DRAFT
GENERAL COMMUNICATION, INC.
13,800,000 Shares
Class A Common Stock
(no par value)
Underwriting Agreement
New York, New York
July __, 1997
Salomon Brothers Inc
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
Xxxxxxxx & Co. Inc.,
As Representatives of the several Underwriters
c/o Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
General Communication, Inc., an Alaska corporation (the "Company"),
proposes to issue and sell to the underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, 7,000,000 shares of Class A common stock, no par value, of the
Company ("Common Stock") and the persons named in Schedule II hereto (the
"Selling Stockholders") propose to sell to the Underwriters 6,800,000 shares of
Common Stock (collectively, the "Underwritten Securities"). In addition, for
the sole purpose of covering over-allotments in connection with the sale of the
Underwritten Securities, a certain Selling Stockholder, as named in Schedule II
hereto (the "Option Selling Stockholder"), proposes to issue and sell to the
Underwriters, at the option of the Underwriters, up to 2,070,000 additional
shares of Common Stock (collectively, the "Option Securities," and together with
the Underwritten Securities, the "Securities").
1. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to, and agrees with, each
Underwriter as set forth below in this Section 1. Certain terms used in this
Section 1 are defined in paragraph (vii) hereof.
(i) The Company meets the requirements for use of Form S-3 under
the Securities Act of 1933, as amended (the "Act"), and has filed with the
Securities and Exchange Commission (the "Commission") a registration
statement (file number 333-28001) on Form S-3, including a related
preliminary prospectus, for the registration under the Act, of the offering
and sale of the Securities. The Company may have filed one or more
amendments thereto, including the related preliminary prospectus, each of
which has previously been furnished to you. The Company will next file
with the Commission either: (A) prior to effectiveness of such
registration statement, a further amendment to such registration statement
(including the form of final prospectus) or (B) after effectiveness of such
registration statement, a final prospectus in accordance with Rules 430A
and 424(b)(1) or (4). In the case of clause (B), the Company has included
in such registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and the
rules thereunder to be included in the Prospectus with respect to the
Securities and the offering thereof. As filed, such amendment and form of
final prospectus, or such final prospectus, shall contain all Rule 430A
Information, together with all other such required information, with
respect to the Securities and the offering thereof and, except to the
extent the Representatives shall agree in writing to a modification, shall
be in all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes (beyond
that contained in the latest Preliminary Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made therein.
Upon your request, the Company also will file with the Commission a Rule
462(b) Registration Statement in accordance with Rule 462(b).
(ii) On the Effective Date, the Registration Statement did or will,
and when the Prospectus is first
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filed (if required) in accordance with Rule 424(b) and on the Closing Date
(as defined herein) and on any date on which Option Securities are
purchased, if such date is not the Closing Date (a "Settlement Date"), the
Prospectus (and any supplements thereto) will, comply in all material
respects with the applicable requirements of the Act and the Securities
Exchange Act of 1934 (the "Exchange Act") and the respective rules and
regulations thereunder; on the Effective Date, the Registration Statement
did not or will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and, on the Effective
Date, the Prospectus, if not filed pursuant to Rule 424(b), did not or will
not, and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date and any Settlement Date, the Prospectus (together with any
supplement thereto) will not, include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that the Company makes no
representations or warranties as to the information contained in or omitted
from the Registration Statement or the Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion in the Registration Statement or
the Prospectus (or any supplement thereto).
(iii) The Company and its subsidiaries (all of which are listed in
Schedule III attached hereto) (individually, a "Subsidiary" and
collectively, the "Subsidiaries") have in effect all the communications
regulatory licenses, permits, franchises, authorizations, registrations,
certifications, consents and approvals ("Communications Licenses")
necessary, including from the Federal Communications Commission ("FCC") and
the Alaska Public Utilities Commission ("APUC"), for the Company and its
Subsidiaries to conduct their respective businesses as presently conducted
or proposed to be conducted, except for Communications Licenses as to which
the failure to obtain, individually or in the aggregate, would not have a
material adverse effect on the Company and its Subsidiaries, taken as a
whole. The Communications
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Licenses obtained by the Company or its Subsidiaries have been duly and
validly issued, are in full force and effect and are not subject to any
restrictions or conditions which, individually or in the aggregate, would
have a material adverse effect on the Company and its Subsidiaries, taken
as a whole. No proceedings to revoke, refuse to renew, modify or restrict
such Communications Licenses are pending or, to the Company's best
knowledge, threatened.
(iv) The Company and its Subsidiaries are not in violation of any
applicable statute, law, ordinance, rule, regulation, policy, franchise or
any judgment, injunction, order or decree ("Governmental Laws") of any
court or governmental authority, including, but not limited to, the FCC or
of the communications regulatory authority of the State of Alaska or of any
other jurisdiction (domestic or foreign) in which the Company or its
Subsidiaries conduct business having jurisdiction over the Company or the
Subsidiaries, or over their respective properties except for violations
which would not, individually or in the aggregate, have a material adverse
effect on the Company and its Subsidiaries, taken as a whole. The Company
and its Subsidiaries have not received any notice of any violation of any
Governmental Laws (including, without limitation, the Communications Act of
1934, as amended, and the FCC's rules).
(v) There is no outstanding adverse judgment, injunction, decree or
order that has been issued by any court or governmental authority,
including, but not limited to, the FCC or the APUC, against the Company or
any of its Subsidiaries or any action, proceeding or investigation pending
before or, to the Company's best knowledge, threatened by any court or
governmental authority, including, but not limited to, the FCC or the APUC,
against the Company or any of its Subsidiaries which would, individually or
in the aggregate, have a material adverse effect on the Company and its
Subsidiaries, taken as a whole.
