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EXHIBIT 1.1
_________ Shares
AMERICAN COMMUNICATIONS SERVICES, INC.
Common Stock
UNDERWRITING AGREEMENT
________, 1997
Alex. Xxxxx & Sons Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
As representatives of the
several underwriters named
in Schedule I hereto
c/o Alex. Xxxxx & Sons Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
American Communications Services, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell _________ shares of its common stock,
par value $.01 per share (the "Firm Shares"), to the several underwriters named
in Schedule I hereto (the "Underwriters"). The Company also proposes to issue
and sell to the several Underwriters not more than _______ shares of its common
stock, par value $.01 per share (the "Additional Shares"), if requested by the
Underwriters as provided in Section 2 hereof. The Firm Shares and the
Additional Shares are collectively called the "Shares." The shares of common
stock of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "Common Stock."
1. Registration Statement and Prospectus. The Company has prepared
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively called the
"Act"), a registration statement on Form SB-2 (Registration No. 333-_____)
including a prospectus relating to the Shares, which may be amended. The
registration statement as amended at the time when it becomes effective,
including a registration statement (if any) filed pursuant to Rule 462(b) under
the Act increasing the size of the offering registered under the Act and
information (if any)
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deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under that Act, is hereinafter referred to as the
"Registration Statement"; and the prospectus in the form first used to confirm
sales of Shares is hereinafter referred as the "Prospectus."
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell, and each
Underwriter agrees, severally and not jointly, to purchase from the Company at
the purchase price per share of $_____ (the "Purchase Price"), the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule I
hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell the Additional Shares and the Underwriters shall have the right to
purchase, severally and not jointly, up to _______ Additional Shares from the
Company at the Purchase Price. Additional Shares may be purchased solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. The Underwriters may exercise their right to purchase
Additional Shares in whole or in part from time to time by giving written
notice thereof to the Company within 30 days after the date of this Agreement.
You shall give any such notice on behalf of the Underwriters and such notice
shall specify the aggregate number of Additional Shares to be purchased
pursuant to such exercise and the date for payment and delivery thereof. The
date specified in any such notice shall be a business day (i) no earlier than
the Closing Date (as hereinafter defined), (ii) no later than the ten business
days after such notice has been given and (iii) no earlier than two business
days after such notice has been given. If any Additional Shares are to be
purchased, each Underwriter, severally and not jointly, agrees to purchase from
the Company the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as you may determine) which bears the same
proportion to the total number of Additional Shares to be purchased from the
Company as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I bears to the total number of Firm Shares.
The Company hereby agrees and the Company shall, concurrently with
the execution of this Agreement, deliver an agreement (a "Lock-up Agreement")
executed by (i) each of the directors and executive officers of the Company,
and (ii) each principal stockholder of the Company listed on Annex I hereto,
pursuant to which each such person agrees not to, directly or
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indirectly, offer, sell, contract to sell, grant any option to purchase, or
otherwise dispose of any Common Stock or any securities convertible into or
exercisable or exchangeable for shares of Common Stock or in any other manner
transfer all or a portion of the economic consequences associated with the
ownership of any such Common Stock, for a period of 180 days after the date of
the Prospectus without the prior written consent of Alex. Xxxxx & Sons
Incorporated ("Alex. Xxxxx"); provided, however, that during such 180-day
period each person delivering an agreement described in this sentence may
surrender shares of Preferred Stock (as defined in Section 6(n) below) owned by
such person to the Company for conversion into shares of Common Stock (in the
manner contemplated by the Prospectus); provided further, that the Lock-up
Agreement executed by each of The Xxxx Alternative Income Fund, L.P., ING
Equity Partners, L.P., Apex Investment Fund I, L.P., Apex Investment Fund II,
L.P., Argentum Capital Partners, L.P., Environmental Private Equity Fund II,
L.P. and the Productivity Fund II, L.P. (collectively, the "Principal
Investors") shall provide that (i) a Principal Investor may exercise demand
registration rights pursuant to the terms of that certain Registration Rights
Agreement dated as of June 26, 1995 (the "Registration Rights Agreement") by
and among the Company and the entities who are signatories thereto (including
the Principal Investors) at any time so that the Company will be obligated to
file a registration statement pursuant to such demand no earlier than on the
150th day after the date of this Agreement, provided that such Principal
Investor may not offer or sell any shares of the Com- pany's Common Stock
pursuant to any registration statement that is filed pursuant to the exercise
of such demand registration rights until the 181st day after the date of this
Agreement; (ii) if the Company files a "shelf" registration statement pursuant
to Rule 415 under the Act for the benefit of any stockholder of the Company
prior to the 180th day after the date of this Agreement, a Principal Investor
may exercise its piggy-back registration rights pursuant to the terms of the
Registration Rights Agreement at any time so that the Company will be obligated
to appropriately include, by amendment or otherwise, the shares such Principal
Investor wishes to have included in such "shelf" registration statement no
earlier than on the 150th day after the date of this Agreement, provided that
such Principal Investor may not offer or sell any shares of Common Stock
pursuant to such "shelf" registration statement until the 181st day after the
date of this Agreement; and (iii) if the Company is required to file and does
file a registration statement under the Act for the benefit of any stockholder
of the Company with respect to an underwritten offering of shares of Common
Stock prior to the 180th day after the date of this Agreement, a Principal
Investor may exercise its piggy-back registration rights pursuant to the terms
of the Registration Rights Agreement in respect of, and have shares of
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its Common Stock included on, such registration statement commencing on the
150th day after the date of this Agreement, provided that the inclusion of any
Principal Investor's shares of Common Stock on such registration statement
shall be subject to any ability of the managing underwriter of such
underwritten offering to "cut back" or otherwise restrict the inclusion of any
Principal Investor's shares of Common Stock on such registration statement
shall be subject to the shares of Common Stock that such Principal Investor so
requested be included on such registration statement; and provided further,
that the Lock-up Agreements executed by each of the Principal Investors shall
provide that each of the Principal Investors' obligations thereunder shall be
released to the extent, but only to the extent, that Alex. Xxxxx releases any
other Principal Investor from any obligation under the Lock-up Agreement
executed by such Principal Investor. Notwithstanding the foregoing, during such
180-day lock-up period, the Company may (i) issue and sell the Shares to the
Underwriters in accordance with this Agreement, (ii) issue an aggregate of
17,377,278 shares of Common Stock upon the conversion of the Company's
outstanding shares of its Preferred Stock (as described in the Prospectus),
(iii) issue shares of Common Stock upon the exercise of stock options granted
under the Com- pany's 1994 Stock Option Plan and otherwise in the ordinary
course of business consistent with past practice as compensation for employees
or consultants of the Company, (iv) grant stock options under the Company's
1994 Stock Option Plan and otherwise in the ordinary course of business
consistent with past practice as compensation for employees or consultants of
the Company, (v) issue shares of Common Stock upon the exercise of currently
outstanding warrants and options (in the aggregate amounts set forth in the
Prospectus) and (vi) issue shares of Common Stock or grant options or warrants
exercisable into shares of Common Stock, in connection with strategic
alliances, joint ventures or other business combinations not prohibited by the
terms of the Indentures (as that term is defined in the Prospectus)
(collectively "Permitted Combinations"), provided that no shares shall be
issued as contemplated by this clause (vi) unless such shares are made subject
to the 180-day lock-up provisions described above. The Company shall,
concurrently with the execution of this Agreement, deliver an agreement
executed by each stockholder of the Company listed on Annex II hereto, pursuant
to which each such person agrees not to, directly or indirectly, offer, sell,
contract to sell, grant any option to purchase, or otherwise dispose of any
Common Stock or any securities convertible into or exer- cisable or
exchangeable for shares of Common Stock or in any other manner transfer all or
a portion of the economic consequences associated with the ownership of any
Common Stock, for a period of 90 days after the date of the Prospectus without
the prior written consent of Alex. Xxxxx; provided, however, that
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during such 90-day period each such person may surrender shares of Preferred
Stock owned by such person to the Company for conversion into shares of Common
Stock (in the manner contemplated by the Prospectus).
3. TERMS OF PUBLIC OFFERING. The Company is advised by you that the
Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the effective date of the Registration Statement as
in your judgment is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus. The Representatives may from time to time
thereafter change the public offering price and other selling terms. To the
extent, if at all, that any Additional Shares are purchased pursuant to Section
2 hereof, the Underwriters will offer them to the public on the foregoing
terms.
It is understood by all parties that approximately _______ Firm
Shares ("Directed Shares") will initially be reserved by the Underwriters for
offer and sale at the public offering price and upon the terms set forth in the
Prospectus to directors, officers, employees and other persons associated with
the Company (the "Directed Share Purchasers") who have heretofore delivered to
Alex. Xxxxx indications of interest to purchase Directed Shares in form
satisfactory to Alex. Xxxxx, and that any allocation of such Directed Shares
among the Directed Share Purchasers shall be made in accordance with timely
directions received by Alex. Xxxxx from the Company; provided, however, that
under no circumstances will Alex. Xxxxx or any other Underwriter be liable to
the Company or to any of the Directed Share Purchasers for any action taken or
omitted in good faith in connection with transactions effected with the
Directed Share Purchasers. It is further understood that any such Directed
Shares that are not purchased by Directed Share Purchasers will be offered by
the Underwriters for sale to the public upon the terms set forth in the
Prospectus.
It is further understood that you will act as the Representatives for
the Underwriters in the offering and sale of the Shares in accordance with a
[Master Agreement Among Underwriters] entered into by you and the several other
Underwriters.
4. DELIVERY AND PAYMENT. Delivery to the Underwriters of and payment
for the Firm Shares shall be made in accordance with Rule 15c6-1 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), at 10:00
A.M., New York City time, on the third or fourth business day following the
date of the public offering unless otherwise permitted by the Commission
pursuant to Rule 15c6-1 under the Exchange Act (the "Closing Date")
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at the offices of Piper & Marbury L.L.P., 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000. The Closing Date and the location of delivery of and the form
of payment for the Firm Shares may be varied by agreement between you and the
Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the offices of Piper &
Marbury L.L.P., 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, at 10:00
A.M., New York City time, on the date specified in the applicable exercise
notice given by you pursuant to Section 2 (an "Option Closing Date"). Any such
Option Closing Date and the location of delivery of and the form of payment for
such Additional Shares may be varied by agreement between you and the Company.
Certificates for the Shares shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date or an Option Closing Date, as the
case may be. Such certificates shall be made available to you for inspection
not later than 9:30 A.M., New York City time, on the business day next
preceding the Closing Date or the applicable Option Closing Date, as the case
may be. Certificates in definitive form evidencing the Shares shall be
delivered to you on the Closing Date or the applicable Option Closing Date, as
the case may be, with any transfer taxes thereon duly paid by the Company, for
the respective accounts of the several Underwriters, against payment of the
Purchase Price therefor by wire or certified or official bank checks payable in
Federal funds to the order of the Company.
