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EXHIBIT 1.1
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EXHIBIT 1.1
9,200,000 Shares
▇▇▇▇▇▇ COMMUNICATIONS CORPORATION
Class A Common Stock
U.S. UNDERWRITING AGREEMENT
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March , 1996
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▇▇▇▇▇ ▇▇▇▇▇▇ INC.
PAINEWEBBER INCORPORATED
CIBC WOOD GUNDY SECURITIES CORP.
BT SECURITIES CORPORATION
As Representatives of the Several U.S. Underwriters
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
▇▇▇▇▇▇ Communications Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell an aggregate of 8,240,000 shares of its
Class A Common Stock, $0.001 par value per share, to the several Underwriters
named in Schedule II hereto (the "U.S. Underwriters"), and the persons named in
Part A of Schedule I hereto (the "Selling Stockholders"), severally and not
jointly, propose to sell to the several U.S. Underwriters an aggregate of [
] shares of Class A Common Stock and the persons named in Part B of Schedule I
hereto (the "Selling Warrantholders" and, together with the Selling
Stockholders, the "Selling Securityholders"), severally and not jointly,
propose to sell to the several U.S. Underwriters warrants (the "Firm Warrants")
to purchase [ ] shares of Class A Common Stock (the "Firm Warrant Shares").
The Company and the Selling Securityholders are hereinafter sometimes referred
to as the "Sellers." The Company's Class A Common Stock, $0.001 par value per
share, is hereinafter referred to as the "Class A Common Stock" and the
8,240,000 shares of Class A Common Stock to be issued and sold to the U.S.
Underwriters by the Company and the [ ] shares of Class A Common Stock
to be sold to the U.S. Underwriters by the Selling Stockholders are hereinafter
referred to as the "Firm Shares." The Firm Shares and the Firm Warrants are
hereinafter referred to as the "Firm Securities." The Company and the Selling
Securityholders listed in Part C of Schedule I hereto, severally and not
jointly, also propose to sell to the U.S. Underwriters, upon the terms and
conditions set forth in Section
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2 hereof, up to an additional [ ] shares (the "Additional Shares" and,
together with the Firm Shares, the "U.S. Shares") of Class A Common Stock and
warrants (the "Additional Warrants" and, together with the Firm Warrants, the
"U.S. Warrants") to purchase [ ] shares of Class A Common Stock (the
"Additional Warrant Shares" and, together with the Firm Warrant Shares, the
"U.S. Warrant Shares"). The Additional Shares and the Additional Warrants are
hereinafter referred to as the "Additional Securities." The U.S. Shares and
the U.S. Warrants are hereinafter referred to as the "U.S. Securities."
It is understood that the Company and the Selling
Securityholders are concurrently entering into an International Underwriting
Agreement, dated the date hereof (the "International Underwriting Agreement"
and, together with the U.S. Underwriting Agreement, the "Underwriting
Agreements"), providing for (i) the sale of [ ] shares of Class A Common
Stock (the "Firm International Shares"), of which 2,060,000 shares will be sold
by the Company and [ ] shares will be sold by the Selling
Securityholders, and warrants (the "Firm International Warrants") to purchase [
] shares of Class A Common Stock (the "Firm International Warrant Shares") and
(ii) the grant of an option to purchase up to an additional [ ] shares
of Class A Common Stock (the "Additional International Shares" and, together
with the Firm International Shares, the "International Shares") and warrants
(the "Additional International Warrants" and, together with the Firm
International Warrants, the "International Warrants") to purchase [ ]
shares of Class A Common Stock (the "Additional International Warrant Shares"
and, together with the Firm International Warrant Shares, the "International
Warrant Shares"), through arrangements with certain underwriters outside the
United States and Canada (the "Managers"), for whom ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.,
PaineWebber International (U.K.) Ltd., CIBC Wood Gundy Securities Corp. and
Bankers Trust International PLC are acting as lead managers (the "Lead
Managers"). The International Shares and the International Warrants are
hereinafter referred to as the "International Securities." The International
Shares and the U.S. Shares are hereinafter referred to as the "Shares." The
International Warrants and the U.S. Warrants are hereinafter referred to as the
"Warrants." The International Warrant Shares and the U.S. Warrant Shares are
hereinafter referred to as the "Warrant Shares." The International Securities
and the U.S. Securities are hereinafter referred to as the "Securities."
The Company and the Selling Securityholders understand that
the U.S. Underwriters and the Managers intend to exercise the Warrants
immediately upon their receipt and will offer the Warrant Shares publicly as
described in the Registration State-
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ment (as hereinafter defined). The Shares and the Warrant Shares are
hereinafter referred to as the "Offered Shares."
The Company and the Selling Securityholders also understand
that the U.S. Underwriters and the Managers have entered into an agreement (the
"Agreement Between U.S. Underwriters and Managers") contemplating the
coordination of certain transactions between the U.S. Underwriters and the
Managers and that, pursuant thereto and subject to the conditions set forth
therein, the U.S. Underwriters may purchase from the Managers a portion of the
International Securities or sell to the Managers a portion of the U.S.
Securities. The Company understands that any such purchases and sales between
the U.S. Underwriters and the Managers shall be governed by the Agreement
Between U.S. Underwriters and Managers and shall not be governed by the terms
of this Agreement or the International Underwriting Agreement.
The Company and the Selling Securityholders wish to confirm as
follows their respective agreements with you (the "Representatives") and the
other several U.S. Underwriters on whose behalf you are acting, in connection
with the several purchases of the U.S. Securities by the U.S. Underwriters.
1. Registration Statement and Prospectus. The Company
has prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act") a registration statement on Form S- 1 under the Act
(the "Registration Statement"), including prospectuses subject to completion
relating to the Offered Shares. The term "Registration Statement" as used in
this Agreement means the Registration Statement (including all financial
schedules and exhibits) and any registration statement filed pursuant to Rule
462(b) under the Act, each as amended at the time it becomes effective, or, if
the Registration Statement became effective prior to the execution of this
Agreement, as supplemented or amended prior to the execution of this Agreement.
If it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the Registration Statement will be filed and must
be declared effective before the offering of the Offered Shares may commence,
the term "Registration Statement" as used in this Agreement means the
Registration Statement as amended by said post-effective amendment. The term
"Prospectuses" as used in this Agreement means the prospectuses in the forms
included in the Registration Statement (including any prospectus subject to
completion meeting the requirements of Rule 434(b) under the Act), or, if the
prospectuses included in the Registration Statement omit informa-
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tion in reliance on Rule 430A under the Act and such information is included in
the prospectuses or term sheets (within the meaning of Rule 434 under the Act)
filed with the Commission pursuant to Rule 424(b) under the Act, the term
"Prospectuses" as used in this Agreement means the prospectuses in the form
included in the Registration Statement as supplemented by the addition of the
Rule 430A information contained in the prospectuses or term sheets (within the
meaning of Rule 434 under the Act) filed with the Commission pursuant to Rule
424(b). The term "Prepricing Prospectuses" as used in this Agreement means the
prospectuses subject to completion in the forms included in the Registration
Statement at the time of the initial filing of the Registration Statement with
the Commission or in any amendment to the Registration Statement filed with the
Commission, and as such prospectuses shall have been amended from time to time
prior to the date of the Prospectuses.
It is understood that two forms of Prepricing Prospectus and
two forms of Prospectus are to be used in connection with the offering and sale
of the Offered Shares: a Prepricing Prospectus and a Prospectus relating to
the U.S. Shares and the U.S. Warrant Shares that are to be offered and sold in
the United States (as defined herein) or Canada (as defined herein) to U.S. or
Canadian Persons (as defined herein) (the "U.S. Prepricing Prospectus" and the
"U.S. Prospectus," respectively), and a Prepricing Prospectus and a Prospectus
relating to the International Shares and the International Warrant Shares which
are to be offered and sold outside the United States and Canada to persons
other than U.S. or Canadian Persons (the "International Prepricing Prospectus"
and the "International Prospectus," respectively). The U.S. Prospectus and the
International Prospectus are herein collectively called the "Prospectuses," and
the U.S. Prepricing Prospectus and the International Prepricing Prospectus are
herein called the "Prepricing Prospectuses." For purposes of this Agreement:
"Rules and Regulations" means the rules and regulations adopted by the
Commission under the Act; "U.S. or Canadian Person" means any resident or
national of the United States or Canada, any corporation, partnership or other
entity created or organized in or under the laws of the United States or Canada
or any estate or trust the income of which is subject to United States or
Canadian income taxation regardless of the source of its income (other than the
foreign branch of any U.S. or Canadian Person), and includes any United States
or Canadian branch of a person other than a U.S. or Canadian Person; "United
States" means the United States of America (including the states thereof and
the District of Columbia) and its territories, its possessions and other areas
subject to its jurisdiction; and
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"Canada" means Canada and its territories, its possessions and other areas
subject to its jurisdiction.
2. Agreements to Sell and Purchase. Subject to such
adjustments as you may determine in order to avoid fractional shares, the
Company hereby agrees, subject to all the terms and conditions set forth
herein, to issue and sell to each U.S. Underwriter and, upon the basis of the
representations, warranties and agreements of the Company, the Selling
Securityholders and the U.S. Underwriters herein contained and subject to all
the terms and conditions set forth herein, each U.S. Underwriter, severally and
not jointly, agrees to purchase from the Company, at a purchase price of $[
] per share (the "purchase price per share"), the number of Firm Shares which
bears the same proportion to the aggregate number of Firm Shares to be issued
and sold by the Company as the number of Firm Shares set forth opposite the
name of such U.S. Underwriter in Schedule II hereto (or such number of Firm
Shares increased as set forth in Section 12 hereof) bears to the aggregate
number of Firm Shares to be sold by the Company and the Selling Securityholders
(with respect to each U.S. Underwriter, such U.S. Underwriter's "Pro Rata
Share"). The Company agrees, upon receipt of the exercise price of the Firm
Warrants and surrender of the certificates, if any, representing such Firm
Warrants, to issue to the U.S. Underwriters the Firm Warrant Shares.
Subject to such adjustments as you may determine in order to
avoid fractional shares or warrants, each Selling Securityholder hereby agrees,
severally and not jointly, and subject to all the terms and conditions set
forth herein, to sell to each U.S. Underwriter and, upon the basis of the
representations, warranties and agreements of the Company, the Selling
Securityholders and the U.S. Underwriters herein contained and subject to all
the terms and conditions set forth herein, each U.S. Underwriter, severally and
not jointly, agrees to purchase from each Selling Securityholder (i) that
number of Firm Shares, if any, set forth opposite such Selling Securityholder's
name on Part A of Schedule I hereto multiplied by each such U.S. Underwriter's
Pro Rata Share at the purchase price per share and (ii) that number of Firm
Warrants, if any, set forth opposite such Selling Securityholder's name on Part
B of Schedule I hereto multiplied by each such U.S. Underwriter's Pro Rata
Share at the warrant purchase price. "Warrant purchase price" for any Warrant
means the excess of (i) the purchase price per share multiplied by the number
of Warrant Shares issuable upon the exercise of the Warrant over (ii) the
exercise price of such Warrant.
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The Company and the Selling Securityholders listed in Part C
of Schedule I hereto also agree, severally and not jointly, and subject to all
the terms and conditions set forth herein, to sell to the U.S. Underwriters
and, upon the basis of the representations, warranties and agreements of the
Company, the Selling Securityholders and the U.S. Underwriters herein contained
and subject to all the terms and conditions set forth herein, the U.S.
Underwriters shall have the right to purchase from the Company and the Selling
Securityholders listed in Part C of Schedule I hereto, at the purchase price
per share in the case of any Additional Shares and at the warrant purchase
price in the case of any Additional Warrants, pursuant to an option (the
"over-allotment option") which may be exercised at any time and from time to
time prior to 9:00 P.M., New York City time, on the 30th day after the date of
the U.S. Prospectus (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the American Stock Exchange
is open for trading), that number of Additional Shares and Additional Warrants,
if any, set forth opposite their respective names in Part C of Schedule I.