(vi) No consent, approval, authorization, license or order of, or
filing, registration or qualification with, any court or governmental
agency or body, domestic or foreign, is required, including, without
limitation, under the Federal Communications Act of 1934, as amended, the
Cable Communications Policy Act of 1984, the Cable Television Consumer
Protection and
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Competition Act of 1992 and the Telecommunications Act of 1996
(collectively, the "Telecommunications Acts") or any order, rule,
regulation or policy of the FCC or of the APUC for the performance by the
Company of its obligations under this Agreement or for the consummation of
the transactions contemplated herein, except such as have been obtained
under the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters and such other approvals as have been
obtained.
(vii) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "the Effective Date" shall mean each date
that the Registration Statement and any post-effective amendment or
amendments thereto and any Rule 462(b) Registration Statement became or
become effective and each date after the date hereof on which a document
incorporated by reference in the Registration Statement is filed.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto. "Preliminary Prospectus"
shall mean any preliminary prospectus referred to in paragraph (i) above
and any preliminary prospectus included in the Registration Statement at
the Effective Date that omits Rule 430A Information. "Prospectus" shall
mean the prospectus relating to the Securities that is first filed pursuant
to Rule 424(b) after the Execution Time or, if no filing pursuant to Rule
424(b) is required, shall mean the form of final prospectus relating to the
Securities included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement referred to
in paragraph (i) above, including incorporated documents, exhibits and
financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment thereto or any
Rule 462(b) Registration Statement becomes effective prior to the Closing
Date, shall also mean such registration statement as so amended or such
Rule 462(b) Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A. "Rule 415," "Rule 424," "Rule
430A," "Rule 462" and "Regulation S-K" refer to such rules or regulation
under the Act. "Rule 430A Information" means information with respect to
the
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Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
Any reference herein to the Registration Statement, a Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective Date of
the Registration Statement or the issue date of such Preliminary Prospectus
or the Prospectus, as the case may be; and any reference herein to the
terms "amend", "amendment" or "supplement" with respect to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement, or the issue date
of any Preliminary Prospectus or the Prospectus, as the case may be, deemed
to be incorporated therein by reference. "Rule 462(b) Registration
Statement" shall mean a registration statement and any amendments thereto
filed pursuant to Rule 462(b) relating to the offering covered by the
initial registration statement (file number 333-28001).
(b) Each Selling Stockholder, severally and not jointly, represents
and warrants to, and agrees with, each Underwriter that:
(i) Such Selling Stockholder is the lawful owner of the Securities
to be sold by such Selling Stockholder hereunder and upon sale and delivery
of, and payment for, such Securities, as provided herein, such Selling
Stockholder will convey good and marketable title to such Securities, free
and clear of all liens, encumbrances, equities and claims whatsoever.
(ii) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or which has constituted or
which might reasonably be expected to cause or result, under the Exchange
Act or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities
and has not effected any sales of shares of Common Stock which, if effected
by the issuer, would be required to be disclosed in response to Item 701 of
Regulation S-K.
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(iii) Certificates in negotiable form for such Selling Stockholder's
Securities have been placed in custody, for delivery pursuant to the terms
of this Agreement, under a Custody Agreement duly authorized, executed and
delivered by such Selling Stockholder, in the form heretofore furnished to
you (the "Custody Agreement"), with Chase Trust Company of California, as
Custodian (the "Custodian"); the Securities represented by the certificates
so held in custody for each Selling Stockholder are subject to the
interests hereunder of the Underwriters, the Company and the other Selling
Stockholders; the arrangements for custody and delivery of such
certificates, made by such Selling Stockholder hereunder and under the
Custody Agreement, are not subject to termination by any acts of such
Selling Stockholder, or by operation of law, whether by the death or
incapacity of such Selling Stockholder or the occurrence of any other
event; and if any such death, incapacity or any other such event shall
occur before the delivery of such Securities hereunder, certificates for
the Securities will be delivered by the Custodian in accordance with the
terms and conditions of this Agreement and the Custody Agreement as if such
death, incapacity or other event had not occurred, regardless of whether or
not the Custodian shall have received notice of such death, incapacity or
other event.
(iv) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by such
Selling Stockholder of the transactions contemplated herein, except such as
may have been obtained under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters and such other approvals
as have been obtained.
(v) Neither the sale of the Securities being sold by such Selling
Stockholder nor the consummation of any other of the transactions herein
contemplated by such Selling Stockholder or the fulfillment of the terms
hereof by such Selling Stockholder will conflict with, result in a breach
or violation of, or constitute a default under any law or any Governmental
Laws or, if applicable, the charter or bylaws of such Selling Stockholder
or the terms of any indenture or other agreement or instrument to which
such Selling Stockholder or any of such Selling Stockholder's properties or
assets is bound, or any judgment, order
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or decree applicable to such Selling Stockholder or any of such Selling
Stockholder's properties or assets of any court, regulatory body,
administrative agency, governmental body or arbitrator.
In respect of any statements in or omissions from the Registration Statement or
the Prospectus or any supplement thereto made in reliance upon and in conformity
with information furnished in writing to the Company by any Selling Stockholder
specifically for use in connection with the preparation thereof, such Selling
Stockholder hereby makes the same representations and warranties to each
Underwriter as the Company makes to such Underwriter under paragraph (a)(ii) of
this Section 1.
(c) Each Selling Stockholder beneficially owning 5% or more of the
Company's outstanding shares of Common Stock, severally and not jointly,
represents and warrants to, and agrees with, each Underwriter that such Selling
Stockholder has no reason to believe that the representations and warranties of
the Company contained in this Section 1 are not true and correct; such Selling
Stockholder is familiar with the Registration Statement and has no knowledge of
any material fact, condition or information not disclosed in the Prospectus or
any supplement thereto which has adversely affected or may adversely affect the
business of the Company or any of its subsidiaries; and the sale of Securities
by such Selling Stockholder pursuant hereto is not prompted by any information
concerning the Company or any of its subsidiaries which is not set forth in the
Prospectus or any supplement thereto.
2. PURCHASE AND SALE. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Company and the Selling Stockholders (collectively, the "Sellers" and
individually a "Seller") agree, severally and not jointly, to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Sellers, at a purchase price of $ per share, the amount of
the Securities set forth opposite such Underwriter's name in Schedule I hereto.
