, approvals and other authorizations (collectively, "Material Licenses") would not individually or in the aggregate result in a Material Adverse Effect; all of the Material Licenses are valid and in full force and effect; and no event, including receipt of notice of proceedings relating to revocation or modification of any Material Licenses, has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or result in any other material impairment of the rights of any holder of any such Material License, subject in each case to such qualifications as may be set forth in the Prospectus. (s) The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing 13 assets at reasonable intervals and appropriate action is taken with respect to any differences. (t) To the best of the Company's knowledge, neither the Company nor any of its Subsidiaries nor any employee or agent of the Company or any Subsidiary has made any payment of funds of the Company or any Subsidiary or received or retained any funds in violation of any law, rule or regulation, which payment, receipt or retention of funds is of a character required to be disclosed in the Prospectus. (u) Except as disclosed in the Prospectus, all United States federal income tax returns of the Company and the Subsidiaries required by law to be filed have been filed (taking into account extensions granted by the applicable federal governmental agency) and all taxes shown by such returns or otherwise assessed, which are due and payable, have been paid, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided and except for such taxes the payment of which would not individually or in the aggregate result in a Material Adverse Effect. All other corporate franchise and income tax returns of the Company and the Subsidiaries required to be filed pursuant to applicable foreign, state or local law have been filed except insofar as the failure to file such returns would not individually or in the aggregate result in a Material Adverse Effect, and all taxes shown on such returns or otherwise assessed which are due and payable have been paid, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided and except for such taxes the payment of which would not individually or in the aggregate result in a Material Adverse Effect. (v) Except for rights which have been waived, no holder of any security of the Company or any Subsidiary has any right to require registration of shares of capital stock or any other security of the Company because of consummation of the transactions ce. Except as described or incorporated by reference in or contemplated by the Prospectus, there are no outstanding options, warrants or other rights calling for the issuance of, and there are no commitments, plans or arrangements to issue, any shares of capital stock or debt securities of the Company or any security convertible into or exchangeable or exercisable for capital stock or debt securities of the Company. (w) Each of the Company and the Subsidiaries is not now, and after sale of the Shares as contemplated hereunder and application of the net proceeds from such sale as described in the Prospectus under the caption "Use of Proceeds" will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "1940 Act"). (x) The Company has filed in a timely manner each document or report required to be filed by it pursuant to the Exchange Act and the rules and regulations thereunder; each such document or report (including any financial statements) and any amendment thereto at the time it was filed conformed to the requirements of the 14 Exchange Act and the rules and regulations thereunder; and none of such documents or reports contained an untrue statement of any material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading. (y) Except as described in the Prospectus, the Company and the Subsidiaries comply in all material respects with all Environmental Laws (as defined below), except to the extent that failure to comply with such Environmental Laws would not individually or in the aggregate result in a Material Adverse Effect. To the knowledge of the Company, none of the Company or any of the Subsidiaries is the subject of any pending or, to the knowledge of the Company, threatened federal, state or local investigation evaluating whether any remedial action by the Company or any of the Subsidiaries is needed to respond to a release of any Hazefined below) into the environment, resulting from the Company's or any of the Subsidiaries' business operations or ownership or possession of any of their properties or assets or is in contravention of any Environmental Law that could reasonably be expected individually or in the aggregate to result in a Material Adverse Effect. None of the Company or any of the Subsidiaries have received any notice or claim, nor are there pending or, to the knowledge of the Company, threatened lawsuits against them, with respect to violations of an Environmental Law or in connection with any release of any Hazardous Material into the environment that could reasonably be expected in the aggregate to result in a Material Adverse Effect. As used herein, "Environmental Laws" means any federal, state or local law or regulation applicable to the Company's or any of the Subsidiaries' business operation or ownership or possession of any of their properties or assets relating to environmental matters, and "Hazardous Materials" means those substances that are regulated by or form the basis of liability under any Environmental Laws. (z) No labor problem exists with the employees of the Company or any of the Subsidiaries or, to the knowledge of the Company, is imminent that, in either case, could reasonably be expected individually or in the aggregate to result in a Material Adverse Effect. (aa) The Company and each of the Subsidiaries maintain insurance of the types and in the amounts that are reasonable for the businesses operated by them, including, but not limited to, insurance covering real and personal property owned or leased by the Company and the Subsidiaries against theft, damage, destruction, acts of vandalism, liability and malpractice, all of which insurance is in full force and effect. (bb) The Company and each of the Subsidiaries is in compliance with, and each such entity has not received any notice of any outstanding violation of, all laws, regulations, ordinances and rules applicable to it and its operations, except, in either case, where any failure by the Company or any of the Subsidiaries to comply with any such law, regulation, ordinance or rule would not individually or in the aggregate result in a Material Adverse Effect. 15 (cc) There are no business relationships or related-party transactions of the nature described in Item 404 of Regulation S-K involving the Company or any of its Subsidiaries and any person described in such Item that are required to be disclosed in the Prospectus and which have not been so disclosed. (dd) To the best of the Company's knowledge, each of Baltimore (WNUV-TV) Licensee, Inc. as the licensee of WNUV-TV, Baltimore, Maryland; WVTV Licensee, Inc. as the licensee of WVTV(TV), Milwaukee, Wisconsin; WPTT, Inc. as the licensee of WPTT(TV), Pittsburgh, Pennsylvania; Raleigh (WRDC-TV) Licensee, Inc. as the licensee of WRDC(TV), Durham, North Carolina; River City License Partnership as the licensee of WTTV(TV), Bloomington, Indiana and WTTK(TV), Kokomo, Indiana; Anderson (WFBC-TV) Licensee, Inc. as the licensee of WFBC-TV, Anderson, South Carolina; San Antonio (KRRT-TV) Licensee, Inc. as the licensee of KRRT(TV), Kerrville, Texas; Tiab Communications Corporation as the licensee of WILT(AM), Mt. Pocono, Pennsylvania; WDBB-TV, Inc. as the licensee of WDBB(TV), Tuscaloosa, Alabama; and Birmingham (WABM-TV) Licensee, Inc. as the licensee of WABM(TV), Birmingham, Alabama (each individually an "LMA Station" and together the "LMA Stations") owns or possesses all governmental licenses, permits, certificates, consents, orders, approvals and other authorizations necessary to own its properties (collectively, the "LMA Material Licenses"), and to conduct its business in the manner described in the Prospectus, except where the failure to own or possess such licenses, permits, certificates, consents, orders, approvals and other authorizations would not individually or in the aggregate result in any Material Adverse Eare valid and in full force and effect; and no event, including receipt of notice of proceedings relating to revocation or modification of any LMA Material License, has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or result in any other material impairment of the rights of any holder of any such permit, subject in each case to such qualifications as may be set forth in the Prospectus; and, except as described in the Prospectus, none of such permits contains any restriction that is materially burdensome to the LMA Station or the Company and the Subsidiaries; and there is in full force and effect with each LMA Station a contract, enforceable in accordance with its terms against the Company and against the LMA Station pursuant to which the Company provides programming services to the LMA Station as described or except as described in the Incorporated Documents. (ee) The execution and delivery of the Heritage Acquisition Agreements (as defined in the Prospectus) by the Company have been duly authorized by all necessary corporate action. The Heritage Acquisition Agreements have been duly executed and delivered by the Company and after execution and delivery by the other parties thereto are the legal, valid, binding and enforceable obligations of the parties thereto. There have been no amendments to the Heritage Acquisition Agreements subsequent to the date thereof. 16 (ff) The execution and delivery of the Underwriting Agreement, dated September 17, 1997 (the "Common Underwriting Agreement") among the Company, certain stockholders of the Company and certain underwriters, relating to the sale of 5,300,000 shares of Class A Common Stock of the Company, by the Company have been duly authorized by all necessary corporate action. The Common Underwriting Agreement has been duly executed and delivered by the Company and when executed and delivered by the Underwriters will be the legal, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the execution, delivery or performance of the Common Underwriting Agreement by the Company or the consummation by the Company of the transactions contemplated thereby, except such as may be required under the Act, the Exchange Act and state securities or blue sky laws or by the National Association of Securities Dealers, Inc. (the "NASD") The execution, delivery and performance of the Common Underwriting Agreement by the Company and the consummation by the Company or any Subsidiary, as the case may be, of the transactions contemplated thereby does not and will not conflict with or result in a breach or violation by the Company of any of the terms or provisions of, constitute a default by the Company under, or result in the creation or imposition of any lien, charge, security interest or encumbrance upon any of the assets of the Company or any Subsidiary pursuant to the terms of any (A) indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which the Company or any of the Subsidiaries, as the case may be, is a party or to which any of them or any of their respective properties is subject, (B) the charter or bylaws of the Company or any of the Subsidiaries, as the case may be, or (C) any statute, judgment, decree, order, rule or regulation of any court or governmental agency or body applicable to the Company or any of the Subsidiaries or any of their respective properties. The representations and warranties made by the Company in the Common Underwriting Agreement are true, complete and correct. (gg) Neither the issuance of, exchange involving or delivery of the Exchange Debentures nor the application of the proceeds thereof by the Company as set forth in the Prospectus will violate Regulations G, T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governers. (hh)Each of the Company and the Subsidiaries is, and immediately after the issuance of the Exchange Debentures will be, Solvent. As used herein, the term "Solvent" means, with respect to any such entity on a particular date, that on such date (A) the fair market value of the assets of such entity is greater than the amount that will be required to pay the probable liabilities of such entity on its debts as they become absolute and matured, (B) such entity is able to realize upon its assets and pay its debts and other liabilities, including contingent obligations, as they mature and (C) such entity does not have unreasonably small capital to carry out such entities' business as now conducted, taking into account such entities' projected capital requirements and availability. 17 7. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless each of you and each other Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act from and against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Prepricing Prospectus or the Prospectus or in any amendment or supplement thereto, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon any untrue statement or omission or alleged untrue statement or omission which has been made therein or omitted therefrom in reliance upon and in conformity with the information furnished in writing to the Company by or on behalf of any Underwriter through you expressly for use in connection therewi however, that the indemnification contained in this paragraph (a) with respect to any Prepricing Prospectus shall not inure to the benefit of any Underwriter (or to the benefit of any person controlling such Underwriter) on account of any such loss, claim, damage, liability or expense arising from the sale of the Shares by such Underwriter to any person if a copy of the Prospectus shall not have been delivered or sent to such person within the time required by the Act and the regulations thereunder, and the untrue statement or alleged untrue statement or omission or alleged omission of a material fact contained in such Prepricing Prospectus was corrected in the Prospectus, provided that the Company has delivered the Prospectus to the several Underwriters in requisite quantity on a timely basis to permit such delivery or sending. The foregoing indemnity agreement shall be in addition to any liability which the Company may otherwise have. (b) If any action, suit or proceeding shall be brought against any Underwriter or any person controlling any Underwriter in respect of which indemnity may be sought against the Company, such Underwriter or such controlling person shall promptly notify the party against whom indemnification is being sought (the "indemnifying parties"), and such indemnifying parties shall assume the defense thereof, including the employment of counsel and payment of all fees and expenses. Such Underwriter or any such controlling person shall have the right to employ separate counsel in any such action, suit or proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Underwriter or such controlling person unless (i) the indemnifying parties have agreed in writing to pay such fees and expenses, (ii) the indemnifying parties have failed to assume the defense and employ counsel or (iii) the named parties to any such action, suit or proceeding (including any impleaded parties)ling person and the indemnifying parties and such Underwriter or such controlling person shall have been advised by its counsel that representation of such indemnified party and any indemnifying party by the same counsel would be inappropriate under applicable 18 standards of professional conduct (whether or not such representation by the same counsel has been proposed) due to actual or potential differing interests between them (in which case the indemnifying party shall not have the right to assume the defense of such action, suit or proceeding on behalf of such Underwriter or such controlling person). It is understood, however, that the indemnifying parties shall, in connection with any one such action, suit or proceeding or separate but substantially similar or related actions, suits or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of only one separate firm of attorneys (in addition to any local counsel) at any time for all such Underwriters and controlling persons not having actual or potential differing interests with you or among themselves, which firm shall be designated in writing by Smith Barney Inc., and that all such reasonable fees and expenses shall be reimbursed as they are incurred. The indemnifying parties shall not be liable for any settlement of any such action, suit or proceeding effected without their written consent, but if settled with such written consent, or if there be a final judgment for the plaintiff in any such action, suit or proceeding, the indemnifying parties agree to indemnify and hold harmless any Underwriter, to the extent provided in the preceding paragraph, and any such controlling person from and against any loss, claim, damage, liability or expense by reason of such settlement or judgment. (c) Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors, its officers who sign the Registration State within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with respect to information relating to such Underwriter furnished in writing by or on behalf of such Underwriter through you expressly for use in the Registration Statement, the Prospectus or any Prepricing Prospectus, or any amendment or supplement thereto. If any action, suit or proceeding shall be brought against the Company, any of its directors, any such officer or any such controlling person based on the Registration Statement, the Prospectus or any Prepricing Prospectus, or any amendment or supplement thereto, and in respect of which indemnity may be sought against any Underwriter pursuant to this paragraph (c), such Underwriter shall have the rights and duties given to the Company by paragraph (b) above (except that if the Company shall have assumed the defense thereof such Underwriter shall not be required to do so, but may employ separate counsel therein and participate in the defense thereof, but the fees and expenses of such counsel shall be at such Underwriter's expense), and the Company, its directors, any of such officers and any such controlling persons shall have the rights and duties given to the Underwriters by paragraph (b) above. The foregoing indemnity agreement shall be in addition to any liability which the Underwriters may otherwise have. (d) If the indemnification provided for in this Section 7 is unavailable to an indemnified party under paragraphs (a) or (c) hereof in respect of any losses, claims, damages, liabilities or expenses referred to therein, then an indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by 19 such indemnified party as a result of such losses, claims, damages, liabilities or expenses (i) in such proportion as is appropriate to reflect the relative benefits received other hand from the offering of the Shares or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand shall be deemed to be in the same proportion as the total net proceeds from the offering of the Shares (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus; provided that, in the event that the Underwriters shall have purchased any Additional Shares hereunder, any determination of the relative benefits received by the Company or the Underwriters from the offering of the Shares shall include the net proceeds (before deducting expenses) received by the Company and the underwriting discounts and commissions received by the Underwriters, from the sale of such Additional Shares, in each case computed on the basis of the respective amounts set forth in the notes to the table on the cover page of the Prospectus. The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or by the Underwriters on the other hand and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. (e) The Company and the underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by a pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities and expenses referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating any claim or defending any such action, suit or proceeding. Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total fees received (and not reimbursed to the Company) by such Underwriter with respect to the Shares underwritten by it and distributed to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 20 The Underwriters' obligations to contribute pursuant to this Section 7 are several in proportion to the respective numbers of Firm Shares set forth opposite their names in Schedule I hereto (or such numbers of Firm Shares increased as set forth in Section 10 hereof) and not joint. (f) No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunincludes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of any indemnified party. (g) Any losses, claims, damages, liabilities or expenses for which an indemnified party is entitled to indemnification or contribution under this Section 7 shall be paid by the indemnifying party to the indemnified party as such losses, claims, damages, liabilities or expenses are incurred. The indemnity and contribution agreements contained in this Section 7 and the representations and warranties of the Company set forth in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter, the Company, its directors or officers or any person controlling the Company, (ii) acceptance of any Shares and payment therefor hereunder and (iii) any termination of this Agreement. A successor to any Underwriter or any person controlling any Underwriter, or to the Company, its directors or officers or any person controlling the Company shall be entitled to the benefits of the indemnity, contribution and reimbursement agreements contained in this Section 7. 8. Conditions of Underwriters' Obligations. The several obligations of the Underwriters to purchase the Firm Shares hereunder are subject to the following conditions: (a) If, at the time this Agreement is executed and delivered, it is necessary for the Registration Statement or a post-effective amendment thereto to be declared effective before the offering of the Shares may commence, the Registration Statement or such post-effective amendment shall have become effective not later than 5:30 P.M., New York City time, on the date hereof, or at such later date and time as shall be consenou, and all filings, if any, required by Rules 424 and 430A under the Act shall have been timely made; no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Company or any Underwriter, threatened by the Commission, and any request of the Commission for additional information (to be included in the Registration Statement or the Prospectus or otherwise) shall have been complied with to your satisfaction. 21 (b) Subsequent to the effective date of this Agreement, there shall not have occurred (i) any change, or any development involving a prospective change, in or affecting the condition (financial or other), business, properties, net worth or results of operations of the Company or the Subsidiaries not contemplated by the Prospectus, which in your opinion, as the several Underwriters, would materially, adversely affect the market for the Shares, or (ii) any event or development relating to or involving the Company or any officer or director of the Company which makes any statement made in the Prospectus untrue or which, in the opinion of the Company and its counsel or the Underwriters and their counsel, requires the making of any addition to or change in the Prospectus in order to state a material fact required by the Act or any other law to be stated therein or necessary in order to make the statements therein not misleading, if amending or supplementing the Prospectus to reflect such event or development would, in your opinion, as Representatives of the several Underwriters, materially adversely affect the market for the Shares. (c) You shall have received on the Closing Date, an opinion of Thomas & Libowitz, P.A., counsel for the Company, dated the Closing Date and addressed to you, as the several Underwriters, to the effect that: (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland, with full power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus, and is duly qualified to transact business as a foreign corporation in good standing under the laws of each jurisdiction where the ownership or leasing of its properties or the conduct of its business requires such qualification except where the failure to so qualify would not have a material adverse effect upon its business taken as a whole; (ii) All of the outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable and were not issued in violation of any preemptive or similar rights of stockholders of the Company arising under the corporation laws of the State of Maryland, under the charter or bylaws of the Company or, to the best of such counsel's knowledge, under any agreement to which the Company is a party; (iii) Each of the Subsidiaries has been duly incorporated and is validly existing as a corporation in good standing under the laws of its respective jurisdiction of incorporation, with full power and authority to own its properties and conduct its business as described in the Prospectus, and is duly qualified to transact business as a foreign corporation in good standing under the laws of each jurisdiction where the ownership or leasing of its properties or the conduct of its business requires such qualification; and all of the outstanding shares of capital stock of each of the Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and were not issued in violation of any preemptive or similar rights of 22 stockholders of such Subsidiary arising under the corporation law of its respective jurisdiction of incorporation, its charter or bylaws or, to the best of such counsel's knowledge, under any agreement to which such Subsidiary is a party, and all of the outstanding shares of capital stock of each of the Subsidiaries are owned beneficially by the Company free and clear of all liens, encumbrances, equities and claims except as described in the Prospectus; (iv) To the knowledge of such counsel, except as described or referred to in the Prospectus, there is not pending or threatened any action, suit, proceeding, inquiry or investigation, to which the Company or any of the Subsidiaries is a party, or to which the property of the Company or any of the Subsidiaries is subject, before or brought by any court or governmental agency or body which, if determined adversely to the Company or any of the Subsidiaries, would individually or in the aggregate result in any material adverse change in the business, financial position, net worth, results of operation or prospects, or materially adversely affect the properties and assets collectively of the Company and the Subsidiaries taken as a whole or might materially adversely affect the consummation of the transactions contemplated by the Registration Statement; and all pending legal or governmental proceedings to which the Company or any of the Subsidiaries is a party or that affect any of their respective properties that are not described in the Prospectus, including ordinary routine litigation incidental to the business, are considered in the aggregate not to result in a material adverse change in the business, financial position, net worth, results of operation or prospects, or materially adversely affect the properties and assets collectively of the Company and the Subsidiaries taken as a whole; (v) The execution, delivery and performance of this Agreement, the Articles Supplementary and the Indenture and the consummation by the Company of the transactions contemplated hereby and thereby and compreof does not and will not conflict with or result in a breach or violation by the Company or any Subsidiary, as the case may be, of any of the terms or provisions of, constitute a default by the Company or any Subsidiary, as the case may be, under, or result in the creation or imposition of any lien, charge, security interest or encumbrance upon any of the assets of the Company or any Subsidiary, as the case may be, pursuant to the terms of (a) any material indenture, mortgage, deed of trust, loan or credit agreement, bond, debenture, note, lease or other agreement or instrument to which the Company or any Subsidiary, as the case may be, is a party or to which any of them or any of their respective properties is subject; (b) the charter or bylaws of the Company or any Subsidiary, as the case may be; or (c) any statute, rule or regulation or, to the best of such counsel's knowledge, any judgment, decree or order of any court or governmental agency or court or body applicable to the Company or any of the Subsidiaries or any of their respective properties; (vi) Neither the Company nor any of the Subsidiaries is in violation of its respective certificate or articles of incorporation or bylaws, or other 23 organizational documents, or to the knowledge of such counsel after reasonable inquiry, is in default in the performance of any material obligation, agreement or condition contained in any bond, debenture, note or other evidence of indebtedness, except as may be disclosed in the Prospectus; (vii) Except as described or incorporated by reference in the Prospectus, there are no outstanding options, warrants or other rights calling for the issuance of, and such counsel does not know of any commitment, plan or arrangement to issue, any shares of capital stock of the Company or any security convertible into or exchangeable or exercisable for capital stock of the Company; (viii) Except for rights which have been waived, there is no holder of any security of the Comptractual or otherwise, to cause the Company to sell or otherwise issue to them, or to permit them to underwrite the sale of, the Shares or the right to have any shares of capital stock or other securities of the Company included in the registration statement or the right, as a result of the filing of the registration statement, to require registration under the Act of any shares of capital stock or other securities of the Company; (ix) The execution and delivery of, and the performance by the Company of its obligations under, this Agreement have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement has been duly executed and delivered by the Company. The Articles Supplementary have been duly authorized by all necessary corporate and stockholder action (if any such stockholder action is required). The Shares have been duly authorized, and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms hereof, are validly issued, fully paid and non-assessable, and free of any preemptive or similar rights; the Preferred Stock conforms to the description thereof in the Prospectus; the Preferred Stock has the rights set forth in the Articles Supplementary, and the terms of the Preferred Stock are valid and binding on the Company; (x) The execution and delivery of the Base Indenture has been duly authorized by all necessary corporate action on the part of the Company, and the Indenture has been duly executed and delivered by the Company. The Exchange Debentures, if and when issued by the Company, assuming due authorization by the Company and due authentication by the Trustee, will be the legal, valid, binding and enforceable obligations of the Company entitled to the benefits of the Indenture, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally, and subject, as to enforceability, to general principles of equity. The Exchaptions thereof in the Prospectus; and (xi) The execution and delivery of the Heritage Acquisition Agreements by the Company have been duly authorized by all necessary corporate action, and the Heritage Acquisition Agreements have been duly executed and delivered by the Company and after execution and delivery by the other parties thereto are the legal, valid, 24 binding and enforceable obligations of the Company. To the best knowledge of such counsel, there have been no amendments to the Heritage Acquisition Agreements subsequent to the date thereof. In addition, such opinion shall state that such counsel has not independently verified the accuracy, completeness or fairness of the statements made or the information contained in or incorporated by reference in the Registration Statement or the Prospectus and such counsel is not passing upon and does not assume any responsibility therefor. In the course of the preparation by the Company and the Subsidiaries of the Registration Statement and the Prospectus, such counsel has participated in discussions with representatives of the Underwriters and those of the Company and the Subsidiaries and their independent accountants, in which the business and affairs of the Company and the Subsidiaries and the contents of the Registration Statement and the Prospectus (including the Incorporated Documents) were discussed. Based upon the information such counsel gained in the course of such counsel's representation of the Company and the Subsidiaries in connection with their preparation of the Registration Statement and the Prospectus and such counsel's participation in the discussions referred to above, such counsel has no reason to believe that (i) as of its effective date, the Registration Statement (including the Rule 430A Information, if applicable, and any amendment thereto) or any of the Incorporated Documents contained any untrue statement of a material fact or omitted to state any material fact required to be stated thererein not misleading or (ii) the Prospectus, or any amendment or supplement thereto, at the time the Prospectus was issued, at the time any such amended or supplemented prospectus was issued or at the Closing Date, contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such counsel need express no opinion, however, as to the financial statements, including the notes and schedules thereto, or any other financial data included in the Registration Statement, the Prospectus or the Incorporated Documents. In giving such opinion, such counsel may rely, as to all matters governed by the laws of jurisdictions other than the federal law of the United States and the law of the State of Maryland, upon the opinions of counsel satisfactory to the Underwriters. