EXHIBIT 1.1
ITC/\DELTACOM, INC.
PLACEMENT AGREEMENT
May 6, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated,
for itself and the other
several Placement Agents
named below
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
ITC/\DeltaCom, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to you (the "Manager") and the other several
purchasers named in Schedule I hereto (collectively with the Manager, the
"Placement Agents") $100,000,000 aggregate principal amount of its 4.50%
Convertible Subordinated Notes due 2006 (the "Notes") to be issued pursuant to
the provisions of an Indenture to be dated as of May 12, 1999 (the "Indenture")
between the Company and U.S. Trust Company of Texas, N.A., Trustee (the
"Trustee"). The Notes will be convertible into shares of common stock of the
Company, par value $0.01 per share (the "Underlying Securities").
The Notes and the Underlying Securities will be offered without
being registered under the Securities Act of 1933, as amended (the "Securities
Act"), to qualified institutional buyers in compliance with the exemption from
registration provided by Rule 144A under the Securities Act.
The Placement Agents and their direct and indirect transferees will
be entitled to the benefits of a Registration Rights Agreement, to be dated the
Closing Date (as defined) and to be substantially in the form attached hereto as
Exhibit A (the "Registration Rights Agreement").
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum (the "Preliminary Memorandum") and will prepare
a final offering memorandum (the "Memorandum") including or incorporating by
reference a description of the terms of the Notes and the Underlying Securities,
the terms of the offering and a description of the Company and its business. As
used herein, the terms "Preliminary Memorandum" and "Memorandum" shall include
the documents incorporated by reference
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therein. The terms "supplement", "amendment" and "amend" as used herein with
respect to the Preliminary Memorandum or the Memorandum shall include all
documents deemed to be incorporated by reference in such Memorandum that are
filed subsequent to the date of such Memorandum with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act).
Pursuant to an underwriting agreement (the "Underwriting Agreement")
among the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇.▇. ▇▇▇▇▇▇▇▇ & Co.,
Credit Suisse First Boston Corporation, First Union Capital Markets Corp. and
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC, as representatives of the underwriters
named on Schedule I thereto (the "Underwriters"), the Company will issue up to
6,037,500 shares of its Common Stock, par value $.01 per share (the "Shares").
1. Representations and Warranties. The Company represents and
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warrants to, and agrees with, you that as of the date hereof:
(a) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Preliminary Memorandum and the
Memorandum complied or will comply when so filed in all material respects with
the Exchange Act and the applicable rules and regulations of the Commission
thereunder and (ii) the Preliminary Memorandum does not contain and the
Memorandum, in the form used by the Placement Agents to confirm sales and on the
Closing Date, will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this Section 1(a) do not apply to
statements or omissions in the Preliminary Memorandum or the Memorandum based
upon information relating to any Placement Agent furnished to the Company in
writing by such Placement Agent through you expressly for use therein.
(b) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Preliminary Memorandum and the Memorandum and is duly qualified
to transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; Schedule 1 to the form of opinion of ▇▇▇▇▇ &
▇▇▇▇▇▇▇ L.L.P. attached hereto as Exhibit B sets forth each jurisdiction in
which the conduct of the Company's business or its ownership or leasing of
property requires the Company to be qualified as a foreign corporation, other
than jurisdictions in which the failure to be qualified in all such
jurisdictions would not, in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
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(c) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Preliminary
Memorandum and the Memorandum and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole;
Schedule 1 to the form of opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P. attached hereto as
Exhibit B sets forth each jurisdiction in which the conduct of the business of
Interstate FiberNet, Inc. ("Interstate FiberNet") or its ownership or leasing of
property requires Interstate FiberNet to be qualified as a foreign corporation,
other than jurisdictions in which the failure to be qualified in all such
jurisdictions would not, in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole. Schedule 1 to the form of
opinion of J. ▇▇▇▇▇▇ ▇▇▇▇▇▇, attached hereto as Exhibit E, sets forth each
jurisdiction in which the conduct of the business of ITC/\DeltaCom
Communications, Inc. ("DeltaCom") or its ownership or leasing of property
requires DeltaCom to be qualified as a foreign corporation, other than
jurisdictions in which the failure to be qualified in all such jurisdictions
would not, in the aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole. Interstate FiberNet and DeltaCom are the
only active subsidiaries, direct or indirect, of the Company.