The amount of Securities to be purchased by each Underwriter from each Seller
shall be as nearly as practicable in the same proportion to the total amount of
Securities to be purchased by such Underwriter as the total amount of Securities
to be sold by each Seller bears to the total amount of Securities to be sold
pursuant hereto.
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(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Option Selling Stockholder
hereby grants an option to the Underwriters to purchase, severally and not
jointly, up to 2,070,000 shares of the Option Securities at the same purchase
price per share as the Underwriters shall pay for the Underwritten Securities.
Said option may be exercised only to cover over-allotments in the sale of the
Underwritten Securities by the Underwriters. Said option may be exercised in
whole or in part at any time on or before the 30th day after the date of the
Prospectus upon written notice by the Representatives to the Option Selling
Stockholder setting forth the number of shares of the Option Securities as to
which the several Underwriters are exercising the option and, subject to Section
3 hereof, the Settlement Date. The Settlement Date may be the same as the
Closing Date but not earlier than the Closing Date nor later than ten business
days after the date of such notice. Delivery of certificates for the shares of
Option Securities by the Option Selling Stockholder and payment therefor to the
Option Selling Stockholder shall be made as provided in Section 3 hereof. The
number of shares of the Option Securities to be purchased by each Underwriter
shall be the same percentage of the total number of shares of the Option
Securities to be purchased by the several Underwriters as such Underwriter is
purchasing of the Underwritten Securities, subject to such adjustments as you in
your absolute discretion shall make to eliminate any fractional shares.
3. DELIVERY AND PAYMENT. The Company, the Representatives and the
Selling Stockholders agree that the delivery of and payment for the Underwritten
Securities shall take place five business days following the date of this
Agreement. Delivery of and payment for the Underwritten Securities and the
Option Securities (if the option provided for in Section 2(b) hereof shall have
been exercised on or before the second business day prior to the Closing Date)
shall be made at 10:00 AM, New York City time, on July __, 1997, or such later
date (not later than _____________, 1997) as the Representatives shall
designate, which date and time may be postponed by agreement among the
Representatives, the Company and the Selling Stockholders or as provided in
Section 9 hereof (such date and time of delivery and payment for the Securities
being herein called the "Closing Date"). Delivery of the Securities shall be
made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the respective
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aggregate purchase prices of the Securities being sold by the Company and each
of the Selling Stockholders to or upon the order of the Company and the Selling
Stockholders, as the case may be, by certified or official bank check or checks
drawn on or by a New York Clearing House bank and payable in next day funds.
Delivery of the Underwritten Securities and the Option Securities shall be made
at such location as the Representatives shall reasonably designate at least one
business day in advance of the Closing Date and payment for the Securities shall
be made at the office of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx. Certificates for the Securities shall be registered in such
names and in such denominations as the Representatives may request not less than
two full business days in advance of the Closing Date.
The Company and the Selling Stockholders agree to have the Securities
available for inspection, checking and packaging by the Representatives in New
York, New York, not later than 1:00 PM on the business day prior to the Closing
Date.
Each Selling Stockholder will pay all applicable state transfer taxes,
if any, involved in the transfer to the several Underwriters of the Securities
to be purchased by them from such Selling Stockholder and the respective
Underwriters will pay any additional stock transfer taxes involved in further
transfers.
If the option provided for in Section 2(b) hereof is exercised after
the second business day prior to the Closing Date, the Option Selling
Stockholder will deliver (at the expense of the Company) to the Representatives,
at Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
xx the date specified by the Representatives (which shall be within three
business days after exercise of said option), certificates for the Option
Securities in such names and denominations as the Representatives shall have
requested against payment of the purchase price thereof to or upon the order of
the Option Selling Stockholder, by certified or official bank check or checks
drawn on or by a New York Clearing House bank and payable in next day funds. If
settlement for the Option Securities occurs after the Closing Date, the Option
Selling Stockholder will deliver to the Representatives on the Settlement Date,
and the obligation of the Underwriters to purchase the Option Securities shall
be conditioned upon receipt of, supplemental opinions, certificates and letters
confirming
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as of such date the opinions, certificates and letters delivered on the Closing
Date pursuant to Section 6 hereof.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. AGREEMENTS. (a) The Company agrees with the several
Underwriters that:
(i) The Company will use its reasonable best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of the
Registration Statement, supplement to the Prospectus or any Rule 462(b)
Registration Statement without your prior consent. Subject to the
foregoing sentence, if the Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Prospectus is otherwise
required under Rule 424(b), the Company will cause the Prospectus, properly
completed, and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Representatives of
such timely filing. Upon your request, the Company will cause the Rule
462(b) Registration Statement, completed in compliance with the Act and the
applicable rules and regulations thereunder, to be filed with the
Commission pursuant to Rule 462(b) and will provide evidence satisfactory
to the Representatives of such filing. The Company will promptly advise
the Representatives (A) when the Registration Statement, if not effective
at the Execution Time, and any amendment thereto, shall have become
effective, (B) when the Prospectus, and any supplement thereto, or any Rule
462(b) Registration Statement, shall have been filed (if required) with the
Commission pursuant to Rule 424(b), (C) when, prior to termination of the
offering of the Securities, any amendment to the Registration Statement
shall have been filed or become effective, (D) of any request by the
Commission for any amendment of the Registration Statement, or any Rule
462(b) Registration Statement, or supplement to the Prospectus or for any
additional information, (E) of the issuance by the Commission of any stop
order suspending the effectiveness of the
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Registration Statement or the institution or threatening of any proceeding
for that purpose and (F) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose. The Company will use its reasonable best efforts to
prevent the issuance of any such stop order and, if issued, to obtain as
soon as possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the Exchange Act or the respective rules and regulations thereunder,
the Company promptly will (i) prepare and file with the Commission, subject
to the second sentence of paragraph (a)(i) of this Section 5, an amendment
or supplement which will correct such statement or omission or effect such
compliance and (ii) supply any amended or supplemented Prospectus to you in
such quantities as you may reasonably request.
