EXHIBIT 1.1
VALOR COMMUNICATIONS GROUP, INC.
(a Delaware corporation)
29,375,000 Shares of Common Stock
FORM OF PURCHASE AGREEMENT
Dated: -, 2005
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VALOR COMMUNICATIONS GROUP, INC.
(a Delaware corporation)
29,375,000 Shares of Common Stock
(Par Value $0.01 Per Share)
PURCHASE AGREEMENT
-, 2005
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Banc of America Securities LLC
▇.▇. ▇▇▇▇▇▇ Securities Inc.
as Representatives of the several Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Valor Communications Group, Inc., a Delaware corporation (the
"Company") and Valor Telecommunications, LLC, a Delaware limited liability
company ("LLC"), confirm their agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the
other Underwriters named in Schedule A hereto (collectively, the "Underwriters",
which term shall also include any underwriter substituted as hereinafter
provided in Section 10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇, Banc of America
Securities LLC ("Banc of America") and ▇.▇. ▇▇▇▇▇▇ Securities Inc. ("JPMorgan")
are acting as representatives (in such capacity, the "Representatives"), with
respect to the issue and sale by the Company and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers of
shares of Common Stock, par value $0.0001 per share, of the Company ("Common
Stock") set forth in said Schedule A, and with respect to the grant by the
persons listed in Schedule B hereto (the "Selling Shareholders"), acting
severally and not jointly, to the Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or any
part of 29,375,000 additional shares of Common Stock to cover overallotments, if
any. The aforesaid 29,375,000 shares of Common Stock (the "Initial Securities")
to be purchased by the Underwriters from the Company and all or any part of the
4,406,250 shares of Common Stock subject to the option described in Section 2(b)
hereof (the "Option Securities) are hereinafter called, collectively, the
"Securities."
The Company, LLC and the Selling Shareholders understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
The Company, LLC, the Selling Shareholders and the Underwriters agree
that up to _______ shares of the Securities to be purchased by the Underwriters
(the "Reserved Securities") shall be reserved for sale by the Underwriters to
certain eligible employees (the "Invitees"), as part of the distribution of the
Securities by the Underwriters, subject to the terms of this Agreement, the
applicable rules, regulations and interpretations of the National Association of
Securities Dealers, Inc. and all other applicable laws, rules and regulations.
To the extent that such Reserved Securities are not orally confirmed for
purchase
by Invitees by the end of the first business day after the date of this
Agreement, such Reserved Securities may be offered to the public as part of the
public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-114298) including
the related preliminary prospectus or prospectuses, covering the registration of
the Securities under the Securities Act of 1933, as amended (the "1933 Act").
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations. The information included in such prospectus that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information." Each prospectus used before such registration statement became
effective, and any prospectus that omitted the Rule 430A Information, that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits and any schedules thereto, at the time it
became effective, and including the Rule 430A Information, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final prospectus in
the form first furnished to the Underwriters for use in connection with the
offering of the Securities is herein called the "Prospectus." For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
In connection with this offering, the Company plans to recapitalize and
restructure certain of the indebtedness of the Company, LLC and their
subsidiaries. The recapitalization and restructuring will include the following
transactions (collectively, the "Related Transactions"): (a) entry into an
amended credit facility among the Company, LLC and their subsidiaries and a
syndicate of lenders including Bank of America Securities LLC and ▇.▇. ▇▇▇▇▇▇
Securities Inc., as lead arrangers and, together with ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, joint book managers, providing for up to $____
million as a senior secured revolving credit facility and $____ million as a
senior secured term loan facility (the "Amended Credit Agreement"); and (b)
repurchase by the Company (the "Reorganization") of all the equity interests in
LLC, and, to the extent not presently held by LLC, Valor Telecommunications
Southwest, LLC, a Delaware limited liability company, for 41,458,333 shares of
Common Stock. A list of the primary agreements relating to the Related
Transactions are set forth on Schedule E hereto (collectively, the "Related
Transaction Documents"). The term "subsidiary" as used in this Agreement shall
mean any entity in which LLC has a majority ownership interest, whether directly
or indirectly, at the time of the signing of this Agreement or the Company will
have a majority ownership interest, whether directly or indirectly, after the
consummation of the Related Transactions.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company and LLC. The Company
and LLC, jointly and severally, represent and warrant to each Underwriter as of
the date hereof, as of the Closing Time referred to in Section 2(c) hereof, and
as of each Date of Delivery (if any) referred to in Section 2(b) hereof, and
agree with each Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto has
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become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement, any Rule 462(b)
Registration Statement or any post-effective amendment thereto has been
issued under the 1933 Act and the Company has not received any notice
that proceedings for that purpose have been instituted or are pending
and, to the knowledge of the Company or LLC, no such proceedings are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with in all
material respects.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the
Prospectus, any preliminary prospectus and any supplement thereto or
prospectus wrapper prepared in connection therewith, at their
respective times of issuance and at the Closing Time, complied and will
comply in all material respects with any applicable laws or regulations
of foreign jurisdictions in which the Prospectus and such preliminary
prospectus, as amended or supplemented, if applicable, are distributed
in connection with the offer and sale of Securities. Neither the
Prospectus nor any amendments or supplements thereto (including any
prospectus wrapper), at the time the Prospectus or any such amendment
or supplement was issued and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. The representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
written information furnished to the Company or LLC by any Underwriter
through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration Statement
(or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto). The parties acknowledge and agree that such
information consists of [ ].
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto complied when so filed in all material respects with
the 1933 Act Regulations and each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The consolidated historical
financial statements of LLC and its consolidated subsidiaries included
in the Registration Statement and the Prospectus, together with the
related schedules and notes, present fairly the financial position of
LLC and its consolidated subsidiaries at the dates indicated and the
statement of operations, stockholders' equity and cash flows of LLC and
its consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved. The supporting schedules included in the
Registration Statement present fairly in accordance with
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GAAP the information required to be stated therein. The selected
financial data and the summary financial information included in the
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The pro forma
financial statements and the related notes thereto included in the
Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company, LLC and the subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company, LLC or any of the subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company, LLC and the subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company or LLC on any class of its
capital stock or other equity interests.
(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under this Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing
in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each of LLC and the
subsidiaries of the Company or LLC has been duly organized and is
validly existing as a corporation or limited liability company in good
standing under the laws of the jurisdiction of its incorporation or
formation, has corporate or limited liability company power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement and Prospectus, all
of the issued and outstanding capital stock or other equity interests,
as the case may be, of each such subsidiary has been duly authorized
and validly issued, is fully paid and non assessable and is owned by
LLC and at Closing Time will, except as described in the Registration
Statement and Prospectus, be owned by the Company, directly or through
subsidiaries, free and clear of any material security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock or equity interests of any
subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such subsidiary. The only subsidiaries of the
Company or LLC are listed on Schedule D.
(vii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is (or will be at the Closing Time) as set
forth in the Prospectus as of September 30, 2004 in the column entitled
"Actual" under the caption "Capitalization" (except for subsequent
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issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or
options referred to in the Prospectus). The shares of issued and
outstanding capital stock of the Company, including the Securities to
be purchased by the Underwriters from the Selling Shareholders, have
been duly authorized and have been (or will be at Closing Time) validly
issued and are (or will be at Closing Time) fully paid and non
assessable; none of the outstanding shares of capital stock of the
Company, including the Securities to be purchased by the Underwriters
from the Selling Shareholders, was (or will be at Closing Time) issued
in violation of the preemptive or other similar rights of any
securityholder of the Company.
(viii) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by the Company and LLC.
(ix) Authorization and Description of Securities. The
Securities to be purchased by the Underwriters from the Company have
been duly authorized for issuance and sale to the Underwriters pursuant
to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration set
forth herein, will be validly issued and fully paid and non assessable;
the Common Stock conforms to all statements relating thereto contained
in the Prospectus and such description conforms to the rights set forth
in the instruments defining the same; no holder of the Securities will
be subject to personal liability by reason of being such a holder; and
the issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Company.
(x) Authorization of Related Transaction Documents. Each of
the Company, LLC and the subsidiaries of the Company or LLC has the
requisite corporate, partnership, limited liability company or other
power and authority to execute, deliver (to the extent a party thereto)
and perform its obligations under the Related Transaction Documents.
The Related Transaction Documents have been duly and validly authorized
by the Company, LLC and each of the subsidiaries, as applicable, and
when executed and delivered (to the extent a party thereto) by the
Company, LLC and each of the subsidiaries (assuming the due
authorization, execution and delivery by the other parties thereto),
will constitute valid and legally binding agreements of the Company,
LLC and each of the subsidiaries, as applicable, enforceable against
the Company, LLC and each of the subsidiaries in accordance with their
terms except that the enforcement thereof may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles. Each
of the Related Transaction Documents conforms in all material respects
to the description thereof in the Registration Statement and the
Prospectus.
(xi) Related Transaction Documents. (i) The Company and LLC
have delivered to the Representatives a true and correct copy of each
of the Related Transaction Documents that have been executed and
delivered prior to the date of this Agreement and each other Related
Transaction Document in the form substantially as it will be executed
and delivered on or prior to the Closing Time, together with all
related agreements and all schedules and exhibits thereto, and as of
the date hereof there have been no amendments, alterations,
modifications or waivers of any of the provisions of any of the Related
Transaction Documents since their date of execution or from the form in
which such Related Transaction Documents have been delivered to the
Representatives; and (ii) there exists as of the date hereof (after
giving effect to the transactions contemplated by each of the Related
Transaction Documents) no event or condition that would constitute a
default or an event of default (in each case as defined in each of the
Related Transaction Documents) under any of the Related Transaction
Documents that would result in a
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Material Adverse Effect or materially adversely affect the ability of
the Company, LLC or any of the subsidiaries to consummate the Related
Transactions.