5. AGREEMENTS OF THE COMPANY. The Company agrees with
you:
(a) To use its best efforts to cause the Registration Statement to
become effective at the earliest possible time.
(b) To advise you promptly and, if requested by you, to confirm
such advice in writing, (i) when the Registration Statement has become
effective and when any post-effective amendment to it becomes
effective, (ii) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus
or for additional information, (iii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction, or the initiation of any
proceeding for such purposes, and (iv) of the happening of any event
during the period referred to in paragraph (e) below which makes any
statement of a material
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fact made in the Registration Statement or the Prospectus untrue or
which requires the making of any additions to or changes in the
Registration Statement or the Prospectus in order to make the
statements therein not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, the Company will make every reasonable effort to obtain the
withdrawal or lifting of such order at the earliest possible time.
(c) To furnish to you, without charge, four signed copies of the
Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you and
each Underwriter designated by you such number of conformed copies of
the Registration Statement as so filed and of each amendment to it,
without exhibits, as you may reasonably request.
(d) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective,
or to make any amendment or supplement to the Prospectus of which you
shall not previously have been advised or to which you shall
reasonably object; and to prepare and file with the Commission,
promptly upon your reasonable request, any amendment to the
Registration Statement or supplement to the Prospectus which may be
necessary or advisable in connection with the distribution of the
Shares by you, and to use its best efforts to cause the same to become
promptly effective.
(e) Promptly after the Registration Statement becomes effective,
and from time to time thereafter for such period as in the opinion of
counsel for the Underwriters a prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, to
furnish to each Underwriter and dealer as many copies of the
Prospectus (and of any amendment or supplement to the Prospectus) as
such Underwriter or dealer may reasonably request.
(f) If during the period specified in paragraph (e) any event
shall occur as a result of which, in the opinion of counsel for the
Underwriters it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of
the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the
Prospectus to comply with any law, forthwith to prepare and file with
the Commission an appropriate amendment or supplement to the
Prospectus so that the statements in the Prospectus, as so
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amended or supplemented, will not in the light of the circumstances
when it is so delivered, be misleading, or so that the Prospectus will
comply with law, and to furnish to each Underwriter and to such
dealers as you shall specify, such number of copies thereof as such
Underwriter or dealers may reasonably request.
(g) Prior to any public offering of the Shares, to cooperate with
you and counsel for the Underwriters in connection with the
registration or qualification of the Shares for offer and sale by the
several Underwriters and by dealers under the state securities or Blue
Sky laws of such jurisdictions as you may request, to continue such
qualification in effect so long as required for distribution of the
Shares and to file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification; provided, however, that the Company shall not be
required to qualify to do business as a foreign corporation in any
such jurisdiction in connection with such registration or
qualification.
(h) To mail and make generally available to its stockholders as
soon as reasonably practicable an earnings statement covering a period
of at least twelve months after the effective date of the Registration
Statement (but in no event commencing later than 90 days after such
date) which shall satisfy the provisions of Section 11(a) of and Rule
158 under the Act, and to advise you in writing when such statement
has been so made available.
(i) During the period of five years after the date of this
Agreement, (i) to mail as soon as reasonably practicable after the end
of each fiscal year to the record holders of its Common Stock a
financial report of the Company and its subsidiaries on a consolidated
basis (and a similar financial report of all unconsolidated
subsidiaries, if any), all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
stockholders' equity as of the end of and for such fiscal year,
together with comparable information as of the end of and for the
preceding year, certified by independent certified public accountants,
and (ii) to mail and make generally available as soon as practicable
after the end of each quarterly period (except for the last quarterly
period of each fiscal year) to such holders, a consolidated balance
sheet, a consolidated statement of operations and a consolidated
statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the end of
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and for such period, and for the period from the beginning of such
year to the close of such quarterly period, together with comparable
information for the corresponding periods of the preceding year.
(j) During the period of five years after the date of this
Agreement, for each quarter for which the Company prepares and
disseminates unaudited financial statements, to have such financial
statements reviewed by the Company's independent accountants in
accordance with a SAS 71.
(k) During the period of five years after the date of this
Agreement, to furnish to you as soon as available a copy of each
report or other publicly available information of the Company mailed
to the holders of Common Stock or filed with the Commission and such
other publicly available information concerning the Company and its
subsidiaries as you may reasonably request.
(l) To pay all costs, expenses, fees and taxes incident to the
performance of its obligations under this Agreement, including those
in connection with (i) the preparation, printing, filing and
distribution under the Act of the Registration Statement (including
financial statements and exhibits), each preliminary prospectus and
all amendments and supplements to any of them prior to or during the
period specified in paragraph (e) of this Section 5, (ii) the printing
and delivery of the Prospectus and all amendments or supplements to it
during the period specified in paragraph (e) of this Section 5, (iii)
the issuance, transfer and delivery of the Shares to the Underwriters,
including, any transfer or taxes payable thereon, (iv) the printing
and delivery of this Agreement, the Preliminary and Supplemental Blue
Sky Memoranda and all other agreements, memoranda, correspondence and
other documents printed and delivered in connection with the offering
of the Shares (including in each case any disbursements of counsel for
the Underwriters relating to such printing and delivery), (v) the
registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of the several states (including in
each case the fees and disbursements of counsel for the Underwriters
relating to such registration or qualification and memoranda relating
thereto), (vi) filings and clearance with the National Association of
Securities Dealers, Inc. (the "NASD") in connection with the offering,
(vii) the listing of the Shares on the Nasdaq National Market, (viii)
furnishing such copies of the Registration Statement, the Prospectus
and all amendments and supplements thereto as may be requested for use
in connection with the
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offering or sale of the Shares by the Underwriters or by dealers to
whom Shares may be sold, and (ix) the cost and charges of any transfer
agent and registrar for the Shares.
(m) To use its best efforts to maintain the inclusion of the
Common Stock in the Nasdaq National Market (or on a national
securities exchange) for a period of five years after the effective
date of the Registration Statement.
(n) To apply the proceeds from the sale of the Shares in the
manner set forth under "Use of Proceeds" in the Prospectus.
(o) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment
company" or a company "controlled" by an "investment company" within
the meaning of such terms under the Investment Company Act of 1940.
(p) To comply with all provisions of all undertakings
contained in the Registration Statement.
(q) Prior to the Closing Date and, if applicable, until the
Option Closing Date, to issue no press release or other communication
or hold any press conference with respect to the offering of the
Shares, or the financial condition, results of operations, operations,
business properties, assets, liabilities, or prospects of the Company,
without your prior consent, which consent shall not be unreasonably
withheld, unless the Company shall conclude upon the advise of counsel
that such press release or other communication should be issued at a
time prior to obtaining such consent.
(r) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by
the Company prior to the Closing Date or any Option Closing Date, as
the case may be, and to satisfy all conditions precedent to the
delivery of the Shares.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Underwriter that:
(a) A registration statement on Form SB-2 (File No.
333-_______) with respect to the Shares has been carefully prepared by
the Company in conformity with the requirements of the Securities Act
of 1933, as amended (the
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"Act"), and the Rules and Regulations (the "Rules and Regulations") of
the Securities and Exchange Commission (the "Commission") thereunder
and has been filed with the Commission. Copies of such registration
statement, including any amendments thereto, the preliminary
prospectuses (meeting the requirements of the Rules and Regulations)
contained therein and the exhibits, financial statements and
schedules, as finally amended and revised, have heretofore been
delivered by the Company to you.
(b) The Company meets the requirements for the use of a
Registration Statement on Form SB-2 under the Act. The Registration
Statement has become effective; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the
Commission.
(c) (i) Each part of the Registration Statement, when such part
became effective, did not contain and each such part, as amended or
supplemented, if applicable, will not contain any 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,
(ii) the Registration Statement and the Prospectus comply and, as
amended or supplemented, if applicable, will comply in all material
respects with the Act and (iii) the Prospectus does not contain and,
as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that
the representations and warranties set forth in this paragraph (b) do
not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information relating to any Underwriter and
the plan of distribution of the Shares by the Underwriters furnished
to the Company in writing on your behalf by Alex. Xxxxx expressly for
use therein.
(d) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Act, and each Registration
Statement filed pursuant to Rule 462(b) under the Act, if any,
complied when so filed in all material respects with the Act; and did
not contain an untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading, except that the
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representations and warranties set forth in this paragraph (c) do not
apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter and the
plan of distribution of the Shares by the Underwriters furnished to
the Company in writing on your behalf by Alex. Xxxxx expressly for use
therein.
(e) Each contract, agreement, instrument, lease, license or other
item required to be described in the Registration Statement or the
Prospectus or filed as an exhibit to the Registration Statement has
been so described or filed (or incorporated by reference therein), as
the case may be.
(f) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and whose
separate report with respect to the audited consolidated financial
statements and schedules for the fiscal years ended June 30, 1995 and
June 30, 1996 appears in the Prospectus, are independent public
accountants with respect to the Company, as required by and within the
meaning of the Act.
(g) The consolidated financial statements of the Company and its
consolidated subsidiaries included in the Registration Statement or
any preliminary prospectus, or to be included in the Prospectus
present fairly the consolidated financial position, results of
operations and charges in financial position of the Company and its
consolidated subsidiaries and the other information purported to be
shown therein at the respective dates and for the respective periods
to which they apply. The foregoing financial statements and related
schedules and notes have been prepared in accordance with generally
accepted accounting principles as in effect in the United States ("US
GAAP") consistently applied throughout the periods involved, except as
disclosed therein, and are, in all material respects, in accordance
with the books and records of the Company and its consolidated
subsidiaries. The summary and selected financial information included
in the Registration Statement and any preliminary prospectus, and to
be included in the Prospectus (other than information determined based
upon EBITDA (as defined below) and capital expenditure information),
has been fairly extracted from the audited consolidated financial
statements of the Company and its consolidated subsidiaries (in the
case of the financial information at or for the three months ended
September 30, 1995 and September 30, 1996, from the unaudited
condensed consolidated financial statements of the Company and its
consolidated subsidiaries)
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and fairly present, on the basis stated in the Registration Statement,
any preliminary prospectus or the Prospectus, the information included
therein. The pro forma financial statements and other pro forma
financial information included in the Registration Statement and the
Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements, have been properly compiled
on the pro forma bases described therein, and, in the opinion of the
Company, the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions or circumstances referred to therein.