Additional Shares and Additional Warrants may be purchased only for the purpose
of covering over-allotments made in connection with the offering of the Firm
Shares and the Firm Warrant Shares. The Additional Shares and Additional
Warrants which the U.S. Underwriters elect to purchase upon any exercise of the
over-allotment option shall be provided (i) by the Company in the form of
Additional Shares equal to the number of Additional Shares set forth opposite
its name on Part C of Schedule I hereto multiplied by a fraction, the numerator
of which is the aggregate number of shares of Class A Common Stock which the
U.S. Underwriters elect to purchase (either directly through the purchase of
Additional Shares or indirectly through the purchase and subsequent exercise of
Additional Warrants) and the denominator of which is the aggregate number of
Additional Shares and Additional Warrant Shares (such fraction, the "Purchased
Percentage") and (ii) by each Selling Securityholder in the form of Additional
Shares and/or Additional Warrants determined by multiplying the number of
Additional Shares and/or Additional Warrant Shares that would be issued upon
the exercise of such Selling Securityholder's Additional Warrants, each as set
forth opposite such Selling Securityholder's name on Part C of Schedule I
hereto by the Purchased Percentage. Upon any exercise of the over-allotment
option, each U.S. Underwriter, severally and not jointly, agrees to (i)
purchase from the Company and each Selling Securityholder who has agreed to
sell Additional Shares that number of Additional Shares to be sold by the
Company or such Selling Securityholder determined pursuant to the preceding
sentence multiplied by each such U.S. Underwriter's Pro Rata Share and (ii)
purchase from each Selling Securityholder who has
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agreed to sell Additional Warrants that number of Additional Warrants to be
sold by the Company or such Selling Securityholder determined pursuant to the
preceding sentence multiplied by each such U.S. Underwriter's Pro Rata Share.
The Company agrees, upon receipt of the exercise price of the Additional
Warrants and surrender of the certificates, if any, representing such
Additional Warrants, to issue to the U.S. Underwriters the Additional Warrant
Shares.
Certificates in transferable form for the U.S. Shares and the
U.S. Warrants which each of the Selling Securityholders agrees to sell pursuant
to this Agreement [(other than Shares issuable upon the exercise of options)]
have been placed in custody with First Union National Bank of North Carolina
(the "Custodian") for delivery under this Agreement pursuant to a Custody
Agreement and Power of Attorney (collectively, the "Custody Agreement")
executed by each of the Selling Securityholders appointing ▇▇▇▇▇▇ ▇. Tek and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ as agents and attorneys-in-fact (the "Attorneys-in-Fact").
With respect to Shares issuable upon the exercise of stock options held by
certain of the Selling Securityholders, the Selling Securityholders holding
such options have deposited with the Custodian irrevocable option exercise and
payment direction letters in form and substance satisfactory to the
Representatives. Each Selling Securityholder agrees, severally and not
jointly, that (i) the U.S. Shares and the U.S. Warrants represented by the
certificates deposited by such Selling Securityholder in custody pursuant to
the Custody Agreement are subject to the interests of the U.S. Underwriters,
the Company and each other Selling Securityholder, (ii) the arrangements made
by such Selling Securityholder for such custody are, except as specifically
provided in the Custody Agreement, irrevocable, and (iii) to the extent that
such Selling Securityholder can, by reliance on this clause (iii), vary the
provisions of any applicable law, the obligations of such Selling
Securityholder hereunder and under the Custody Agreement shall not be
terminated by any act of such Selling Securityholder or by operation of law,
whether upon the death or incapacity of any Selling Securityholder or the
occurrence of any other event, except as specifically provided in the Custody
Agreement. Subject to the terms and conditions of the Custody Agreement, if
any Selling Securityholder shall die or be incapacitated or if any other event
referred to in clause (iii) of the immediately preceding sentence shall occur
before the delivery of the U.S. Shares and the U.S. Warrants hereunder,
certificates for the U.S. Shares and the U.S. Warrants of such Selling
Securityholder shall be delivered to the U.S. Underwriters by the
Attorneys-in-Fact in accordance with the terms and conditions of this Agreement
and the Custody Agreement
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as if such death or incapacity or other event had not occurred, regardless of
whether or not the Attorneys-in-Fact or any U.S. Underwriter shall have
received notice of such death, incapacity or other event. To the extent
specifically provided in the Custody Agreement, each Attorney-in-Fact is
authorized, on behalf of such Selling Securityholder, to execute this Agreement
and certain other documents in connection with the sale of the U.S. Shares and
the U.S. Warrants to be sold hereunder by such Selling Securityholder including
acknowledging, on behalf of such Selling Securityholder, receipt of the
proceeds from the sale of the U.S. Shares and the U.S. Warrants. Each
Attorney-in-Fact agrees to perform his duties under the Custody Agreement.
Each U.S. Underwriter represents, warrants, covenants and
agrees that, except as contemplated under Section 2 of the Agreement Between
U.S. Underwriters and Managers dated the date hereof, (i) it is not purchasing
any Shares or Warrants for the account of anyone other than a U.S. or Canadian
Person, (ii) it has not offered or sold, and will not offer, sell, resell or
deliver, directly or indirectly, any Shares or Warrants or distribute any U.S.
Prospectus outside the United States or Canada or to anyone other than a U.S.
or Canadian Person and (iii) any offer of Shares or Warrants in Canada will be
made only pursuant to an exemption from the requirement to file a prospectus in
the relevant province of Canada in which such offer is made.
3. Terms of Public Offering. The Sellers have been
advised by you that the U.S. Underwriters propose to make a public offering of
their respective portions of the Offered Shares as soon after the Registration
Statement and this Agreement have become effective as in your judgment is
advisable and initially to offer such Offered Shares upon the terms set forth
in the U.S. Prospectus.
4. Delivery of the Securities and Payment Therefor.
Delivery to the U.S. Underwriters of and payment for the Firm Securities shall
be made at the office of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇, at 10:00 A.M., New York City time, on March [ ], 1996 (the "Closing
Date"). The place of closing for the Firm Securities and the Closing Date may
be varied by agreement among you, the Company and the Attorneys-in-Fact.
Delivery to the U.S. Underwriters of and payment for any
Additional Securities to be purchased by the U.S. Underwriters shall be made at
the aforementioned office of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. at such times on such dates
(each, an "Option Closing
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Date"), which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor earlier than three nor later than ten
business days after the giving of the notice hereinafter referred to, as shall
be specified in a written notice from you on behalf of the U.S. Underwriters to
the Company and the Attorneys-in-Fact of the U.S. Underwriters' determination
to purchase a number, specified in such notice, of Additional Securities. The
place of closing for any Additional Securities and the Option Closing Date for
such Additional Securities may be varied by agreement among you, the Company
and the Attorneys-in-Fact.
Certificates for the Firm Shares and the Firm Warrant Shares
and for any Additional Shares and any Additional Warrant Shares to be purchased
hereunder (or acquired upon the exercise of Warrants purchased hereunder) shall
be registered in such names and in such denominations as you shall request
prior to 1:00 P.M., New York City time, on the second business day preceding
the Closing Date or any Option Closing Date, as the case may be. Such
certificates shall be made available to you in New York City for inspection and
packaging not later than 9:30 A.M., New York City time, on the business day
next preceding the Closing Date or the Option Closing Date, as the case may be.
The certificates evidencing the Firm Shares and the Firm Warrant Shares and any
Additional Shares and any Additional Warrant Shares to be purchased hereunder
(or acquired upon the exercise of Warrants purchased hereunder) shall be
delivered to you on the Closing Date or the Option Closing Date, as the case
may be, against payment of the purchase price therefor by certified or official
bank check or checks payable in New York Clearing House (next day) funds to the
order of the Company or the Attorneys-in-Fact, as the case may be.
5. Agreements of the Company. The Company agrees with
the several U.S. Underwriters as follows:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a
post-effective amendment thereto to be declared effective before the
offering of the Offered Shares may commence, the Company will endeavor
to cause the Registration Statement or such post-effective amendment
to become effective as soon as possible and will advise you promptly
and, if requested by you, will confirm such advice in writing, when
the Registration Statement or such post-effective amendment has become
effective.
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(b) The Company will advise you promptly and, if
requested by you, will confirm such advice in writing: (i) of any
request by the Commission for amendment of or a supplement to the
Registration Statement, any of the Prepricing Prospectuses or the
Prospectuses or for additional information; (ii) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the
Offered Shares for offering or sale in any jurisdiction or the
initiation of any proceeding for such purpose; and (iii) within the
period of time referred to in the first sentence of paragraph (f) of
this Section 5, of any change in the Company's or any of its
subsidiaries' condition (financial or other), business, prospects,
properties, net worth or results of operations, or of the happening of
any event, which makes any statement of a material fact made in the
Registration Statement or the Prospectuses (as then amended or
supplemented) untrue or which requires the making of any additions to
or changes in the Registration Statement or the Prospectuses (as then
amended or supplemented) in order to state a material fact required by
the Act or the regulations thereunder to be stated therein or
necessary in order to make the statements therein not misleading, or
of the necessity to amend or supplement the Prospectuses (as then
amended or supplemented) to comply with the Act or any other law. If
at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will use its
best efforts to obtain the withdrawal of such order at the earliest
possible time.
(c) The Company will furnish to you, without charge, five
signed copies of the registration statement as originally filed with
the Commission and of each amendment thereto, including financial
statements and all exhibits thereto, and will also furnish to you,
without charge, such number of conformed copies of the registration
statement as originally filed and of each amendment thereto, but
without exhibits, as you may reasonably request.
(d) The Company will not (i) file any amendment to the
Registration Statement or make any amendment or supplement to the
Prospectuses (including by way of issuance and filing under the Act of
any term sheet within the meaning of Rule 434 under the Act) of which
you shall not previously have been advised or to which you shall
reasonably object within a reasonable period of time after being so
advised or (ii) during such period as, in the reasonable opinion of
counsel for the U.S. Underwriters, a prospectus is required
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to be delivered in connection with sales by any U.S. Underwriter or
dealer, file any information, documents or reports pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
without delivering a copy of such information, documents or reports to
you, as Representatives of the U.S. Underwriters, prior to or
concurrently with such filing.
(e) Prior to the execution and delivery of this
Agreement, the Company has delivered to you, without charge, in such
quantities as you have reasonably requested, copies of each form of
the U.S. Prepricing Prospectus. The Company consents to the use, in
accordance with the provisions of the Act and with the securities or
Blue Sky laws of the jurisdictions in which the Offered Shares are
offered by the several U.S. Underwriters and by dealers, prior to the
date of the U.S. Prospectus, of each U.S. Prepricing Prospectus so
furnished by the Company.
(f) As soon after the execution and delivery of this
Agreement as possible and thereafter from time to time for such period
as in the reasonable opinion of counsel for the U.S. Underwriters a
prospectus is required by the Act to be delivered in connection with
sales of Offered Shares by any U.S. Underwriter or dealer, the Company
will expeditiously deliver to each U.S. Underwriter, without charge,
as many copies of the U.S. Prospectus (and of any amendment or
supplement thereto) as you may reasonably request. The Company
consents to the use of the U.S. Prospectus (and of any amendment or
supplement thereto) in accordance with the provisions of the Act and
with the securities or Blue Sky laws of the jurisdictions in which the
Offered Shares are offered by the several U.S. Underwriters and by all
dealers to whom Offered Shares may be sold, both in connection with
the offering and sale of the Offered Shares and for such period of
time thereafter as the U.S. Prospectus is required by the Act to be
delivered in connection with sales by any U.S. Underwriter or dealer.
If during such period of time any event shall occur that in the
judgment of the Company or in the opinion of counsel for the U.S.
Underwriters is required to be set forth in the U.S. Prospectus (as
then amended or supplemented) or should be set forth therein in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary to
supplement or amend the U.S. Prospectus in order to comply with the
Act or any other law, the Company will forthwith prepare and, subject
to the provisions of paragraph (d) above, file with the Commission an
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appropriate supplement or amendment thereto, and will expeditiously
furnish to the U.S. Underwriters as many copies thereof as they may
reasonably request. In the event that the Company and you, as
Representatives of the several U.S. Underwriters, agree that the U.S.
Prospectus should be amended or supplemented, the Company, if
requested by you, will promptly issue a press release announcing or
disclosing the matters to be covered by the proposed amendment or
supplement.
(g) The Company will cooperate with you and with counsel
for the U.S. Underwriters in connection with the registration or
qualification of the Offered Shares for offering and sale by the
several U.S. Underwriters and by dealers under the securities or Blue
Sky laws of such jurisdictions as you may designate and will file such
consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification;
provided that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to
take any action which would subject it to service of process in suits,
other than those arising out of the offering or sale of the Offered
Shares, in any jurisdiction where it is not now so subject.
(h) The Company will make generally available to its
security holders a consolidated earning statement, which need not be
audited, covering a twelve-month period commencing after the effective
date of the Registration Statement and ending not later than 15 months
thereafter, as soon as practicable after the end of such period, which
consolidated earning statement shall satisfy the provisions of Section
11(a) of the Act and Rule 158 promulgated thereunder.