(xii) Absence of Defaults and Conflicts. Neither the Company,
LLC nor any of their subsidiaries is in violation of its charter or
by-laws or other equivalent documents or in default in the performance
or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which
the Company, LLC or any of the subsidiaries is a party or by which it
or any of them may be bound, or to which any of the property or assets
of the Company, LLC or any subsidiary is subject (collectively,
"Agreements and Instruments") except for such violations or defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement, the Related Transaction
Documents and the consummation of the transactions contemplated herein
and therein and in the Registration Statement (including the issuance
and sale of the Securities and the use of the proceeds from the sale of
the Securities as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Company and LLC with its obligations
hereunder and thereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company, LLC
or any subsidiary pursuant to, the Agreements and Instruments (except
for such conflicts, breaches, defaults or Repayment Events or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions
of (i) the charter or by laws or equivalent documents of the Company,
LLC or any subsidiary or (ii) any applicable law, statute, including
the Federal Communications Act of 1934, as amended (the "Communications
Act") (including the Telecommunications Act of 1996), rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company, LLC or any subsidiary or any of their assets, properties
or operations (except in the case of this clause (ii) as would not
result in a Material Adverse Effect). As used herein, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company,
LLC or any subsidiary.
(xiii) Authorization of Issuance and Sale of Securities. All
necessary corporate action has been duly and validly taken by the
Company to authorize the issuance and sale of the Securities by the
Company.
(xiv) Listing and Registration of Securities. The Securities
will be duly registered under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), the Securities have been authorized for
listing, subject to notice of issuance, on the New York Stock Exchange.
A registration statement on Form 8-A with respect to the Offered
Securities has been filed on Form 8-A pursuant to Section 12 of the
1934 Act, which registration statement complies in all material
respects with the 1934 Act.
(xv) Continued Listing and Registration of Securities. Neither
the Company nor LLC has taken any action designed to, or likely to have
the effect of, terminating the registration of the Securities under the
1934 Act or the listing of the Securities on the New York Stock
Exchange, nor has the Company or LLC received any notification that the
Commission or the New York Stock Exchange is contemplating terminating
such registration or quotation.
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(xvi) No Preemptive Rights. The issuance of the Securities by
the Company is not subject to preemptive or other similar rights that
have not been or will not be waived prior to the Closing Time.
(xvii) Absence of Labor Dispute. No labor dispute with the
employees of the Company, LLC or any subsidiary exists or, to the
knowledge of the Company or LLC, is imminent, and neither the Company
nor LLC is aware of any existing or imminent labor disturbance by the
employees of any of their or any subsidiary's principal suppliers,
manufacturers, customers or contractors, which, in either case, would
result in a Material Adverse Effect.
(xviii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company or LLC, threatened, against or affecting
the Company, LLC or any subsidiary, which is required to be disclosed
in the Registration Statement (other than as disclosed therein), or
which would reasonably be expected to result in a Material Adverse
Effect, or which might materially and adversely affect the consummation
of the transactions contemplated in this Agreement or the performance
by the Company or LLC of their obligations hereunder; the aggregate of
all pending legal or governmental proceedings to which the Company, LLC
or any subsidiary is a party or of which any of their respective
property or assets is the subject which are not described in the
Registration Statement or would not reasonably be expected to result in
a Material Adverse Effect.
(xix) Compliance with Law. Neither the Company, LLC nor any
subsidiary is in violation of any applicable law, statute, including
the Communications Act (including the Telecommunications Act of 1996),
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company, LLC or any subsidiary or any of their
assets, properties or operations except as would not reasonably be
expected to result in a Material Adverse Effect.
(xx) Accuracy of Description of Agreements and Exhibits. There
are no contracts, agreements or other documents which are required to
be described in the Registration Statement or Prospectus, or to be
filed as exhibits thereto, which have not been so described or filed as
required, and the statements in the Prospectus under the headings
"Related Party Transactions," "Description of Certain Indebtedness" and
"Material United States Federal Tax Consequences" insofar as such
statements summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate and fair summaries of such
legal matters, agreements, documents or proceedings in all material
respects.
(xxi) Possession of Intellectual Property. The Company, LLC
and the subsidiaries own or possess, or can acquire on reasonable
terms, adequate 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, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company,
LLC nor any of the subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company, LLC or any of the
subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
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(xxii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company or
LLC of their obligations hereunder, in connection with the offering,
issuance or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except (i) such as have
been already obtained or as may be required under the 1933 Act or the
1933 Act Regulations or state securities laws, (ii) such as have been
already obtained under (A) the Communications Act, (B) the rules,
regulations and decisions adopted pursuant to or interpreting the
Communications Act, and (C) the applicable laws, regulations, court
decisions, and rules governing the telecommunications industry in the
States of Texas, Oklahoma, New Mexico and Arkansas, and (iii) such as
have been obtained under the laws and regulations of jurisdictions
outside the United States in which the Securities are offered.
(xxiii) No Affiliate Transactions. No transaction has occurred
(or is expected to occur) between or among the Company, LLC and any of
their officers or directors, stockholders, members or any affiliate or
affiliates of any such officer, director, shareholder or member that is
required to be described in and is not described in the Registration
Statement and the Prospectus.
(xxiv) No Sales of Common Stock. Except as described in the
Registration Statement and the Prospectus, the Company has not sold or
issued any shares of Common Stock during the six-month period preceding
the date of the Prospectus, including any sales pursuant to Rule 144A
under the 1933 Act or Regulations D or S of the 1933 Act Regulations,
other than shares of Common Stock issued pursuant to employee benefit
plans, qualified stock option plans or employee compensation plans or
pursuant to outstanding options, warrants or rights.
(xxv) Absence of Manipulation. Neither the Company, LLC nor
any affiliate of the Company or LLC has taken, nor will the Company,
LLC or any affiliate take, directly or indirectly, any action which is
designed to or which has constituted or which would be expected to
cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(xxvi) Taxes.
(A) There are no material transfer taxes or other similar fees
or charges under federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the Company
or sale by the Company of the Securities.
(B) The Company, LLC and the subsidiaries have filed all
foreign, federal, state and local tax returns that are required to be
filed or have requested extensions thereof (except in any case in which
the failure so to file would not result in a Material Adverse Effect)
and have paid all taxes required to be paid by them and any other
assessment, fine or penalty levied against them, to the extent that any
of the foregoing is due and payable, except for any such assessment,
fine or penalty that is currently being contested in good faith or as
would not result in a Material Adverse Effect.
(xxvii) Possession of Licenses and Permits. The Company, LLC
and the subsidiaries possess such permits, licenses, approvals,
consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them, except where the failure so to possess would not,
singly or in the aggregate, result in a Material Adverse
8
Effect; the Company, LLC and the subsidiaries are in compliance with
the terms and conditions of all such Governmental Licenses, except
where the failure so to comply would not, singly or in the aggregate,
result in a Material Adverse Effect; all of the Governmental Licenses
are valid and in full force and effect, except when the invalidity of
such Governmental Licenses or the failure of such Governmental Licenses
to be in full force and effect would not, singly or in the aggregate,
result in a Material Adverse Effect; and neither the Company, LLC nor
any of the subsidiaries has received any notice of proceedings relating
to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.
(xxviii) Title to Property. The Company, LLC and the
subsidiaries have good and marketable title to all real property owned
by the Company, LLC and the subsidiaries and good title to all other
properties owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the
Prospectus or (b) do not, singly or in the aggregate, materially affect
the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company, LLC or any of the
subsidiaries; and all of the leases and subleases material to the
business of the Company, LLC and the subsidiaries, considered as one
enterprise, and under which the Company, LLC or any of the subsidiaries
holds properties described in the Prospectus, are in full force and
effect, and neither the Company, LLC nor any subsidiary has any notice
of any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company, LLC or any subsidiary under any
of the leases or subleases mentioned above, or affecting or questioning
the rights of the Company, LLC or such subsidiary to the continued
possession of the leased or subleased premises under any such lease or
sublease, except as would not reasonably be expected to result in a
Material Adverse Effect.
(xxix) Investment Company Act. The Company is not required,
and upon the issuance and sale of the Securities as herein contemplated
and the application of the net proceeds therefrom as described in the
Prospectus will not be required, to register as an "investment company"
under the Investment Company Act of 1940, as amended (the "1940 Act").
(xxx) Environmental Laws. Except as described in the
Registration Statement and Prospectus and except as would not, singly
or in the aggregate, result in a Material Adverse Effect, (A) neither
the Company, LLC nor any of the subsidiaries is in violation of any
federal, state, local or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products,
asbestos-containing materials or mold (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (B) the Company, LLC
and the subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or
threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company, LLC or any of the subsidiaries and (D) there
are no events or circumstances that would reasonably be expected to
form the basis of an order for clean-up or remediation, or an action,
suit or proceeding by any private party or governmental body or agency,
against or affecting the Company, LLC or any of the subsidiaries
9
relating to Hazardous Materials or any Environmental Laws. Except as
set forth in the Registration Statement and Prospectus and except as
would not, singly or in the aggregate, result in a Material Adverse
Effect, neither the Company, LLC nor any of the subsidiaries has been
named as a "potentially responsible party" under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended.
