Exhibit 1.1
[________] Shares
ITC/\DELTACOM, INC.
Common Stock (par value $.01 per share)
UNDERWRITING AGREEMENT
[________ __], 1997
[_____________], 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇.▇. ▇▇▇▇▇▇▇▇ & Co.
Wheat, First Securities, Inc.
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
ITC/\DeltaCom, Inc. a Delaware corporation (the "Company"), proposes
to issue and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters") [____] shares of its Common Stock (par value $.01 per share)
(the "Firm Shares").
The Company also proposes to issue and sell to the several
Underwriters not more than an additional [______] shares of its Common Stock
(par value $.01 per share) (the "Additional Shares") if and to the extent that
you, as managers of the offering, shall have determined to exercise, on behalf
of the Underwriters, the right to purchase such shares of common stock granted
to the Underwriters in Section 2 hereof. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "Shares". The shares of
Common Stock (par value $.01 per share) of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the "Common Stock".
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement, including a prospectus, relating to
the Shares. The registration statement, as amended at the time it becomes
effective, including the exhibits thereto and the information (if any) deemed to
be part of the registration statement at the time of effectiveness pursuant to
Rule 430A under the Securities Act of 1933, as amended (the "Securities Act"),
is hereinafter referred to as the "Original Registration Statement"; any
registration statement filed pursuant to Rule 462(b) under the Securities Act is
hereinafter referred to as the "Rule 462(b) Registration Statement"; the
Original Registration Statement and any Rule 462(b) Registration Statement are
hereinafter referred to collectively as the "Registration Statement"; the
prospectus in the form first used to confirm sales of Shares is hereinafter
referred to as the "Prospectus".
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As part of the offering contemplated by this Agreement, ▇.▇. ▇▇▇▇▇▇▇▇
& Co. ("▇.▇. ▇▇▇▇▇▇▇▇") has agreed to reserve out of the Firm Shares set forth
opposite its name on Schedule I to this Agreement, up to [__________] shares,
for sale to the Company's employees, officers and directors and certain other
individuals who have expressed an interest in purchasing shares of Common Stock
(collectively, "Participants"), as set forth in the Prospectus under the heading
"Underwriters" (the "Directed Share Program"). The Shares to be sold by ▇.▇.
▇▇▇▇▇▇▇▇ pursuant to the Directed Share Program (the "Directed Shares") will be
sold by ▇.▇. ▇▇▇▇▇▇▇▇ pursuant to this Agreement at the Public Offering Price
(as defined), except for [__________] shares of Common Stock reserved for sale
to the Company's employees, officers and directors, which will be sold at the
Public Offering Price less the Concession (as defined). Any Directed Shares not
orally confirmed for purchase by any Participants by the end of the first
business day after the date on which this Agreement is executed will be offered
to the public by ▇.▇. ▇▇▇▇▇▇▇▇ as set forth in the Prospectus.
1. Representations and Warranties. The Company represents and
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warrants to each of the Underwriters that:
(a) The Original Registration Statement has become effective, and
if the Company has elected to rely upon Rule 462(b) under the Securities
Act, the Rule 462(b) Registration Statement shall have become effective not
later than the earlier of (i) 10:00 p.m. Eastern time on the date hereof
and (ii) the time confirmations are sent or given, as specified by
Rule 462(b) under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) Each part of the Registration Statement, when such part
became effective, did not contain and each such part, as amended or
supplemented, if applicable, will not contain any 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,
(ii) the Registration Statement and the Prospectus comply and, as amended
or supplemented, if applicable, will comply in all material respects with
the Securities Act and the applicable rules and regulations of the
Commission thereunder and (iii) the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this paragraph (b) do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business
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as described in the Prospectus and is duly qualified to transact business
and is in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole; Schedule [_] to the form of opinion
of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., attached hereto as Exhibit A, sets forth each
jurisdiction in which the conduct of the Company's business or its
ownership or leasing of property requires the Company to be qualified as a
foreign corporation, other than jurisdictions in which the failure to be
qualified in all such jurisdictions would not, in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(d) Each subsidiary of the Company has been duly incorporated, is
validly existing in good standing under the laws of the jurisdiction of its
incorporation, has the power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified
to transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole; Schedule [_] to the
form of opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., attached hereto as Exhibit A,
sets forth each jurisdiction in which the conduct of the Company's
subsidiaries (other than DeltaCom, Inc.'s) businesses or their ownership or
leasing of property requires such subsidiaries to be qualified as a foreign
corporation, other than jurisdictions in which the failure to be qualified
in all such jurisdictions would not, in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
Schedule [_] to the form of opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇, attached hereto as
Exhibit D, sets forth each jurisdiction in which the conduct of DeltaCom,
Inc.'s business or its ownership or leasing of property requires DeltaCom,
Inc. to be qualified as a foreign corporation, other than jurisdictions in
which the failure to be qualified in all such jurisdictions would not, in
the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(e) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(f) The shares of Common Stock outstanding prior to the issuance of
the Shares have been duly authorized and are validly issued, fully paid and
non-assessable.
(g) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares will
not be subject to any preemptive or similar rights.