(iii) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(iv) The Company will furnish to each of the Representatives and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits thereto)
and, so long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act or otherwise required, as many copies of each
Preliminary Prospectus and the Prospectus and any supplement thereto as the
Representatives may reasonably request The Company
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will pay the expenses of printing or other production of all documents
relating to the offering.
(v) The Company will arrange in cooperation with the
Representatives for the qualification of the Securities for sale under the
laws of such jurisdictions as the Representatives may designate, will
maintain such qualifications in effect so long as required for the
distribution of the Securities, will arrange for the determination of the
legality of the Securities for purchase by institutional investors and will
pay the fee of the National Association of Securities Dealers, Inc., in
connection with its review of the offering.
(vi) The Company will not, for a period of 180 days following the
Execution Time, without the prior written consent of Salomon Brothers Inc,
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any other shares of Common Stock,
any other equity securities of the Company or any securities convertible
into or exchangeable or exercisable for shares of Common Stock or other
equity securities of the Company; PROVIDED, HOWEVER, that the Company may
(1) issue and sell Common Stock pursuant to any employee stock option plan
or stock ownership plan in effect at the Execution Time, (2) issue Common
Stock issuable upon the conversion of Class B common stock of the Company
outstanding at the Execution Time, and (3) issue options to acquire _____
shares of Common Stock that were approved by the Board of Directors of the
Company on February __, 1997, and which will be issued pending shareholder
approval, which is being sought at a shareholder meeting contemplated to be
held in September 1997.
(vii) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 517.075, Florida Statutes,
relating to issuers doing business with the Government of Cuba or with any
person or affiliate located in Cuba, and the Company further agrees that if
it commences engaging in business with the government of Cuba or with any
person or affiliate located in Cuba after the date the Registration
Statement becomes or has become effective with the Commission or with the
Florida Department of Banking and Finance (the "Department"), whichever
date is later, or if the information reported in the Prospectus, if any,
concerning the Company's business
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with Cuba or with any person or affiliate located in Cuba changes in any
material way, the Company will provide the Department notice of such
business or change, as appropriate, in a form acceptable to the Department.
(b) Each Selling Stockholder agrees with the several Underwriters
that such Selling Stockholder will not during the period of 180 days following
the Execution Time, without the prior written consent of Salomon Brothers Inc,
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any other shares of Common Stock, or
any other equity securities of the Company, beneficially owned by such person,
or any securities convertible into, or exchangeable for, shares of Common Stock
or any other equity securities of the Company, other than shares of Common Stock
disposed of as bona fide gifts.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders contained herein as of the Execution Time, the Closing Date and any
Settlement Date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company and the Selling Stockholders made in any certificates pursuant to
the provisions hereof, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
5:30 PM, New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM, New
York City time, on such date or (ii) 12:00 noon on the business day
following the day on which the public offering price was determined, if
such determination occurred after 3:00 PM, New York City time, on such
date; if filing of the Prospectus, or any supplement thereto, is required
pursuant to the applicable paragraph of Rule 424(b), the Prospectus, and
any such supplement, will be filed in the manner and within the time period
required by Rule 424(b); and no stop order
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suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have furnished to the Representatives the
opinion of Xxxxxxxxx, Arget, Singer, Xxxxxxx & Xxxxxx corporate counsel for
the Company, dated the Closing Date, to the effect that:
(i) each of the Company and each of its Subsidiaries has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation,
with full corporate power and authority to own its properties and
conduct its business as described in the Prospectus, and is duly
qualified to transact business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or
conducts material business;
(ii) all the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in
the Prospectus, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company either directly or through
wholly owned Subsidiaries, free and clear of any perfected security
interest and, to the knowledge of such counsel, after due inquiry, any
other security interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization is as
set forth in the Company's Prospectus; the capital stock of the
Company conforms to the description thereof contained in the
Prospectus; the outstanding equity securities of the Company
(including the Securities being sold hereunder by the Selling
Stockholders) have been duly authorized and validly issued, fully paid
and nonassessable; the Securities have been duly authorized, and, when
issued and delivered to and paid for by the Underwriters pursuant to
this Agreement, will be validly issued, fully paid and nonassessable;
the Securities being sold by the Selling Stockholders are duly listed
and admitted for trading on the Nasdaq National Market
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("Nasdaq"); the Securities being sold hereunder by the Company are
duly authorized for listing, subject to official notice of issuance,
on the Nasdaq; the certificates for the Securities are in valid and
sufficient form; and the holders of outstanding shares of capital
stock of the Company are not entitled to preemptive or other rights to
subscribe for the Securities;
(iv) to the best knowledge of such counsel, there are no
pending or threatened actions, suits or proceedings before any court
or governmental agency, authority or body or any arbitrator involving
the Company or any of its Subsidiaries of a character required to be
disclosed in the Registration Statement or the Prospectus which are
not adequately disclosed therein, and there are no franchises,
contracts or other documents of a character required to be described
in the Registration Statement or Prospectus, or to be filed as
exhibits, which are not described or filed as required; and the
statements included or incorporated in the Prospectus describing any
legal proceedings, regulatory matters, statutes, material contracts or
agreements relating to the Company fairly summarize such matters;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) no consent, approval, authorization, license or order
of, or filing, registration or qualification with, any court or
governmental agency or body, domestic or foreign, is required,
including without limitation, under the Telecommunications Acts or any
order, rule, regulation or policy of the FCC or the APUC, for the
performance by the Company of its obligations under this Agreement or
for the consummation of the transactions contemplated herein, except
such as have been obtained under the Act and such as may be required
under the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the Underwriters and
such other approvals (specified in such opinion) as have been
obtained;
(vii) neither the issue and sale of the Securities, nor the
consummation of any other of
-16-
the transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation of, or
constitute a default under any law or any Governmental Laws or the
certificate of incorporation or by-laws of the Company or the terms of
any indenture or other agreement or instrument known to such counsel
and to which the Company or any of its Subsidiaries is a party or
bound or any judgment, injunction, order or decree known to such
counsel to be applicable to the Company or any of its Subsidiaries of
any court, regulatory body, administrative agency, governmental body
or arbitrator;
(viii) except as set forth in the Registration Statement under
the section entitled "Certain Transactions -- Registration Rights
Agreements," no holders of securities of the Company have rights to
the registration of such securities under the Registration Statement;
(ix) the execution and delivery of this Agreement and the
issuance and sale of Securities by the Company, and the performance by
the Company of its obligations under this Agreement and the
Securities, do not violate the Telecommunications Acts or any rules,
regulations or policies thereunder binding on the Company or its
Subsidiaries or any order, writ, judgment, injunction, decree or award
of the FCC binding on the Company or its Subsidiaries; and
(x) the Company and its Subsidiaries are not, nor with the
passage of time or the giving of notice or both would be, to the best
knowledge of such counsel, in violation of any Governmental Laws of
any court or any governmental authority, excluding the FCC or the
APUC, relating specifically to the Company or its Subsidiaries or to
any properties of the Company or its Subsidiaries. The Company and
its Subsidiaries have not received any notice of any violation of any
Governmental Laws.