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers or other appropriate representatives of the Company and the Subsidiaries and certificates of public officials. (d) You shall have received on the Closing Date, an opinion of Wilmer, Cutler & Pickering, securities counsel for the Company, dated the Closing Date and addressed to you, as Representatives of the several Underwriters, to the effect that: (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland, with full power and authority (corporate and other) to own its properties and conduct its 25 business as described in the Prospectus, and is duly qualified to transact business as a foreign corporation in good standing under the laws of each jurisdiction where the ownership or leasing of its properties or the conduct of its business requires such qualification except where the failure to so qualify would not have a material adverse effect upon its business taken as a whole; (ii) The execution and delivery of, and the performance by the Company of its obligations under, this Agreement have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement has been duly executed and delivered by the Company. The Articles Supplementary have been duly authorized by all necessary corporate and stockholder action; (iii) The execution and delivery of the Base Indenture has been duly authorized by all necessary corporate action on the part of the Company. The Exchange Debentures, if and when issued by the Company, assuming due authorization by the Company and due authentication by the Trustee, will be the legal, valid, binding and enforceable obligations of the Company entitled to the benefits of the Indenture, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally, and subject, as to enforceability, to general principles of equity. The Exchange Debentures and the Indenture conform to the descriptions thereof in the Prospectus; (iv) No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the execution, delivery or performance of this Agreement by the Company or the consummation by the Company of the transactions contemplated by this Agreement, except (i) such as have been obtained under the Act and the Exchange Act and (ii) such as may be required under state securities or blue sky laws in connection with the purchase and distribution of the Shares by the several Underwriters or as may be required by the NASD, as to each of which in clause (ii) such counsel expresses no opinion; (v) The descriptions in the Registration Statement and Prospectus of statutes, legal and governmental proceedings, and contracts and other documents present fairly in all material respects the information required to be shown; and such counsel does not know of any statutes or regtal proceedings required to be described in the Prospectus which are not described as required, nor of any contracts or documents of a character required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement which are not described or filed as required. Such counsel need express no opinion as to the description of any statute, regulation or proceedings with respect to the regulation of the Company and the Subsidiaries by the Federal Communications Commission. (vi) The authorized and outstanding capital stock of the Company is as set forth under the caption "Capitalization" in the Prospectus; and the authorized capital stock of the Company conforms in all material respects as to legal matters to the 26 description thereof contained in the Prospectus under the caption "Description of Capital Stock;" (vii) All the shares of capital stock of the Company outstanding prior to the issuance of the Shares to be issued and sold by the Company pursuant to this Agreement have been duly authorized and validly issued, and are fully paid and nonassessable; (viii) The Shares have been duly authorized, and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms hereof, are validly issued, fully paid and non-assessable, and free of any preemptive or similar rights; the Preferred Stock conforms to the description thereof in the Prospectus; the Preferred Stock has the rights set forth in the Articles Supplementary, and the terms of the Preferred Stock are valid and binding on the Company; (ix) The form of certificates for the Shares conforms to the requirements of the corporation law of the State of Maryland; (x) The shares of Class A Common Stock issuable upon conversion of the Shares or Exchange Debentures have been duly authorized and reserved for issuance upon such conversion by all necessary corporate action and such shares of Class A Common Stock, when issued upon such conversionlidly issued, fully paid and non-assessable and free of any preemptive or similar rights that entitle or will entitle any person to acquire any shares of Class A Common Stock upon the issuance thereof by the Company; (xi) The Registration Statement and the Prospectus and any supplements or amendments thereto as of their respective dates of filing with the Commission, comply as to form in all material respects to the requirements of the Act as applicable to registration statements on Form S-3, except that such counsel, however, need express no opinion as to the financial statements, schedules and other financial data included in the Registration Statement or the Prospectus; (xii) The Registration Statement has become effective under the Act, any required filing of the Prospectus or any supplement thereto has been made with the Commission pursuant to Rule 424(b), in the manner and within the time period required by Rule 424(b), and, to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are threatened, pending or contemplated under the Act; (xiii) Upon delivery of the Shares pursuant to the Underwriting Agreement and payment therefor as contemplated therein, assuming that the Underwriters are bona fide purchasers within the meaning of the New York Uniform Commercial Code, the Underwriters will acquire good and marketable title to the Shares free and clear 27 of any lien, claim, security interest, or other encumbrance, restriction on transfer or other defect in title; (xiv) Neither the Company nor any Subsidiary is an investment company within the meaning of the Investment Company Act of 1940, as amended; (xv) All Incorporated Documents, when they were filed with the Commission, complied as to form in all material respects with the requirements of the Exchange Act; and such counsel has no reason to believe that any of such documents, when they were so filed, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such documents were so filed, not misleading (except for the financial statements, schedules or other financial data contained in any such document as to which counsel need express no opinion); and (xvi) The Indenture has been qualified under the Trust Indenture Act of 1939. In addition, such opinion shall state that such counsel has not independently verified the accuracy, completeness or fairness of the statements made or the information contained in the Registration Statement or the Prospectus (including the Incorporated Documents) and, except with respect to the descriptions referred to in paragraphs (iv) and (v) above, such counsel is not passing upon and does not assume any responsibility therefor. In the course of the preparation by the Company of the Registration Statement and the Prospectus (including the Incorporated Documents), such counsel has participated in discussions with representatives of the Underwriters and thoseich the business and affairs of the Company and the Subsidiaries and the contents of the Registration Statement and the Prospectus (including the Incorporated Documents) were discussed. Based upon the information such counsel gained in the course of such counsel's representation of the Company in connection with its preparation of the Registration Statement and the Prospectus and such counsel's participation in the discussions referred to above, nothing has come to such counsel's attention that leads them to believe that (i) as of its effective date, the Registration Statement (including the Rule 430A Information, if applicable, and any amendment thereto) or any of the Incorporated Documents contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) the Prospectus, or any amendment or supplement thereto, at the time the Prospectus were issued, at the time any such amended or supplemented prospectus was issued or at the Closing Date, contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such counsel need express no opinion, however, as to the financial statements, including the notes and schedules thereto, or any other financial information included in the Registration Statement, the Prospectus or the Incorporated Documents. 28 In giving such opinion, such counsel may rely, as to all matters governed by the laws of jurisdictions other than the federal law of the United States, the law of the State of New York, the law of the State of Maryland and the General Corporation Law of the State of Delaware, upon the opinions of counsel satisfactory to the Underwriters. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of office appropriate representatives of the Company and the Subsidiaries and certificates of public officials. (e) The Underwriters shall have received an Opinion, dated the Closing Date of Fisher, Wayland, Cooper, Leader & Zaragoza, L.L.P., regulatory counsel for the Company, in form and substance satisfactory to the Underwriters to the effect that: (i) Except for such Federal Communications Commission (the "FCC") approvals that have already been obtained, which approvals, to such counsel's knowledge, are in full force and effect, no FCC approval, authorization, consent or license is required under the Communications Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Communications Laws") for the consummation of the transactions contemplated by this Agreement and the issuance and sale under this Agreement of the Shares. The execution, delivery and performance in accordance with the terms of this Agreement by the Company will not violate the Communications Laws. It should be noted that, under the Communications Laws, FCC approval is required prior to the transfer of control of the Company or any of the Subsidiaries which hold broadcast licenses or the assignment of any FCC licenses or authorizations or prior to the exercise of any voting rights or management authority over the Company or any of the Subsidiaries which hold broadcast licenses to the extent that such exercise constitutes a transfer of control of the Company or any of such Subsidiaries or an assignment of any FCC licenses or authorizations. (ii) The following Subsidiaries are the licensees of the respective stations as identified below, and, except as disclosed in the Prospectus, are authorized to own and operate their respective stations: Subsidiary Station - ---------- ------- Chesapeake Television WBFF(TV) Licensee, Inc. Baltimore, MD WTTE, Channel 28 Licensee, WTTE(TV) Inc. Columbus, OH WPGH Licensee, Inc. WPGH-TV Pittsburgh, PA WCGV Licensee, Inc. WCGV-TV Milwaukee, Wisconsin 29 WTTO Licensee, Inc. WTTO(TV) Birmingham, Alabama WLFL Licensee, Inc. WLFL(TV) Raleigh, North Carolina WTVZ Licensee, Inc. WTVZ-TV Norfolk, Virginia WSTR Licensee, Inc. WSTR-TV Cincinnati, Ohio KSMO Licensee, Inc. KSMO-TV Kansas City, MO WYZZ Licensee Inc. WYZZ(TV) Bloomington, Illinois Superior OK License Corp. KOCB(TV) Oklahoma City, OK Superior KY License Corp. WDKY-TV Danville, KY WSMH Licensee, Inc. WSMH(TV) Flint, MI KOVR Licensee, Inc. KOVR(TV) Stockton, CA KDSM Licensee, Inc. KDSM-TV Des Moines, IA KDNL Licensee, Inc. KDNL-TV St. Louis, MO KUPN Licensee, Inc. KUPN(TV) Las Vegas, NV KABB Licensee, Inc. KABB(TV) San Antonio, TX WLOS Licensee, Inc. WLOS(TV) Asheville, NC Sinclair Radio of Los Angeles Licensee, Inc. KBLA(AM) Santa Monica, CA 30
Sinclair Radio of New Orleans Licensee, Inc. WWL(AM), New Orleans, Louisiana WSMB(AM), New Orleans, Louisiana WLMG(FM), New Orleans, Louisiana KMEZ(FM), Belle Chasse, Louisiana Sinclair Radio of Buffalo Licensee, Inc. WBEN(AM), Buffalo, New York WWKB(AM), Buffalo, New York WMJQ(FM), Buffalo, New York WKSE(FM), Niagara Falls, New York WGR(AM), Buffalo, New York WWWS (AM), Buffalo, New York Sinclair Radio of Memphis Licensee, Inc. WJCE(AM), Memphis, Tennessee WRVR-FM, Memphis, Tennessee WOGY-FM, Germantown, Tennessee Sinclair Radio of Nashville Licensee, Inc. WLAC(AM), Nashville, Tennessee WLAC-FM, Nashville, Tennessee WJZC(FM), Russellville, Kentucky Sinclair Radio of Wilkes-Barre Licensee, Inc. WGBI(AM), Scranton, Pennsylvania WILK(AM), Wilkes-Barre, Pennsylvania WGGY(FM), Scranton, Pennsylvania WKRZ(FM), Wilkes-Barre, Pennsylvania WILP(AM), West Hazelton, Pennsylvania WWFH(FM), Freeland, Pennsylvania WKRF(FM), Tobyhanna, Pennsylvania WWSH(FM), Pittston, Pennsylvania Sinclair Radio of St. Louis Licensee, Inc. WVRV(FM), East St. Louis, Illinois KPNT(FM), St. Genevieve, Missouri
To such counsel's knowledge, all of the licenses held by the subsidiaries identified in this paragraph (ii) necessary to operate their respective stations (the "FCC Material Licenses") are valid and in full force and effect. The stations identified in this paragraph (ii) are collectively referred to as the "Stations." (iii) To the best of such counsel's knowledge, Baltimore (WNUV-TV) Licensee, Inc. is the licensee of WNUV-TV, Baltimore, Maryland; WVTV Licensee, Inc. is the licensee of WVTV(TV), Milwaukee, Wisconsin; WPTT, Inc. is the licensee of WPTT(TV), Pittsburgh, Pennsylvania; Raleigh (WRDC-TV) Licensee, Inc. is the licensee of WRDC(TV), Durham, North Carolina; River City License Partnership is the licensee of WTTV(TV), Bloomington, Indiana and WTTK(TV), Kokomo, Indiana; Anderson (WFBC-TV) Licensee, Inc. is the licensee of WFBC-TV, Anderson, South Carolina; San Antonio (KRRT-TV) Licensee, Inc. is the licensee of KRRT(TV), Kerrville, Texas; Tiab Communications Corporation is the licensee of WILT(AM), Mt. Pocono, Pennsylvania; WDBB-TV, Inc. is the licensee of WDBB(TV), Tuscaloosa, Alabama; and Birmingham 31 (WABM-TV) Licensee, Inc., is the licensee of WABM(TV), Birmingham, Alabama. To the best of such counsel's knowledge, Baltimore (WNUV-TV) Licensee, Inc., WVTV Licensee, Inc., WPTT, Inc., Raleigh (WRDC-TV) Licensee, Inc., River City License Partnership, Anderson (WFBC-TV) Licensee, Inc., San Antonio (KRRT-TV) Licensee, Inc., Tiab Communications Corporation, WDBB-TV, Inc., and Birmingham (WABM-TV) Licensee, Inc., (collectively the "LMA Station Licensees"), except as disclosed in the Prospectus, are authorized to own and operate their respective LMA stations identified in this Paragraph (iii) (each individually a "LMA Station" and collectively the "LMA Stations". To such counsel's knowledge, the licenses held by the LMA Station Licensees to own and operate their respective LMA Stations are valid and in full force and effect. (iv) Except as set forth in the Prospectus, to such counsel's knowledge, there are no proceedings pending or threatened in writing under the Communications Laws that are specifically directed against the Company, the Subsidiaries, or the Stations before or by the FCC or any court having jurisdiction over matters arising under the Communicationsting to any invalidity, revocation, or modification of any FCC Material Licenses, wherein an unfavorable ruling, decision, or finding would materially and adversely change the financial condition, business or properties of the Company and the Subsidiaries individually or taken as a whole. To such counsel's knowledge, based solely upon such counsel's examination of records available for public inspection at the FCC in Washington, D.C., the Stations are operating in compliance with their FCC Material Licenses, except possibly for noncompliance that would not have a material adverse effect on the financial condition, business or properties of the Company and the Subsidiaries individually or taken as a whole. (v) The statements in the Prospectus under the captions (a) "RISK FACTORS--Competition" "--Impact of New Technologies," "--Governmental Regulations; Necessity of Maintaining FCC Licenses," "--Multiple Ownership Rules and Effect on LMAs," and "--LMAs - Rights of Preemption and Termination" and (b) "BUSINESS OF SINCLAIR-- Federal Regulation of Television and Radio Broadcasting" insofar as such statements constitute a summary of material Communications Laws and material proceedings, fairly and in all material respects present the information contained under such captions in light of the circumstances in which such statements are made, and to the extent they constitute matters of law and legal conclusions under the Communications Laws, fairly and in all material respects accurately present the information contained under such captions in light of the circumstances in which such statements are made. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers or other appropriate representatives of the Company and the Subsidiaries and certificates of public officials. 32 (f) You shall have received on the Closing Date an opinion of Fried, Frank, Harris, Shriver & Jacobson, counsel for the Underwriters, dated the Closing Date and addressed to you, as Representatives of the several Underwriters, with respect to the matters agreed upon. In addition, such opinion shall also state the following: In the course of the preparation by the Company of the Registration Statement and the Prospectus, such counsel participated in conferences with certain of the officers and representatives of, and the independent public accountants for, the Company, at which the Registration Statement and the Prospectus were discussed. Between the date of effectiveness of the Registration Statement and the time of delivery of such opinion, such counsel attended additional conferences with certain of the officers and representatives of the Company, at which the contents of the Prospectus were discussed to a limited extent. Given the limitations inherent in the independent verification of factual matters and the character of determinations involved in the registration process, such counsel is not passing upon or assuming any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus. Subject to the foregoing and on the basis of the information gained in the performance of the services referred to above, including information obtained from officers and other representatives of, and the independent public accountants for, the Company, no facts have come to such counsel's attention that cause such counsel to believe that the Registration Statement, as of its effective date, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading or that the Prospectus as of its effective date contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein in light oing. Also, subject to the foregoing, no facts have come to such counsel's attention in the course of proceedings described in the second sentence of this paragraph that cause such counsel to believe that the Prospectus, at the Closing Date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading. Such counsel express no view or belief, however, with respect to financial statements, notes or schedules thereto or other financial information included in or omitted from the Registration Statement or Prospectus. In giving such opinion, such counsel may rely, as to all matters governed by the laws of jurisdictions other than the federal law of the United States, the law of the State of New York, and the General Corporation Law of the State of Delaware, upon the opinions of counsel satisfactory to the Underwriters. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers or other appropriate representatives of the Company and the Subsidiaries and certificates of public officials. (g) You shall have received letters addressed to you, as Representatives of the several Underwriters, and dated the date hereof and the Closing Date from Arthur 33 Andersen LLP, Ernst & Young LLP, KPMG Peat Marwick and Price Waterhouse LLP, independent certified public accountants, substantially in the forms heretofore approved by you. (h) (i) No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been taken or, to the knowledge of the Company, shall be contemplated by the Commission at or prior to the Closing Date; (ii) there shall not have been any change in the capital stock of the Company nor any material increase in the sh (other than in the ordinary course of business) from that set forth or contemplated in the Registration Statement or the Prospectus (or any amendment or supplement thereto); (iii) there shall not have been, since the respective dates as of which information is given in the Registration Statement and the Prospectus (or any amendment or supplement thereto), except as may otherwise be stated in the Registration Statement and Prospectus (or any amendment or supplement thereto), any material adverse change in the condition (financial or other), business, prospects, properties, net worth or results of operations of the Company and the Subsidiaries taken as a whole; (iv) the Company and the Subsidiaries shall not have any liabilities or obligations, direct or contingent (whether or not in the ordinary course of business), that are material to the Company and the Subsidiaries, taken as a whole, other than those reflected in the Registration Statement or the Prospectus (or any amendment or supplement thereto); and (v) all the representations and warranties of the Company contained in this Agreement shall be true and correct on and as of the date hereof and on and as of the Closing Date as if made on and as of the Closing Date, and you shall have received a certificate, dated the Closing Date and signed by the chief executive officer and the chief financial officer of the Company (or such other officers as are acceptable to you), to the effect set forth in this Section 10(h) and in Section 10(i) hereof. (i) The Company shall not have failed at or prior to the Closing Date to have performed or complied with any of its agreements contained in this Agreement and required to be performed or complied with by it hereunder at or prior to the Closing Date. (j) Each of Thomas & Libowitz, P.A. and Wilmer, Cutler & Pickering shall have delivered to you a signed copy of the opinion rendered by such counsel pursuant to the Common Unate of such opinion stating that you may rely on such opinion as if it were addressed to you. (k) The Company shall have entered into an amendment to the Bank Credit Agreement (as defined in the Prospectus) previously submitted to the Underwriters and in form and substance satisfactory to them which permits the transactions contemplated hereby and the use of the proceeds of such transactions as described in the Prospectus. 34 (l) The Company shall have furnished to you "lock-up" letters, in form and substance satisfactory to you, signed by each of its current officers and directors and each of its stockholders designated by you. All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof only if they are satisfactory in form and substance to you and your counsel. Any certificate or document signed by any officer of the Company or any Attorney-in-Fact or any Selling Stockholder and delivered to you, as the several Underwriters, or to counsel for the Underwriters, shall be deemed a representation and warranty by the Company to each Underwriter as to the statements made therein. The several obligations of the Underwriters to purchase Additional Shares hereunder are subject to the satisfaction on and as of any Option Closing Date of the conditions set forth in this Section 8, except that, if any Option Closing Date is other than the Closing Date, the certificates, opinions and letters referred to in paragraphs (c) through (g) shall be dated the Option Closing Date in question and the opinions called for by paragraphs (c), (d) and (f) shall be revised to reflect the sale of Additional Shares. 9. Expenses. The Company agrees to pay the following costs and expenses and all other costs and expenses incident to the performance by it of its obligations hereunder: (i) the preparation, printing or reproduction, and filing with the Commission of the Registration Statement (including financial statement the Prepricing Prospectus, the Prospectus, and each amendment or supplement to any of them; (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, the Prepricing Prospectus, the Prospectus, and all amendments or supplements to any of them as may be reasonably requested for use in connection with the offering and sale of the Shares; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Shares, including any stamp taxes in connection with the original issuance and sale of the Shares; (iv) the printing (or reproduction) and delivery of this Agreement, the Blue Sky Memorandum and all other agreements or documents printed (or reproduced) and delivered in connection with the offering of the Shares; (v) the registration of the Preferred Stock under the Exchange Act and the listing of the Shares on the Nasdaq National Market; (vi) the lodging, meals and expenses incurred by or on behalf of Company officers in connection with presentations to prospective purchasers of the Shares; (vii) the registration or qualification of the Shares for offer and sale under the securities or Blue Sky laws of the several states as provided in Section 5(g) hereof (including the reasonable fees and expenses of counsel for the Underwriters relating to the preparation, printing or reproduction, and delivery of the preliminary and supplemental Blue Sky Memoranda and such registration and qualification); and (viii) the fees and expenses of the Company's accountants and the fees and expenses of counsel (including local and special counsel) for the Company. 