EXHIBIT 1A
$350,000,000
LCI INTERNATIONAL, INC.
7.25% SENIOR NOTES DUE JUNE 15, 2007
UNDERWRITING AGREEMENT
June 18, 1997
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇, SACHS & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇
& ▇▇▇▇▇ INCORPORATED
NATIONSBANC CAPITAL MARKETS, INC.
As Representatives of the several
Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
LCI International, Inc., a Delaware corporation (the "Company"),
proposes to sell $350,000,000 aggregate principal amount of the Company's 7.25%
Senior Notes due June 15, 2007 (the "Securities"). The Securities are to be
issued pursuant to an Indenture, dated as of June 23, 1997, (the "Indenture") to
be entered into between the Company and First Trust National Association, as
trustee, the form of which has been filed as an exhibit to the Registration
Statement (as defined below). This is to confirm the agreement concerning the
purchase of the Securities from the Company by the Underwriters named in
Schedule 1 hereto (the "Underwriters").
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 (Registration No.
33-96186) (the "Primary Registration Statement") and one or more
amendments thereto, with respect to $300,000,000 aggregate offering
price of the Securities have (i) been prepared by the Company in
conformity with the requirements of the Securities Act of 1933 (the
"Securities Act") and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission under
the Securities Act and (iii) such registration statement has become
effective under the Securities Act. A second registration statement
on Form S-3 (the "Rule 462(b) Registration Statement") with respect to
$50,000,000 aggregate offering price of the Securities has also been
prepared by the Company in conformity with the requirements of the
Securities Act and the Rules and Regulations and has been filed with
the Commission under the Securities Act pursuant to Rule 462(b) of the
Rules and Regulations on the date hereof and has become effective. No
other document with respect to either such registration statement (or
document incorporated by reference therein) has heretofore been filed
with the Commission (other than exhibits to the registration statement
filed with the Commission on Form 8-K and prospectuses filed or to be
filed pursuant to Rule 424(b) of the Rules and Regulations). Copies
of such registration statements and any amendments thereto
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have been delivered by the Company to you as the representatives (the
"Representatives") of the Underwriters. As used in this Agreement,
"Effective Time" means, with respect to the Primary Registration
Statement, the date and the time as of which such registration
statement was declared effective by the Commission and, with respect to
the Rule 462(b) Registration Statement, the date and the time as of
which such registration statement was filed with the Commission;
"Effective Date" means the date of the Effective Time of each such
registration statement; "Preliminary Prospectus" means each prospectus
included in the Primary Registration Statement, or amendments thereof,
before it became effective under the Securities Act and any prospectus
filed with the Commission by the Company with the consent of the
Representatives pursuant to Rule 424(a) of the Rules and Regulations;
"Registration Statement" means, collectively, the Primary Registration
Statement and the Rule 462(b) Registration Statement, as amended in
each case at their respective Effective Times, including any documents
incorporated by reference therein at such time and all information
contained in the final prospectus filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations in accordance with Section
4(a) hereof; and "Prospectus" means such final prospectus, with any
changes thereto made by the Company with the consent of the
Representatives, as filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations. Reference made herein to any Preliminary
Prospectus or to the Prospectus shall be deemed to refer to and include
any documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act, as of the date of such Preliminary
Prospectus or the Prospectus, as the case may be, and any reference to
any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any document filed
under the Securities Exchange Act of 1934 (the "Exchange Act") after
the date of such Preliminary Prospectus or the Prospectus, as the case
may be, and incorporated by reference in such Preliminary Prospectus
or the Prospectus, as the case may be; and any reference to any
amendment to the Registration Statement shall be deemed to include any
annual report of the Company filed with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act after the Effective Time
that is incorporated by reference in the Registration Statement. The
Commission has not issued any order preventing or suspending the use
of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to
the requirements of the Securities Act and the Rules and Regulations
and do not and will not, as of the applicable effective date (as to
the Registration Statement and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; PROVIDED that
no representation or warranty is made as to (i) the Trustee's
Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
(ii) information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with
written information furnished
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to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein and described in
Section 7(e) hereof. The Indenture conforms in all respects to the
requirements of the Trust Indenture Act and the rules and regulations
of the Commission thereunder.