In addition, such counsel shall state that nothing has come to its
attention that leads it to believe that the Registration Statement at the time
the Registration Statement became effective or on the Closing Date (other
-17-
than the financial statements and supporting notes and schedules and other
financial and statistical data contained therein, as to which such counsel need
not comment) contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or that the Prospectuses at the time
they were delivered or on the Closing Date (other than the financial statements
and supporting notes and schedules and other financial and statistical data
contained therein, as to which such counsel need not comment) contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Alaska [, Limited Partnership Law of the State of Delaware] or the United States
to the extent such counsel deems proper and as specified in such opinion, upon
the opinion of other counsel of good standing whom such counsel believes to be
reliable and who are satisfactory to counsel for the Underwriters and (B) as to
matters of fact, to the extent deemed proper, on certificates of responsible
officers of the Company and public officials. References to the Prospectus in
this paragraph (b) include any supplements thereto at the Closing Date.
(c) The Company shall have furnished to the Representatives the
opinion of Xxxx Xxxxxxx, counsel for the Company, dated the Closing Date, to the
effect that:
(i) the Company and its Subsidiaries have been granted and
presently hold all Communications Licenses necessary, including from
the FCC and the APUC, for the Company and its Subsidiaries to conduct
their respective businesses as presently conducted or proposed to be
conducted; to the best knowledge of such counsel such Communications
Licenses have been duly and validly issued and are in full force and
effect, and such Communications Licenses are not subject to any
restrictions or conditions which, individually or in the aggregate,
would have a material adverse effect on the Company and its
Subsidiaries, taken as a whole. No proceedings to revoke, refuse to
renew, modify or restrict such Communications Licenses
-18-
are pending or, to the best knowledge of such counsel, threatened;
(ii) there is no proceeding pending before the FCC or the
APUC, or, to the best knowledge of such counsel, any investigation or
proceeding pending or threatened by the FCC or the APUC against the
Company or its Subsidiaries which, if adversely determined,
individually or in the aggregate, could have a material adverse effect
on the Company and its Subsidiaries taken as a whole; and
(iii) the Company and its Subsidiaries are not, nor with the
passage of time or the giving of notice or both would be, to the best
knowledge of such counsel, in violation of any Governmental Laws of
any court or any governmental authority, including, but not limited
to, the FCC or the APUC relating to the Company or its Subsidiaries or
to any properties of the Company or its Subsidiaries. The Company and
its Subsidiaries have not received any notice of any violation of any
Governmental Laws.
(d) The Company shall have furnished to the Representatives the
opinion of Xxxxxxx & Xxxxxx L.L.C., special counsel for the Company, dated the
Closing Date, to the effect that:
(i) each of the Company and each of its Subsidiaries has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation,
with full corporate power and authority to own its properties and
conduct its business as described in the Prospectus;
(ii) the Company's authorized equity capitalization is as
set forth in the Prospectus; and the capital stock of the Company
conforms to the description thereof contained in the Prospectus;
(iii) the Registration Statement has become effective under
the Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule
-19-
424(b); to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened and
the Registration Statement and the Prospectus (other than the
financial statements and other financial and statistical information
contained therein as to which such counsel need express no opinion)
comply as to form in all material respects with the applicable
requirements of the Act and the Exchange Act and the respective rules
thereunder;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) no consent, approval, authorization, license or order
of, or filing, registration or qualification with, any court or
governmental agency or body, domestic or foreign, is required,
including without limitation, under the Telecommunications Acts or any
order, rule, regulation or policy of the FCC or the APUC for the
performance by the Company of its obligations under this Agreement or
for the consummation of the transactions contemplated herein, except
such as have been obtained under the Act and such as may be required
under the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the Underwriters and
such other approvals (specified in such opinion) as have been
obtained;
(vi) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation of, or constitute a default under any law or any
Governmental Laws or the certificate of incorporation or by-laws of
the Company or the terms of any agreement governing indebtedness for
money borrowed or other material agreement or instrument known to such
counsel and to which the Company or any of its Subsidiaries is a party
or bound or any judgment, injunction, order or decree known to such
counsel to be applicable to the Company or any of its Subsidiaries of
any court, regulatory body, administrative agency,
-20-
governmental body or arbitrator except for such conflicts, breaches,
violations or defaults as would not have a material adverse effect on
the Company and its Subsidiaries, taken as a whole.