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(h) This Agreement has been duly authorized, executed and delivered
by the Company.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement and the
issuance, sale and delivery of the Shares will not contravene any provision
of applicable law or the certificate of incorporation or by-laws of the
Company or any material agreement or other material instrument binding upon
the Company or any of its subsidiaries, or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the Company
or any of its subsidiaries, and no permit, license, consent, approval,
authorization or order of, or filing, declaration or qualification with,
any governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares. Schedule [_] to the form
of opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., attached hereto as Exhibit A, sets
forth all material agreements and instruments to which the Company or any
of its subsidiaries (other than DeltaCom, Inc.) is a party. Schedule [_] to
the form of opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇, attached hereto as Exhibit D, sets
forth all material agreements and instruments to which DeltaCom, Inc. is a
party.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Prospectus. Furthermore, except in each case as described
in the Prospectus, (i) the Company and its subsidiaries have not incurred
any material liability or obligation, direct or contingent, nor entered
into any material transaction not in the ordinary course of business;
(ii) neither the Company nor any of its subsidiaries has purchased any of
the Company's outstanding capital stock, nor declared, paid or otherwise
made any dividend or distribution of any kind on the Company's capital
stock; and (iii) there has not been any material change in the capital
stock, short-term debt or long-term debt of the Company and its
subsidiaries, taken as a whole.
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration Statement or
the Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(l) Each of the Company and its subsidiaries (i) has all necessary
consents, authorizations, approvals, orders, certificates and permits of
and from, and has made all declarations and filings with, all federal,
state, local and other governmental,
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administrative or regulatory authorities, all self-regulatory organizations
and all courts and other tribunals, to own, lease, license and use its
properties and assets and to conduct its business in the manner described
in the Prospectus, except to the extent that the failure to obtain such
consents, authorizations, approvals, orders, certificates and permits or
make such declarations and filings would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole, and (ii) has not
received any notice of proceedings relating to revocation or modification
of any such consent, authorization, approval, order, certificate or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would reasonably be expected to result in a
material adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries, taken
as a whole, except as described in or contemplated by the Prospectus.
(m) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act or incorporated by reference
into or filed as part of the Rule 462(b) Registration Statement, complied
when so filed in all material respects with the Securities Act and the
rules and regulations of the Commission thereunder.
(n) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(o) The Company and each of its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants, including all such laws and regulations concerning
electromagnetic radio frequency emissions ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or approvals or failure
to comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(p) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any
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potential liabilities to third parties) which would, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(q) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(r) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to their
businesses, in each case free and clear of all liens, encumbrances and
defects, except such as are described in the Prospectus, such as do not
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by them; and any real
property and buildings held under lease by them are held under valid,
subsisting and enforceable leases with such exceptions as are not material
and do not materially interfere with the use made and proposed to be made
of such property and buildings by them, in each case except as described in
or contemplated by the Prospectus.
(s) The Company and its subsidiaries own or possess, or can acquire
on reasonable terms, all material patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names currently
employed by them in connection with their businesses as now operated, and
neither the Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to
any of the foregoing which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in any material
adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries, taken
as a whole.
(t) No material labor dispute with the employees of the Company or
any of its subsidiaries exists, except as described in or contemplated by
the Prospectus, or, to the knowledge of the Company, is imminent; and the
Company is not aware of any existing, threatened or imminent labor
disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could result in any material adverse
change in the condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole.
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(u) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses in
which they are engaged; neither the Company nor any of its subsidiaries has
been refused any insurance coverage sought or applied for; and neither the
Company nor any of its subsidiaries has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not materially
and adversely affect the condition, financial or otherwise, or the
earnings, business or operations of the Company and its subsidiaries, taken
as a whole, except as described in or contemplated by the Prospectus.
(v) The historical and pro forma financial statements included in
the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the related
published rules and regulations.
(w) There are no holders of securities (debt or equity) of the
Company or any of its subsidiaries, or holders of rights, options, or
warrants to obtain securities of the Company or any of its subsidiaries,
who have the right, during the 180 day period after the date of this
Agreement to request the Company to register securities held by them under
the Securities Act, other than holders who have waived such right for the
180 day period after the date of the initial public offering of the Shares
and have waived their rights with respect to the inclusion of their
securities in the Registration Statement.
Furthermore, the Company represents and warrants to ▇.▇. ▇▇▇▇▇▇▇▇
that (i) the Registration Statement, the Prospectus and any preliminary
prospectus comply, and any further amendments or supplements thereto will
comply, with any applicable laws or regulations of foreign jurisdictions in
which the Prospectus or any preliminary prospectus, as amended or supplemented,
if applicable, are distributed in connection with the Directed Share Program,
and that (ii) no authorization, approval, consent, license, order, registration
or qualification of or with any government, governmental instrumentality or
court, other than such as have been obtained, is necessary under the securities
laws and regulations of foreign jurisdictions in which the Directed Shares are
offered outside the United States.
2. Agreement to Sell and Purchase. The Company hereby agrees to
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sell to the several Underwriters, and the Underwriters, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agree, severally and not jointly, to purchase from the
Company the respective numbers of Firm Shares set forth in Schedule I hereto
opposite their names at $[_____] a share (the "Purchase Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Shares, and the Underwriters shall have a
one-time right to purchase, severally
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and not jointly, up to [_________] Additional Shares at the Purchase Price.
