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Exhibit 1.1
▇▇▇▇▇▇, INC.
6,200,000 Shares
Class A Common Stock
($.01 par value)
Underwriting Agreement
October __, 1996
Salomon Brothers Inc
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
As Representatives of the several Underwriters
c/o Salomon Brothers Inc
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
▇▇▇▇▇▇, Inc., a Delaware corporation (the "Company"), proposes to sell
to the underwriters named in Schedule I hereto (the "Underwriters"), for whom
you (the "Representatives") are acting as representatives, _________ shares of
Class A Common Stock, $.01 par value (the "Common Stock") of the Company, and
the persons named in Schedule II hereto (the "Selling Stockholders") propose to
sell to the Underwriters 514,000 shares of Common Stock (the shares to be
issued and sold by the Company and the shares to be sold by the Selling
Stockholders collectively being hereinafter called the "Underwritten
Securities"). The Company also proposes to grant to the Underwriters an option
to purchase up to 930,000 additional shares of Common Stock (the "Option
Securities"; the Option Securities, together with the Underwritten Securities,
being hereinafter called the "Securities").
1. Representations and Warranties.
(a) The Company represents and warrants to, and agrees with, each
Underwriter as set forth below in this Section 1. Certain terms used in this
Section 1 are defined in paragraph (iii) hereof.
(i) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement (file
number 333-13885) on Form S-1, including a related preliminary
prospectus, for the registration under the Securities Act of 1933 (the
"Act") of the offering and sale of the Securities. The Company may
have filed one or
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more amendments thereto, including the related preliminary prospectus,
each of which have previously been furnished to you. The Company will
next file with the Commission either (A) prior to effectiveness of
such registration statement, a further amendment to such registration
statement (including the form of final prospectus) or (B) after
effectiveness of such registration statement, a final prospectus in
accordance with Rules 430A and 424(b)(1) or (4). In the case of
clause (B), the Company has included in such registration statement,
as amended at the Effective Date, all information (other than Rule
430A Information) required by the Act and the rules thereunder to be
included in the Prospectus with respect to the Securities and the
offering thereof. As filed, such amendment and form of final
prospectus, or such final prospectus, shall contain all Rule 430A
Information, together with all other such required information, with
respect to the Securities and the offering thereof and, except to the
extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you
prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the latest
Preliminary Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein.
(ii) On the Effective Date, the Registration Statement did
or will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the Prospectus
(and any supplements thereto) will, comply in all material respects
with the applicable requirements of the Act and the rules thereunder;
on the Effective Date, the Registration Statement did not or will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and, on the Effective
Date, the Prospectus, if not filed pursuant to Rule 424(b), did not or
will not, and on the date of any filing pursuant to Rule 424(b), the
Prospectus will not, and on the Closing Date, the Prospectus (together
with any supplement thereto) will not, include any untrue statement of
a material fact or 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; provided, however, that the
Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the
Prospectus (or any supplement thereto) in reliance upon
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and in conformity with information furnished in writing to the Company
by or on behalf of any Underwriter through the Representatives or any
Selling Stockholders specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto).
(iii) The terms which follow, when used in this Agreement,
shall have the meanings indicated. "Effective Date" shall mean each
date that the Registration Statement and any post-effective amendment
or amendments thereto became or become effective. "Execution Time"
shall mean the date and time that this Agreement is executed and
delivered by the parties hereto. "Preliminary Prospectus" shall mean
any preliminary prospectus referred to in paragraph (i) above and any
preliminary prospectus included in the Registration Statement at the
Effective Date that omits Rule 430A Information. "Prospectus" shall
mean the prospectus relating to the Securities that is first filed
pursuant to Rule 424(b) after the Execution Time or, if no filing
pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date. "Registration Statement" shall mean
the registration statement referred to in paragraph (i) above,
including exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time, in the
form in which it shall become effective) and, in the event any
post-effective amendment thereto becomes effective prior to the
Closing Date (as hereinafter defined), shall also mean such
registration statement as so amended. Such term shall include any
Rule 430A Information deemed to be included therein at the Effective
Date as provided by Rule 430A. "Rule 424" and "Rule 430A" refer to
such rules under the Act. "Rule 430A Information" means information
with respect to the Securities and the offering thereof permitted to
be omitted from the Registration Statement when it becomes effective
pursuant to Rule 430A.
(iv) Since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto),
there has been no material adverse change, or any development which
could reasonably be expected to result in a material adverse change,
in the condition (financial or other), earnings, business, prospects
or properties of the Company and its subsidiaries, whether or not
arising from transactions in the ordinary course of business, except
as set forth in the Prospectus (exclusive of any supplement thereto);
and, since the respective dates as of which information is given in
the
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Registration Statement and the Prospectus, there has not been any
change in the capital stock (other than grants of options and
issuances of common stock pursuant to existing employee stock option
plans, stock ownership plans or stock purchase plans, repurchases by
the Company of its common stock in the ordinary course of business or
conversions of outstanding convertible securities) or long-term debt
(other than changes as a result of borrowings under the Telecom Credit
Facility (as defined in the Prospectus) in the ordinary course of
business, maturities, regularly scheduled payments and payments
contemplated as a result of the application of proceeds of the
offering of the Securities as described in the Prospectus,
amortization of debt discount or currency fluctuations) of the Company
or any of its subsidiaries.