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the Selling Stockholders, representatives of the independent
public accountants for the Company, representatives of the Representatives and
counsel for the Representatives at which the contents of the Registration
Statement and related matters were discussed and, although such counsel has not
independently verified, are not passing upon and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement, no facts have come to such counsel's
attention that leads such counsel to believe that the Registration Statement, as
of the date it is declared effective by the Commission or on the Closing Date,
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 the Prospectus as of the Closing Date contains an untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading (it being understood that such counsel does
not comment as to the financial statements (including supporting schedules), and
other financial data included in the Registration Statement, and the Prospectus
or the exhibits to the Registration Statement).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
[Colorado] [, the General Corporation/Limited Partnership Law of the State of
Delaware] or the United States, to the extent such counsel deems proper and as
specified in such opinion, upon the opinion of other counsel of good standing
whom such counsel believes to be reliable and who are satisfactory to counsel
for the Underwriters and (B) as to matters of fact, to the extent deemed proper,
on certificates of responsible officers of the Company and public officials.
References to the Prospectus in this paragraph (d) include any supplements
thereto at the Closing Date.
(e) Each Selling Stockholder shall have furnished to the
Representatives the opinion of such Selling Stockholder's counsel, dated the
Closing Date, to the effect that:
-21-
(i) this Agreement, the Custody Agreement and the Power of
Attorney have been duly authorized, executed and delivered by the
Selling Stockholders; the Custody Agreement is valid and binding on
the Selling Stockholders and each Selling Stockholder has full legal
right and authority to sell, transfer and deliver in the manner
provided in this Agreement and the Custody Agreement the Securities
being sold by such Selling Stockholder hereunder;
(ii) the delivery by each Selling Stockholder to the several
Underwriters of certificates for the Securities being sold hereunder
by such Selling Stockholder against payment therefor as provided
herein, will pass good and marketable title to such Securities to the
several Underwriters, free and clear of all liens, encumbrances,
equities and claims whatsoever;
(iii) no consent, approval, authorization, license or order
of, or filing, registration, or qualification with, any court or
governmental agency or body is required for the consummation by any
Selling Stockholder of the transactions contemplated herein, except
such as may have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the
Underwriters and such other approvals (specified in such opinion) as
have been obtained; and
(iv) neither the sale of the Securities being sold by any
Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by any Selling Stockholder or the
fulfillment of the terms hereof by any Selling Stockholder will
conflict with, result in a breach or violation of, or constitute a
default under any law or any Governmental Laws or, if applicable, the
charter or By-laws of the Selling Stockholder or the terms of any
indenture or other agreement or instrument known to such counsel and
to which any Selling Stockholder or any of such Selling Stockholder's
properties or assets is bound, or any judgment, order or decree known
to such counsel to be applicable to any Selling Stockholder or any of
such Selling Stockholder's properties or assets of any court,
regulatory
-22-
body, administrative agency, governmental body or arbitrator.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the laws
of the jurisdiction in which they are admitted and the United States, to
the extent they deem proper and specified in such opinion, upon the opinion
of other counsel of good standing whom they believe to be reliable and who
are satisfactory to counsel for the Underwriters, and (B) as to matters of
fact, to the extent they deem proper, on certificates of, or certificates
of responsible officers of, the Selling Stockholders and public officials.
(f) the Representative shall have received from Paul, Hastings,
Xxxxxxxx & Xxxxxx LLP, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to the issuance and sale of
the Securities, the Registration Statement, the Prospectus (together with
any supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company and each Selling Stockholder shall
have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(g) the Company shall have furnished to the Representatives a
certificate of the Company, signed by (1) the President and the Chief
Executive Officer and (2) the Chief Financial Officer of the Company, dated
the Closing Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Prospectus, any
supplement to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects on and as
of the Closing Date with the same effect as if made on the Closing
Date and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
-23-
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto),
there has been no material adverse change in the condition financial
or other), earnings, business, properties or prospects of the Company
and its Subsidiaries, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto).
(h) Each Selling Stockholder shall have furnished to the
Representatives a certificate, signed by an attorney-in-fact on behalf of
each such Selling Stockholder, dated the Closing Date, to the effect that
the Selling Stockholders have carefully examined the Registration
Statement, the Prospectus, any supplement to the Prospectus and this
Agreement and that the representations and warranties of such Selling
Stockholder in this Agreement are true and correct in all material respects
on and as of the Closing Date to the same effect as if made on the Closing
Date.
(i) At the Execution Time and at the Closing Date, KPMG Peat
Marwick LLP shall have furnished to the Representatives a letter or
letters, dated respectively as of the Execution Time and as of the Closing
Date, in form and substance satisfactory to the Representatives, confirming
that they are independent accountants within the meaning of the Act and the
Exchange Act and the respective applicable published rules and regulations
thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules and pro forma financial statements
included or incorporated in the Registration Statement and the
Prospectus and reported on by them comply in form in all material
respects with the applicable accounting requirements of the Act and
the Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
Subsidiaries; their limited review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited interim financial information as indicated in their
reports incorporated in the Registration Statement and the
-24-
Prospectus; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors and executive,
audit and compensation committees of the Company and the Subsidiaries;
and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company and
its Subsidiaries as to transactions and events subsequent to December
31, 1996, nothing came to their attention which caused them to believe
that:
(1) any unaudited financial statements included or
incorporated in the Registration Statement and the Prospectus
do not comply in form in all material respects with applicable
accounting requirements of the Act and the related published
rules and regulations with respect to financial statements
included or incorporated in quarterly reports on Form 10-Q
under the Exchange Act; and said unaudited financial statements
are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with
that of the audited financial statements included or
incorporated in the Registration Statement and the Prospectus;
(2) with respect to the period subsequent to December 31,
1996, audited or unaudited, in or incorporated in the
Prospectus, there was any change, at a specified date not more
than five business days prior to the date of the letter, in the
capital stock, increase in long-term debt or decrease in
consolidated net current assets or stockholders' equity of the
Company and its Subsidiaries as compared with the amounts shown
on the December 31, 1996 consolidated balance sheet included or
incorporated in the Registration Statement and the Prospectus,
or for the period from January 1, 1997 to such specified date
there were any decreases, as compared with the corresponding
period in the preceding year, in consolidated net sales or in
the total or per share amounts of income before extraordinary
items or net income of
-25-
the Company and its Subsidiaries, except in all instances for
changes, increases or decreases that the Registration Statement
and Prospectus discloses have occurred or may occur, in which
case the letter shall be accompanied by an explanation by the
Company as to the significance thereof unless said explanation
is not deemed necessary by the Representatives; or
(3) the information included in the Registration Statement
and the Prospectus in response to Regulation S-K, Item 301
(Selected Financial Data), Item 302 (Supplementary Financial
Information) and Item 402 (Executive Compensation) is not in
conformity with the applicable disclosure requirements of
Regulation S-K;
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its Subsidiaries) set
forth in the Registration Statement and the Prospectus, including the
information set forth under the captions "Prospectus Summary," "Risk
Factors," "Use of Proceeds," "Capitalization," "Selected Consolidated
Financial Data," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Business," "Management," and
"Certain Transactions" in the Prospectus, the information included or
incorporated in Items [________] of the Company's Annual Report on
Form 10-K, incorporated in the Registration Statement and the
Prospectus, the information included in the "Management's Discussion
and Analysis of Financial Condition and Results of Operations"
included or incorporated in the Company's Quarterly Reports on Form
10-Q, incorporated in the Registration Statement and the Prospectus,
and the information in the Company's Current Report on Form 8-K, if
any, incorporated in the Registration Statement and the Prospectus
agrees with the accounting records of the Company and its
Subsidiaries, excluding any questions of legal interpretation.