35 10. Effective Date of Agreement. This Agreement shall become effective: (i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at the time this Agreement is executed and delivered, it is necessary for the registration statement or a post-effeo to be declared effective before the offering of the Shares may commence, when notification of the effectiveness of the Registration Statement or such post-effective amendment has been released by the Commission. Until such time as this Agreement shall have become effective, it may be terminated by the Company, by notifying you, or by you, as Representatives of the several Underwriters, by notifying the Company. If any one or more of the Underwriters shall fail or refuse to purchase Shares which it or they are obligated to purchase hereunder on the Closing Date, and the aggregate number of Shares which such defaulting Underwriter or Underwriters are obligated but fail or refuse to purchase is not more than one-tenth of the aggregate number of Shares which the Underwriters are obligated to purchase on the Closing Date, each non-defaulting Underwriter shall be obligated, severally, in the proportion which the number of Firm Shares set forth opposite its name in Schedule I hereto bears to the aggregate number of Firm Shares set forth opposite the names of all non-defaulting Underwriters or in such other proportion as you may specify in accordance with Section 20 of the Master Agreement Among Underwriters of Smith Barney Inc. to purchase the Shares which such defaulting Underwriter or Underwriters are obligated, but fail or refuse, to purchase. If any one or more of the Underwriters shall fail or refuse to purchase Shares which it or they are obligated to purchase on the Closing Date and the aggregate number of Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Shares which the Underwriters are obligated to purchase on the Closing Date and arrangements satisfactory to you and the Company for the purchase of such Shares by one or more non-defaulting Underwriters or other party or parties approved by you and the Company are not made within 36 hours after such default, this Agreement will terminate without liability the Company. In any such case which does not result in termination of this Agreement, either you or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and the Prospectus or any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any such default of any such Underwriter under this Agreement. The term "Underwriter" as used in this Agreement includes, for all purposes of this Agreement, any party not listed in Schedule I hereto who, with your approval and the approval of the Company, purchases Shares which a defaulting Underwriter is obligated, but fails or refuses, to purchase. Any notice under this Section 10 may be given by fax, telegram, telecopy or telephone but shall be subsequently confirmed by letter. 36 11. Termination of Agreement. This Agreement shall be subject to termination in your absolute discretion, without liability on the part of any Underwriter to the Company, if prior to the Closing Date or any Option Closing Date (if different from the Closing Date and then only as to the Additional Shares), as the case may be, (i) trading in securities generally on the New York Stock Exchange, American Stock Exchange or the Nasdaq National Market shall have been suspended or materially limited, (ii) trading in the Class A Common Stock on the Nasdaq National Market shall have been suspended or materially limited, (iii) a general moratorium on commercial banking activities in New York or Maryland shall have been declared by either federal or state authorities, or (iv) there shall have occurred any outbreak or escalation of hostilities or other international or domestic calamity, crisis or change in political, financial or economic conditions, the effect of which on the financial markets of the United States is such ait, in your judgment, impracticable or inadvisable to commence or continue the offering of the Shares at the offering price to the public set forth on the cover page of the Prospectus or to enforce contracts for the resale of the Shares by the Underwriters. Notice of such termination may be given to the Company by fax., telegram, telecopy or telephone and shall be subsequently confirmed by letter. 12. Information Furnished by the Underwriters. The statements set forth in the last paragraph on the cover page, the stabilization legend on the inside cover page, and the statements in the first, third and seventh paragraphs under the caption "Underwriting" in any Prepricing Prospectus and in the Prospectus constitute the only information furnished by or on behalf of the Underwriters through you as such information is referred to in Sections 6(b) and 7 hereof. 13. Miscellaneous. Except as otherwise provided in Sections 5, 10 and 11 hereof, notice given pursuant to any provision of this Agreement shall be in writing and shall be delivered (i) if to the Company, at the office of the Company at 2000 West 41st Street, Baltimore, Maryland 21211, Attention: David D. Smith, President, with a copy to Thomas & Libowitz, P.A., 100 Light Street, Suite 1100, Baltimore, Maryland 21202, Attention: Steven A. Thomas, Esq., with a copy to Wilmer, Cutler & Pickering, 2445 M Street, Washington, D.C. 20037, Attention: John B. Watkins, Esq.; or (ii) if to you, as the several Underwriters, c/o Smith Barney Inc., 388 Greenwich Street, New York, New York 10013, Attention: Manager, Investment Banking Division, with a copy to Fried, Frank, Harris, Shriver & Jacobson, One New York Plaza, New York, New York 10004, Attention: Valerie Ford Jacob, Esq. This Agreement has been and is made solely for the benefit of the several Underwriters, the Company, its directors and officers,r respective successors and assigns, to the extent provided herein, and no other person shall acquire or have any right under or by virtue of this Agreement. Neither the term "successor" nor the term "successors and assigns" as used in this Agreement shall include a purchaser from any Underwriter of any of the Shares in his status as such purchaser. 37 14. Applicable Law; Counterparts. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York. This Agreement may be signed in various counterparts which together constitute one and the same instrument. If signed in counterparts, this Agreement shall not become effective unless at least one counterpart hereof shall have been executed and delivered on behalf of each party hereto. 38 Please confirm that the foregoing correctly sets forth the agreement between the Company and the several Underwriters. Very truly yours, SINCLAIR BROADCAST GROUP, INC. By:/s/ David B. Amy --------------------------- Name: David B. Amy Title: Chief Financial Officer Confirmed as of the date first above mentioned. SMITH BARNEY INC. BT ALEX. BROWN INCORPORATED CREDIT SUISSE FIRST BOSTON CORPORATION SALOMON BROTHERS INC CHASE SECURITIES INC. FURMAN SELZ LLC By SMITH BARNEY INC. By: /s/ Michael E. Anderson ------------------------ 39 SCHEDULE I SINCLAIR BROADCAST GROUP, INC. Underwriter Number of Firm Shares Smith Barney Inc. 637,500 BT Alex. Brown Incorporated 637,500 Credit Suisse First Boston Corporation 637,500 Salomon Brothers Inc 637,500 Chase Securities Inc. 225,000 Furman Selz LLC 225,000 --------------------- Total: 3,000,000 1 EXHIBIT A SINCLAIR BROADCAST GROUP, INC. Chesapeake Television, Inc. Chesapeake Television Licensee, Inc. Cresap Enterprises, Inc. FSF-TV, Inc. KABB Licensee, Inc. KDNL Licensee, Inc. KDSM, Inc. KDSM Licensee, Inc. KSMO, Inc. KSMO Licensee, Inc. KUPN Licensee, Inc. SCI-Indiana Licensee, Inc. SCI-Sacramento Licensee, Inc. Sinclair Capital (Delaware statutory trust) Sinclair Communications, Inc. Sinclair Radio of Albuquerque, Inc. Sinclair Radio of Albuquerque Licensee, Inc. Sinclair Radio of Buffalo, Inc. Sinclair Radio of Buffalo Licensee, Inc. Sinclair Radio of Greenville, Inc. Sinclair Radio of Greenville Licensee, Inc. Sinclair Radio of Los Angeles, Inc. Sinclair Radio of Los Angeles Licensee, Inc. Sinclair Radio of Memphis, Inc. Sinclair Radio of Memphis Licensee, Inc. Sinclair Radio of Nashville, Inc. Sinclair Radio of Nashville Licensee, Inc. Sinclair Radio of New Orleans, Inc. Sinclair Radio of New Orleans Licensee, Inc. Sinclair Radio of St. Louis, Inc. Sinclair Radio of St. Louis Licensee, Inc. Sinclair Radio of Wilkes-Barre, Inc. Sinclair Radio of Wilkes-Barre Licensee, Inc. Sinclair Communications of Kentucky, Inc. Sinclair Communications of Oklahoma, Inc. Superior KY License Corp. Superior OK License Corp. 2 Tuscaloosa Broadcasting, Inc. WCGV, Inc. WCGV Licensee, Inc. WDBB, Inc. WLFL, Inc. WLFL Licensee, Inc. WLOS Licensee, Inc. WPGH, Inc. WPGH Licensee, Inc. WSMH, Inc. WSMH Licensee, Inc. WSTR, Inc. WSTR Licensee, Inc. WSYX, Inc. WTTE, Channel 28, Inc. WTTE, Channel 28 Licensee, Inc. WTTO, Inc. WTTO Licensee, Inc. WTVZ, Inc. WTVZ Licensee, Inc. WYZZ, Inc. WYZZ Licensee, Inc. 3 EX-4.1 4 EXHIBIT 4.1 SINCLAIR BROADCAST GROUP, INC. ARTICLES SUPPLEMENTARY SERIES D CONVERTIBLE EXCHANGEABLE PREFERRED STOCK Sinclair Broadcast Group, Inc., a Maryland corporation, having its principal office in Baltimore City, Maryland (the "Company"), hereby certifies to the Maryland State Department of Assessments and Taxation as follows: FIRST: Pursuant to authority expressly vested in the Board of Directors of the Company (the "Board of Directors") by Article Sixth of the Charter of the Company, the Board of Directors has duly divided and classified 3,450,000 shares of the Preferred Stock of the Company into a series designated "Series D Convertible Exchangeable Preferred Stock" and has provided for the issuance of such series. SECOND: The terms of the Series D Convertible Exchangeable Preferred Stock (the "Convertible Exchangeable Preferred Stock"), par value of $.01 per share, as set by the Board of Directors are as follows: 1. Designation and Amount. The shares of such series shall be designated as "Series D Convertible Exchangeable Preferred Stock" and the number of shares constituting such series shall initially be 3,450,000 subject to increase or decrease by action of the Board of Directors effectuated by further Articles Supplementary. The liquidation preference of the Convertible Exchangeable Preferred Stock shall be $50 per share (the "Liquidation Preference"). 2. Ranking. The Convertible Exchangeable Preferred Stock will rank (i) junior in right of payment to all indebtedness of the Company and the Subsidiaries; (ii) senior in right of payment to all Common Stock of the Company; (iii) pari passu with the Company's Series C Preferred Stock, par value $.01 per share (the "Series C Preferred Stock"); and (iv) senior to the Company's Series B Convertible Preferred Stock, par value $.01 per share (the "Series B Preferred Stock") except that upon the termination of Mr. Barry Baker's ("Mr. Baker's") employment agreement dated as of April 10, 1996, between Mr. Baker and the Company as in existence on the date hereof (the "Employment Agreement") prior to May 31, 2001 (the expiration date of the initial five-year agreement term under the Employment Agreement), (i) by the Company for any reason other than "for cause" as defined in the Employment Agreement, or (ii) by Mr. Baker under Section 10.3.1 of the Employment Agreement (clauses (i) and (ii) referred to as the "Termination Conditions"), then the Convertible Exchangeable Preferred Stock and the Series C Preferred Stock will rank pari passu with the Series B Preferred Stock in respect of dividend and distributions upon liquidation, dissolution and winding-up of the Company. The Company hereby declares the Series C Preferred Stock and the Convertible Exchangeable Preferred Stock to be "New Securities" and the Company shall not declare more than $400 million aggregate liquidation value of equity securities, including the Series C Preferred Stock and the Convertible Exchangeable Preferred Stock, as New Securities under the Series B Preferred Stock for purposes of the Articles Supplementary relating to the Series B Preferred Stock. 3. Dividends. 3.1 Beginning on the date of issuance of the Convertible Exchangeable Preferred Stock, registered holders of record ("Holders") of Convertible Exchangeable Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of funds legally available therefor, cash dividends on the Convertible Exchangeable Preferred Stock, of $3.00 per share annually, payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year (each, a "Dividend Payment Date"), commencing on December 15, 1997. Such dividends will accrue and be cumulative from the most recent Dividend Payment Date or, if none has been paid, from the date of first issuance of the Convertible Exchangeable Preferred Stock and will be payable to Holders of Convertible Exchangeable Preferred Stock on the March 1, June 1, September 1 and December 1 next preceding each such Dividend Payment Date, respectively. In the event that any date on which dividends are otherwise payable on the Convertible Exchangeable Preferred Stock is not a Business Day, payment of the dividends payable will be made on the next succeeding day that is a Business Day without any additional amounts required to be paid; provided that dividends will accrue and be cumulative from Dividend Payment Dates and not from the date of payment. 2 3.2 The Convertible Exchangeable Preferred Stock will have priority as to dividends over the Class A Common Stock, the Class B Common Stock and any other series or class of the Company's stock that ranks junior to the Convertible Exchangeable Preferred Stock, as to dividends ("Junior Dividend Stock"). The Company's Series B Preferred Stock is Junior Dividend Stock except as described in the following paragraph. No dividend (other than dividends payable solely in Common Stock, any Junior Dividend Stock or warrants or other rights to acquire such Common Stock or Junior Dividend Stock) may be paid or set apart for payment on, and no purchase, redemption or other acquisition shall be made by the Company of, the Common Stock or Junior Dividend Stock unless all accrued and unpaid dividends on the Convertible Exchangeable Preferred Stock, including the full dividend for the then-current quarterly dividend period and any Additional Dividends (as defined herein), shall have been paid or declared and set apart for payment without interest. Except as provided below, the Company may not pay dividends on any class or series of stock having parity with the Convertible Exchangeable Preferred Stock as to dividends ("Parity Dividend Stock") unless it has paid or declared and set apart for payment or contemporaneously pays or declares and sets apart for payment all accrued and unpaid dividends for all prior dividend payment periods on the Convertible Exchangeable Preferred Stock. The Company's Series C Preferred Stock is Parity Dividend Stock and, if Mr. Baker's employment with the Company is terminated pursuant to the Termination Conditions prior to May 31, 2001, the Series B Preferred Stock would be also Parity Dividend Stock. In addition, except as provided below, the Company may not pay dividends on the Convertible Exchangeable Preferred Stock unless it has paid or declared and set apart for payment or contemporaneously pays or declares and sets apart for payment all accrued and unpaid dividends for all prior dividend payment periods on the Parity Dividend Stock. Whenever all accrued dividends are not paid in full on Convertible Exchangeable Preferred Stock and on any Parity Dividend Stock, all dividends declared on the Convertible Exchangeable Preferred Stock 3 and the Parity Dividend Stock will be declared and made pro rata so that the amount of dividends declared on the Convertible Exchangeable Preferred Stock and the Parity Dividend Stock will bear the same ratio that accrued and unpaid dividends on the Convertible Exchangeable Preferred Stock and the Parity Dividend Stock bear to each other. The Company may not purchase any shares of the Convertible Exchangeable Preferred Stock or any Parity Dividend Stock (except for consideration payable in Common Stock or Junior Dividend Stock) or redeem fewer than all the shares of the Convertible Exchangeable Preferred Stock and Parity Dividend Stock then outstanding if the Company has failed to pay any accrued dividend on the Convertible Exchangeable Preferred Stock or any Parity Dividend Stock on a stated payment date. Notwithstanding the foregoing, in such event, the Company may purchase or redeem fewer than all the shares of the Convertible Exchangeable Preferred Stock and Parity Dividend Stock if such repurchase or redemption is made pro rata so that the amounts purchased or redeemed bear to each other the same ratio that the required redemption payments on the shares of the Convertible Exchangeable Preferred Stock and any Parity Dividend Stock then outstanding bear to each other. If the Company hereafter issues any series or class of stock that ranks senior as to dividends to the Convertible Exchangeable Preferred Stock ("Senior Dividend Stock") and fails to pay or declare and set apart for payment accrued and unpaid dividends on any Senior Dividend Stock (except to the extent allowed by the terms of the Senior Dividend Stock), the Company may not pay or declare and set apart for payment any dividend on the Convertible Exchangeable Preferred Stock unless and until all accrued and unpaid dividends on the Senior Dividend Stock, including the full dividends for the then-current dividend period, have been paid or declared and set apart for payment without interest. 3.3 The dividend payable on Convertible Exchangeable Preferred Stock for each quarterly dividend period will be computed by dividing the annual dividend amount by four. The amount of dividends payable for the initial dividend period and for any period shorter than a full quarterly dividend period will be computed on the basis of a 360-day year of twelve 30-day months. No interest will be payable on any scheduled Convertible Exchangeable Preferred Stock dividend that may be in arrears. All references to "dividends" shall include Additional Dividends (as defined below). 4 4. Optional Redemption Provisions. 4.1 The Convertible Exchangeable Preferred Stock will be redeemable, at the Company's option, in whole or from time to time in part, at any time on or after September 20, 2000 (the date on which such Convertible Exchangeable Preferred Stock is redeemed, the "Redemption Date"), at the following redemption prices ("Redemption Prices") plus accrued and unpaid dividends (including Additional Dividends, if any), expressed on a per share basis, whether or not declared, to the date of redemption. If redeemed during the 12-month period beginning September 15 in the year indicated (September 20, in the case of 2000), the Redemption Price shall be: Redemption Redemption Price Price Year per Share Year per Share ---- --------- ---- --------- 2000 $52.10 2004 $50.90 2001 51.80 2005 50.60 2002 51.50 2006 50.30 2003 51.20 2007 and thereafter 50.00 If fewer than all the outstanding shares of Convertible Exchangeable Preferred Stock are to be redeemed, the Company will select those shares to be redeemed pro rata or in such other manner as the Board of Directors may reasonably determine to be equitable. In the event that the Company has failed to pay accrued and unpaid dividends (including Additional Dividends, if any) on the Convertible Exchangeable Preferred Stock, it may not redeem less than all of the outstanding shares of the Convertible Exchangeable Preferred Stock until all such accrued and unpaid dividends have been paid in full. 5 4.2 Notice of Redemption. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days' prior to the Redemption Date, to each Holder of the Convertible Exchangeable Preferred Stock to be redeemed, at his address appearing in the security register. The notice if mailed in the manner herein provided shall be conclusively presumed to have been given, whether or not the Holder of Convertible Exchangeable Preferred Stock receives such notice. In any case, failure to give such notice to any Holder of Convertible Exchangeable Preferred Stock designated for redemption as a whole or in part, or any defect in any such notice, shall not affect the validity of the proceedings for the redemption of such Convertible Exchangeable Preferred Stock. All notices of redemption shall state the following and may contain such other information as the Company deems advisable: (a) the Redemption Date; (b) in the case of shares of the Convertible Exchangeable Preferred Stock to be redeemed in part, the number of such shares of Convertible Exchangeable Preferred Stock held by such Holder to be redeemed; (c) the place or places where the certificates representing the Convertible Exchangeable Preferred Stock are to be surrendered for payment of the Redemption Price; and (d) that dividends on shares of Convertible Exchangeable Preferred Stock to be redeemed shall cease to accrue on such Redemption Date (except as otherwise provided herein). 4.3 Procedure for Redemption. On or after the Redemption Date, each Holder of shares of Convertible Exchangeable Preferred Stock called for redemption must present and surrender his or her certificate or certificates for such shares (properly endorsed or assigned for transfer, if the Board of Directors shall so require and the notice shall so state) to the Company at the place designated in the notice of such redemption and thereupon the Redemption Price of such shares shall be paid to or on the order of the person whose name appears on such certificate or certificates as the owner thereof and each surrendered certificate shall be canceled. In case fewer that all the shares represented by any such surrendered certificate are called for redemption, a new certificate shall be issued at the expense of the Company representing the unredeemed shares. If a notice of redemption shall have been given as provided in Section 4.1 above, and the funds necessary for redemption (including an amount in respect of all accrued and unpaid dividends that will accrue to the Redemption Date) shall have been segregated and irrevocably set apart by the Company, in trust for the benefit of the Holders of Convertible Exchangeable Preferred Stock called for redemption, then dividends shall cease to accrue on the Redemption Date on the shares to be redeemed and, at the close of business on the date on, or when, such funds were segregated and set apart, the Holders of 6 Convertible Exchangeable Preferred Stock to be redeemed shall cease to be stockholders of the Company and shall be entitled only to receive the Redemption Price for such shares, except the conversion rights to the extent described below and the right to receive the Redemption Price plus accrued and unpaid dividends (including Additional Dividends, if any), whether or not declared, to the Redemption Date, without interest. 5. Liquidation Preference. In the case of the voluntary or involuntary liquidation, dissolution or winding up of the Company, subject to the payment in full, or until provision has been made for the payment in full of all claims of creditors of the Company, and subject to payment of the liquidation preference of any series or class of stock that ranks senior as to liquidation rights to the Convertible Exchangeable Preferred Stock ("Senior Liquidation Stock"), if any, (i) Holders of Convertible Exchangeable Preferred Stock shall be entitled to receive the Liquidation Preference of $50.00 per share, plus an amount equal to any accrued and unpaid dividends (including Additional Dividends, if any), whether or not declared, to the payment date, before any payment or distribution is made to the holders of Common Stock or any other series or class of stock hereafter issued that ranks junior as to liquidation rights to the Convertible Exchangeable Preferred Stock ("Junior Liquidation Stock"), and (ii) Holders of Convertible Exchangeable Preferred Stock will not be entitled to receive the Liquidation Preference of their shares until the liquidation preference of any other series or class of stock hereafter issued that ranks senior as to liquidation rights to the Convertible Exchangeable Preferred Stock ("Senior Liquidation Stock"), if any, has been paid in full. The Holders of Convertible Exchangeable Preferred Stock and any series or class of stock hereafter issued that ranks on a parity as to the liquidation rights with the Convertible Exchangeable Preferred Stock ("Parity Liquidation Stock") are entitled to share ratably, in accordance with the respective preferential amounts payable on their stock, in any distribution (after payment of the liquidation preference on any Senior Liquidation Stock) that is not sufficient to pay in full the aggregate liquidation preference on both the Convertible Exchangeable Preferred Stock and the Parity Liquidation Stock. The Series C Preferred Stock is Parity Liquidation Stock and the Series B Preferred Stock is Junior Liquidation Stock except if Mr. Baker's employment is terminated pursuant to the Termination Conditions prior to May 31, 2001, in which case it would become Parity Liquidation Stock. 7 After payment in full of the liquidation preference plus any accrued and unpaid dividends (including Additional Dividends, if any), on the Convertible Exchangeable Preferred Stock, the Holders of Convertible Exchangeable Preferred Stock will not be entitled to any further participation in any distribution of assets by the Company. Neither a consolidation or merger of the Company with another entity nor a sale or transfer of all or part of the Company's assets for cash, securities or other property will be considered a liquidation, dissolution or winding up of the Company. 6. Voting Rights. 6.1 The Holders of Convertible Exchangeable Preferred Stock will have no voting rights except as described below or as required by law. If entitled to voting rights, each Holder of Convertible Exchangeable Preferred Stock will be entitled to one vote for each $50 aggregate Liquidation Preference of Convertible Exchangeable Preferred Stock held by such Holder. 6.2 Notwithstanding the previous sentence, whenever dividends on the Convertible Exchangeable Preferred Stock are in arrears in aggregate amount equal to at least six quarterly dividends (whether or not consecutive), the size of the Company's Board of Directors will be increased by two, and the Holders of Convertible Exchangeable Preferred Stock, voting separately as a class, will be entitled to select the two additional directors (the "Preferred Directors") to the Board of Directors at (i) any annual meeting of stockholders at which directors are to be elected held during the period when the dividends remain in arrears or (ii) at a special meeting of stockholders called by the Company at the request of the Holders of the Convertible Exchangeable Preferred Stock; provided, that, at any time when shares of Convertible Exchangeable Preferred Stock are outstanding and after the earlier of (i) the time when the Amended and Restated Articles of Incorporation of the Company (the "Amended Certificate") are amended to increase the number of directors that may be elected to the Board of Directors by two or two directors have resigned as contemplated by the next succeeding paragraph and (ii) one year after the Issue Date, if additional directors are not then holding office pursuant to this Section 6.2, the number of directors at any such time constituting the Board of Directors may not exceed the number which is two less than the maximum number of directors then specified in the Amended Certificate. These voting rights will terminate when all dividends in arrears and for the current quarterly period have been paid in full or declared and set apart for payment. The term of office of the additional directors so elected will terminate immediately upon that payment or provision for payment. The Company shall, (a) within one year after the Issue Date, either cause the Amended Certificate to be amended to increase the maximum number of directors by two or 8 cause two directors to resign, and (b) comply with the proviso in the prior paragraph. If it shall fail to do so, then the Company shall pay additional dividends ("Additional Dividends") to the Holders of the Convertible Exchangeable Preferred Stock. Additional Dividends shall accrue on the Convertible Exchangeable Preferred Stock over and above the stated payment rates thereon at a rate of .50% per annum for the first 90 days immediately following the first anniversary of the Issue Date or the date of the breach of the proviso of the prior paragraph, as the case may be, with such Additional Dividend rate increasing by an additional .25% per annum at the beginning of each subsequent 90-day period; provided, however, that the Additional Dividend rate on any shares of the Convertible Exchangeable Preferred Stock may not exceed 1.5% per annum; and provided further, that when the Amended Certificate has been so amended or such directors have resigned and the breach has been cured, Additional Dividends shall cease to accrue. Any Additional Dividends will be payable in cash on the various payment dates related to the Convertible Exchangeable Preferred Stock. The Additional Dividends will be determined by multiplying the applicable Additional Dividend rate by the Liquidation Preference multiplied by a fraction, the numerator of which is the number of days such Additional Dividend rate was applicable during such period, and the denominator of which is 360. 6.3 Each Preferred Director elected by the Holders of the Convertible Exchangeable Preferred Stock pursuant to Section 6.2 shall continue to serve as director for a term of one year, except that upon termination of the right of Holders of the Convertible Exchangeable Preferred Stock as a class to elect two directors as provided herein, the term of office of such directors shall automatically terminate. The Preferred Directors may be removed by, and except as provided in the immediately preceding sentence shall not be removed except by, the vote of the Holders of a majority of the outstanding Liquidation Preference present (in person or by proxy) and voting separately as a single class at a meeting of such stockholders, or at any meeting of the Holders of the Convertible Exchangeable Preferred Stock called for that purpose, or by written consent signed by the Holders of a majority of the outstanding Liquidation Preference. In the event that one or both of the Preferred Director positions are vacant for any reason other than the termination of the right of the Holders of Convertible Exchangeable Preferred Stock to elect the Preferred Directors, the Holders of a majority of the outstanding 9 Liquidation Preference shall be permitted to elect a sufficient number of directors to fill such vacancies. 6.4 So long as the right of the Holders of Convertible Exchangeable Preferred Stock described in this Section 6 to vote for directors continues, the Secretary of the Company or the person performing the functions of the secretary of the Company shall call, upon the written request of any Holder of Convertible Exchangeable Preferred Stock addressed to him or her at the principal office of the Company or, if such a request is not made, upon his or her own motion, a special meeting of the Holders of such shares of Convertible Exchangeable Preferred Stock for the election of such directors, as provided herein. Such meeting shall be held not less than 20 or more than 45 days after the accrual of such voting rights, at the place and upon the notice provided by law and in the By-Laws of the Company for the holding of meetings of shareholders. 