(v) Each of (a) the Company and (b) ▇▇▇▇▇▇ Telemanagement,
Inc., MWR Telecom, Inc., ▇▇▇▇▇▇ Network Services, Inc., MWR Wireless,
Inc., ▇▇▇▇▇▇ Transit, Inc., ▇▇▇▇▇▇ Telecommunications, Inc.,
Telecom*USA Publishing Group, Inc., Telecom*USA Publishing Company and
▇▇▇▇▇▇▇, ▇▇▇▇ & Associates, Inc. (individually a "Subsidiary" and
collectively the "Subsidiaries") has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction in which it is chartered or organized, with full
corporate power and authority to own its properties and conduct its
business as described in the Prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification, except
where the failure to be so qualified could not reasonably be expected
to have a material adverse effect on the Company and the Subsidiaries.
Except for the Subsidiaries, the Company has no subsidiaries which,
considered in the aggregate as a single subsidiary, would constitute a
"significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X
promulgated under the Act.
(vi) All the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in
the Prospectus, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company either directly or through
wholly owned subsidiaries free and clear of any security interests,
claims, liens or encumbrances.
(vii) The Company's authorized equity capitalization is as
set forth in the Prospectus; the capital stock of the
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Company conforms in all material respects to the description thereof
contained in the Prospectus; the outstanding shares of Common Stock
have been duly and validly authorized and issued and are fully paid
and nonassessable; the Securities have been duly and validly
authorized, and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be fully paid and
nonassessable; the Securities are duly authorized for listing, subject
to official notice of issuance, on the Nasdaq National Market; the
certificates for the Securities are in valid and sufficient form; and
the holders of outstanding shares of capital stock of the Company are
not entitled to statutory preemptive or similar contractual rights to
subscribe for the Securities being sold by the Company in connection
with the issuance and sale thereof by the Company.
(viii) There is no pending or, to the Company's knowledge,
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or
any of its subsidiaries of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the
Prospectus, and there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit, which is not described or
filed as required; and the statements in the Prospectus under the
headings "Risk Factors - Dependence on Regional ▇▇▇▇ Operating
Companies; US West Centrex Action," "Business - Legal Proceedings,"
"Management - Investor Agreement," "Management - Compensation
Committee Interlocks and Insider Participation," "Certain
Transactions" and, with respect to the Telecom Credit Facility (as
defined in the Prospectus), "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and Capital
Resources" fairly summarize the franchises, contracts or other
documents therein described.
(ix) This Agreement has been duly authorized, executed and
delivered by the Company.
(x) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by the
Company of the transactions contemplated herein, except such as have
been or will be obtained under the Act and such as may be required
under all applicable state securities and blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
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Securities by the Underwriters and such other approvals as have been
obtained.
(xi) Neither the issue and sale of the Securities, the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof, in each case by the Company, will
conflict with, result in a breach or violation of, or constitute a
default under the charter or by-laws of the Company or the terms of
any indenture or other agreement or instrument to which the Company or
any of its Subsidiaries is a party or bound or (assuming compliance
with all applicable state securities and blue sky laws and that the
Registration Statement has been declared effective and, if required,
that the Prospectus has been filed pursuant to Rule 424(b)(1) or
424(b)(4)) any law, rule or regulation applicable to the Company or
any of the Subsidiaries or any judgement, order or decree applicable
to the Company or any of its subsidiaries of any court, regulatory
body, administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its subsidiaries.
(xii) No holders of securities of the Company have rights to
the registration of such securities under the Registration Statement
that have not been duly waived.
(xiii) McGladrey & ▇▇▇▇▇▇, LLP, who are reporting upon the
audited financial statements and schedules included in the
Registration Statement, are independent public accountants as required
by the Act and the rules and regulations of the Commission thereunder.
(xiv) The consolidated financial statements included in the
Registration Statement present fairly the financial position of the
Company and its subsidiaries as of the dates indicated and the
consolidated results of the operations and cash flows of the Company
and its subsidiaries for the periods specified. Such financial
statements (except as disclosed in the notes thereto or otherwise
stated therein) have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the entire period involved. The financial statement
schedules, if any, included in the Registration Statement present
fairly the information stated therein. The selected financial data
included in the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of the
audited consolidated financial statements included in the Registration
Statement. The pro forma financial statements
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and other pro forma financial information, if any, included in the
Registration Statement 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, have been
properly compiled on the pro forma bases described therein, and, in
the opinion of the Company, the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances
referred to therein.
(xv) Neither the Company nor any of the Subsidiaries is in
violation of its charter or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any indenture or other agreement or instrument to which
the Company or any of the Subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of
the Company or any of the Subsidiaries is subject, other than defaults
(considered in the aggregate) which could not reasonably be expected
to have a material adverse effect on the condition (financial or
other), earnings, business, prospects or properties of the Company and
its subsidiaries.
(xvi) The Company and the Subsidiaries possess adequate
certificates, authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct
the business now operated by them and are in compliance in all
material respects with all such certificates, authorities and permits.
Neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit, with such exceptions as
could not reasonably be expected to, singly or in the aggregate, have
a material adverse effect on the condition (financial or other),
earnings, business, prospects or properties of the Company and its
subsidiaries.