(d) This Agreement has been duly authorized, executed and delivered
by the Company.
(e) The Notes have been duly authorized by the Company and, when
executed and authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Placement Agents in accordance with the terms
of this Agreement, will (x) be valid and binding obligations of the Company
enforceable against the Company in accordance ith their terms, except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (B) rights of acceleration, if
applicable, and the availability of equitable remedies may be limited by
equitable principles of general applicability and (y) be entitled to the
benefits of the Indenture.
(f) The Indenture has been duly authorized by the Company and, when
executed and delivered by the Company, will be a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms except
as (x) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (y) rights of
acceleration, if applicable, and the availability of equitable remedies may be
limited by equitable principles of general applicability.
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(g) The Registration Rights Agreement has been duly authorized and,
when executed and delivered by the Company, will be a valid and binding
agreement of, the Company, enforceable against the Company in accordance with
its terms except as (x) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally, (y) the
availability of equitable remedies may be limited by equitable principles of
general applicability and (z) the rights to indemnification and contribution
thereunder may be limited by state or federal securities laws or the policies
underlying such laws.
(h) The shares of common stock of the Company outstanding on the
date hereof have been duly authorized and are validly issued, fully paid and
non-assessable.
(i) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Memorandum.
(j) The Underlying Securities reserved for issuance upon conversion
of the Notes have been duly authorized and reserved and, when issued upon
conversion of the Notes in accordance with the terms of the Notes, will be
validly issued, fully paid and non-assessable, and the issuance of the
Underlying Securities will not be subject to any preemptive or similar rights.
(k) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indenture, the Registration Rights Agreement and the Notes (collectively, the
"Transaction Documents") and the issuance, sale and delivery of the Notes and
the Underlying Securities will not contravene any provision of applicable law or
the certificate of incorporation or by-laws of the Company or any material
agreement or other material instrument binding upon the Company or any of its
subsidiaries or any judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Company or any of its subsidiaries, and no
permit, license, consent, approval, authorization or order of, or filing,
declaration or qualification with, any governmental body or agency is required
for the performance by the Company of its obligations under the Transaction
Documents, except (i) such as may be required by the securities or Blue Sky laws
of the various states in connection with the offer and sale of the Notes and
(ii) such as are required to be obtained after the date hereof and specifically
set forth in the Transaction Documents. Schedule 2 to the form of opinion of
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P. attached hereto as Exhibit B sets forth all material
agreements and instruments to which the Company or Interstate FiberNet is a
party. Schedule 2 to the form of opinion of J. ▇▇▇▇▇▇ ▇▇▇▇▇▇ attached hereto as
Exhibit E sets forth all material agreements and instruments to which DeltaCom
is a party.
(l) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole,
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from that set forth in the Memorandum. Furthermore, except in each case as
described in the Memorandum, (i) the Company and its subsidiaries have not
incurred any material liability or obligation, direct or contingent, nor entered
into any material transaction not in the ordinary course of business; (ii)
neither the Company nor any of its subsidiaries has purchased any of the
Company's outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on the Company's capital stock; and (iii)
there has not been any material change in the capital stock, short-term debt or
long-term debt of the Company and its subsidiaries, taken as a whole.
(m) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is subject
other than proceedings accurately described in all material respects in the
Preliminary Memorandum and the Memorandum and proceedings that would not have a
material adverse effect on the Company and its subsidiaries, taken as a whole,
or on the power or ability of the Company to perform its obligations under the
Transaction Documents or to consummate the transactions contemplated by the
Memorandum.
(n) Neither the Company nor any affiliate (as defined in Rule 501(b)
of Regulation D under the Securities Act, an "Affiliate") of the Company has
directly, or through any agent, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the Notes in a
manner that would require the registration under the Securities Act of the Notes
or (ii) engaged in any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Securities Act) in connection
with the offering of the Notes or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act.