(i) During the period of five years hereafter, the
Company will furnish to you promptly after available, a copy of each
report of the Company mailed to common stockholders or filed with the
Commission or the American Stock Exchange (unless the Company has, in
good faith, requested confidential treatment with respect to such
filing).
(j) If this Agreement shall terminate or shall be
terminated after execution pursuant to any provisions hereof
(otherwise than pursuant to the second paragraph of Section 12 hereof
or by notice given by you terminating this Agreement pursuant to
Section 12 or Section 13 hereof) or if this Agreement shall be
terminated by the U.S. Underwriters
14
-13-
because of any failure or refusal on the part of the Company or the
Selling Securityholders to comply with the terms or fulfill any of the
conditions of this Agreement, the Company agrees to reimburse the
Representatives for all reasonable out-of-pocket expenses (including
reasonable fees and expenses of counsel for the U.S. Underwriters)
incurred by you in connection herewith.
(k) The Company will apply the net proceeds from the sale
of the Offered Shares to be sold by it hereunder substantially in
accordance with the description set forth in the Prospectuses.
(l) If Rule 430A of the Act is employed, the Company will
timely file the Prospectuses pursuant to Rule 424(b) under the Act and
will advise you of the time and manner of such filing.
(m) Except as provided in this Agreement and the
International Underwriting Agreement, the Company will not sell, offer
to sell, solicit an offer to buy, contract to sell, grant any option
to purchase or otherwise transfer or dispose of any common stock of
the Company (the "Common Stock") or any securities convertible into or
exercisable or exchangeable for Common Stock, for a period of 180 days
after the date of the Prospectuses, without the prior written consent
of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc; provided, however, that the Company may (i)
repurchase from Selling Securityholders Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock, (ii)
issue Common Stock upon the exercise of currently outstanding warrants
or upon the exercise of options granted under the Company's existing
stock option grants or plans or the proposed stock option plan to be
adopted by the Company as described in the Prospectuses, (iii) issue
Class A Common Stock upon conversion or exchange of existing shares of
another class of Common Stock, (iv) grant an option, and permit the
exercise thereof, with respect to 75,000 shares of Class A Common
Stock to ▇▇▇▇ ▇▇▇▇▇ or his designee and (v) issue shares of Common
Stock as consideration for the acquisition of additional broadcast
assets provided that in the case of this clause (v), the entity or
individual receiving such shares agrees in writing to be bound by the
terms of a lock-up letter with terms substantially similar to those
referred to in clause (n) below.
(n) Except as stated in this Agreement and in the
International Underwriting Agreement and in the Prepricing
15
-14-
Prospectuses and Prospectuses, the Company has not taken, nor will it
take, directly or indirectly, any action designed to cause or result
in stabilization or manipulation of the price of any of the Company's
capital stock (the "Capital Stock") to facilitate the sale or resale
of the Offered Shares.
(o) The Company will use its best efforts to have the
Offered Shares listed, subject to issuance, on the American Stock
Exchange on or before the Closing Date.
6. Agreements of the Selling Securityholders. Each of
the Selling Securityholders, severally and not jointly, agrees with the
several U.S. Underwriters as follows:
(a) Such Selling Securityholder will use reasonable
efforts to cooperate to the extent reasonably necessary to cause the
Registration Statement or any post-effective amendment thereto to
become effective at the earliest possible time, to the extent that
such effectiveness is contingent upon an action to be taken by such
Selling Securityholder.
(b) On the Closing Date or the Option Closing Date, as
the case may be, all stock transfer or other taxes (other than income
taxes) which are required to be paid in connection with the sale and
transfer hereunder to the several U.S. Underwriters by such Selling
Securityholder of the Shares or Warrants to be sold by such Selling
Securityholder to the several Underwriters hereunder on such date will
have been paid or provided for by such Selling Securityholder.
(c) Except as provided in this Agreement and in the
International Underwriting Agreement, such Selling Securityholder
will not sell, offer to sell, solicit an offer to buy, contract to
sell, grant any option to purchase or otherwise transfer or dispose
of any Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock, for a period of 180 days after the
date of the Prospectuses, without the prior written consent of ▇▇▇▇▇
▇▇▇▇▇▇ Inc; provided, however, that such Selling Securityholder may (i)
transfer shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock to (x) the Company, (y)
any other Selling Securityholder who is bound by the terms of this
paragraph (c) or (z) to any Affiliate of any Selling Securityholder if
such Affiliate agrees in writing to be bound by the terms of this
paragraph (c) or (ii) exercise, exchange or convert stock
16
-15-
options, warrants, convertible securities or other rights entitling
such Selling Securityholder to receive shares of Common Stock or
convert or exchange shares of one class of Common Stock into shares of
a different class of Common Stock, with all the shares of Common Stock
received upon any such exercise, exchange or conversion being subject
to the terms of this paragraph (c).
(d) Except as stated in this Agreement and the
International Underwriting Agreement and in the Prepricing
Prospectuses and the Prospectuses, such Selling Securityholder has not
taken, nor will it take, directly or indirectly, any action designed
to cause or result in stabilization or manipulation of the price of
any Capital Stock to facilitate the sale or resale of the Offered
Shares (it being understood that this paragraph (d) shall not apply to
any stabilization efforts of any affiliate of such Selling
Securityholder who is a U.S. Underwriter or Manager).
(e) Such Selling Securityholder will advise you promptly,
and if requested by you, will confirm such advice in writing, within
the period of time referred to in the first sentence of paragraph (f)
of Section 5 hereof (but not in excess of nine months from the date of
this Agreement), of (i) any change in information relating to such
Selling Securityholder previously furnished to you or the Company in
writing by such Selling Securityholder specifically for use in the
Registration Statement and (ii) if, but only if such Selling
Securityholder is an officer of the Company, any change in the
Company's or any of its subsidiaries' condition (financial or other),
business, prospects, properties, net worth or results of operations or
of any change in information relating to the Company or any such
subsidiary or any new information relating to the Company or any of
its subsidiaries or relating to any matter stated in the Prospectuses
or any amendment or supplement thereto which comes to the attention of
such Selling Securityholder who is an officer that suggests that any
statement made in the Registration Statement or the Prospectuses (as
then amended or supplemented, if amended or supplemented) is or may be
untrue in any material respect or that the Registration Statement or
Prospectuses (as then amended or supplemented, if amend-
17
-16-
ed or supplemented) omit or may omit to state a material fact or a
fact necessary to be stated therein in order to make the statements
therein not misleading in any material respect, or of the necessity
to amend or supplement the Prospectuses (as then amended or
supplemented, if amended or supplemented) in order to comply with the
Act or any other law.
(f) Such Selling Securityholder agrees to deliver to you
prior to or at the Closing Date a properly completed and executed
United States Treasury Department Form W-9 (or other applicable form
or statement specified by Treasury Department regulations in lieu
thereof).
7. Representations and Warranties of the Company. The
Company represents and warrants to each U.S. Underwriter that:
(a) Each Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment
or supplement thereto, or filed pursuant to Rule 424 under the Act,
complied when so filed in all material respects with the provisions of
the Act. The Commission has not issued any order preventing or
suspending the use of any Prepricing Prospectus.
(b) The Registration Statement in the form in which it
became or becomes effective and also in such form as it may be when
any post-effective amendment thereto shall become effective and the
Prospectuses and any supplement or amendment thereto when filed with
the Commission under Rule 424(b) under the Act complied or will comply
in all material respects with the provisions of the Act and did not
and will not at any such times contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
except that this representation and warranty does not apply to
statements in or omissions from the Registration Statement or the
Prospectuses made in reliance upon and in conformity with information
relating to any U.S. Underwriter or Manager furnished to the Company
in writing by or on behalf of any U.S. Underwriter or Manager through
you expressly for use therein.
(c) All the outstanding shares of Capital Stock of the
Company have been duly authorized and validly issued, are fully paid
and nonassessable and are free of any preemptive or similar rights;
the Shares to be issued and sold by the Company have been duly
authorized and, when issued and delivered to the U.S. Underwriters
and the Managers against payment therefor in accordance with the terms
hereof and in the International Underwriting Agreement, will be
validly issued, fully paid and nonassessable and free of any preemp-
18
-17-
tive or similar rights; and the Capital Stock of the Company conforms
in all material respects to the descriptions thereof in the
Registration Statement and the Prospectuses.
(d) The warrant agreements governing the Warrants (the
"Warrant Agreements") have been duly and validly authorized by the
Company, and the Warrant Agreements have been duly executed and
delivered by the Company and constitute valid and legally binding
agreements of the Company, enforceable against the Company in
accordance with their terms, except that the enforcement thereof may
be subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought.
(e) The Warrants have been duly and validly authorized by the
Company and have been duly executed and delivered by the Company and
constitute valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms except
that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of
the court before which any proceeding therefor may be brought. The
exercise price for the Warrants is $.001 per Warrant.
(f) The Warrant Shares have been validly reserved for
issuance; when issued, the Warrant Shares will be duly authorized,
validly issued, fully paid and nonassessable and free of any
preemptive or similar rights.
(g) The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of
Delaware with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectuses, and is duly registered
and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration or qualification,
except where the failure so to register or qualify could not have a
material adverse effect on the condition (financial or other),
business, properties, net worth or
19
-18-
results of operations of the Company and its subsidiaries taken as a
whole (a "Material Adverse Effect").
(h) All the Company's subsidiaries (collectively, the
"Subsidiaries") are listed in an exhibit to the Registration
Statement. Each Subsidiary is either (i) a corporation duly
incorporated or organized, validly existing and in good standing in
the jurisdiction of its incorporation or organization or (ii) a
partnership duly organized and validly existing under the applicable
laws of the State of Florida and, in each case, with full corporate or
partnership power and authority, as the case may be, to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectuses, and is duly registered
and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration or qualification,
except where the failure so to register or qualify does not have a
Material Adverse Effect; all the outstanding shares of capital stock
of each Subsidiary which is a corporation have been duly authorized
and validly issued and are fully paid and nonassessable; all of the
outstanding shares of capital stock or outstanding partnership
interests of the Subsidiaries are owned by the Company directly, or
indirectly through one of the other Subsidiaries, and, other than as
set forth in the Prospectuses, are owned free and clear of any lien,
adverse claim, security interest, equity or other encumbrance.
(i) There are no legal or governmental proceedings
pending or, to the knowledge of the Company, threatened, against the
Company or any of the Subsidiaries or any of their respective officers
or directors, or to which the Company or any of the Subsidiaries, or
to which any of their respective properties is subject, that are
required to be described in the Registration Statement or the
Prospectuses but are not described as required, and there are no
agreements, contracts, indentures, leases or other instruments that
are required to be described in the Registration Statement or the
Prospectuses or to be filed as an exhibit to the Registration
Statement that are not described or filed as required by the Act.
(j) Neither the Company nor any of the Subsidiaries is in
violation of its certificate or articles of incorporation or by-laws,
or other organizational documents, or of any law, ordinance,
administrative or governmental rule or regulation applicable to the
Company or any of the Subsidiaries or of any decree of any court or
governmental agency or body having jurisdiction over the Company or
any of the Subsid-
20
-19-
iaries, or in default in any material respect in the performance of
any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any
material agreement, indenture, lease or other instrument to which the
Company or any of the Subsidiaries is a party or by which any of them
or any of their respective properties may be bound, except as would
not (individually or in the aggregate) have a Material Adverse Effect.
(k) Except as disclosed in the Registration Statement and
the Prospectuses, neither the issuance and sale of the Offered Shares,
the execution, delivery or performance of this Agreement or the other
Transaction Documents (as hereinafter defined) by the Company or the
Subsidiaries (to the extent a party thereto) nor the consummation by
the Company or the Subsidiaries (to the extent a party thereto) of the
transactions contemplated hereby or thereby (i) requires any consent,
approval, authorization or other order of or registration or filing
with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except (A) such as may be
required for the registration of the Offered Shares under the Act and
compliance with the securities or Blue Sky and other laws of various
jurisdictions and countries, all of which have been or will be
effected in accordance with this Agreement and (B) as would not
(individually or in the aggregate) have a Material Adverse Effect) or
conflicts or will conflict with or constitutes or will constitute a
breach of, or a default under, the certificate or articles of
incorporation or by-laws, or other organizational documents, of the
Company or any of the Subsidiaries or (ii) conflicts or will conflict
with or constitutes or will constitute a breach of, or a default
under, any agreement, indenture, lease or other instrument to which
the Company or any of the Subsidiaries is a party or by which any of
them or any of their respective properties may be bound, or violates
or will violate any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Company or any of the
Subsidiaries or any of their respective properties, or will result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Subsidiaries pursuant
to the terms of any agreement or instrument to which any of them is a
party or by which any of them may be bound or to which any of the
property or assets of any of them is subject, except as would not
(indi-
21
-20-
vidually or in the aggregate) have a Material Adverse Effect.