(xxxi) Registration Rights; Lock-Up Agreement. Except as
described in the Prospectus, no holder of any security of the Company
or any security or other interest that is convertible into or
exchangeable or exercisable for such security has any right, which has
not been waived, to have any security owned by such holder included in
the Registration Statement or to demand registration of any security
owned by such holder for a period of 180 days after the date of this
Agreement. Each person listed on Schedule F has delivered to the
Representatives his enforceable written lock-up agreement in the form
attached as Exhibit A hereto (the "Lock-Up Agreement").
(xxxii) Insurance. The Company, LLC and each of the
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, all
of which insurance is in full force and effect; the Company, LLC and
each of the subsidiaries are in compliance with the terms of such
policies and instruments in all material respects; there are no claims
by the Company, LLC or any of the subsidiaries under any such policy or
instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause; and neither the
Company, LLC nor any subsidiary has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a cost that would not,
singly or in the aggregate, result in a Material Adverse Effect.
(xxxiii) Internal Controls. The Company, LLC and each of the
subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (A) transactions are
executed in accordance with management's general or specific
authorizations, (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability,
(C) access to assets is permitted only in accordance with management's
general or specific authorization and (D) the recorded accountability
for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(xxxiv) Offering Materials. None of the Company, LLC, their
directors or officers has distributed or will distribute prior to the
later of (A) the Closing Time or any Date of Delivery and (B) the
completion of the distribution of the Offered Securities, any offering
material in connection with the offering and sale of the Offered
Securities other than any preliminary prospectus, the Prospectus, the
Registration Statement and other materials, if any, permitted by the
1933 Act.
(xxxv) Industry and Marketing Data. The statistical and market
and industry related data included in the Registration Statement, each
of the preliminary prospectuses and the Prospectus are based on or
derived from sources which the Company and LLC believe to be reliable
and accurate or represent the Company's and LLC's good faith estimates
that are made on the basis of data derived from such sources.
(xxxvi) ERISA. The minimum funding standard under Section 302
of the Employee Retirement Income Security Act of 1974, as amended, and
the regulations and published
10
interpretations thereunder ("ERISA"), has been satisfied by each
"pension plan" (as defined in Section 3(2) of ERISA) which has been
established or maintained by the Company, LLC and/or one or more of the
subsidiaries, and the trust forming part of each such plan which is
intended to be qualified under Section 401 of the Code is so qualified;
each of the Company, LLC and the subsidiaries has fulfilled its
obligations, if any, under Section 515 of ERISA; neither the Company,
LLC nor any of the subsidiaries maintains or is required to contribute
to a "welfare plan" (as defined in Section 3(1) of ERISA) which
provides retiree or other post-employment welfare benefits or insurance
coverage (other than "continuation coverage" (as defined in Section 602
of ERISA)); each pension plan and welfare plan established or
maintained by the Company, LLC and/or one or more of the subsidiaries
is in compliance in all material respects with the currently applicable
provisions of ERISA; and neither the Company, LLC nor any of the
subsidiaries has incurred or could reasonably be expected to incur any
withdrawal liability under Section 4201 of ERISA, any liability under
Section 4062, 4063 or 4064 of ERISA, or any other liability under Title
IV of ERISA, except in each case, where such failures or liabilities
(or potential liabilities) would not reasonably be expected to result
in a Material Adverse Effect.
(xxxvii) Sarbanes Oxley Act. There is and has been no failure
on the part of the Company or any of the Company's directors or
officers, in their capacities as such, to comply in all material
respects with any applicable provision of the Sarbanes Oxley Act of
2002 and the rules and regulations promulgated thereunder, including,
without limitation, Section 402 related to loans.
(xxxviii)Relationship with Representatives. Except as
disclosed in the Registration Statement and the Prospectus, neither the
Company nor LLC (A) has any material lending or other relationship with
any bank or lending affiliate of any Representative and (B) intends to
use any of the proceeds from the sale of the Offered Securities
hereunder to repay any outstanding debt owed to any affiliate of any
Representative.
(xxxix) NASD. There are no affiliations with any member of the
National Association of Securities Dealers, Inc. (the "NASD") among the
Company's or LLC's officers, directors or any stockholder of the
Company or member of LLC, except as set forth in the Registration
Statement and Prospectus or otherwise disclosed in writing to the
Representatives.
(xl) Dividend Policy. The forward-looking statements contained
under the caption "Dividend Policies and Restrictions" in the
Prospectus represent the Company's and LLC's good faith estimates of
the Company's future performance, results and liquidity and are based
upon the Company's and LLC's assessment and analysis of all material
factors they deem relevant and the application of assumptions which
they deem reasonable after due and proper consideration of relevant
facts.
(xli) Regulatory Approvals. The statements made in the
Prospectus under the caption "Risk Factors -- -- Regulatory risks"
fairly present in all material respects the risks associated with
federal and state regulatory related laws and regulations, and all
pending or, to the knowledge of the Company or LLC, threatened legal or
governmental proceedings relating to such laws or regulations that
could result in a Material Adverse Effect. The business of the Company
and LLC, as described in the Prospectus, is being conducted in all
material respects in compliance with applicable requirements under the
Communications Act and the Telecommunications Act of 1996 and any
regulations issued thereunder and, to the knowledge of the Company or
LLC, there is no reason for the Federal Communications Commission (the
"FCC"), or any state regulatory agency to initiate enforcement
proceedings against the Company, LLC, their agents, employees or
products for any act or omission related to the Company's or
11
LLC's business. Except as disclosed in the Registration Statement and
Prospectus, there are no material administrative enforcement or legal
actions pending or, to the knowledge of the Company or LLC, threatened,
against the Company or LLC by the FCC or any other federal or state
regulatory agency. The execution and delivery of this Agreement and the
consummation of the transactions contemplated in this Agreement, in and
of themselves, (i) do not and will not (A) violate any requirement of
the Communications Act (including the Telecommunications Act of 1996)
or any regulation issued thereunder or (B) result in the creation of a
material lien, charge or encumbrance upon any property or assets of the
Company, LLC or any of the subsidiaries due to the operation of the
Communications Act (including the Telecommunications Act of 1996) or
any regulation issued thereunder and (ii) do not require any consent or
approval by the FCC or any other federal, state or local regulatory
agency.
(b) Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder severally and not jointly represents and warrants to each
Underwriter as of the date hereof, as of the Closing Time, and, if the Selling
Shareholder is selling Option Securities on a Date of Delivery, as of each such
Date of Delivery, and agrees with each Underwriter, as follows:
(i) Accurate Disclosure. The information which relates
specifically to each Selling Shareholder, as set forth under the
caption "Principal and Selling Shareholders" 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 not misleading; there are no agreements
between such Selling Shareholder and any other Selling Shareholder that
would be required to be described in the Prospectus that are not so
described; such Selling Shareholder is not prompted to sell the
Securities to be sold by such Selling Shareholder hereunder by any
information concerning the Company, LLC or any subsidiary of the
Company which is not set forth in the Prospectus.
(ii) Authorization of this Agreement. This Agreement has been
duly authorized, executed and delivered by or on behalf of such Selling
Shareholder.
(iii) Authorization of Power of Attorney and Custody
Agreement. The Power of Attorney (the "Power of Attorney") and the
Custody Agreement (the "Custody Agreement"), in the forms heretofore
furnished to the Representatives, have been duly authorized, executed
and delivered by such Selling Shareholder and, assuming the due
authorization, execution and delivery by the other parties thereto, are
the valid and binding agreements of such Selling Shareholder.
(iv) Noncontravention. The execution and delivery of this
Agreement and the Power of Attorney and the Custody Agreement and the
sale and delivery of the Securities to be sold by such Selling
Shareholder and the consummation of the transactions contemplated
herein and compliance by such Selling Shareholder with its obligations
hereunder do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach
of, or default under, or result in the creation or imposition of any
tax, lien, charge or encumbrance upon the Securities to be sold by such
Selling Shareholder pursuant to any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, license, lease or other
agreement or instrument to which such Selling Shareholder is a party or
by which such Selling Shareholder may be bound, or to which any of the
property or assets of such Selling Shareholder is subject (except for
such conflicts, breaches or defaults that would not adversely affect
such Selling Shareholder's ability to fulfill its obligations hereunder
or under the Power of Attorney or Custody Agreement in any material
respect), nor will such action result in any violation of the
provisions of the charter or by-laws or other organizational instrument
of such Selling
12
Shareholder, if applicable, or any applicable treaty, law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over such Selling Shareholder or any of its properties
(except for violations of any treaty, law, statute, rule, regulation,
judgment, order, writ or decree that would not adversely affect such
Selling Shareholder's ability to fulfill its obligations hereunder or
under the Power of Attorney and Custody Agreement in any material
respect).
(v) Valid Title. At the Closing Time, such Selling Shareholder
will have valid title to the Securities to be sold by such Selling
Shareholder free and clear of all security interests, claims, liens,
equities or other encumbrances other than pursuant to this Agreement
and other than those arising from the lock-up agreements contemplated
by Section 5(l) hereof, and all right, power and authority to enter
into this Agreement and the Power of Attorney and the Custody Agreement
and to sell, transfer and deliver the Securities to be sold by such
Selling Shareholder or a valid security entitlement in respect of such
Securities.
