Equity Exhibit 1.1
NEXTLINK COMMUNICATIONS, INC.
CLASS A COMMON STOCK ($0.02 PAR VALUE PER SHARE)
UNDERWRITING AGREEMENT
(U.S. VERSION)
----------------------
New York, New York, USA
September __, 1997
Salomon Brothers Inc
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
Lazard Freres & Co. LLC
as Representatives of the several Underwriters
named in Schedule A hereto
c/o Salomon Brothers Inc
Seven World Financial Center
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Ladies and Gentlemen:
NEXTLINK Communications, Inc., a corporation organized under the laws of
the State of Washington (the "Company"), proposes, subject to the terms and
conditions stated herein, to issue and sell to the underwriters named in
Schedule A hereto (the "Underwriters"), for whom Salomon Brothers Inc ("Salomon
Brothers"), ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, Bear, ▇▇▇▇▇▇▇ &
Co. Inc. and Lazard Freres & Co. LLC are acting as representatives (in such
capacity, the "Representatives"), an aggregate of 9,600,000 shares and, at the
election of the Underwriters, up to 1,824,000 additional shares of Class A
Common Stock, par value $0.02 per share (the "Stock"), and Eagle River
Investments, L.L.C., a Washington limited liability company (the "Selling
Shareholder"), proposes, subject to the terms and conditions stated herein, to
sell to the Underwriters an aggregate of 2,560,000 shares of Stock. The
aggregate of 12,160,000 shares to be sold by the Company and the Selling
Shareholder is herein called the "Firm Shares" and the aggregate of 1,824,000
additional shares to be sold by the Company is herein called the "Optional
Shares" (the Firm Shares and the Optional Shares that the Underwriters elect to
purchase pursuant to Section 2 hereof collectively called the "Shares").
It is understood and agreed to by all parties that the Company and the
Selling Shareholder are concurrently entering into an agreement (the
"International Underwriting Agreement") providing for the sale by the Company
and the Selling Shareholder of up to a total of 3,496,000 shares of Stock (the
"International Shares"), including the overallotment option thereunder, through
arrangements with certain underwriters outside the United States and Canada (the
"International Underwriters"), for whom Salomon Brothers International Limited,
▇▇▇▇▇▇▇ ▇▇▇▇▇ International, Bear, ▇▇▇▇▇▇▇ International Limited and Lazard
Capital Markets are acting as lead managers. Anything herein or therein to the
contrary notwithstanding, the respective closings under this Agreement and the
International Underwriting Agreement are hereby expressly made conditional on
one another. The Underwriters hereunder and the International Underwriters are
simultaneously entering into an Agreement Between U.S. Underwriters and
International Underwriters (the "Agreement between U.S. Underwriters and
International Underwriters") which provides, among other things, for the
transfer of shares of Stock between the two syndicates. Two forms of Prospectus
are to be used in connection with the offering and sale of shares of Stock
contemplated by the foregoing, one relating to the Shares hereunder and the
other relating to the International Shares. The latter form of Prospectus will
be identical to the former except for certain substitute pages as included in
the registration statement and amendments thereto as mentioned below. Except as
used in Sections 2(a), 2(b), 2(c) and 10 herein, and except as the context may
otherwise require, references hereinafter to the Shares shall include all the
shares of Stock which may be sold pursuant to either this Agreement or the
International Underwriting Agreement, and references herein to any prospectus
whether in preliminary or final form, and whether as amended or supplemented,
shall include both the U.S. and the international versions thereof.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents and warrants to each of the Underwriters as of the date hereof and as
of each Closing Time referred to in Section 2(c) hereof, and agrees with each of
the Underwriters as follows:
(i) Effectiveness of Registration Statement. A registration
statement on Form S-1 (File No. 333-32001) (the "Initial Registration
Statement") in respect of the Shares has been filed with the Securities
and Exchange Commission (the "Commission"); the Initial Registration
Statement and any post-effective amendment thereto, each in the form
heretofore delivered to the Representatives, and, excluding exhibits
thereto, to the Representatives for each of the other Underwriters, have
been declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement") filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the "1933 Act") which
became effective upon filing, no other document with respect to the
Initial Registration Statement has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the 1933
Act, is hereinafter called a "Preliminary Prospectus"; the various parts
of the Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and including the
information contained in the form of final Prospectus filed with the
Commission pursuant to Rule 424(b) under the 1933 Act in accordance with
Section 3(a) hereof and deemed by virtue of Rule 430A under the 1933 Act
to be part of the Initial Registration Statement at the time it was
declared effective, or such part of the Rule 462(b) Registration
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Statement, if any, at the time it became effective (each such part of a
registration statement as amended at the time such part became
effective), are hereinafter collectively called the "Registration
Statement"; and such final Prospectus, in the form first filed pursuant
to Rule 424(b) under the 1933 Act, is hereinafter called the
"Prospectus").
(ii) Compliance of Preliminary Prospectus with the Requirements
of the 1933 Act. No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the 1933 Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter
through Salomon Brothers expressly for use therein or by the Selling
Shareholder expressly for use in the preparation of the answers therein
to items 7 and 11(1) of Form S-1.
(iii) Compliance of Registration Statement and Prospectus with the
Requirements of the 1933 Act. The Registration Statement conforms, and
the Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in all material
respects to the requirements of the 1933 Act and the rules and
regulations of the Commission thereunder and do not and will not, as of
the applicable effective date as to the Registration Statement and any
amendment thereto, and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; PROVIDED, HOWEVER, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and
in conformity with information furnished in writing to the Company by an
Underwriter through Salomon Brothers expressly for use therein or by the
Selling Shareholder expressly for use in the preparation of the answers
therein to items 7 and 11(1) of Form S-1.
(iv) Independent Accountants. The accountants who certified the
financial statements included in the Prospectus are independent
certified public accountants with respect to the Company and its
subsidiaries within the meaning of Regulation S-X under the 1933 Act.
(v) Financial Statements. The financial statements, together
with the related notes, included in the Prospectus present fairly the
financial position of the Company and its consolidated subsidiaries at
the dates indicated and the statement of operations, shareholders'
equity and cash flows of the Company and its consolidated subsidiaries
for the periods specified; said financial statements have been prepared
in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The
selected financial data and the summary financial information included
in the Prospectus present fairly the information shown therein and have
been compiled on a basis consistent with that of the audited financial
statements included in the Prospectus.
(vi) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Prospectus,
except as otherwise stated therein, (1) there has been no
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material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise (a "Material Adverse
Effect"), whether or not arising in the ordinary course of business,
(2) there have been no transactions entered into by the Company or any
of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise and (3) there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(vii) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation under the laws of the
State of Washington and has power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
(viii) Good Standing of Designated Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) and NEXTLINK Pennsylvania, L.P. and NEXTLINK Ohio,
L.L.C. (each a "Designated Subsidiary" and, collectively, the
"Designated Subsidiaries") has been duly organized and is validly
existing and in good standing, where applicable, as a corporation,
limited liability company or limited partnership, as the case may be,
under the laws of the jurisdiction of its formation, has power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a
foreign corporation, limited liability company or limited partnership,
as the case may be, to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect; except as otherwise disclosed
in the Prospectus, all of the issued and outstanding capital stock or
other equity interest of each Designated Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and 99%
thereof is owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; none of the outstanding shares of capital stock or
other equity interest of the Designated Subsidiaries was issued in
violation of any preemptive or similar rights arising by operation of
law, or under the constituting or operative document or agreement of any
Designated Subsidiary or under any agreement to which the Company or any
Designated Subsidiary is a party.
(ix) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus as of the
dates indicated therein. The shares of issued and outstanding capital
stock of the Company have been duly authorized and validly issued and
are fully paid and non-assessable; and none of the outstanding shares of
capital stock of the Company was issued in violation of the preemptive
right, co-sale right, registration right, right of first refusal or
other similar rights of any securityholder of the Company, as
applicable.