(l) Each of Price Waterhouse LLP and ▇▇▇▇▇▇, ▇▇▇▇▇▇ and
Company, who have certified or shall certify the financial statements
included in the Registration Statement and the Prospectuses (or any
amendment or supplement thereto), are independent public accountants
as required by the Act.
(m) The financial statements of the Company and the
Subsidiaries, together with related schedules and notes, included in
the Registration Statement and the Prospectuses (and any amendment or
supplement thereto) present fairly the consolidated financial
position, results of operations and changes in financial position of
the Company and the Subsidiaries on the basis stated in the
Registration Statement and the Prospectuses at the respective dates or
for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the
other financial and statistical information and data included in the
Registration Statement and the Prospectuses (and any amendment or
supplement thereto) are accurately presented and prepared on a basis
consistent with such financial statements and the books and records of
the Company and the Subsidiaries.
(n) The unaudited pro forma consolidated financial
statements and other pro forma financial information (including the
notes thereto) included in the Registration Statement and the
Prospectuses (A) present fairly in all material respects the
information shown therein; (B) have been prepared in accordance with
applicable requirements of Regulation S-X promulgated under the
Exchange Act; (C) have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements; and (D) have been properly computed on the bases described
therein. The assumptions used in the preparation of the pro forma
financial statements and other pro forma condensed consolidated
financial information included in the Registration Statement and the
Prospectuses are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances
referred to therein.
(o) The execution and delivery of, and the performance by
the Company of its obligations under, this Agreement have been duly
and validly authorized by the Company, and this
22
-21-
Agreement has been duly executed and delivered by the Company and
constitutes the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms except
(i) that the enforcement hereof may be subject to bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, and to general principles of equity and the discretion of
the court before which any proceeding therefor may be brought and (ii)
as any rights to indemnity or contribution hereunder may be limited by
applicable securities laws and public policy considerations.
(p) The execution and delivery of, and the performance by
the Company and the Subsidiaries (to the extent a party thereto) of
each of its obligations under, each agreement or instrument executed
or delivered in connection with the Proposed Acquisitions (as defined
in the Prospectuses), the exercise of the Station Options (as defined
in the Prospectuses) and the termination of the put option on the
Company's Class A and Class B Common Stock warrants (collectively,
the "Transaction Documents"), other than this Agreement, have been
duly and validly authorized by the Company and the Subsidiaries (to
the extent a party thereto), and such Transaction Documents have been
duly executed and delivered by the Company and the Subsidiaries (to
the extent a party thereto) and constitute the valid and legally
binding agreement of the Company and the Subsidiaries (to the extent a
party thereto), enforceable against them in accordance with their
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating
to creditors' rights generally, and (ii) to general principles of
equity and the discretion of the court before which any proceeding
therefor may be brought.
(q) Except as disclosed in the Registration Statement and
the Prospectuses (or any amendment or supplement thereto), subsequent
to the respective dates as of which such information is given in the
Registration Statement and the Prospectuses (or any amendment or
supplement thereto), neither the Company nor any of the Subsidiaries
has incurred any liability or obligation, contingent or otherwise, or
entered into any transaction, not in the ordinary course of business,
that is material to the Company and the Subsidiaries taken as a whole,
and there has not been any change in the capital stock (other than as
contemplated by the Under-
23
-22-
writing Agreements or the exercise of stock options pursuant to grants
or plans described in the Prospectuses), or material increase in the
short-term debt or long-term debt, of the Company or any of the
Subsidiaries, or any material adverse change, or any development
involving or which may reasonably be expected to involve, a
prospective material adverse change, in the condition (financial or
other), business, properties, net worth or results of operations of
the Company and the Subsidiaries taken as a whole.
(r) Each of the Company and the Subsidiaries has good and
marketable title to all property (real and personal) described in the
Prospectuses as being owned by it which is material to the business of
the Company and the Subsidiaries, taken as a whole, free and clear of
all liens, claims, security interests or other encumbrances except
such as are described in the Registration Statement and the
Prospectuses or would not (individually or in the aggregate) have a
Material Adverse Effect and all property described in the Registration
Statement (including exhibits thereto) and the Prospectuses as being
held under lease by each of the Company and the Subsidiaries which is
material to the business of the Company and the Subsidiaries, taken as
a whole, is held by it under binding leases that are in force and
effect.
(s) The Company has not distributed and, prior to the
later to occur of (i) the Closing Date and (ii) completion of the
distribution of the Shares, will not distribute any offering material
in connection with the offering and sale of the Offered Shares other
than the Registration Statement, the Prepricing Prospectuses, the
Prospectuses or other materials, if any, permitted by the Act.
(t) The Company and each of the Subsidiaries have such
permits, licenses, franchises and authorizations of governmental or
regulatory authorities, including, without limitation, permits,
licenses, franchises and authorizations from the United States Federal
Communications Commission (the "FCC") ("Permits"), as are necessary to
own their respective properties and to conduct their business in the
manner described in the Prospectuses, subject to such qualifications
as may be set forth in the Prospectuses and, except as, individually
or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect; the Company and each of the Subsidiaries have
fulfilled and performed all of their respective obligations with
respect to such Permits and no event has occurred which allows, or
after
24
-23-
notice or lapse of time would allow, revocation or termination thereof
or results in any other material impairment of the rights of the
holder of any such Permit, subject in each case to such qualifications
as may be set forth in the Prospectuses and, except as, individually
or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect; and, except as described in the Prospectuses,
none of such Permits contains any restriction that is materially
burdensome to the Company or any of the Subsidiaries, taken as a
whole. Other than as disclosed in the Prospectuses, there are no
license renewal or rate or tariff proceedings existing, pending or, to
the best knowledge of the Company, threatened that could reasonably be
expected to have a Material Adverse Effect.
(u) To the extent required by the Exchange Act, each of
the Company and the Subsidiaries maintains a system of internal
accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; (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 existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(v) To the Company's knowledge, neither the Company nor
any of the Subsidiaries nor any officer, director, employee or agent
of the Company or any Subsidiary has made any payment of funds of the
Company or any Subsidiary or received or retained any funds in
violation of any law, rule or regulation, which payment, receipt or
retention of funds is of a character required to be disclosed in the
Prospectuses.
(w) The Company and each of the Subsidiaries have filed
all tax returns required to be filed, which returns are complete and
correct, and neither the Company nor any Subsidiary is in default in
the payment of any taxes which were payable pursuant to said returns
or any assessments with respect thereto, other than those taxes or
assessments being contested in good faith and those taxes or
assessments for which adequate reserves or accruals have been
established in accordance with generally accepted accounting
principles, except where the failure to file such tax re-
25
-24-
turns or to pay such taxes or assessments is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect.
The Company knows of no actual or proposed additional tax assessments
for any fiscal period against the Company or any of the Subsidiaries
that would, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect.
(x) Except as disclosed in the Registration Statement or
the Prospectuses, no holder of any security of the Company has any
right to require registration of any security of the Company because
of the filing of the Registration Statement or consummation of the
transactions contemplated by this Agreement.
(y) The Company and the Subsidiaries own or possess all
patents, trademarks, trademark registrations, service marks, service
▇▇▇▇ registrations, trade names, copyrights, licenses, inventions,
trade secrets and rights described in the Prospectuses as being owned
by them or any of them or necessary for the conduct of their
respective businesses, the absence of which would have or could
reasonably be expected to have a Material Adverse Effect, and the
Company is not aware of any claim to the contrary or any challenge by
any other person to the rights of the Company and the Subsidiaries
with respect to the foregoing which claims or challenges, if the
subject of an unfavorable decision, would individually or in the
aggregate, have a Material Adverse Effect.
(z) The Company has complied with all provisions of
Florida Statutes, Section 517.075, relating to issuers doing business
with Cuba.
(aa) The Company is not now, and after sale of the Shares
to be sold by it hereunder and application of the net proceeds from
such sale as described in the Prospectuses under the caption "Use of
Proceeds" will not be, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(ab) There are no business relationships or related-party
transactions of the nature described in Item 404 of Regulation S-K
involving the Company or any of its Subsidiaries and any persons
described in such Item that are required to be disclosed in the
Prospectuses and which have not been so disclosed.
26
-25-
(ac) Except as stated in this Agreement and in the
International Underwriting Agreement and in the Prepricing
Prospectuses and the Prospectuses, neither the Company nor any of the
Subsidiaries, or any of such entities' directors, officers or
controlling persons, has taken, or will take, directly or indirectly,
any action designed to cause or result in stabilization or
manipulation of the price of any Capital Stock of the Company to
facilitate the sale or resale of the Offered Shares.
8. Representations and Warranties of the Selling
Securityholders. Each Selling Securityholder, severally and not jointly,
represents and warrants to each U.S. Underwriter that:
(a) Such Selling Securityholder now has, and on the
Closing Date and the Option Closing Date will have, valid and
marketable title to the Shares or the Warrants to be sold by such
Selling Securityholder hereunder, free and clear of any lien, claim,
security interest or other encumbrance, including, without limitation,
any restriction on transfer other than those arising under this
Agreement, the Custody Agreement, the Communications Act of 1934, as
amended and the policies, rules and regulations promulgated thereunder
(collectively, the "Communications Act") and any federal or state
securities laws.
(b) Such Selling Securityholder now has, and on the
Closing Date and the Option Closing Date will have, full legal right,
power and authorization to sell, assign, transfer and deliver such
Shares or Warrants in the manner and on the terms provided in and
contemplated by this Agreement. Assuming that the U.S. Underwriters
have purchased such Shares or Warrants for value and without notice of
any adverse claim, upon delivery of and payment for such Shares or
Warrants hereunder, the several U.S. Underwriters will acquire valid
and marketable title to such Shares or Warrants, as the case may be,
free and clear of any lien, claim, security interest or other
encumbrance, it being understood that no representation or warranty is
being made herein with respect to the securities or Blue Sky laws of
any jurisdiction or the Communications Act.
(c) Each of this Agreement and the Custody Agreement has
been duly authorized, executed and delivered by or on behalf or such
Selling Securityholder and assuming that each has been duly
authorized, executed and delivered by or on behalf of and constitutes
a valid and binding agreement of each other party thereto, constitutes
a valid and binding
27
-26-
agreement of such Selling Securityholder enforceable against such
Selling Securityholder in accordance with its terms, except (i) that
the enforcement thereof may be subject to bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights
generally, and to general principles of equity and the discretion of
the court before which any proceeding therefor may be brought and (ii)
as any rights to indemnity or contribution thereunder may be limited
by applicable laws and public policy considerations.
(d) Assuming that the agreement among the Company and
certain of the Selling Securityholders setting forth certain
amendments to the Stockholders Agreement (as defined in the
Prospectuses) and certain other instruments and agreements are in full
force and effect, that the waivers and consents given by the other
parties thereto are valid and binding and that the Company's
representations and warranties contained herein are true and complete
in all material respects, neither the execution and delivery of this
Agreement or the Custody Agreement by or on behalf of such Selling
Securityholder nor the performance by such Selling Securityholder of
its obligations hereunder or thereunder requires any consent,
approval, authorization or order of, or filing or registration with,
any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may have been
obtained or as may be required under the Act or the Communications Act
or such as may be required under state securities or Blue Sky laws) or
conflicts with or constitutes a breach of, or default under, any
agreement, indenture or other instrument to which such Selling
Securityholder is a party or by which such Selling Securityholder is
bound, or any statute, law, rule, regulation, ruling, judgment,
injunction, order or decree applicable to such Selling Securityholder
except, in each case, as would not (individually or in the aggregate)
have a material adverse effect on such Selling Securityholder or its
ability to perform its obligations hereunder.
(e) The Registration Statement and the Prospectuses do
not contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading (in the case of the
Prospectuses, in the light of the circumstances under which such
statements were made), provided that the representations and
warranties set forth in this paragraph (e) shall apply only to
statements in or omissions
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from the Registration Statement or any Prospectus made in reliance
upon and in conformity with the most recent information relating to
such Selling Securityholder provided by or on behalf of such Selling
Securityholder in writing expressly for use therein.
(f) If, but only if, such Selling Securityholder is an
officer of the Company, such Selling Securityholder does not have any
knowledge or any reason to believe that the Registration Statement or
the Prospectuses (or any amendment or supplement thereto) contains any
untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading.
(g) The representations and warranties of such Selling
Securityholder in the Custody Agreement are true and correct.