(vi) Delivery of Securities. Upon payment of the purchase
price for the Securities to be sold by such Selling Shareholder
pursuant to this Agreement, delivery of such Securities, as directed by
the Underwriters, to Cede & Co. ("Cede") or such other nominee as may
be designated by The Depository Trust Company ("DTC") (unless delivery
of such Securities is unnecessary because such Securities are already
in possession of Cede or such nominee), registration of such Securities
in the name of Cede or such other nominee (unless registration of such
Securities is unnecessary because such Securities are already
registered in the name of Cede or such nominee) and the crediting of
such Securities on the books of DTC to securities accounts of the
Underwriters (assuming that neither DTC nor any such Underwriter has
notice of any "adverse claim", within the meaning of Section 8-105 of
the New York Uniform Commercial Code (the "UCC"), to such Securities),
(A) DTC shall be a "protected purchaser", within the meaning of Section
8-303 of the UCC, of such Securities and will acquire its interest in
the Securities (including, without limitation, all rights that such
Selling Shareholder had or has the power to transfer in such
Securities) free and clear of any adverse claim within the meaning of
Section 8-102 of the UCC, (B) under Section 8-501 of the UCC, the
Underwriters will acquire a valid security entitlement in respect of
such Securities and (C) no action (whether framed in conversion,
replevin, constructive trust, equitable lien, or other theory) based on
any "adverse claim", within the meaning of Section 8-102 of the UCC, to
such Securities may be asserted against the Underwriters with respect
to such security entitlement; for purposes of this representation, such
Selling Shareholder may assume that when such payment, delivery (if
necessary) and crediting occur, (x) such Securities will have been
registered in the name of Cede or another nominee designated by DTC, in
each case on the Company's share registry in accordance with its
certificate of incorporation, bylaws and applicable law, (y) DTC will
be registered as a "clearing corporation", within the meaning of
Section 8-102 of the UCC, and (z) appropriate entries to the accounts
of the several Underwriters on the records of DTC will have been made
pursuant to the UCC.
(vii) Absence of Manipulation. Such Selling Shareholder has
not taken, and will not take, directly or indirectly, any action which
is designed to or which has constituted or would reasonably be expected
to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(viii) Absence of Further Requirements. No filing with, or
consent, approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by each Selling
Shareholder of its obligations hereunder or in the Power of Attorney or
the Custody Agreement,
13
or in connection with the sale and delivery of the Securities hereunder
or the consummation of the transactions contemplated by this Agreement,
except (i) such as may have previously been made or obtained or as may
be required under the 1933 Act or the 1933 Act Regulations or state
securities laws and (ii) such as have been obtained under the laws and
regulations of jurisdictions outside the United States in which the
Securities are offered.
(ix) Restriction on Sale of Securities. During a period of 180
days from the date of the Prospectus, such Selling Shareholder will
not, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (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 or otherwise transfer or dispose of,
directly or indirectly, any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or
file, or cause to be filed, any registration statement under the 1933
Act with respect to any of the foregoing or (ii) enter into any swap or
any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of
the Common Stock, whether any such swap or 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. Notwithstanding the
foregoing, such Selling Shareholder may transfer any securities of the
Company without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, provided
that (1) ▇▇▇▇▇▇▇ ▇▇▇▇▇ receives a signed lock-up agreement for the
balance of the lockup period from each donee, trustee, distributee, or
transferee, as the case may be, (2) any such transfer shall not involve
a disposition for value, (3) such transfers are not required to be
reported in any public report or filing with the Securities and
Exchange Commission, or otherwise and (4) the undersigned does not
otherwise voluntarily effect any public filing or report regarding such
transfers: (i) as a bona fide gift or gifts, (ii) to any trust for the
direct or indirect benefit of the undersigned or the immediate family
of the undersigned, (iii) as a distribution to limited partners or
stockholders of the undersigned or (iv) to the undersigned's affiliates
or to any investment fund or other entity controlled or managed by the
undersigned. In addition, the undersigned may exercise any warrants or
options (in each case as described in the Prospectus) to purchase
securities of the Company held by the undersigned; provided that the
undersigned hereby acknowledges and agrees that any securities of the
Company issued upon exercise of such warrants or options shall be
subject to the restrictions set forth in this paragraph. For purposes
of this lock-up agreement, "immediate family" shall mean any
relationship by blood, marriage or adoption, not more remote than first
cousin. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar
against the transfer of the Lock-Up Securities except in compliance
with the foregoing restrictions. Notwithstanding the foregoing, if (1)
during the last 17 days of the 180-day restricted period the Company
issues an earnings release or material news or a material event
relating to the Company occurs or (2) prior to the expiration of the
180-day restricted period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of
the 180-day period, the restrictions imposed in this clause (ix) shall
continue to apply until the expiration of the 18-day period beginning
on the issuance of the earnings release or the occurrence of the
material news or material event. Such Selling Shareholder hereby
acknowledges and agrees that written notice of any extension of the
180-day lock-up period pursuant to the previous paragraph will be
delivered by ▇▇▇▇▇▇▇ ▇▇▇▇▇ to the Company (in accordance with Section
13 of the Purchase Agreement) and that any such notice properly
delivered will be deemed to have been given to, and received by, such
Selling Shareholder. Such Selling Shareholder further agrees that,
prior to engaging in any transaction or taking any other action that is
subject to the terms of this lock-up agreement during the period from
the date of this lock-up agreement to and including the 34th day
following the expiration of the initial 180-day lock-up period, it will
give notice thereof to the Company and will not consummate such
transaction or take any such action unless it has received written
confirmation from the Company
14
that the 180-day lock-up period (as may have been extended pursuant to
the previous paragraph) has expired.
(x) No Association with NASD. Neither such Selling Shareholder
nor any of his/her/its affiliates directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under
common control with, or is a person associated with (within the meaning
of Article I (dd) of the By-laws of the National Association of
Securities Dealers, Inc.), any member firm of the National Association
of Securities Dealers, Inc.
(c) Officer's Certificates. Any certificate signed by any officer of
the Company or LLC or any of the subsidiaries delivered to the Representatives
or to counsel for the Underwriters shall be deemed a representation and warranty
by the Company and LLC to each Underwriter as to the matters covered thereby;
and any certificate signed by or on behalf of the Selling Shareholders as such
and delivered to the Representatives or to counsel for the Underwriters pursuant
to the terms of this Agreement shall be deemed a representation and warranty by
such Selling Shareholder to the Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule C, the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Selling Shareholders, acting severally and not jointly, hereby
grant an option to the Underwriters, severally and not jointly, to purchase up
to an additional [______] shares of Common Stock as set forth in Schedule B, at
the price per share set forth in Schedule C, less an amount per share equal to
any dividends or distributions declared by the Company and payable on the
Initial Securities but not payable on the Option Securities. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering overallotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by ▇▇▇▇▇▇▇ ▇▇▇▇▇ to the Company and the Selling
Shareholders setting forth the number of Option Securities as to which the
several Underwriters are then exercising the option and the time and date of
payment and delivery for such Option Securities. Any such time and date of
delivery (a "Date of Delivery") shall be determined by ▇▇▇▇▇▇▇ ▇▇▇▇▇, but shall
not be later than seven full business days after the exercise of said option,
nor in any event prior to the Closing Time, as hereinafter defined. If the
option is exercised as to all or any portion of the Option Securities, each of
the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Securities set forth in Schedule A opposite the name of
such Underwriter bears to the total number of Initial Securities, subject in
each case to such adjustments as ▇▇▇▇▇▇▇ ▇▇▇▇▇ in its discretion shall make to
eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, Four Times Square, New York
10036-6522, or at such other place as shall be agreed upon by the
Representatives and the Company and the Selling Shareholders, at 9:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
15
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives, the Company and the Selling Shareholders (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above mentioned
offices, or at such other place as shall be agreed upon by the Representatives,
the Company and the Selling Shareholders, on each Date of Delivery as specified
in the notice from the Representatives to the Company and the Selling
Shareholders.
Payment shall be made to the Company and the Selling Shareholders by
wire transfer of immediately available funds to bank accounts designated by the
Company and the Custodian pursuant to each Selling Shareholder's Power of
Attorney and Custody Agreement, as the case may be, against delivery to the
Representatives for the respective accounts of the Underwriters of certificates
for the Securities to be purchased by them. It is understood that each
Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
one full business day before the Closing Time or the relevant Date of Delivery,
as the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
(e) Appointment of Qualified Independent Underwriter. The Company, LLC
and the Selling Shareholders hereby confirm their engagement of ▇▇▇▇▇▇ Brothers
Inc. as, and ▇▇▇▇▇▇ Brothers Inc. hereby confirms its agreement with the
Company, LLC and the Selling Shareholders to render services as, a "qualified
independent underwriter" within the meaning of Rule 2720 of the Conduct Rules of
the National Association of Securities Dealers, Inc. with respect to the
offering and sale of the Securities. ▇▇▇▇▇▇ Brothers Inc., solely in its
capacity as qualified independent underwriter and not otherwise, is referred to
herein as the "Independent Underwriter".