(h) The financial information included in the Registration
Statement, any preliminary prospectus or the Prospectus that is based
upon (i) net income (loss) before net interest, income taxes,
depreciation and amortization ("EBITDA") and (ii) capital expenditures
fairly present, on the basis stated in the Registration Statement, any
preliminary prospectus or the Prospectus, the information included
therein.
(i) Subsequent to the respective dates as of which information is
given in the Registration Statement, except as set forth in the
Registration Statement, there has not been any material adverse change
in the business, properties, operations, condition (financial or
other) or results of operations of the Company and the subsidiaries
(as defined below) taken as a whole, whether or not arising from
transactions in the ordinary course of business, and since the date of
the latest balance sheet of the Company included in the Registration
Statement, and except as contemplated by the Registration Statement or
as may be contemplated by the Prospectus, (i) neither the Company nor
any subsidiary (A) has incurred or undertaken any liabilities or
obligations, direct or contingent, that are, individually or in the
aggregate, material to the Company and the subsidiaries taken as a
whole, or (B) entered into any transaction not in the ordinary course
of business that is material to the Company and the subsidiaries taken
as a whole; (ii) the Company has not declared or paid any dividend on
or made any distribution of or with respect to any shares of its
capital stock or redeemed, purchased or otherwise acquired or agreed
to redeem, purchase or otherwise acquire any shares of its or its
subsidiaries' capital stock; and (iii) there has not been (A) any
change in the capital stock of the Company or any subsidiary or (B)
any issuance of options, warrants, convertible securities or other
rights to purchase capital
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stock of the Company (other than the grant of options pursuant to the
Company's 1994 Stock Option Plan in the ordinary course) or any
subsidiary or otherwise as compensation to employees or consultants of
the Company in the ordinary course of business consistent with past
practice. As used in this Agreement, the term "subsidiary" means any
corporation, partnership, joint venture, association, company,
business trust or other entity in which the Company, directly or
indirectly, (i) beneficially owns or controls a majority of the
outstanding voting securities having by the terms thereof ordinary
voting power to elect a majority of the board of directors (or other
body fulfilling a substantially similar function) of such entity
(irrespective of whether or not at the time any class or classes of
such voting securities shall have or might have voting power by reason
of the happening of any contingency) or (ii) has the authority or
ability to control the policies of such entity (including, but without
limitation thereto, any partnership of which the Company or a
subsidiary is a general partner or owns or has the right to obtain a
majority of limited partnership interests and any joint venture in
which the Company or a subsidiary has liability similar to the
liability of a general partner of a partnership or owns or has the
right to obtain a majority of the joint venture interests).
(j) The Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement
and to issue, sell and deliver the Shares in accordance with the terms
and conditions hereof, and has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Registration Rights Indemnification Agreement (as defined below). This
Agreement and the Registration Rights Indemnification Agreement have
been duly and validly authorized, executed and delivered by the
Company and are legal and binding obligations of the Company,
enforceable against the Company in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity),
and except insofar as rights to indemnification and contribution
contained therein may be limited by federal or state securities laws
or related public policy. As used in this Agreement, the terms
"Registration Rights Indemnification Agreement" means that certain
indemnification agreement of even date herewith be-
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tween the Company, on the one hand, and Alex. Xxxxx and the other
Underwriters, on the other hand, pursuant to which the Company, among
other things, will agree to hold you and the Underwriters harmless
against certain matters in connection with the Registration Rights (as
such term is defined in Section 6(v) hereof).
(k) The Company's execution and delivery of, and its performance
of its obligations under, this Agreement and the consummation of the
transactions contemplated hereby will not (i) conflict with or result
in a breach of any of the terms and provisions of, or constitute a
default under (or an event that with notice or lapse of time, or both,
would constitute a default under) or require approval or consent
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any
subsidiary pursuant to the terms of, any agreement (other than
agreements to which the Company is a party that gives the other party
thereto Registration Rights (as such term is hereinafter defined in
this Agreement) (collectively, the "Registration Rights Agreements")),
contract, indenture, mortgage, lease, license, arrangement or
understanding to which the Company or a subsidiary is a party, or to
which any of its properties is subject, that is material to the
Company and the subsidiaries taken as a whole (hereafter,
collectively, "Material Contracts"), or any governmental franchise,
license, permit or authorization heretofore issued to the Company or
any subsidiary that is material to the Company and the subsidiaries
taken as a whole (hereafter, collectively, "Material Permits"), (ii)
violate or conflict with any provision of the certificate of
incorporation, by-laws or similar governing instruments of the Company
or any subsidiary or (iii) violate or conflict with any judgment,
decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction over the
Company or any subsidiary or any of its respective properties or
assets, except for those violations or conflicts, that, individually
or in the aggregate, would not have a material adverse effect on the
business, prospects, financial condition or results of operations of
the Company and the subsidiaries taken as a whole (hereafter, a
"Material Adverse Effect").
(l) No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court or any
public, governmental or regulatory agency or body having jurisdiction
over the Company or any subsidiary or any of its respective properties
or assets is required for the Company's execution and delivery of, and
its
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performance of its obligations under, this Agreement, and the
consummation of the transactions contemplated thereby, except the
registration of the Shares under the Act and the Exchange Act, the
authorization of the Shares for inclusion on the Nasdaq National
Market and such filings and registrations as may be required under
state securities or "Blue Sky" laws in connection with the purchase
and distribution of the Shares by the Underwriters.
(m) All of the outstanding shares of capital stock of the Company
and all of the outstanding shares of capital stock (or similar
interests) of each of the subsidiaries have been duly and validly
authorized and issued, are fully paid and nonassessable and were not
issued in violation of any preemptive rights. The Company owns
directly or indirectly such percentage of the outstanding capital
stock (or similar interests) of each of its subsidiaries as is set
forth opposite the name of such subsidiary in Schedule II hereto, free
and clear of all claims, liens, security interests, pledges, charges,
encumbrances, stockholders agreements and voting trusts, except as
otherwise described in said Schedule II.
(n) The Shares have been duly authorized and, when issued,
delivered and sold in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable, and will not
have been issued in violation of any preemptive rights, and the
Underwriters will receive valid title to those of the Shares to be
purchased by them from the Company, free and clear of all liens,
security interests, pledges, charges, encumbrances, stockholders'
agreements and voting trusts. The Company has, as of the date hereof,
and will have, as of the Closing Date and the Option Closing Date, if
any, an authorized and outstanding capitalization as set forth under
the caption "Capitalization" in the Registration Statement and as
shall be set forth in the Prospectus, both on a historical basis and
as adjusted to give effect to (i) the offering of the Shares, (ii) the
conversion of the Company's 9% Series A-1 Convertible Preferred Stock,
par value $1.00 per share (the "Series A Preferred Stock"), 9% Series
B-1 Convertible Preferred Stock, par value $1.00 per share (the
"Series B-1 Preferred Stock"), 9% Series B-2 Convertible Preferred
Stock, par value $1.00 per share (the "Series B-2 Preferred Stock"),
9% Series B-3 Convertible Preferred Stock, par value $1.00 per share
(the "Series B-3 Preferred Stock"), and 9% Series B-4 Convertible
Preferred Stock, par value $1.00 per share (the "Series B-4 Preferred
Stock", and collectively with the Series A Preferred Stock, the Series
B-1
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Preferred Stock, the Series B-2 Preferred Stock and the Series B-3
Preferred Stock, the "Preferred Stock"), into an aggregate of
17,377,264 shares of Common Stock, and (iii) the acquisition of
Cybergate, Inc. as described in the Prospectus.
(o) At the Closing, the Company's capital stock will conform to
the descriptions thereof set forth in the Registration Statement and
as shall be set forth in the Prospectus.
(p) There is no commitment, plan or arrangement to issue, and no
outstanding option, warrant or other right calling for the issuance
of, any shares of capital stock (or similar interests) of the Company
or of any subsidiary or any security or other instrument that by its
terms is convertible into or exercisable or exchangeable for capital
stock (or similar interests) of the Company or such subsidiary, except
as described in the Registration Statement and the Prospectus or as
shall be granted as compensation for employees or consultants of the
Company in the ordinary course of business consistent with past
practice.
(q) The Company has no subsidiaries other than those listed in
Schedule II hereto. Each of the Company and the subsidiaries has been
duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdictions of incorporation. Each of
the Company and the subsidiaries is duly qualified and in good
standing as a foreign corporation in each jurisdiction in which the
character or location of its properties (owned, leased or licensed) or
the nature or conduct of its business makes such qualification
necessary, except for those failures to be so qualified or in good
standing that will not in the aggregate have a Material Adverse
Effect.
(r) Each of the Company and the subsidiaries has all requisite
corporate power and authority, and all necessary consents, approvals,
authorizations, orders, registrations, filings, qualifications,
licenses (including, without limitation, all material licenses from
the Federal Communications Commission ("FCC") and state, local or
other governmental or regulatory authorities), and permits of and from
all public, regulatory or governmental agencies and bodies, to own,
lease and operate its properties and conduct its business as now being
conducted and as described in the Registration Statement and as shall
be described in the Prospectus (except for those the absence of which,
individually or in the aggregate, would not have a Material
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18
Adverse Effect), and no such consent, approval, authorization, order,
registration, qualification, license or permit contains a materially
burdensome restriction that is not adequately disclosed in the
Registration Statement and the Prospectus. Neither the Company nor any
subsidiary has received any notice of proceedings relating to the
revocation or materially adverse modification of any such consents,
approvals, authorizations, orders, registrations, filings,
qualifications, licenses or permits. To the best of the Company's
knowledge, the descriptions in the Registration Statement and to be in
the Prospectus of federal, state or local statutes, laws, ordinances
and regulations governing the Company's and the subsidiaries'
respective businesses, properties or assets, including any proposed
amendments or additions to any such statutes, laws, ordinances or
regulations, fairly present the information required to be shown
therein.
(s) Except with respect to the Registration Rights Agreements
neither the Company nor any subsidiary, nor to the best knowledge of
the Company, any other party, is in violation or breach of, or in
default under (nor has an event occurred that with notice, lapse of
time or both, would constitute a default under), any of the contracts
listed on Annex III hereto (collectively, the "Listed Contracts"), and
each of the Listed Contracts is in full force and effect, and is the
legal, valid, and binding obligation of the Company or such
subsidiary, as the case may be, and (subject to applicable bankruptcy,
insolvency, and other laws affecting the enforceability of creditors'
rights generally) is enforceable as to the Company or such subsidiary,
as the case may be, in accordance with its terms. Neither the Company
nor any subsidiary is in violation of its certificate of
incorporation, by-laws or similar governing instrument. With the
exception of the Listed Contracts, which may or may not fall within
the definition of Material Contracts, neither the Company nor any
subsidiary is party to any other Material Contract.