9. Indemnification and Contribution. (a) The Company
and Second ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, L.P. (the "Indemnifying Selling Securityholder"),
jointly and severally, agree to indemnify and hold harmless each of you and
each other U.S. Underwriter and each person, if any, who controls any U.S.
Underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act from and against any and all losses, claims, damages, liabilities
and expenses (including reasonable costs of investigation) arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Prepricing Prospectus or in the Registration Statement or the
Prospectuses or in any amendment or supplement thereto, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating to
such U.S. Underwriter furnished in writing to the Company by or on behalf of
any U.S. Underwriter through you expressly for use in connection therewith;
provided, however, that the indemnification contained in this paragraph (a)
with respect to any Prepricing Prospectus and any other preliminary prospectus,
the Prospectuses or any other amendment or supplement thereto shall not inure
to the benefit of any U.S. Underwriter (or to the benefit of any person
controlling such U.S. Underwriter) on account of any such loss, claim, damage,
liability or expense arising from the sale of the Offered Shares by such U.S.
29
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Underwriter to any person if a copy of the U.S. Prospectus, as amended or
supplemented, shall not have been delivered or sent to such person within the
time required by the Act and the regulations thereunder, and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such U.S. Prepricing Prospectus was corrected in the
U.S. Prospectus; provided that the Company has delivered the U.S. Prospectus,
as amended or supplemented, to the several U.S. Underwriters in requisite
quantity on a timely basis to permit such delivery or sending. The foregoing
indemnity agreement shall be in addition to any liability which the Company or
any Indemnifying Selling Securityholder may otherwise have. Notwithstanding
the foregoing, to the extent any such loss, claim, damage, liability or expense
arises out of matters other than those which are referred to in paragraph 9(c)
hereof and which relate to the Indemnifying Selling Securityholder, each U.S.
Underwriter agrees that it shall seek indemnification or contribution for any
claim hereunder first against the Company and if, and only if, the Company is
unable to fulfill its indemnification or contribution obligations hereunder,
the U.S. Underwriters shall then be entitled to seek any remaining
indemnification or contribution of any claim hereunder from the Indemnifying
Selling Securityholder. The obligations and liability of the Indemnifying
Selling Securityholder, whether with respect to indemnification pursuant to
this Section 9(a) or Section 9(c), contribution pursuant to Section 9(e) or
otherwise, shall not in any event exceed the aggregate amount of the net
proceeds received by the Indemnifying Selling Securityholder from the sale of
Shares sold by the Indemnifying Selling Securityholder to the U.S. Underwriters
pursuant to this Agreement.
(b) If any action, suit or proceeding shall be brought
against any U.S. Underwriter or any person controlling any U.S. Underwriter in
respect of which indemnity may be sought against the Company or the
Indemnifying Selling Securityholder, such U.S. Underwriter or such controlling
person shall promptly notify the parties against whom indemnification is being
sought (the "indemnifying parties"), and such indemnifying parties shall assume
the defense thereof, including the employment of counsel and payment of all
fees and expenses. Such U.S. Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action, suit or
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such U.S. Underwriter or such
controlling person unless (i) the indemnifying parties have agreed in writing
to pay such fees and expenses, (ii) the indemnifying parties have failed to
assume the defense and employ counsel or (iii) the named parties to any such
action, suit or proceeding
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(including any impleaded parties) include both such U.S. Underwriter or such
controlling person and the indemnifying parties and such U.S. Underwriter or
such controlling person shall have been advised by its counsel that
representation of such indemnified party and any indemnifying party by the same
counsel would be inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them (in which
case the indemnifying party shall not have the right to assume the defense of
such action, suit or proceeding on behalf of such U.S. Underwriter or such
controlling person). It is understood, however, that the indemnifying parties
shall, in connection with any one such action, suit or proceeding or separate
but substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such U.S.
Underwriters and controlling persons not having actual or potential differing
interests with you or among themselves, which firm shall be designated in
writing by ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and shall be reasonably acceptable to the
indemnified parties, and that all such fees and expenses shall be reimbursed as
they are incurred. The indemnifying parties shall not be liable for any
settlement of any such action, suit or proceeding effected without their
written consent, but if settled with such written consent, or if there be a
final judgment for the plaintiff in any such action, suit or proceeding, the
indemnifying parties agree to indemnify and hold harmless any U.S. Underwriter,
to the extent provided in the preceding paragraph, and any such controlling
person from and against any loss, claim, damage, liability or expense by reason
of such settlement or judgment.
(c) Each Selling Securityholder agrees, severally and not
jointly, to indemnify and hold harmless each of you and each other U.S.
Underwriter and each person, if any, who controls any U.S. Underwriter within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, the
Company, its directors, its officers who sign the Registration Statement, and
any person who controls the Company within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectuses or in any amendment or supplement thereto, or arising out of
or based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make
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the statements therein not misleading, but only with respect to the information
relating to such Selling Securityholder furnished in writing by or on behalf of
such Selling Securityholder other than the Indemnifying Selling Securityholder
expressly for use in the Registration Statement or any Prospectus, or any
amendment or supplement thereto; provided, however, that (i) such Selling
Securityholder shall not be liable in any such case, whether for
indemnification pursuant to this Section 9(c), contribution pursuant to Section
9(e), or otherwise, if any such untrue statement or alleged untrue statement or
omission or alleged omission was contained in or omitted from the Registration
Statement or any Prospectus used after such time as the Company shall have been
advised by or on behalf of such Selling Securityholder of such untrue statement
or alleged untrue statement or omission or alleged omission, and (ii) the
obligations and liability of such Selling Securityholder, whether with respect
to indemnification pursuant to this Section 9(c), contribution pursuant to
Section 9(e) or otherwise, shall not in any event exceed in the aggregate the
amount of net proceeds received by such Selling Securityholder from the sale of
the Shares or Warrants sold by such Selling Securityholder to the U.S.
Underwriters pursuant to this Agreement. If any action, suit or proceeding
shall be brought against any U.S. Underwriter, any such controlling person of
any U.S. Underwriter, the Company, any of its directors, any such officer, or
any such controlling person of the Company, based on the Registration Statement
or any Prospectus or any amendment or supplement thereto, and in respect of
which indemnity may be sought against any Selling Securityholder pursuant to
this paragraph (c), such Selling Securityholder shall have the rights and
duties given to the Company by paragraph (b) above (except that if the Company
shall have assumed the defense thereof such Selling Securityholder shall not be
required to do so, but may employ separate counsel therein and participate in
the defense thereof, but the fees and expenses of such counsel shall be at such
Selling Securityholder's expense), and each U.S. Underwriter, each such
controlling person of any U.S. Underwriter, the Company, its directors, any
such officer, and any such controlling person of the Company shall have the
rights and duties given to the U.S. Underwriters by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability which any
Selling Securityholder may otherwise have.
(d) Each U.S. Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its
officers who sign the Registration Statement, each Selling Securityholder, and
any person who controls the Company or any Selling Securityholder within the
meaning of Section 15 of
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the Act or Section 20(a) of the Exchange Act, to the same extent as the
foregoing indemnity from the Company and the Selling Securityholders to each
U.S. Underwriter, but only with respect to information relating to such U.S.
Underwriter furnished in writing by or on behalf of such U.S. Underwriter
through you expressly for use in the Registration Statement, the Prospectus or
any Prepricing Prospectus, or any amendment or supplement thereto. If any
action, suit or proceeding shall be brought against the Company, any of its
directors, any such officer, any Selling Securityholder, or any such
controlling person based on the Registration Statement, the Prospectus or any
Prepricing Prospectus, or any amendment or supplement thereto, and in respect
of which indemnity may be sought against any U.S. Underwriter pursuant to this
paragraph (d), such U.S. Underwriter shall have the rights and duties given to
the Company by paragraph (b) above (except that if the Company shall have
assumed the defense thereof such U.S. Underwriter shall not be required to do
so, but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at such U.S.
Underwriter's expense), and the Company, its directors, any such officer, the
Selling Securityholders, and any such controlling person shall have the rights
and duties given to the U.S. Underwriters by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability which any
U.S. Underwriter may otherwise have.
(e) If the indemnification provided for in this Section 9
is unavailable to an indemnified party under paragraphs (a), (c) or (d) hereof
or is insufficient to hold an indemnified party harmless in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company, the
Selling Securityholders (severally) and the U.S. Underwriters from the sale of
the Shares and the Warrants and the offering of the Offered Shares, or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, the
Selling Securityholders (severally) and the U.S. Underwriters in connection
with the statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, the Selling
Securityholders (severally) and the U.S. Underwriters shall be deemed to be in
the same
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proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company or such Selling Securityholders (severally)
bear to the total underwriting discounts and commissions received by the U.S.
Underwriters, in each case determined as set forth in the table on the cover
page of the U.S. Prospectus; provided that, in the event that the U.S.
Underwriters shall have purchased any Additional Shares and/or Additional
Warrants hereunder, any determination of the relative benefits received by the
Company, the Selling Securityholders (severally) or the U.S. Underwriters from
the offering of the Offered Shares shall include the net proceeds (before
deducting expenses) received by the Company and the Selling Securityholders
(severally), and the underwriting discounts and commissions received by the
U.S. Underwriters, from the sale of such Additional Shares and Additional
Warrants, in each case computed on the basis of the respective amounts set
forth in the notes to the table on the cover page of the U.S. Prospectus. The
relative fault of the Company, the Selling Securityholders and the U.S.
Underwriters 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, the Selling Securityholders or the U.S. Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. In determining the benefits to,
or the fault of, any particular Selling Securityholder, the benefits to and
fault of each other Selling Securityholder and the Company shall not be taken
into account.
(f) The Company, the Selling Securityholders and the U.S.
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by a pro rata allocation (even if
the U.S. Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in paragraph (e) above. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
and expenses referred to in paragraph (e) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
any claim or defending any such action, suit or proceeding. Notwithstanding
the provisions of this Section 9, no U.S. Underwriter shall be required to
contribute any amount in excess of the amount by which the total price of the
Offered Shares underwritten by it and distributed to the public exceeds the
amount of any damages which such U.S. Underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
34
-33-
alleged omission. 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. The U.S.
Underwriters' obligations to contribute pursuant to this Section 9 are several
in proportion to the respective numbers of Firm Shares set forth opposite their
names in Schedule II hereto (or such numbers of Firm Shares increased as set
forth in Section 12 hereof) and not joint. The obligations of the Selling
Securityholders to contribute pursuant to this Section 9 are several and not
joint and no Selling Securityholder shall in any event be required to
contribute any amount which is in excess of the amount by which the total net
proceeds received by such Selling Securityholder from the sale of the Shares or
Warrants sold by such Selling Securityholder to the U.S. Underwriters pursuant
to this Agreement exceeds the amounts that such Selling Securityholder has
otherwise been required to pay by reason of the statements or omissions which
result in such obligation to contribute.
(g) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or 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 action, suit or proceeding.
(h) Any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification or contribution
under this Section 9 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred.
The indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Securityholders
set forth in this Agreement shall remain operative and in full force and
effect, regardless of (i) any investigation made by or on behalf of any U.S.
Underwriter or any person controlling any U.S. Underwriter, the Company, its
directors or officers or the Selling Securityholders or any person controlling
the Company or any Selling Securityholder, (ii) acceptance of any Shares or
Warrants and payment therefor hereunder and (iii) any termination of this
Agreement. A successor to any U.S. Underwriter or any person controlling any
U.S. Underwriter, to the Company, its directors or officers, or any person
controlling the Company, or to any Selling Securityholder, its directors,
officers or partners, or any person controlling a
35
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Selling Securityholder shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 9.
10. Conditions of U.S. Underwriters' Obligations. The
several obligations of the U.S. Underwriters to purchase the Firm Shares and
the Firm Warrants hereunder are subject to the following conditions:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a
post-effective amendment thereto to be declared effective before the
offering of the Offered Shares may commence, the Registration
Statement or such post-effective amendment shall have become effective
not later than 5:30 P.M. (or, in the case of a Registration Statement
filed pursuant to Rule 462(b) under the Act, not later than 10:00
P.M.), New York City time, on the date hereof, or at such later date
and time as shall be consented to in writing by you, and all filings,
if any, required by Rules 424 and 430A under the Act shall have been
timely made; no stop order suspending the effectiveness of the
Registration Statement shall have been issued and be in effect and no
proceeding for that purpose shall have been instituted or, to the
knowledge of the Company, any Selling Securityholder or any
Underwriter, threatened by the Commission, and any request of the
Commission for additional information (to be included in the
Registration Statement or the Prospectuses or otherwise) shall have
been complied with to your reasonable satisfaction.