6.5 So long as any Convertible Exchangeable Preferred Stock is outstanding, the Company will not, without the affirmative vote or consent of the Holders of at least 66 2/3% of all outstanding shares of Convertible Exchangeable Preferred Stock, (i) amend, alter or repeal (by merger or otherwise) any provision of the Amended Certificate or the By-Laws of the Company so as to affect adversely the relative rights, preferences, qualifications, limitations or restrictions of the Convertible Exchangeable Preferred Stock, (ii) authorize any new class of Senior Dividend Stock, any Senior Liquidation Stock or any security convertible into or exchangeable for Senior Dividend Stock or Senior Liquidation Stock or (iii) effect any reclassification of the Convertible Exchangeable Preferred Stock or any reclassification of any capital stock into Senior Dividend Stock or Senior Liquidation Stock. 7. Preemptive Rights. No shares of Convertible Exchangeable Preferred Stock shall have any rights of preemption whatsoever as to any securities of the Company, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities or such warrants, rights or options may be designated, issued or granted. 8. Conversion Rights. 8.1 Conversion Privilege and Conversion Price. The Holder of any shares of Convertible Exchangeable Preferred Stock will have the right, at the Holder's option, to convert the Liquidation Preference thereof (or any portion thereof that is an integral multiple of $50) into shares of Class A Common Stock, par value $.01 per share (the "Class A Common Stock" and together with the Company's Class B Common Stock, par value $.01 per share (the "Class B Common Stock"), the "Common Stock") at any time, initially at the conversion price of $45.625 per share of the underlying Class A Common Stock (subject to adjustments as described in paragraphs (a), (b), (c), (d), (e), (f) and (i) of Section 8.4 below); provided, that if Convertible 10 Exchangeable Preferred Stock is called for redemption, the conversion right will terminate on the close of business on the second business day preceding the date fixed for redemption. 8.2 Exercise of Conversion Privilege. In order to exercise the conversion privilege, the Holder of any Convertible Exchangeable Preferred Stock shall surrender such Convertible Exchangeable Preferred Stock, duly endorsed or assigned to the Company or in blank, to the Company, accompanied by written notice in a form acceptable to the Company that the Holder of Convertible Exchangeable Preferred Stock elects to convert such Convertible Exchangeable Preferred Stock or, if less than the entire Liquidation Preference amount thereof is to be converted, the portion thereof to be converted. Holders of Convertible Exchangeable Preferred Stock at the close of business on a dividend payment record date shall be entitled to receive the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the conversion thereof following such dividend payment record date and prior to such Dividend Payment Date. If shares of Convertible Exchangeable Preferred Stock not called for redemption are surrendered for conversion during the period between the close of business on any Dividend Record Date and the opening of business on any corresponding Dividend Payment Date such shares so surrendered must be accompanied by payment in same day funds of an amount equal to the dividend payable on such shares on such Dividend Payment Date and such shares will be entitled to such dividends. No such payment will be required to accompany shares of Convertible Exchangeable Preferred Stock called for redemption and surrendered during such period and which are not converted. A Holder of shares of Convertible Exchangeable Preferred Stock on a Dividend Record Date who (or whose transferee) tenders any such shares for conversion into shares of Class A Common Stock on the corresponding Dividend Payment Date will receive the dividend payable by the Company on such shares of Convertible Exchangeable Preferred Stock on such date, and the converting Holder of Convertible Exchangeable Preferred Stock need not include payment of the amount of such dividend 11 upon surrender of shares of Convertible Exchangeable Preferred Stock for conversion. Except as provided above, the Company will make no payment or allowance for accrued and unpaid dividends, whether or not in arrears, on converted shares or for dividends on the shares of Class A Common Stock issuable upon such conversion. Convertible Exchangeable Preferred Stock shall be deemed to have been converted immediately prior to the close of business on the day of surrender of such Convertible Exchangeable Preferred Stock for conversion in accordance with the foregoing provisions, and at such time the rights of the Holders of such Convertible Exchangeable Preferred Stock as Holders of Convertible Exchangeable Preferred Stock shall cease, and the Person or Persons entitled to receive the Class A Common Stock issuable upon conversion shall be treated for all purposes of the record holder or holders of such Class A Common Stock as and after such time. As promptly as practicable on or after the conversion date, the Company shall issue and deliver a certificate or certificates for the number of full shares of Class A Common Stock issuable upon conversion, together with payment in lieu of any fraction of a share, as provided in Section 8.3 below. In the case of any Convertible Exchangeable Preferred Stock which is converted in part only, upon such conversion the Company shall execute and deliver to the Holder of Convertible Exchangeable Preferred Stock thereof, at the expense of the Company, new Convertible Exchangeable Preferred Stock of authorized denominations in Liquidation Preference amounts equal to the unconverted portion of the Liquidation Preference of such Convertible Exchangeable Preferred Stock. 8.3 Fractions of Shares. No fractional shares of Class A Common Stock shall be issued upon conversion of Convertible Exchangeable Preferred Stock. If more than one share of Convertible Exchangeable Preferred Stock shall be surrendered for conversion at one time by the same Holder, the number of full shares which shall be issuable upon conversion thereof shall be computed on the basis of the aggregate Liquidation Preference (or specified portions thereof) so surrendered. Instead of any fractional share of such Class A Common Stock which would otherwise be issuable upon conversion of any Convertible Exchangeable Preferred Stock (or specified portions thereof), the Company shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction of the Closing Price (as hereinafter defined) at the 12 close of business on the day of conversion (or, if such day is not a Trading Day (as hereinafter defined), on the Trading Day immediately preceding such day). 8.4 Adjustment of Conversion Price. (a) In case the Company shall pay or make a dividend or other distribution on Common Stock exclusively in Common Stock or shall pay or make a dividend or other distribution on any other class of capital stock of the Company which dividend or distribution includes Common Stock, the conversion price in effect at the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such dividend or other distribution shall be reduced by multiplying such conversion price by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination and the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such reduction to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purpose of this paragraph (a), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company. The Company shall not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company. (b) Subject to paragraph (g) of this Section, in case the Company shall pay or make a dividend or other distribution on Common Stock consisting exclusively of, or shall otherwise issue to all holders of any class of Common Stock, rights or warrants entitling the holders thereof to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price (determined as provided in paragraph (h) of this Section) on the date fixed for the determination of shareholders entitled to receive such rights or warrants, the conversion price in effect at the opening of business on the day following the date fixed for such determination shall be reduced by multiplying such conversion price by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed 13 for such determination plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such Current Market Price and the denominator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock so offered for subscription or purchase, such reduction to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this paragraph (b), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company. The Company shall not issue any rights or warrants in respect of shares of Common Stock held in the treasury of the Company. (c) In case outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the conversion price in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately reduced, and, conversely, in case outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the conversion price in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately increased, such reduction or increase, as the case may be, to become effective immediately after the opening of business on the day following the day upon which subdivision or combination becomes effective. (d) Subject to the last sentence of this paragraph (d) and to paragraph (g) of this Section, in case the Company shall, by dividend or otherwise, distribute to all holders of any class of Common Stock evidences of its indebtedness, shares of any class of its capital stock, cash or other assets (including securities, but excluding any rights or warrants referred to in paragraph (b) of this Section, excluding any dividend or distribution paid exclusively in cash and excluding any dividend or distribution referred to in paragraph (a) of this Section), the conversion price shall be reduced by multiplying the conversion price in effect immediately prior to the close of business on the date fixed for the determination of shareholders entitled to such distribution by a fraction of which the numerator shall be the Current Market Price (determined as provided in paragraph (h) of this Section) on such date less the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) on such date of the portion of the evidences of indebtedness, shares of capital stock, cash 14 and other assets to be distributed applicable to one share of Common Stock and the denominator shall be such Current Market Price, such reduction to become effective immediately prior to the opening of business on the day following such date. If the Board of Directors determines the fair market value of any distribution for purposes of this paragraph (d) by reference to the actual or when-issued trading market for any securities comprising part or all of such distribution, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price pursuant to paragraph (h) of this Section, to the extent possible. For purposes of this paragraph (d), any dividend or distribution that includes shares of Common Stock, rights or warrants to subscribe for or purchase shares of Common Stock or securities convertible into or exchangeable for shares of Common Stock shall be deemed to be (x) a dividend or distribution of the evidences of indebtedness, cash, assets or shares of capital stock other than such shares of Common Stock, such rights or warrants or such convertible or exchangeable securities (making any conversion price reduction required by this paragraph (d)) immediately followed by (y) in the case of such shares of Common Stock or such rights or warrants, a dividend or distribution thereof (making any further conversion price reduction required by paragraph (a) and (b) of this Section, except any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" within the meaning of paragraph (a) of this Section), or (z) in the case of such convertible or exchangeable securities, a dividend or distribution of the number of shares of Common Stock as would then be issuable upon the conversion or exchange thereof, whether or not the conversion or exchange of such securities is subject to any conditions (making any further conversion price reduction required by paragraph (a) of this Section, except the shares deemed to constitute such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" within the meaning of paragraph (a) of this Section). 15 (e) In case the Company shall, by dividend or otherwise, at any time distribute to all holders of any class of Common Stock cash (excluding any cash that is distributed as part of a distribution referred to in paragraph (d) of this Section or in connection with a transaction to which Section 8.10 applies) in an aggregate amount that, together with (A) the aggregate amount of any other distributions to all holders of any class of Common Stock made exclusively in cash within the 12 months preceding the date fixed for the determination of shareholders entitled to such distribution and in respect of which no conversion price adjustment pursuant to this paragraph (e) has been made previously and (B) the aggregate of any cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) as of such date of determination of consideration payable in respect of any tender offer by the Company or a Subsidiary for all or any portion of Common Stock consummated within the 12 months preceding such date of determination and in respect of which no conversion price adjustment pursuant to paragraph (f) of this Section has been made previously, exceeds 12.5% of the product of the Closing Price on such date of determination times the number of shares of Common Stock outstanding on such date, the conversion price shall be reduced by multiplying the conversion price in effect immediately prior to the close of business on such date of determination by a fraction of which the numerator shall be the Current Market Price (determined as provided in paragraph (h) of this Section) on such date less the amount of cash to be distributed at such time and the amounts referred to in clauses (A) and (B) above applicable to one share of Common Stock and the denominator shall be such Current Market Price, such reduction to become effective immediately prior to the opening of business on the day after such date. (f) In case a tender offer made by the Company or any Subsidiary for all or any portion of Common Stock shall be consummated and such tender offer shall involve an aggregate consideration having a fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) as of the last time (the "Expiration Time") that tenders may be made pursuant to such tender offer (as it shall have been amended) that, together with (A) the aggregate of the cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) as of the Expiration Time of the other consideration paid in respect of any other tender offer by the Company or a Subsidiary for all or any portion of Common Stock consummated 16 within the 12 months preceding the Expiration Time and in respect of which no conversion price adjustment pursuant to this paragraph (f) has been made previously and (B) the aggregate amount of any distributions to all holders of any class of Common Stock made exclusively in cash within the 12 months preceding the Expiration Time and in respect of which no conversion price adjustment pursuant to paragraph (e) of this Section has been made previously, exceeds 12.5% of the product of the Closing Price immediately prior to the Expiration Time times the number of shares of Common Stock outstanding (including any tendered shares) at the Expiration Time, the conversion price shall be reduced by multiplying the conversion price in effect immediately prior to the Expiration Time by a fraction of which the numerator shall be (x) the product of the Current Market Price (determined as provided in paragraph (h) of this Section) immediately prior to the Expiration Time times the number of shares of Common Stock outstanding (including any tendered shares at the Expiration Time minus (y) the fair market value (determined as aforesaid) of the aggregate consideration payable to shareholders upon consummation of such tender offer and the amounts referred to in (A) and (B) above and the denominator shall be the product of (A) such Current Market Price times (B) such number of outstanding shares at the Expiration Time minus the number of shares accepted for payment in such tender offer (the "Purchased Shares"), such reduction to become effective immediately prior to the opening of business on the day following the Expiration Time; provided, that if the number of Purchased Shares or the aggregate consideration payable therefor have not been finally determined by such opening of business, the adjustment required by this paragraph (f) shall, pending such final determination, be made based upon the preliminarily announced results of such tender offer, and, after such final determination shall have been made, the adjustment required by this paragraph (f) shall be made based upon the number of Purchased Shares and the aggregate consideration payable therefor as so finally determined. (g) The reclassification of any class of Common Stock into securities which include securities other than Common Stock (other than any reclassification upon 17 a consolidation or merger to which Section 8.10 applies) shall be deemed to involve (i) a distribution of such securities other than Common Stock to all holders of such class of Common Stock (and the effective date of such reclassification shall be deemed to be "the date fixed for the determination of shareholders entitled to such distribution" within the meaning of paragraph (d) of this Section), and (ii) a subdivision or combination, as the case may be, of the number of shares of Common Stock outstanding immediately prior to such reclassification into the number of shares of Common Stock outstanding immediately thereafter (and the effective date of such reclassification shall be deemed to be "the day upon which such subdivision becomes effective" or "the day upon which such combination becomes effective," as the case may be, and "the day upon which such subdivision or combination becomes effective" within the meaning of paragraph (c) of this Section). Rights or warrants issued by the Company to all holders of any class of Common Stock entitling the holders thereof to subscribe for or purchase shares of Common Stock (either initially or under certain circumstances), which rights or warrants (i) are deemed to be transferred with such shares of Common Stock, (ii) are not exercisable and (iii) are also issued in respect of future issuances of Common Stock, in each case in clauses (i) through (iii) until the occurrence of a specified event or events ("Trigger Event"), shall for purposes of this Section 8.4 not be deemed issued until the occurrence of the earliest Trigger Event. If any such rights or warrants, including any such existing rights or warrants distributed prior to the date of this Articles Supplementary are subject to subsequent events, upon the occurrence of each of which such rights or warrants shall become exercisable to purchase different securities, evidences of indebtedness or other assets, then the occurrence of each such event shall be deemed to be such date of issuance and record date with respect to new rights or warrants (and a termination or expiration of the existing rights or warrants without exercise by the holder thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event with respect thereto, that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Price under this Section 8.4 was made, (1) in the case of any such rights or warrant which shall all have been redeemed or repurchased without exercise by any Holders thereof, the Conversion Price shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or repurchase price received by a holder or 18 holders of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of Common Stock as of the date of such redemption or repurchase, and (2) in the case of such rights or warrants which shall have expired or been terminated without exercise by any holders thereof, the Conversion Price shall be readjusted as if such rights and warrants had not been issued. (h) For the purpose of any computation under this paragraph and paragraphs (b), (d) and (e) of this Section, the current market price per share of Common Stock (the "Current Market Price") on any date shall be deemed to be the average of the daily Closing Prices for the 5 consecutive Trading Days before, and ending not later than, the date in question; provided, however, that if the "ex" date for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the conversion price pursuant to paragraph (a), (b), (c), (d), (e) or (f) above occurs on or after the 5th Trading Day prior to the date in question and prior to the "ex" date for the issuance or distribution requiring such computation, the Closing Price for each Trading Day prior to the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the same fraction by which the conversion price is so required to be adjusted as a result of such other event. For the purpose of any computation under paragraph (f) of this Section, the Current Market Price on any date shall be deemed to be the average of the daily Closing Prices for the 5 consecutive Trading Days commencing on or after the latest (the "Commencement Date") of (x) the date of commencement of the tender offer requiring such computation and (y) the date of the last amendment, if any, of such tender offer involving a change in the maximum number of shares for which tenders are sought or a change in the consideration offered; provided, further, however, that if the "ex" date for any event (other than the tender offer requiring such computation) that requires an adjustment to the conversion price pursuant to paragraph (a), (b), (c), (d), (e) or (f) above occurs on or after the Commencement Date and prior to the Expiration Time for the tender offer requiring such computation, the Closing Price for each Trading Day prior to the "ex" date for such other event shall be adjusted by 19 multiplying such Closing Price by the same fraction by which the conversion price is so required to be adjusted as a result of such other event. The closing price for any Trading Day (the "Closing Price") shall be the last reported sales price regular way or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices regular way, in either case on the New York Stock Exchange or, if the Common Stock is not listed or admitted to trading on such exchange, on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if not listed or admitted to trading on any national securities exchange, on the Nasdaq Stock Market's National Market or, if the Common Stock is not listed or admitted to trading on any national securities exchange or quoted on such National Market, the average of the closing bid and asked prices in the over-the-counter market as furnished by any New York Stock Exchange member firm selected from time to time by the Company for that purpose. For purposes of this paragraph, the term "Trading Day" means each Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on which securities are generally not traded on the applicable securities exchange or in the applicable securities market and the term "'ex' date," (A) when used with respect to any issuance or distribution, means the first date on which the Common Stock trades regular way on the relevant exchange or in the relevant market from which the Closing Prices were obtained without the right to receive such issuance or distribution, (B) when used with respect to any subdivision or combination of shares of Common Stock, means the first date on which the Common Stock trades regular way on such exchange or in such market after the time at which such subdivision or combination becomes effective, and (C) when used with respect to any tender offer means the first date on which the Common Stock trades regular way on such exchange or in such market after the last time that tenders may be made pursuant to such tender offer (as it shall have been amended). (i) The Company may make such reductions in the conversion price, in addition to those required by paragraphs (a), (b), (c), (d), (e) and (f) of this Section, (i) to the extent permitted by law, by any amount for any period of at least 20 days or (ii) as it considers to be advisable (as evidenced by a Board Resolution) in order that any event treated for federal income tax purposes as a dividend of stock or stock rights shall not be taxable to the recipients or, if that is not possible, to diminish any income taxes that are otherwise payable because of such event. Whenever the conversion price is reduced pursuant to the preceding sentence, the Company shall mail to Holders of Convertible Exchangeable Preferred Stock a notice of reduction at least 15 days prior to the date the 20 reduced conversion price takes effect, and such notice shall state the reduced conversion price and the period it will take effect. (j) No adjustment in the conversion price shall be required unless such adjustment (plus any other adjustments not previously made by reason of this paragraph (j)) would require an increase or decrease of at least 1% in the conversion price; provided, however, that any adjustments which by reason of this paragraph (j) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. (k) Notwithstanding any other provision of this Section 8.4, no adjustment to the conversion price shall reduce the conversion price below the then par value per share of the Class A Common Stock, and any such purported adjustment shall instead reduce the conversion price to such par value. The Company hereby covenants not to take any action to increase the par value per share of the Class A Common Stock. 8.5 Notice of Adjustments of Conversion Price. Whenever the conversion price is adjusted as herein provided: (a) the Company shall compute the adjusted conversion price in accordance with Section 8.4 and shall prepare an Officers' Certificate signed by the Treasurer of the Company setting forth the adjusted conversion price and showing in reasonable detail the facts upon which such adjustment is based; and (b) a notice stating that the conversion price has been adjusted and setting forth the adjusted conversion price shall forthwith be prepared, and as soon as practicable after it is prepared, such notice shall be mailed by the Company to all Holders of Convertible Exchangeable Preferred Stock at their last addresses as they shall appear in the security register. In the case of any adjustment pursuant to Section 8.4(h)(i), such notice shall be mailed at least 15 days before the date the reduced conversion price shall take effect and shall state the reduced conversion price and the period it will be in effect. 21 8.6 Notice of Certain Corporate Action. In case: (a) the Company shall declare a dividend (or any other distribution) on Common Stock payable (i) otherwise than exclusively in cash or (ii) exclusively in cash in an amount that would require a conversion price adjustment pursuant to paragraph (e) of Section 8.4; or (b) the Company shall authorize the granting to the holders of any class of Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any other rights (excluding shares of capital stock or option for capital stock issued pursuant to a benefit plan for employees, officers or directors of the Company); or (c) of any reclassification of Common Stock (other than a subdivision or combination of the outstanding shares of Common Stock), or of any consolidation, merger or share exchange to which the Company is a party and for which approval of any stockholders of the Company is required, or of the sale or transfer of all or substantially all of the assets of the Company; or (d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company; or (e) the Company or any Subsidiary shall commence a tender offer for all or a portion of outstanding shares of Common Stock (or shall amend any such tender offer to change the maximum number of shares being sought or the amount or type of consideration being offered therefor); then the Company shall cause to be mailed to all Holders of Convertible Exchangeable Preferred Stock at their last addresses as they shall appear in the security register, at least 21 days (or 11 days in any case specified in clause (a), (b) or (e) above) prior to the applicable record, effective or expiration date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record who will be entitled to such dividend, distribution, rights or warrants are to be determined, (y) the date on which such reclassification, consolidation, merger, share exchange, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for 22 securities, cash or other property deliverable upon such reclassification, consolidation, merger, share exchange, sale, transfer, dissolution, liquidation or winding up, or (z) the date on which such tender offer commenced, the date on which such tender offer is scheduled to expire unless extended, the consideration offered and the other material terms thereof (or the material terms of any amendment thereto). Neither the failure to give any such notice nor any defect therein shall affect the legality or validity of any action described in clauses (a) through (e) of this Section 8.6. 8.7 Company to Reserve Class A Common Stock. The Company shall at all times reserve and keep available, free from preemptive rights, out of the authorized but unissued Class A Common Stock or out of the Class A Common Stock held in treasury, for the purpose of effecting the conversion of Convertible Exchangeable Preferred Stock, the full number of shares of Class A Common Stock then issuable upon the conversion of all outstanding Convertible Exchangeable Preferred Stock. Shares of Class A Common Stock issuable upon conversion of outstanding Convertible Exchangeable Preferred Stock shall be issued out of the Class A Common Stock held in Treasury to the extent available. 8.8 Taxes on Conversions. The Company will pay any and all taxes that may be payable in respect of the issue or delivery of shares of Class A Common Stock on conversion of Convertible Exchangeable Preferred Stock pursuant hereto. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Class A Common Stock in a name other than that of the Holder of Convertible Exchangeable Preferred Stock to be converted, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid. 8.9 Covenant as to Class A Common Stock. The Company covenants that all shares of Class A Common Stock which may be issued upon conversion of 23 Convertible Exchangeable Preferred Stock will upon issue be fully paid and nonassessable and, except as provided in Section 8.8, the Company will pay all taxes, liens and charges with respect to the issue thereof. 8.10 Provisions of Consolidation, Merger or Sale of Assets. In case of any reclassification of the Class A Common Stock, any consolidation of the Company with, or merger of the Company into, any other entity, any merger of any entity into the Company (other than a merger that does not result in a reclassification, conversion, exchange or cancellation of the outstanding shares of Class A Common Stock), any sale or transfer of all or substantially all of the assets of the Company or any compulsory share exchange whereby the Class A Common Stock is converted into other securities, cash or other property, then the Holder of Convertible Exchangeable Preferred Stock then outstanding shall have the right thereafter, during the period that the Convertible Exchangeable Preferred Stock shall be convertible, to convert that Convertible Exchangeable Preferred Stock only into the kind and amount of securities, cash and other property receivable upon the reclassification, consolidation, merger, sale, transfer or share exchange by a holder of the number of shares of Class A Common Stock into which the Convertible Exchangeable Preferred Stock would have been convertible immediately prior to the reclassification, consolidation, merger, sale, transfer or share exchange. The kind and amount of securities into or for which the shares of Convertible Exchangeable Preferred Stock will be convertible or redeemable after consummation of such transaction will be subject to adjustment as described above following the date of consummation of such transaction. The Company may not become a party to any such transaction unless the terms thereof are consistent with the foregoing and the surviving corporation in any such transaction agrees in writing to comply with the terms of the foregoing. 9. Exchange Rights. The Company may, at its option, on any scheduled Dividend Payment Date on or after December 15, 2000, exchange the Convertible Exchangeable Preferred Stock, in whole but not in part, for debentures (the "Exchange Debentures") the terms and conditions of which are set forth in the indenture relating to or for such Exchange Debentures attached hereto as Exhibit A (the "Exchange Debenture Indenture"); provided that (i) on the date of such exchange there are no accumulated and unpaid dividends (whether or not declared) (including Additional Dividends, if any) on the Convertible Exchangeable Preferred Stock which are not being simultaneously paid with such exchange (including the dividend payable on such date) or other contractual 24 impediments to such exchange; (ii) there shall be legally available funds sufficient for any such dividends; (iii) immediately after giving effect to such exchange, no Default or Event of Default (each as defined in the Exchange Debenture Indenture) would exist under the Exchange Debenture Indenture; and (iv) no default or event of default would exist under the Existing Indentures or the Bank Credit Agreement. Holders of Convertible Exchangeable Preferred Stock so exchanged will be entitled to receive, subject to the succeeding sentence, $1,000 principal amount of Exchange Debentures for each $1,000 of liquidation preference of Convertible Exchangeable Preferred Stock held by such Holders at the time of exchange plus an amount per share in cash equal to all accrued but unpaid dividends thereon to the date of exchange. Exchange Debentures will be issued (i) only in denominations of $1,000 and integral multiples thereof, with a single Exchange Debenture in an amount less than $1,000 if necessary to effectuate the transfer or exchange or (ii) in such other denominations as may be authorized by the Company for purposes of transfer or exchange. Following such exchange, all dividends on the Convertible Exchangeable Preferred Stock will cease to accrue, the rights of the Holders of Convertible Exchangeable Preferred Stock as stockholders of the Company shall cease and the person or persons entitled to receive the Exchange Debentures issuable upon exchange shall be treated as the registered holder or holders of such Exchange Debentures. Notice of exchange will be mailed at least 30 days but not more than 60 days prior to the date of exchange to each Holder of Convertible Exchangeable Preferred Stock. 10. Change of Control. (a) If a Change of Control occurs with respect to the Company, then shares of the Convertible Exchangeable Preferred Stock may be converted, at the option of the Holder thereof, at any time from the date of such Change of Control until the expiration of 45 days after the date of a notice by the Company to all Holders of the Convertible Exchangeable Preferred Stock of the occurrence of the Change of Control, into the number of shares of Class A Common Stock determined by dividing (i) the $50 liquidation preference of the Convertible Exchangeable Preferred 25 Stock, plus accrued and unpaid dividends, if any, up to but excluding the date of the Change of Control by (ii) the Adjusted Conversion Price (as defined below). The Adjusted Conversion Price is the greater of (i) the average of the Closing Price per share of the Class A Common Stock for the last five Trading Days before the Change of Control or (ii) $26.42, which amount shall be adjusted for stock splits and combinations occurring after September 16, 1997. The special conversion rights will exist upon the occurrence of any Change of Control, whether or not the transaction relating thereto has been approved by management of the Company and may not be waived by management. Exercise of the special conversion rights by the Holder of a share of Convertible Exchangeable Preferred Stock will be irrevocable. If the Change of Control involves a consolidation, merger or sale of assets of the Company, the Holders of Convertible Exchangeable Preferred Stock exercising their special conversion rights will be entitled to receive the same consideration as received for the number of shares of Class A Common Stock into which their shares of Convertible Exchangeable Preferred Stock would have been converted pursuant to the special conversion rights. These special conversion rights are in addition to the regular conversion rights set forth in Section 8 above. (b) The Company may, at its option, elect to pay Holders of the Convertible Exchangeable Preferred Stock exercising their special conversion rights an amount in cash equal to the $50 liquidation preference of the Convertible Exchangeable Preferred Stock, plus accrued and unpaid dividends (including Additional Dividends), if any, up to but excluding the date of the Change of Control, in which event no conversion pursuant to the exercise of the special conversion rights set forth in the preceding paragraph will occur, unless the Company defaults in making payment of such amounts. 11. Miscellaneous Provisions. Shares of Convertible Exchangeable Preferred Stock issued and reacquired will, upon compliance with the applicable requirements of Maryland law, have the status of authorized but unissued shares of preferred stock of the Company undesignated as to series and may with any and all other authorized but unissued shares of preferred stock of the Company be designated or redesignated and issued or reissued, as the case may be, as part of any series of preferred stock of the Company, except that any issuance or reissuance of shares of preferred stock must be in compliance with the Articles Supplementary and except that such shares may not be reissued or sold as shares of Convertible Exchangeable Preferred Stock. 26 12. Definitions. As used in these Articles Supplementary, the terms below shall have the following meanings (with terms defined in the singular having comparable meanings when used in the plural and vice versa), unless the context otherwise requires: "1997 Indenture" means the indenture pursuant to which the 1997 Notes were issued. "1997 Notes" means the 9% Senior Subordinated Notes due 2007. "Additional Dividends" has the meaning set forth in Section 6.2. "Affiliate" means, with respect to any specified Person, (i) any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person, (ii) any other Person that owns, directly or indirectly, 5% or more of such specified Person's Equity Interest or any officer or director of any such Person or other Person or, with respect to any natural Person, any person having a relationship with such Person or other Person by blood, marriage or adoption not more remote than first cousin or (iii) any other Person 10% or more of the voting Equity Interests of which are beneficially owned or held directly or indirectly by such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person directly or indirectly, whether through ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Bank Credit Agreement" means the Third Amended and Restated Credit Agreement, dated as of May 20, 1997, among the Company, the Subsidiaries of the Company identified on the signature pages thereof under the caption "Subsidiary Guarantors," the lenders named therein, and The Chase Manhattan Bank, as agent, as such agreement may be amended, renewed, extended, substituted, refinanced, restructured, replaced, supplemented or otherwise modified from time to time (including, without limitation, any successive renewals, extensions, substitutions, refinancings, 27 restructuring, replacements, supplementations or other modifications of the foregoing). The term "Bank Credit Agreement" shall include any amendments, renewals, extensions, substitutions, refinancings, restructurings, replacements, supplements or any other modifications that increase the principal amount of the Indebtedness or the commitments to lend thereunder. "Business Day" means any day other than (x) a Saturday or a Sunday or (y) a day on which banking institutions in Maryland or the City of New York are authorized or obligated by law or executive order to remain closed or (z) a day on which the office of the transfer agent or an agent or affiliate thereof at which any particular time the transfer agency business for the purposes of the Convertible Exchangeable Preferred Stock shall be principally administered is closed for business. "Capital Lease Obligation" means any obligation under any capital lease of real or personal property which, in accordance with GAAP, has been recorded as a capitalized lease obligation. "Change of Control" means the occurrence of any of the following events: (i) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than Permitted Holders, is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to have beneficial ownership of all shares that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 40% of the total outstanding Voting Stock of the Company, provided that the Permitted Holders "beneficially own" (as so defined) a lesser percentage of such Voting Stock than such other Person and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the board of directors of the Company; (ii) during any period of two consecutive years, individuals who at the beginning of such period constituted the board of directors of the Company (together with any new directors whose election to such board of directors, or whose nomination for election by the shareholders of the Company, was approved by a vote of 66 2/3% of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of such board of directors then in office; (iii) the Company consolidates with or merges with or into any Person or conveys, transfers or leases all or substantially all of its assets to any Person, or any corporation 28 consolidates with or merges into or with the Company, in any such event pursuant to a transaction in which the outstanding Voting Stock of the Company is changed into or exchanged for cash, securities or other property, other than any such transaction where the outstanding Voting Stock of the Company is not changed or exchanged at all (except to the extent necessary to reflect a change in the jurisdiction of incorporation of the Company) or where (A) the outstanding Voting Stock of the Company is changed into or exchanged for (x) Voting Stock of the surviving corporation which is not Disqualified Equity Interests or (y) cash, securities and other property (other than Equity Interests of the surviving corporation) in an amount which could be paid by the Company as a Restricted Payment under the terms of the 1997 Indenture as in effect on September 23, 1997, without giving effect to any later amendments thereto (and such amount shall be treated as a Restricted Payment) and (B) no "person" or "group" other than Permitted Holders owns immediately after such transaction, directly or indirectly, more than the greater of (1) 40% of the total outstanding Voting Stock of the surviving corporation and (2) the percentage of the outstanding Voting Stock of the surviving corporation owned, directly or indirectly, by Permitted Holders immediately after such transaction; or (iv) the Company is liquidated or dissolved or adopts a plan of liquidation or dissolution other than in a transaction which complies with the provisions described in Article Eight of the 1997 Indenture. "Disqualified Equity Interests" means any equity interests that, either by their terms or by the terms of any security into which they are convertible or exchangeable or otherwise, are or upon the happening of an event or passage of time would be required to be redeemed prior to any Stated Maturity of the principal of the applicable security or are redeemable at the option of the holder thereof at any time prior to any such Stated Maturity, or are convertible into or exchangeable for debt securities at any time prior to any such Stated Maturity at the option or the holder thereof. "Equity Interest" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in 29 (however designated) corporate stock or other equity participations, including partnership interests, whether general or limited, of such Person, including any Preferred Equity Interests. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Existing Indentures" means the indentures relating to the Existing Notes. "Existing Notes" means the Company's 10% Senior Subordinated Notes due 2003, the Company's 10% Senior Subordinated Notes due 2005 and the 9% Senior Subordinated Notes due 2007. "Fair Market Value" means, with respect to any asset or property, the sale value that would be obtained in an arm's-length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy. "Film Contract" means contracts with suppliers that convey the right to broadcast specified films, videotape motion pictures, syndicated television programs or sports or other programming. "Generally Accepted Accounting Principles" or "GAAP" means generally accepted accounting principles in the United States, consistently applied, which were in effect on the date of the 1993 Notes. "Guaranteed Debt" of any Person means, without duplication, all Indebtedness of any other person referred to in the definition of Indebtedness contained herein and guaranteed directly or indirectly in any manner by such Person, or in effect guaranteed directly or indirectly by such Person through an agreement (i) to pay or purchase such Indebtedness or to advance or supply funds for the payment or purchase of such Indebtedness, (ii) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Indebtedness or to assure the holder of such Indebtedness against loss, (iii) to supply funds to, or in any other manner invest in, the debtor (including any agreement to pay for property or services without requiring that such property be received or such services be rendered), (iv) to maintain working capital or equity capital of the debtor, or otherwise to maintain the net worth, solvency or other financial condition of the debtor or (v) otherwise to assure a creditor against loss; provided that the term "guarantee" shall 30 not include endorsements for collection or deposit, in either case in the ordinary course of business. "Holder" or "Holders" has the meaning set forth in Section 3.1. "Indebtedness" means, with respect to any Person, without duplication, (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services, excluding any trade payables and other accrued current liabilities arising in the ordinary course of business, but including, without limitation, all obligations, contingent or otherwise, of such Person in connection with any letters of credit issued under letter of credit facilities, acceptance facilities or other similar facilities and in connection with any agreement to purchase, redeem, exchange, convert or otherwise acquire for value any Equity Interests of such Person, or any warrants, rights or options to acquire such Equity Interests, now or hereafter outstanding, (ii) all obligations of such Person evidenced by bonds, notes, debentures or other similar instruments, (iii) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even if the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), but excluding trade payables arising in the ordinary course of business, (iv) all obligations under Interest Rate Agreements of such Person, (v) all Capital Lease Obligations of such Person, (vi) all Indebtedness referred to in clauses (i) through (v) above of other Persons and all dividends of other Persons, the payment of which is secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien, upon or with respect to property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness, (vii) all Guaranteed Debt of such Person, (viii) all Disqualified Equity Interests valued at the greater of their voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid dividends, and (ix) any amendment, supplement, modification, deferral, renewal, extension, refunding or refinancing of any 31 liability of the types referred to in clauses (i) through (viii) above; provided, however, that the term Indebtedness shall not include any obligations of the Company and its Restricted Subsidiaries with respect to Film Contracts entered into in the ordinary course of business. "Interest Rate Agreements" means one or more of the following agreements which shall be entered into by one or more financial institutions: interest rate protection agreements (including, without limitation, interest rate swaps, caps, floors, collars and similar agreements) and any obligations in respect of any Hedging Agreement, as defined in the Bank Credit Agreement. "Issue Date" means September 23, 1997. "Junior Dividend Stock" has the meaning set forth in Section 3.2. "Junior Liquidation Stock" has the meaning set forth in Section 5. "Lien" means any mortgage, charge, pledge, lien (statutory or otherwise), privilege, security interest, hypothecation or other encumbrance upon or with respect to any property of any kind (including any conditional sale or other title retention agreement, any leases in the nature thereof, and any agreement to give any security interest), real or personal, movable or immovable, now owned or hereafter acquired. "Liquidation Preference" has the meaning set forth in Section 1. "Parity Dividend Stock" has the meaning set forth in Section 3.2. "Parity Liquidation Stock" has the meaning set forth in Section 5. "Permitted Holders" means as of the date of determination (i) any of David D. Smith, Frederick G. Smith, J. Duncan Smith and Robert E. Smith; (ii) family members of the relatives of the Persons described in clause (i); (iii) any trusts created for the benefit of any of the Persons described in clauses (i), (ii) or (iv) or any trust for the benefit of such trust; or (iv) in the event of the incompetence or death of any of the Persons described in clauses (i) and (ii), such Person's estate, executor, administrator, committee or other personal representative or beneficiaries, who, in each case, at any particular date shall beneficially own or have the right to acquire, directly or indirectly, Equity Interests of the Company. 32 "Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivisions thereof. "Preferred Equity Interest," as applied to the Equity Interest of any Person, means an Equity Interest of any class or classes (however designated) which is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such person, over Equity Interests of any other class of such Person. "Restricted Subsidiary" means a Subsidiary subject to the covenants or events of default under agreements governing other indebtedness of the Company. "Senior Dividend Stock" has the meaning set forth in Section 3.2. "Senior Liquidation Stock" has the meaning set forth in Section 5. "Stated Maturity," when used with respect to any Indebtedness or any installment of interest thereon, means the date specified in such Indebtedness as the fixed date on which the principal of such Indebtedness or such installment of interest is due and payable. "Subsidiary" of any Person means any Person a majority of the equity ownership or the Voting Stock of which is at the time owned, directly or indirectly, by such Person or by one or more other Subsidiaries of such Person, or by such Person and one or more other Subsidiaries. "Voting Stock" means stock of the class or classes pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of a corporation (irrespective of whether or not at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency). 33 IN WITNESS WHEREOF, Sinclair Broadcast Group, Inc. has caused these presents to be signed in its name and on its behalf by its President and witnessed by its Secretary on September 19, 1997. WITNESS: SINCLAIR BROADCAST GROUP, INC. /s/ J. Duncan Smith By:/s/ David D. Smith - ---------------------------- ----------------------------- J. Duncan Smith, Secretary David D. Smith, President THE UNDERSIGNED, President of SINCLAIR BROADCAST GROUP, INC., who executed on behalf of the Corporation these Articles Supplementary of which this certificate is made a part, hereby acknowledges in the name and on behalf of the Corporation the foregoing Articles Supplementary to be the corporate act of the Corporation and hereby certifies that the matters and facts set forth herein with respect to the authorization and approval thereof are true in all material respects under the penalties of perjury. /s/ David D. Smith ----------------------------- David D. Smith, President 34 SINCLAIR BROADCAST GROUP, INC., as Issuer, and FIRST UNION NATIONAL BANK, as Trustee FIRST SUPPLEMENTAL INDENTURE Dated as of __________, 1997 $150,000,000 6% Convertible Subordinated Debentures due 2012 TABLE OF CONTENTS PAGE ---- PARTIES.............................................................. 1 RECITALS............................................................. 1 ARTICLE ONE RELATION TO INDENTURE; GENERAL PROVISIONS ............... 2 Section 101. Relation to Indenture............................... 2 Section 102. General Provisions.................................. 2 ARTICLE TWO AMENDMENT TO THE INDENTURE............................... 3 Section 201. Definitions......................................... 3 "1997 Indenture"............................................... 3 "Change of Control"............................................ 3 "Existing Indentures".......................................... 4 "Existing Notes"............................................... 4 "Fair Market Value"............................................ 4 "Issue Date"................................................... 4 "Payment Default".............................................. 4 "Permitted Holders"............................................ 4 "Restricted Subsidiary"........................................ 4 "Senior Indebtedness".......................................... 4 "Senior Subordinated Indebtedness"............................. 5 Section 202. Other Definitions.................................. 5 Section 203. Establishment of Series............................ 5 Section 204. Form of Debt Securities........................... 7 Section 205. Conversion Rights................................. 14 i Section 206. Remedies.......................................... 24 Section 207. Supplemental Indentures........................... 28 Section 208. Change of Control................................. 29 Section 209. Redemption of Debt Securities..................... 32 Section 210. Suspension of Payment When Senior Indebtedness in Default....................................... 33 ARTICLE THREE MISCELLANEOUS......................................... 33 Section 301. Continued Effectiveness of Indenture.............. 33 Section 302. Purpose........................................... 34 Section 303. Rights of Trustee................................. 34 Section 304. Successors and Assigns............................ 34 Section 305. Separability Clause............................... 34 Section 306. Benefits of First Supplemental Indenture.......... 34 Section 307. Governing Law..................................... 34 Section 308. Counterparts...................................... 34 Section 309. Effect of Headings and Table of Contents.......... 34 TESTIMONIUM SIGNATURES AND SEALS ACKNOWLEDGMENTS ii Reconciliation and tie between Trust Indenture Act of 1939 and Indenture, dated as of ________, 1997 Trust Indenture Act Section Act Section Indenture Sectionct Section ----------- --------------------------- ss. 310......................(a) 610, 611 ss. 311......................(a) 612 ss. 312......................(c) 702 ss. 313......................(a) 703 ss. 314......................(a) 704 (a)(4) 1021 (c)(1) 103 (c)(2) 103 (e) 103 ss. 315......................(a) 602, 903 ss. 316......................(a) iii FIRST SUPPLEMENTAL INDENTURE, dated as of _____, 1997 (the "First Supplemental Indenture"), between SINCLAIR BROADCAST GROUP, INC., a Maryland corporation (the "Company") and FIRST UNION NATIONAL BANK, a national banking association organized under the laws of the United States of America, as trustee (the "Trustee"). RECITALS OF THE COMPANY The Company has executed and delivered the Indenture, dated as of ________, 1997 (the "Base Indenture") to the Trustee to provide for the future issuance of the Company's unsecured subordinated debentures, notes or other evidence of indebtedness (the "Securities") thereto, to be issued from time to time in one or more series as might be determined by the Company under the Base Indenture, as may thereafter be supplemented; Pursuant to the terms of the Base Indenture, the Company desires to provide for the establishment of a new series of its Securities to be known as its "6% Convertible Subordinated Debentures due 2012" (the "Debt Securities"), the terms, provisions and conditions of such Debt Securities and the form thereof to be set forth as provided in the Base Indenture as supplemented by this First Supplemental Indenture; Section 901 of the Base Indenture provides, among other things, that the Company and the Trustee may enter into indentures supplemental to the Base Indenture without the consent of holders of Securities for, among other things, the purpose of establishing the forms and terms of securities of any series as permitted by Sections 201 and 301 thereof and to add to, change or eliminate any of the provisions of the Base Indenture in respect of one or more series of Securities to be issued thereunder; and All things necessary to make the Debt Securities when executed by the Company and authenticated and delivered by the Trustee, the valid and binding obligations of the Company and to make this First Supplemental Indenture a valid and binding supplemental indenture and agreement according to its terms, have been done; NOW THEREFORE, in consideration of the premises and the purchase and acceptance of the Debt Securities by the holders thereof, and for the purpose of setting forth the terms, provisions and conditions of the Debt Securities and the form thereof, the Company covenants and agrees with the Trustee as follows: ARTICLE ONE RELATION TO INDENTURE; GENERAL PROVISIONS Section 101. Relation to Indenture. This First Supplemental Indenture constitutes an integral part of the Base Indenture but is effective only with respect to the Debt Securities issued under the Indenture. 1 Section 102. General Provisions. For all purposes of this First Supplemental Indenture: (a) references herein to the Indenture shall mean the Base Indenture as supplemented by this First Supplemental Indenture; (b) a term defined in the Base Indenture has the same meaning when used in this First Supplemental Indenture unless otherwise defined herein (in which case the definition set forth herein shall govern); (c) a term defined anywhere in this First Supplemental Indenture has the same meaning throughout; (d) the singular includes the plural and vice versa; (e) headings are for convenience of reference only and do not affect interpretation; (f) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (g) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP; (h) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; and (i) all references to $, US$, dollars or United States dollars shall refer to the lawful currency of the United States of America. 