(xvii) The Company and its subsidiaries have timely filed all
United States federal income tax returns and all other material tax
returns which are required to be filed by them and have paid all taxes
due and payable (other than taxes, the payment of which are being
contested in good faith), and no tax liens have been filed and no
claims are being asserted with respect to any such taxes, which could
reasonably be expected to have a material adverse effect on the
condition (financial or other), earnings, business, prospects or
properties of the Company and its subsidiaries. The provisions for
taxes on the books of the Company are
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adequate in all material respects for all open years and for its
current fiscal period.
(xviii) The Company and the Subsidiaries (A) are in
compliance with all applicable federal, state, local and foreign and
other laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (B) have
received all permits, licenses and other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses and (C) are in compliance with all terms and conditions of
any such permit, license and approval, except, in each case, where
such noncompliance with Environmental Law, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals could not
reasonably be expected, singly or in the aggregate, to have a material
adverse effect on the condition (financial or other), earnings,
business, prospects or properties of the Company and its subsidiaries.
(xix) The Company and the Subsidiaries have good and
marketable title to all real property and good and valid title to all
personal property owned by them, in each case free and clear of all
liens, encumbrances and defects, and any real property and buildings
held under lease by the Company and the Subsidiaries are held by them
under valid, subsisting and enforceable leases, except, in each case,
for such exceptions as are set forth in the Prospectus or which could
not reasonably be expected to have a material adverse effect on the
condition (financial or other), earnings, business, prospects or
properties of the Company and its subsidiaries.
(xx) The Company together with its subsidiaries own and
possess all right, title and interest in and to, or have duly licensed
from third parties a valid, enforceable right to use, all patents,
patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service
marks and trade names currently employed by the Company and its
subsidiaries in connection with the business conducted by them
(collectively, "Patent and Proprietary Rights") and neither the
Company nor any of its subsidiaries has received notice of
infringement or misappropriation of or conflict with asserted rights
of others with respect to any Patent and Proprietary Rights, or of any
facts which would render
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any Patent and Proprietary Rights invalid or inadequate to protect the
interest of the Company or of its subsidiaries therein, and which
infringement, misappropriation or conflict or invalidity or
inadequacy, individually or in the aggregate, could reasonably be
expected to result in a material adverse effect on the condition
(financial or other), earnings, business, prospects or properties of
the Company and its subsidiaries.
(xxi) The Company has complied with all provisions of Section
1 of Laws of Florida, Chapter 92-198 Securities-Business with Cuba.
(b) Each Selling Stockholder represents and warrants to, and
agrees with, each Underwriter that:
(i) Such Selling Stockholder is the lawful owner of the
Securities to be sold by such Selling Stockholder hereunder and upon
sale and delivery of, and payment for, such Securities, as provided
herein, such Selling Stockholder will convey good and marketable title
to such Securities, free and clear of all liens, encumbrances,
equities and claims whatsoever.
(ii) Such Selling Stockholder has no reason to believe
that the representations and warranties of the Company contained in
this Section 1 are not true and correct, is familiar with the
Registration Statement and has no knowledge of any material fact,
condition or information not disclosed in the Prospectus or any
supplement thereto which has adversely affected or may adversely
affect the business of the Company or any of its subsidiaries; and the
sale of Securities by such Selling Stockholder pursuant hereto is not
prompted by any information concerning the Company or any of its
subsidiaries which is not set forth in the Prospectus or any
supplement thereto.
(iii) Such Selling Stockholder has not taken and will not
take, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result,
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise, in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Securities and has not effected any sales of shares of Common Stock
which, if effected by the issuer, would be required to be disclosed in
response to Item 701 of Regulation S-K.
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(iv) Certificates in negotiable form for such Selling
Stockholder's Securities have been placed in custody, for delivery
pursuant to the terms of this Agreement, under a Custody Agreement and
Power of Attorney duly executed and delivered by such Selling
Stockholders, in the form heretofore furnished to you (the "Custody
Agreement") with of , as Custodian (the "Custodian");
the Securities represented by the certificates so held in custody for
such Selling Stockholder are subject to the interests hereunder of the
Underwriters, the arrangements for custody and delivery of such
certificates, made by such Selling Stockholder hereunder and under the
Custody Agreement, are not subject to termination by any acts of such
Selling Stockholder, or by operation of law, whether by the death or
incapacity of such Selling Stockholder or the occurrence of any other
event; and if any such death, incapacity or any other such event shall
occur before the delivery of such Securities hereunder, certificates
for the Securities will be delivered by the Custodian in accordance
with the terms and conditions of this Agreement and the Custody
Agreement as if such death, incapacity or other event had not
occurred, regardless of whether or not the Custodian shall have
received notice of such death, incapacity or other event.
(v) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by
such Selling Stockholder of the transactions contemplated herein,
except such as may have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the
Underwriters and such other approvals as have been obtained.
(vi) Neither the sale of the Securities being sold by such
Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by such Selling Stockholder or the
fulfillment of the terms hereof by such Selling Stockholder will
conflict with, result in a breach or violation of, or constitute a
default under any law or the terms of any indenture or other agreement
or instrument to which such Selling Stockholder is a party or bound,
or any judgement, order or decree applicable to such Selling
Stockholder of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over such Selling
Stockholder.