(o) The Company is not and, after giving effect to the offering and
sale of the Notes and the application of the proceeds thereof as described in
the Memorandum, will not be an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended.
(p) It is not necessary in connection with the offer, sale and
delivery of the Notes to the Placement Agents in the manner contemplated by this
Agreement to register the Notes under the Securities Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended.
(q) The Company and each of its subsidiaries (i) have all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and have made all declarations and filings with, all federal, state, local
and other governmental, administrative or regulatory authorities, all
self-regulatory organizations and all courts and other tribunals, to
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own, lease, license and use their respective properties and assets and to
conduct their respective businesses in the manner described in the Memorandum,
except to the extent that the failure to obtain such consents, authorizations,
approvals, orders, certificates and permits or make such declarations and
filings would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole, and (ii) have not received any notice of
proceedings relating to revocation or modification of any such consent,
authorization, approval, order, certificate or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a material adverse effect on the Company and its subsidiaries, taken as a
whole, except as described in or contemplated by the Memorandum.
(r) The Company and each of its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants, including all such laws and regulations concerning electromagnetic
radio frequency emissions ("Environmental Laws"), (ii) have received all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(s) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(t) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(u) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned
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by them which is material to their respective businesses, in each case free and
clear of all liens, encumbrances and defects, except such as are described in
the Memorandum, such as do not materially affect the value of such property and
do not interfere with the use made and proposed to be made of such property by
them; and any real property and buildings held under lease by them are held
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and proposed to be
made of such property and buildings by them, in each case except as described in
or contemplated by the Memorandum.
(v) The Company and its subsidiaries own or possess, or can acquire
on reasonable terms, all material patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names currently employed by them in
connection with their businesses as now operated, and neither it nor any of its
subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the Company and its subsidiaries, taken
as a whole.
(w) No material labor dispute exists with the employees of the
Company or any of its subsidiaries, except as described in or contemplated by
the Memorandum, or, to its knowledge, is imminent; and it is not aware of any
existing, threatened or imminent labor disturbance by the employees of any of
its principal suppliers, manufacturers or contractors that could result in any
material adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries, taken as a
whole.
(x) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; neither the Company nor any of its subsidiaries has been refused any
insurance coverage sought or applied for; and neither the Company nor any of its
subsidiaries has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise, or the earnings, business or operations of the Company
and its subsidiaries, taken as a whole, except as described in or contemplated
by the Memorandum.
(y) The historical financial statements included in the Memorandum
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act and the related published rules and
regulations.
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(z) The Company has reviewed its operations and that of its
subsidiaries to evaluate the extent to which the business or operations of the
Company or any of its subsidiaries will be affected by the Year 2000 Problem
(that is, any significant risk that computer hardware or software applications
used by the Company and its subsidiaries will not, in the case of dates or time
periods occurring after December 31, 1999, function at least as effectively as
in the case of dates or time periods occurring prior to January 1, 2000); as a
result of such review, (i) the Company has no reason to believe, and does not
believe, that (A) there are any issues related to the Company's preparedness to
address the Year 2000 Problem that are of a character required to be described
or referred to in the Memorandum which have not been so described in the
Memorandum and (B) the Year 2000 Problem will have a material adverse effect on
the condition, financial or otherwise, or on the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, or result in
any material loss or material interference with the business or operations of
the Company and its subsidiaries, taken as a whole; and (ii) the Company
reasonably believes, after due inquiry, that the suppliers, vendors, customers
or other material third parties used or served by the Company and its
subsidiaries are addressing or will address the Year 2000 Problem in a timely
manner, except to the extent that a failure to address the Year 2000 Problem by
any supplier, vendor, customer or other material third party would not have a
material adverse effect on the condition, financial or otherwise, or on the
earnings, business or operations of the Company and its subsidiaries, taken as a
whole.
(aa) The Notes satisfy the requirements set forth in Rule 144A(d)(3)
under the Securities Act.