-26-
(iv) on the basis of a reading of the unaudited pro forma
financial statements included or incorporated in the Registration
Statement and the Prospectus (the "pro forma financial statements");
carrying out certain specified procedures; inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters; and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in
the pro forma financial statements, nothing came to their attention
which caused them to believe that the pro forma financial statements
do not comply in form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X or that the
pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
References to the Prospectus in this paragraph (h) include any
supplement thereto at the date of the letter.
The Representatives shall have also received from KPMG Peat Marwick
LLP a letter stating that the Company's system of internal accounting controls
taken as a whole is sufficient to meet the broad objectives of internal
accounting control insofar as those objectives pertain to the prevention or
detection of errors or irregularities in amounts that would be material in
relation to the financial statements of the Company and its Subsidiaries.
(j) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Registration Statement (exclusive of
any amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraph (h) of this Section 6 or
(ii) any change, or any development involving a prospective change, in or
affecting the business or properties of the Company and its Subsidiaries
the effect of which, in any case referred to in clause (i) or (ii) above,
is, in the judgment of the Representatives, so material and adverse as to
make it impractical or inadvisable to proceed with the offering or delivery
of the Securities as contemplated by the Registration Statement (exclusive
of any amendment thereof) and the Prospectus (exclusive of any supplement
thereto).
(k) At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially
-27-
in the form of Exhibit A hereto from each officer and director of the
Company and each holder of five percent (5%) or more of outstanding shares
of (i) any class of equity securities of the Company or (ii) all classes of
equity securities of the Company (counted as a single class) addressed to
the Representatives, in which each such person agrees not to offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly, or
announce an offering of, any shares of Common Stock, or any other equity
securities of the Company, beneficially owned by such person or any
securities convertible into, or exchangeable for, shares of Common Stock or
any other equity securities of the Company for a period of 180 days
following the Execution Time without the prior written consent of Salomon
Brothers Inc, other than shares of Common Stock disposed of as bona fide
gifts.
(l) Prior to the Closing Date, the Company and each Selling
Stockholder shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may
reasonably request.
(m) The Securities shall be duly authorized for listing, subject to
official notice of issuance, on the Nasdaq.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be cancelled at,
or at any time prior to, the Closing Date by the Representatives. Notice of
such cancellation shall be given to the Company and each Selling Stockholder in
writing or by telephone or facsimile and confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, counsel for
the Underwriters, at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the Closing Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the
-28-
Underwriters set forth in Section 6 hereof is not satisfied, because of any
termination pursuant to Section 10 hereof or because of any refusal, inability
or failure on the part of the Company or any Selling Stockholder to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities. If the
Company is required to make any payments to the Underwriters under this Section
7 because of any Selling Stockholder's refusal, inability or failure to satisfy
any condition to the obligations of the Underwriters set forth in Section 6, the
Selling Stockholders, PRO RATA in proportion to the percentage of Securities to
be sold by each Selling Stockholder, shall reimburse the Company on demand for
all amounts so paid.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein. This
-29-
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Selling Stockholder, severally and not jointly, agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, each Underwriter, the directors,
officers, employees and agents of each Underwriter and each person who controls
the Company or any Underwriter within the meaning of either the Act or the
Exchange Act and each other Selling Stockholder to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information furnished to the Company by or on behalf of
such Selling Stockholder specifically for use in the preparation of the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any Selling Stockholder may otherwise
have.
(c) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act and each Selling Stockholder and
each person who controls such Selling Stockholder, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company and each Selling Stockholder
acknowledge that the statements set forth in the last paragraph of the cover
page and under the heading "Underwriting" in any Preliminary Prospectus and the
Prospectus constitute the only information furnished in writing by or on behalf
of the several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus, and you, as the Representatives, confirm that such statements are
correct.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a), (b) or (c) above unless
and to the extent it did not otherwise learn of such action and
-30-
such failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a), (b) or (c) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the 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. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a), (b)
or (c) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Selling Stockholders and the
Underwriters agree to contribute to the aggregate losses,
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claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) (collectively
"Losses") to which the Company, one or more of the Selling Stockholders and one
or more of the Underwriters may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Company, by the Selling
Stockholders and by the Underwriters from the offering of the Securities;
PROVIDED, HOWEVER, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting discount
or commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company, the Selling Stockholders and the
Underwriters shall contribute in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the Company, of
the Selling Stockholders and of the Underwriters in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company and by the
Selling Stockholders shall be deemed to be equal to the total net proceeds from
the offering (before deducting expenses) received by each of them, and benefits
received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Prospectus. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information provided
by the Company, the Selling Stockholders or the Underwriters. The Company, the
Selling Stockholders and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (e), no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls an Underwriter within the meaning of either the Act or
the Exchange Act and each director, officer, employee and agent of an
Underwriter shall have the same rights to contribution as such Underwriter, and
each person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company,
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subject in each case to the applicable terms and conditions of this paragraph
(e).