In respect of any statements in or omissions from the Registration Statement or
the Prospectus or any supplements
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thereto made in reliance upon and in conformity with written information
furnished to the Company by any Selling Stockholder specifically for use in
connection with the preparation thereof, such Selling Stockholder hereby makes
the same representations and warranties to each Underwriter as the Company
makes to such Underwriter under paragraph (a)(ii) of this Section.
2. Purchase and Sale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth: (i)
the Company agrees to sell to the Underwriters __________ shares of Class A
Common Stock and each Underwriter agrees, severally and not jointly, to
purchase from the Company, at a purchase price of $_______ per share (the
"Purchase Price"), that proportion of the number of shares of Underwritten
Securities set forth in Schedule II opposite the name of the Company which the
number of shares of Underwritten Securities set forth in Schedule I opposite the
name of the Underwriter bears to the total number of shares of Underwritten
Securities, subject, in each case, to adjustments as the Representatives in
their discretion shall make to eliminate any sales or purchases of fractional
shares; and (ii) each Selling Stockholder agrees to sell to the Underwriters the
number of shares of Underwritten Securities set forth in Schedule II opposite
the name of such Selling Stockholder, and each Underwriter agrees, severally and
not jointly, to purchase from each Selling Stockholder, at the Purchase Price,
that proportion of the number of shares of Underwritten Securities set forth in
Schedule II opposite the name of each Selling Stockholder which the number of
shares of Underwritten Securities set forth in Schedule I opposite the name of
the Underwriter bears to the total number of Underwritten Securities, subject,
in each case, to adjustments as the Representatives in their discretion shall
make to eliminate any sales or purchases of fractional shares.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
930,000 shares of the Option Securities at the same purchase price per share as
the Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in
part at any time on or before the 30th day after the date of the Prospectus upon
written notice by the Representatives to the Company setting forth the number of
shares of the Option Securities as to which the several
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Underwriters are exercising the option and the settlement date. The number of
shares of the Option Securities to be purchased by each Underwriter shall be
the same percentage of the total number of shares of the Option Securities to
be purchased by the several Underwriters as such Underwriter is purchasing of
the Underwritten Securities, subject to such adjustments as the Representatives
in their absolute discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for
in Section 2(b) hereof shall have been exercised on or before the third
business day prior to the Closing Date) shall be made at 10:00 AM, New York
City time, on , 1996, which date and time may be postponed by
agreement among the Representatives and the Company or as provided in Section 9
hereof (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). Delivery of the Securities shall be made to
the Representatives for the respective accounts of the several Underwriters
against payment by the several Underwriters through the Representatives of the
respective aggregate purchase prices of the Securities being sold by the
Company and the Selling Stockholders to or upon the order of the Company and
the Selling Stockholders by Federal Funds check or checks payable in same day
funds or by wire transfer of same day funds to an account or accounts specified
by the Company and the Selling Stockholders at least one business day in
advance of the Closing Date. Delivery of the Securities shall be made at such
location as the Representatives shall reasonably designate at least one
business day in advance of the Closing Date and payment for such Securities
shall be made at the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇. Certificates for the Securities shall be
registered in such names and in such denominations as the Representatives may
request not less than three full business days in advance of the Closing Date.
The Company and the Selling Stockholders agree to have the
certificates for the Securities available for inspection, checking and
packaging by the Representatives in New York, New York, not later than 1:00 PM
on the business day prior to the Closing Date.
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Each Selling Stockholder will pay all applicable state transfer taxes,
if any, involved in the transfer to the several Underwriters of the Securities
to be purchased by them from such Selling Stockholder and the respective
Underwriters will pay any additional stock transfer taxes involved in further
transfers.
If the option provided for in Section 2(b) hereof is exercised after
the third business day prior to the Closing Date, the Company will deliver (at
the expense of the Company) to the Representatives, at One New York Plaza, New
York, New York, on the date specified by the Representatives (which shall be
within three business days after exercise of said option), certificates for the
Option Securities in such names and denominations as the Representatives shall
have requested at least three full business days in advance of the settlement
date against payment of the purchase price thereof to or upon the order of the
Company by Federal Funds check or checks payable in same day funds or by wire
transfer of same day funds to an account specified by the Company at least one
business day in advance of the settlement date. The Company agrees to have the
certificates for the Option Securities available for inspection, checking and
packaging by the Representatives in New York, New York, not later than 1:00
p.m. on the business day prior to the settlement date. If settlement for the
Option Securities occurs after the Closing Date, the Company will deliver to
the Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set
forth in the Prospectus.
5. Agreements.
(a) The Company agrees with the several Underwriters that:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereof to become effective. Prior to the termination
of the offering of the Securities, the Company will not file any
amendment of the Registration Statement or supplement to the
Prospectus without the prior consent of the Representatives (which
consent shall not be unreasonably delayed or withheld). Subject to
the foregoing sentence, if the Registration Statement has become or
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becomes effective pursuant to Rule 430A, or filing of the Prospectus
is otherwise required under Rule 424(b), the Company will cause the
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule
424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The
Company will promptly advise the Representatives (A) when the
Registration Statement, if not effective at the Execution Time, and
any amendment thereto, shall have become effective, (B) when the
Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b), (C) when, prior
to termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (D)
of any request by the Commission for any amendment of the Registration
Statement or supplement to the Prospectus or for any additional
information with respect to the Registration Statement or the
Prospectus, (E) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (F)
of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
the Prospectus to comply with the Act or the rules thereunder, the
Company promptly will prepare and file with the Commission, subject to
the second sentence of paragraph (a) (i) of this Section 5, an
amendment or supplement which will correct such statement or omission
or effect such compliance.