2 ARTICLE TWO AMENDMENT TO THE INDENTURE Section 201. Definitions. Section 101 of the Indenture is amended so that the following definitions are amended, restated or added in alphabetical order: "1997 Indenture" means the Indenture, dated July 2, 1997, between the Company, the guarantors signatory thereto and the Trustee, under which the 9% Senior Subordinated Notes due 2007 were issued. "Change of Control" means the occurrence of any of the following events: (i) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than Permitted Holders, is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to have beneficial ownership of all shares that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 40% of the total outstanding Voting Stock of the Company, provided that the Permitted Holders "beneficially own" (as so defined) a lesser percentage of such Voting Stock than such other Person and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Board of Directors of the Company; (ii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company (together with any new directors whose election to such Board or whose nomination for election by the shareholders of the Company, was approved by a vote of 66-2/3% of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of such Board of Directors then in office; (iii) the Company consolidates with or merges with or into any Person or conveys, transfers or leases all or substantially all of its assets to any Person, or any corporation consolidates with or merges into or with the Company, in any such event pursuant to a transaction in which the outstanding Voting Stock of the Company is changed into or exchanged for cash, securities or other property, other than any such transaction where the outstanding Voting Stock of the Company is not changed or exchanged at all (except to the extent necessary to reflect a change in the jurisdiction of incorporation of the Company) or where (A) the outstanding Voting Stock of the Company is changed into or exchanged for (x) Voting Stock of the surviving corporation which is not Disqualified Equity Interests or (y) cash, securities and other property (other than Equity Interests of the surviving corporation) in an amount which could be paid by the Company as a Restricted Payment in accordance with Section 1009 of the 1997 Indenture as in effect on September 23, 1997, without giving effect to any later amendments thereto (and such amount shall be treated as a Restricted Payment subject to the provisions described under Section 1009 of the 1997 Indenture) and (B) no "person" or "group" other than Permitted Holders owns immediately after such transaction, directly or indirectly, more than the greater of (1) 40% of the total outstanding Voting Stock of the surviving corporation and (2) the percentage of the outstanding Voting Stock of the surviving corporation owned, directly or indirectly, by Permitted Holders immediately after such transaction; or (iv) the Company is liquidated or dissolved or adopts a plan of liquidation or dissolution other than in a transaction which complies with the provisions described under Article Eight. 3 "Existing Indentures" means the indentures relating to the Existing Notes. "Existing Notes" means the Company's 10% Senior Subordinated Notes due 2003, the Company's 10% Senior Subordinated Notes due 2005 and the Company's 9% Senior Subordinated Notes due 2007. "Fair Market Value" means, with respect to any asset or property, the sale value that would be obtained in an arm's-length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy. "Issue Date" means _____, 1997. "Payment Default" means any default in payment of principal of, premium, if any, or interest on any Senior Indebtedness. "Permitted Holders" means as of the date of determination (i) any of David D. Smith, Frederick G. Smith, J. Duncan Smith and Robert E. Smith; (ii) family members or the relatives of the Persons described in clause (i); (iii) any trusts created for the benefit of the Persons described in clause (i), (ii) or (iv) or any trust for the benefit of any such trust; or (iv) in the event of the incompetence or death of any of the Persons described in clauses (i) and (ii), such Person's estate, executor, administrator, committee or other personal representative or beneficiaries, in each case who at any particular date shall beneficially own or have the right to acquire, directly or indirectly, Equity Interests of the Company. "Restricted Subsidiary" means a Subsidiary subject to the covenants or events of default under the agreements governing other indebtedness of the Company. "Senior Indebtedness" is defined as the principal of, premium, if any, and interest (including interest accruing after the filing of a petition initiating any proceeding under any state, federal or foreign bankruptcy law whether or not allowable as a claim in such proceeding) on any Indebtedness of the Company (other than as otherwise provided in this definition), whether outstanding on the date of this Indenture or thereafter created, incurred or assumed, and whether at any time owing, actually or contingently, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the Debt Securities. Without limiting the generality of the foregoing, "Senior Indebtedness" shall include (i) the principal of, premium, if any, and interest (including interest accruing after the filing of a petition initiating any proceeding under any state, federal or foreign bankruptcy law whether or not allowable as a claim in such proceeding) and all other obligations of every nature of the Company from time to time owed to the lenders (or their agent) under the Bank Credit Agreement; provided, however, that any Indebtedness under any refinancing, refunding or replacement of the Bank Credit Agreement shall not constitute Senior Indebtedness to the extent that the Indebtedness thereunder is by its express terms subordinate to any other Indebtedness of the Company, (ii) Indebtedness outstanding under the Founders' Notes, (iii) existing and future Senior Subordinated Indebtedness of the Company and (iv) Indebtedness under Interest Rate Agreements. Notwithstanding the foregoing, "Senior Indebtedness" shall not include (i) Indebtedness evidenced by the Debt Securities, (ii) Indebtedness which when incurred and without respect to any election under Section 1111(b) of Title 11 of the United States Code, is without recourse to the Company, (iii) Indebtedness which is represented by Disqualified Equity Interests, (iv) any liability for foreign, federal, state, local or other taxes owed or owing by the Company, (v) Indebtedness of the Company to the extent such liability constitutes Indebtedness to a Subsidiary or any other Affiliate of the Company or any of such Affiliate's subsidiaries, and (vi) Indebtedness owed by the Company for compensation to employees or for services. "Senior Subordinated Indebtedness" means the Existing Notes and all other Indebtedness ranking pari passu in right of payment with the Existing Notes. 4 Section 202. Other Definitions. Section 102 of the Indenture is amended so that the following definitions are added in alphabetical order: Defined in Term Section ---- ----------- "Change of Control Offer" 1010 "Change of Control Purchase Date" 1010 "Change of Control Purchase Notice" 1010 "Change of Control Purchase Price" 1010 Section 203. Establishment of Series. There is hereby established, pursuant to the authority granted under the Base Indenture, a series of Securities that shall be known and designated as the "6% Convertible Subordinated Debentures due 2012", of the Company. The Stated Maturity of the Debt Securities shall be September 15, 2012, and the Debt Securities shall each bear interest at the rate of 6% from ______, ____ or from the most recent Interest Payment Date to which interest has been paid, as the case may be, payable on December 15, ____ and quarterly thereafter on March 15, June 15, September 15 and December 15 in each year, until the principal thereof is paid or duly provided for. The aggregate principal amount of Debt Securities which may be authenticated and delivered is limited to $150,000,000 in principal amount of Debt Securities, except for Debt Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Debt Securities pursuant to Section 303, 304, 305, 306, 307, 906, 1010 or 1108 of the Base Indenture. The principal of, premium, if any, and interest on the Debt Securities shall be payable at the office or agency of the Company maintained for such purpose; provided, however, that at the option of the Company interest may be paid by check mailed to addresses of the Persons entitled thereto as such addresses shall appear on the Security Register. If any of the Debt Securities are held by the Depositary, payments of interest may be made by wire transfer to the Depositary. The Trustee is hereby initially designated as the Paying Agent under this Indenture. Article Fourteen of the Indenture - Guarantees - shall not apply to the Debt Securities. Article Four of the Indenture - Defeasance and Covenant Defeasance - shall not apply to the Debt Securities. The Debt Securities shall be redeemable as provided in Article Eleven of the Indenture. The terms of redemption are set forth in the form of the Debt Security as set forth in Section 204 of this First Supplemental Indenture. The Debt Securities shall be subordinated in right of payment to Senior Indebtedness as provided in Article Twelve of the Indenture. The Debt Securities shall be convertible into shares of the Company's Class A Common Stock as provided in Section 205 of this First Supplement Indenture. The Debt Securities shall be redeemable, at the option of the Holder, upon a Change of Control as provided in Section 208 of this First Supplemental Indenture. 5 Section 204. Form of Debt Securities. (a) The form of the face of any Debt Security authenticated and delivered hereunder shall be substantially as follows: SINCLAIR BROADCAST GROUP, INC. 6% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2012 No. ................... $................. SINCLAIR BROADCAST GROUP, INC., a Maryland corporation (herein called the "Company," which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to or registered assigns, the principal sum of United States dollars ($________) on September 15, 2012, at the office or agency of the Company referred to below, and to pay interest thereon from __________, ____, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly on March 15, June 15, September 15 and December 15, in each year, commencing __________, ____ at the rate of 6% per annum, in United States dollars, until the principal hereof is paid or duly provided for. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Debt Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be March 1, June 1, September 1 and December 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid, or duly provided for, and interest on such defaulted interest at the interest rate borne by the Debt Securities, to the extent lawful, shall forthwith cease to be payable to the Holder on such Regular Record Date, and may be paid to the Person in whose name this Debt Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of Debt Securities not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Debt Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Payment of the principal of, premium, if any, and interest on this Debt Security will be made at the office or agency of the Company maintained for that purpose, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check mailed to the address of the Person entitled thereto as such address shall appear on the Security Register. If any of the Debt Securities are held by the Depositary, payments of interest to the Depositary may be made by wire transfer to the Depositary. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. 6 Reference is hereby made to the further provisions of this Debt Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been duly executed by the Trustee referred to on the reverse hereof or by the authenticating agent appointed as provided in the Indenture by manual signature, this Debt Security shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by the manual or facsimile signature of its authorized officers and its corporate seal to be affixed or reproduced hereon. Dated: SINCLAIR BROADCAST GROUP, INC. By: _________________________________ Attest: [SEAL] .................................... Secretary (b) The form of the reverse of the Debt Securities shall be substantially as follows: 7 SINCLAIR BROADCAST GROUP, INC. 6% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2012 This Debt Security is one of a duly authorized issue of Securities of the Company designated as its "6% Convertible Subordinated Debentures due 2012" (herein called the " Debt Securities"), limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to $________ issued under an indenture (herein called the "Indenture"), dated as of __________, ____, as supplemented by the First Supplemental Indenture thereto, dated as of __________, ____, among the Company and First Union National Bank, as trustee (herein called the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties, obligations and immunities thereunder of the Company, the Trustee and the Holders of the Debt Securities, and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. The Indebtedness evidenced by the Debt Securities is, to the extent and in the manner provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness, whether Outstanding on the date of the Indenture or thereafter, and this Debt Security is issued subject to such provisions. Each Holder of this Debt Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in the Indenture and (c) appoints the Trustee his attorney-in-fact for such purpose. The Indenture contains provisions for conversion of the Debt Securities, at the option of the Holder, into shares of Class A Common Stock, par value $.01 per share, of the Company at any time prior to the Maturity Date, at a conversion rate and under circumstances and conditions set forth therein. The Debt Securities are subject to redemption at any time on or after December 15, 2000, at the option of the Company, in whole or in part, on not less than 30 nor more than 60 days' prior notice by first-class mail in amounts of $1,000 or an integral multiple of $1,000 or such other denominations as may be authorized by the Company at the following redemption prices (expressed as a percentage of the principal amount), if redeemed during the 12-month period beginning September 15 of the years indicated below (December 15, in the case of 2000): Redemption Redemption Year Price Year Price - ---- ----- ---- ----- 2000 104.20% 2004 101.80% 2001 103.60 2005 101.20 2002 103.00 2006 100.60 2003 102.40 2007 and thereafter 100.00 in each case together with accrued and unpaid interest, if any, to the Redemption Date (subject to the right of Holders of record on relevant Regular Record Dates to receive interest due on an Interest Payment Date that is on or prior to the Redemption Date). If less than all of the Debt Securities are to be redeemed, the Trustee shall select the Debt Securities or portions thereof to be redeemed pro rata, by lot or by any other method the Trustee shall deem fair and reasonable. 8 Upon the occurrence of a Change of Control, each Holder may require the Company to repurchase all or a portion of such Holder's Debt Securities in an amount of $1,000 or integral multiples of $1,000 or such other denominations as may be authorized by the Company, at a purchase price in cash equal to 100% of the principal amount thereof, together with accrued and unpaid interest, if any, to the date of repurchase. In the case of any redemption of Debt Securities, interest installments whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Debt Securities of record as of the close of business on the relevant record date referred to on the face hereof. Debt Securities (or portions thereof) for whose redemption and payment provision is made in accordance with the Indenture shall cease to bear interest from and after the date of redemption. In the event of redemption of this Debt Security in part only, a new Debt Security or Debt Securities for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof. If an Event of Default shall occur and be continuing, the principal amount of all the Debt Securities may be declared due and payable in the manner and with the effect provided in the Indenture. If this Debt Security is in certificated form, then as provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Debt Security is registrable on the Security Register of the Company, upon surrender of this Debt Security for registration of transfer at the office or agency of the Company maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or its attorney duly authorized in writing, and thereupon one or more new Debt Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. If this Debt Security is a Global Security, except as described below, it is not exchangeable for a Debt Security or Securities in certificated form. The Securities will be delivered in certificated form if (i) the Depositary ceases to be registered as a clearing agency under the Exchange Act or is no longer willing or able to provide securities depository services with respect to the Securities and a successor depositary is not appointed by the Company within 90 days and (ii) the Company, in its sole discretion, so determines and (iii) there shall have occurred an Event of Default or an event which, with the giving of notice or lapse of time or both, would constitute an Event of Default with respect to the Securities represented by such Global Security and such Event of Default or event continues for a period of 90 days. Upon any such issuance, the Trustee is required to register such certificated Debt Security in the name of, and cause the same to be delivered to, such Person or Persons (or the nominee of any thereof). 9 The Indenture permits, with certain exceptions (including certain amendments permitted without the consent of any Holders) as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a specified percentage in aggregate principal amount of the Debt Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Debt Securities at the time Outstanding, on behalf of the Holders of all the Debt Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past Defaults under the Indenture and their consequences. Any such consent or waiver by or on behalf of the Holder of this Debt Security shall be conclusive and binding upon such Holder and upon all future Holders of this Debt Security and of any Debt Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Debt Security. No reference herein to the Indenture and no provision of this Debt Security or of the Indenture shall alter or impair the obligation of the Company which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Debt Security at the times, place, and rate, and in the coin or currency, herein prescribed, subject to the subordination provisions of the Indenture. The Debt Securities if issued in certificated form are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof or such other denominations as may be authorized by the Company. As provided in the Indenture and subject to certain limitations therein set forth, the Debt Securities are exchangeable for a like aggregate principal amount of Debt Securities of a different authorized denomination, as requested by the Holder surrendering the same. 10 No service charge shall be made for any registration of transfer or exchange or redemption of Debt Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to and at the time of due presentment of this Debt Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Debt Security is registered as the owner hereof for all purposes (subject to provisions with respect to record dates for the payment of interest), whether or not this Debt Security is overdue, and neither the Company, the Trustee nor any agent shall be affected by notice to the contrary. THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF). All terms used in this Debt Security which are defined in the Indenture and not otherwise defined herein shall have the meanings assigned to them in the Indenture. (c) The form of conversion notice shall be substantially as follows: TO SINCLAIR BROADCAST GROUP, INC.: The undersigned registered owner of this Security hereby irrevocably exercises the option to convert this Security, or the portion hereof (which is $1,000 or a multiple thereof or such other denominations as may be authorized by the Company) designated below, into shares of Class A Common Stock in accordance with the terms of the Indenture referred to in this Security, and directs that the shares issuable and deliverable upon the conversion, together with any check in payment for a fractional share and any Security representing any unconverted principal name has been provided below. If this Notice is being delivered on a date after the close of business on a Regular Record Date and prior to the close of business on the related Interest Payment Date, this Notice is accompanied by payment in same day funds, or other funds acceptable to the Company, of an amount equal to the interest payable on such Interest Payment Date on the principal of this Security to be converted (unless this Security has been called for redemption). If shares or any portion of this Security not converted are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Any amount required to be paid by the undersigned on account of interest accompanies this Security. Dated: ....................................... ....................................... Signature(s) 11 Signature(s) must be guaranteed by an "eligible guarantor institution" that is a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Trustee or agent responsible for conversion, which requirements include the membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such "signature guarantee program" as may be determined by the Trustee in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, if shares of Class A Common Stock are to be delivered, or Securities are to be issued, other than to and in the name of the registered owner. ............................................ Signature Guarantee Fill in for registration of shares of Class A Common Stock if they are to be delivered, or Securities if they are to be issued, other than to and in the name of the registered owner: ............................................ (Name) ............................................ (Street Address) ............................................ (City, State and zip code) (Please print name and address Register: ____ Class A Common Stock ____ Securities (Check appropriate line(s)). Principal amount to be converted (if less than all): $________,000 Social Security or other Taxpayer Identification Number of owner 12 Section 205. Conversion Rights. The following is added as Article Fifteen of Indenture following Article Fourteen: "ARTICLE FIFTEEN CONVERSION OF THE DEBT SECURITIES Section 1501. Conversion Privilege and Conversion Price. The Holder of any Debt Security will have the right, at the Holder's option, to convert the principal amount thereof (or any portion thereof that is an integral multiple of $1,000 or such other denomination as may be authorized by the Company) into shares of Class A Common Stock at any time prior to Maturity, initially at the conversion price in effect on the Series D Convertible Exchangeable Preferred Stock, par value $.01 per share, of the Company at the date of exchange of the Convertible Exchangeable Preferred Stock for Debt Security (subject to adjustments as described in paragraphs (a), (b), (c), (d), (e), (f) and (i) of Section 1504 below); provided except that if a Debt Security is called for redemption, the conversion right will terminate on the close of business on the second business day preceding the date fixed for redemption. Section 1502. Exercise of Conversion Privilege. In order to exercise the conversion privilege, the Holder of any Debt Security shall surrender such Debt Security, duly endorsed or assigned to the Company or in blank, at any office or agency of the Company maintained pursuant to Section 1002 of the Indenture, accompanied by written notice to the Company in the form provided in the Debt Security (or such other notice as is acceptable to the Company) at such office or agency that the Holder of Debt Securities elects to convert such Debt Security or, if less than the entire principal amount thereof is to be converted, the portion thereof to be converted. Debt Securities surrendered for conversion during the period from the close of business on any Regular Record Date next preceding any Interest Payment Date to the close of business on such Interest Payment Date shall (except in the case of Debt Securities or portions thereof which have been called for redemption) be accompanied by payment in same day funds of an amount equal to the interest payable on such Interest Payment Date on the principal amount being surrendered for conversion. Except as provided in the immediately preceding sentence, no payment of interest or no adjustment in respect of dividends shall be made upon any conversion of any Debt Security. 13 Debt Securities shall be deemed to have been converted immediately prior to the close of business on the day of surrender of such Debt Securities for conversion in accordance with the foregoing provisions, and at such time the rights of the Holders of such Debt Securities as Holders shall cease, and the Person or Persons entitled to receive the Class A Common Stock issuable upon conversion shall be treated for all purposes of the record holder or holders of such Class A Common Stock as and after such time. As promptly as practicable on or after the conversion date, the Company shall issue and shall deliver at such office or agency a certificate or certificates for the number of full shares of Class A Common Stock issuable upon conversion, together with payment in lieu of any fraction of a share, as provided in Section 1503. In the case of any Debt Security which is converted in part only, upon such conversion the Company shall execute and the Trustee shall authenticate and deliver to the Holder thereof, at the expense of the Company, a new Debt Security or Debt Securities of authorized denominations in aggregate principal amount equal to the unconverted portion of the principal amount of such Debt Security. Section 1503. Fractions of Shares. No fractional shares of Class A Common Stock shall be issued upon conversion of Debt Securities unless the Company determines to issue fractional shares. If more than one Debt Security shall be surrendered for conversion at one time by the same Holder, the number of full shares which shall be issuable upon conversion thereof shall be computed on the basis of the aggregate principal amount of the Debt Securities (or specified portions thereof) so surrendered. Instead of any fractional share of such Class A Common Stock which would otherwise be issuable upon conversion of any Debt Security or Debt Securities (or specified portions thereof), the Company may pay a cash adjustment in respect of such fraction in an amount equal to the same fraction of the Closing Price (as hereinafter defined) at the close of business on the day of conversion (or, if such day is not a Trading Day (as hereafter defined), on the Trading Day immediately preceding such day). Section 1504. Adjustment of Conversion Price. (a) In case the Company shall pay or make a dividend or other distribution on Common Stock exclusively in Common Stock or shall pay or make a dividend or other distribution on any other class of capital stock of the Company which dividend or distribution includes Common Stock, the conversion price in effect at the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such dividend or other distribution shall be reduced by multiplying such conversion price by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination and the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such reduction to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purpose of this paragraph (a), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company. The Company shall not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company. 14 (b) Subject to paragraph (g) of this Section, in case the Company shall pay or make a dividend or other distribution on Common Stock consisting exclusively of, or shall otherwise issue to all holders of any class of Common Stock, rights or warrants entitling the holders thereof to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price (determined as provided in paragraph (h) of this Section) on the date fixed for the determination of shareholders entitled to receive such rights or warrants, the conversion price in effect at the opening of business on the day following the date fixed for such determination shall be reduced by multiplying such conversion price by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such Current Market Price and the denominator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock so offered for subscription or purchase, such reduction to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this paragraph (b), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company. The Company shall not issue any rights or warrants in respect of shares of Common Stock held in the treasury of the Company. (c) In case outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the conversion price in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately reduced, and, conversely, in case outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the conversion price in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately increased, such reduction or increase, as the case may be, to become effective immediately after the opening of business on the day following the day upon which subdivision or combination becomes effective. 