Additional Shares may be purchased as provided in Section 4 hereof solely for
the purpose of covering overallotments made in connection with the offering of
the Firm Shares. If any Additional Shares are to be purchased, each Underwriter
agrees, severally and not jointly, to purchase the number of Additional Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of Firm Shares set forth in Schedule I
hereto opposite the name of such Underwriter bears to the total number of Firm
Shares.
The Company hereby agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), it will not, for a period
of 180 days after the date of the Prospectus, (i) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
such shares of Common Stock, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, other than (a) the sale of the Shares to the
Underwriters pursuant to this Agreement, (b) transactions relating to shares of
Common Stock or other securities acquired in open market transactions after the
completion of the public offering of the Common Stock hereunder or (c) the
issuance by the Company of shares of Common Stock upon the exercise of an option
or warrant or the conversion of a security, in each case, outstanding on the
date hereof and of which the Underwriters have been advised in writing.
3. Terms of Public Offering. The Company is advised by you that
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the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Original Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Company is
further advised by you that the Shares are to be offered to the public initially
at $[____] a share (the "Public Offering Price") and to certain dealers selected
by you at a price that represents a concession not in excess of $[____] a share
(the "Concession") under the Public Offering Price, and that any Underwriter may
allow, and such dealers may reallow, a concession, not in excess of $[____] a
share, to any Underwriter or to certain other dealers.
4. Payments and Delivery. Payment for the Firm Shares shall be
---------------------
made in federal funds or other funds immediately available in New York City
against delivery of such Firm Shares for the respective accounts of the several
Underwriters at the office of Shearman & Sterling, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 9:00 a.m., New York City time, on [______], 1997, or at
such other time on the same or such other date, not later than [________], 1997,
as shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Closing Date".
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Payment for any Additional Shares shall be made in federal funds or
other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at the
office of Shearman & Sterling, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
at 9:00 a.m., New York City time, on such date (which may be the same as the
Closing Date but shall in no event be earlier than the Closing Date nor later
than ten business days after the giving of the notice hereinafter referred to)
as shall be designated in a written notice from you to the Company of your
determination, on behalf of the Underwriters, to purchase a number, specified in
said notice, of Additional Shares, or on such other date, in any event not later
than [______], 1997, as shall be designated in writing by you. The time and date
of such payment are hereinafter referred to as the "Option Closing Date". The
notice of the determination to exercise the option to purchase Additional Shares
and of the Option Closing Date may be given at any time within 30 days after the
date of this Agreement.
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The obligations of
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the Company and the several obligations of the Underwriters hereunder are
subject to the condition that the Registration Statement shall have become
effective not later than the date hereof.
The several obligations of the Underwriters hereunder are subject to
the following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's securities by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act, and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations,
of the Company and its subsidiaries,
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taken as a whole, from that set forth in the Registration Statement,
that, in your judgment, is material and adverse and makes it, in your
judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect set forth in clause (a)(i) above and to the
effect that the representations and warranties of the Company contained in
this Agreement are true and correct in all material respects as of the
Closing Date and that the Company has complied in all material respects
with all of the agreements and satisfied all of the conditions on its part
to be performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the
best of his knowledge as to proceedings threatened.
(c) No stop order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for such purpose shall be
pending before or, to the knowledge of the Company, threatened by the
Commission.
(d) You shall have received on the Closing Date an opinion of ▇▇▇▇▇
& ▇▇▇▇▇▇▇ L.L.P., counsel for the Company, dated the Closing Date, in the
form set forth in Exhibit A.
The opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P. shall be rendered to you at the
request of the Company and shall so state therein.
(e) You shall have received on the Closing Date an opinion of
Brantley & ▇▇▇▇▇▇▇▇▇, P.C., Alabama communications counsel for the Company,
dated the Closing Date, in the form set forth in Exhibit B.
The opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C. shall be rendered to you at
the request of the Company and shall so state therein.
(f) You shall have received on the Closing Date an opinion of
Stowers, Hayes, ▇▇▇▇▇ & ▇▇▇▇▇, Georgia communications counsel for the
Company, dated the Closing Date, in the form set forth in Exhibit C.
The opinion of Stowers, Hayes, ▇▇▇▇▇ & ▇▇▇▇▇ shall be rendered to you
at the request of the Company and shall so state therein.
(g) You shall have received on the Closing Date an opinion of
▇▇▇▇▇▇ ▇▇▇▇▇▇, General Counsel of DeltaCom, Inc., dated the Closing Date,
in the form set forth in Exhibit D.
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The opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ shall be rendered to you at the request
of the Company and DeltaCom, Inc. and shall so state therein.
(h) You shall have received on the Closing Date an opinion of
Shearman & Sterling, counsel for the Underwriters, dated the Closing Date,
in form and substance satisfactory to you.
(i) You shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to you, from the Company's
independent public accountants, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(j) The "lock-up" agreements, each substantially in the form of
Exhibit E hereto, between you and certain stockholders, officers and
directors of the Company relating to sales and certain other dispositions
of shares of Common Stock or any securities convertible into or exercisable
or exchangeable for such Common Stock, delivered to you on or before the
date hereof, shall be in full force and effect on the Closing Date.