(iii) As soon as reasonably practicable, the Company will
make generally available to its security holders and to the
Representatives an earnings statement or statements of the Company and
its subsidiaries which will satisfy the
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provisions of Section 11(a) of the Act and Rule 158 under the Act.
(iv) The Company will furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of each Preliminary
Prospectus and the Prospectus and any supplement thereto as the
Representatives may reasonably request. The Company will pay the
expenses of printing or other production of all documents relating to
the offering.
(v) The Company will cooperate with the Representatives
and counsel for the Underwriters in order to register or qualify the
Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such registrations or
qualifications in effect so long as required for the distribution of
the Securities and will pay the fee of the National Association of
Securities Dealers, Inc. in connection with its review of the
offering; provided, however, that in no event shall the Company be
obligated to register or qualify as a foreign corporation or to take
any action that would subject it to general service of process in any
jurisdiction where it is not now so subject.
(vi) The Company will not, for a period of 120 days following
the Execution Time, without the prior written consent of Salomon
Brothers Inc ("Salomon Brothers"), offer, sell or contract to sell, or
otherwise dispose of, directly or indirectly, or announce the offering
of, any other shares of Common Stock or any securities convertible
into, or exchangeable for, shares of Common Stock; provided, however,
that the Company may grant options and issue and sell Common Stock
pursuant to any employee stock option plan, stock ownership plan or
stock purchase plan of the Company in effect at the Execution Time and
the Company may issue Common Stock issuable upon the conversion of
securities or the exercise of warrants outstanding at the Execution
Time.
(b) Each Selling Stockholder agrees with the several Underwriters
that they will not during the period of 120 days following the Execution Time,
without the prior written consent of Salomon Brothers, offer, sell or contract
to sell, or otherwise dispose of, directly or indirectly, or announce the
offering of, any other shares of Common Stock beneficially owned by such
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person, or any securities convertible into, or exchangeable for, shares of
Common Stock, other than shares of Common Stock disposed of as bona fide gifts
or pledges where the recipients of such gifts or the pledgees, as the case may
be, agree in writing with the Underwriters to be bound by the terms of this
paragraph (b).
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders contained herein as of the Execution Time, the Closing Date and
any settlement date pursuant to Section 3 hereof, to the accuracy of the
statements of the Company and the Selling Stockholders made in any certificates
pursuant to the provisions hereof, to the performance by the Company and the
Selling Stockholders of their respective obligations hereunder and to the
following additional conditions:
(a) If the Registration Statement has not become
effective prior to the Execution Time, unless the Representatives
agree in writing to a later time, the Registration Statement will
become effective not later than (i) 5:30 PM New York City time on the
date of determination of the public offering price, if such
determination occurred at or prior to 3:00 PM New York City time on
such date or (ii) 12:00 Noon on the business day following the day on
which the public offering price was determined, if such determination
occurred after 3:00 PM New York City time on such date; if filing of
the Prospectus, or any supplement thereto, is required pursuant to
Rule 424(b), the Prospectus, and any such supplement, will be filed in
the manner and within the time period required by Rule 424(b); and no
stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have furnished to the
Representatives the opinion of counsel for the Company, dated the
Closing Date, substantially in the form of Exhibit A.
(c) The Company shall have furnished to the
Representatives the opinion of ▇▇▇▇▇▇▇ & Berlin, special counsel to
the Company on regulatory matters, dated the Closing Date, to the
effect that:
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(i) the statements in the Prospectus under the
headings "Risk Factors - Wireline Competition," "Risk Factors
- Regulation," "Business - Business Strategy," "Business-Market
Potential," "Business - Expansion of Certain Facilities-based
Services," "Business - Wireless Services," "Business -
Competition" and "Business - Regulation" fairly and accurately
summarize the laws, case law, rules and regulations and orders
of the Federal Communications Commission ("FCC") and the
comparable state regulatory agencies or bodies with direct
regulatory jurisdiction over telecommunications matters in the
states in which the Company and any of the Subsidiaries provide
intrastate services (the "State Regulatory Agencies") and, to
the best knowledge of such counsel, the statements in the
Prospectus under the headings "Risk Factors - Dependence on
Regional ▇▇▇▇ Operating Companies; US West Centrex Action" and
"Business - Legal Proceedings" fairly and accurately summarize
the legal proceedings set forth therein with respect to the US
West Centrex Action (as defined in the Prospectus);
(ii) the Company and the Subsidiaries possess all
material certificates, authorities and permits required by the
FCC and State Regulatory Agencies for the provision of the
telecommunications services currently provided by the Company
and the Subsidiaries, except where the failure to possess such
certificates, authorities or permits could not reasonably be
expected to have a material adverse effect in the Company and
its subsidiaries; and the Company and the Subsidiaries are in
compliance in all material respects with such certificates,
authorities and permits;
(iii) to the best knowledge of such counsel, neither
the Company nor any of the Subsidiaries is subject to any
pending or threatened action, suit or proceeding before the
FCC or any State Regulatory Agency or (with respect to federal
or state telecommunications laws) any court of a character
required to be disclosed in the Registration Statement, which
is not described as required;
(iv) no consent, approval, authorization or order of
the FCC or any State Regulatory Agency is required for the
issuance and sale of the Securities or the consummation of the
transactions contemplated hereby; and
(v) neither the issuance and sale of the Securities
nor the consummation of the transactions contemplated hereby
will result in a breach or
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violation of any law, rule, regulation, judgment, order or
decree of the FCC or any State Regulatory Agency applicable to
the Company or any of the Subsidiaries.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent they deem proper and reasonable, on certificates
of public officials and responsible officers of the Company, including
certificates that define the scope of the telecommunications services
provided by the Company and the Subsidiaries.