(x) Authorization of Agreements. This Agreement and the
International Underwriting Agreement have been duly authorized, executed
and delivered by the Company.
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(xi) Authorization and Description of the Shares. The Shares to
be issued and sold by the Company to the Underwriters hereunder have
been duly authorized for issuance and sale to the Underwriters pursuant
to this Agreement and, when issued and delivered by the Company pursuant
to this Agreement against payment of the consideration set forth herein,
will be validly issued and fully paid and non-assessable; the Shares
conform and will conform to the statements relating thereto contained in
the Prospectus and such description conforms to the rights set forth in
the instruments defining the same; no holder of the Shares will be
subject to personal liability by reason of being such a holder; and the
issuance of the Shares by the Company is not subject to the preemptive
right, co-sale right, registration right, right of first refusal or
other similar rights of any securityholder of the Company other than
those that have been expressly waived prior to the date hereof. Except
as disclosed in or contemplated by the Prospectus and the financial
statements of the Company, and the related notes thereto, included in
the Prospectus, the Company does not have outstanding any options or
warrants to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of its
capital stock or any such options, rights, convertible securities or
obligations. The description of the Company's stock option and other
plans or arrangements, and the options or other rights granted and
exercised thereunder, set forth in the Prospectus accurately and fairly
presents, in all material respects, the information required to be shown
with respect to such plans, arrangements, options and rights.
(xii) Absence of Defaults and Conflicts. Neither the Company nor
any of its subsidiaries is in violation of its constituting or operative
document or agreement or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party, or by which or any of
them may be bound, or to which any of the property or assets of the
Company or any of its subsidiaries is subject (collectively, "Agreements
and Instruments") except for such defaults that would not result in a
Material Adverse Effect; the issue and sale of the Shares, the
execution, delivery and performance of this Agreement, the International
Underwriting Agreement, the Shares and any other agreement or instrument
entered into or issued or to be entered into or issued by the Company in
connection with the transactions contemplated hereby, thereby or in the
Prospectus and the consummation of the transactions contemplated herein,
therein and in the Prospectus (including the issuance and sale of the
Shares by the Company hereunder and under the International Underwriting
Agreement), the compliance by the Company with its obligations hereunder
and under the International Underwriting Agreement have been duly
authorized by all necessary action and do not and will not, whether with
or without the giving of notice or passage of time or both, conflict
with or constitute a breach of, or default or a Repayment Event (as
defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company
or any of its subsidiaries pursuant to, the Agreements and Instruments
except for such conflicts, breaches or defaults or liens, charges or
encumbrances that, singly or in the aggregate, would not result in a
Material Adverse Effect, nor will such action result in any violation of
the provisions of the constituting or operative document or agreement of
the Company or any of its subsidiaries or any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its subsidiaries or any of their
assets or properties. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any material note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right
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to require to repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company or any of its subsidiaries.
(xiii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance or
sale of the Shares hereunder or the consummation of the actions
contemplated by this Agreement, except the registration under the 1933
Act of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters and the International
Underwriters.
(xiv) Possession of Licenses and Permits. Except as set forth in
or contemplated by the Prospectus with respect to systems under
development and the offering of dial tone service, each of the Company
and its Designated Subsidiaries has all material certificates, consents,
exemptions, orders, permits, licenses, authorizations, franchises or
other material approvals (each, an "Authorization") of and from, and has
made all material declarations and filings with, all Federal, state,
local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, necessary or
appropriate for the Company and its Designated Subsidiaries to own,
lease, license, use and construct its properties and assets and to
conduct its business in the manner described in the Prospectus, except
to the extent that the failure to obtain any such Authorizations or make
any such declaration or filing would not, singly or in the aggregate,
result in a Material Adverse Effect. Except as set forth in or
contemplated by the Prospectus, all such Authorizations are in full
force and effect with respect to the Company and its Designated
Subsidiaries; to the best knowledge of the Company, no event has
occurred that permits, or after notice or lapse of time could permit,
the revocation, termination or modification of any such Authorization;
the Company and its Designated Subsidiaries are in compliance in all
material respects with the terms and conditions of all such
Authorizations and with the rules and regulations of the regulatory
authorities and governing bodies having jurisdiction with respect
thereto; and, except as set forth in the Prospectus, the Company has no
knowledge that any person is contesting or intends to contest the
granting of any material Authorization; and neither the execution and
delivery of this Agreement, the International Underwriting Agreement or
the Shares, nor the consummation of the transactions contemplated hereby
and thereby nor compliance with the terms, conditions and provisions
hereof and thereof by the Company or any of its Designated Subsidiaries
will cause any suspension, revocation, impairment, forfeiture,
nonrenewal or termination of any Authorization.
(xv) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of
any existing labor disturbance by the employees of any of its or any of
its subsidiaries' principal suppliers, manufacturers, customers or
contractors, which, in either case, would reasonably be expected to
result in a Material Adverse Effect.
(xvi) Absence of Proceedings. Except as disclosed in the
Prospectus, there is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body,
domestic or foreign, now pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its subsidiaries
which could reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and
adversely affect
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the properties or assets of the Company or any of its subsidiaries or
the consummation of this Agreement or the International Underwriting
Agreement or the performance by the Company of its obligations hereunder
or thereunder. The aggregate of all pending legal or governmental
proceedings to which the Company or any subsidiary thereof is a party or
of which any of their respective property or assets is the subject which
are not described in the Prospectus, including ordinary routine
litigation incidental to the business, could not reasonably be expected
to result in a Material Adverse Effect.
(xvii) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and except as otherwise
described in the Prospectus neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect
to any Intellectual Property or of any facts or circumstances which
would render any Intellectual Property invalid or inadequate to protect
the interest of the Company or any of its subsidiaries therein, and
which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in
the aggregate, would result in a Material Adverse Effect.
(xviii) Title to Property. The Company and its subsidiaries have
good and marketable title to all real property owned by them and good
title to all other properties owned by them, in each case, free and
clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company or
any of its subsidiaries; and all of the leases and subleases material to
the business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries holds
properties described in the Prospectus, are in full force and effect,
and neither the Company nor any of its subsidiaries has any notice of
any material claim of any sort that has been asserted by anyone adverse
to the rights of the Company or any of its subsidiaries under any of the
leases or subleases mentioned above, or affecting or questioning the
rights of the Company or any subsidiary thereof to the continued
possession of the leased or subleased premises under any such lease or
sublease.
(xix) Tax Returns. The Company and its subsidiaries have filed
all federal, state, foreign and, to the extent material, local tax
returns that are required to be filed or have duly requested extensions
thereof and have paid all taxes required to be paid by any of them and
any related assessments, fines or penalties, except for any such tax,
assessment, fine or penalty that is being contested in good faith and by
appropriate proceedings; and adequate charges, accruals and reserves
have been provided for in the financial statements referred to in
Section 1(a)(v) above in respect of all federal, state, local and
foreign taxes for all periods as to which the tax liability of the
Company or any of its subsidiaries has not been finally determined or
remains open to examination by applicable taxing authorities.
(xx) Environmental Laws. Except as described in the Prospectus
and except such matters as would not, singly or in the aggregate, result
in a Material Adverse Effect, (A) neither the
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Company nor any of its subsidiaries is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or, to the Company's knowledge, threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against
the Company or any of its subsidiaries and (D) there are no events or
circumstances that would reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or affecting
the Company or any of its subsidiaries relating to Hazardous Materials
or Environmental Laws.