(k) The Company shall have complied with the provisions of Section
6(a) hereof with respect to the furnishing of Prospectuses on the business
day next following the date of this Agreement, in such quantities as you
shall have reasonably requested.
(l) The Shares shall have been approved for quotation on the Nasdaq
National Market System by the National Association of Securities Dealers,
Inc. (the "NASD").
(m) ITC Holding Company, Inc. shall have consummated on or prior to
the Closing Date (i) the transfer of all of its assets (other than its
stock in the Company) and all of its liabilities to another entity and then
(ii) the merger with and into the Company (the "Merger").
(n) You shall have received such other documents and certificates
as you or your counsel may request.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on the Option Closing Date
of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Additional
Shares and other matters related to the issuance of the Additional Shares.
12
6. Covenants of the Company. In further consideration of the
------------------------
agreements of the Underwriters herein contained, the Company covenants as
follows:
(a) To furnish to you, without charge, [_____] signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and, during the period mentioned in paragraph
(c) below, as many copies of the Prospectus and any supplements and
amendments thereto or to the Registration Statement as you may reasonably
request. In the case of the Prospectus, to furnish copies of the Prospectus
in New York City, prior to 10:00 a.m., on the business day next following
the date of this Agreement, in such quantities as you reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and to file no such proposed amendment or supplement to which
you reasonably object.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will furnish
to the Company) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with applicable law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request and to pay all expenses (including fees and disbursements of
counsel) in connection with such qualification and in connection with any
review of the offering of the Shares by the NASD.
(e) If the Company elects to rely on Rule 462(b) under the
Securities Act, the Company shall file a Rule 462(b) Registration Statement
with the Commission in compliance with Rule 462(b) under the Securities Act
no later than the earlier of (i) 10:00 p.m. Eastern time on the date hereof
and (ii) the time confirmations are sent or
13
given, as specified by Rule 462(b)(2) under the Securities Act, and shall
pay the applicable fees in accordance with Rule 111 under the Securities
Act.
(f) To make generally available to the Company's security holders
and to you, as soon as practicable but not later than 60 days after the end
of the twelve-month period beginning at the end of the Company's fiscal
quarter during which the effective date of the Original Registration
Statement occurs, an earnings statement of the Company covering such
twelve-month period that satisfies the provisions of Section 11(a) of the
Securities Act and the rules and regulations of the Commission thereunder.
(g) To use the net proceeds received by the Company from the sale
of the Shares hereunder in the manner specified in the Prospectus under the
caption "Use of Proceeds".
(h) That in connection with the Directed Share Program, the Company
will ensure that the Directed Shares will be restricted to the extent
required by the NASD or the NASD rules from sale, transfer, assignment,
pledge or hypothecation for a period of three months following the date of
the effectiveness of the Registration Statement. ▇.▇. ▇▇▇▇▇▇▇▇ will notify
the Company as to which Participants will need to be so restricted. At the
request of ▇.▇. ▇▇▇▇▇▇▇▇, the Company will direct the transfer agent to
place stop transfer restrictions upon such securities for such period of
time.
(i) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
the following: (i) the fees, disbursements and expenses of the Company's
counsel and the Company's accountants in connection with the registration
and delivery of the Shares under the Securities Act and all other fees or
expenses in connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments and
supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof to
the Underwriters and dealers, in the quantities hereinabove specified, (ii)
all costs and expenses related to the transfer and delivery of the Shares
to the Underwriters, including any transfer or other taxes payable thereon,
(iii) the cost of printing or producing any Blue Sky or legal investment
memorandum in connection with the offer and sale of the Shares under state
securities laws and all expenses in connection with the qualification of
the Shares for offer and sale under state securities laws as provided in
Section 6(d) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) all filing fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification of
the offering of the Shares by the NASD, (v) all fees and disbursements of
counsel incurred by the Underwriters in connection with the
14
Directed Share Program and stamp duties, similar taxes or duties or other
taxes, if any, incurred by the Underwriters in connection with the Directed
Share Program, (vi) all fees and expenses in connection with the
presentation and filing of the registration statement on Form 8-A relating
to the Common Stock and all costs and expenses incidental to quoting the
Shares on the Nasdaq National Market System, (vii) the cost of printing
certificates representing the Shares, (viii) the costs and charges of any
transfer agent, registrar or depositary, (ix) the costs and expenses of the
Company relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Shares, including,
without limitation, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Company, travel and lodging expense of the representatives and officers of
the Company and any such consultants, and the cost of any aircraft
chartered in connection with the road show, and (x) all other costs and
expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section. It is
understood, however, that except as provided in this Section, Section 7 and
the last paragraph of Section 9 below, the Underwriters will pay all of
their costs and expenses, including fees and disbursements of their
counsel, stock transfer taxes payable on resale of any of the Shares by
them, and any advertising expenses connected with any offers they may make.
Furthermore, the Company covenants with ▇.▇. ▇▇▇▇▇▇▇▇ that the
Company will comply with all applicable securities and other applicable laws,
rules and regulations in each foreign jurisdiction in which the Directed Shares
are offered in connection with the Directed Share Program.