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, or in
the case of any document incorporated by reference in the Prospectus
which has been amended prior to the date hereof, as of the date that
such amendment was filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such 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; and any further documents so
filed and incorporated by reference in the Prospectus, when such
documents become effective or are filed with Commission, as the case
may be, will conform in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder and will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(d) The Company and each of its subsidiaries (as defined in
Section 14) have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, are duly qualified to do business and
are in good standing as foreign corporations in each jurisdiction in
which their respective ownership or lease of property or the conduct
of their respective businesses requires such qualification (except
where the failure to be so qualified would not have a material adverse
effect on the Company and its subsidiaries taken as a whole ("Company
Material Adverse Effect")), and have all power and authority necessary
to own or hold their respective properties and to conduct the
businesses in which they are engaged.
(e) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof
contained in the Prospectus; and all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims.
(f) The Company has full right, power and authority to execute
and deliver this Agreement, the Indenture and the Securities and to
perform its obligations hereunder and thereunder; and all corporate
action required to be taken for the due and proper authorization,
execution and delivery of this Agreement,
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the Indenture and the Securities and the consummation of the
transactions contemplated by this Agreement and the Indenture have
been duly and validly taken.
(g) The execution, delivery and performance of this Agreement,
the Indenture and the Securities by the Company and the consummation
of the transactions contemplated hereby and thereby will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of the
properties or assets of the Company or any of its subsidiaries is
subject, except for such conflicts, breaches, violations or defaults
as will not have a Company Material Adverse Effect, nor will such
actions result in any violation of the provisions of the charter or
by-laws of the Company or any of its subsidiaries or any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries
or any of their properties or assets; and except for the registration
of the Securities under the Securities Act, the qualification of the
Indenture under the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state securities laws or the
By-Laws and rules of the National Association of Securities Dealers,
Inc. (the "NASD") in connection with the purchase and distribution of
the Securities by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution,
delivery and performance of this Agreement, the Indenture or the
Securities by the Company and the consummation of the transactions
contemplated hereby and thereby.
(h) The Indenture, when duly executed by the proper officers of
the Company and delivered by the Company, will constitute a valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, and by
general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and
the Securities, when duly executed, authenticated, issued and
delivered as provided in the Indenture, will be duly and validly
issued and outstanding and will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture
and enforceable in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, and by general equitable
principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law); and the Indenture and the
Securities conform to the descriptions thereof contained in the
Prospectus.
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(i) There are no contracts, agreements or understandings between
the Company and any person granting such person the right (other than
rights which have been waived or satisfied) to require the Company to
include any securities of the Company owned or to be owned by such
person in the securities registered pursuant to the Registration
Statement.
(j) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since such
date, there has not been any material change in the capital stock or
long-term debt of the Company or any of its subsidiaries (other than
borrowings under the Company's $700 million revolving credit agreement
(the "Credit Agreement") and the Company's $50 million
discretionary lines of credit (the "Credit Facilities")), or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus.
(k) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included or incorporated by reference in the Prospectus present fairly
the financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved.
(l) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have audited certain financial
statements of the Company, whose report is incorporated by reference
in the Prospectus, are independent public accountants as required by
the Securities Act and the Rules and Regulations.
(m) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such as do not materially affect
the value of such property and do not materially interfere with the
use made and proposed to be made of such property by the Company and
its subsidiaries; and all real property and buildings held under lease
by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its
subsidiaries.
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(n) The Company and each of its subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the value
of their respective properties.
(o) The Company and each of its subsidiaries own or possess
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service ▇▇▇▇ registrations, copyrights and licenses necessary for the
conduct of their respective businesses, except where the failure to
have such rights will not have a Company Material Adverse Effect, and
have no reason to believe that the conduct of their respective
businesses will conflict with, and have not received any notice of any
claim of conflict with, any such rights of others, except for such
conflicts as will not have a Company Material Adverse Effect.
(p) Except as described in documents incorporated by reference in
the Prospectus, there are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or of which
any property or asset of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, would reasonably be expected to have a Company Material
Adverse Effect; and to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(q) The conditions for use of Form S-3 by the Company, as set
forth in the General Instructions thereto, have been satisfied.
(r) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed
as exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations.
(s) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus which is not so
described.
(t) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent which might be
expected to have a Company Material Adverse Effect.
(u) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which the Company
7
would have any liability; the Company has not incurred and does not
expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder
(the "Code"); and each "pension plan" for which the Company would have
any liability that is intended to be qualified under Section 401(a) of
the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
(v) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and
has paid all taxes due thereon, other than tax returns for which a
valid extension is pending, and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had (nor
does the Company have any knowledge of any tax deficiency which, if
determined adversely to the Company or any of its subsidiaries, would
reasonably be expected to have) a Company Material Adverse Effect.