2. Offering. You have advised the Company that the Placement Agents
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will make an offering of the Notes purchased by the Placement Agents hereunder
on the terms set forth in the Memorandum as soon as practicable after this
Agreement is entered into as in your judgment is advisable.
3. Purchase and Delivery. The Company hereby agrees to sell to the
---------------------
several Placement Agents, and the Placement Agents, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agree, severally and not jointly, to purchase from the
Company the respective principal amount of Notes set forth in Schedule I hereto
opposite their names at a purchase price of 97.25% of the principal amount
thereof plus accrued interest, if any, from May 12, 1999 to the date of payment
and delivery.
The Company hereby agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, it will not, for a period of 90 days after
the date of the Memorandum, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or
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otherwise transfer or dispose of, directly or indirectly, any shares of common
stock or any securities convertible into or exercisable or exchangeable for
common stock, or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
such shares of common stock, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, other than (a) the sale of the Shares to the
Underwriters pursuant to the Underwriting Agreement, (b) the sale of the Notes
to the Placement Agents pursuant to the Placement Agreement, (c) the issuance of
the Underlying Securities upon conversion of the Notes, (d) the issuance by the
Company of shares of common stock upon the exercise of an option or warrant or
the conversion of a security, in each case, outstanding on the date hereof and
of which the Underwriters have been advised in writing, (e) the issuance of
additional options to purchase shares of Common Stock pursuant to the Company's
Stock Option Plan or Director Stock Option Plan (as each term is defined in the
Company's Annual Report on Form 10-K, as amended on the date hereof), (f)
transactions relating to shares of Common Stock or other securities acquired in
open market transactions after the completion of the private placement of the
Notes hereunder or (g) the issuance of shares of Common Stock pursuant to the
Agreement and Plan of Merger, dated April 15, 1999, among the Company,
Interstate FiberNet and AvData Systems, Inc.
Payment for the Notes shall be made against delivery of the Notes at
a closing (the "Closing") to be held at the office of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, at 9:00 A.M., local time,
May 12, 1999, or at such other time on the same or such other date, not later
than May 26, 1999, as shall be designated in writing by you. The time and date
of such payment are herein referred to as the "Closing Date". Payment for the
Notes shall be made to the Company in federal funds or other funds immediately
available in New York City.
Certificates for the Notes shall be in definitive form and
registered in such names and in such denominations as you shall request in
writing not less than one full business day prior to the Closing Date. The
certificates evidencing the Notes shall be delivered to you on the Closing Date
for the respective accounts of the several Placement Agents, with any transfer
taxes payable in connection with the transfer of the Notes to the Placement
Agents duly paid, against payment of the purchase price therefor.
4. Conditions to Closing. The several obligations of the Placement
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Agents under this Agreement to purchase the Notes on the Closing Date will be
subject to the following conditions:
(a) Subsequent to the date of this Agreement and prior to the
Closing Date:
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(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Company's securities by
any "nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations, of the Company and its
subsidiaries, taken as a whole, from that set forth in the Memorandum
that, in your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Notes on the terms and in the manner
contemplated in the Memorandum.
(b) You shall have received on the Closing Date a certificate, dated
the Closing Date and signed by an executive officer of the Company, to the
effect set forth in clause (a)(i) above and to the effect that the
representations and warranties of the Company contained in this Agreement are
true and correct in all material respects as of the Closing Date and that the
Company has complied in all material respects with all of the agreements and
satisfied all of the conditions on its part to be performed or satisfied on or
before the Closing Date.
The officer signing and delivering any such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(c) You shall have received on the Closing Date an opinion of ▇▇▇▇▇
& ▇▇▇▇▇▇▇ L.L.P., counsel for the Company, dated the Closing Date, in the form
set forth in Exhibit B.
The opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P. shall be rendered to you at
the request of the Company and shall so state therein.
(d) You shall have received on the Closing Date an opinion of
Brantley & ▇▇▇▇▇▇▇▇▇, P.C., Alabama communications counsel for the Company,
dated the Closing Date, in the form set forth in Exhibit C.
The opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C. shall be rendered to you
at the request of the Company and shall so state therein.