(xxi) Investment Company Act. The Company is not, and upon the
issuance and sale of the Shares as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(xxii) Certain Disclosures in Prospectus. The statements set forth
in the Prospectus under the caption "Description of Capital Stock",
insofar as they purport to constitute a summary of the terms of the
Stock, and under the captions "Business-Regulatory Overview" and
"Underwriting", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate and complete in
all material respects; and the statements set forth in the international
version of the Prospectus under the caption "Certain United States Tax
Consequences to Non-U.S. Holders", insofar as such statements purport to
summarize certain United States federal income and estate tax
consequences of the ownership and dispensation of the Stock by certain
non-U.S. holders (as such term is defined in the International
Prospectus) of the Shares, provide a fair summary of such consequences
under current law.
(xxiii) Cuba. Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida Statutes.
(xxiv) No Manipulation or Stabilization. Neither the Company nor,
to its knowledge, any of its officers, directors or affiliates has taken
and will take, directly or indirectly, any action which is designed to
or which has constituted or which might reasonably be expected to cause
or result in stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Shares.
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(b) REPRESENTATIONS AND WARRANTIES BY, AND COVENANTS OF, THE SELLING
SHAREHOLDER. The Selling Shareholder represents and warrants to, and agrees
with, each of the Underwriters and the Company that:
(i) Authorizations. All consents, approvals, authorizations
and orders necessary for the execution and delivery by such Selling
Shareholder of this Agreement and the International Underwriting
Agreement, and for the sale and delivery of the Shares to be sold by
such Selling Shareholder hereunder and under the International
Underwriting Agreement, have been obtained; and such Selling Shareholder
has full right, power and authority to enter into this Agreement and the
International Underwriting Agreement, and to sell, assign, transfer and
deliver the Shares to be sold by such Selling Shareholder hereunder and
under the International Underwriting Agreement.
(ii) Absence of Defaults and Conflicts. The sale of the
Shares to be sold by such Selling Shareholder hereunder and under the
International Underwriting Agreement and the compliance by such Selling
Shareholder with all of the provisions of this Agreement and the
International Underwriting Agreement, and the consummation of the
transactions herein and therein contemplated have been duly authorized
by all necessary action and do not and will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, any statute or material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
such Selling Shareholder is a party or by which such Selling Shareholder
is bound, or to which any of the property or assets of such Selling
Shareholder is subject, nor will such action result in any violation of
the provisions of the constituting or operative document or agreement of
such Selling Shareholder or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over
such Selling Shareholder or the property of such Selling Shareholder.
(iii) Title to Shares. Such Selling Shareholder has, and
immediately prior to the First Closing Time (as defined in Section 2
hereof) such Selling Shareholder will have, good and valid title to the
Shares to be sold by such Selling Shareholder hereunder and under the
International Underwriting Agreement, free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of such Shares and
payment therefor pursuant hereto and thereto, good and valid title to
such Shares, free and clear of all liens, encumbrances, equities or
claims, will pass to the several Underwriters or the International
Underwriters, as the case may be.
(iv) No Manipulation or Stabilization. Such Selling
Shareholder has not taken and will not take, directly or indirectly, any
action which is designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares, or which has otherwise constituted or
will constitute any prohibited bid for or purchase of the Shares or any
related securities.
(v) Compliance of Preliminary Prospectus, Registration
Statement and Prospectus with the Requirements of the 1933 Act. To the
extent that any statements or omissions made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment
or supplement thereto are made in reliance upon and in conformity with
written information furnished to the Company by such Selling Shareholder
expressly for use therein, such Preliminary Prospectus and the
Registration Statement did, and the Prospectus and any further
amendments or supplements of the Registration Statement and the
Prospectus, when they become effective or are filed with the
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Commission, as the case may be, will conform in all material respects to
the requirements of the 1933 Act and the rules and regulations of the
Commission thereunder and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(vi) Form W-9. In order to document the Underwriters'
compliance with the reporting and withholding provisions of the Tax
Equity and Fiscal Responsibility Act of 1982 with respect to the
transactions herein contemplated, such Selling Shareholder will deliver
to you prior to or at the First Closing Time (as hereinafter defined) 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).
(vii) Survival of Selling Shareholder's obligations. The
obligations of the Selling Shareholder hereunder shall not be terminated
by operation of law, whether by dissolution or by the occurrence of any
other event; if the Selling Shareholder should be dissolved, or if any
other such event should occur, before the delivery of the Shares
hereunder, certificates representing the Shares shall be delivered by or
on behalf of the Selling Shareholder in accordance with the terms and
conditions of this Agreement and of the International Underwriting
Agreement.
(c) OFFICER'S CERTIFICATES. Any certificate signed by any officer of
the Company (or any of its subsidiaries) or of the Selling Shareholder delivered
to the Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company and the Selling Shareholder, as the
case may be, to each Underwriter as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) SECURITIES. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, (a)
each of the Company and the Selling Shareholder agrees to sell to each
Underwriter, severally and not jointly, and each Underwriter, severally and not
jointly, agrees to purchase from the Company and the Selling Shareholder, at the
purchase price per share of $_____, the number of Firm Shares (to be adjusted by
the Representatives so as to eliminate fractional shares) determined by
multiplying the aggregate number of Firm Shares to be sold by the Company and
the Selling Shareholder as set forth opposite their respective names in Schedule
B hereto by a fraction, the numerator of which is the aggregate number of Firm
Shares to be purchased by such Underwriter as set forth opposite the name of
such Underwriter in Schedule A hereto and the denominator of which is the
aggregate number of Firm Shares to be purchased by all of the Underwriters from
the Company and the Selling Shareholder hereunder and (b) in the event and to
the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company agrees to issue and sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per share set forth
in clause (a) of this Section 2, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by the
Representatives so as to eliminate fractional shares) determined by multiplying
such number of Optional Shares by a fraction, the numerator of which is the
maximum number of Optional Shares which such Underwriter is entitled to purchase
as set forth opposite the name of such Underwriter in Schedule A hereto and the
denominator of which is the maximum number of Optional Shares that all of the
Underwriters are entitled to purchase hereunder.
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The Company hereby grants to the Underwriters the right to purchase at
their election up to 1,824,000 Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from the Representatives
to the Company, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate number of Optional Shares to be purchased
and the date on which such Optional Shares are to be delivered, as determined by
the Representatives but in no event earlier than the First Closing Time (as
defined in Section 2(c) hereof) or, unless the Representatives and the Company
otherwise agree in writing, earlier than two or later than ten business days
after the date of such notice.
(b) TERMS AND CONDITIONS OF SALE. Upon the authorization by the
Representatives of the release of the Firm Shares, the several Underwriters
propose to offer the Firm Shares for sale upon the terms and conditions set
forth in the Prospectus.
(c) CLOSING AND PAYMENT. (i) The Shares to be purchased by each
Underwriter hereunder, in definitive form, and in such authorized denominations
and registered in such names as Salomon Brothers may request upon at least
forty-eight hours' prior notice to the Company and the Selling Shareholder shall
be delivered by or on behalf of the Company and the Selling Shareholder to
Salomon Brothers, through the facilities of the Depository Trust Company ("DTC")
(unless the Representatives shall otherwise instruct) for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer or certified or official bank check or checks,
payable to the order of the Company and the Selling Shareholder, as their
interests may appear, in immediately available (same day) funds. The Company
will cause the certificates representing the Shares to be made available for
checking and packaging at least twenty-four hours prior to the Closing Time (as
defined below) with respect thereto at the offices of DTC or its designated
custodian (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Firm Shares, 10:00 a.m. on _______ _, 1997
or such other time and date as Salomon Brothers, the Company and the Selling
Shareholder may agree upon in writing, and, with respect to the Optional Shares,
10:00 a.m. on the date specified by Salomon Brothers in the written notice given
by Salomon Brothers of the Underwriters' election to purchase such Optional
Shares, or such other time and date as Salomon Brothers and the Company may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Closing Time", such time and date for delivery of the
Optional Shares, if not the First Closing Time, is herein called the "Second
Closing Time", and each such time and date for delivery is herein called a
"Closing Time".