(w) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Company has not (i) issued or granted
any securities, other than securities issued or granted under the
Company's benefit plans,(ii) incurred any material liability or
obligation, direct or contingent, other than liabilities and
obligations which were incurred in the ordinary course of
business,(iii) entered into any material transaction not in the
ordinary course of business or (iv) declared or paid any dividend on
its capital stock.
(x) The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance
with management's authorization,(B) transactions are recorded as
necessary to permit preparation of its financial statements and to
maintain accountability for its assets, and (C) access to its assets
is permitted only in accordance with management's authorization.
(y) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws,(ii) is in default in any material
respect, and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any
material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound
or to which any of its properties or assets is subject, except for
such defaults as will not have a Company Material Adverse Effect, or
(iii) is in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its
properties or assets may be subject or has failed to obtain any
material license, permit, certificate, franchise or other governmental
authorization
8
or permit necessary to the ownership of its properties or assets or to
the conduct of its business.
(z) Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries, has used
any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is
in violation of any provision of the Foreign Corrupt Practices Act of
1977; or made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
(aa) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of
toxic wastes, medical wastes, hazardous wastes or hazardous substances
by the Company or any of its subsidiaries (or, to the knowledge of the
Company, any of their predecessors in interest) at, upon or from any
of the properties now or previously owned or leased by the Company or
its subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or
remedial action which would not have, or could not be reasonably
likely to have, singularly or in the aggregate with all such
violations and remedial actions, a Company Material Adverse Effect;
there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such property
or into the environment surrounding such property of any toxic wastes,
medical wastes, solid wastes, hazardous wastes or hazardous substances
due to or caused by the Company or any of its subsidiaries or with
respect to which the Company or any of its subsidiaries have
knowledge, except for any such spill, discharge, leak, emission,
injection, escape, dumping or release which would not have or would
not be reasonably likely to have, singularly or in the aggregate with
all such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a Company Material Adverse Effect; and the
terms "hazardous wastes", "toxic wastes", "hazardous substances" and
"medical wastes" shall have the meanings specified in any applicable
local, state, federal and foreign laws or regulations with respect to
environmental protection.
(ab) Neither the Company nor any subsidiary is an "investment
company" within the meaning of such term under the Investment Company
Act of 1940 and the rules and regulations of the Commission
thereunder.
2. PURCHASE OF THE SECURITIES BY THE UNDERWRITERS. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to issue and sell the
aggregate principal amount of the Securities to the several Underwriters and
each of the Underwriters, severally and not jointly, agrees to
9
purchase the principal amount of the Securities set opposite that Underwriter's
name in Schedule 1 hereto at a purchase price equal to 98.884% of the principal
amount thereof.
The Company shall not be obligated to deliver any of the Securities,
except upon payment for all the Securities to be purchased as provided herein.
3. DELIVERY OF AND PAYMENT FOR THE SECURITIES
Delivery of and payment for the Securities shall be made at the office
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
at 10:00 A.M., New York City time, on the third full business day following the
date of this Agreement or at such other date or place as shall be determined by
agreement between the Representatives and the Company. This date and time are
sometimes referred to as the "Closing Date." The Securities to be purchased by
each Underwriter hereunder will be represented by one or more definitive global
securities in book-entry form which will be deposited by or on behalf of the
Company with The Depository Trust Company ("DTC") or its designated custodian.
The Company will deliver the Securities to ▇▇▇▇▇▇ Brothers Inc., for the account
of each Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor in Federal (same-day) funds by wire transfer to an
account designated by the Company for such purpose, by causing DTC to credit the
Securities to the account of ▇▇▇▇▇▇ Brothers Inc. at DTC. The Company will
cause the certificates representing the Securities to be made available to
▇▇▇▇▇▇ Brothers Inc. for checking at least twenty-four hours prior to the Time
of Delivery (as defined below) at the office of DTC or its designated custodian.
The time and date of such delivery and payment shall be 9:30 a.m., New York City
time, on June 23, 1997 or such other time and date as ▇▇▇▇▇▇ Brothers Inc. and
the Company may agree upon in writing. Such time and date are herein called the
"Time of Delivery". Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder.
4. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives (which approval shall not be unreasonably withheld)
and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than Commission's close of business on the
second business day following the execution and delivery of this
Agreement; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus prior to the Closing Date
except as permitted herein; to advise the Representatives, promptly
after it receives notice thereof, of the time when any amendment to
the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and to furnish the Representatives with copies thereof; to file
promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering
or sale of the Securities; to advise the
10
Representatives, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Securities
for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request
by the Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of
any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, to
use promptly its best efforts to obtain its withdrawal;
(b) To deliver promptly to the Representatives in New York City
such number of the following documents as the Representatives shall
request: (i) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto (in
each case excluding exhibits other than this Agreement, the Indenture
and the computation of per share earnings),(ii) the Prospectus and any
amended or supplemented Prospectus and (iii) any document incorporated
by reference in the Prospectus (excluding exhibits thereto); and, if
the delivery of a prospectus is required at any time in connection
with the offering or sale of the Securities and if at such time any
event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary to amend
or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to
comply with the Securities Act or the Exchange Act, to notify the
Representatives and, upon their request, to file such document and to
prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as the Representatives may from
time to time request of an amended or supplemented Prospectus which
will correct such statement or omission or effect such compliance;
(c) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
(d) The Company will file no amendment to the Registration
Statement or supplement to the Prospectus or to any document
incorporated by reference in the Prospectus that shall have not been
previously submitted to the Representatives a reasonable time prior to
the proposed filing thereof or to which the Representatives shall
reasonably object in writing or which is not in compliance with the
Securities Act and the Rules and Regulations or the provisions of this
Agreement;
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(e) To make generally available to the Company's security
holders and to deliver to the Representatives an earnings statement of
the Company and its subsidiaries (which need not be audited) complying
with Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158);
(f) For a period of five years following the Effective Date,
upon request to furnish to the Representatives copies of all materials
furnished by the Company to its stockholders and all public reports
and all reports and financial statements furnished by the Company to
the principal national securities exchange or automatic quotation
system upon which the common stock of the Company may be listed or
quoted pursuant to requirements of or agreements with such exchange or
system or to the Commission pursuant to the Exchange Act or any rule
or regulation of the Commission thereunder;
(g) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as
the Representatives may reasonably request and to comply with such
laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Securities, except that the Company shall not be
required in connection therewith or as a condition thereof to qualify
as a foreign corporation, or to execute a general consent to service
of process in any jurisdiction, or to make an undertaking with respect
to the conduct of its business; and
(h) To apply the net proceeds from the sale of the Securities
being sold by the Company as set forth in the Prospectus.
5. EXPENSES. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Securities and any taxes
payable in that connection;(b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto;(c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus or
any document incorporated by reference therein, all as provided in this
Agreement;(d) the costs of reproducing and distributing this Agreement;(e) the
costs of distributing the terms of agreement relating to the organization of the
underwriting syndicate and selling group to the members thereof by mail,
facsimile, telex or other means of communication;(f) the filing fees incident to
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of sale of the Securities; (g)the fees and expenses of
qualifying the Securities under the securities laws of the several jurisdictions
as provided in Section 4(g) and of preparing, printing and distributing a Blue
Sky Memorandum (including related fees and expenses of counsel to the
Underwriters);(h) any fees charged by securities rating services for rating the
Securities; and (i) all other costs and expenses incident to the performance of
the obligations of the Company.
12
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on Closing Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 4(a); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied
with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration
Statement or the Prospectus or any amendment or supplement thereto
contains any untrue statement of a fact which, in the opinion of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, is material
or omits to state any fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to made
the statements therein not misleading.
(c) All corporate proceedings and other legal matters in
connection with this Agreement, the form of the Indenture, the
Securities, the Registration Statement and the Prospectus, and all
other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory to counsel for
the Underwriters, and the Company shall have furnished to such counsel
all documents and information that they may reasonably request to
enable them to pass upon such matters.