(e) You shall have received on the Closing Date an opinion of
Stowers, Hayes, ▇▇▇▇▇ & ▇▇▇▇▇, Georgia communications counsel for the Company,
dated the Closing Date, in the form set forth in Exhibit D.
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The opinion of Stowers, Hayes, ▇▇▇▇▇ & ▇▇▇▇▇ shall be rendered to
you at the request of the Company and shall so state therein.
(f) You shall have received on the Closing Date an opinion of J.
▇▇▇▇▇▇ ▇▇▇▇▇▇, General Counsel of the Company, dated the Closing Date, in the
form set forth in Exhibit E.
The opinion of J. ▇▇▇▇▇▇ ▇▇▇▇▇▇ shall be rendered to you at the
request of the Company and shall so state therein.
(g) You shall have received on the Closing Date an opinion of
Shearman & Sterling, counsel for the Placement Agents, dated the Closing Date,
in form and substance satisfactory to you.
(h) You shall have received on each of the date hereof and the
Closing Date a letter, dated the date hereof or the Closing Date, as the case
may be, in form and substance satisfactory to you, from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, the
Company's independent public accountants, containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Memorandum.
(i) The "lock-up" agreements, each substantially in the form of
Exhibit F hereto, between you and certain shareholders, officers and directors
of the Company relating to sales and certain other dispositions of shares of
common stock or certain other securities shall be in full force and effect on
the Closing Date.
(j) Interstate FiberNet, Inc., NationsBank, N.A. and a majority of
the lenders party to the First Amended and Restated Credit Agreement dated as of
February 24, 1998 and as amended as of February 10, 1999 shall have entered into
an amendment thereto, substantially in the form set forth in Exhibit G and such
amendment shall be in full force and effect on the Closing Date.
(k) You shall have received such other certificates and documents as
you or your counsel may request.
5. Covenants of the Company. In further consideration of the
------------------------
agreements of the Placement Agents contained in this Agreement, the Company
covenants as follows:
(a) To furnish to you, without charge, during the period mentioned
in paragraph (c) below, as many copies of the Memorandum, any documents
incorporated by reference therein and any supplements and amendments thereto as
you may reasonably request
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and to use its best efforts to deliver such copies to you by 10:00 a.m. (New
York City time) on the business day next following the execution of this
Agreement.
(b) Before amending or supplementing the Preliminary Memorandum or
the Memorandum, to furnish to you a copy of each such proposed amendment or
supplement and not to use any such proposed amendment or supplement to which you
reasonably object.
(c) If, during such period after the date hereof and prior to the
date on which all of the Notes shall have been sold by the Placement Agents, any
event shall occur or condition exist as a result of which it is necessary in
your judgment to amend or supplement the Memorandum in order to make the
statements therein, in the light of the circumstances when the Memorandum is
delivered to a purchaser, not misleading, or if, in the opinion of counsel to
the Placement Agents, it is necessary to amend or supplement the Memorandum to
comply with applicable law, forthwith to prepare and furnish, at its own
expense, to the Placement Agents, either amendments or supplements to the
Memorandum so that the statements in the Memorandum as so amended or
supplemented will not, in the light of the circumstances when the Memorandum is
delivered to a purchaser, be misleading or so that the Memorandum, as so amended
or supplemented, will comply with applicable law.