(ii) The documents to be delivered at each Closing Time by or on
behalf of the parties hereto pursuant to Section 5 hereof, including the cross
receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 5(m) hereof, will be delivered at the offices
of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Closing
Location"), and the Shares will be delivered at the Designated Office, all at
such Closing Time. A meeting will be held at the Closing Location at 2:00 p.m.
on the New York Business Day next preceding such Closing Time, at which meeting
the final drafts of the documents to be delivered pursuant to the preceding
sentence will be available for review by the parties hereto. For the purposes
of this Section 2 and Section 3(a)(iii) below, "New York Business Day" shall
mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in New York are generally authorized or obligated by
law or executive order to close.
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(iii) It is understood and agreed that each Closing Time under this
Agreement shall occur simultaneously with each Closing Time under the
International Underwriting Agreement.
SECTION 3. COVENANTS.
(a) COVENANTS OF THE COMPANY. The Company covenants with each
Underwriter as follows:
(i) Preparation of Prospectus; Notices. To prepare the Prospectus in
a form approved by the Representatives and to file such Prospectus, properly
completed, and any supplement thereto, pursuant to Rule 424(b) under the 1933
Act not later than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if applicable, such
earlier time as may be required by Rule 430A(a)(3) under the 1933 Act, and to
provide evidence satisfactory to the Representatives of such timely filing; to
use its best efforts to cause the Registration Statement, if not effective at
the time of execution of this Agreement, to become effective; prior to
termination of the offering of the Shares, to make or file no further amendment
or any supplement to the Registration Statement or Prospectus which shall be
disapproved by the Representatives promptly after reasonable notice thereof; to
advise the Representatives, promptly after it receives notice thereof, of the
time when the Registration Statement or any amendment thereto has been filed or
becomes effective or the Prospectus or any supplement thereto or any amended
Prospectus has been filed and to furnish the Representatives with copies
thereof; to advise the Representatives, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or Prospectus, of
the suspension of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus or suspending any
such qualification, promptly to use its best efforts to obtain the withdrawal of
such order.
(ii) Qualifications of the Shares under State Securities Laws.
Promptly from time to time to take such action as the Representatives may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as they may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Shares, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction.
(iii) Copies of and Amendments to Prospectus and Supplements. Prior to
12:00 noon on the New York Business Day next succeeding the date of this
Agreement and from time to time, to furnish the Underwriters with copies of the
Prospectus in New York City in such quantities as the Representatives may
reasonably request, and, if the delivery of a Prospectus is required at any time
prior to the expiration of nine months after the time of issue of the Prospectus
in connection with the offering or sale of the Shares and if at such time any
event shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus in order to comply with
the 1933 Act, to notify the Representatives and upon their request to prepare
and furnish without charge to each Underwriter and
-12-
to any dealer in securities as many copies as the Representatives may from time
to time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a Prospectus in
connection with sales of any of the Shares at any time nine months or more after
the time of issue of the Prospectus, upon the Representatives' request but at
the expense of such Underwriter, to prepare and deliver to such Underwriter as
many copies as the Representatives may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the 1933 Act. The Company will
advise the Representatives promptly of any proposal to amend or supplement the
Prospectus and will not effect such amendment or supplement without the consent
of the Representatives. Neither the consent of the Representatives, nor the
Underwriter's delivery of any such amendment or supplement, shall constitute a
waiver of any of the conditions set forth in Section 5 hereof.
(iv) Earning Statement. To make generally available to its
securityholders as soon as practicable, but in any event not later than the 30th
day following the end of the fiscal quarter first occurring after the first
anniversary of the effective date of the Registration Statement (as defined in
Rule 158(c) under the 1933 Act), an earning statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of the
1933 Act and the rules and regulations thereunder (including, at the option of
the Company, Rule 158).
(v) Lock-Up. During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the Prospectus,
not to offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, or announce an offering of, except as provided hereunder or under
the International Underwriting Agreement, any Stock or any securities
convertible into or exchangeable for Stock (other than (i) grants of options and
issuances and sales of Class A Common Stock issued pursuant to any employee or
director stock option plan, stock ownership plan or stock purchase plan in
effect on the date of this Agreement, (ii) issuances of Class A Common Stock
upon the conversion of securities or the exercise of warrants outstanding on the
date of this Agreement, (iii) issuance of Class B Common Stock upon exercise of
options outstanding on the date of this Agreement, (iv) issuance of common stock
pursuant to agreements in effect on the date of this Agreement (which issuances
will not involve the issuance of a material amount of shares of Common Stock) or
(v) issuance of Common Stock in connection with acquisitions; PROVIDED that the
recipients of such shares of Common Stock agree in writing with Salomon Brothers
to be bound by the unexpired term of this agreement not to sell) without the
prior written consent of Salomon Brothers.
(vi) Investment Company. Not to be or become, at any time prior to
the expiration of three years after the Closing Time, an open-end investment
company, unit investment trust, closed-end investment company or face-amount
certificate company that is or is required to be registered under Section 8 of
the 1940 Act.
(vii) Information to the Shareholders. To furnish to its shareholders
as soon as practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, shareholders' equity and
cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail.
-13-
(viii) Information to the Representatives. During a period of five
years from the effective date of the Registration Statement, to furnish to the
Representatives copies of all reports or other communications (financial or
other) furnished to shareholders, and to deliver to the Representatives (i) as
soon as they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities exchange on
which any class of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the Company as
the Representatives may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission).
(ix) Listing. To use its best efforts to qualify the Shares for
inclusion on the National Association of Securities Dealers Automated Quotations
National Market System ("NASDAQ").
(x) Use of Proceeds. To use the net proceeds received by it from the
sale of the Shares pursuant to this Agreement and the International Underwriting
Agreement in the manner specified in the Prospectus under "Use of Proceeds".
(xi) Rule 462(b) Registration Statement. If the Company elects to
rely upon Rule 462(b), to file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time,
on the date of this Agreement, and at the time of filing to either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the 1933 Act.
(b) COVENANTS OF THE UNDERWRITERS. Each Underwriter agrees that:
(i) it is not purchasing any of the Shares for the account of any
person other than a United States or Canadian Person;
(ii) it has not offered or sold, and will not offer or sell, directly
or indirectly, any of the Shares and has not distributed and will not distribute
any Prospectus to any person outside the United States or Canada, or to person
other than a United States or Canadian Person, and
(iii) any dealer to whom it may sell any of the Shares will represent
that it is not purchasing for the account of person other than a United States
or Canadian Person and agree that it will not offer or resell, directly or
indirectly, any of the Shares outside the United States or Canada, or to person
other than a United States or Canadian Person or to any other dealer who does
not so represent and agree;
PROVIDED, HOWEVER, that the foregoing shall not restrict (A) purchases and sales
between the Underwriters on the one hand and the International Underwriters on
the other hand pursuant to the Agreement Between U.S. Underwriters and
International Underwriters, (B) stabilization transactions contemplated under
the Agreement Between U.S. Underwriters and International Underwriters,
conducted through Salomon Brothers Inc (or through the Representatives and
International Representatives) as a part of the distribution of the Shares, and
(C) sales to or through (or distributions of Prospectuses or Preliminary
Prospectuses to) persons who are United States or Canadian Persons who are
investment advisors, or who otherwise exercise investment discretion, and who
are purchasing for the account of any persons who are not United States or
Canadian Persons.
-14-
The agreements of the Underwriters set forth in this paragraph (b) of
Section 3 shall terminate upon the earlier of the following events:
(i) a mutual agreement of the Representatives and the U.S.