(t) Except as described in the Registration Statement and as
shall be described in the Prospectus, there is no litigation,
arbitration, claim, governmental or other proceeding, complaint or
investigation pending or, to the best knowledge of the Company,
threatened with respect to the Company or any subsidiary, or any of
its respective operations, businesses, properties or assets, that,
individually or in the aggregate, might reasonably be expected to have
a Material Adverse Effect. Neither the Company nor any subsidiary is,
or, to the best knowledge of the Company, with
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19
the giving of notice or lapse of time or both would be, in violation
of or non-compliance with the requirements of any Material Permit or
the provisions of any law, rule, regulation, order, judgment or
decree, including, but without limitation thereto, any applicable
federal, state and local laws and regulations relating to (i) zoning,
land use, protection of the environment, human health and safety or
hazardous or toxic substances, wastes, pollutants or contaminants and
(ii) employee or occupational safety, discrimination in hiring,
promotion or pay of employees, employee hours and wages or employee
benefits, except as described in the Registration Statement and as
shall be described in the Prospectus or for such violations or
failures of compliance that, individually or in the aggregate, would
not have a Material Adverse Effect.
(u) Neither the Company nor any subsidiary owns any real
property. Except as described in the Registration Statement and as
shall be described in the Prospectus, the Company and each subsidiary
have (i) good and marketable title to all personal properties owned by
them, free and clear of all liens, security interests, pledges,
charges, encumbrances, and mortgages, and (ii) valid, subsisting and
enforceable, and enjoy peaceful and undisturbed possession under,
leases or licenses for all real and personal properties leased or
licensed by them, including all rights-of-way, conduit, pole
attachment, service and fiber leases and agreements, in each case,
subject in each case to such exceptions as, individually or in the
aggregate, do not have and are not reasonably likely to have a
Material Adverse Effect. No real or personal property, rights-of-way,
conduits, pole attachments or fiber leased, licensed or used by the
Company or by a subsidiary lies in an area that is, or to the best
knowledge of the Company will be, subject to zoning, use, or building
code restrictions that would prohibit, and no state of facts relating
to the actions or in- action of another person or entity or his, her
or its ownership, leasing, licensing or use of any such real or
personal property, rights-of-way, conduits, pole attachments or fiber
exists that would prevent, the continued effective leasing, licensing
or use of such real or personal property, rights-of-way, conduits,
pole attachments or fiber in the business of the Company or such
subsidiary as presently conducted, subject to in each case such
exceptions as, individually or in the aggregate, do not have and are
not reasonably likely to have a Material Adverse Effect.
(v) The Company, directly or through one or more of
the subsidiaries, owns or possesses all patents, patent
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20
rights, licenses, inventions, copyrights, trademarks, know-how
(including trade secrets and other unpatented and/or un- patentable
proprietary or confidential information, systems or procedures),
service marks and trade names (collectively, "Intellectual Property")
necessary to conduct its business as now conducted and proposed to be
conducted as disclosed in the Registration Statement and as shall be
disclosed in the Prospectus, except where the failure to own or
possess such Intellectual Property, individually or in the aggregate,
would not have a Material Adverse Effect. Neither the Company nor any
subsidiary has received notice of infringement of or conflict with the
asserted rights of others with respect to any Intellectual Property.
To the best knowledge of the Company, there is no infringement by
others of any Intellectual Property of the Company or any subsidiary
that has had or may in the future reasonably be expected to have a
Materially Adverse Effect.
(w) Except as set forth in the Registration Rights Schedule (as
defined below) and except as disclosed in the Registration Statement
and the Prospectus, no person or entity has the right, by contract or
otherwise, to require registration under the Act of shares of capital
stock or other securities of the Company solely because of the filing
or effectiveness of the Registration Statement and the consummation of
the transactions contemplated by this Agreement (such rights are
hereinafter referred to as "Registration Rights"). The Company has
previously provided to Alex. Xxxxx and counsel for the Underwriters a
schedule, dated as of _______, 1997 (the "Registration Rights
Schedule"), which Registration Rights Schedule sets forth a correct
and complete list of (i) all security holders of the Company who have
Registration Rights; (ii) the number of shares of Common Stock held by
each such security holder (or shares of Common Stock underlying
securities convertible into or exer- cisable or exchangeable for
Common Stock) with respect to which each such security holder has
Registration Rights, and which of such shares of Common Stock are
subject to under- writers' "cut back" rights pursuant to any contract
or agreement pursuant to which such security holder's Registration
Rights were granted; and (iii) the number of shares of Common Stock
held by such security holder (or shares of Common Stock underlying
securities convertible into or exercis- able or exchangeable for
Common Stock) that, with respect to which each such security holder
has Registration Rights as of the date of the Registration Rights
Schedule, are eligible for sale pursuant to Rule 144 under the Act
based upon the holding period of such shares of Common Stock by such
holder (assuming that no actions have been taken by
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21
such holder and that no events have occurred which interrupted such
holding period or commenced a new holding period). On the date of this
Agreement, the Company has delivered to Alex. Xxxxx and counsel for
the Underwriters a letter from Xxxx & Xxxxxxx addressed to the
Underwriters, dated the date of this Agreement (the "Registration
Rights Waiver Letter"), which Registration Rights Waiver Letter sets
forth a correct and complete list of those security holders of the
Company who have and who have not executed waivers of Registration
Rights. Those security holders who have executed waivers of
Registration Rights have legally and effectively waived their
Registration Rights.
(x) Neither the Company nor, to the best knowledge of the
Company, any of its officers, directors or affiliates (as defined in
the Act) has taken or will take, directly or indirectly, prior to the
termination of the offering of the Shares contemplated by this
Agreement, any action designed to stabilize or manipulate the price of
the Common Stock, or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the Common
Stock.
(y) Neither the Company nor any subsidiary is, or intends to
conduct its business in such a manner that it would become, an
"investment company" or a company "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act").
(z) Except as may be set forth in the Prospectus, the Company has
not incurred any liability for a fee, commission, or other
compensation on account of the employment of a broker or finder or
financial advisor or consultant in connection with the transactions
contemplated by this Agreement.
(aa) To the Company's best knowledge, neither the Company nor any
subsidiary, nor any director, officer or employee of the Company or
any subsidiary has, directly or indirectly, used any corporate funds
for unlawful contributions, gifts, entertainment, or other unlawful
expenses relating to political activity; made any unlawful payment to
foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds; violated
any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or made any bribe, rebate, payoff, influence payment,
kickback, or other unlawful payment.
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(bb) The Company and each of the subsidiaries maintain systems of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with US GAAP and to maintain accountability for assets;
(iii) the access to the respective assets of the Company and each
subsidiary, as the case may be, is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(cc) Other than as disclosed in the Registration Statement and as
shall be disclosed in the Prospectus, no labor dispute with the
employees of the Company or any subsidiary exists or, to the best
knowledge of the Company, is imminent that, individually or in the
aggregate, is or is reasonably likely to have a Material Adverse
Effect, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers or
contractors that reasonably can be expected to have a Material Adverse
Effect.
(dd) (i) All United States Federal income tax returns of the
Company and each subsidiary required by law to be filed have been
filed and all taxes shown by such returns or which have otherwise been
assessed and are now due and payable have been paid, except
assessments against which appeals have been or will be promptly taken
and (ii) the Company and the subsidiaries have filed all other tax
returns that are required to have been filed by them pursuant to the
applicable laws of all other jurisdictions, except, as to each of the
foregoing clauses (i) and (ii), insofar as the failure to file such
returns, individually or in the aggregate, would not have a Material
Adverse Effect, and the Company and the subsidiaries have paid all
taxes due pursuant to said returns or pursuant to any assessment
received by the Company or any subsidiary, except for such taxes, if
any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with US GAAP. The charges,
accruals and reserves on the consolidated books of the Company in
respect of any tax liability for any years not finally determined are
adequate to meet any assessments or re-assessments for additional tax
for any years not finally determined, except to the extent of any
inadequacy that would not have a Material Adverse Effect.
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(ee) The Company and each subsidiary is insured by insurers of
recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in
which the Company and the subsidiaries are engaged. The Company has no
reason to believe that it or any subsidiary will not be able to renew
its existing insurance coverage from similar insurers as may be
necessary to continue its business, except as disclosed in the
Registration Statement and as shall be disclosed in the Prospectus.
(ff) Except as disclosed in the Registration Statement and as
shall be disclosed in the Prospectus, there are no business
relationships or related party transactions of the nature described in
Item 404 of Regulation S-B of the Commission involving the Company or
any other persons referred to in such Item 404, except for such
transactions that would be considered immaterial under such Item 404.
(gg) The Company has filed in a timely manner (or pursuant to an
extension obtained in accordance with applicable law) each document or
report required to be filed by it pursuant to the Exchange Act, and
the rules and regulations thereunder; each such document or report at
the time it was filed conformed in all material respects to the
requirements of the Exchange Act and the rules and regulations there-
under; and none of such documents or reports contained an untrue
statement of any material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(hh) The Company has not distributed and will not distribute any
prospectus or other written offering material in connection with the
offering of the Shares contemplated hereby other than any preliminary
prospectus, the Prospectus or other materials permitted by the Act and
the Regulations to be distributed by the Company.
(ii) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages, liabilities and judgments caused
by any untrue statement
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24
or alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriters furnished in writing to the Company by or on behalf of any
Underwriter or relating to the plan of distribution of the Shares by the
Underwriters through you expressly for use therein; provided, however, that the
foregoing indemnity agreement with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages and liabilities and judgements purchased Shares,
or any person controlling such Underwriter, if a copy of the Prospectus (as
then amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Shares to such person, and
if the Prospectus (as so amended and supplemented) would have cured the defect
giving rise to such loss, claim, damage, liability or judgment.