(d) To endeavor to qualify the Notes for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) Whether or not any sale of such Notes is consummated, to pay all
expenses incident to the performance of its obligations under this Agreement,
including: (i) the preparation of the Preliminary Memorandum and the Memorandum
and all amendments and supplements thereto, (ii) the preparation, issuance and
delivery of the Notes, (iii) the fees and disbursements of the Company's counsel
and accountants and the Trustee and the Company's transfer agent and each of
their counsel, (iv) the qualification of such Notes under securities or Blue Sky
laws in accordance with the provisions of Section 5(d), including filing fees
and the fees and disbursements of counsel for the Placement Agents in connection
therewith and in connection with the preparation of any Blue Sky or legal
investment memoranda, (v) the printing and delivery to the Placement Agents in
quantities as hereinabove stated of copies of the Preliminary Memorandum and the
Memorandum and any amendments or supplements thereto, (vi) any fees charged by
rating agencies for the rating of such Notes, (vii) all document production
charges and expenses of counsel to the Placement Agents (but not including their
fees for professional services) in connection with the preparation of this
Agreement, (viii) the fees and expenses, if any, incurred in connection with the
admission of such Notes for trading in PORTAL or any other appropriate market
system, (ix) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the marketing of
the Notes, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants
13
engaged in connection with the road show presentations with the prior approval
of the Company, travel and lodging expense of the representatives and officers
of the Company and any such consultants, and the cost of any aircraft chartered
in connection with the road show, and (x) all other costs and expenses incident
to the performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section.
(f) Neither the Company nor any Affiliate will sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in the Securities Act) which could be integrated with the sale of the
Notes in a manner which would require the registration under the Securities Act
of such Notes.
(g) Not to solicit any offer to buy or offer or sell the Notes or
the Underlying Securities by means of any form of general solicitation or
general advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act.
(h) While any of the Notes or the Underlying Securities remain
outstanding, the Company will make available, upon request, to any seller of
such Notes or the Underlying Securities the information specified in Rule
144A(d)(4) under the Securities Act, unless the Company is then subject to
Section 13 or 15(d) of the Exchange Act.
(i) To use its best efforts to permit the Notes to be designated
PORTAL securities in accordance with the rules and regulations adopted by the
National Association of Securities Dealers, Inc. relating to trading in the
PORTAL Market.
(j) To use the net proceeds received by it from the sale of the
Notes pursuant to this Agreement in the manner specified in the Memorandum under
the caption "Use of Proceeds."
(k) During the period of two years after the Closing Date, the
Company will not, and will not permit any of its affiliates (as defined in Rule
144 under the Securities Act) to resell any of the Notes or the Underlying
Securities which constitute "restricted securities" under Rule 144 that have
been reacquired by any of them.
6. Offering of Notes; Restrictions on Transfer. Each Placement
-------------------------------------------
Agent, severally and not jointly, represents and warrants to the Company that
such Placement Agent is a qualified institutional buyer as defined in Rule 144A
under the Securities Act (a "QIB"). Each Placement Agent, severally and not
jointly, agrees with the Company that (i) it will not solicit offers for, or
offer or sell, such Notes by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act and (ii) it
14
will solicit offers for such Notes only from, and will offer such Notes only to,
persons that it reasonably believes to be QIBs.
7. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Placement Agent, and each person, if any, who
controls such Placement Agent within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, or is under common control
with, or is controlled by, such Placement Agent, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Placement Agent or any such
controlling or affiliated person in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Memorandum or the
Memorandum (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Placement Agent furnished to the
Company in writing by such Placement Agent through you expressly for use
therein; provided, however, that the foregoing indemnity agreement with respect
to the Preliminary Memorandum or the Memorandum shall not inure to the benefit
of any Placement Agent (or any other person indemnified pursuant to this
paragraph (a)) to the extent that any such losses, claims, damages or
liabilities result from the fact that such Placement Agent sold securities to a
person to whom there was not sent or given by or on behalf of such Placement
Agent a copy of the Memorandum at or prior to the written confirmation of the
sale of the Notes to such person (if the Company shall have furnished the
Memorandum to such Placement Agent prior to the written confirmation of such
sale), and if the losses, claims, damages or liabilities result from an untrue
statement or alleged untrue statement or an omission or alleged omission
contained in the Preliminary Memorandum that was corrected in the Memorandum.