(b) Subsequent to the effective date of this Agreement,
there shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting the condition
(financial or other), business, prospects, properties, net worth, or
results of operations of the Company or the Subsidiaries not
contemplated by the Prospectuses, which in your opinion, as
Representatives of the several U.S. Underwriters, would materially,
adversely affect the market for the Offered Shares or (ii) any event
or development relating to or involving the Company or any officer or
director of the Company or any Selling Securityholder which makes any
statement made in the Prospectuses untrue or which, in the opinion of
the Company and its counsel or the U.S. Underwriters and their
counsel, requires the making of any addition to or change in the
Prospectuses in order to state a material fact required by the Act or
any other law to be stated therein or necessary in order to make
36
-35-
the statements therein not misleading if amending or supplementing the
Prospectuses to reflect such event or development would, in your
opinion, as Representatives of the several U.S. Underwriters,
materially adversely affect the market for the Offered Shares.
(c) You shall have received on the Closing Date, an
opinion of Holland & Knight, counsel for the Company and Second
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, L.P., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇. Tek, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and S. ▇▇▇▇▇▇▇ ▇▇▇▇▇
(collectively, the "Management Stockholders"), dated the Closing Date
and addressed to you, as Representatives of the several U.S.
Underwriters, to the effect that:
(i) The Company is a corporation duly incorporated
and validly existing in good standing under the laws of the
State of Delaware with full corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the
Prospectuses (and any amendment or supplement thereto), and is
duly registered and qualified to conduct its business and is
in good standing in each jurisdiction or place where the
nature of its properties or the conduct of its business
requires such registration or qualification, except where the
failure so to register or qualify does not have a Material
Adverse Effect;
(ii) Each Subsidiary which is a Florida corporation
or partnership is either (i) a corporation duly incorporated
or organized, validly existing and in good standing in Florida
or (ii) a partnership duly organized and validly existing
under the applicable laws of the State of Florida and the
status of each such Subsidiary is active; to the knowledge of
such counsel, each Subsidiary has the requisite corporate or
partnership power to own and operate its property and assets
and to transact the business in which it is engaged except
where the failure to own or operate such property or assets or
transact such business would not have a Material Adverse
Effect; each Subsidiary which is a Delaware corporation is
duly incorporated, validly existing and in good standing under
the laws of the State of Delaware; and each Subsidiary is duly
registered and qualified to conduct its business and is in
good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business
37
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requires such registration or qualification, except where the
failure so to register or qualify does not have a Material
Adverse Effect;
(iii) To the knowledge of such counsel after
reasonable inquiry, the authorized and outstanding Capital
Stock of the Company is as set forth under the caption
"Capitalization" in the Prospectuses; and the authorized
Capital Stock of the Company conforms in all material respects
as to legal matters to the descriptions thereof contained in
the Prospectuses under the caption "Description of Capital
Stock"; all of the outstanding shares of capital stock of or
ownership interests in each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any
preemptive or similar rights;
(iv) All the shares of Capital Stock of the
Company outstanding prior to the issuance of the Shares to be
issued and sold by the Company hereunder and the Warrant
Shares have been duly authorized and validly issued and are
fully paid and nonassessable and were not issued in violation
of any preemptive or similar rights; the Warrant Shares have
been validly reserved for issuance[; when issued upon exercise
of the Warrants, the Warrant Shares will be duly authorized
and validly issued and will be fully paid and non-assessable
and will not be issued in violation of any preemptive or
similar rights];
(v) The Offered Shares to be issued and sold
to the U.S. Underwriters by the Company hereunder (including
the Warrant Shares) have been duly authorized and, when issued
and delivered to the U.S. Underwriters against payment
therefor in accordance with the terms hereof, will be validly
issued, fully paid and nonassessable and free of any
preemptive or similar rights that entitle or will entitle any
person to acquire any securities of the Company upon the
issuance thereof by the Company;
(vi) The form of certificates for the Offered
Shares conforms to the requirements of the Delaware General
Corporation Law;
(vii) The Registration Statement and all
post-effective amendments, if any, have become effective
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under the Act and, to the knowledge of such counsel after
reasonable inquiry, no stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceedings for that purpose are pending before or
contemplated by the Commission; and any required filing of the
Prospectuses pursuant to Rule 424(b) has been made in
accordance with Rule 424(b);
(viii) The Company has corporate power and
authority to enter into this Agreement and to issue, sell and
deliver the Offered Shares, and this Agreement has been duly
authorized, executed and delivered by the Company;
(ix) Neither the offer, sale or delivery of
the Offered Shares, the execution, delivery or performance of
this Agreement, compliance by the Company with the provisions
hereof nor consummation by the Company of the transactions
contemplated hereby conflicts or will conflict with or
constitutes or will constitute a breach of, or a default
under, the certificate or articles of incorporation or
by-laws, or other organizational documents, of the Company or
any of the Subsidiaries or to the knowledge of such counsel
after reasonable inquiry any agreement or document relating to
the Capital Stock of the Company, nor will any such action
result in any violation of any law, regulation, rule (assuming
compliance with all applicable state securities and Blue Sky
laws) or to the knowledge of such counsel after reasonable
inquiry judgment, ruling or court decree applicable to the
Company, the Subsidiaries or any of their respective
properties;
(x) No consent, approval, authorization or
other order of, or registration or filing with, any court,
regulatory body, administrative agency or other governmental
body, agency, or official is required on the part of the
Company (except as have been obtained under the Act or such as
may be required under state securities or Blue Sky laws
governing the purchase and distribution of the Offered Shares)
for the valid issuance and sale of the Offered Shares to the
U.S. Underwriters as contemplated by this Agreement;
(xi) The Registration Statement and the
Prospectuses and any supplements or amendments thereto (except
for the financial statements and the notes thereto and the
schedules and other financial and statistical data included
therein, as to which such counsel need not
39
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express any opinion) comply as to form in all material
respects with the requirements of the Act;
(xii) To the knowledge of such counsel after
reasonable inquiry, (A) other than as described or
contemplated in the Prospectuses (or any supplement thereto),
there are no legal or governmental proceedings pending or
threatened against the Company or any of the Subsidiaries, or
to which the Company or any of the Subsidiaries, or any of
their property, is subject, which are required to be described
in the Registration Statement or Prospectuses (or any
amendment or supplement thereto) and (B) there are no
agreements, contracts, indentures, leases or other instruments
that are required to be described in the Registration
Statement or the Prospectuses (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration
Statement that are not described or filed as required, as the
case may be;
(xiii) Other than with respect to federal,
state or local broadcasting, licensing or communications law
or regulatory matters, the statements in the Registration
Statement and Prospectuses, insofar as they are descriptions
of contracts, agreements or other legal documents, or refer to
statements of law or legal conclusions, are accurate and
present fairly the information required to be shown;
(xiv) This Agreement and the Custody Agreement
have each been duly executed and delivered by or on behalf of
each of the Management Stockholders and are valid and binding
agreements of each Management Stockholder enforceable against
each Management Stockholder in accordance with their
respective terms;
(xv) To the knowledge of such counsel after
reasonable inquiry, each Management Stockholder has full legal
right, power and authorization, and any approval required by
law, to sell, assign, transfer and deliver good and marketable
title to the Shares which such Management Stockholder has
agreed to sell pursuant to this Agreement;
(xvi) To the knowledge of such counsel after
reasonable inquiry the execution and delivery of this
Agreement and the Custody Agreement by the Management
Stockholders and the consummation of the transactions
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contemplated hereby and thereby will not conflict with,
violate, result in a breach of or constitute a default under
the terms or provisions of any agreement, indenture, mortgage
or other instrument known to such counsel to which any
Management Stockholder is a party or by which any of them or
any of their assets or property is bound, or any court order
or decree or any law, rule, or regulation applicable to any
Management Stockholder or to any of the property or assets of
any Management Stockholder;
(xvii) Upon delivery of the Offered Shares and
the Warrants pursuant to this Agreement and payment therefor
as contemplated herein, and assuming that each purchasing U.S.
Underwriter shall have purchased the Offered Shares and the
Warrants in good faith without notice of any adverse claim,
such U.S. Underwriter will acquire good and marketable title
to the Offered Shares and Warrants free and clear of any lien,
claim, security interest, or other encumbrance, restriction on
transfer or other defect in title; and
(xviii) The Company is not an "investment
company" or a company "controlled by an investment company"
within the meaning of the Investment Company Act of 1940, as
amended.
Such counsel shall also state that although counsel has not
undertaken, except as otherwise indicated in their opinion, to
determine independently, and does not assume any responsibility for,
the accuracy or completeness of the statements in the Registration
Statement or the Prospectuses, such counsel has participated in the
preparation of the Registration Statement and the Prospectuses,
including review and discussion of the contents thereof, and nothing
has come to the attention of such counsel that has caused them to
believe that the Registration Statement at the time the Registration
Statement became effective, or the Prospectuses, as of their date and
as of the Closing Date or the Option Closing Date, as the case may be,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that any amendment or supplement
to the Prospectuses, as of its respective date, and as of the Closing
Date or the Option Closing Date, as the case may be, contained any
untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light
of the
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circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to
the financial statements and the notes thereto and the schedules and
other financial and statistical data included in the Registration
Statement or the Prospectuses).
(d) You shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., General Counsel to the Company,
dated the Closing Date and addressed to you, as Representatives of the
several U.S. Underwriters, to the effect that:
(i) The Company and each of the Subsidiaries has
full corporate or partnership power and authority, and all
necessary governmental authorizations, approvals, orders,
licenses, certificates, franchises and permits of and from all
governmental regulatory officials and bodies (except where the
failure so to have any such authorizations, approvals, orders,
licenses, certificates, franchises or permits, individually or
in the aggregate, would not have a Material Adverse Effect),
to own their respective properties and to conduct their
respective businesses as now being conducted, as described in
the Prospectuses;
(ii) Except as disclosed in the Prospectuses, all
the outstanding shares of capital stock of each of the
Subsidiaries are owned by the Company directly, or indirectly
through one of the other Subsidiaries, free and clear of any
lien, adverse claim, security interest, equity, or other
encumbrance;
(iii) This Agreement is a valid, legal and binding
agreement of the Company, enforceable against the Company in
accordance with its terms (it being noted, without expressing
any opinion with regard to the federal securities laws and
regulations, that the Commission has expressed the view that
indemnification against securities law liabilities is against
public policy) and subject to the qualification that the
enforceability of the Company's obligations hereunder may be
limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and by general equitable
principles;
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(iv) Each of the Company and the Subsidiaries has
all corporate or partnership power and authority, as the case
may be, to execute, deliver and perform each of the
Transaction Documents to which it is a party, to perform all
of its obligations thereunder and to consummate the
transactions contemplated thereby;
(v) Neither the Company nor any of the
Subsidiaries is in violation of its certificate or articles of
incorporation or by-laws, or other organizational documents,
or to the knowledge of such counsel after reasonable inquiry,
is in default (and no event has occurred which with notice or
lapse of time, or both, would constitute a default) in the
performance of any obligation, agreement or condition
contained in any bond, debenture, note or other evidence of
indebtedness;
(vi) Except as disclosed in the Registration
Statement and the Prospectuses, to the knowledge of such
counsel after reasonable inquiry, neither the offer, sale or
delivery of the Offered Shares, the execution, delivery or
performance of this Agreement and the other Transaction
Documents, compliance by the Company or the Subsidiaries (to
the extent a party thereto) with the provisions hereof or
thereof nor consummation by the Company or the Subsidiaries
(to the extent a party thereto) of the transactions
contemplated hereby or thereby, conflict or will conflict with
or constitute or will constitute a breach of, or a default
under the certificate or articles of incorporation or by-
laws, or other organizational documents, of the Company or any
of the Subsidiaries or any agreement, indenture, lease or
other instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of
their respective properties is bound or will result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of the
Subsidiaries which conflict, breach, default or lien could
reasonably be expected to have a Material Adverse Effect;
(vii) To the knowledge of such counsel after
reasonable inquiry, other than as described in the
Prospectuses (or any supplement thereto), there are no legal
or governmental proceedings pending or threatened against the
Company or any of the Subsidiaries, or to which the Company or
any of the Subsidiaries, or any of
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their property, is subject, which are required to be described
in the Registration Statement or Prospectuses (or any
amendment or supplement thereto);
(viii) There are no agreements, contracts,
indentures, leases or other instruments that are required to
be described in the Registration Statement or the Prospectuses
(or any amendment or supplement thereto) or to be filed as an
exhibit to the Registration Statement that are not described
or filed as required, as the case may be;
(ix) To the knowledge of such counsel after
reasonable inquiry, neither the Company nor any of the
Subsidiaries is in violation of any law, ordinance,
administrative or governmental rule or regulation applicable
to the Company or any of the Subsidiaries or of any decree of
any court or governmental agency or body having jurisdiction
over the Company or any of the Subsidiaries;
(x) Except as described in the Prospectuses,
there are no outstanding options, warrants or other rights
calling for the issuance of, and such counsel does not know of
any commitment, plan or arrangement to issue, any shares of
Capital Stock of the Company or any security convertible into
or exchangeable or exercisable for Capital Stock of the
Company; and
(xi) Except as described in the Prospectuses,
there is no holder of any security of the Company or any other
person who has the right, contractual or otherwise, to cause
the Company to sell or otherwise issue to them, or to permit
them to underwrite the sale of, the Offered Shares or the
right to have any Capital Stock or other securities of the
Company included in the Registration Statement or the right,
as a result of the filing of the Registration Statement, to
require registration under the Act of any shares of Capital
Stock or other securities of the Company.