15 (d) Subject to the last sentence of this paragraph (d) and to paragraph (g) of this Section, in case the Company shall, by dividend or otherwise, distribute to all holders of any class of Common Stock evidences of its indebtedness, shares of any class of its capital stock, cash or other assets (including securities, but excluding any rights or warrants referred to in paragraph (b) of this Section, excluding any dividend or distribution paid exclusively in cash and excluding any dividend or distribution referred to in paragraph (a) of this Section), the conversion price shall be reduced by multiplying the conversion price in effect immediately prior to the close of business on the date fixed for the determination of shareholders entitled to such distribution by a fraction of which the numerator shall be the Current Market Price (determined as provided in paragraph (h) of this Section) on such date less the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) on such date of the portion of the evidences of indebtedness, shares of capital stock, cash and other assets to be distributed applicable to one share of Common Stock and the denominator shall be such Current Market Price, such reduction to become effective immediately prior to the opening of business on the day following such date. If the Board of Directors determines the fair market value of any distribution for purposes of this paragraph (d) by reference to the actual or when-issued trading market for any securities comprising part or all of such distribution, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price pursuant to paragraph (h) of this Section, to the extent possible. For purposes of this paragraph (d), any dividend or distribution that includes shares of Common Stock, rights or warrants to subscribe for or purchase shares of Common Stock or securities convertible into or exchangeable for shares of Common Stock shall be deemed to be (x) a dividend or distribution of the evidences of indebtedness, cash, assets or shares of capital stock other than such shares of Common Stock, such rights or warrants or such convertible or exchangeable securities (making any conversion price reduction required by this paragraph (d)) immediately followed by (y) in the case of such shares of Common Stock or such rights or warrants, a dividend or distribution thereof (making any further conversion price reduction required by paragraph (a) and (b) of this Section, except any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" within the meaning of paragraph (a) of this Section), or (z) in the case of such convertible or exchangeable securities, a dividend or distribution of the number of shares of Common Stock as would then be issuable upon the conversion or exchange thereof, whether or not the conversion or exchange of such securities is subject to any conditions (making any further conversion price reduction required by paragraph (a) of this Section, except the shares deemed to constitute such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" within the meaning of paragraph (a) of this Section). 16 (e) In case the Company shall, by dividend or otherwise, at any time distribute to all holders of any class of Common Stock cash (excluding any cash that is distributed as part of a distribution referred to in paragraph (d) of this Section or in connection with a transaction to which Section 1511 applies) in an aggregate amount that, together with (A) the aggregate amount of any other distributions to all holders of any class of Common Stock made exclusively in cash within the 12 months preceding the date fixed for the determination of shareholders entitled to such distribution and in respect of which no conversion price adjustment pursuant to this paragraph (e) has been made previously and (B) the aggregate of any cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) as of such date of determination of consideration payable in respect of any tender offer by the Company or a Subsidiary for all or any portion of Common Stock consummated within the 12 months preceding such date of determination and in respect of which no conversion price adjustment pursuant to paragraph (f) of this Section has been made previously, exceeds 12.5% of the product of the Closing Price on such date of determination times the number of shares of Common Stock outstanding on such date, the conversion price shall be reduced by multiplying the conversion price in effect immediately prior to the close of business on such date of determination by a fraction of which the numerator shall be the Current Market Price (determined as provided in paragraph (h) of this Section) on such date less the amount of cash to be distributed at such time and the amounts referred to in clauses (A) and (B) above applicable to one share of Common Stock and the denominator shall be such Current Market Price, such reduction to become effective immediately prior to the opening of business on the day after such date. (f) In case a tender offer made by the Company or any Subsidiary for all or any portion of Common Stock shall be consummated and such tender offer shall involve an aggregate consideration having a fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) as of the last time (the "Expiration Time") that tenders may be made pursuant to such tender offer (as it shall have been amended) that, together with (A) the aggregate of the cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) as of the Expiration Time of the other consideration paid in respect of any other tender offer by the Company or a Subsidiary for all or any portion of Common Stock consummated within the 12 months preceding the Expiration Time and in respect of which no conversion price adjustment pursuant to this paragraph (f) has been made previously and (B) the aggregate amount of any distributions to all holders of any class of Common Stock made exclusively in cash within the 12 months preceding the Expiration Time and in respect of which no conversion price adjustment pursuant to paragraph (e) of this Section has been made previously, exceeds 12.5% of the product of the Closing Price immediately prior to the Expiration Time times the number of shares of Common Stock outstanding (including any tendered shares) at the Expiration Time, the conversion price shall be reduced by multiplying the conversion price in effect immediately prior to the Expiration Time by a fraction of which the numerator shall be (x) the product of the Current Market Price (determined as provided in paragraph (h) of this Section) immediately prior to the Expiration Time times the number of shares of Common Stock outstanding (including any tendered shares) at the Expiration Time minus (y) the fair market value (determined as aforesaid) of the aggregate consideration payable to shareholders upon consummation of such tender offer and the amounts referred to in (A) and (B) above and the denominator shall be the product of (A) such Current Market Price times (B) such number of outstanding shares at the Expiration Time minus the number of shares accepted for payment in such tender offer (the "Purchased Shares" ), such reduction to become effective immediately prior to the opening of business on the day following the Expiration Time; provided, that if the number of Purchased Shares or the aggregate consideration payable therefor have not been finally determined by such opening of business, the adjustment required by this paragraph (f) shall, pending such final determination, be made based upon the preliminarily announced results of such tender offer, and, after such final determination shall have been made, the adjustment required by this paragraph (f) shall be made based upon the number of Purchased Shares and the aggregate consideration payable therefor as so finally determined. 17 (g) The reclassification of any class of Common Stock into securities which include securities other than Common Stock (other than any reclassification upon a consolidation or merger to which Section 1511 applies) shall be deemed to involve (i) a distribution of such securities other than Common Stock to all holders of such class of Common Stock (and the effective date of such reclassification shall be deemed to be "the date fixed for the determination of shareholders entitled to such distribution" within the meaning of paragraph (d) of this Section), and (ii) a subdivision or combination, as the case may be, of the number of shares of Common Stock outstanding immediately prior to such reclassification into the number of shares of Common Stock outstanding immediately thereafter (and the effective date of such reclassification shall be deemed to be "the day upon which such subdivision becomes effective" or "the day upon which such combination becomes effective," as the case may be, and "the day upon which such subdivision or combination becomes effective" within the meaning of paragraph (c) of this Section). Rights or warrants issued by the Company to all holders of any class of Common Stock entitling the holders thereof to subscribe for or purchase shares of Common Stock (either initially or under certain circumstances), which rights or warrants (i) are deemed to be transferred with such shares of Common Stock, (ii) are not exercisable and (iii) are also issued in respect of future issuances of Common Stock, in each case in clauses (i) through (iii) until the occurrence of a specified event or events ("Trigger Event"), shall for purposes of this Section 1504 not be deemed issued until the occurrence of the earliest Trigger Event. If any such rights or warrants, including any such existing rights or warrants distributed prior to the date of this Indenture, are subject to subsequent events, upon the occurrence of each of which such rights or warrants shall become exercisable to purchase different securities, evidences of indebtedness or other assets, then the occurrence of each such event shall be deemed to be such date of issuance and record date with respect to new rights or warrants (and a termination or expiration of the existing rights or warrants without exercise by the holder thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event with respect thereto, that was counted for purposes of calculating a distribution amount for which an adjustment to the conversion price under this Section 1504 was made, (1) in the case of any such rights or warrants which shall all have been redeemed or repurchased without exercise by any Holders thereof, the conversion price shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or repurchase price received by a holder or holders of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of Common Stock as of the date of such redemption or repurchase, and (2) in the case of such rights or warrants which shall have expired or been terminated without exercise by any holders thereof, the Conversion Price shall be readjusted as if such rights and warrants had not been issued. 18 (h) For the purpose of any computation under this paragraph and paragraphs (b), (d) and (e) of this Section, the current market price per share of Common Stock (the "Current Market Price") on any date shall be deemed to be the average of the daily Closing Prices for the 5 consecutive Trading Days before, and ending not later than, the date in question; provided, however, that if the "ex" date for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the conversion price pursuant to paragraph (a), (b), (c), (d), (e) or (f) above occurs on or after the 5th Trading Day prior to the date in question and prior to the "ex" date for the issuance or distribution requiring such computation, the Closing Price for each Trading Day prior to the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the same fraction by which the conversion price is so required to be adjusted as a result of such other event. For the purpose of any computation under paragraph (f) of this Section, the Current Market Price on any date shall be deemed to be the average of the daily Closing Prices for the 5 consecutive Trading Days commencing on or after the latest (the "Commencement Date") of (x) the date of commencement of the tender offer requiring such computation and (y) the date of the last amendment, if any, of such tender offer involving a change in the maximum number of shares for which tenders are sought or a change in the consideration offered; provided, however, that if the "ex" date for any event (other than the tender offer requiring such computation) that requires an adjustment to the conversion price pursuant to paragraph (a), (b), (c), (d), (e) or (f) above occurs on or after the Commencement Date and prior to the Expiration Time for the tender offer requiring such computation, the Closing Price for each Trading Day prior to the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the same fraction by which the conversion price is so required to be adjusted as a result of such other event. The closing price for any Trading Day (the "Closing Price") shall be the last reported sales price regular way or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices regular way, in either case on the New York Stock Exchange or, if the Common Stock is not listed or admitted to trading on such exchange, on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if not listed or admitted to trading on any national securities exchange, on the Nasdaq Stock Market's National Market or, if the Common Stock is not listed or admitted to trading on any national securities exchange or quoted on such National Market, the average of the closing bid and asked prices in the over-the-counter market as furnished by any New York Stock Exchange member firm selected from time to time by the Company for that purpose. For purposes of this paragraph, the term "Trading Day" means each Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on which securities are generally not traded on the applicable securities exchange or in the applicable securities market and the term "'ex' date," (A) when used with respect to any issuance or distribution, means the first date on which the Common Stock trades regular way on the relevant exchange or in the relevant market from which the Closing Prices were obtained without the right to receive such issuance or distribution, (B) when used with respect to any subdivision or combination of shares of Common Stock, means the first date on which the Common Stock trades regular way on such exchange or in such market after the time at which such subdivision or combination becomes effective, and (C) when used with respect to any tender offer means the first date on which the Common Stock trades regular way on such exchange or in such market after the last time that tenders may be made pursuant to such tender offer (as it shall have been amended). 19 (i) The Company may make such reductions in the conversion price, in addition to those required by paragraphs (a), (b), (c), (d), (e) and (f) of this Section, (i) to the extent permitted by law, by any amount for any period of at least 20 days or (ii) as it considers to be advisable (as evidenced by a Board Resolution) in order that any event treated for federal income tax purposes as a dividend of stock or stock rights shall not be taxable to the recipients or, if that is not possible, to diminish any income taxes that are otherwise payable because of such event. Whenever the conversion price is reduced pursuant to the preceding sentence, the Company shall mail to Holders a notice of the reduction at least 15 days prior to the date the reduced conversion price takes effect, and such notice shall state the reduced conversion price and the period it will take effect. (j) No adjustment in the conversion price shall be required unless such adjustment (plus any other adjustments not previously made by reason of this paragraph (j)) would require an increase or decrease of at least 1% in the conversion price; provided, however, that any adjustments which by reason of this paragraph (j) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. (k) Notwithstanding any other provision of this Section 1504, no adjustment to the conversion price shall reduce the conversion price below the then par value per share of the Class A Common Stock, and any such purported adjustment shall instead reduce the conversion price to such par value. The Company hereby covenants not to take any action to increase the par value per share of the Class A Common Stock. Section 1505. Notice of Adjustments of Conversion Price. Whenever the conversion price is adjusted as herein provided: (a) the Company shall compute the adjusted conversion price in accordance with Section 1504 and shall prepare an Officers' Certificate signed by the Treasurer of the Company setting forth the adjusted conversion price and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall forthwith be filed (with a copy to the Trustee) at each office or agency maintained for the purpose of conversion of Debt Securities pursuant to Section 1002 of the Indenture; and (b) a notice stating that the conversion price has been adjusted and setting forth the adjusted conversion price shall forthwith be prepared, and as soon as practicable after it is prepared, such notice shall be mailed by the Company to all Holders at their last addresses as they shall appear in the Security Register. In the case of any adjustment pursuant to Section 1504(h)(i), such notice shall be mailed at least 15 days before the date the reduced conversion price shall take effect and shall state the reduced conversion price and the period it will be in effect. 20 Section 1506. Notice of Certain Corporate Action. In case: (a) the Company shall declare a dividend (or any other distribution) on Common Stock payable (i) otherwise than exclusively in cash or (ii) exclusively in cash in an amount that would require a conversion price adjustment pursuant to paragraph (e) of Section 1504; or (b) the Company shall authorize the granting to the holders of any class of Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any other rights (excluding shares of capital stock or option for capital stock issued pursuant to a benefit plan for employees, officers or directors of the Company); or (c) of any reclassification of Common Stock (other than a subdivision or combination of the outstanding shares of Common Stock), or of any consolidation, merger or share exchange to which the Company is a party and for which approval of any stockholders of the Company is required, or of the sale or transfer of all or substantially all of the assets of the Company; or (d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company; or (e) the Company or any Subsidiary shall commence a tender offer for all or a portion of outstanding shares of Common Stock (or shall amend any such tender offer to change the maximum number of shares being sought or the amount or type of consideration being offered therefor); then the Company shall cause to be filed at each office or agency maintained pursuant to Section 1002 of the Indenture, and shall cause to be mailed to all Holders of Debt Securities at their last addresses as they shall appear in the Security Register, at least 21 days (or 11 days in any case specified in clause (a), (b) or (e) above) prior to the applicable record, effective or expiration date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record who will be entitled to such dividend, distribution, rights or warrants are to be determined, (y) the date on which such reclassification, consolidation, merger, share exchange, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, share exchange, sale, transfer, dissolution, liquidation or winding up, or (z) the date on which such tender offer commenced, the date on which such tender offer is scheduled to expire unless extended, the consideration offered and the other material terms thereof (or the material terms of any amendment thereto). Neither the failure to give any such notice nor any defect therein shall affect the legality or validity of any action described in clauses (a) through (e) of this Section 1506. 21 Section 1507. Company to Reserve Class A Common Stock. The Company shall at all times reserve and keep available, free from preemptive rights, out of the authorized but unissued Class A Common Stock or out of the Class A Common Stock held in treasury, for the purpose of effecting the conversion of Debt Securities, the full number of shares of Class A Common Stock then issuable upon the conversion of all outstanding Debt Securities. Section 1508. Taxes on Conversions. The Company will pay any and all taxes that may be payable in respect of the issue or delivery of shares of Class A Common Stock on conversion of Debt Securities pursuant hereto. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Class A Common Stock in a name other than that of the Holder of the Debt Security or Debt Securities to be converted, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid. Section 1509. Covenant as to Class A Common Stock. The Company covenants that all shares of Class A Common Stock which may be issued upon conversion of Debt Securities will upon issue be fully paid and nonassessable and, except as provided in Section 1508, the Company will pay all taxes, liens and charges with respect to the issue thereof. Section 1510. Cancellation of Converted Debt Securities. All Debt Securities delivered for conversion shall be delivered to the Trustee to be canceled by or at the direction of the Trustee, which shall dispose of the same as provided in Section 1507 of the Indenture. Section 1511. Provisions of Consolidation, Merger or Sale of Assets. In case of any reclassification of the Class A Common Stock, any consolidation of the Company with, or merger of the Company into, any other entity, any merger of any entity into the Company (other than a merger that does not result in a reclassification, conversion, exchange or cancellation of the outstanding shares of Class A Common Stock), any sale or transfer of all or substantially all of the assets of the Company or any compulsory share exchange whereby the Class A Common Stock is converted into other securities, cash or other property, then the Holder of Debt Securities then outstanding shall have the right thereafter, during the period that the Debt Securities shall be convertible, to convert that Debt Security only into the kind and amount of securities, cash and other property receivable upon the reclassification, consolidation, merger, sale, transfer or share exchange by a holder of the number of shares of Class A Common Stock into which the Debt Securities would have been convertible immediately prior to the reclassification, consolidation, merger, sale, transfer or share exchange. The kind and amount of securities into or for which the shares of Debt Securities will be convertible or redeemable after consummation of such transaction will be subject to adjustment as described above following the date of consummation of such transaction. The Company may not become a party to any such transaction unless the terms thereof are consistent with the foregoing and the surviving corporation in any such transaction agrees in writing to comply with the terms of the foregoing." 22 Section 206. Remedies. Sections 501 and 502 of the Indenture are hereby replaced with the following for purposes of the Debt Securities only: "Section 501. Events of Default. "Event of Default", wherever used herein, means any one of the following events which has occurred and is continuing (whatever the reason for such Event of Default and whether it shall be occasioned by the provisions of Article Twelve or be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (a) there shall be a default in the payment of any interest on any Debt Security when it becomes due and payable, and such default shall continue for a period of 30 days; (b) there shall be a default in the payment of the principal of (or premium, if any, on) any Debt Security at its Maturity (upon acceleration, optional or mandatory redemption, required repurchase or otherwise); (c) (i) there shall be a default in the performance, or breach, of any covenant or agreement of the Company under this Indenture applicable to the Debt Securities (other than a default in the performance or breach of a covenant or agreement which is specifically dealt with in clause (a) or (b) or in clause (ii) or (iii) of this clause (c)) and such default or breach shall continue for a period of 30 days after written notice has been given, by certified mail, (1) to the Company by the Trustee or (z) to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Debt Securities; (ii) there shall be a default in the performance or breach of the provisions of Article Eight of the Indenture; or (iii) the Company shall have failed to make or consummate a Change of Control Offer in accordance with the provisions of Section 1010 of the Indenture; (d) one or more defaults shall have occurred under any agreements, indentures or instruments under which the Company or any Restricted Subsidiary then has outstanding Indebtedness in excess of $5,000,000 in the aggregate and, if not already matured at its final maturity in accordance with its terms, such Indebtedness shall have been accelerated; (e) there shall have been the entry by a court of competent jurisdiction of (i) a decree or order for relief in respect of the Company or any Restricted Subsidiary in an involuntary case or proceeding under any applicable Bankruptcy Law or (ii) a decree or order adjudging the Company or any Restricted Subsidiary bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or composition of or in respect of the Company or any Restricted Subsidiary under any applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or any Restricted Subsidiary or of any substantial part of their respective properties, or ordering the winding up or liquidation of their affairs, and any such decree or order for relief shall continue to be in effect, or any such other decree or order shall be unstayed and in effect, for a period of 60 consecutive days; or 23 (f) (i) the Company or any Restricted Subsidiary commences a voluntary case or proceeding under any applicable Bankruptcy Law or any other case or proceeding to be adjudicated bankrupt or insolvent, (ii) the Company or any Restricted Subsidiary consents to the entry of a decree or order for relief in respect of the Company or such Restricted Subsidiary in an involuntary case or proceeding under any applicable Bankruptcy Law or to the commencement of any bankruptcy or insolvency case or proceeding against it, (iii) the Company or any Restricted Subsidiary files a petition or answer or consent seeking reorganization or relief under any applicable federal or state law, (iv) the Company or any Restricted Subsidiary (1) consents to the filing of such petition or the appointment of, or taking possession by, a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or such Restricted Subsidiary or of any substantial part of its respective properties, (2) makes an assignment for the benefit of creditors or (3) admits in writing its inability to pay its debts generally as they become due, or (v) the Company or any Restricted Subsidiary takes any corporate action authorizing any such actions in this paragraph (i). The Company shall deliver to the Trustee within five days after the occurrence thereof, written notice, in the form of an Officers' Certificate, of any Default, its status and what action the Company is taking or proposes to take with respect thereto. Unless the Corporate Trust Office of the Trustee has received written notice of an Event of Default of the nature described in this Section, the Trustee shall not be deemed to have knowledge of such Event of Default for the purposes of Article Five or for any other purpose. Section 502. Acceleration of Maturity; Rescission and Annulment. If an Event of Default (other than an Event of Default specified in Sections 501(e) and (f)), shall occur and be continuing, the Trustee or the Holders of not less than 25% in aggregate principal amount of the Debt Securities Outstanding may, and the Trustee at the request of the Holders of not less than 25% in aggregate principal amount of the Debt Securities Outstanding shall, declare all unpaid principal of, premium, if any, and accrued interest on all the Debt Securities to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holders of the Debt Securities); provided that so long as the Bank Credit Agreement is in effect, such declaration shall not become effective until the earlier of (a) five Business Days after receipt of such notice of acceleration from the Holders or the Trustee by the agent under the Bank Credit Agreement or (b) acceleration of the Indebtedness under the Bank Credit Agreement. Thereupon the Trustee may, at its discretion, proceed to protect and enforce the rights of the Holders of the Debt Securities by appropriate judicial proceeding. If an Event of Default specified in clause (e) or (f) of Section 501 occurs and is continuing, then all the Debt Securities shall ipso facto become and be immediately due and payable, in an amount equal to the principal amount of the Debt Securities, together with accrued and unpaid interest, if any, to the date the Debt Securities become due and payable, without any declaration or other act on the part of the Trustee or any Holder. The Trustee or, if notice of acceleration is given by the Holders, the Holders shall give notice to the agent under the Bank Credit Agreement of any such acceleration. 