Representatives to terminate the selling restrictions set forth in this
paragraph (b) of this Section 3 and in Section 3(b) of the International
Underwriting Agreement; or
(ii) the expiration of a period of 30 days after the Closing Time,
unless (A) the Representatives shall have given notice to the Company and the
International Representatives that the distribution of the Shares by the
Underwriters has not yet been completed, or (B) the International
Representatives shall have given notice to the Company and the Underwriters that
the distribution of the Shares by the International Underwriters has not yet
been completed. If such notice by the International Representatives or the
Representatives is given, the agreements set forth in such paragraph (b) shall
survive until the earlier of (1) the event referred to in the immediately
preceding clause (i) of this paragraph (b) or (2) the expiration of an
additional period of 30 days from the date of any such notice.
"United States or Canadian Person" shall mean any person who is a
national or resident 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 of any political subdivision thereof, or any estate
or trust the income of which is subject to United States or Canadian Federal
income taxation, regardless of its source (other than any non-United States or
non-Canadian branch of any United States or Canadian Person), and shall include
any United States or Canadian branch of a person other than a United States or
Canadian Person. "U.S. or "United States" shall mean the United States of
America (including the states thereof and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. Each of the Company and the Selling Shareholder,
covenants and agrees with one another and with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the 1933 Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or reproducing any Agreement
among Underwriters, this Agreement, the International Underwriting Agreement,
the Agreement Between U.S. Underwriters and International Underwriters, the
Selling Agreement, the Blue Sky Memorandum, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Shares; (iii) all expenses in connection with
the qualification of the Shares for offering and sale under state securities
laws as provided in Section 3(b) hereof, including the fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky survey, (iv) all fees and expenses in connection
with inclusion of the Shares on the NASDAQ; (v) the filing fees incident to, and
the fees and disbursements of counsel for the Underwriters in connection with,
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of the sale of the Shares; (vi) the cost of preparing stock
certificates; (vii) the cost and charges of any transfer agent or registrar and
of DTC; and (viii) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section. It is understood, however, that, except as provided in this
Section, and Sections 6, 7 and 10(d) hereof, the Underwriters will pay all of
their own costs and expenses,
-15-
including the fees of their counsel, stock transfer taxes on resale of any of
the Shares by them, and any advertising expenses connected with any offers they
may make.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations
of the several Underwriters hereunder, as to the Shares to be delivered at each
Closing Time, are subject to the accuracy, at and as of such Closing Time, of
the representations and warranties of the Company and the Selling Shareholder
contained in Section 1 hereof or in certificates of any officer of the Company
or any of its subsidiaries delivered pursuant to the provisions hereof, to the
performance by each of the Company and the Selling Shareholder of its covenants
and other obligations hereunder, and to the following further conditions:
(a) FILING OF PROSPECTUS AND EFFECTIVENESS OF REGISTRATION STATEMENT.
If the Registration Statement has not become effective prior to execution of
this Agreement, unless the Representatives and the lead managers for the
International Underwriters agree in writing to a later time, the Registration
Statement shall have become effective not later than (i) 6:00 p.m. on the date
of determination of the public offering price, if such determination occurred at
or prior to 3:00 p.m. on such date or (ii) 9:30 a.m. on the business day
following the day on which the public offering price was determined, if such
determination occurred after 3:00 p.m. on such date; if filing is required
pursuant to Rule 424(b), the Prospectus shall have been filed with the
Commission pursuant to such Rule within the applicable time period prescribed
for such filing by the rules and regulations under the 1933 Act and in
accordance with Section 3(a) hereof; no stop order suspending the effectiveness
of the Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to the Representatives' reasonable
satisfaction.
(b) OPINION OF COUNSEL FOR COMPANY. At such Closing Time, the
Representatives shall have received the favorable opinions, dated as of such
Closing Time, of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel for the Company, of R. ▇▇▇▇▇
▇▇▇▇▇▇, Esq., Vice President, General Counsel and Secretary of the Company, and
of ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, special Washington counsel to the Company, in form
and substance satisfactory to counsel for the Underwriters, to the effect set
forth in Exhibits ▇-▇, ▇-▇ and A-3 hereto, respectively, and to such further
effect as counsel to the Underwriters may reasonably request.
(c) OPINION OF COUNSEL FOR UNDERWRITERS. At such Closing Time, the
Representatives shall have received the favorable opinion, dated as of such
Closing Time, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, with respect
to the incorporation of the Company, the validity of the Shares being delivered
at such Closing Time, the Registration Statement, the Prospectus and such other
related matters as the Representatives may reasonably request. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the federal law of
the United States, upon the opinions of counsel satisfactory to the
Underwriters. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and certificates of
public officials.
-16-
(d) OPINION OF COUNSEL FOR SELLING SHAREHOLDER. At the First Closing
Time, the Representatives shall have received the favorable opinions, dated as
of such Closing Time, of [▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇], counsel for the Selling
Shareholder, to the effect set forth in Exhibit A-4 hereto, and to such further
effect as counsel to the Underwriters may reasonably request.
(e) OFFICERS' CERTIFICATES. At such Closing Time, there shall not
have been, since the date hereof or since the date of the most recent financial
statements included in the Prospectus (exclusive of any supplement thereto), any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising from
transactions in the ordinary course of business except as set forth in the
Prospectus (exclusive of any supplement thereto), and the Representatives shall
have received certificates of the Chairman of the Board, the President or a
Vice President of the Company and of the chief financial or chief accounting
officer of the Company, and (with respect to subsections (iii) and (iv) below)
of officers of equivalent title and functions of the Selling Shareholder,
satisfactory to the Representatives, to the effect that, at and as of such
Closing Time, (i) they have carefully examined the Registration Statement, the
Preliminary Prospectus, the Prospectus and any supplements thereto and this
Agreement, (ii) there has been no such material adverse change, (iii) the
representations and warranties of the Company and the Selling Shareholder, in
each case as applicable, in Section 1 hereof are true and correct in all
material respects on and as of the Closing Time with the same force and effect
as though expressly made at and as of such Closing Time, (iv) the Company and
the Selling Shareholder, in each case as applicable, have complied with all
agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to such Closing Time, and (v) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's knowledge,
threatened.
(f) ACCOUNTANT'S COMFORT LETTER. On the date of the Prospectus at a
time prior to the execution of this Agreement, and at 10:00 a.m. on the
effective date of any post-effective amendment to the Registration Statement
filed subsequent to the date of this Agreement, the Representatives shall have
received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter or letters dated the respective dates
of delivery thereof, in form and substance satisfactory to the Representatives,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to the Underwriters with respect to the financial
statements and certain financial information contained in the Prospectus.
(g) BRING-DOWN COMFORT LETTER. At such Closing Time, the
Representatives shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter, dated as
of such Closing Time, to the effect that they reaffirm the statements made in
the letter furnished pursuant to subsection (f) of this Section 5, except that
the specified date referred to shall be a date not more than three business days
prior to such Closing Time.
(h) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Prospectus, except as otherwise
stated therein, (1) there has been no Material Adverse Effect, whether or not
arising in the ordinary course of business, (2) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise (3) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock and (4) there has been no change or decrease specified in the
letters referred to in Section 5(f) and 5(g) above, the effect of which, in any
case referred to in clauses (1) through (4) above, is, in the sole judgment of
the Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering
-17-
or delivery of the Shares as contemplated by the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of any
supplement thereto).
(i) MAINTENANCE OF RATING. On or after the date of this Agreement,
there shall not have occurred a downgrading in the rating assigned to the
Company's debt securities or preferred stock by any nationally recognized
securities rating agency, and no such securities rating agency shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities or
preferred stock.
(j) LISTING. The Shares to be sold by the Company and the Selling
Shareholder at such Closing Time shall have been included for quotation on
NASDAQ.
(k) DELIVERY OF PROSPECTUSES. The Company shall have complied with
the provisions of Section 3(a)(iii) hereof with respect to the furnishing of
Prospectuses on the New York Business Day next succeeding the date of this
Agreement.