(e) You shall have received on the Closing Date an
opinion of Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special communications counsel for
the Company, dated the Closing Date and addressed to you, as
Representatives of the several U.S. Underwriters, to the effect that:
44
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(i) Based upon a review of the FCC files, (a)
▇▇▇▇▇▇▇▇▇ Media, Inc., Bradenton Broadcast Television Company,
Ltd., ▇▇▇▇ Communications, Inc., ▇▇▇▇▇▇▇ Broadcasting Company
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, L.P. and each subsidiary of the Company and
each subsidiary of The Christian Network, Inc. holds those
broadcast licenses issued by the FCC ("FCC Licenses")
identified as held by such entity and (b) each of the FCC
Licenses authorizes radio or television broadcast operations
by the holder thereof using the channel or frequency
assignment and serving the community of license that is
identified for each of the FCC Licenses;
(ii) To the knowledge of such counsel, based upon
the review of the publicly available records of the FCC and
inquiry to officers of the Company, except as may be disclosed
in the Prospectuses, there is no order, judgment, decree,
notice of apparent liability, or order of forfeiture
outstanding, and no petition, objection, notice of apparent
liability, order of forfeiture, investigation, complaint, or
other proceeding pending before the FCC or threatened by the
FCC against the stations listed (the "Stations") or the FCC
Licenses that reasonably could be expected to result in the
termination, revocation, suspension, or denial of renewal of
any of the FCC Licenses, except for rule making and other
similar proceedings generally applicable to the radio or
television broadcasting industry or substantial segments
thereof;
(iii) To the knowledge of such counsel based upon
the review of the publicly available files of the FCC and
inquiry to officers of the Company, other than as disclosed in
the Prospectuses, (a) there are no license renewal proceedings
pending for any of the FCC Licenses; and (b) except as set
forth on the FCC authorization certificates for the FCC
Licenses or imposed by the generally applicable rules of the
FCC, none of the FCC Licenses is subject to any condition
imposed by the FCC that reasonably could be expected to have a
material adverse effect on the Company's ability to conduct
its broadcast operations, taken as a whole;
(iv) The issuance, sale and delivery of the
Offered Shares and the Warrants pursuant to this Agreement (A)
does not require any consent or authorization from the FCC,
and (B) does not constitute a violation
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of the Communications Act or the published rules and
regulations of the FCC promulgated thereunder;
(v) The identified applications for consent to
assignment or transfer of control of licenses issued by the
FCC in connection with the Proposed Acquisitions and the
exercise of the Station Options (each as defined in the
Prospectuses) have been filed with the FCC; and, to the
knowledge of such counsel based upon the review of the
publicly available files of the FCC and inquiry to officers of
the Company, except as identified, no petition to deny such
applications has been filed with the FCC;
(vi) The statements in the Prospectuses under the
captions "Risk Factors -- Must Carry Regulations," "--
Government Regulation," "-- Multiple Ownership Rules; Time
Brokerage Agreements" and "Business -- Federal Regulation of
Broadcasting," insofar as they constitute summaries of the
Communications Act and the published rules and regulations of
the FCC promulgated thereunder, have been reviewed by such
counsel and are accurate in all material respects;
(vii) The execution, delivery and performance of
(x) this Agreement by the Company and (y) this Agreement and
the Custody Agreement by the Selling Securityholders (A) do
not require any consent or authorization from the FCC, and (B)
do not and will not violate the Communications Act and the
rules and regulations promulgated thereunder;
(viii) There are no restrictions or limitations
imposed by the FCC on the ability of the Company to pay cash
dividends on its shares of Class A Common Stock or, except as
set forth in the Prospectuses, otherwise make distributions in
cash on its shares of Capital Stock.
(f) You shall have received on the Closing Date an
opinion, to be governed by and interpreted in accordance with the
Legal Opinion Accord of the ABA Section of Business Law (1991) (the
"ABA Accord"), of (i) ▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., special counsel to Sandler
Mezzanine Partners, L.P., a Delaware limited partnership ("SMP"),
Sandler Mezzanine Foreign Partners, L.P., a Delaware limited
partnership ("SMFP") and Sandler Mezzanine T-E Partners, L.P., a
Delaware limited partnership ("SMTE"), (ii) ▇▇. ▇▇▇▇▇▇▇
46
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D'Alessander, counsel to National Union Fire Insurance Company of
Pittsburgh, PA, a [ ] ("National Union"), in their
capacities as Selling Securityholders, (iii) ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
counsel to BT Investment Partners, Inc., (iv) ▇▇. ▇▇▇ ▇▇▇▇▇▇, counsel
to First Union Corporation of Virginia, [others to be provided] (in
each case, the Selling Securityholder(s) so represented, the
"Stockholders"), dated the Closing Date and addressed to you, as
Representatives of the several U.S. Underwriters, to the effect that:
(i) Each of the Stockholders has the necessary
corporate or partnership (as applicable) power and authority
to execute and deliver this Agreement and the Custody
Agreement and to sell to the U.S. Underwriters, in accordance
with this Agreement, the Shares or Warrants to be sold by such
Stockholder to the several U.S. Underwriters pursuant to this
Agreement;
(ii) This Agreement and the Custody Agreement have
been duly executed and delivered by or on behalf of each
Stockholder;
(iii) Assuming this Agreement constitutes the
legal, valid and binding obligation of each of the U.S.
Underwriters, the Company and each of the other Selling
Securityholders, this Agreement is a valid and binding
obligation of each of the Stockholders, except that no opinion
is expressed with respect to rights to indemnity or
contribution or with respect to the validity of this Agreement
under, or the effect on the validity or binding nature of this
Agreement of, the Communications Act; and
(iv) Upon the purchase by, and delivery to, the
several U.S. Underwriters in accordance with the terms of this
Agreement of the Shares or Warrants to be sold by a
Stockholder to the several U.S. Underwriters pursuant to this
Agreement (including, without limitation, payment for such
Shares or Warrants by the several U.S. Underwriters as
provided in this Agreement) and the registration of such
Shares or Warrants in the respective names of the several
purchasing U.S. Underwriters, and assuming that each
purchasing U.S. Underwriter shall have purchased such Shares
or Warrants in good faith and without notice of any adverse
claim (within the meaning of Section 8-302 of the Uniform
Commercial Code), such purchasing U.S. Underwriter will
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have acquired such Shares or Warrants so purchased by such
U.S. Underwriter free of any adverse claims.
Such counsel may limit such opinion in all respects to the
laws of the State of New York and federal law (excluding the
Communications Act (and also excluding the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended)) normally applicable to similar
transactions in the experience of such counsel, to the limited
partnership or corporation statute of the jurisdiction of formation of
any Stockholder which is an entity and insofar as such opinions are
based on any such limited partnership or corporation statute, may base
such opinions solely on such counsel's reading of such statute,
without consultation of any judicial or administrative interpretations
thereof. If this Agreement shall have been executed and delivered on
behalf of any Stockholder by any Attorney-in-Fact pursuant to the
Custody Agreement, then such counsel may assume that such execution
and delivery was duly and validly made. Such opinion may be made to
any other assumptions, qualifications, exceptions and limitations as
are customary for similar opinions rendered in similar circumstances
or as are contemplated by the ABA Accord.
(g) You shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the U.S. Underwriters,
dated the Closing Date and addressed to you, as Representatives of the
several U.S. Underwriters, with respect to the matters referred to in
clauses (v), (vii), (viii) and (xi) and the final clause of the
foregoing paragraph (c) and such other related matters as you may
request.
(h) You shall have received "cold comfort" letters
addressed to you, as Representatives of the several U.S. Underwriters,
and dated the date hereof and the Closing Date from Price Waterhouse
LLP, independent certified public accountants, substantially in the
forms heretofore approved by you.
(i) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been taken or, to the knowledge of the
Company, the Selling Securityholders or the Underwriters, shall be
contemplated by the Commission at or prior to the Closing Date; (ii)
there shall not have been any change in the Capital Stock of the
Company nor any material increase in the consolidated short-term or
long-
48
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term debt of the Company (other than in the ordinary course of
business) from that set forth or contemplated in the Registration
Statement or the Prospectuses (or any amendment or supplement
thereto); (iii) there shall not have been, since the respective dates
as of which information is given in the Registration Statement and the
Prospectuses (or any amendment or supplement thereto), except as may
otherwise be stated in the Registration Statement and Prospectuses (or
any amendment or supplement thereto), any material adverse change in
the condition (financial or other), business, prospects, properties,
net worth or results of operations of the Company and the Subsidiaries
taken as a whole; (iv) the Company and the Subsidiaries shall not have
any liabilities or obligations, contingent or otherwise (whether or
not in the ordinary course of business), that are material to the
Company and the Subsidiaries, taken as a whole, other than those
reflected in the Registration Statement or the Prospectuses (or any
amendment or supplement thereto); and (v) all the representations and
warranties of the Company contained in this Agreement shall be true
and correct on and as of the date hereof and on and as of the Closing
Date as if made on and as of the Closing Date, and you shall have
received a certificate, dated the Closing Date and signed by the chief
executive officer and the chief financial officer of the Company (or
such other officers as are acceptable to you), to the effect set forth
in this Section 10(i) and in Section 10(j) hereof.
(j) The Company shall not have failed at or prior to the
Closing Date to have performed or complied with any of its agreements
herein contained and required to be performed or complied with by it
hereunder at or prior to the Closing Date.
(k) All the representations and warranties of the Selling
Securityholders contained in this Agreement shall be true and correct
on and as of the date hereof and on and as of the Closing Date as if
made on and as of the Closing Date, and you shall have received one or
more certificates, dated the Closing Date and signed by or on behalf
of the several Selling Securityholders to the effect set forth in this
Section 10(k) and in Section 10(l) hereof.
(l) The Selling Securityholders shall not have failed at
or prior to the Closing Date to have performed or complied with any of
their agreements herein contained and required to be performed or
complied with by them hereunder at or prior to the Closing Date.
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(m) Prior to the Closing Date the Offered Shares shall
have been listed, subject to issuance, on the American Stock Exchange.
(n) The Sellers shall have furnished or caused to be
furnished to you such further certificates and documents as you shall
have requested.
(o) The closing under the International Underwriting
Agreement shall have occurred concurrently with the closing hereunder
on the Closing Date.
(p) The "lock-up" letters referred to in Section 5(n)
hereof shall be in full force and effect on the Closing Date.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to you and your counsel.
Any certificate or document signed by any officer of the
Company or any Attorney-in-Fact or any Selling Securityholder and delivered to
you, as Representatives of the U.S. Underwriters, or to counsel for the U.S.
Underwriters, shall be deemed a representation and warranty by the Company, the
Selling Securityholders or the particular Selling Securityholder, as the case
may be, to each U.S. Underwriter as to the statements made therein.
The several obligations of the U.S. Underwriters to purchase
Additional Securities hereunder are subject to the satisfaction on and as of
any Option Closing Date of the conditions set forth in this Section 10, except
that, if any Option Closing Date is other than the Closing Date, the
certificates, opinions and letters referred to in paragraphs (c) through (l)
shall be dated the Option Closing Date in question and the opinions called for
by paragraphs (c), (d), (e), (f) and (g) shall be revised to reflect the sale
of Additional Securities.