(b) In case any action shall be brought against any Underwriter or
any person controlling such Underwriter, based upon any preliminary prospectus,
the Registration Statement or the Prospectus or any amendment or supplement
thereto and with respect to which indemnity may be sought against the Company,
such Underwriter shall promptly notify the Company in writing and the Company
shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all fees and
expenses. Any Underwriter or any such controlling person shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Underwriter or such controlling person unless (i) the employment of such
counsel shall have been specifically authorized in writing by the Company, (ii)
the Company shall have failed to assume the defense and employ counsel or (iii)
the named parties to any such action (including any im- pleaded parties)
include both such Underwriter or such controlling person and the Company and
such Underwriter or such controlling person shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the Company
24
25
(in which case the Company shall not have the right to assume the defense of
such action on behalf of such Underwriter or such controlling person, it being
understood, however, that the Company shall not, in connection with any one
such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all such Underwriters and controlling
persons, which firm shall be designated in writing by Alex. Xxxxx and that all
such fees and expenses shall be reimbursed as they are incurred). The Company
shall not be liable for any settlement of any such action effected without its
written consent but if settled with the written consent of the Company, the
Company agrees to indemnify and hold harmless any Underwriter and any such
controlling person from and against any loss or liability by reason of such
settlement. Notwithstanding the immediately preceding sentence, if in any case
where the fees and expenses of counsel are at the expense of the indemnifying
party and an indemnified party shall have requested the indemnifying party to
reimburse the indemnified party for such fees and expenses of counsel as
incurred, such indemnifying party agrees that it shall be liable for any
settlement of any action effected without its written consent if (i) such
settlement is entered into more than ten business days after the receipt by
such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall have failed to reimburse the indemnified party in accordance with
such request for reimbursement prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and any person controlling the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter but only
with reference to information relating to such Underwriter and the plan of
distribution of the Shares by the Underwriters furnished to the Company in
writing by or on behalf of such Underwriter expressly for use in the
Registration Statement, the Prospectus or any preliminary prospectus. The
Company acknowledges that the statements set forth in the last paragraph
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26
of the cover page of the Prospectus, the legends concerning stabilization and
passive market making on the inside front cover page of the Prospectus and the
statements set forth under the caption "Underwriting" in the Prospectus
constitute the only information furnished in writing by or on behalf of any
Underwriter expressly for use in the Registration Statement, any preliminary
prospectus and the Prospectus. In case any action shall be brought against the
Company, any of its directors, any such officer or any person controlling the
Company based on the Registration Statement, the Prospectus or any preliminary
prospectus and in respect of which indemnity may be sought against any
Underwriter, the Underwriter shall have the rights and duties given to the
Company (except that if the Company shall have assumed the defense thereof,
such Underwriter shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Underwriter), and the
Company, its directors, any such officers and any person controlling the
Company shall have the rights and duties given to the Underwriter, by Section
7(b) hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Underwriters shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received
by the Company, and the total underwriting discounts and commissions received
by the Underwriters, bear to the total price to the public of the Shares, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Company and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates
to information supplied by the Company or the Underwriters and the
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27
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) 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 in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities or judgments referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, no
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. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7(d) are several in proportion to the
respective number of Shares purchased by each of the Underwriters hereunder and
not joint.
8. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The
obligations of the Underwriters to purchase the Firm Shares under
this Agreement are subject to the satisfaction of each of the
following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the
Closing Date.
(b) The Registration Statement shall have become effective not
later than 5:00 P.M. (and in the case of a Registration Statement
filed under Rule 462(b) of the Act, not later than 10:00 P.M.), New
York City time, on the date of this Agreement or at such later date
and time as you may approve in writing, and at the Closing Date no
stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose
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shall have been commenced or shall be pending before or
contemplated by the Commission.
(c)(i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been
any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, affairs or business prospects, whether
or not arising in the ordinary course of business, of the Company,
from that set forth in the Registration Statement and Prospectus, (ii)
since the date of the latest balance sheet included in the
Registration Statement and the Prospectus there shall not have been
any change, or any development involving a prospective material
adverse change, in the capital stock or in the long-term debt of the
Company, (iii) the Company and its subsidiaries shall have no
liability or obligation, direct or contingent, which is material to
the Company and its subsidiaries, taken as a whole, other than those
disclosed in or contemplated by the Registration Statement and the
Prospectus and (iv) on the Closing Date you shall have received a
certificate dated the Closing Date, signed by Xxxx X. Xxxxx, in his
capacity as the Chief Executive Officer, and by ________________, in
his capacity as Chief Financial Officer of the Company, to the effect
that, as of the Closing Date or the Option Closing Date, as the case
may be, each represents as follows:
A. The Registration Statement has become effective under
the Act and no stop order suspending the effectiveness of the
Registrations Statement has been issued, and no proceedings
for such purpose have been taken or are, to his knowledge,
contemplated by the Commission;
B. The representations and warranties of the
Company contained in Section 6 hereof are true and
correct as of the Closing Date or the Option Closing
Date, as the case may be;
C. All filings required to have been made pur-
suant to Rules 424 or 430A under the Act have been
made;
D. He has carefully examined the Registration
Statement and the Prospectus and, in his opinion, as of
the effective date of the Registration Statement, the
statements contained in the Registration Statement were
true and correct, and such Registration Statement and
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Prospectus did not omit to state a material fact required to
be stated therein or necessary in order to make the
statements therein not misleading, and since the effective
date of the Registration Statement, no event has occurred
which should have been set forth in a supplement to or an
amendment of the Prospectus which has not been so set forth
in such supplement or amendment; and
E. Since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has
not been any material adverse change or any development
involving a prospective material adverse change in or
affecting the condition, financial or otherwise, of the
Company and its Subsidiaries taken as a whole or the
earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects
of the Company and the Subsidiaries taken as a whole, whether
or not arising in the ordinary course of business.
(d) You shall have received on the Closing Date the written
opinion of Xxxxx X. Xxxxxx, Esq., General Counsel for the Company,
dated the Closing Date, addressed to the Underwriters, and in form and
scope satisfactory to counsel for the Underwriters, to the effect
that:
(i) Each of the Company and the subsidiaries listed in
Schedule II to the Underwriting Agreement has all necessary
consents, approvals, authorizations, orders, registrations,
filings, qualifications, licenses (including, without
limitation, all material licenses from the FCC and state,
local or other governmental or regulatory authorities) and
permits of and from all public, regulatory or governmental
agencies and bodies to own, lease and license its respective
properties and conduct its respective business as now being
conducted, except for those the absence of which,
individually or in the aggregate, would not have a Material
Adverse Effect. Neither the Company nor any such subsidiary
(x) has received any notice of proceedings relating to
revocation or materially adverse modification of any such
consents, approvals, authorizations, orders, registrations,
filings, qualifications, licenses or permits, or (y) is
subject to any pending proceeding, complaint or investigation
before any federal, state or local regulatory authority, nor,
to such counsel's knowledge, has any such proceeding,
complaint or investigation been threatened, with re-
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spect to the respective telecommunications businesses
of the Company and the subsidiaries.
(ii) There is no commitment, plan or arrangement to
issue, and no outstanding option, warrant or other right
calling for the issuance of, any shares of capital stock (or
similar interests) of the Company or of any subsidiary or any
security or other instrument that by its terms is convertible
into or exercisable or exchangeable for capital stock (or
similar interests) of the Company or any subsidiary, except
as described in the Registration Statement and the Prospectus
or as shall be granted as compensation for employees or
consultants of the Company in the ordinary course of business
consistent with past practice.
(iii) The Company's execution and delivery of, and its
performance of its obligations under, the Underwriting
Agreement and the consummation of the transactions
contemplated thereby do not and, when such performance is
required pursuant to the terms thereof, will not (A) conflict
with or result in a breach of any of the terms and provisions
of, or constitute a default under (or an event that with
notice or lapse of time, or both, would constitute a default
under) or require approval or consent under, or result in the
creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any subsidiary
pursuant to the terms of, any Listed Contract or any permit
referred to in the opinions of local counsel attached hereto,
or (B) to such counsel's knowledge, violate or conflict with
any judgment, decree, order, statute, rule or regulation of
any court or any public, governmental or regulatory agency or
body having jurisdiction over the Company or any subsidiary
or any of its respective properties or assets, except for
those violations or conflicts that, individually or in the
aggregate, would not have a Material Adverse Effect. To such
counsel's knowledge, the permits referred to in the attached
opinions of local counsel are the only Material Permits.
(iv) To such counsel's knowledge, no consent, approval,
authorization, order, registration, filing, qualification,
license or permit of or with any public, governmental or
regulatory agency or body having jurisdiction over the
Company's or any subsidiary's telecommunications business is
required for the Company's execution and delivery of, and its
performance of its
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obligations under, the Underwriting Agreement, and the
consummation of the transactions contemplated thereby,
including, without limitation, the issuance, sale and
delivery of the Shares.
(v) Insofar as statements in the Prospectus purport to
summarize the nature and status of litigation or the
provisions of statutes, laws, rules, regulations, orders,
judgments or decrees, in either case only those which relate
to the federal, state or local regulation of the respective
telecommunications businesses of the Company and the
subsidiaries, or Permits, such statements fairly summarize
the matters referred to therein in all material respects.
(vi) Except as described in the Prospectus, the Company
and each subsidiary have (i) good and marketable title to all
personal properties owned by them, free and clear of all
liens, security interests, pledges, charges, encumbrances,
and mortgages, and (ii) valid, subsisting and enforceable,
and enjoy peaceful and undisturbed possession under, leases
or licenses for all real and personal properties leased or
licensed by them, including all rights-of-way, conduit, pole
attachment, service and fiber leases and agreements, in each
case, subject in each case to such exceptions as,
individually or in the aggregate, do not have and are not
reasonably likely to have a Material Adverse Effect. No real
or personal property, rights-of-way, conduits, pole
attachments or fiber leased, licensed or used by the Company
or by a subsidiary lies in an area that is, or to the best
knowledge of the Company will be, subject to zoning, use, or
building code restrictions that would prohibit, and no state
of facts relating to the actions or inaction of another
person or entity or his, her or its ownership, leasing,
licensing or use of any such real or personal property,
rights-of-way, conduits, pole attachments or fiber exists
that would prevent, the continued effective leasing,
licensing or use of such real or personal property,
rights-of-way, conduits, pole attachments or fiber in the
business of the Company or such subsidiary as presently
conducted, subject in each case to such exceptions as,
individually or in the aggregate, do not have and are not
reasonably likely to have a Material Adverse Effect. With
respect to the opinion given in the immediately preceding
sentence, such counsel has no reason to believe that the
Company or any subsidiary
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will not be able to conduct its business as the Pro-
spectus indicates is contemplated to be conducted.
(vii) To such counsel's knowledge, neither the Company
nor any subsidiary, nor any other party, is in violation or
breach of, or in default under (nor has an event occurred
that with notice, lapse of time or both, would constitute a
default under), any Material Contract, and each Material
Contract is in full force and effect, and is the legal,
valid, and binding obligation of the Company or such
subsidiary, as the case may be, and (subject to applicable
bankruptcy, insolvency, and other laws affecting the
enforceability of creditors' rights generally) is enforceable
as to the Company or such subsidiary, as the case may be, in
accordance with its terms. Neither the Company nor any
subsidiary is in violation of its certificate of
incorporation, by-laws or similar governing instrument.