(l) ADEQUATE DISCLOSURE OF LITIGATION. There is no litigation or
governmental or other action, suit, claim, proceeding or investigation before
any court or any public, regulatory or governmental agency or body, pending or,
to the best of the Company's knowledge, threatened against the Company or any of
its subsidiaries or any of their respective officers (in their capacity as
officers of the Company or such subsidiaries) or any of the properties, assets,
business or rights of the Company or such subsidiaries which is of a character
required to be disclosed in the Registration Statement and Prospectus which is
not disclosed therein.
(m) ADDITIONAL DOCUMENTS. At such Closing Time: (i) the Company and
the Selling Shareholder shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may reasonably
request; (ii) counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Shares as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and (iii) all
proceedings taken by the Company in connection with the issuance and sale of the
Shares as herein contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
(n) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by notice to the Company at
any time at or prior to such Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6 and 7 shall survive any such termination and remain in
full force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF UNDERWRITERS. (i) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any and all losses, liabilities (joint or several), claims,
damages and expenses whatsoever, to which they or any of them may become subject
under the 1933 Act, the 1934 Act or other Federal or state
-18-
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement for the registration of the Shares
as originally filed or in any amendment thereof, or in any Preliminary
Prospectus or Prospectus (or any amendment or supplement thereto), or arise out
of or are based upon the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the Company and the Selling
Shareholder will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(ii) If the indemnification provided for in Section 6(a)(i) hereof is
unavailable or insufficient to hold harmless an indemnified party under such
section in respect of any losses, claims, damages or liabilities (or actions in
respect thereof) and any legal or other expenses reasonably incurred in
connection with investigating or defending any such loss, claim, damage,
liability or action, the Selling Shareholder agrees to (A) indemnify and hold
harmless each Underwriter, the directors, officers, employees and agents of each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any
and all losses, liabilities (joint or several), claims, damages and expenses
whatsoever, to which they or any of them may become subject under the 1933 Act,
the 1934 Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement for the registration of the Shares as originally filed or in any
amendment thereof, or in any Preliminary Prospectus or Prospectus (or any
amendment or supplement thereto), or arise out of or are based upon the omission
or alleged omission therefrom of a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, in each
case to the extent, but only to the extent, that any such untrue statement or
alleged untrue statement or omission or alleged omission was made in such
registration statement, Preliminary Prospectus or Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Selling Shareholder expressly for
use therein, and (B) reimburse each such indemnified party, as incurred, for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the Selling Shareholder will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion therein;
PROVIDED, FURTHER, that the liability of the Selling Shareholder pursuant to
this subsection shall not exceed the product of the number of Shares sold by
such Selling Shareholder and the initial public offering price of the Shares
(less underwriting discount) as set forth in the Prospectus. This indemnity
agreement will be in addition to any liability which the Selling Shareholder may
otherwise have.
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICER AND SELLING
SHAREHOLDER. Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its
-19-
officers who sign the Registration Statement (including any person who, with his
or her consent, is named in the Registration Statement as about to become a
director of the Company) and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
and the Selling Shareholder, against any and all losses, liabilities (joint or
several), claims, damages and expenses described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to written
information furnished to the Company by such Underwriter through Salomon
Brothers specifically for inclusion in the documents referred to in the
foregoing indemnity. The Company acknowledges that the statements set forth in
the last paragraph of the cover page regarding delivery of the Shares, the
stabilization legend in block capital letters on the reverse of the cover page
and, under the heading "Underwriting", (i) the sentences related to concessions
and reallowances and (ii) the paragraph related to stabilization in the
Preliminary Prospectus, the Registration Statement or the Prospectus constitute
the only information furnished in writing by or on behalf of the several
Underwriters for inclusion in such Preliminary Prospectus, Registration
Statement or Prospectus.
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party
shall give written notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party (i) will not relieve it from liability under paragraph (a) or (b) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); PROVIDED, HOWEVER, that such counsel shall be satisfactory to
the indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
-20-
SECTION 7. CONTRIBUTION. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses (including legal or other expenses reasonably incurred in
connection with investigating or defending same) incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Shareholder on the one
hand and the Underwriters on the other hand from the offering of the Shares
pursuant to this Agreement (provided that in no case shall any Underwriter
(except as may be provided in any agreement among underwriters relating to the
offering of the Shares) be responsible for any amount in excess of the
underwriting discount or commission applicable to the Shares purchased by such
Underwriter hereunder) or (ii) if the allocation provided by clause (i) is
unavailable for any reason, 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 and the Selling Shareholder on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling
Shareholder on the one hand and the Underwriters on the other hand in connection
with the offering of the Shares pursuant to this Agreement shall be deemed to be
in the same respective proportions as the total net proceeds from the offering
of the Shares pursuant to this Agreement (before deducting expenses) received by
the Company and the Selling Shareholder and the total underwriting discount
received by the Underwriters, in each case as set forth on the cover page of the
Prospectus, bear to the aggregate initial offering price of the Shares.
The relative fault of the Company and the Selling Shareholder on the one
hand and the Underwriters on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Selling Shareholder on the one
hand or by the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Selling Shareholder and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇
▇▇▇) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such
-21-
Underwriter, and each person, if any, who controls the Company or the Selling
Shareholder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Company. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Shares set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement, or in certificates of officers of the Company or the Selling
Shareholder submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company or the
Selling Shareholder, and shall survive delivery of the Shares to the
Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company and the Selling Shareholder prior to delivery of and payment for
the Shares, if at any time prior to such time (i) trading in the Company's
Common Stock shall have been suspended by the Commission or the NASDAQ or
trading in securities generally on the New York Stock Exchange or the NASDAQ
shall have been suspended or limited or minimum prices shall have been
established on such Exchange or NASDAQ, (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities or (iii) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war or other calamity or crisis the
effect of which on financial markets is such as to make it, in the sole judgment
of the Representatives, impractical or inadvisable to proceed with the offering
or delivery of the Shares as contemplated by the Prospectus (exclusive of any
supplement thereto).
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6 and 7 shall survive such termination and remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If any one
or more of the Underwriters shall fail to purchase and pay for any of the Shares
agreed to be purchased by such Underwriter or Underwriters hereunder and such
failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective proportions which
the amount of Shares set forth opposite their names in Schedule A hereto bears
to the aggregate amount of Shares set forth opposite the names of all the
remaining Underwriters) the Shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase; PROVIDED, HOWEVER, that in the event
that the aggregate amount of Shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Shares set forth in Schedule A hereto, the remaining Underwriters
shall have the right to purchase all, but shall not be under any obligation to
purchase any, of the Shares, and if such nondefaulting Underwriters do not
purchase all of the Shares, this Agreement will terminate without liability to
any nondefaulting Underwriter or the Company. In the event of a default by any
Underwriter as set forth in this Section 10, the Closing Time shall be postponed
for such period, not exceeding five Business Days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
the Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter
-22-
of its liability, if any, to the Company or the Selling Shareholder and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
SECTION 11. RELIANCE; NOTICES. In all dealings hereunder, the
Representatives shall act on behalf of each of the Underwriters, and the parties
hereto shall be entitled to act and rely upon any statement, request, notice or
agreement on behalf of any Underwriter made or given by the Representatives
jointly or by Salomon Brothers on their behalf.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the Representatives in care of Salomon Brothers Inc
General Counsel (fax no. (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to Salomon Brothers Inc,
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel;
if to the Company shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Prospectus,
Attention: General Counsel; and if to the Selling Shareholder shall be delivered
or sent by mail, telex or facsimile transmission to Eagle River Investments,
▇.▇▇., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, Attention: General
Counsel; PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to
Section 6(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company or the Selling Shareholder by the Representatives upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
SECTION 12. PARTIES. This Agreement shall inure to the benefit of
and be binding upon the Underwriters, the Company, the Selling Shareholder and
their respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Company, the Selling Shareholder and their respective
successors and the controlling persons and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Company, the Selling Shareholder and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Shares from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 13. TIME OF THE ESSENCE. Time shall be of the essence of
this Agreement. As used herein, the term "business day" shall mean any day when
the Commission's office in Washington, D.C. is open for business.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
-23-
SECTION 16. COUNTERPARTS. This Agreement may be executed by any one
of more of the parties hereto in any number of counterparts, each of which shall
be deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, and upon
the acceptance hereof by the Representatives, on behalf of each of the
Underwriters, this letter and such acceptance hereof shall constitute a binding
agreement between each of the Underwriters, the Company and the Selling
Shareholder. It is understood that your acceptance
-24-
of this letter on behalf of each of the Underwriters is pursuant to the
authority set forth in a form of Master Agreement Among Underwriters, the form
of which shall be submitted to the Company and the Selling Shareholder for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly Yours,
NEXTLINK Communications, Inc.