(d) ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ shall have furnished to the
Representatives its written opinion, as counsel to the Company,
addressed to the Underwriters and dated the Closing Date, in form and
substance satisfactory to the Representatives, to the effect that:
(i) The Company and each of its material subsidiaries have
been duly incorporated and are validly existing as corporations
in good standing under the laws of their respective jurisdictions
of incorporation, are duly qualified to do business and are in
good standing as foreign corporations in each jurisdiction listed
on Exhibit 1 hereto;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital
stock of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and conform to the
description thereof contained in the Prospectus; and all of the
issued shares of capital stock of each subsidiary
13
of the Company have been duly and validly authorized and issued
and are fully paid, non-assessable and, to our knowledge, are
owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims;
(iii) The Indenture and the Securities conform to the
descriptions thereof contained in the Prospectus;
(iv) To the best of such counsel's knowledge, there are
no legal or governmental proceedings pending against the Company
or any of its subsidiaries, or to which any of their respective
properties is subject, that are required to be described in the
Prospectus but are not described as required;
(v) The Registration Statement was declared effective
under the Securities Act and the Indenture was qualified under
the Trust Indenture Act as of the date and time specified in such
opinion, the Prospectus was filed with the Commission pursuant to
the subparagraph of Rule 424(b) of the Rules and Regulations
specified in such opinion on the date specified therein and, to
the best knowledge of such Counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and
no proceeding for that purpose is pending or threatened by the
Commission;
(vi) The Registration Statement, as of the Effective
Date, and the Prospectus, as of its date, and any further
amendments or supplements thereto, as of their respective dates,
made by the Company prior to the Closing Date (other than the
financial statements and related schedules and other financial
and statistical data contained therein, as to which such counsel
need express no opinion) appear on their face to have complied as
to form in all material respects with the requirements of the
Securities Act and the Rules and Regulations, and the documents
incorporated by reference in the Prospectus and any further
amendment or supplement to any such incorporated document made by
the Company prior to the Closing Date (other than the financial
statements and related schedules and other financial and
statistical data contained therein, as to which such counsel need
express no opinion), when they became effective or were filed
with the Commission, as the case may be, or in the case of any
document incorporated by reference in the Prospectus which has
been amended prior to the date of such opinion, as of the date
that such amendment was filed with the Commission, complied as to
form in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder; and the Indenture
conforms in all material respects to the requirements of the
Trust Indenture Act and the applicable rules and regulations
thereunder;
14
(vii) To the best of such counsel's knowledge, there are
no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described or filed as exhibits to
the Registration Statement or incorporated therein by reference
as permitted by the Rules and Regulations;
(viii) This Agreement has been duly authorized, executed
and delivered by the Company;
(ix) The Company has full right, power and authority to
execute and deliver this Agreement, the Indenture and the
Securities and to perform its obligations hereunder and
thereunder; and all corporate action required to be taken for the
due and proper authorization, execution and delivery of this
Agreement, the Indenture and the Securities and the consummation
of the transactions contemplated by this Agreement and the
Indenture have been duly and validly taken;
(x) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming due execution and delivery
by the Trustee, will constitute a valid and binding agreement of
the Company enforceable against the Company in accordance with
its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) or an implied covenant of good
faith and fair dealing; the Securities are in the form
contemplated by the Indenture and have been duly authorized and
executed by the Company and, upon the due authentication and
delivery thereof by the Trustee pursuant to the Indenture, will
be duly and validly issued and outstanding and will constitute
valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable in accordance with
their terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) or an implied covenant of good
faith and fair dealing;
(xi) The execution, delivery and performance of this
Agreement, the Indenture and the Securities by the Company and
the compliance by the Company with all of the provisions of this
Agreement will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel
to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which
any of the
15
properties or assets of the Company or any of its subsidiaries is
subject, except for such conflicts, breaches, violations or
defaults as will not have a Company Material Adverse Effect, nor
will such actions result in any violation of the provisions of
the charter or by-laws of the Company or any of its subsidiaries
or any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any
of their properties or assets; and, except for the registration
of the Securities under the Securities Act, the qualification of
the Indenture under the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may
be required under the Exchange Act and applicable state
securities laws and the By-Laws and rules of the NASD in
connection with the purchase and distribution of the Securities
by the Underwriters, no consent, approval, authorization or order
of, or filing or registration with, any such court or
governmental agency or body is required for the execution,
delivery and performance of this Agreement, the Indenture or the
Securities by the Company and the consummation of the
transactions contemplated hereby and thereby;
(xii) To the best of such counsel's knowledge, there are
no contracts, agreements or understandings between the Company
and any person granting such person the right (other than rights
which have been waived or satisfied) to require the Company to
include any securities of the Company owned or to be owned by
such person in the securities registered pursuant to the
Registration Statement.
(xiii) No approval of the FCC is required in connection
with the offering of the Securities; and
(xiv) The execution, delivery and performance of this
Agreement, the Indenture and the Securities by the Company and
compliance by the Company with the provisions of this Agreement
do not and will not violate the Communications Act of 1934, as
amended and the rules and regulations of the FCC thereunder
(collectively, the "Act") or any order or decision of the FCC.