7. Indemnity and Contribution. (a) The Company agrees to
--------------------------
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or is under common control with, or is controlled by, such
Underwriter, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by any Underwriter or any such controlling or affiliated
person in connection with defending or investigating any such action or claim)
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein; provided, however,
-------- -------
that the foregoing indemnity agreement with respect to any preliminary
15
prospectus shall not inure to the benefit of any Underwriter (or any other
person indemnified pursuant to this paragraph (a)) to the extent that any such
losses, claims, damages or liabilities result from the fact that such
Underwriter sold securities to a person to whom there was not sent or given by
or on behalf of such Underwriter (if required by law so to have been delivered)
a copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) at or prior to the written
confirmation of the sale of the Shares to such person, and if the losses,
claims, damages or liabilities result from an untrue statement or alleged untrue
statement or an omission or alleged omission contained in such preliminary
prospectus that was corrected in the Prospectus (as so amended or supplemented),
unless such failure is the result of noncompliance by the Company with Section
6(a) hereof.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) The Company also agrees to indemnify and hold harmless
▇.▇. ▇▇▇▇▇▇▇▇ and each person, if any, who controls ▇.▇. ▇▇▇▇▇▇▇▇ within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, or is under common control with, or is controlled by, ▇.▇. ▇▇▇▇▇▇▇▇ (AJ.▇.
▇▇▇▇▇▇▇▇ Entities@), from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) (i) caused by any untrue statement or alleged untrue statement
of a material fact contained in the prospectus wrapper material prepared by or
with the consent of the Company for distribution in foreign jurisdictions in
connection with the Directed Share Program attached to the Prospectus or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statement therein, when considered in conjunction with the Prospectus or any
applicable preliminary prospectus, not misleading; (ii) caused by the failure of
any Participant to pay for and accept delivery of the shares which, immediately
following the effectiveness of the Registration Statement, were subject to a
properly confirmed agreement to purchase; or (iii) related to, arising out of,
or in connection with the Directed Share Program, provided that, the Company
shall not be responsible under this clause (iii) for any losses, claim, damages
or liabilities (or expenses relating thereto) that are finally judicially
determined to have resulted from the bad faith or gross negligence of ▇.▇.
▇▇▇▇▇▇▇▇ Entities.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to paragraph (a), (b) or (c) of this Section 7,
such person (the "indemnified party") shall
16
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all such indemnified parties and that all
such fees and expenses shall be reimbursed as they are incurred. Such firm shall
be designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in the case of parties indemnified
pursuant to paragraph (a) or (c) of this Section 7 and by the Company in the
case of parties indemnified pursuant to paragraph (b) of this Section 7.
Notwithstanding anything contained herein to the contrary, if indemnity may be
sought pursuant to paragraph (c) of this Section 7 in respect of such action or
proceeding, then in addition to such separate firm for the indemnified parties,
the indemnifying party shall be liable for the reasonable fees and expenses of
not more than one separate firm (in addition to any local counsel) for ▇.▇.
▇▇▇▇▇▇▇▇ for the defense of any losses, claims, damages and liabilities arising
out of the Directed Share Program, and all persons, if any, who control ▇.▇.
▇▇▇▇▇▇▇▇ within the meaning of either Section 15 of the Act or Section 20 of the
Exchange Act or are under common control with, or are controlled by, ▇.▇.
▇▇▇▇▇▇▇▇. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
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 includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
17
(e) To the extent the indemnification provided for in paragraph
(a), (b) or (c) of this Section 7 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company 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 on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, 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 in connection
with the offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Shares (before
deducting expenses) received by the Company and the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth in the
table on the cover of the Prospectus, bear to the aggregate Public Offering
Price of the Shares. 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 or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the respective number of
Shares they have purchased hereunder, and not joint.
(f) The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 7 were determined by
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 (e) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (e) 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
or defending any such action or claim. 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 price at which the Shares underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages that 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 Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 7 are not exclusive
18
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in this
Section 7 and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or by or on
behalf of the Company, its officers or directors or any person controlling the
Company and (iii) acceptance of and payment for any of the Shares.
8. Termination. This Agreement shall be subject to termination by
-----------
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the NASD, the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in your judgment, is material and
adverse and (b) in the case of any of the events specified in clauses (a)(i)
through (iv), such event singly or together with any other such event makes it,
in your judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall
--------------------------------------
become effective upon the later of (x) execution and delivery hereof by the
parties hereto and (y) release of notification of the effectiveness of the
Original Registration Statement by the Commission.
If, on the Closing Date or the Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I bears to the
aggregate number of Firm Shares set forth opposite the names of all such
nondefaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
--------
number of Shares that any Underwriter has agreed to purchase pursuant to Section
2 be increased pursuant to this Section 9 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date or the
19
Option Closing Date, as the case may be, any Underwriter or Underwriters shall
fail or refuse to purchase Shares and the aggregate number of Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Shares to be purchased on such date, and arrangements satisfactory to
you and the Company for the purchase of such Shares are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case either you or
the Company shall have the right to postpone the Closing Date or the Option
Closing Date, as the case may be, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and in
the Prospectus or in 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 default of such Underwriter under this
Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or more
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by the laws of
--------------
the State of New York.