By__________________________________
Name: R. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
Title: Vice President
EAGLE RIVER INVESTMENTS, L.L.C.
By__________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
Salomon Brothers Inc
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
Lazard Freres & Co. LLC
By: Salomon Brothers Inc
By____________________________________
Name:
Title:
For themselves and as Representatives of the
other Underwriters named in Schedule A hereto.
-25-
SCHEDULE A
NUMBER OF OPTIONAL
TOTAL NUMBER OF SHARES TO BE PURCHASED IF
FIRM SHARES TO BE MAXIMUM OPTION
UNDERWRITER PURCHASED EXERCISED
----------- ----------------- -------------------------
Salomon Brothers Inc . . . . . . . . . . . .
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated . . . . . . . . . .
Bear, ▇▇▇▇▇▇▇ & Co. Inc. . . . . . . . . . .
Lazard Freres & Co. LLC. . . . . . . . . . .
----------- ----------
Total . . . . . . . . . . . . . . . 12,160,000 1,824,000
=========== ==========
Sch A-1
SCHEDULE B
NUMBER OF OPTIONAL
TOTAL NUMBER OF SHARES TO BE PURCHASED IF
FIRM SHARES TO BE MAXIMUM OPTION
UNDERWRITER PURCHASED EXERCISED
----------- ----------------- -------------------------
The Company . . . . . . . . . . . . . . . . 9,600,000 1,824,000
The Selling Shareholder . . . . . . . . . . 2,560,000 0
---------- ---------
Total . . . . . . . . . . . . . . . 12,160,000 1,824,000
========== =========
Sch B-1
Exhibit A-1
FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing
as a corporation under the laws of the State of Washington.
(ii) The Company has power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under the Underwriting Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus as of the dates indicated therein; the
shares of issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; and none of
the outstanding shares of capital stock of the Company was issued in violation
of the preemptive or other similar rights of any securityholder of the Company.
(v) Each Designated Subsidiary has been duly formed and is validly
existing as a corporation, limited liability company or limited partnership in
good standing, where applicable, under the laws of the jurisdiction of its
formation, and has power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus; all of the issued
and outstanding shares, membership interests or partnership interests of each
Designated Subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable and, except as otherwise set forth in the Prospectus in
respect of the minority interests described therein, is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(vi) The Underwriting Agreement and the International Underwriting
Agreement have been duly authorized, executed and delivered by the Company.
(vii) The Shares being delivered at each Closing Time have been duly
authorized and validly issued and are fully paid and non-assessable; and the
Shares conform in all material respects to the description of Stock contained in
the Prospectus.
(viii) The issuance of the Shares is not subject to the preemptive or
other similar rights of any securityholder of the Company.
(ix) The information in the Prospectus under the caption "Description
of Capital Stock", to the extent that it constitutes a summary of the terms of
the Stock, and under the captions "Business-Regulatory Overview" and
"Underwriting", to the extent that it constitutes matters of law,
A-1-1
summaries of legal matters, or legal conclusions, has been reviewed by us and is
correct in all material respects.
(x) The statements set forth in the international version of the
Prospectus under the caption "Certain United States Tax Consequences to Non-U.S.
Holders", insofar as such statements purport to summarize certain United States
federal income and estate tax consequences of the ownership and dispensation of
the Stock by certain non-U.S. holders (as such term is defined therein) of the
Shares, provide a fair summary of such consequences under current law.
(xi) All descriptions in the Prospectus of contracts and other
documents to which the Company or any of its subsidiaries are a party are
accurate in all material respects; to the best of our knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments that would be required to be described in the Prospectus that
are not described or referred to in the Prospectus other than those described or
referred to therein and the descriptions thereof or references thereto are
correct in all material respects.
(xii) To the best knowledge of such counsel, neither the Company nor
any of its Designated Subsidiaries is in violation of its charter or by-laws or
other constituting or operative document or agreement and, to the best of our
knowledge, no default by the Company or any of its subsidiaries exists in the
due performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or referred to in the
Prospectus.
(xiii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the performance by the Company
of its obligations under the Underwriting Agreement, in connection with the
offering, issuance or sale of the Shares hereunder or the consummation of the
actions contemplated by the Underwriting Agreement, except the registration
under the 1933 Act of the Shares, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters and the International Underwriters.
(xiv) The issue and sale of the Shares, the execution, delivery and
performance of the Underwriting Agreement, the International Underwriting
Agreement, the Shares and any other agreement or instrument entered into or
issued or to be entered into or issued by the Company in connection with the
transactions contemplated hereby, thereby or in the Prospectus, and the
consummation of the transactions contemplated herein, therein and in the
Prospectus (including the issuance and sale of the Shares by the Company
hereunder and under the International Underwriting Agreement), the compliance by
the Company with its obligations hereunder and under the International
Underwriting Agreement have been duly authorized by all necessary action and do
not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default or a Repayment
Event under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries, pursuant to any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, lease, or any other agreement or instrument known to
such counsel to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or assets
of the Company or any subsidiaries thereof is subject, except for such
conflicts, breaches or defaults or liens, charges or encumbrances that, singly
or in the aggregate, would not
A-1-2
result in a Material Adverse Effect, nor will such action result in any
violation of the provisions of the constituting or operative document or
agreement of the Company or any of its subsidiaries or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its subsidiaries or any of their assets or
properties.
(xv) The Company is not, and upon the issuance and sale of the Shares
and the application of the net proceeds therefrom will not be, an "investment
company" or an entity "controlled" by an "investment company," as such terms are
defined in the 1940 Act.
(xvi) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to each Closing
Time (other than the financial statements and related schedules therein, as to
which such counsel need express no opinion) comply as to form in all material
respects with the requirements of the 1933 Act and the rules and regulations
thereunder; although they do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, except for those referred to in subsection (ix) of
this opinion, they have no reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made by the Company
prior to such Closing Time (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion) 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, as if its date, the Prospectus or any further amendment or
supplement thereto made by the Company prior to such Closing Time (other than
the financial statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading or that,
as of such Closing Time, either the Registration Statement or the Prospectus or
any further amendment or supplement thereto made by the Company prior to such
Closing Time (other than the financial statements and related schedules therein,
as to which such counsel need express no opinion) contains an untrue statement
of a material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and they do not know of any amendment to the Registration
Statement required to be filed or of any contracts or other documents of a
character required to be filed as an exhibit to the Registration Statement or
required to be described in the Registration Statement or the Prospectus which
are not filed or described as required.
In rendering such opinion, such counsel (A) may rely (i) as to matters
involving the application of the laws of the State of Washington, upon the
opinion of ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, special Washington counsel to the Company
(which opinion shall be dated and furnished to the Underwriters at each Closing
Time, shall be satisfactory in form and substance to counsel for the
Underwriters and shall expressly state that the Underwriters may rely on such
opinion as if it were addressed to them), provided that ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
shall state in their opinion that they believe that they and the Underwriters
are justified in relying upon such opinion, and (ii) as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials and (B) may state that
they express no opinion as to the laws of any jurisdiction outside the United
States. Such opinion shall not state that it is to be governed or qualified by,
or that it is otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF R. ▇▇▇▇▇ ▇▇▇▇▇▇, ESQ.