24 At any time after such declaration of acceleration has been made but before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in aggregate principal amount of the Debt Securities Outstanding, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if: (a) the Company has paid or deposited with the Trustee a sum sufficient to pay (i) all sums paid or advanced by the Trustee under this Indenture and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, (ii) all overdue interest on all Debt Securities, (iii) the principal of and premium, if any, on any Debt Securities which have become due otherwise than by such declaration of acceleration and interest thereon at a rate borne by the Debt Securities, and (iv) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate borne by the Debt Securities; and (b) all Events of Default, other than the non-payment of principal of the Debt Securities which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513. No such rescission shall affect any subsequent Default or impair any right consequent thereon provided in Section 513." Section 207. Supplemental Indentures. Clauses (a), (b), (c), (d) and (e) of Section 902 of the Indenture are hereby replaced with the following for purposes of the Debt Securities only: "(a) change the Stated Maturity of the principal of, or any installment of interest on, any Debt Security, or reduce the principal amount thereof or the rate of interest thereon or any premium, if any, payable upon the redemption thereof, or change the coin or currency in which the principal of any Debt Security or any premium, if any, or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date); (b) amend, change or modify the obligation of the Company to make and consummate a Change of Control Offer in the event of a Change of Control in accordance with Section 1010 of the Indenture, including, amending, changing or modifying any definitions with respect thereto; (c) reduce the percentage in principal amount of the Outstanding Debt Securities, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver or compliance with certain provisions of this Indenture or certain defaults; 25 (d) modify any of the provisions of this Section, Section 513 or Section 1009, except to increase the percentage in principal amount of the Outstanding Debt Securities, the consent of whose Holders is required for any such actions or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Debt Security affected thereby; (e) except as otherwise permitted under Article Eight, consent to the assignment or transfer by the Company of any of its rights and obligations under this Indenture; or (f) amend or modify any of the provisions of this Indenture relating to the subordination or conversion of the Debt Securities in any manner adverse to the Holders of the Debt Securities." Section 208. Change of Control. Section 1010, as set forth below, is added to Article Ten following Section 1009: "Section 1010. Purchase of Debt Securities upon a Change of Control. (a) If a Change of Control shall occur at any time, then each Holder of Debt Securities shall have the right to require that the Company purchase such Holder's Debt Securities in whole or in part in integral multiples of $1,000, at a purchase price (the "Change of Control Purchase Price") in cash in an amount equal to 100% of the principal amount of such Debt Securities, plus accrued and unpaid interest, if any, to the date of purchase (the "Change of Control Purchase Date"), pursuant to the offer described in subsection (c) of this Section (the "Change of Control Offer") and in accordance with the procedures set forth in Subsections (b), (c), (d) and (e) of this Section. (b) Within 30 days following any Change of Control, the Company shall notify the Trustee thereof and give written notice (a "Change of Control Purchase Notice") of such Change of Control to each Holder by first-class mail, postage prepaid, at his address appearing in the Security Register stating or including: 26 (1) that a Change of Control has occurred, the date of such event, and that such Holder has the right to require the Company to repurchase such Holder's Debt Securities at the Change of Control Purchase Price; (2) the circumstances and relevant facts regarding such Change of Control (including but not limited to information with respect to pro forma historical income, cash flow and capitalization after giving effect to such Change of Control); (3) (i) the most recently filed Annual Report on Form 10-K (including audited consolidated financial statements) of the Company, the most recent subsequently filed Quarterly Report on Form 10-Q, as applicable, and any Current Report on Form 8-K of the Company filed subsequent to such Quarterly Report (or in the event the Company is not required to prepare any of the foregoing Forms, the comparable information that would have been provided had the Company been required to prepare such Forms), (ii) a description of material developments in the Company's business subsequent to the date of the latest of such reports and (iii) such other information, if any, concerning the business of the Company which the Company in good faith believes will enable such Holders to make an informed investment decision; (4) that the Change of Control Offer is being made pursuant to this Section 1010(a) and that all Debt Securities properly tendered pursuant to the Change of Control Offer will be accepted for payment at the Change of Control Purchase Price; (5) the Change of Control Purchase Date which shall be a Business Day no earlier than 30 days nor later than 60 days from the date such notice is mailed, or such later date as is necessary to comply with requirements under the Exchange Act; (6) the Change of Control Purchase Price; (7) the names and addresses of the Paying Agent and the offices or agencies referred to in Section 1002; (8) that Debt Securities must be surrendered on or prior to the Change of Control Purchase Date to the Paying Agent at the office of the Paying Agent or to an office or agency referred to in Section 1002 to collect payment; (9) that the Change of Control Purchase Price for any Debt Security which has been properly tendered and not withdrawn will be paid promptly following the Change of Control Offer Purchase Date; 27 (10) the procedures for withdrawing a tender of Debt Securities and Change of Control Purchase Notice; (11) that any Debt Security not tendered will continue to accrue interest; and (12) that, unless the Company defaults in the payment of the Change of Control Purchase Price, any Debt Security accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Purchase Date. (c) Upon receipt by the Company of the proper tender of Debt Securities, the Holder of the Debt Security in respect of which such proper tender was made shall (unless the tender of such Debt Security is properly withdrawn) thereafter be entitled to receive solely the Change of Control Purchase Price with respect to such Debt Security. Upon surrender of any such Debt Security for purchase in accordance with the foregoing provisions, such Debt Security shall be purchased by the Company at the Change of Control Purchase Price; provided, however, that installments of interest whose Stated Maturity is on or prior to the Change of Control Purchase Date shall be payable to the Holders of such Debt Securities, or one or more Predecessor Securities, registered as such on the relevant Regular Record Dates according to the terms and the provisions of Section 309. If any Debt Security tendered for purchase shall not be so purchased upon surrender thereof, the principal thereof (and premium, if any, thereon) shall, until paid, bear interest from the Change of Control Purchase Date at the rate borne by such Debt Security. Holders electing to have Debt Securities purchased will be required to surrender such Debt Securities to the Paying Agent at the address specified in the Change of Control Purchase Notice at least two Business Days prior to the Change of Control Purchase Date. Any Debt Security that is to be purchased only in part shall be surrendered to a Paying Agent at the office of such Paying Agent (with, if the Company, the Security Registrar or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Security Registrar or the Trustee, as the case may be, duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing), and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Debt Security, without service charge, one or more new Debt Securities of any authorized denomination as requested by such Holder in an aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Debt Security so surrendered that is not purchased. (d) The Company shall (i) not later than the Change of Control Purchase Date, accept for payment Securities or portions thereof tendered pursuant to the Change of Control Offer, (ii) not later than 11:00 a.m. (New York City time) on the Change of Control Purchase Date, deposit with the Paying Agent an amount of cash sufficient to pay the aggregate Change of Control Purchase Price of all the Debt Securities or portions thereof which are to be purchased as of the Change of Control Purchase Date and (iii) not later than the Change of Control Purchase Date, deliver to the Paying Agent an Officers' Certificate stating the Debt Securities or portions thereof accepted for payment by the Company. The Paying Agent shall promptly mail or deliver to Holders of Debt Securities so accepted payment in an amount equal to the Change of Control Purchase Price of the Debt Securities purchased from each such Holder, and the Company shall execute and the Trustee shall promptly authenticate and mail or deliver to such Holders a new Debt Security equal in principal amount to any unpurchased portion of the Debt Security surrendered. Any Securities not so accepted shall be promptly mailed or delivered by the Paying Agent at the Company's expense to the Holder thereof. The Company will publicly announce the results of the Change of Control Offer on the Change of Control Purchase Date. For purposes of this Section 1010, the Company shall choose a Paying Agent which shall not be the Company. 28 (e) A Change of Control Purchase Notice may be withdrawn before or after delivery by the Holder to the Paying Agent at the office of the Paying Agent of the Debt Security to which such Change of Control Purchase Notice relates, by means of a written notice of withdrawal delivered by the Holder to the Paying Agent at the office of the Paying Agent or to the office or agency referred to in Section 1002 to which the related Change of Control Purchase Notice was delivered not later than three Business Days prior to the Change of Control Purchase Date specifying, as applicable: (1) the name of the Holder; (2) the certificate number of the Debt Security in respect of which such notice of withdrawal is being submitted; (3) the principal amount of the Debt Security (which shall be $1,000 or an integral multiple thereof unless the Company determines to issue Debt Securities in smaller denominations) delivered for purchase by the Holder as to which such notice of withdrawal is being submitted; and (4) the principal amount, if any, of such Debt Security (which shall be $1,000 or an integral multiple thereof) that remains subject to the original Change of Control Purchase Notice and that has been or will be delivered for purchase by the Company. (f) Subject to applicable escheat laws, as provided in the Debt Securities, the Trustee and the Paying Agent shall return to the Company any cash that remains unclaimed, together with interest or dividends, if any, thereon, held by them for the payment of the Change of Control Purchase Price; provided, however, that (x) to the extent that the aggregate amount of cash deposited by the Company pursuant to clause (ii) of paragraph (d) above exceeds the aggregate Change of Control Purchase Price of the Debt Securities or portions thereof to be purchased, then the Trustee shall hold such excess for the Company and (y) unless otherwise directed by the Company in writing, promptly after the Business Day following the Change of Control Purchase Date the Trustee shall return any such excess to the Company together with interest, if any, thereon. (g) The Company shall comply with the applicable tender offer rules, including Rule 14e-1 under the Exchange Act, and any other applicable securities laws or regulations in connection with a Change of Control Offer." Section 209. Redemption of Debt Securities. In accordance with Article Eleven of the Indenture, the following sets forth the terms and conditions on which the Debt Securities may be redeemed: 29 "Section 1101. Rights of Redemption. (a) The Debt Securities may be redeemable, at the Company's option, in whole or from time to time in part, at any time on or after December 15, 2000, upon not less than 30 nor more than 60 days' prior notice by first class mail to each Holder of Debt Securities to be redeemed at its address appearing in the Security Register and prior to Maturity at the following redemption prices ("Redemption Prices") (expressed as percentages of the principal amount) plus accrued interest to the dated fixed for such redemption (the "Redemption Date") (subject to the right of Holders of record on the relevant Regular Record Date to receive interest due on an Interest Payment Date that is on or prior to the Redemption Date). (b) If redeemed during the 12-month period beginning September 15, in the year indicated (December 15, in the case of 2000), the Redemption Price shall be: Redemption Redemption Year Price Year Price ---- ----- ---- ----- 2000............. 104.20% 2004................ 101.80% 2001............. 103.60 2005................ 101.20 2002............. 103.00 2006................ 100.60 2003............. 102.40 2007 and thereafter 100.00 Section 210. Suspension of Payment When Senior Indebtedness in Default. Section 1203 (a) of the Indenture is replaced with the following for purposes of the Debt Securities: "(a) Unless Section 1202 shall be applicable, upon the occurrence of a Payment Default or non-payment default with respect to Senior Indebtedness pursuant to which the maturity thereof has been accelerated, no payment or distribution of any assets of the Company of any kind or character (excluding Permitted Junior Securities) shall be made by the Company on account of principal of, premium, if any, or interest on, the Debt Securities or any other Indenture Obligations or on account of the purchase, redemption, defeasance or other acquisition of or in respect of the Debt Securities unless and until such Payment Default shall have been cured or waived or shall have ceased to exist or the Designated Senior Indebtedness with respect to which such Payment Default shall have occurred shall have been discharged or paid in full in cash or Cash Equivalents or in any other form as acceptable to the Holders of Senior Indebtedness, after which the Company shall resume making any and all required payments in respect of the Debt Securities, including any missed payments." 30 ARTICLE THREE Section 301. Continued Effectiveness of Indenture. Except as amended hereby, the Indenture shall continue in full force and effect. Section 302. Purpose. The purpose of this First Supplemental Indenture is to effect the amendments set forth herein. The Company represents and warrants that all the conditions and requirements necessary to make this First Supplemental Indenture, when duly executed and delivered, a valid and binding agreement in accordance with its terms and for the purposes herein expressed, have been performed and fulfilled. Section 303. Rights of Trustee. The Trustee executes this First Supplemental Indenture only on the condition that it shall have and enjoy with respect thereto all of the rights, duties, and immunities as set forth in the Indenture. Section 304. Successors and Assigns. All covenants and agreements in this First Supplemental Indenture by the Company and the Guarantors shall bind their respective successors and assigns, whether or not so expressed. Section 305. Separability Clause. In case any provision in this First Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 306. Benefits of First Supplemental Indenture. Nothing in this First Supplemental Indenture or in the related Debt Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any Paying Agent and the Holders of Debt Securities of any series created on or after the date hereof, any benefit or any legal or equitable right, remedy or claim under this First Supplemental Indenture. Section 307. Governing Law. This First Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in said state. Section 308. Counterparts. The First Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. Section 309. Effect of Headings and Table of Contents. The Article and Section headings are for convenience only and shall not affect the construction hereof. 31 IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed, all as of the day and year first above written. SINCLAIR BROADCAST GROUP, INC., as Issuer Attest ......................... By: _______________________________ Name: Name: Title: Title: FIRST UNION NATIONAL BANK, as Trustee By: _________________________________ Name: Title: 32 STATE OF ...........................) ) ss.: COUNTY OF ..........................) On the day of ______, ____, before me personally came ____________, to me known, who, being by me duly sworn, did depose and say that he resides at______________ ________ ; that he is of Sinclair Broadcast Group, Inc., the corporation described in and which executed the foregoing instrument; and that he signed his name thereto pursuant to authority of the Boards of Directors of such corporation. (NOTARIAL SEAL) ............................................ 33 STATE OF ...........................) ) ss.: COUNTY OF ..........................) On the day of ______, ____, before me personally came___________ ______, to me known, who, being by me duly sworn, did depose and say that he resides at ___________ ______ ______ ; that he is an authorized officer of First Union National Bank, one of the corporations described in and which executed the above instrument; that he knows the corporate seal of such corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed pursuant to authority of the Board of Directors of such corporation; and that he signed his name thereto pursuant to like authority. (NOTARIAL SEAL) ............................................ 34 EX-4.2 5 EXHIBIT 4.2 EXHIBIT 4.2 Certificate Number Number of Preferred Securities P- CUSIP NO. 829226505 Certificate Evidencing Series D Preferred Stock, par value $.01 per share of SINCLAIR BROADCAST GROUP, INC. Sinclair Broadcast Group, Inc., a corporation incorporated in the State of Maryland (the "Company"), hereby certifies that __________ (the "Holder") is the registered owner of ___________ shares of Series D Preferred Stock, par value $.01 of the Company (the "Series D Preferred Stock"). The shares of Series D Preferred Stock are transferable on the books and records of the Company, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Series D Preferred Stock are set forth in, and this certificate and the Series D Preferred Stock represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Articles Supplementary relating to the Series D Preferred Stock filed with the Maryland Department of Assessment and Taxation, as the same may be amended from time to time, including the designation of the terms of Series D Preferred Stock as set forth therein. A copy of the Articles Supplementary may be obtained free of charge from the Company upon request. IN WITNESS WHEREOF, this certificate has been executed this __rd day of __________ ______, by the undersigned on behalf of Sinclair Broadcast Group, Inc. - --------------------------- ---------------------- President Secretary [Seal] EXHIBIT 4.2 (Continued) ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Series D Preferred Stock Certificate to: - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (Insert assignee's social security or tax identification number) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (Insert address and zip code of assignee) and irrevocably appoints - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------ agent to transfer this Series D Preferred Stock Certificate on the books of the Company. The agent may substitute another to act for him or her. Date:__________________ Signature:________________________ (Sign exactly as your name appears on the other side of the Series D Preferred Stock Certificate. Sinclair Broadcast Group, Inc. September 19, 1997 EX-5.1 6 EXHIBIT 5.1 Wilmer, Cutler & Pickering 100 Light Street Baltimore, Maryland (410) 986-2800 (phone) (410) 986-2828 (fax) September 19, 1997 Sinclair Broadcast Group, Inc. 2000 West 41st Street Baltimore, Maryland 21211 Re: Sinclair Broadcast Group, Inc. Registration Statement on Form S-3 Dear Ladies and Gentlemen: We have acted as counsel to Sinclair Broadcast Group, Inc., a Maryland corporation (the "Company"), in connection with a Registration Statement (as amended, and including prospectus supplements filed pursuant to Rule 424 of the Securities Act of 1933, the "Registration Statement") on Form S-3 filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended. The Registration Statement relates to the registration of the issuance by the Company of, among other things, 4,000,000 shares of Class A Common Stock of the Company, par value $0.01 per share (the "Class A Common Stock"), 3,000,000 shares of $3.00 Series D Convertible Exchangeable Preferred Stock, par value $0.01 per share (the "Convertible Exchangeable Preferred Shares"), and 6% Convertible Subordinated Exchange Debentures due September 15, 2012 (the "Exchange Debentures") and the sale by certain Selling Stockholders identified therein of up to 1,300,000 shares of Class A Common Stock (together with the 4,000,000 shares of Class A Common Stock offered by the Company, the "Class A Common Shares"). The Class A Common Shares are to be sold pursuant to an Underwriting Agreement (the "Common Stock Underwriting Agreement") by and among the Company, certain Selling Stockholders named therein, and Smith Barney Inc., BT Alex. Brown Incorporated, Credit Suisse First Boston Corporation, Salomon Brothers Inc, Chase Securities Inc. and Furman Selz LLC (the "Representatives"), as representative of the Underwriters. The Convertible Exchangeable Preferred Shares are to be sold pursuant to an Underwriting Agreement (the "Preferred Stock Underwriting Agreement") by and among the Company and the Representatives. For the purposes of this opinion, we have examined copies of the following documents: 1. The Registration Statement; Sinclair Broadcast Group, Inc. September 19, 1997 Page 2 2. The Amended and Restated Articles of Incorporation of the Company; 3. The Articles Supplementary to the Amended and Restated Articles of Incorporation of the Company governing the Convertible Exchangeable Preferred Shares; 4. The form of the Subordinated Indenture (the "Indenture") between the Company and the First Union National Bank, as Trustee (the "Trustee"); 5. The form of the First Supplemental Indenture (the "Supplemental Indenture") between the Company and the Trustee; 6. The Bylaws of the Company; 7. The Common Stock Underwriting Agreement; 8. The Preferred Stock Underwriting Agreement; and 9. The Resolutions of the Board of Directors of the Company dated September 12, 1997. In our examination of the aforesaid documents, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the completeness and authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, telecopied, photostatic or reproduced copies. This opinion is limited to the laws of the United State, the General Corporation Law of Maryland and New York contract law (but not including any statutes, ordinances, administrative decisions, rules or regulations of any political subdivision of the State of New York). We are members of the Bar of the State of Maryland and do not hold ourselves out as being experts in the laws of any other jurisdiction. Although we do not hold ourselves out as being experts in the laws of any other jurisdiction, we have made such investigation of the laws of the State of New York as we deemed necessary to express the opinions set forth herein. Our opinion is rendered only with respect to the laws and the rules, regulations and orders thereunder that are currently in effect. Based upon, subject to, and limited by the foregoing, we are of the opinion that: Sinclair Broadcast Group, Inc. September 19, 1997 Page 3 1. The Class A Common Shares have been lawfully and duly authorized and such Class A Common Shares, when issued and delivered in accordance with the terms of the Common Stock Underwriting Agreement, will be validly issued, fully paid and nonassessable. 2. The Convertible Exchangeable Preferred Shares have been lawfully and duly authorized and such Convertible Exchangeable Preferred Shares, when issued and delivered in accordance with the terms of the Preferred Stock Underwriting Agreement, will be validly issued, fully paid and nonassessable. 3. The Company has the legal authority to issue the Exchange Debentures that may be issued upon conversion of the Convertible Exchangeable Preferred Shares and such Exchange Debentures, when issued and delivered in accordance with the Indenture and the Supplemental Indenture, will, assuming due authorization prior to such issuance, constitute valid and binding obligations of the Company, enforceable in accordance with their terms, except as (a) the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or similar laws now or hereinafter in effect relating to or affecting the enforcement of creditors' rights generally and (b) the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a proceeding at law or in equity). We assume no obligation to advise you of any changes in the foregoing subsequent to the delivery of this opinion. This opinion has been prepared solely for your use in connection with the filing of the Form 8-K on September 22, 1997 and incorporation by reference into the Registration Statement, and should not be quoted in whole or in part or otherwise be referred to, nor otherwise be filed with or furnished to any governmental agency or other person or entity, without our express prior written consent. We hereby consent to the filing of this opinion as an exhibit to the Form 8-K and incorporation by reference into the Registration Statement and to the use of our name therein under the caption "Legal Matters." Sincerely, WILMER, CUTLER & PICKERING By: /s/ John B. Watkins -------------------------------------- John B. Watkins, a partner EX-5.2 7 EXHIBIT 5.2 LAW OFFICES THOMAS & LIBOWITZ, P.A. A Professional Association Suite 1100 100 Light Street BALTIMORE MARYLAND 21202-1053 (410) 752-2468 ------ FAX (410) 752-2046 (410) 752-2049 STEVEN ANARGYROS THOMAS** COUNSEL MICHAEL S. LIBOWITZ BASIL A. THOMAS ROBERT J. LYNOTT SUSAN M. RITTENHOUSE JOHN R. WISE CLINTON R. BLACK IV C. WAYNE DAVIS PETER W. TALIAFERRO THOMAS C. SWISS MARGARET L. ARGENT *** MICHAEL L .J COLLINS DAVID P CHAISSON JAMES E MYERS CHARLES B. JONES September 19, 1997 * ALSO MEMBER OF D.C. BAR ** ALSO MEMBER OF CA BAR * ALSO MEMBER OF VA BAR Sinclair Broadcast Group, Inc. 2000 West 41 ST Street Baltimore, Maryland 21211 Re: Sinclair Broadcast Group, Inc. Registration Statement on Form S-3 Dear Ladies and Gentlemen: We have acted as counsel to Sinclair Broadcast Group Inc. a Maryland corporation (the "Company"), in connection with a Registration Statement (as amended and including prospectus supplements filed pursuant to Rule 424 of the Securities Act of 1933. the "Registration Statement") on Form S-3 filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended. The Registration Statement relates to the registration of the issuance by the Company of, among other things, 4,000,000 shares of Class A Common Stock of the Company, par value $0.01 per share (the "Class A Common Stock"), 3,000,000 shares of $3.00 Series D Convertible Exchangeable Preferred Stock, par value $0.01 per share (the "Convertible Exchangeable Preferred Shares"), and 6% Convertible Subordinated Exchange Debentures due September 15, 2012 (the "Exchange Debentures) and the sale by certain Selling Stockholders identified in the Registration Statement of up to 1,300.000 shares of Class A Common Stock (together with the 4,000,000 shares of Class A Common Stock offered by the Company, the "Class A Common Shares"). The Class A Common Shares are to be sold pursuant to an Underwriting Agreement (the "Common Stock Underwriting Agreement") by and among the Company, certain Selling Stockholders named therein and Smith Barney Inc., BT Alex. Brown Incorporated, Credit Suisse First Boston Corporation, Salomon Brothers Inc., Chase Securities Inc. and Furman Selz LLC (the "Representatives"), as representative of the Underwriters. The Convertible Exchangeable Preferred Shares are to be sold pursuant to an Underwriting Agreement (the "Preferred Stock Underwriting Agreement by and among the Company and the Representatives. Sinclair Broadcast Inc. September 19, 1997 Page 2 For the Purposes of this opinion, we have examined copies of the following documents: 1. The Registration Statement; 2. The Amended and Restated Articles of Incorporation of the Company; 3. The Articles Supplementary to the Amended and Restated Articles of Incorporation of the Company governing the Convertible Exchangeable Preferred Shares; 4. The form of the Subordinated Indenture (the "Indenture") between the Company and the First Union National Bank, as Trustee (the "Trustee"); 5. The form of the First Supplemental Indenture (the "Supplemental Indenture") between the Company and the Trustee; 6. The Bylaws of the Company; 7. The Common Stock Underwriting Agreement; 8. The Preferred Stock Underwriting Agreement; and 9. The Resolutions of the Board of Directors of the Company dated September 12, 1997. In our examination of the aforesaid documents, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the completeness and authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, telecopied, photostatic or reproduced copies. This opinion is limited to the laws of the United States and the State of Maryland. We are members of the Bar of the State of Maryland and do not hold ourselves out as being experts in the laws of any other jurisdiction. Based upon, subject to, and limited by the foregoing, we are of the opinion that: 1. The Class A Common Shares have been lawfully and duly authorized and such Class A Common Shares, when issued and delivered in accordance with the teens of the Common Stock Underwriting Agreement, will be validly issued, fully paid and nonassessable. Sinclair Broadcast Group, Inc. September 19, 1997 Page 3 2. The Convertible Exchangeable Preferred Shares have been lawfully and duly authorized and such Convertible Exchangeable Preferred Shares, when issued and delivered in a accordance with the terns of the Preferred Stock Underwriting Agreement, will be validly issued. fully paid and nonassessable. 3. The Company has the legal authority to issue the Exchange Debentures that may be issued upon conversion of the Convertible Exchangeable Preferred Shares and such Exchange Debentures when issued and delivered in accordance with the Indenture and the Supplemental Indenture, will, assuming due authorization prior to such issuance, constitute valid and binding obligations of the Company, enforceable in accordance with Weir terms, except as (a) the enforceability thereof may be limited by bankruptcy' insolvency, reorganization, fraudulent transfer, moratorium or similar laws now or hereinafter in effect relating to or affecting the enforcement of creditors' rights generally and (b) the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether considered in a proceeding at law or in equity). We assume no obligation to advise you of any changes in the foregoing subsequent to the delivery of this opinion. This opinion has been prepared solely for your use in connection with the filing of the Form 8-K on September 22, 1997 and incorporation by reference into the Registration Statement, and should not be quoted in whole or in part or otherwise be referred to, nor otherwise be field with or furnished to any governmental agency or other person or entity, without our express prior written consent. We hereby consent to the filing of this opinion as an exhibit to the Form 8-K and incorporation by reference into the Registration Statement and to the use of our name therein under the caption "Legal Matters." Sincerely, /S/ THOMAS & LIBOWITZ P.A. -----END PRIVACY-ENHANCED MESSAGE-----