20
12. Headings. The headings of the sections of this Agreement have
--------
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
Very truly yours,
ITC/\DELTACOM, INC.
By
------------------------------
Name:
Title:
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED
▇.▇. ▇▇▇▇▇▇▇▇ & CO.
WHEAT, FIRST SECURITIES, INC.
Acting severally on behalf of themselves
and the several Underwriters
named in Schedule I hereto.
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By
--------------------------
Name:
Title:
SCHEDULE I
Number of
Firm Shares
Underwriter To Be Purchased
----------- ---------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇.▇. ▇▇▇▇▇▇▇▇ & Co.
Wheat, First Securities, Inc.
---------------
Total Firm Shares.........................................
===============
EXHIBIT A
Pursuant to Section 5(d) of the Underwriting Agreement, ▇▇▇▇▇ &
▇▇▇▇▇▇▇ L.L.P., counsel for the Company, shall furnish an opinion to the effect
that:
(a) Each of the Company and the subsidiaries of the Company (other
than DeltaCom, Inc.) has been duly incorporated, and is validly existing and in
good standing, as of the date of the certifications specified in such counsel's
opinion letter, under the laws of the State of Delaware. Each of the Company and
the subsidiaries of the Company (other than DeltaCom, Inc.) is authorized to
transact business as a foreign corporation in each jurisdiction specified in a
schedule attached to such counsel's opinion letter with respect to it, as of the
respective dates specified therein.
(b) Each of the Company and the subsidiaries of the Company (other
than DeltaCom, Inc.) has the corporate power and corporate authority under its
Certificate of Incorporation and Bylaws and the Delaware General Corporation Law
to own its property and conduct its business as described in the Prospectus.
(c) The Underwriting Agreement has been duly authorized, executed and
delivered on behalf of the Company.
(d) The authorized capital stock of the Company conforms in all
material respects to the description thereof set forth in the Prospectus under
the caption "Description of Capital Stock".
(e) The shares of Common Stock outstanding prior to the issuance of
the Shares have been duly authorized and, assuming the receipt of consideration
thereof as provided in resolutions of the Company's Board of Directors
authorizing issuance thereof, are validly issued, fully paid and non-assessable.
(f) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of the Underwriting Agreement, will be
validly issued, fully paid and non-assessable; no holder of outstanding shares
of Common Stock of the Company has any preemptive rights under the Delaware
General Corporation Law, any right to subscribe for any of the Shares pursuant
to the Certificate of Incorporation of the Company or any agreement or other
instrument filed as an exhibit to the Registration Statement or, to such
counsel's knowledge, under any other agreement or instrument.
(g) The execution and delivery by the Company of, and the performance
by the Company as of the Closing Date of its obligations under, the Underwriting
Agreement will not (i) violate the Company's Certificate of Incorporation or
Bylaws, the Delaware General Corporation Law or, to such counsel's knowledge,
any applicable provision of applicable federal law; (ii) breach or constitute a
default under or contravene any contract or
A-2
agreement filed as an exhibit to the Registration Statement; or (iii) to such
counsel's knowledge, violate any existing judgment, order or decree of any
federal or Delaware state governmental body, agency or court to which the
Company is subject; provided, that no opinion is expressed with respect to the
federal securities laws and the federal communications laws (certain matters
with respect to such laws being addressed elsewhere in such counsel's opinion
letter).
(h) No consent, approval, authorization or order of, or qualification
with, any federal or Delaware state governmental body, agency or court having
jurisdiction over the Company is required for the performance as of the Closing
Date by the Company of its obligations under the Underwriting Agreement, except
such as may be required under state securities or "blue sky" laws (as to which
such counsel expresses no opinion) in connection with the offer and sale of the
Shares; provided, that no opinion is expressed with respect to the federal
securities laws and the federal communications laws (certain matters with
respect to such laws being addressed elsewhere in such counsel's opinion
letter).
(i) The information (1) in the Prospectus set forth under the
captions "Risk Factors - Regulation," "Risk Factors - Competition," "Risk
Factors - Dependence on Incumbent Local Exchange Carriers," "Business - Industry
Overview," "Business - Regulation," "Business - Legal Proceedings," "Description
of Capital Stock", "Underwriters" and "Certain United States Federal Tax
Consequences for Non-United States Holders" and (2) in the Registration
Statement in Items 14 and 15, to the extent that such information constitutes
matters of law or legal conclusions, or purports to describe certain provisions
of specified documents, has been reviewed by such counsel and is correct in all
material respects.
(j) The Company is not, and immediately following the issuance and
sale of the Shares and the application of the proceeds thereof as described in
the Prospectus will not be, an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended.
(k) A schedule attached to such counsel's opinion letter lists all
authorizations, licenses and permits of the FCC granted or issued to each of the
Company and its subsidiaries (the "FCC Licenses"). The FCC Licenses constitute
all of the authorizations, licenses or permits of the FCC required as of the
Closing Date for the Company and its subsidiaries to carry on their businesses
as described in the Prospectus. The FCC Licenses are in full force and effect.