(b) Each Placement Agent agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors and officers and each
person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Placement Agent, but only with
reference to information relating to such Placement Agent furnished to the
Company in writing by such Placement Agent through you expressly for use in the
Preliminary Memorandum or the Memorandum or any amendments or supplements
thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to
15
either paragraph (a) or (b) of this Section 7 above, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all such indemnified parties and that all
such fees and expenses shall be reimbursed as they are incurred. Such firm shall
be designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated in the case of
parties indemnified pursuant to paragraph (a) of this Section 7 above and by the
Company in the case of parties indemnified pursuant to paragraph (b) of this
Section 7 above. The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in paragraph (a)
or (b) of this Section 7 is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (i) in such
16
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Placement Agents, on the other hand, from the
offering of such Notes or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Placement Agents on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Placement Agents on the other hand in connection with the offering of
such Notes shall be deemed to be in the same respective proportions as the net
proceeds from the offering of such Notes (before deducting expenses) received by
the Company and the total discounts and commissions received by the Placement
Agents in respect thereof bear to the aggregate offering price of such Notes.
The relative fault of the Company on the one hand and of the Placement Agents on
the other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Placement Agents and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Placement Agents' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the respective principal amount of
Notes they have purchased hereunder, and not joint.
(e) The Company and the Placement Agents agree that it would not be
just or equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Placement Agents were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7, no Placement Agent shall be required to contribute any amount in
excess of the amount by which the total price at which the Notes resold by it in
the initial placement of such Notes were offered to investors exceeds the amount
of any damages that such Placement Agent has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution provisions contained in this Section
7 and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement,
17
(ii) any investigation made by or on behalf of the Placement Agents or any
person controlling the Placement Agents or by or on behalf of the Company, any
of its officers or directors or any person controlling the Company and (iii)
acceptance of and payment for any of the Notes. The remedies provided for in
this Section 7 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in equity.
8. Termination. This Agreement shall be subject to termination by
-----------
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses (a)(i) through (iv), such event singly or
together with any other such event makes it, in your judgment, impracticable to
market the Notes on the terms and in the manner contemplated in the Memorandum.
9. Miscellaneous. If, on the Closing Date, any one or more of the
-------------
Placement Agents shall fail or refuse to purchase Notes that it or they have
agreed to purchase hereunder on such date, and the aggregate principal amount of
Notes which such defaulting Placement Agent or Placement Agents agreed but
failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of Notes to be purchased on such date, the other Placement
Agents shall be obligated severally in the proportions that the principal amount
of Notes set forth opposite their respective names in Schedule I bears to the
aggregate principal amount of Notes set forth opposite the names of all such
non-defaulting Placement Agents, or in such other proportions as you may
specify, to purchase the Notes which such defaulting Placement Agent or
Placement Agents agreed but failed or refused to purchase on such date; provided
that in no event shall the principal amount of Notes that any Placement Agent
has agreed to purchase pursuant to Section 3 be increased pursuant to this
Section 9 by an amount in excess of one-ninth of such principal amount of Notes
without the written consent of such Placement Agent. If, on the Closing Date,
any Placement Agent or Placement Agents shall fail or refuse to purchase Notes
which it or they have agreed to purchase hereunder on such date and the
aggregate principal amount of Notes with respect to which such default occurs is
more than one-tenth of the aggregate principal amount of Notes to be purchased
on such date and arrangements satisfactory to you and the Company for the
purchase of such Notes are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Placement Agent or of the Company. In any such case either you or the
18
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Memorandum or in any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Placement Agent from
liability in respect of any default of such Placement Agent under this
Agreement.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
If this Agreement shall be terminated by the Placement Agents, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Placement Agents or such
Placement Agents as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Placement Agents in
connection with this Agreement or the offering contemplated hereunder.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
The headings of the sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed a part of this
Agreement.
19
Please confirm your agreement to the foregoing by signing in the
space provided below for that purpose and returning to us a copy hereof,
whereupon this Agreement shall constitute a binding agreement between us.
Very truly yours,
ITC/\DeltaCom, Inc.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
Agreed as of the date first above written
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
First Union Capital Markets Corp.
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By_________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Principal
SCHEDULE I
Principal Amount
of Notes
Placement Agent To Be Purchased
--------------- ---------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ......................... $ 60,001,000
Credit Suisse First Boston Corporation .................... $ 13,333,000
First Union Capital Markets Corp. ......................... $ 13,333,000
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC ..................... $ 13,333,000
------------
Total ..................................................... $100,000,000
============
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
[Intentionally Omitted]
EXHIBIT B
OPINION OF ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
[Intentionally Omitted]
EXHIBIT C
OPINION OF ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C.