SECTION 3. Covenants of the Company. The Company and, with respect to
Section 3(1) below, LLC covenant with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Representatives immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification
16
of the Securities for offering or sale in any jurisdiction, or of the initiation
or threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)) or any amendment, supplement
or revision to either the prospectus included in the Registration Statement at
the time it became effective or to the Prospectus, will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representatives or counsel for the
Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consent to the use
of such copies for purposes permitted by the 1933 Act. The Company will furnish
to each Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto furnished to
the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the reasonable
opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the reasonable opinion
of such counsel, at any such time to amend the Registration Statement or amend
or supplement the Prospectus in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters such number of copies of such amendment
or supplement as the Underwriters may reasonably request.
17
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject.
(g) Rule 158. The Company will timely file such reports pursuant to the
Securities Exchange Act of 1934 (the "1934 Act") as are necessary in order to
make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds."
(i) Listing. The Company will use their reasonable best efforts to
effect the listing of the Common Stock (including the Securities), subject to
notice of issuance, on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 180 days from
the date of the Prospectus, the Company will not, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ (i) directly or indirectly, 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 or otherwise
transfer or dispose of any share of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or 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. The foregoing sentence shall not apply to (A)
the Securities to be sold hereunder, (B) any shares of Common Stock issued by
the Company upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the Prospectus, (C)
any shares of Common Stock issued or options to purchase Common Stock granted
pursuant to existing employee benefit plans of the Company referred to in the
Prospectus or (D) any shares of Common Stock issued pursuant to any non-employee
director stock plan or dividend reinvestment plan. Notwithstanding the
foregoing, if (1) during the last 17 days of the 180-day restricted period the
Company issues an earnings release or material news or a material event relating
to the Company occurs or (2) prior to the expiration of the 180-day restricted
period, the Company announces that it will release earnings results during the
16-day period beginning on the last day of the 180-day period, the restrictions
imposed in this clause (j) shall continue to apply until the expiration of the
18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file all
documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods required by the 1934 Act and the rules and regulations
of the Commission thereunder, subject to any permitted extensions thereunder.
(l) Regulatory Filings. On or before completion of this offering, the
Company and LLC shall make all filings required in order to consummate the
transactions contemplated hereby and the Related Transactions under the
Communications Act (including the Telecommunications Act of 1996), the rules and
regulations adopted by the FCC and applicable laws, regulations and rules
governing the
18
telecommunications industry in the States of Texas, Oklahoma, New Mexico and
Arkansas, except when the failure to do so would not reasonably be expected to
result in a Material Adverse Effect.
(m) Compliance with NASD Rules. The Company hereby agrees that they
will ensure that the Reserved Securities will be restricted as 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 this Agreement. The
Underwriters will notify the Company as to which persons will need to be so
restricted. At the request of the Underwriters, the Company will direct the
transfer agent to place a stop transfer restriction upon such securities for
such period of time. Should the Company release, or seek to release, from such
restrictions any of the Reserved Securities, the Company agrees to reimburse the
Underwriters for any reasonable expenses (including, without limitation, legal
expenses) they incur in connection with such release.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company, LLC and the Selling Shareholders will pay or
cause to be paid all expenses incident to the performance of their obligations
under this Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's or LLC's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus and of the
Prospectus and any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriters of copies of the Blue Sky Survey and
any supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Securities, (ix) the costs and expenses of the Company or LLC
relating to investor presentations on any "road show" undertaken in connection
with the marketing of the Securities, 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, travel and lodging expenses of the representatives and officers
of the Company or LLC and any such consultants, and the cost of aircraft and
other transportation chartered in connection with the road show, (x) the filing
fees incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the National Association of
Securities Dealers, Inc. (the "NASD") of the terms of the sale of the
Securities, (xi) the fees and expenses incurred in connection with the listing
of the Securities on the New York Stock Exchange, (xii) all costs and expenses
of the Underwriters, including the fees and disbursements of counsel for the
Underwriters, in connection with matters related to the Reserved Securities
which are designated by the Company and LLC for sale to Invitees and (xiii) the
fees and expenses of the Independent Underwriter. Except as otherwise set forth
herein, the Underwriters shall be responsible for all other expenses incurred by
them, including the fees and expenses of their counsel.
(b) Expenses of the Selling Shareholders. The Company, jointly and
severally, will pay all expenses incident to the performance of the Selling
Shareholders' respective obligations under, and the consummation of the
transactions contemplated by this Agreement, including (i) any stamp duties,
capital duties and stock transfer taxes, if any, payable upon the sale of the
Securities to the Underwriters, and
19
their transfer between the Underwriters pursuant to an agreement between such
Underwriters, and (ii) the fees and disbursements of the Selling Shareholders'
respective counsel and other advisors.
(c) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5, Section 9(a) or
Section 11 hereof, the Company and LLC shall reimburse the Underwriters for all
of their out of pocket expenses, including the reasonable fees and disbursements
of counsel for the Underwriters.
(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company, LLC and the Selling Shareholders may make
for the sharing of such costs and expenses.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company, LLC and the Selling Shareholders
contained in Section 1 hereof or in certificates of any officer of the Company
or LLC or any subsidiary or on behalf of any Selling Shareholder delivered
pursuant to the provisions hereof, to the performance by the Company and LLC of
their covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A).
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the opinion, dated as of Closing Time, of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for the Company, in form and substance as set
forth in Exhibit B hereto, together with signed or reproduced copies of such
letter for each of the other Underwriters as counsel to the Underwriters may
reasonably request. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company, LLC and the subsidiaries and
certificates of public officials.
(c) Opinion of Counsel for the Selling Shareholders. At Closing Time,
the Representatives shall have received the opinion, dated as of Closing Time,
of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for the Selling Shareholders, in form and
substance as set forth in Exhibit C hereto, together with signed or reproduced
copies of such letter for each of the other Underwriters as counsel to the
Underwriters may reasonably request. Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company, LLC and the
subsidiaries and certificates of public officials.
(d) Opinion of Regulatory Counsel for Company.(1) At Closing Time, the
Representatives shall have received the opinion, dated as of Closing Time, of
[ ], regulatory counsel for the Company, in form and substance as set forth in
Exhibit D hereto, together with signed or reproduced copies of such letter for
each of the other Underwriters as counsel to the Underwriters may reasonably
----------
(1) The underwriters will need outside counsel to provide both the Texas
regulatory opinion and the FCC Opinion, although the opinions related
to the remaining states can come from ▇▇▇▇ ▇▇▇▇▇.
20
request. Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company, LLC and the subsidiaries and
certificates of public officials.
(e) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters reasonably satisfactory to the Underwriters. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of the Company,
LLC and the subsidiaries and certificates of public officials.
(f) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company, LLC and the subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representatives shall have
received a certificate of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company and LLC have complied with all agreements and
satisfied all conditions on their part to be performed or satisfied at or prior
to Closing Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are pending or, to their knowledge, contemplated by the
Commission.
(g) Certificate of Selling Shareholders. At Closing Time, the
Representatives shall have received a certificate of an Attorney-in-Fact on
behalf of each Selling Shareholder, dated as of Closing Time, to the effect that
(i) the representations and warranties of each Selling Shareholder contained in
Section 1(b) hereof are true and correct in all respects with the same force and
effect as though expressly made at and as of Closing Time and (ii) each Selling
Shareholder has complied in all material respects with all agreements and all
conditions on its part to be performed under this Agreement at or prior to
Closing Time.
(h) Accountants' Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from Deloitte & Touche LLP, a
letter dated such date, in form and substance reasonably satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters 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.
(i) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from Deloitte & Touche LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (g) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(j) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(k) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
21
(l) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form of
Exhibit A hereto signed by the persons listed on Schedule F hereto.
(m) Officers' Certificate. The Representatives shall have received at
Closing Time a certificate, dated as of Closing Time and signed by the chief
executive officer and the chief financial officer of the Company, substantially
in the form set forth in Exhibit E hereto.
(n) Related Transactions. On or prior to Closing Time, the Amended
Credit Agreement shall have been duly and validly authorized, executed and
delivered by the Company, LLC and the subsidiaries (to the extent a party
thereto) and the Reorganization shall have been consummated pursuant to legally
enforceable terms.
(o) Related Transactions Documents. Each of the Related Transaction
Documents shall be reasonably satisfactory in form and substance to the
Representatives and shall have been executed and delivered by all the respective
parties thereto and shall be in full force and effect, and there shall have been
no material amendments, alterations, modifications or waivers if any provisions
thereof since the date of this Agreement.
(p) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company and the Selling Shareholders contained herein and the statements
in any certificates furnished by the Company or any subsidiary of the Company
and the Selling Shareholders hereunder shall be true and correct as of each Date
of Delivery and, at the relevant Date of Delivery, the Representatives shall
have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(f) hereof remains true and correct as of such Date of
Delivery.
(ii) Certificate of Selling Shareholders. A certificate, dated
such Date of Delivery, of an Attorney-in-Fact on behalf of each Selling
Shareholder confirming that the certificate delivered at Closing Time
pursuant to Section 5(g) remains true and correct as of such Date of
Delivery.
(iii) Opinion of Counsel for Company. The favorable opinion of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for the Company, in form and substance
reasonably satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iv) Opinion of Counsel for the Selling Shareholders. The
favorable opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for the Selling
Shareholders, in form and substance reasonably satisfactory to counsel
for the Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(c)
hereof.