(l) The execution and delivery of, and performance as of the Closing
Date by the Company of its obligations under, the Underwriting Agreement
(including the issuance and sale of the Shares) will not result in any violation
of the Communications Act or any rules or regulations of the FCC, nor shall such
execution, delivery or performance cause any
A-3
forfeiture or impairment of any FCC License issued by the FCC to the Company and
its subsidiaries.
(m) The Company is not required to obtain any consent, approval or
authorization from, or to file any declaration or statement with, the FCC in
connection with or as a condition to the execution, delivery of, or performance
as of the Closing Date of obligations under, the Underwriting Agreement.
(n) To such counsel's knowledge, (i) there is no outstanding adverse
judgment, decree or order that has been issued by the FCC against the Company or
any of its subsidiaries and (ii) there is no action, suit, inquiry, notice of
violation, order to show cause, complaint, investigation or proceeding at law or
in equity by or before the FCC, pending or threatened against the Company or any
of its subsidiaries.
(o) To such counsel's knowledge, based upon an examination of
available public files of the FCC in Washington, D.C. and upon representations
of responsible officers of the Company and its subsidiaries, no petitions to
deny or other challenges have been filed against any pending application of the
Company or any of its subsidiaries at the FCC.
(p) No consents, approval, authorization or order of, or
qualification with, any federal governmental body, agency or court having
jurisdiction over the Company or any of its subsidiaries or ITC Holding Company,
Inc. is required to be obtained for the consummation of the Merger, except for
such consents, approvals, authorizations or orders of, or qualifications with,
the FCC, as have been obtained.
(q) The Registration Statement has become effective under the
Securities Act; and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or suspending or preventing the use
of the Prospectus has been issued and no proceedings for that purpose have been
instituted or are threatened by the Commission.
(r) Such counsel (1) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and other financial
information and data included therein or omitted therefrom as to which such
counsel need not express any opinion) comply as to form in all material respects
with the Securities Act and the rules and regulations of the Commission
thereunder, (2) has no reason to believe that (except for financial statements
and other financial information and data included therein as to which such
counsel need not express any belief) the Registration Statement and the
prospectus included therein at the time the Registration Statement became
effective contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, (3) has no reason to believe that (except for
financial statements and other financial information and data included therein
as to which such counsel
A-4
need not express any belief) the Prospectus, as of its date or the Closing Date,
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, (4) has no reason to
believe that there are 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 that are not described or referred to
therein or so filed and (5) has no reason to believe that there are any legal or
governmental proceedings pending or threatened, or pending judgments, orders or
decrees against the Company or any of its subsidiaries that would be required to
be described in the Registration Statement or the Prospectus and not so
described.
EXHIBIT B
Pursuant to Section 5(e) of the Underwriting Agreement, Brantley &
▇▇▇▇▇▇▇▇▇, P.C., Alabama Communications Counsel for the Company, shall furnish
an opinion to the effect that:
(a) A schedule attached to such counsel's opinion letter accurately
and completely lists all authorizations, licenses and permits of the Alabama
Public Service Commission (the "APSC") granted or issued to the Company and each
of its subsidiaries (the "APSC Licenses"), with the exception of orders of a
routine nature approving tariff revisions. The APSC Licenses constitute all of
the authorizations, licenses or permits of the APSC required by the APSC as of
the Closing Date or necessary for the Company and each of its subsidiaries to
carry on their businesses as described in the Prospectus. The APSC Licenses are
in full force and effect.
(b) The execution and delivery of, and performance as of the Closing
Date by the Company of its obligations under, the Underwriting Agreement, will
not result in any violation of Title 37 of the Alabama Code or any rules,
regulations, orders or policies of the APSC, nor will such execution, delivery
or performance cause any forfeiture or impairment of any APSC License or any
authorization issued by the APSC to the Company and its subsidiaries.
(c) The Company is not required to obtain any consent, approval or
authorization from, or to file any declaration or statement with, the APSC in
connection with or as a condition to its execution, delivery of, or performance
as of the Closing Date of obligations under, the Underwriting Agreement or the
consummation of the Merger, except for such consents, approvals, authorizations,
declarations or statements as have been obtained or filed.
(d) To such counsel's knowledge, (i) there is no outstanding adverse
judgment, decree or order that has been issued by the APSC against the Company
or any of its subsidiaries and (ii) there is no action, suit, inquiry, notice of
violation, order to show cause, complaint, investigation, or proceeding at law
or in equity by or before the APSC, pending or threatened against the Company or
any of its subsidiaries, with the exception of generic proceedings involving
competitive issues of general application to all telecommunications carriers
holding authority from the APSC.
(e) To such counsel's knowledge, based upon an examination of the
available public files of the APSC in Montgomery, Alabama, and upon
representations of responsible officers of the Company and its subsidiaries, no
petitions to deny or other challenges have been filed against any pending
application of the Company and its subsidiaries at the APSC.
EXHIBIT C
Pursuant to Section 5(f) of the Underwriting Agreement, Stowers,
Hayes, ▇▇▇▇▇ & ▇▇▇▇▇, Georgia communications counsel for the Company, shall
furnish an opinion to the effect that:
(a) A schedule attached to such counsel's opinion letter
accurately and completely lists all authorizations, licenses and permits of the
Georgia Public Service Commission (the "GPSC") granted or issued to the Company
and each of its subsidiaries (the "GPSC Licenses"). The GPSC Licenses constitute
all of the authorizations, licenses or permits of the GPSC required by the GPSC
as of the Closing Date or necessary for the Company and each of its subsidiaries
to carry on their businesses as described in the Prospectus. The GPSC Licenses
are in full force and effect.