In rendering such opinion, such counsel may (i) state that its opinion is
limited to matters governed by the Federal laws of the United States of
America, the laws of the State of New York and the General Corporation Law
of the State of Delaware and that such counsel is not admitted in the State
of Delaware. Such counsel shall also have furnished to the Representatives
a written statement, addressed to the Underwriters and dated the Closing
Date, in form and substance satisfactory to the Representatives, to the
effect that (x) such counsel has acted as counsel to the Company in
connection with the preparation of the Registration Statement, and (y)
based on the foregoing, no facts have come to the attention of such counsel
which lead it to believe that (I) the Registration Statement (other than
the financial statements and related schedules and other financial and
statistical data
16
contained therein as to which no opinion need be given), as of the
Effective Date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading, or that
the Prospectus contains any untrue statement of a material fact or omits to
state any 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 or (II) any document incorporated by
reference in the Prospectus or any further amendment or supplement to any
such incorporated document made by the Company prior to the Closing Date,
when they became effective or were filed with the Commission, as the case
may be, (other than the financial statements and related schedules and
other financial and statistical data contained therein as to which no
opinion need be given), or in the case of any document incorporated by
reference in the Prospectus which has been amended prior to the date of
such opinion, as of the date that such amendment was filed with the
Commission, contained, any untrue statement of a material fact or omitted
to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus except for the
statements made in the Prospectus under the caption "Description of Notes",
"Description of the Debt Securities", "Description of Preferred Stock",
"Description of Common Stock", "Description of Outstanding Capital Stock"
and"Description of Warrants", insofar as such statements relate to the
Securities and concern legal matters.
(e) ▇▇▇ ▇▇▇▇▇▇ shall have furnished to the Representatives his
written opinion, as General Counsel of the Company, addressed to the
Underwriters and dated the Closing Date, in form and substance
satisfactory to the Representatives, to the effect that such counsel
does not know of any order, judgment or decree of any court or
governmental body of the United States relating to the Act that would
be violated by the execution, delivery and performance of this
Agreement by the Company and compliance by the Company with the
provisions of this Agreement and counsel does not know of any
proceeding before the FCC against or involving the properties,
systems, licenses or authorizations of the Company or any of its
subsidiaries, or of any provision of the Act relevant to such
properties, licenses or authorizations required to be described in the
Registration Statement or the Prospectus which is not described as
required.
(f) With respect to the letter of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP delivered
to the Representatives concurrently with the execution of this
Agreement (the "initial letter"), the Company shall have furnished to
the Representatives a letter (the "bring-down letter") of such
accountants, addressed to the Underwriters and dated the Closing Date
(i) confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as
of the date of the bring-down
17
letter (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information
is given in the Prospectus, as of a date not more than five days prior
to the date of the bring-down letter), the conclusions and findings of
such firm with respect to the financial information and other matters
covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(g) The Company shall have furnished to the Representatives a
certificate, dated the Closing Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating
that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of the Closing Date;
the Company has complied with all its agreements contained
herein; and the conditions set forth in Sections 6(a) and 6(h)
have been fulfilled;
(ii) (A) Neither the Company nor any of its subsidiaries
has sustained since the date of the latest audited financial
statements included or incorporated by reference in the
Prospectus, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus or (B) since such date there
has not been any material change in the capital stock or
long-term debt of the Company or any of its subsidiaries (other
than borrowings under the Credit Agreement and the Credit
Facilities) or any material adverse change, or any development
involving a prospective material adverse change, in or affecting
the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and
its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus; and
(iii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) the
Registration Statement, as of the Effective Date, and the
Prospectus, as of its date, did not include any untrue statement
of a material fact and did not omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (B) since the Effective Date, no
event has occurred which should have been set forth in a
supplement or amendment to the Registration Statement or the
Prospectus.
(h)(i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus,
any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or
18
decree, otherwise than as set forth or contemplated in the Prospectus or (ii)
since such date there shall not have been any material change in the capital
stock or long-term debt of the Company or any of its subsidiaries (other than
borrowings under the Credit Agreement and the Credit Facilities) or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause (i) or
(ii), is, in the judgment of the Representatives, so material and adverse as
to make it impracticable or inadvisable to proceed with the public offering
or the delivery of the Securities on the terms and in the manner contemplated
in the Prospectus.
(i) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Company's other debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) of the Rules and Regulations
and (ii) no such organization shall have publicly announced that it
has under surveillance or review, with possible negative implications,
its rating of any of the Company's debt securities.
(j) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred any of the following:(i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental
authority having jurisdiction,(ii) a banking moratorium shall have
been declared by Federal or state authorities,(iii) the United States
shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall
have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred such a material adverse
change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the
United States shall be such) as to make it, in the judgment of a
majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the
Securities on the terms and in the manner contemplated in the
Prospectus.
(k) The Guaranty Agreements under the Credit Agreement shall have
been released and terminated.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to counsel
for the Underwriters.