(v) Opinion of Regulatory Counsel for Company. The favorable
opinion of [ ], regulatory counsel for the Company, in form and
substance reasonably satisfactory to counsel for the Underwriters,
dated such Date of Delivery, relating to the Option
22
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(d) hereof.
(vi) Opinion of Counsel for Underwriters. The favorable
opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(e) hereof.
(vii) Bring-down Comfort Letter. A letter from Deloitte &
Touche LLP, in form and substance reasonably satisfactory to the
Representatives and dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to the Representatives
pursuant to Section 5(i) hereof, except that the "specified date" in
the letter furnished pursuant to this paragraph shall be a date not
more than five days prior to such Date of Delivery.
(q) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company, LLC and the Selling Shareholders in connection with the
issuance and sale of the Securities as herein contemplated shall be satisfactory
in form and substance to the Representatives and counsel for the Underwriters.
(r) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the Company,
LLC and the Selling Shareholders at any time at or prior to Closing Time or such
Date of Delivery, as the case may be, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6, 7 and 8 shall survive any such termination and remain
in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters by the Company. (1) The Company and
LLC, jointly and severally, agree to indemnify and hold harmless each
Underwriter, its affiliates, as such term is defined in Rule 501(b) under the
1933 Act (each, an "Affiliate"), its selling agents and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any
23
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(e) below) any such
settlement is effected with the written consent of the Company;
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇
▇▇▇▇▇), incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company or LLC
by any Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto; and provided, further, that the Company will not be liable to any
Underwriter with respect to any Prospectus to the extent the Company shall
sustain the burden of proving that any such loss, liability, claim, damage or
expense resulted from the fact that such Underwriter, in contravention of a
requirement under this Agreement or applicable law, sold Securities to a person
to whom such Underwriter failed to send or give, at or prior to the Closing Date
or Date of Delivery, as applicable, a copy of the Prospectus, as then amended or
supplemented if (A) the Company has previously furnished copies thereof
(sufficiently in advance of the Closing Date or Date of Delivery, as applicable,
to allow for distribution by the Closing Date or Date of Delivery, as
applicable) to the Underwriter and the loss, liability, claim, damage or expense
of such Underwriter resulted from an untrue statement or omission of a material
fact contained in or omitted from the preliminary prospectus which was corrected
in the Prospectus as, if applicable, amended or supplemented prior to the
Closing Date or Date of Delivery, as applicable, and such Prospectus was
required by law to be delivered at or prior to the written confirmation of the
sale to such person and (B) such failure to give or send such Prospectus by the
Closing Date or Date of Delivery, as applicable, to the person or persons
asserting such loss, liability, claim, damage or expense would have constituted
the sole defense to the claim asserted by such person.
(2) In addition to and without limitation of the Company's and LLC's
obligation to indemnify ▇▇▇▇▇▇ Brothers Inc. as an Underwriter, the Company and
LLC also jointly and severally, agree to indemnify and hold harmless the
Independent Underwriter, its Affiliates and Selling Agents and each person, if
any, who controls the Independent Underwriter within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act, from and against any and all
loss, liability, claim, damage and expense whatsoever, as incurred, incurred as
a result of the Independent Underwriter's participation as a "qualified
independent underwriter" within the meaning of Rule 2720 of the Conduct Rules of
the National Association of Securities Dealers, Inc. in connection with the
offering of the Securities, provided, however, that the Company shall not be
liable in any such case to the extent such losses, liabilities, claims, damages
or expenses resulted directly from the gross negligence, bad faith or willful
misconduct of ▇▇▇▇▇▇ Brothers Inc.
(b) Indemnification of Underwriters by the Selling Shareholders. Each
Selling Shareholder, severally, but not jointly, agrees to indemnify and hold
harmless each Underwriter, its Affiliates and selling agents and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act to the extent and in the manner set forth in
clauses (a)(1) and (2) above; provided, however, that any untrue statement or
omission or alleged untrue statement or omission was made in reliance upon and
in conformity with written information furnished to the
24
Company by any Selling Shareholders expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto). It is hereby understood that each Selling Shareholder shall be deemed
to have provided the information with respect to such Shareholder as set forth
under the caption "Principal and Selling Shareholders." Notwithstanding anything
to the contrary contained herein, the extent of such Selling Shareholder's
liability under this Agreement shall be limited to the gross proceeds received
by such Selling Shareholder from the sale of the shares of Common Stock by such
Selling Shareholder pursuant to this Agreement.
(c) Indemnification of Company, LLC, Directors and Officers and Selling
Shareholders. Each Underwriter severally agrees to indemnify and hold harmless
the Company, LLC, their directors, each of their officers who signed the
Registration Statement, and each person, if any, who controls the Company or LLC
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
and each Selling Shareholder and each person, if any, who controls any Selling
Shareholder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company or LLC by such Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto). The
parties hereto agree that such written information consists of: [ ].
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) and 6(b)
above, counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇,
and, in the case of parties indemnified pursuant to Section 6(c) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties 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; provided, that, if indemnity is
sought pursuant to Section 6(a)(2), then, in addition to the fees and expenses
of such counsel for the indemnified parties, the indemnifying party shall be
liable for the reasonable fees and expenses of not more than one counsel (in
addition to any local counsel) separate from its own counsel and that of the
other indemnified parties for the Independent Underwriter in its capacity as a
"qualified independent underwriter" and all persons, if any, who control the
Independent Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of 1934 Act 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 if, in the reasonable judgment of the Independent
Underwriter, there may exist a conflict of interest between the Independent
Underwriter and the other indemnified parties. Any such separate counsel for the
Independent Underwriter and such control persons of the Independent Underwriter
shall be designated in writing by the Independent Underwriter. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any
25
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel with respect to a claim in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof, such indemnifying party agrees that it shall be
liable for any settlement of the nature contemplated by Section 6(a)(ii) or
settlement of any claim in connection with any violation referred to in Section
6(f) effected without its written consent if (i) such settlement is entered into
more than 45 days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall have received notice of the terms of
such settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
(f) Indemnification for Reserved Securities. In connection with the
offer and sale of the Reserved Securities, the Company and LLC agree, to
indemnify and hold harmless the Underwriters, their Affiliates and selling
agents and each person, if any, who controls any Underwriter within the meaning
of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and
against any and all loss, liability, claim, damage and expense (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending, investigating or settling any such action or claim),
as incurred, (i) arising out of the violation of any applicable laws or
regulations of foreign jurisdictions where Reserved Securities have been
offered; (ii) arising out of any untrue statement or alleged untrue statement of
a material fact contained in any prospectus wrapper or other material prepared
by or with the consent of the Company or LLC for distribution to Invitees in
connection with the offering of the Reserved Securities 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; (iii)
caused by the failure of any Invitee to pay for and accept delivery of Reserved
Securities which have been orally confirmed for purchase by any Invitee by the
end of the first business day after the date of the Agreement; or (iv) related
to, or arising out of or in connection with, the offering of the Reserved
Securities.
(g) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement among the Company, LLC and the
Selling Shareholders with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, LLC and
the Selling Shareholders on the one hand and the Underwriters on the other hand
from the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) 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, LLC and the
Selling Shareholders on the one hand and of the Underwriters on the other hand
in connection with the statements or omissions, or in connection with any
violation of the nature referred to in Section 6(e) hereof, which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
26
The relative benefits received by the Company, LLC and the Selling
Shareholders on the one hand and the Underwriters on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Selling Shareholders and the total
underwriting discount received by the Underwriters, in each case as set forth on
the cover of the Prospectus, bear to the aggregate initial public offering price
of the Securities as set forth on the cover of the Prospectus.
The relative fault of the Company, LLC and the Selling Shareholders on
the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether any such 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, LLC or the Selling
Shareholders or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission or any violation of the nature referred to in Section 6(e) hereof.
The Company, LLC, the Selling Shareholders and the Underwriters agree
that ▇▇▇▇▇▇ Brothers Inc. will not receive any additional benefits hereunder for
serving as the Independent Underwriter in connection with the offering and sale
of the Securities.
The Company, LLC, the Selling Shareholders and the Underwriters agree
that it would not be just and 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 which does
not take account of the equitable considerations referred to above in this
Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, (i) 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 were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission, and (ii) no Selling
Shareholder shall be required to contribute any amount in excess of the gross
proceeds received by such Selling Shareholder from the sale of its Securities
pursuant to this Agreement.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each Underwriter's Affiliates and selling agents shall have the
same rights to contribution as such Underwriter, and each director of the
Company or LLC, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company, LLC or any Selling
Shareholder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Company, LLC or
such Selling Shareholder, as the case may be. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the number of Initial Securities set forth opposite their respective names in
Schedule A hereto and not joint. The Selling Shareholders' respective
27
obligations to contribute pursuant to this Section 7 are several in proportion
to the number of Securities set forth opposite their respective names in
Schedule B hereto and not joint.