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) There is not pending or, to the best of my knowledge, threatened
any action, suit, proceeding, inquiry or investigation, to which the Company or
any subsidiary thereof is a party, or to which the property of the Company or
any subsidiary thereof is subject, before or brought by any court or
governmental agency or body, which could reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of the
transactions contemplated in the Underwriting Agreement or the International
Underwriting Agreement or the performance by the Company of its obligations
thereunder or the transactions contemplated by the Prospectus.
(ii) To the best of my knowledge and except as set forth in or
contemplated by the Prospectus with respect to systems under development, (a)
each of the Company and its Designated Subsidiaries has all Authorizations of
and from, and has made all declarations and filings with, all Federal, state,
local and other governmental authorities, all self-regulatory organizations and
all courts and other tribunals, which are necessary or appropriate for the
Company and its Designated Subsidiaries to own, lease, license, use and
construct its properties and assets and to conduct its business in the manner
described in the Prospectus, except to the extent that the failure to obtain any
such Authorizations or make any such declaration or filing would not, singly or
in the aggregate, reasonably be expected to result in a Material Adverse Effect,
(b) all such Authorizations are in full force and effect with respect to the
Company and its Designated Subsidiaries, (c) no event has occurred that permits,
or after notice or lapse of time could permit, the revocation, termination or
modification of any such Authorization and (d) the Company and its Designated
Subsidiaries are in compliance in all material respects with the terms and
conditions of all such Authorizations and with the rules and regulations of the
regulatory authorities and governing bodies having jurisdiction with respect
thereto.
(iii) To the best of my knowledge, neither the execution and delivery
of the Underwriting Agreement or the International Underwriting Agreement, nor
the consummation by the Company of the transactions contemplated hereby or
thereby will cause any suspension, revocation, impairment, forfeiture,
nonrenewal or termination of any Authorization.
In rendering such opinion, such counsel (A) may rely (i) as to matters
involving the application of the laws of the State of Washington, upon the
opinion of ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, special Washington counsel to the Company
(which opinion shall be dated and furnished to the Underwriters at each Closing
Time, shall be satisfactory in form and substance to counsel for the
Underwriters and shall expressly state that the Underwriters may rely on such
opinion as if it were addressed to them), provided that Mr. Easter shall state
in his opinion that he believes that he and the Underwriters are justified in
relying upon such opinion, and (ii) as to matters of fact (but not as to legal
conclusions), to the extent he deems proper, on certificates of responsible
officers of the Company and public officials and (B) may state that he expresses
no opinion as to the laws of any jurisdiction outside the United States. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing
as a corporation under the laws of the State of Washington.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Underwriting
Agreement and the International Underwriting Agreement.
(iii) Each Designated Subsidiary formed under the laws of the State of
Washington has been duly formed and is validly existing as limited liability
company or limited partnership under the laws of the State of Washington; has
power and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus, subject to compliance with local
regulatory requirements; and all of the issued and outstanding membership
interests or partnership interests of each such Designated Subsidiary have been
duly authorized and validly issued, and are fully paid.
(iv) The authorized capital stock of the Company is as set forth in
the Prospectus; the shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable.
(v) The Underwriting Agreement and the International Underwriting
Agreement have been duly authorized, executed and delivered by the Company under
the laws of the State of Washington.
(vi) The Shares being delivered at each Closing Time have been duly
authorized and validly issued and are fully paid and non-assessable; and the
Shares conform to the description of Stock contained in the Prospectus.
(vii) The issuance of the Shares being delivered at each Closing Time
is not subject to the preemptive or other similar rights of any securityholder
of the Company.
(viii) To the best of such counsel's knowledge, neither the Company, nor
any of its Designated Subsidiaries is in violation of, as applicable, its
articles, bylaws, limited liability company agreement or partnership agreement.
(ix) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency of the State of Washington is necessary or required for the
performance by the Company of its obligations under the Underwriting Agreement
or the International Underwriting Agreement, in connection with the offering,
issuance or sale of the Shares thereunder or the consummation of the actions
contemplated thereby except such filings as have been made or may be required
under federal law or securities or blue sky laws of the State of Washington in
connection therewith.
(x) The issue and sale of the Shares, the execution, delivery and
performance of the Underwriting Agreement, the International Underwriting
Agreement, the Shares and any other agreement or instrument entered into or
issued or to be entered into or issued by the Company in connection with
A-3-1
the transactions contemplated thereby or in the Prospectus, and the consummation
of the transactions contemplated therein and in the Prospectus (including the
issuance and sale of the Shares by the Company under the Underwriting Agreement
and under the International Underwriting Agreement and the use of the proceeds
from the sale of the Shares as described in the Prospectus under the caption
"Use of Proceeds"), the compliance by the Company with its obligations under the
Underwriting Agreement and under the International Underwriting Agreement have
been duly authorized by all necessary action and do not and will not, whether
with or without the giving of notice or passage of time or both, conflict with,
contravene or constitute a breach of the Company's Articles of Incorporation or
By-Laws.
In rendering such opinion, such counsel (A) may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials and (B)
may state that they express no opinion as to the laws of any jurisdiction other
than the State of Washington. Such opinion shall not state that it is to be
governed or qualified by, or that it is otherwise subject to, any treatise,
written policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
TO BE DELIVERED PURSUANT TO SECTION 5(d)
(i) The Underwriting Agreement and the International Underwriting
Agreement have been duly executed and delivered by or on behalf of the Selling
Shareholder; and the sale of the Shares to be sold by such Selling Shareholder
thereunder and the compliance by such Selling Shareholder with all of the
provisions of the Underwriting Agreement and the International Underwriting
Agreement, and the consummation of the transactions therein contemplated will
not conflict with or result in a breach or violation of any terms or provisions
of, or constitute a default under, any statute or material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument known to such
counsel to which such Selling Shareholder is a party or by which such Selling
Shareholder is bound, or to which any of the property or assets of such Selling
Shareholder is subject, nor will such action result in any violation of the
provisions of the constituting or operative document or agreement of such
Selling Shareholder or any statute or any order, rule or regulation known to
such counsel of any court or governmental agency or body having jurisdiction
over such Selling Shareholder or the property of such Selling Shareholder.
(ii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the transactions
contemplated by the Underwriting Agreement and the International Underwriting
Agreement in connection with Shares to be sold by such Selling Shareholder
thereunder, except such as have been duly obtained and are in full force and
effect and such as may be required under federal law or state securities or Blue
Sky laws of the State of Washington in connection with the purchase and
distribution of such Shares by the Underwriters or the International
Underwriters.
(iii) To the best of such counsel's knowledge, immediately prior to
the First Closing Time such Selling Shareholder had good and valid title to the
Shares to be sold at such First Closing Time by such Selling Shareholder under
the Underwriting Agreement and the International Underwriting Agreement, free
and clear of all liens, encumbrances, equities or claims, and full right, power
and authority to sell assign, transfer and deliver the Shares to be sold by
such Selling Shareholder thereunder.
(iv) To best of such counsel's knowledge, good and valid title to
such Shares, free and clear of all liens, encumbrances, equities or claims,
has been transferred to each of the several Underwriters or International
Underwriters, as the case may be, who have purchased such Shares in good faith
and without notice of any such lien, encumbrance, equity or claim or any other
adverse claim within the meaning of the Uniform Commercial Code.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the State of Washington
and in rendering the opinion in subparagraphs (iii) and (iv) such counsel may
rely upon a certificate of such Selling Shareholder in respect of matters of
fact as to ownership of, and liens, encumbrances, equities or claims on the
Shares sold by such Selling Shareholder, provided that such counsel shall state
that they believe that both you and they are justified in relying upon such
certificate.
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