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; PROVIDED, HOWEVER, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter, the
Selling Stockholders or the Company. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding seven days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
the Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Company, the Selling Stockholders and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. TERMINATION. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in the Company's Common Stock shall have been suspended by the
Commission or the Nasdaq 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 the New York Stock Exchange or the 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
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to make it, in the judgment of the Representatives, impracticable or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Prospectus (exclusive of any supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of each Selling Stockholder and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter,
any Selling Stockholder or the Company or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 7 and 8 hereof
shall survive the termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telegraphed and confirmed to them, care of Salomon Brothers Inc,
Seven Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: Legal Department;
or, if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it, at 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxx
00000-0000, attention: Xxxx X. Xxxxxx; or, if sent to any Selling Stockholder,
will be mailed, delivered or telegraphed and confirmed to such Selling
Stockholder, care of General Communication, Inc., 0000 Xxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxx 00000-0000, attention: Xxxx X. Xxxxxx and Xxxxxx X. Xxxxxx.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
GENERAL COMMUNICATION, INC.
By:______________________________
Name:
Title:
XXXX X. XXXXXX,
as Attorney-in-Fact for
the Selling Stockholders
_________________________________
XXXXXX X. XXXXXX,
as Attorney-in-Fact for
the Selling Stockholders
________________________________
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The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written
SALOMON BROTHERS INC
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXXXX & CO. Inc.
By: SALOMON BROTHERS INC
By:_______________________
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
-36-
EXHIBIT A
[Letterhead of officer, director or 5%
shareholder of General Communication, Inc.]
GENERAL COMMUNICATION, INC.
PUBLIC OFFERING OF COMMON STOCK
, 1997
Salomon Brothers Inc
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
Xxxxxxxx & Co. Inc.,
As Representatives of the several Underwriters
c/o Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between General
Communication, Inc., an Alaska corporation (the "Company"), certain Selling
Stockholders named therein and each of you as representatives of a group of
Underwriters named therein, relating to an underwritten public offering of Class
A common stock, no par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned agrees not to offer, sell or contract to
sell, or otherwise dispose of, directly or indirectly, or announce an offering
of, any shares of Common Stock, or any other equity securities of the Company,
beneficially owned by the undersigned or any securities convertible into, or
exchangeable for, shares of Common Stock or any other equity securities of the
Company for a period of 180 days following the day on which the Underwriting
Agreement is executed without the prior written consent of Salomon Brothers Inc,
other than shares of Common Stock disposed of as bona fide gifts.
If for any reason the Underwriting Agreement is not entered into on or
before September 15, 1997 or if entered into by such date and is thereafter
terminated prior to the Closing Date (as defined in the Underwriting Agreement),
the agreement set forth above shall likewise terminate without further action on
the part of any party.
Yours very truly,
[Signature of officer, director or
5% shareholder]
[Name and address of officer,
director or 5% shareholder]
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SCHEDULE I
Number of Shares
Underwriters of Securities to
be Purchased
Salomon Brothers Inc . . . . . . . . . . . . . . . . .
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation . . . . . . . . . . . . . . .
Xxxxxxxx & Co. Inc. . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE II
NUMBER OF
NUMBER OF SHARES OF
SHARES OF OPTION
SECURITIES SECURITIES TO
SELLING STOCKHOLDERS TO BE SOLD BE SOLD
-------------------- ---------- -------------
Xxxx Family Charitable
Remainder Trust 200,000
TCI GCI, Inc. 590,043
Prime Venture I Holdings, L.P. 247,452 345,000
Prime Cable Growth Partners, L.P. 544,395 759,000
Prime Cable Limited Partnership 445,414 621,000
Prime Venture II, L.P. 247,452 345,000
BancBoston Capital, Inc. 257,793
First Chicago Investment
Corporation 233,810
Madison Dearborn Partners V 23,982
Xxxx Xxxx Xxxxx Incorporated 2,923,077
General Communication, Inc.
Employee Stock Purchase Plan 682,263
Xxxxxxx X. Xxxxxx 35,000
Ameritas Life Insurance Corp. 4,784
KLANS Associates 1,557
Pillsbury Master Retirement Trust 14,333
Tribune Company Master Trust
for Pension Plans 7,107
K.D.F., a Massachusetts general
partnership 17,968
Fidelity Pension Trust 7,167
Commerce Banc Shares, Inc. 10,802
Xxxxxx X. Xxxxxx 144
Equitable Life Assurance
Society of the United States 9,561
Xxxxxx Xxxxx 60,000
Xxxxx Xxxxx 106,153
Xxxxxx Xxxxx 129,743
TOTAL 6,800,000 2,070,000
--------- ---------
SCHEDULE III
SUBSIDIARIES OF THE COMPANY
GCI, Inc., an Alaska corporation
GCI Holdings, Inc., an Alaska corporation
GCI Communication Corp., an Alaska corporation
GCI Communication Services, Inc., an Alaska corporation
GCI Leasing Co., Inc., an Alaska corporation
GCI Cable, Inc., an Alaska corporation
GCI Cable/Fairbanks, Inc., an Alaska corporation
Prime Cable of Alaska, LP, a Delaware limited partnership
GCI Cable/Juneau, Inc., an Alaska corporation
GCI Transport Company, an Alaska corporation
GCI Satellite Company, an Alaska corporation
GCI Fiber Company, an Alaska corporation
Fiber Hold Company, an Alaska corporation
Alaska United Partnership, an Alaska partnership