The provisions of this Section 7 shall not affect any agreement among
the Company, LLC and the Selling Shareholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or LLC or the Selling Shareholders
submitted pursuant hereto, shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of any Underwriter or
its Affiliates or selling agents, any person controlling any Underwriter, its
officers or directors or any person controlling the Company or LLC or any person
controlling any Selling Shareholder and (ii) delivery of and payment for the
Securities.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, LLC and the Selling Shareholders, at any
time at or prior to Closing Time (i) if there has been, since the time of
execution of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company, LLC and the subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representatives, impracticable or
inadvisable to market the Securities or to enforce contracts for the sale of the
Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the New York Stock
Exchange, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or (iv) a material disruption has
occurred in commercial banking or securities settlement or clearance services in
the United States, or (v) if a banking moratorium has been declared by either
Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24 hour period, then:
(i) if the number of Defaulted Securities does not exceed 10%
of the number of Securities to be purchased on such date, each of the
non defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
28
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non defaulting Underwriters, or
(ii) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the Underwriters to purchase and of the Selling
Shareholders to sell the Option Securities to be purchased and sold on
such Date of Delivery shall terminate without liability on the part of
any non defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of or arising from its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Selling Shareholders to sell the relevant
Option Securities, as the case may be, either (i) the Representatives or (ii)
the Company, LLC and any Selling Shareholder shall have the right to postpone
Closing Time or the relevant Date of Delivery, as the case may be, for a period
not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements.
As used herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10.
SECTION 11. Default by the Company or one or more of the Selling
Shareholders.
(a) If the Company shall fail at Closing Time to sell the number of
Securities that it is obligated to sell hereunder, then this Agreement shall
terminate without any liability on the part of any nondefaulting party;
provided, however, that the provisions of Sections 1, 4, 6, 7 and 8 shall remain
in full force and effect. No action taken pursuant to this Section shall relieve
the Company or LLC (which shall be jointly and severally liable with the
Company) from liability, if any, in respect of such default.
(b) If a Selling Shareholder shall fail at a Date of Delivery to sell
and deliver the number of Securities which such Selling Shareholder or Selling
Shareholders are obligated to sell hereunder and the remaining Selling
Shareholders do not exercise the right hereby granted to increase, pro rata or
otherwise, the number of Securities to be sold by them hereunder to the total
number to be sold by all Selling Shareholders as set forth in Schedule B hereto,
then the Underwriters may, at option of the Representatives, by notice from the
Representatives to the Company and the non-defaulting Selling Shareholders,
either (i) terminate this Agreement with respect to the Option Securities
without any liability on the fault of any non-defaulting party except that the
provisions of Sections 1, 4, 6, 7 and 8 shall remain in full force and effect or
(ii) elect to purchase the Securities which the non-defaulting Selling
Shareholders and the Company have agreed to sell hereunder. No action taken
pursuant to this Section 11 shall relieve any Selling Shareholder so defaulting
from liability, if any, in respect of such default.
In the event of a default by any Selling Shareholder as referred to in
this Section 11, each of the Representatives, the Company, LLC and the
non-defaulting Selling Shareholders shall have the right to postpone Closing
Time or Date of Delivery for a period not exceeding seven days in order to
effect any required change in the Registration Statement or Prospectus or in any
other documents or arrangements.
SECTION 12. Tax Disclosure. Notwithstanding any other provision of this
Agreement, from the commencement of discussions with respect to the transactions
contemplated hereby, the Company and LLC (and each employee, representative or
other agent of the Company or LLC) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure (as such terms are
used in
29
Sections 6011, 6111 and 6112 of the U.S. Code and the Treasury Regulations
promulgated thereunder) of the transactions contemplated by this Agreement and
all materials of any kind (including opinions or other tax analyses) that are
provided relating to such tax treatment and tax structure.
SECTION 13. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at 4 World Financial
Center, New York, New York 10080, attention of o; and notices to the
Company or LLC shall be directed to the Company or LLC, as the case may be, at
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, attention of
Chief Financial Officer and notices to the Selling Shareholders shall be
directed to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP, Citicorp Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
SECTION 14. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters, the Company, LLC and the Selling
Shareholders and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters, the Company, LLC and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company, LLC and the Selling
Shareholders and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 16. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT.
EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 17. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
SECTION 18. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
30
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company, LLC and the Attorney in Fact
for the Selling Shareholders a counterpart hereof, whereupon this instrument,
along with all counterparts, will become a binding agreement among the
Underwriters, the Company, LLC and the Selling Shareholders in accordance with
its terms.
Very truly yours,
VALOR COMMUNICATIONS GROUP, INC.
By
--------------------------------------------------
Name:
Title:
VALOR TELECOMMUNICATIONS, LLC
By
--------------------------------------------------
Name:
Title:
[Selling Stockholders]
CONFIRMED AND ACCEPTED,
as of the date first above written:
2
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
BANC OF AMERICA SECURITIES LLC
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By
-----------------------------------------
Name:
Title:
For themselves and as Representatives of the other Underwriters named
in Schedule A hereto.
3
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------- ------------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated.....................................................
Banc of America Securities LLC .......................................................
▇.▇. ▇▇▇▇▇▇ Securities Inc..........................................................
▇▇▇▇▇▇ Brothers Inc. .................................................................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.....................................................
Wachovia Capital Markets, LLC.........................................................
Bear, ▇▇▇▇▇▇▇ & Co. Inc. .............................................................
CIBC World Markets Corp. .............................................................
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated..................................................
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc. .....................................................
Total................................................... 29,375,000
Schedule A-1
SCHEDULE B
SELLING SHAREHOLDERS
Maximum Number of Option
Selling Shareholder Securities to be Sold
------------------- ------------------------
Total................................ 4,406,250
Schedule B-1
SCHEDULE C
VALOR COMMUNICATIONS GROUP, INC.
Shares of Common Stock
(Par Value $0.0001 Per Share)
1. The initial public offering price per share for the
Securities, determined as provided in said Section 2, shall be $[ ].
2. The purchase price per share for the Securities to be paid by
the several Underwriters shall be $[ ], being an amount equal to the initial
public offering price set forth above less $[ ] per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the overallotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial Securities but not payable on the Option Securities.
Schedule C-1
SCHEDULE D
SUBSIDIARIES OF THE COMPANY
Valor Telecommunications, LLC
Valor Telecommunications of Texas, LP
Valor Telecommunications Equipment, LP
Valor Telecommunications Services, LP
Valor Telecommunications Investments, LLC
Valor Telecommunications Enterprises, LLC
Valor Telecommunications Enterprise Finance Corp.
Valor Telecommunications LD, LP
Southwest Enhanced Network Services, LLC
Western Access Services, LLC
Western Access Services of Arizona, LLC
Western Access Services of Arkansas, LLC
Western Access Services of Colorado, LLC
Western Access Services of Oklahoma, LLC
Western Access Services of New Mexico, LLC
Western Access Services of Texas, LP
Valor Telecommunications Corporate Group, LP
Valor Telecommunications Southwest, LLC
Valor Telecommunications Southwest II, LLC
Valor Telecommunications Enterprises II, LLC
Kerrville Communications Corporation
Kerrville Communications Management, LLC
Kerrville Communications Enterprises, LLC
Advanced Tel-Com Systems, LP
Kerrville Telephone, LP
Kerrville Cellular, LP
KCC TelCom, LP
Kerrville Cellular Management, LLC
Kerrville Cellular Holdings, LLC
Kerrville Mobile Holdings, Inc.
Kerrville Wireless Holdings, LP
Schedule E-1
SCHEDULE E
RELATED TRANSACTION DOCUMENTS
[Amended Credit Agreement]
[Purchase Agreement]
[Securityholders' Agreement]
2
SCHEDULE F
LIST OF PERSONS AND ENTITIES
SUBJECT TO LOCK-UP
[To Come]
3
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
TO BE DELIVERED PURSUANT TO SECTION 5(l)
o, 2005
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated,
Banc of America Securities LLC
▇.▇. ▇▇▇▇▇▇ Securities Inc.
as Representatives of the several
Underwriters to be named in the
within mentioned Purchase Agreement
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Proposed Public Offering by Valor Communications Group, Inc.
Dear Sirs:
The undersigned, a stockholder, an officer or a director of Valor
Communications Group, Inc., a Delaware corporation (the "Company"), understands
that ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
("▇▇▇▇▇▇▇ ▇▇▇▇▇"), Banc of America Securities LLC and ▇.▇. ▇▇▇▇▇▇ Securities
Inc. propose to enter into a Purchase Agreement (the "Purchase Agreement") with
the Company providing for the public offering of shares (the "Securities") of
the Company's common stock, par value $0.0001 per share (the "Common Stock"). In
recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder, an officer or a director of the Company, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the undersigned agrees with each underwriter to be named in
the Purchase Agreement that, during a period of l80 days from the date of the
Purchase Agreement, the undersigned will not, without the prior written consent
of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, (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 for the sale of, or otherwise
dispose of or transfer any shares of the Company's Common Stock or any
securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file, or cause to be filed, any registration statement under the Securities Act
of 1933, as amended, with respect to any of the foregoing (collectively, the
"Lock-Up Securities") or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Lock-Up Securities, whether any such
swap or transaction is to be settled by delivery of Common Stock or other
securities, in cash or otherwise.
Notwithstanding the foregoing, if (1) during the last 17 days of the
180-day restricted period the Company issues an earnings release or material
news or a material event relating to the Company occurs or (2) prior to the
expiration of the 180-day restricted period, the Company announces that it will
release
A-1
earnings results during the 16-day period beginning on the last day of the
180-day period, the restrictions imposed in this agreement shall continue to
apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.