In addition, such counsel shall state that she has
participated in conferences with officers and other representatives of
the Company, representatives of the independent certified public
accountants of the Company, representatives of the Underwriters and
counsel for the Underwriters at which the contents of the Registration
Statement, the Prospectus and any amendments thereof or supplements
thereto and related matters were discussed and, although such counsel
has not undertaken to investigate or verify independently and is not
passing upon, and does not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus or any amendments thereof or
supplements thereto (except as to matters referred to in the last
sentence of clause (ii) above), no facts have come to her attention
which lead her to believe that the Registration Statement, on the
effective date thereof (or any post-effective amendment thereof as of
the date of such amendment), contained an untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus, on the date thereof or the date of
such opinion, contained an untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need express no view with respect to the
financial statements and related notes, the financial statement
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schedules and the other financial and accounting data in-
cluded therein).
In rendering such opinion, such counsel (i) may limit her
opinions to the laws of the District of Columbia, the corporate laws
of the State of Delaware and the federal laws of the United States of
America, and (ii) may rely (A) as to matters involving the application
of laws other than the laws of the District of Columbia, the corporate
laws of the State of Delaware and the federal laws of the United
States of America, to the extent such counsel deems proper and to the
extent specified in such opinion letter, if at all, upon a written
opinion or opinions (in form and scope reasonably satisfactory to
counsel for the Underwriters) of other counsel reasonably acceptable
to counsel for the Underwriters, familiar with the applicable laws;
and (B) as to matters of fact, to the extent such counsel may deem
proper, on certificates of responsible officers of the Company and
certificates or other written statements of officers of departments of
various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company and the
subsidiaries. In addition, such counsel may rely as to matters
involving the laws administered by the FCC or involving state
regulatory matters, to the extent such counsel deems proper and to the
extent specified in such opinion letter, if at all, upon a written
opinion of Xxxxxx, Xxxx & Xxxxxx (in substantially the form and scope
set forth in Section 8(g) hereof) or other state and local regulatory
counsel reasonably acceptable to counsel for the Underwriters. The
opinion of such counsel shall specifically state that the opinion of
any such other counsel is in form and scope satisfactory to such
counsel and, in such counsel's opinion, such counsel, you and counsel
for the Underwriters are justified in relying thereon. A copy of the
opinion of any such other counsel shall be delivered to counsel for
the Underwriters.
The opinion of Xxxxx X. Xxxxxx, Esq. described in this
paragraph (d) shall be rendered to you at the request of the Com-
pany and shall so state therein.
(e) You shall have received on the Closing Date the written
opinion of Xxxx & Xxxxxxx, special counsel for the Company, dated the
Closing Date, addressed to the Underwriters, and in form and scope
satisfactory to counsel for the Underwriters, to the effect that:
(i) The authorized capital stock of the Company
as of ________, 1996 consisted of (i) 75,000,000 shares
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34
of common stock, par value $0.01 per share and (ii) _______
shares of preferred stock, par value $1.00 per share. Of such
shares of preferred stock authorized as of ________, 1996,
186,664 shares were designated as 9% Series A-1 Convertible
Preferred Stock, par value $1.00 per share, 100,000 shares
were designated as 9% Series B-1 Convertible Preferred Stock,
par value $1.00 per share, 102,500 shares were designated as
9% Series B-2 Convertible Preferred Stock, par value $1.00
per share, 25,000 shares were designated as 9% Series B-3
Convertible Preferred Stock, par value $1.00 per share, and
50,000 shares were designated as 9% Series B-4 Convertible
Preferred Stock, par value $1.00 per share. The authorized
capital stock of the Company as of the date of this letter
consist of (i) 75,000,000 shares of common stock, par value
$0.01 per share and (ii) 813,336 shares of preferred stock,
par value $1.00 per share. Of such shares of preferred stock
authorized as of the date of this letter, no shares have been
designated as any specific class or series.
(ii) All of the outstanding shares of capital stock of
the Company have been duly and validly authorized and issued,
are fully paid and nonassessable and were not issued in
violation of any preemptive rights.
(iii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations
under the Registration Rights Indemnification Agreement. The
Registration Rights Indemnification Agreement has been duly
and validly authorized, executed and delivered by the
Company. The Registration Rights Indemnification Agreement
constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity),
and except insofar as rights to indemnification contained in
the Registration Rights Indemnification Agreement may be
limited by federal or state securities laws or related public
policy.
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35
(iv) Except as set forth in the Registration Rights
Schedule and except as disclosed in the Registration
Statement and the Prospectus, to such counsel's knowledge, no
person or entity has any Registration Rights. To such
counsel's knowledge, the Registration Rights Schedule sets
forth a correct and complete list, as of the date thereof, of
(i) all security holders of the Company who have Registration
Rights; (ii) the number of shares of Common Stock held by
each such security holder (or shares of Common Stock
underlying securities convertible into or exercisable or
exchangeable for Common Stock) with respect to which each
such security holder has Registration Rights, and which of
such shares of Common Stock are subject to under- writers'
"cut back" rights pursuant to any contract or agreement
pursuant to which such security holder's Registration Rights
were granted; and (iii) the number of shares of Common Stock
held by such security holder (or shares of Common Stock
underlying securities convertible into or exercisable or
exchangeable for Common Stock) that, with respect to which
each such security holder has Registration Rights as of the
date of the Registration Rights Schedule, are eligible for
sale pursuant to Rule 144 under the Act based upon the
holding period of such shares of Common Stock by such holder
(assuming that no actions have been taken by such holder and
that no events have occurred which interrupted such holding
period or commenced a new holding period). The Registration
Rights Waiver Letter sets forth a correct and complete list
of those security holders of the Company who have and who
have not executed waivers of Registration Rights. Those
security holders who have executed waivers of Registration
Rights have legally and effectively waived their Registration
Rights.
(v) The statements contained [(i)(A) in the first seven
sentences of the first paragraph and (B) in the fourth
paragraph] under the caption "Risk Factors -- Shares Eligible
for Future Sale" in the Prospectus and [(ii)(A) in the first
seven sentences of the first paragraph and (B) in the fourth
paragraph] under the caption "Shares Eligible for Future
Sale" are true and accurate descriptions of the information
purported to be described therein.
In rendering such opinion, such counsel (i) may limit its
opinions to the laws of the State of New York and the State of
Illinois, and the corporate laws of the State of
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36
Delaware, and (ii) may rely as to matters involving the application of
laws other than the laws of the State of New York and the State of
Illinois, and the corporate laws of the State of Delaware, to the
extent such counsel deems proper and to the extent specified in such
opinion letter, if at all, upon a written opinion or opinions (in form
and scope reasonably satisfactory to counsel for the Underwriters) of
other counsel reasonably acceptable to counsel for the Underwriters,
familiar with the applicable laws; and (B) as to matters of fact, to
the extent such counsel may deem proper, on certificates of
responsible officers of the Company. The opinion of such counsel shall
specifically state that the opinion of any such other counsel is in
form and scope satisfactory to such counsel and, in such counsel's
opinion, such counsel, you and counsel for the Underwriters are
justified in relying thereon. A copy of the opinion of any such other
counsel shall be delivered to counsel for the Underwriters.
The opinion of Xxxx & Xxxxxxx described in this paragraph (e)
shall be rendered to you at the request of the Company and shall so
state therein.
(f) You shall have received on the Closing Date the written
opinion of Piper & Marbury L.L.P., special counsel for the Company,
dated the Closing Date, addressed to the Underwriters and in form and
scope satisfactory to counsel for the Underwriters, to the effect
that:
(i) Each of the Company and the subsidiaries listed in
Schedule II to the Underwriting Agreement has been duly
organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation
and is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the
nature or conduct of its business makes such qualification
necessary, except for those failures to be so qualified or in
good standing that will not in the aggregate have a Material
Adverse Effect.
(ii) Each of the Company and the subsidiaries listed on
Schedule II to the Underwriting Agreement has all requisite
corporate power and authority to own, lease and license its
respective properties and conduct its respective business as
now being conducted and as described in the Registration
Statement and the Prospectus, except in those cases where the
failure to
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37
have such power or authority would not individually or in the
aggregate have a Material Adverse Effect.
(iii) All of the issued and outstanding capital stock (or
similar interests) of each subsidiary listed on Schedule II
have been duly and validly authorized and issued, are fully
paid and nonassessable and were not issued in violation of
any preemptive rights and are owned by the Company or a
subsidiary, free and clear of all claims, liens, security
interests, pledges, charges, encumbrances, stockholders
agreements and voting trusts, except as otherwise described
in Schedule II to the Underwriting Agreement.
(iv) The Company meets the requirements for the use of a
registration statement on Form SB-2 under the Act. The
Registration Statement and the Prospectus (except for the
financial statements and the notes thereto, the financial
statement schedules and the other financial and accounting
data included therein, as to which no opinion need be
expressed) comply as to form in all material respects with
the requirements of the Act.
(v) The Registration Statement became effective under
the Act on ________, 1997, and to the knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose are, pending before or contemplated by the
Commission.
(vi) The Shares have been duly authorized and, when
issued, delivered and sold in accordance with the terms of
the Underwriting Agreement, will be validly issued, fully
paid and nonassessable, and will not have been issued in
violation of any preemptive rights.
(vii) The capital stock of the Company conforms in all
material respects to the descriptions thereof contained in
the Registration Statement and the Prospectus.
(viii) The Company's execution and delivery of, and its
performance of its obligations under, the Underwriting
Agreement and the consummation of the transactions
contemplated thereby do not and, when such performance is
required pursuant to the terms thereof, will not violate or
conflict with any provisions of the
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certificate of incorporation, by-laws or similar
governing instruments of the Company or any subsidiary.
(ix) To such counsel's knowledge, no consent, approval,
authorization, order, registration, filing, qualification,
license or permit of or with any court or any public,
governmental or regulatory agency or body having jurisdiction
over the Company or any subsidiary or any of the Company's or
any subsidiary's properties or assets, other than those
relating to or affecting the telecommunications businesses of
the Company and the subsidiaries (as to which counsel need
not express an opinion) is required for the Company's
execution and delivery of, and its performance of its
obligations under, the Underwriting Agreement, and the
consummation of the transactions contemplated thereby,
including, without limitation, the issuance, sale and
delivery of the Shares, except for (A) such as may be
required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares
by the Underwriters (as to which such counsel need express no
opinion) and (B) such as have been made or obtained under the
Act, the Exchange Act or the rules of the Nasdaq National
Market or the NASD.
(x) Insofar as statements in the Prospectus purport to
summarize the nature and status of litigation or the
provisions of statutes, laws, rules, regulations, orders,
judgments or decrees (other than federal, state or local
regulation relating to or affecting the respective
telecommunications businesses of the Company and the
subsidiaries as to which counsel need not express an
opinion), or the terms of any Listed Contracts, such
statements are correct in all material respects and are fair
summaries of the matters referred to therein.