[Intentionally Omitted]
EXHIBIT D
OPINION OF STOWERS, HAYES, ▇▇▇▇▇ & ▇▇▇▇▇
[Intentionally Omitted]
EXHIBIT E
OPINION OF J. ▇▇▇▇▇▇ ▇▇▇▇▇▇
[Intentionally Omitted]
EXHIBIT F
May_____, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇.▇. ▇▇▇▇▇▇▇▇ & Co.
Credit Suisse First Boston Corporation
First Union Capital Markets Corp.
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
First Union Capital Markets Corp.
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned understands that ITC/\DeltaCom, Inc., a Delaware
corporation (the "Company"), proposes to enter into (1) an underwriting
agreement (the "Underwriting Agreement") with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), ▇.▇. ▇▇▇▇▇▇▇▇ & Co., Credit Suisse First Corporation, First
Union Capital Markets Corp. and NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC, as
representatives of the several underwriters (the "Underwriters") named in
Schedule I thereto, providing for the public offering (the "Public Offering") of
shares of the Company's Common Stock (par value $.01 per share) (the "Common
Stock") and (2) a placement agreement (the "Placement Agreement") with ▇▇▇▇▇▇
▇▇▇▇▇▇▇, Credit Suisse First Corporation, First Union Capital Markets Corp. and
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC (the "Placement Agents"), providing for
the private placement (the "Private Placement") of the Company's 4.50%
Convertible Subordinated Notes due 2006 (the "Notes").
To induce the Underwriters that may participate in the Public
Offering and the Placement gents that may participate in the Private Placement
to continue their efforts in connection with the Public Offering and Private
Placement, respectively, and for other good and valuable considerations receipt
of which is hereby acknowledged, the undersigned hereby agrees that, without the
prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of the Underwriters and the
Placement Agents, it will not, during the period commencing on the date hereof
and ending 90 days after the date of the final prospectus relating to the Public
Offering (the "Prospectus") and the final offering memorandum relating to the
Private Placement (the "Memorandum"), (1) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock
or (2) enter into any swap or other arrangement that transfer to another, in
whole or in part, any of the economic consequences of ownership of Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or otherwise.
The foregoing sentence shall not apply to (a) transactions relating to shares of
Common Stock or other securities acquired in open market transactions after the
completion of the Public Offering and the Private Placement, (b) transfers of
Common Stock to the Company, (c) a pledge, grant of security interest or other
encumbrance effected in a bona fide transaction with an unrelated and
unaffiliated pledgee, under a written pledge agreement that provides that the
pledgee shall hold the Common Stock subject to the terms of this Agreement and,
as a condition precedent to such pledge, security interest or other encumbrance,
shall be required to execute and deliver this Agreement and (d) any transfer (i)
to a trust for the benefit of such transferor or such transferor's spouse or
lineal descendants or (ii) by gift, will or intestate succession to such
transferor's spouse or lineal descendants, provided, in each case, that, as a
condition precedent to such transfer, the transferee of any such transfer, or
the trustee or legal guardian on behalf of any such transferee, duly executes
and delivers this Agreement. In addition, the undersigned agrees that, without
the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of the Underwriters and
the Placement Agents, it will not, during the period commencing on the dae
hereof and ending 90 days after the date of the Prospectus and Memorandum, make
any demand for or exercise any right with respect to, the registration of any
shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock.
2
Whether or not the Public Offering or Private Placement actually
occurs depends on a number of factors, including market conditions. Any Public
Offering or Private Placement will only be made pursuant to an Underwriting
Agreement and Placement Agreement, respectively, the terms of which are subject
to negotiation between the Company and the Underwriters or the Placement Agents,
as the case may be.
Very truly yours,
________________________________________
(Signature)
________________________________________
Print Name)
___________________________________ (Address)
Accepted as of the date
first set forth above:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By:________________________________
3
EXHIBIT G
[Intentionally Omitted]