(d) The Selling Stockholder shall have furnished to the
Representatives the opinion of ▇▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ P.C., their
counsel, dated the Closing Date, to the effect that:
(i) this Agreement and the Custody Agreement have
been duly executed and delivered by the Selling Stockholders,
the Custody Agreement is valid and binding on the Selling
Stockholders and each Selling Stockholder has full legal right
and authority to sell, transfer and deliver in the manner
provided in this Agreement and the Custody Agreement the
Securities being sold by such Selling Stockholder hereunder;
(ii) the delivery by each Selling Stockholder to
the several Underwriters of certificates for the Securities
being sold hereunder by such Selling Stockholder against
payment therefor as provided herein, will pass good and
marketable title to such Securities to the several
Underwriters, free and clear of all liens, encumbrances,
equities and claims whatsoever;
(iii) no consent, approval, authorization or order
of any court or governmental agency or body is required for
the consummation by any Selling Stockholder of the
transactions contemplated herein, except such as may have been
obtained under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the
Underwriters and such other approvals (specified in such
opinion) as have been obtained; and
(iv) neither the sale of the Securities being sold
by any Selling Stockholder nor the consummation of any other
of the transactions herein contemplated by any Selling
Stockholder or the fulfillment of the terms
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hereof by any Selling Stockholder will conflict with, result
in a breach or violation of, or constitute a default under any
law or the terms of any indenture or other agreement or
instrument known to such counsel and to which any Selling
Stockholder is a party or bound, or any judgement, order or
decree known to such counsel to be applicable to any Selling
Stockholder of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction
over any Selling Stockholder.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent they deem proper and reasonable, on certificates
of the Selling Stockholders and public officials.
(e) The Representatives shall have received from ▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, with respect to the issuance and sale of the
Securities, the Registration Statement, the Prospectus (together with
any supplement thereto) and other related matters as the
Representatives may reasonably require, and the Company and the
Selling Stockholders shall have furnished to such counsel such
documents as they may reasonably request for the purpose of enabling
them to pass upon such matters.
(f) The Company shall have furnished to the
Representatives a certificate of the Company, signed by the Chairman
of the Board or the President and the principal financial or
accounting officer of the Company, dated the Closing Date, to the
effect that the signers of such certificate have carefully examined
the Registration Statement, the Prospectus, any supplements to the
Prospectus and this Agreement and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date and the Company has complied in
all material respects with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at
or prior to the Closing Date;
(ii) the Registration Statement has become effective
under the Act; any required filing of the Prospectus, and any
supplement thereto, pursuant to Rule 424(b) has been made in
the manner and within the
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time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
(iii) since the date of the most recent audited
financial statements included in the Prospectus (exclusive of
any supplement thereto), there has been no material adverse
change in the condition (financial or other), earnings,
business, prospects or properties of the Company and its
subsidiaries, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement
thereto).
(g) Each Selling Stockholder shall have furnished to the
Representatives a certificate, signed by such Selling Stockholder,
dated the Closing Date, to the effect that the signer of such
certificate has carefully examined the Registration Statement, the
Prospectus, any supplement to the Prospectus and this Agreement and
that the representations and warranties of such Selling Stockholder in
this Agreement are true and correct in all material respects on and as
of the Closing Date with the same effect as if made on the Closing
Date.