(xi) The Shares have been duly authorized for quotation
on the Nasdaq National Market, subject only to official
notice of issuance.
(xii) The Company has all requisite corporate right, power
and authority to execute, deliver and perform its obligations
under the Underwriting Agreement and to issue, sell and
deliver the Shares in accordance with the terms and
conditions thereof. The Underwriting Agreement has been duly
and validly authorized, executed and delivered by the
Company. The Underwriting Agreement constitutes a valid and
binding
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obligation of the Company, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding
at law or in equity), and except insofar as rights to
indemnification and contribution contained therein may be
limited by federal or state securities laws or related public
policy.
(xiii) Upon delivery of and payment for the Shares to be
sold by the Company to each Underwriter in accordance with
the Underwriting Agreement, each Underwriter will acquire
good and marketable title to the Shares so sold and delivered
to it, free and clear of all liens, pledges, charges, claims,
security interests, restrictions on transfer, agreements or
other defects of title whatsoever (other than those resulting
from any action taken by such Underwriter).
(xiv) To such counsel's knowledge, there is no litigation,
arbitration or governmental or other action, suit, proceeding
or investigation before any court or before or by any public,
regulatory or governmental agency or body pending or
threatened against, or involving the properties or business
of, the Company or any subsidiary, that, if resolved against
the Company or such subsidiary, individually or, to the
extent involving related claims or issues, in the aggregate,
is of a character required to be disclosed in the
Registration Statement and the Prospectus that has not been
properly disclosed therein; and to such counsel's knowledge,
there is no contract or document concerning the Company or
any subsidiary of a character required to be described in the
Registration Statement and the Prospectus or to be filed as
an exhibit to the Registration Statement, that is not so
described or filed.
(xv) The Company is not and will not become an
"investment company" or a company "controlled" by an
"investment company" as defined in the Investment Company
Act.
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40
In addition, you shall have received a statement from such
counsel to the effect of the penultimate paragraph of Section 8(d)
hereof. In rendering such opinion, such counsel (i) may limit its
opinions to the laws of the State of New York, the State of Maryland,
the corporate laws of the State of Delaware and the federal laws of
the United States of America, and (ii) may rely (A) as to matters
involving the application of laws other than the laws of the State of
New York, the State of Maryland, the corporate laws of the State of
Delaware and the federal laws of the United States of America, to the
extent such counsel deems proper and to the extent specified in such
opinion letter, if at all, upon a written opinion or opinions (in form
and scope reasonably satisfactory to counsel for the Underwriters) of
other counsel reasonably acceptable to counsel for the Underwriters,
familiar with the applicable laws; and (B) as to matters of fact, to
the extent such counsel may deem proper, on certificates of
responsible officers of the Company and certificates or other written
statements of officers of departments of various jurisdictions having
custody of documents respecting the corporate existence or good
standing of the Company and the subsidiaries. The opinion of such
counsel shall specifically state that the opinion of any such other
counsel is in form and scope satisfactory to such counsel and, in such
counsel's opinion, such counsel, you and counsel for the Underwriters
are justified in relying thereon. A copy of the opinion of any such
other counsel shall be delivered to counsel for the Underwriters.
The opinion of Piper & Marbury L.L.P. described in this
paragraph (f) shall be rendered to you at the request of the Company and shall
so state therein.
(g) You shall have received on the Closing Date the written
opinion of Xxxxxx, Xxxx & Xxxxxx, special regulatory counsel for the
Company, dated the Closing Date, addressed to the Underwriters, and in
form and scope reasonably satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Company and each subsidiary have all necessary
consents, approvals, authorizations, orders, registrations,
filings, qualifications, licenses and permits of and from the
FCC and other federal regulatory or governmental agencies and
bodies, to conduct their respective telecommunications
businesses as described in the Registration Statement and the
Prospectus.
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41
(ii) There is no proceeding, complaint or investigation
pending or, to such counsel's knowledge, threatened before
the FCC or any other federal regulatory or governmental
agency or body with respect to the respective
telecommunications businesses of the Company and the
subsidiaries.
(iii) Insofar as statements in the Prospectus purport to
summarize the provisions of statutes, laws, rules,
regulations, orders, judgments or decrees relating to the
federal regulation of the respective telecommunications
businesses of the Company and the subsidiaries, such
statements are correct in all material respects.
(iv) The Company's execution and delivery of, and its
performance of its obligations under, the Underwriting
Agreement and the consummation of the transactions
contemplated thereby do not and, when such performance is
required pursuant to the terms thereof, will not, to such
counsel's knowledge, violate or conflict with any judgment,
decree, order, statute, rule or regulation of, or license,
permit or authorization granted to the Company or any
subsidiary by, the FCC or any other federal regulatory or
governmental agency or body,relating to the respective
telecommunications businesses of the Company or any
subsidiary.
In rendering such opinion, such counsel (i) may limit its
opinions to the laws of the District of Columbia and the federal laws
of the United States of America and (ii) may rely (A) as to matters
involving the application of laws other than the laws of the District
of Columbia and the federal laws of the United States of America, to
the extent such counsel deems proper and to the extent specified in
such opinion letter, if at all, upon a written opinion or opinions (in
form and scope reasonably satisfactory to counsel for the
Underwriters) of counsel reasonably acceptable to counsel for the
Underwriters, familiar with the applicable laws; and (B) may rely as
to matters of fact, to the extent such counsel may deem proper, on
certificates of responsible officers of the Company and certificates
or other written statements of officers of departments of various
jurisdictions having custody of documents respecting the Company and
the subsidiaries. The opinion of such counsel shall specifically state
that the opinion of any such other counsel is in form and scope
satisfactory to such counsel and, in such counsel's opinion, such
counsel, you and counsel for the Underwriters are justified in relying
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thereon. A copy of the opinion of any such other counsel
shall be delivered to counsel for the Underwriters.
The opinion of Xxxxxx, Xxxx and Xxxxxx discussed in this
paragraph (g) shall be rendered to you at the request of the Company
and shall so state therein.
(h) You shall have received on the Closing Date the written opinion
of Weil, Gotshal & Xxxxxx LLP, counsel for the Underwriters, dated the
Closing Date, and addressed to the Underwriters, to the effect that:
(i) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority
to enter into and perform the Underwriting Agreement.
(ii) The Shares have been duly authorized and, when
issued, delivered and sold in accordance with the terms of
the Underwriting Agreement, will be validly issued, fully
paid and nonassessable, and will not have been issued in
violation of any preemptive rights.
(iii) The Underwriting Agreement has been duly and validly
authorized, executed and delivered by the Company. The
Underwriting Agreement constitutes a valid and binding
obligation of the Company, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding
at law or in equity), and except insofar as rights to
indemnification and contribution contained therein may be
limited by federal or state securities laws or related public
policy.
(iv) The Registration Statement has become effective
under the Act on ________, 1997, no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceeding for that purpose are, to the knowledge of
such counsel, pending before or contemplated by the
Commission.
(v) The statements under the captions "Descrip-
tion of Capital Stock" and "Underwriting" in the Regis-
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tration Statement insofar as such statements constitute a
summary of legal matters, documents or proceedings referred
to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings in
all material respects.
In addition, you shall have received a statement from such
counsel to the effect of the penultimate paragraph of Section 8(d)
hereof.
The Company shall have furnished to counsel for the
Underwriters such documents as such counsel may request for the
purpose of enabling such counsel to pass upon such matters.
(i) At the time this Agreement is executed and at the Closing
Date, you shall have received a letter, from KPMG Peat Marwick LLP,
dated the date of its delivery, addressed to the Underwriters and in
form and substance reasonably satisfactory to you, to the effect that:
(i) they are independent public accountants with respect to the
Company within the meaning of the Act and stating that the answer to
Item 13 of the Registration Statement is correct insofar as it relates
to them; (ii) in their opinion, the consolidated financial statements
of the Company and its subsidiaries included in the Registration
Statement and the Prospectus and covered by their opinion included
therein comply as to form in all material respects with the applicable
accounting requirements of the Act and the applicable published rules
and regulations of the Commission thereunder; (iii) on the basis of
procedures (but not an examination made in accordance with generally
accepted auditing standards) consisting of a reading of the latest
available unaudited interim consolidated financial statements of the
Company and the subsidiaries, a reading of the minutes of meetings and
consents of the stockholders and boards of directors of the Company
and the subsidiaries and the committees of such boards subsequent to
June 30, 1996, inquiries of officers and other employees of the
Company and the subsidiaries who have responsibility for financial and
accounting matters of the Company and the subsidiaries with respect to
transactions and events subsequent to June 30, 1996, reading the
unaudited condensed consolidated financial statements of the Company
and its consolidated subsidiaries at and for the three months ended
September 30, 1996 and 1995, respectively, and other specified
procedures and inquiries to a date not more than five days prior to
the date of such letter, nothing has come to their attention that
would cause them to believe that: (A) the unaudited historical con-
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44
densed consolidated financial statements of the Company and its
consolidated subsidiaries included in the Registration Statement and
the Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Act or that such
unaudited condensed consolidated financial statements are not
presented in conformity with US GAAP applied on a basis substantially
consistent with that of the audited consolidated financial statements
of the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus; (B) with respect to the
period subsequent to September 30, 1996 there were, as of the date of
the most recent available monthly condensed consolidated financial
statements of the Company and its consolidated subsidiaries, if any,
and as of a specified date not more than five days prior to the date
of such letter, any changes in the capital stock or indebtedness of
the Company or any decrease in the net current assets or stockholders'
equity of the Company, in each case as compared with the amounts shown
in the most recent balance sheet included in the Registration
Statement and the Prospectus, except for changes or decreases that the
Registration Statement and the Prospectus disclose have occurred or
may occur; (C) that during the period from September 30, 1996 to the
date of the most recent available monthly condensed consolidated
financial statements of the Company and its consolidated subsidiaries,
if any, and to a specified date not more than five days prior to the
date of such letter, there was any decrease in total revenues or any
increase in total or per share net loss, in each case as compared with
the corresponding period in the prior fiscal year, except for such
decreases or increases, as the case may be, that the Prospectus
discloses have occurred or may occur; or (D) any unaudited pro forma
consolidated condensed financial statements included in the Prospectus
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements; and (iv) stating that they have compared specific dollar
amounts, numbers of shares, percentages of revenues and earnings and
other financial information pertaining to the Company and the
subsidiaries set forth in the Prospectus, which have been specified by
you prior to the date of this Agreement, to the extent that such
dollar amounts, numbers, percentages and information may be derived
from the general accounting and financial records that are subject to
the internal control structure policies and procedures of the
Company's accounting systems or that have been derived directly from
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45
such accounting records by analysis or computation, and excluding any
questions requiring an interpretation by legal counsel, with the
results obtained from the application of specified readings,
inquiries, and other appropriate procedures specified by you (which
procedures do not constitute an examination in accordance with
generally accepted auditing standards) set forth in such letter, and
found them to be in agreement.