11. Expenses. Notwithstanding any termination of this
Agreement (pursuant to Section 12, Section 13 or otherwise), the Company agrees
to pay the following costs and expenses and all other costs and expenses
incident to the performance by the Sellers of their obligations hereunder: (i)
the preparation, printing or reproduction, and filing with the Commission of
the registration statement (including financial statements and exhibits
thereto), each of the Prepricing Prospectuses, the
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Prospectuses, and each amendment or supplement to any of them; (ii) the
printing (or reproduction) and delivery (including postage, air freight charges
and charges for counting and packaging) of such copies of the registration
statement, each Prepricing Prospectus, the Prospectuses, and all amendments or
supplements to any of them as may be reasonably requested for use in connection
with the offering and sale of the Offered Shares; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the Offered
Shares, including any stamp taxes in connection with the original issuance and
sale of the Offered Shares; (iv) the printing (or reproduction) and delivery of
this Agreement, the preliminary and supplemental Blue Sky Memoranda and all
other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Offered Shares; (v) the listing of the
Offered Shares on the American Stock Exchange; (vi) the registration or
qualification of the Offered Shares for offer and sale under the securities or
Blue Sky laws of the several states as provided in Section 5(g) hereof
(including the reasonable fees, expenses and disbursements of counsel for the
U.S. Underwriters relating to the preparation, printing or reproduction, and
delivery of the preliminary and supplemental Blue Sky Memoranda and such
registration and qualification); (vii) the filing fees and the reasonable fees
and expenses of counsel for the U.S. Underwriters in connection with any
filings required to be made with the National Association of Securities
Dealers, Inc.; (viii) the transportation and other expenses incurred by or on
behalf of Company representatives in connection with presentations to
prospective purchasers of the Offered Shares; and (ix) the fees and expenses of
the Company's accountants and the fees and expenses of counsel (including local
and special counsel) for the Company.
12. Effective Date of Agreement. This Agreement shall
become effective: (i) upon the execution and delivery hereof by the parties
hereto; or (ii) if, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Offered Shares may
commence, when notification of the effectiveness of the registration statement
or such post-effective amendment has been released by the Commission. Until
such time as this Agreement shall have become effective, it may be terminated
by the Company, by notifying you and the Selling Securityholders, or by you, as
Representatives of the several U.S. Underwriters, by notifying the Company and
the Selling Securityholders.
If any one or more of the U.S. Underwriters shall fail or
refuse to purchase Shares or Warrants which it or they are
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obligated to purchase hereunder on the Closing Date, and the aggregate number
of Shares or Warrants which such defaulting U.S. Underwriter or U.S.
Underwriters are obligated but fail or refuse to purchase is not more than
one-tenth of the aggregate number of Shares or Warrants, respectively, which
the U.S. Underwriters are obligated to purchase on the Closing Date, each
non-defaulting U.S. Underwriter shall be obligated, severally, in the
proportion which the number of Firm Shares set forth opposite its name in
Schedule II hereto bears to the aggregate number of Firm Shares set forth
opposite the names of all non-defaulting U.S. Underwriters or in such other
proportion as you may specify in accordance with Section 20 of the Master
Agreement Among Underwriters of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., to purchase the Firm Shares
and Firm Warrants which such defaulting U.S. Underwriter or U.S. Underwriters
are obligated, but fail or refuse, to purchase. If any one or more of the U.S.
Underwriters shall fail or refuse to purchase Shares or Warrants which it or
they are obligated to purchase on the Closing Date and the aggregate number of
Shares or Warrants with respect to which such default occurs is more than
one-tenth of the aggregate number of Shares or Warrants, respectively, which
the U.S. Underwriters are obligated to purchase on the Closing Date and
arrangements satisfactory to you and the Company for the purchase of such
Shares or Warrants by one or more non-defaulting U.S. Underwriters or other
party or parties approved by you and the Company are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting U.S. Underwriter, the Company or the Selling
Securityholders. In any such case which does not result in termination of this
Agreement, either you or the 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 Registration Statement and the Prospectuses or
any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting U.S. Underwriter from liability
in respect of any such default of any such U.S. Underwriter under this
Agreement. The term "U.S. Underwriter" as used in this Agreement includes, for
all purposes of this Agreement, any party not listed in Schedule II hereto who,
with your approval and the approval of the Company, purchases Shares or
Warrants which a defaulting U.S. Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 12 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
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13. Termination of Agreement. This Agreement shall be
subject to termination in your absolute discretion, without liability on the
part of any U.S. Underwriter to the Company or any Selling Securityholder, by
notice to the Company and the Selling Securityholders, if prior to the Closing
Date or any Option Closing Date (if different from the Closing Date and then
only as to the Additional Securities), as the case may be, (i) trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market shall have been suspended or materially
limited, (ii) a general moratorium on commercial banking activities in New York
or Florida shall have been declared by either federal or state authorities, or
(iii) there shall have occurred any outbreak or escalation of hostilities or
other international or domestic calamity, crisis or change in political,
financial or economic conditions, the effect of which on the financial markets
of the United States is such as to make it, in your judgment, impracticable or
inadvisable to commence or continue the offering of the Offered Shares at the
offering price to the public set forth on the cover page of the Prospectuses or
to enforce contracts for the resale of the Offered Shares by the U.S.
Underwriters. Notice of such termination may be given to the Company and the
Selling Securityholders by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
14. Information Furnished by the Underwriters. The
statements set forth in the last paragraph on the cover page, the stabilization
legend on the inside cover page, and the statements in the first, fourth,
ninth, tenth, eleventh and fifteenth paragraphs under the caption
"Underwriting" in any U.S. Prepricing Prospectus and in the U.S. Prospectus
constitute the only information furnished by or on behalf of the U.S.
Underwriters through you as such information is referred to in Sections 7(b)
and 9 hereof.
15. Miscellaneous. Except as otherwise provided in
Sections 5, 12 and 13 hereof, notice given pursuant to any provision of this
Agreement shall be in writing and shall be delivered (i) if to the Company or
the Management Stockholders, at the office of the Company at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Esq., Vice President and General Counsel; or (ii) if to the Selling
Securityholders, at [ ], Attention: [ ], with copies to be
delivered as follows: (A) Sandler Mezzanine Partners, L.P., General Motors
Building, 767 Fifth Avenue, New York, New York, Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, (B)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
(C) [others?]; or (iii) if to you, as Representatives of the several
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U.S. Underwriters, care of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of
the several U.S. Underwriters, the Company, its directors and officers, the
other controlling persons referred to in Section 9 hereof and the Selling
Securityholders, their controlling persons and their respective successors and
assigns, to the extent provided herein, and no other person shall acquire or
have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any U.S. Underwriter of any of the Shares in his
status as such purchaser.
16. Applicable Law; Counterparts. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed within the State of New
York.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If signed in counterparts,
this Agreement shall not become effective unless at least one counterpart
hereof shall have been executed and delivered on behalf of each party hereto.
54
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Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Selling Securityholders and the several U.S.
Underwriters.
Very truly yours,
▇▇▇▇▇▇ COMMUNICATIONS CORPORATION
By
-----------------------------
Name:
Title:
Each of the Selling
Securityholders named in
Schedule I hereto
By
-----------------------------
Name:
Title: Attorney-in-Fact
By
-----------------------------
Name:
Title: Attorney-in-Fact
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
U.S. Underwriters named in Schedule II
hereto.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
PAINEWEBBER INCORPORATED
CIBC WOOD GUNDY SECURITIES CORP.
BT SECURITIES CORPORATION
As Representatives of the Several U.S. Underwriters
By ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By
-----------------------------
Name:
Title:
55
SCHEDULE I
▇▇▇▇▇▇ COMMUNICATIONS CORPORATION
Part A - Firm Shares
--------------------
Number of
Selling Securityholders Firm Shares
----------------------- -----------
--------------
Total........
==============
Part B - Firm Warrants
----------------------
Number of
Selling Securityholders Firm Warrants
----------------------- -------------
--------------
Total........
==============
Part C - Additional Shares
--------------------------
Number of Number of
Additional Additional
Selling Securityholders Shares Warrants
----------------------- ---------- ----------
----------- -----------
Total . . . . . . .
=========== ===========
56
SCHEDULE II
▇▇▇▇▇▇ COMMUNICATIONS CORPORATION
Number of Number of
Underwriter Firm Shares Firm Warrants
----------- ----------- -------------
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. . . . . . . . . . . . . .
PaineWebber Incorporated . . . . . . . . . .
CIBC Wood Gundy Securities Corp. . . . . . .
BT Securities Corporation . . . . . . . . .
--------- -------------
Total . . . . . . . . . . . . . .
========= =============
57
▇▇▇▇▇▇ COMMUNICATIONS CORPORATION
LOCK-UP LETTER
March , 1996
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
PAINEWEBBER INCORPORATED
CIBC WOOD GUNDY SECURITIES CORP.
BT SECURITIES CORPORATION
PAINEWEBBER INTERNATIONAL (U.K.) LTD.
BANKERS TRUST INTERNATIONAL PLC
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
The undersigned understands that (i) ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ("▇▇▇▇▇
▇▇▇▇▇▇"), PaineWebber Incorporated, CIBC Wood Gundy Securities Corp. ("CIBC"),
and BT Securities Corporation (the "Representatives") and certain other firms
propose to enter into a U.S. Underwriting Agreement (the "U.S. Underwriting
Agreement") providing for the purchase by the Representatives and such other
firms (the "U.S. Underwriters") of shares (the "U.S. Shares") of Class A Common
Stock, par value $.001 per share (the "Class A Common Stock"), of ▇▇▇▇▇▇
Communications Corporation (the "Company") and warrants (the "U.S. Warrants")
to purchase shares of Class A Common Stock to be sold by the Company and
certain of its securityholders including the undersigned (the "Selling
Securityholders") and (ii) ▇▇▇▇▇ ▇▇▇▇▇▇, PaineWebber International (U.K.) Ltd.,
CIBC and Bankers Trust International PLC (the "Lead Managers") and certain
other firms propose to enter into an International Underwriting Agreement (the
"International Underwriting Agreement" and, together with the U.S. Underwriting
Agreement, the "Underwriting Agreements") providing for the purchase by the
Lead Managers and such other firms (the "Managers" and, together with the U.S.
Underwriters, the "Underwriters") of shares (the "International Shares" and,
together with the U.S. Shares, the "Shares") of Class A Common Stock and
warrants (the "International Warrants" and, together with the U.S. Warrants,
the "Warrants") to purchase shares of Class A Common Stock to be sold by the
Company and the Selling Securityholders, and that in each case the Underwriters
propose to
58
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reoffer the Shares and the shares issuable upon the exercise of the Warrants
(the "Warrant Shares") to the public.
In consideration of the execution of the Underwriting
Agreements by the Underwriters party thereto, and for other good and valuable
consideration, the undersigned hereby irrevocably agrees that without the prior
written consent of ▇▇▇▇▇ ▇▇▇▇▇▇ the undersigned will not sell, offer to sell,
solicit an offer to buy, contract to sell, grant any option to purchase, or
otherwise transfer or dispose of (other than pursuant to the Underwriting
Agreements), any shares of common stock of the Company ("Common Stock"), or any
securities convertible into or exercisable or exchangeable for Common Stock,
for a period of 180 days after the date of the final Prospectuses relating to
the offering of the Shares and the Warrant Shares to the public by the
Underwriters; provided, however, that the undersigned may (i) sell Shares and
Warrants to the Underwriters pursuant to the Underwriting Agreements, (ii)
transfer shares of Common Stock or securities convertible into or exercisable
for Common Stock to (a) the Company, (b) any other Selling Securityholder who
is bound by the terms of a letter agreement similar to this one, or (c) any
Affiliate (as such term is defined for purposes of the Securities Exchange Act
of 1934, as amended) of any Selling Securityholder, if such Affiliates agrees
in writing to be bound by the terms of this letter agreement, or (iii)
exercise, exchange or convert stock options, warrants, convertible securities
or other rights entitling the undersigned to receive shares of Common Stock or
convert or exchange shares of one class of Common Stock into shares of a
different class of Common Stock, with all shares of Common Stock received upon
any such exercise, exchange or conversion being subject to the terms of this
letter agreement.
The undersigned agrees that the provisions of this letter
agreement shall be binding also upon the successors, assigns, heirs and
personal representatives of the undersigned.
In furtherance of the foregoing, the Company and First Union
Bank of North Carolina, its Transfer Agent, are hereby authorized to decline to
make any transfer of securities if such transfer would constitute a violation
or breach of this letter agreement.
It is understood that, if the Underwriting Agreements do not
become effective by May 1, 1996, or if the Underwriting Agreements (other than
the provisions thereof which survive termination) shall terminate or be
terminated prior to payment for and delivery of the Shares and the Warrants, or
if the sale
59
-3-
of the Shares or the Warrants shall not have been consummated prior to ,
1996, this letter agreement and the undersigned's obligations hereunder shall
terminate.
Very truly yours,
-------------------
[Name of Signatory]