(h) At the Execution Time and at the Closing Date, McGladrey
& ▇▇▇▇▇▇, LLP shall have furnished to the Representatives a letter or
letters, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants
within the meaning of the Act and the applicable published rules and
regulations thereunder and stating in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules included in the
Registration Statement and the Prospectus and reported on by
them, as applicable, comply in form in all material respects
with the applicable accounting requirements of the Act and the
related published rules and regulations;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its subsidiaries; carrying out certain specified
procedures (but not an examination in accordance with
generally accepted auditing standards)
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which would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders and directors of the
Company; and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company and
its subsidiaries as to transactions and events subsequent to December
31, 1995, nothing came to their attention which caused them to believe
that:
(1) any unaudited financial statements
included in the Registration Statement and the
Prospectus do not comply in form in all material
respects with applicable accounting requirements of
the Act and with the published rules and regulations
of the Commission with respect to registration
statements on Form S-1; and said unaudited financial
statements are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited
financial statements included in the Registration
Statement and the Prospectus; or
(2) with respect to the period
subsequent to September 30, 1996, there were any
changes, at a specified date not more than five
business days prior to the date of the letter, in the
long-term debt of the Company and its subsidiaries or
capital stock of the Company or decreases in the
stockholders' equity of the Company and its
subsidiaries as compared with the amounts shown on
the September 30, 1996 consolidated balance sheet
included in the Registration Statement and the
Prospectus, or for the period from October 1, 1996 to
such specified date as compared with the
corresponding period in the preceding year, there
were any decreases in telecommunications revenue or
increases in operating loss or net loss of the
Company and its subsidiaries, except in all instances
for such changes, decreases or increases set forth in
such letter, in which case the letter shall be
accompanied by an explanation by the Company as to
the significance thereof unless said explanation is
not deemed necessary by the Representatives;
(iii) they have performed certain other specified
procedures as a result of which they determined that
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certain information of an accounting, financial or statistical
nature (which is limited to accounting, financial or
statistical information derived from the general accounting
records of the Company and its subsidiaries) set forth in the
Registration Statement and the Prospectus agrees with the
accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation; and
(iv) on the basis of a reading of the unaudited pro
forma financial statements included in the Registrations
Statement and the Prospectus (the "pro forma financial
statements"); carrying out certain specified procedures;
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters; and
proving the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the pro forma
financial statements, nothing came to their attention which
caused them to believe that the pro forma financial statements
do not comply in form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation
S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of such
statements.
References to the Prospectus in this paragraph (h) includes
any supplement thereto at the date of the letter.
(i) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change,
decrease or increase specified in the letter or letters referred to in
paragraph (f)(ii)(2) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting the
business, prospects or properties of the Company and its subsidiaries
the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the
Prospectus (exclusive of any supplement thereto).
(j) At the Execution Time, the Company shall have furnished
to the Representatives a letter substantially in
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the form of Exhibit B hereto from Allsop Venture Partners III L.P. and
each director and officer of the Company, addressed to the
Representatives, in which each such person or entity agrees not to
offer, sell or contract to sell or otherwise dispose of, directly or
indirectly, or announce an offering of, any shares of Common Stock
beneficially owned by such person or entity or any securities
convertible into, or exchangeable for, shares of Common Stock for a
period of 120 days following the Execution Time without the prior
written consent of Salomon Brothers, except in the case of each of
such persons and entities, shares of Common Stock disposed of as bona
fide gifts or pledges where the recipients of such gifts or the
pledgees, as the case may be, agree in writing with the Underwriters
to be bound by the terms of this paragraph (j).
(k) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably
request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of
such cancellation shall be given to the Company and each Selling Stockholder in
writing or by telephone confirmed in writing.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied
or because of any refusal, inability or failure on the part of the Company or
any Selling Stockholder to perform any agreement herein or comply with any
provision hereof other than by reason of a default by any of the Underwriters,
the Company will reimburse the Underwriters severally upon demand for all
reasonable out-of-pocket expenses (including reasonable fees and disbursements
of counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each Underwriter and
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each person who controls any Underwriter within the meaning of either the Act
or the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the
Act, the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement for the registration of the Securities as originally
filed or in any amendment thereof, or in any Preliminary Prospectus or the
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter through the Representatives or any Selling Stockholder
specifically for inclusion therein; and provided, further, that the foregoing
indemnity agreement with respect to any Preliminary Prospectus or Prospectus
shall not inure to the benefit of any Underwriter from whom the person
asserting or causing any such losses, claims, damages or liabilities purchased
Securities (or to the benefit of any person controlling such Underwriter or any
directors, officers, employees and agents of each Underwriter), if a copy of
the Preliminary Prospectus or the Prospectus (as amended or supplemented, if
the Company shall have timely furnished the Underwriters with sufficient copies
thereof) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Securities to such person and if the
Preliminary Prospectus or the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such loss, claim, damage or liability.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Selling Stockholder severally agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, each Underwriter, the directors, officers,
employees and agents of each Underwriter
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and each person who controls the Company or any Underwriter within the meaning
of either the Act or the Exchange Act and each other Selling Stockholder to the
same extent as the foregoing indemnity from the Company to each Underwriter,
but only with reference to information furnished in writing to the Company by
or on behalf of such Selling Stockholder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which any Selling Stockholder may
otherwise have.