19
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each Underwriter,
its officers and employees and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof, to
which that Underwriter, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon,(i) any untrue
statement or alleged untrue statement of a material fact contained (A) in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement or the Prospectus, or in any amendment or supplement thereto, or (B)
in any blue sky application or other document prepared or executed by the
Company (or based upon any written information furnished by the Company)
specifically for the purpose of qualifying any or all of the Securities under
the securities laws of any state or other jurisdiction (any such application,
document or information being hereinafter called a "Blue Sky Application") or
(ii) the omission or alleged omission to state in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application any material fact required to be stated therein or necessary to make
the statements therein not misleading, and shall reimburse each Underwriter and
each such officer, employee and controlling person promptly upon demand for any
legal or other expenses reasonably incurred by that Underwriter, officer,
employee or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred; PROVIDED, HOWEVER, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any such
amendment or supplement, or in any Blue Sky Application in reliance upon and in
conformity with the written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein and described in Section 7(e) hereof; and PROVIDED FURTHER that as to
any preliminary prospectus supplement this indemnity agreement shall not inure
to the benefit of any Underwriter, its officers or employees or any person
controlling that Underwriter on account of any loss, claim, damage, liability or
action arising from the sale of Securities to any person by that Underwriter if
that Underwriter failed to send or give a copy of the Prospectus, as the same
may be amended or supplemented, to that person within the time required by the
Securities Act, and the untrue statement or alleged untrue statement of any
material fact or omission or alleged omission to state a material fact in such
preliminary prospectus supplement was corrected in the Prospectus, unless such
failure resulted from non-compliance by the Company with Section 4(b) hereof.
For purposes of the last proviso to the immediately preceding sentence, the term
"Prospectus" shall not be deemed to include the documents incorporated therein
by reference, and no Underwriter shall be obligated to send or give any
supplement or amendment to any document incorporated by reference in any
preliminary prospectus supplement or the Prospectus to any person other than a
person to whom such Underwriter had delivered such incorporated document or
documents in response to a written request therefor. The foregoing indemnity
agreement is in addition to any liability which the Company may otherwise have
to any Underwriter or to any officer, employee or controlling person of that
Underwriter.
20
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers and employees, each of its directors and
each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon,(i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement or the Prospectus,
or in any amendment or supplement thereto, or (B) in any Blue Sky Application or
(ii) the omission or alleged omission to state in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application any material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with the written information
furnished to the Company through the Representatives by or on behalf of that
Underwriter specifically for inclusion therein and described in Section 7(e)
hereof, and shall reimburse the Company and any such director, officer or
controlling person for any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Underwriter may
otherwise have to the Company or any such director, officer or controlling
person.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent it has
been materially prejudiced by such failure and, PROVIDED FURTHER, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 7.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; PROVIDED, HOWEVER, that
(i) the Representatives shall have the right to employ counsel to represent
jointly the Representatives and those other Underwriters and their respective
officers, employees and controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Underwriters against the Company under this Section 7 if, in the reasonable
judgment of the Representatives, it is advisable for the Representatives and
those Underwriters, officers, employees and controlling persons to be jointly
represented by separate counsel, and in that event the fees and expenses of such
separate counsel shall be paid by the Company and (ii) the Company shall have
the right to employ counsel to represent it and its officers, employees and
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Company against the Underwriters
under this Section 7 if, in the reasonable judgment of the Company, it is
advisable for the Company and those officers, employees and controlling persons
to be jointly represented by separate
21
counsel, and in that event the fees and expenses of such separate counsel shall
be paid by the Underwriters. In no event shall the Company or the Underwriters,
as the case may be, be liable for the fees and expenses of more than one such
separate counsel in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent, but if
settled with its written consent or if there be a final judgment of the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 7 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 7(a) or 7(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof,(i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from
the offering of the Securities 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 with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other with respect to such
offering shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Securities purchased under this Agreement (before
deducting expenses) received by the Company on the one hand, and the total
underwriting discounts and commissions received by the Underwriters with respect
to the Securities purchased under this Agreement, on the other hand, bear to the
total gross proceeds from the offering of the Securities under this Agreement,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and
22
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 7(d) were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 7(d) shall be deemed to include, for
purposes of this Section 7(d), 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(d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public was offered to the public exceeds the amount of any
damages which such Underwriter has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 7(d) are
several in proportion to their respective underwriting obligations and not
joint.