(j) The NASD, upon review of the terms of the underwriting
arrangements for the public offering of the Shares, shall have raised
no objections thereto.
(k) The Shares shall have been approved for quotation on the
Nasdaq National Market, subject to official notice of issuance.
(l) At the time this Agreement is executed, the Company shall
have furnished to you the agreements specified in Section 2 hereof, in
each case, in form and substance satisfactory to counsel for the
Underwriters and in full force and effect.
(m) The Company shall not have failed at or prior to the Closing
Date to perform or comply with any of the agreements herein contained
and required to be performed or complied with by the Company at or
prior to the Closing Date.
(n) Prior to the Closing Date, the Company shall have furnished
to you such further information, certificates and documents as you or
counsel for the Underwriters may reasonably request.
The several obligations of the Underwriters to purchase any
Additional Shares hereunder are subject to the delivery to you on the
applicable Option Closing Date of such documents as you or counsel for the
Underwriters may reasonably request with respect to the good standing of the
Company, the due authorization and issuance of such Additional Shares and other
matters related to the issuance of such Additional Shares.
9. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This Agree-
ment shall become effective upon the later of (i) execution of
this Agreement and (ii) when notification of the effectiveness of
the Registration Statement has been released by the Commission.
This Agreement may be terminated at any time prior to
the Closing Date by you by written notice to the Company if any
of the following has occurred: (i) since the respective dates as
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46
of which information is given in the Registration Statement and the Prospectus,
any material adverse change or development involving a prospective material
adverse change in the condition, financial or otherwise, of the Company and its
subsidiaries, taken as a whole, or the earnings, affairs, or business prospects
of the Company or any of its subsidiaries, taken as whole, whether or not
arising in the ordinary course of business, which would, in your judgment, make
it impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus, (ii) any outbreak or escalation of hostilities
or other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in your reasonable judgment, is material and adverse and would, in your
reasonable judgment, make it impracticable to market the Shares on the terms
and in the manner contemplated in the Prospectus, (iii) the suspension or
material limitation of trading in securities on the New York Stock Exchange,
the American Stock Exchange or the Nasdaq National Market or limitation on
prices for securities on any such exchange or Nasdaq National Market, (iv) the
enactment, publication, decree or other promulgation of any federal or state
statute, regulation, rule or order of any court or other governmental authority
which in your opinion materially and adversely affects, or will materially and
adversely affect, the business or operations of the Company or any subsidiary,
(v) the declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused
to purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I hereto bears to the total number of
Firm Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused
to purchase on such date; provided that in no
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47
event shall the number of Firm Shares or Additional Shares, as the case may be,
which any Underwriter has agreed to purchase pursuant to Section 2 hereof be
increased pursuant to this Section 9 by an amount in excess of one-ninth of
such number of Firm Shares or Additional Shares, as the case may be, without
the written consent of such Underwriter. If on the Closing Date or on an Option
Closing Date, as the case may be, any Underwriter or Underwriters shall fail or
refuse to purchase Firm Shares, or Additional Shares, as the case may be, and
the aggregate number of Firm Shares or Additional Shares, as the case may be,
with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares to be purchased on such date by all Underwriters and
arrangements satisfactory to you and the Company for purchase of such Shares
are not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter and the
Company. In any such case which does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date or the applicable Option Closing Date, as the case may be, but in
no event for longer than seven days, in order that the required changes, if
any, in the Registration Statement and Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
any such Underwriter under this Agreement.
10. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to
American Communications Services, Inc., 000 Xxxxxxxx Xxxxxxxx Xxxxxxx, Xxxxx
000, Xxxxxxxxx Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx, Esq. (Fax
No.: 000-000-0000), and (b) if to any Underwriter or to you, to you c/o Alex.
Xxxxx & Sons Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx
00000, Attention: Syndicate Department (Fax No.: (000) 000-0000), or in any
case to such other address or facsimile number as the person to be notified may
have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, its officers and directors and
of the several Underwriters set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will survive delivery
of and payment for the Shares, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter or
by or on behalf of the Company, the officers or directors of the Company or any
controlling person of the
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Company, (ii) acceptance of the Shares and payment for them hereunder and (iii)
termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Company to comply with the terms or
to fulfill any of the conditions of this Agreement, the Company agrees to
reimburse the several Underwriters for all out-of-pocket expenses (including
the fees and disbursements of counsel for the Underwriters) reasonably incurred
by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement,
and no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
For the purposes of this Agreement, "business day" means any day on
which the New York Stock Exchange is open for trading.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts, which together
shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
AMERICAN COMMUNICATIONS SERVICES, INC.
By:
---------------------------------------
Name:
Title:
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Accepted as of the date first above written.
ALEX. XXXXX & SONS INCORPORATED
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By: ALEX. XXXXX & SONS
INCORPORATED
By:
---------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
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50
SCHEDULE I
Number of
Firm Shares
Name of Underwriter to be Purchased
------------------- ---------------
Alex. Xxxxx & Sons Incorporated.............................................
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation....................................................
---------
TOTAL =========
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SCHEDULE II
SUBSIDIARIES *
Jurisdiction of Percentage
Name Incorporation of Equity
---- ------------- ---------
American Communication Services Delaware **
of Columbia, Inc.
American Communication Services Delaware **
of Fort Worth, Inc.
American Communication Services Delaware **
of Greenville, Inc.
American Communication Services Delaware 100
of Little Rock, Inc.
American Communication Services Delaware **
of Louisville, Inc.
American Communication Services Delaware 100
of Albuquerque, Inc.
American Communication Services Delaware 100
of Charleston, Inc.
American Communication Services Delaware 100
of Chattanooga, Inc.
American Communication Services Delaware **
of El Paso, Inc.
American Communication Services Delaware 100
of Lexington, Inc.
American Communication Services Delaware 100
of Pima County, Inc.
American Communication Services Delaware 100
of Birmingham, Inc.
-------------
* All subsidiaries are subject to restrictions and other
provisions of the Indentures.
** AT&T Credit owns 7.25% of outstanding stock of subsidiary, has a
security interest in the rest, which ASCI has pledged to AT&T Credit.
52
Jurisdiction of Percentage
Name Incorporation of Equity
---- ------------- ---------
American Communication Services Delaware 100
of Mobile, Inc.
ACSI Advanced Technologies, Inc. Maryland 100
American Communication Services Maryland 100
of Irving, Inc.
American Communication Services Maryland 100
of Xxxxxxxxxx, Inc.
American Communication Services Maryland 100
of Amarillo, Inc.
American Communication Services Maryland 100
of Baton Rouge, Inc.
American Communication Services Maryland 100
of Xxxxxxx, Inc.
American Communication Services Maryland 100
of Spartanburg, Inc.
American Communication Services Maryland 100
of Columbus, Inc.
American Communication Services Maryland 100
of Las Vegas, Inc.
American Communication Services Maryland 100
of Maryland, Inc.
[Piper & Marbury to update]
53
ANNEX I
STOCKHOLDERS SUBJECT TO 180-DAY LOCK-UP PERIOD
Xxxxxxx X. Xxxxxxxxx
Xxxx Xxxxx
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxx, III
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxx
Xxxxxxxxxxx X. Xxxxxxxx
Xxxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxx
The Xxxx Alternative Income Fund, L.P.
ING Equity Partners, L.P.
Apex Investment Fund I, L.P.
Apex Investment Fund II, L.P.
Argentum Capital Partners, L.P.
[Blazerhold & Co.]
Environmental Private Equity Fund II, L.P.
The Productivity Fund II, L.P.
54
ANNEX II
STOCKHOLDERS SUBJECT TO 90-DAY LOCK-UP PERIOD
Xxxx Xxxxx Capital, L.P.
Xxxx Xxxxx Capital International
Prime II Management, L.P.
U.S. Signal Corporation
55
ANNEX III
LISTED CONTRACTS
1. Indenture, dated November 14, 1995, between the Company and
Chemical Bank, as trustee, relating to $190,000,000 in
principal amount of 13% Senior Discount Notes due 2005;
2. Indenture, dated March 26, 1996, between the Company and
Chemical Bank, as trustee, relating to $120,000,000 in
principal amount of 12 3/4% Senior Discount Notes Due 2006;
3. Loan and Security Agreement, dated October 17, 1994, between
AT&T Credit Corporation and American Communication Services
of Louisville, Inc.;
4. Loan and Security Agreement, dated February 28, 1995,
between AT&T Credit Corporation and American Communication
Services of Fort Worth, Inc.;
5. Loan and Security Agreement, dated June 30, 1995, between
AT&T Credit Corporation and American Communication Services
of Greenville, Inc. and American Communication Services of
Columbia, Inc.;
6. Loan and Security Agreement, dated September 8, 1995,
between AT&T Credit Corporation and American Communications
Services of El Paso, Inc.;
7. Parent Support and Pledge Agreement (Louisville) dated
October 17, 1994, between the Company and AT&T Credit
Corporation;
8. Parent Support and Pledge Agreement (El Paso) dated
September 8, 1995, between the Company and AT&T Credit
Corporation;
9. Amendment No. 1 to Parent Support and Pledge Agreement
(Louisville) between the Company and AT&T Credit
Corporation;
10. Amendment No. 1 to Parent Support and Pledge Agreement (Fort
Worth) between the Company and AT&T Credit Corporation;
11. Amendment No. 1 to Loan and Security Agreement between
American Communications Services of Louisville, Inc. and
AT&T Credit Corporation;
12. Stock Purchase Agreement, dated October 17, 1994, between
the Company and AT&T Credit Corporation;
56
13. Stock Purchase Agreement, dated October 17, 1994, between
the American Communications Services of Louisville, Inc. and
AT&T Credit Corporation;
14. AT&T Credit Facility Master Agreement;
15. AT&T Credit Facility Addendums for Louisville, Fort Worth,
Greenville, Columbia and El Paso subsidiaries;
16. Master IRU Agreement, dated June 23, 1995, by and between
MCImetro Access Transmission Services, Inc. and the Company;
17. Agreement, dated as of June 15, 1996, by and between AT&T
Communications, Inc. and the Company;
18. Access Service Agreement, dated June 15, 1996, by and
between LCI International Telecom Corp. and the Company, and
Addendum, dated February 22, 1996;
19. General Agreement between Lucent Technologies, Inc. and the
Company, and Addendum Number One to the General Agreement
between Lucent Technologies, Inc. and the Company, executed
June 25, 1996.
[additional contracts to be listed]