(c) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act and each Selling Stockholder, to
the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to written information relating to such
Underwriter furnished to the Company by or on behalf of such Underwriter
through the Representatives specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement will be in
addition to any liability which any Underwriter may otherwise have. The
Company and each Selling Stockholder acknowledge that the statements set forth
in the last paragraph of the cover page and in the [first through sixth]
paragraphs under the heading "Underwriting" in any Preliminary Prospectus and
the Prospectus constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in any Preliminary Prospectus
or the Prospectus, and you, as the Representatives, confirm that such
statements are correct.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a), (b) or (c) above unless
and to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a), (b) or (c) above. The indemnifying
party shall be entitled to appoint counsel of the indemnifying party's choice
at the indemnifying party's expense to represent the indemnified party in any
action for which indemnification is sought (in which case the indemnifying
party shall not thereafter be responsible for the
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fees and expenses of any separate counsel retained by the indemnified party or
parties except as set forth below); provided, however, that such counsel shall
be reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i)
the use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of interest, (ii)
the actual or potential defendants in, or targets of, any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses available to
it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, (iii) the indemnifying party shall
not have employed counsel satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a), (b)
or (c) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Selling Stockholders and the
Underwriters agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which the Company, one or more of the Selling Stockholders and one or more of
the Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company, by the Selling Stockholders and
by the Underwriters from the offering of the Securities; provided, however,
that in no case shall any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount
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or commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company, the Selling Stockholders and the
Underwriters shall contribute in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the Company, of
the Selling Stockholders and of the Underwriters in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company and by the
Selling Stockholders shall be deemed to be equal to the total net proceeds from
the offering (before deducting expenses) received by each of them, and benefits
received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Prospectus. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information
provided by the Company, the Selling Stockholders or the Underwriters. The
Company, the Selling Stockholders and the Underwriters agree that it would not
be just and equitable if contribution were determined by pro rata allocation or
any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (e), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 8, each person who controls an Underwriter within the meaning
of either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each director of the Company and each
officer who shall have signed the Registration Statement shall have the same
rights to contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (e).
9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase
shall constitute a default in the performance of its or their obligations under
this Agreement, the remaining Underwriters shall be obligated severally to take
up and pay for (in the respective proportions which the amount of Underwritten
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate amount of Underwritten Securities set forth opposite the names of all
the remaining Underwriters) the
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Securities which the defaulting Underwriter or Underwriters agreed but failed
to purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed
to purchase shall exceed 10% of the aggregate amount of Underwritten Securities
set forth in Schedule I hereto, the remaining Underwriters shall have the right
to purchase all, but shall not be under any obligation to purchase any, of such
Securities, and if such nondefaulting Underwriters do not purchase all such
Securities, this Agreement will terminate without liability to any
nondefaulting Underwriter, the Selling Stockholders or the Company. In the
event of a default by any Underwriter as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding seven days, as
the Representatives shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company,
the Selling Stockholders and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination
in the absolute discretion of the Representatives, by notice given to the
Company prior to delivery of and payment for the Securities, if prior to such
time (i) trading in the Company's Common Stock shall have been suspended by the
Commission or the Nasdaq National Market or trading in securities generally on
the New York Stock Exchange or the Nasdaq National Market shall have been
suspended or limited or minimum prices shall have been established on either of
such Exchange or Market, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war or other calamity or crisis the effect of
which on financial markets is such as to make it, in the judgment of the
Representatives, impracticable or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Prospectus (exclusive of any
supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
the Company or its officers, of each Selling Stockholder and of the
Underwriters set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter, any Selling Stockholder or the Company or any of the officers,
directors or controlling persons referred to in Section
29
29
8 hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or sent by facsimile transmission and confirmed to them, care of
Salomon Brothers Inc, at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇;
or, if sent to the Company, will be mailed, delivered or sent by facsimile
transmission and confirmed to it at ▇▇▇▇▇▇, Inc., Town Centre, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, attention of the legal
department; or if sent to the Selling Stockholders, will be mailed, delivered
or sent by facsimile transmission and confirmed to them at the addresses set
forth on Schedule II hereto.
13. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
▇▇▇▇▇▇, INC.
By:
------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Chief Financial Officer
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30
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By: Salomon Brothers Inc
By:
------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Managing Director
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
31
31
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
By:
------------------------------------------------
By:
------------------------------------------------
For the Selling Stockholders named
in Schedule II to the foregoing
Agreement.
32
SCHEDULE I
Number of Shares of
Underwritten Securities
Underwriters To Be Purchased
------------ -----------------------
Salomon Brothers Inc
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
--------------
Total . . . . . . . . . . . . . . . . . .
33
SCHEDULE II
Number of Shares of
Underwritten Securities
To Be Sold
------------------
▇▇▇▇▇▇, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .
▇▇▇▇▇▇ ▇. ▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
▇▇▇▇▇ ▇. ▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . . 170,000
▇▇▇▇▇ ▇. ▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . 40,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . 12,000
34
EXHIBIT B
[Letterhead of Stockholder]
▇▇▇▇▇▇, Inc.
------------
Public Offering of Class A Common Stock
---------------------------------------
, 1996
Salomon Brothers Inc
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
As Representatives of the several Underwriters
c/o Salomon Brothers Inc
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), between ▇▇▇▇▇▇,
Inc., a Delaware corporation (the "Company"), certain Selling Stockholders
named therein and each of you as Representatives of a group of Underwriters
named therein, relating to an underwritten public offering of Class A Common
Stock, $.01 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter
into the Underwriting Agreement, the undersigned agrees not to offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly, or announce
an offering of, any shares of Common Stock beneficially owned by the
undersigned or any securities convertible into, or exchangeable for, shares of
Common Stock for a period of 120 days following the day on which the
Underwriting Agreement is executed without the prior written consent of the
Representatives, except shares of Common Stock disposed of as bona fide gifts
or pledges where the recipients of such gifts or the pledgees, as the case may
be, agree in writing with the Underwriters to be bound by the terms of this
letter.
If for any reason the Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the Underwriting
Agreement), the agreement set forth above shall likewise be terminated.
Yours very truly,