The undersigned hereby acknowledges and agrees that written notice of
any extension of the 180-day lock-up period pursuant to the previous paragraph
will be delivered by ▇▇▇▇▇▇▇ ▇▇▇▇▇ to the Company (in accordance with Section 13
of the Purchase Agreement) and that any such notice properly delivered will be
deemed to have been given to, and received by, the undersigned. The undersigned
further agrees that, prior to engaging in any transaction or taking any other
action that is subject to the terms of this lock-up agreement during the period
from the date of this lock-up agreement to and including the 34th day following
the expiration of the initial 180-day lock-up period, it will give notice
thereof to the Company and will not consummate such transaction or take any such
action unless it has received written confirmation from the Company that the
180-day lock-up period (as may have been extended pursuant to the previous
paragraph) has expired.
Notwithstanding the foregoing, the undersigned may transfer the Lock-Up
Securities without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, provided that (1)
▇▇▇▇▇▇▇ ▇▇▇▇▇ receives a signed lock-up agreement for the balance of the lockup
period from each donee, trustee, distributee, or transferee, as the case may be,
(2) any such transfer shall not involve a disposition for value, (3) such
transfers are not required to be reported in any public report or filing with
the Securities and Exchange Commission, or otherwise and (4) the undersigned
does not otherwise voluntarily effect any public filing or report regarding such
transfers:
(i) as a bona fide gift or gifts;
(ii) to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned;
(iii) as a distribution to limited partners or stockholders of the
undersigned; or
(iv) to the undersigned's affiliates or to any investment fund or
other entity controlled or managed by the undersigned.
In addition, the undersigned may exercise any warrants or options to
purchase securities of the Company held by the undersigned; provided that the
undersigned hereby acknowledges and agrees that any securities of the Company
issued upon exercise of such warrants or options shall be subject to the
restrictions set forth in this paragraph. For purposes of this lock-up
agreement, "immediate family" shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin. The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent and registrar against the transfer of the Lock-Up Securities except in
compliance with the foregoing restrictions.
The restrictions hereunder shall lapse and become null and void if the
proposed public offering is not consummated by June 30, 2005.
Very truly yours,
Signature:
---------------------------
A-2
Print Name:
---------------------------
A-3
EXHIBIT B
FINAL ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ OPINION ON BEHALF OF THE COMPANY
PURSUANT TO SECTION 5(B) TO BE INSERTED HERE
[TO COME]
B-1
EXHIBIT C
FINAL ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ OPINION ON BEHALF OF THE SELLING SHAREHOLDERS
PURSUANT TO SECTION 5(C) TO BE INSERTED HERE
[TO COME]
EXHIBIT D
FORM OF OPINION OF REGULATORY COUNSEL FOR THE COMPANY
Definitions specific to this opinion:
"Authorization" means all certificates, concessions, cable and other
franchises, consents, exemptions, orders, permits, licenses, authorizations or
other approvals (each, an "Authorization") of and from a Governmental Authority.
"Applicable Law" shall mean any of (i) the Federal Communications Act
of 1934, as amended, including the Telecommunications Act of 1996 (the "Act"),
and the rules, regulations, policies, orders, court or administrative agency
decisions and interpretations made pursuant to the Act and (ii) the statutes,
rules, regulations, policies, orders, court or administrative agency decisions
and interpretations, or other laws of a Governmental Authority, including,
without limitation, communications and environmental laws and regulations.
"Governmental Authority" means (i) the Federal Communications
Commission and (ii) all Texas, Oklahoma, New Mexico and Arkansas state, local
and other governmental authorities (including the Public Utility Commission of
Texas, [ADD OK, NM and AK regulatory boards], all self-regulatory governmental
organizations, all cable franchising authorities and all courts and other
tribunals).
Capitalized terms used and not otherwise defined herein shall have the meanings
ascribed to them in the Underwriting Agreement (the "Agreement").
Opinions:
1. Each of the Company and its subsidiaries validly holds each of the
Authorizations listed in Exhibit A as being held by it (the "Company
Authorizations"). The Company Authorizations are in full force and
effect and we have no reason to believe that the Company Authorizations
will not be renewed in the ordinary course. The Company Authorizations
are the only Authorizations necessary or required under Applicable Laws
for the Company and its subsidiaries to conduct their business as
currently conducted and as proposed to be conducted following the
Closing Time in the Registration Statement and Prospectus, including
the incumbent local exchange services, long distance service, dial-up
and DSL internet access and other communication services provided by
the Company and its subsidiaries.
2. Neither the Company nor any of its subsidiaries has received any notice
of proceedings relating to the revocation, suspension or modification
of any Company Authorization. All Company Authorizations are valid and
in full force and effect and the Company and its subsidiaries are in
compliance in all material respects with the terms and conditions of
all Company Authorizations and with the rules and regulations of the
regulatory authorities having jurisdiction with respect thereto, except
where the failure to be in full force and effect or be in compliance
would not result in a material adverse effect on the Company. The
Company Authorizations are not subject to any material conditions
outside the ordinary course.
2
3. The Company and LLC have made all reports and filings, and paid all
fees, required by all Governmental Authorities necessary for the
Company and its subsidiaries to own, lease, license and use their
properties and assets and to conduct their business in the manner
described in the Registration Statement and Prospectus or as currently
conducted, except for those reports, filings, and fees the failure to
file or pay of which would not have a material adverse effect on the
Company.
4. No consent, approval, or authorization of, or filing with, any
Governmental Authority under any Applicable Law is necessary for the
execution and delivery of the Agreement and performance by the Company
and its subsidiaries and the Selling Shareholders of their respective
obligations under the Agreement, and the consummation of the
transactions contemplated by the Agreement, the Registration Statement
and Prospectus. The execution and delivery of the Agreement and the
performance by each of the Company, LLC and the subsidiaries and the
Selling Shareholders of their respective obligations under the
Agreement, and the consummation of the transactions contemplated by the
Agreement, the Registration Statement and Prospectus do not violate any
Applicable Law.
5. There is no unsatisfied adverse order, decree or ruling under any
Applicable Law outstanding against the Company or any of its
subsidiaries. There is no proceeding (including any rulemaking
proceeding), complaint, petition or investigation pending or, to the
best of our knowledge, threatened, against the Company or any of its
subsidiaries, before any Governmental Authority under any Applicable
Law (other than proceedings affecting the telecommunications industry
generally, to which none of the Company and its subsidiaries is a
specific party and which have been accurately described in the
Registration Statement and Prospectus). Neither the Company nor LLC is
a party to any complaint, petition, investigation or other proceeding
against other licensees or applicants under any Applicable Law.
6. Based upon an investigation, to our knowledge neither the Company nor
LLC is in violation of, or in default under any Applicable Law, the
effect of which, singly or in the aggregate, would have a material
adverse effect on the Company.
7. The Registration Statement and Prospectus contain an accurate and
correct description of all material regulation to which the Company and
its subsidiaries are subject under any Applicable Law. The statements
in the Registration Statement and Prospectus pertaining to matters of
Applicable Law, insofar as such statements constitute a summary of the
legal matters, documents, or proceedings of a Governmental Authority,
are accurate and complete summaries of the matters referred to therein.
3
EXHIBIT E
VALOR COMMUNICATIONS GROUP, INC.
CERTIFICATE OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
Reference is hereby made to the Underwriting Agreement (the
"Underwriting Agreement"), dated , 2005 by and among Valor
Communications Group, Inc., a Delaware corporation (the "Company"), the selling
shareholders listed on the signature pages thereto and the underwriters named
therein (collectively, the "Underwriters"), in connection with the initial
public offering of shares of the Company's common stock, $0.0001 par value
per share. Capitalized terms used herein but not defined herein shall have the
meanings ascribed to them in the Underwriting Agreement.
The undersigned hereby certify that they are, respectively, the duly
elected, qualified and acting (i) Chief Executive Officer and President and (ii)
Executive Vice President -- Chief Financial Officer, and pursuant to Section
6(o) of the Underwriting Agreement, in such capacity, do hereby certify on
behalf of the Company, as follows:
1. I have carefully reviewed the prospectus filed by the Company with the
Securities & Exchange Commission on ___________, 2005 pursuant to Rule 424(b)
under the Securities Act (the "Prospectus");
2. The forward-looking statements contained under the caption "Dividend Policies
and Restrictions" in the Prospectus represent good faith estimates of the
Company's future performance, results and liquidity and are based upon the
Company's assessment and analysis of all factors it deems relevant and the
application of assumptions which it deems reasonable after due and proper
consideration of relevant facts;
3. (a) The Company has prepared each of the numbers (the "Financial Numbers")
that are circled and ticked with the symbol X in the pages of the Prospectus
attached hereto as Exhibit A and, in connection with the preparation of the
Financial Numbers, I have made such review and have made due inquiries of
certain other officials of the Company who are responsible for financial and
accounting matters, as I have deemed necessary, to ensure the accuracy of the
Financial Numbers and (b) as of the date hereof, each of the Financial Numbers
matches exactly with or is accurately derived from the appropriate internal
accounting and/or financial records of the Company.
4. I have reviewed each of the numbers and statements that are circled and
ticked with the symbol Y in the pages of the Prospectus attached hereto as
Exhibit A (the "Numbers and Statements") and have made due inquiries of certain
other officials of the Company, as I have deemed necessary and I have found such
Numbers and Statements to be true and correct in all material respects.
4
IN WITNESS WHEREOF, we have signed our names this ___ day of
_____________, 2005.
By: _________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
and President
By: _________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President, Chief
Financial Officer
EXHIBIT A
Exhibit C-1