(e) The Underwriters severally confirm that the statements with
respect to the public offering of the Securities set forth on the cover page
of, the first paragraph on page S-2 of, and the first four paragraphs
(including the table) and the sixth, seventh and eighth paragraphs under the
caption "Underwriting" in, the Prospectus are correct and constitute the only
information furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
8. DEFAULTING UNDERWRITERS.
If, on the Closing Date, any Underwriter defaults in the performance
of its obligations under this Agreement, the remaining non-defaulting
Underwriters shall be obligated to purchase the Securities which the defaulting
Underwriter agreed but failed to purchase on the Closing Date in the respective
proportions which the principal amount of Securities set opposite the name of
each remaining non-defaulting Underwriter in Schedule 1 hereto bears to the
aggregate principal amount of Securities set opposite the names of all the
remaining non-defaulting Underwriters in Schedule 1 hereto; PROVIDED, HOWEVER,
that the remaining non-defaulting Underwriters shall not be obligated to
purchase any of the Securities on the Closing Date if the aggregate principal
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase on such date exceeds 9.09% of the Securities to be purchased
on the Closing Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the principal amount of Securities which
it agreed to purchase on the Closing Date pursuant to the terms of Section 2.
If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Securities to be
purchased on the Closing Date. If the remaining Underwriters or other
underwriters satisfactory to the Representatives do not elect to purchase the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such Closing Date, this Agreement shall terminate
23
without liability on the part of any non-defaulting Underwriter or the Company,
except that the Company will continue to be liable for the payment of expenses
to the extent set forth in Sections 5 and 10. As used in this Agreement, the
term "Underwriter" includes, for all purposes of this Agreement unless the
context requires otherwise, any party not listed in Schedule 1 hereto who,
pursuant to this Section 8, purchases Securities which a defaulting Underwriter
agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Securities of a
defaulting or withdrawing Underwriter, either the Representatives or the Company
may postpone the Closing Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel for
the Underwriters may be necessary in the Registration Statement, the Prospectus
or in any other document or arrangement.
9. TERMINATION. The obligations of the Underwriters hereunder may
be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Securities if, prior to that
time, any of the events described in Sections 6(h), (i) or (j) shall have
occurred or if the Underwriters shall decline to purchase the Securities for any
reason permitted under this Agreement.
10. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) the Company
shall fail to tender the Securities for delivery to the Underwriters for any
reason permitted under this Agreement or (b)the Underwriters shall decline to
purchase the Securities for any reason permitted under this Agreement (including
the termination of this Agreement pursuant to Section 9), the Company shall
reimburse the Underwriters for the reasonable fees and expenses of their counsel
and for such other out-of-pocket expenses as shall have been incurred by them in
connection with this Agreement and the proposed purchase of the Securities, and
upon demand the Company shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 8 by
reason of the default of one or more Underwriters, the Company shall not be
obligated to reimburse any Underwriter on account of those expenses.
11. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a)if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: ▇▇▇-▇▇▇-▇▇▇▇);
(b)if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to LCI International, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: General Counsel
(Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇);
24
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 7(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by ▇▇▇▇▇▇ Brothers Inc. on behalf of the
Representatives.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Underwriters and the Company and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained
in Section 7(b) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 12, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein. The term
"successor" as used in this Agreement shall be deemed to include a purchaser
from any Underwriter of any of the Securities in his status as a purchaser.
13. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Securities and
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any of them or any person controlling any of them.
14. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SUBSIDIARY". For
purposes of this Agreement,(a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK, AS THOSE LAWS APPLY TO CONTRACTS TO BE
PERFORMED IN NEW YORK, AND WITHOUT GIVING EFFECT TO THE CHOICE OF LAW OR
CONFLICTS OF LAW PRINCIPLES THEREOF.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
25
17. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
26
If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
LCI INTERNATIONAL, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President -
Finance and Development
and Chief Financial Officer
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇
& ▇▇▇▇▇ INCORPORATED
NATIONSBANC CAPITAL MARKETS, INC.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By ▇▇▇▇▇▇ BROTHERS INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
Authorized Representative
SCHEDULE 1
PRINCIPAL
UNDERWRITERS AMOUNT
------------ ---------
▇▇▇▇▇▇ Brothers Inc..............................................84,000,000
▇▇▇▇▇▇▇, Sachs & Co..............................................84,000,000
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated..............84,000,000
NationsBanc Capital Markets, Inc.................................84,000,000
BNY Capital Markets, Inc........................................ 3,500,000
ABN AMRO Chicago Corporation.................................... 3,500,000
First Chicago Capital Markets, Inc.............................. 3,500,000
First Union Capital Markets Corp................................ 3,500,000
___________
Total..........................................................$350,000,000
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