(b) The execution and delivery of, and performance as of the Closing
Date by the Company of its obligations under, the Underwriting Agreement will
not result in any violation of Title 46 of the Official Code of Georgia or any
rules, regulations, orders or policies of the GPSC, nor will such execution,
delivery or performance cause any forfeiture or impairment of any GPSC License
or any authorization issued by the GPSC to the Company and its subsidiaries.
(c) The Company is not required to obtain any consent, approval or
authorization from, or file any declaration or statement with, the GPSC in
connection with or as a condition to its execution, delivery of, or performance
as of the Closing Date of obligations under, the Underwriting Agreement or the
consummation of the Merger, except for such consents, approvals, authorizations,
declarations or statements as have been obtained or filed.
(d) To such counsel's knowledge, (i) there is no outstanding adverse
judgment, decree or order that has been issued by the GPSC against the Company
or any of its subsidiaries and (ii) there is no action, suit, inquiry, notice of
violation, order to show cause, complaint, investigation, or proceeding at law
or in equity by or before the GPSC, pending or threatened against the Company or
any of its subsidiaries.
(e) To such counsel's knowledge, based upon an examination of the
available public files of the GPSC in Atlanta, Georgia, and upon representations
of responsible officers of the Company and its subsidiaries, no petitions to
deny or other challenges have been filed against any pending application of the
Company or any of its subsidiaries at the GPSC.
EXHIBIT D
Pursuant to Section 5(g) of the Underwriting Agreement, ▇▇▇▇▇▇
▇▇▇▇▇▇, General Counsel of DeltaCom, Inc., shall furnish an opinion to the
effect that:
(a) DeltaCom, Inc. ("DeltaCom") has been duly incorporated, and is
validly existing and in good standing as of the date of the certifications
specified in such counsel's opinion letter, under the laws of the State of
Alabama. DeltaCom has the corporate power and corporate authority under its
Articles of Incorporation and Bylaws and the Alabama Business Corporation
Act to own its property and conduct its business as described in the
Prospectus. Based on the certificates identified in a schedule attached to
such counsel's opinion letter, DeltaCom is authorized to transact business
as a foreign corporation in each jurisdiction specified in a schedule
attached to such counsel's opinion letter, as of the respective dates
specified therein.
(b) No consent, approval, authorization or order of, or qualification
with, any Alabama state governmental body, agency or court having
jurisdiction over DeltaCom is required for the consummation of the Merger.
EXHIBIT E
October __, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇.▇. ▇▇▇▇▇▇▇▇ & Co.
Wheat, First Securities, Inc.
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned understands that ITC/\DeltaCom, Inc., a Delaware
corporation (the "Company"), proposes to enter into an underwriting agreement
(the "Underwriting Agreement") with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇
▇▇▇▇▇▇▇"), ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇.▇. ▇▇▇▇▇▇▇▇ &
Co. and Wheat, First Securities, Inc., as representatives of the several
underwriters (the "Underwriters") named in Schedule I thereto, providing for the
public offering (the "Public Offering") of shares of the Company's Common Stock
(par value $.01 per share) (the "Common Stock").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, and
for other good and valuable considerations receipt of which is hereby
acknowledged, the undersigned hereby agrees that, without the prior written
consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the
period commencing on the date hereof and ending 180 days after the date of the
final prospectus relating to the Public Offering (the "Prospectus"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (2) enter into any swap or other arrangement
that transfer to another, in whole or in part, any of the economic consequences
of ownership of Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise. The foregoing sentence shall not apply to (a)
the sale of any shares of Common Stock to the Underwriters pursuant to the
Underwriting Agreement, (b) transactions relating to shares of Common Stock or
other securities acquired in open market transactions after the completion
2
of the Public Offering, (c) transfers of Common Stock to the Company, (d) a
pledge, grant of security interest or other encumbrance effected in a bona fide
transaction with an unrelated and unaffiliated pledgee, under a written pledge
agreement that provides that the pledgee shall hold the Common Stock subject to
the terms of this Agreement and, as a condition precedent to such pledge,
security interest or other encumbrance, shall be required to execute and deliver
this Agreement and (e) any transfer (i) to a trust for the benefit of such
transferor or such transferor's spouse or lineal descendants or (ii) by gift,
will or intestate succession to such transferor's spouse or lineal descendants,
provided, in each case, that, as a condition precedent to such transfer, the
transferee of any such transfer, or the trustee or legal guardian on behalf of
any such transferee, duly executes and delivers this Agreement. In addition, the
undersigned agrees that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 180 days after the date of the Prospectus, make any
demand for or exercise any right with respect to, the registration of any shares
of Common Stock or any security convertible into or exercisable or exchangeable
for Common Stock.
Whether or not the Public Offering actually occurs depends on a
number of factors, including market conditions. Any Public Offering will only be
made pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
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(Signature)
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(Print Name)
-----------------------------------------
(Address)
Accepted as of the date
first set forth above:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By:
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