Exhibit 1.1
UNITED STATES CELLULAR CORPORATION
(a Delaware corporation)
Debt Securities
UNDERWRITING AGREEMENT
October 31, 2002
Merrill, Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
UBS Warburg LLC
As representatives of the several underwriters referred to below
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
United States Cellular Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell up to $132,250,000 aggregate initial
public offering price of its debt securities, (the "Securities") from time to
time, in or pursuant to one or more offerings on terms to be determined at the
time of sale.
The Securities will be issued in one or more series under an indenture,
dated as of June 1, 2002, between the Company and BNY Midwest Trust Company, as
trustee (the "Trustee"), as supplemented by the First Supplemental Indenture
between the Company and the Trustee (as so supplemented, the "Indenture", which
term shall include any indenture entered into by the Company and the Trustee
providing for the issuance of any subordinated indebtedness). Each series of
Securities may vary, as applicable, as to title, aggregate principal amount,
rank, interest rate or formula and timing of payments thereof, stated maturity
date, redemption and/or repayment provisions, sinking fund requirements and any
other variable terms established by or pursuant to the Indenture.
Whenever the Company determines to make an offering of Securities, the
Company will enter into an agreement (each, a "Terms Agreement") providing for
the sale of such Securities to, and the purchase and offering thereof by, the
underwriters named therein (the "Underwriters," which term shall include one
underwriter acting as sole Underwriter or as a member of an underwriting
syndicate, as well as any Underwriter substituted pursuant to Section 10
hereof). The Terms Agreement relating to the offering of Securities shall
specify the number or aggregate principal amount, as the case may be, of
Securities to be initially issued (the "Initial Underwritten Securities"), the
name of each Underwriter participating in such offering (subject to substitution
as provided in Section 10 hereof) and the name of any Underwriter acting as
manager or co-manager in connection with such offering, the number or aggregate
principal amount, as the case may be, of Initial Underwritten Securities which
each such Underwriter
severally agrees to purchase, whether such offering is on a fixed or variable
price basis and, if on a fixed price basis, the initial offering price, the
price at which the Initial Underwritten Securities are to be purchased by the
Underwriters, the form, time, date and place of delivery and payment of the
Initial Underwritten Securities and any other material variable terms of the
Initial Underwritten Securities, as well as the material variable terms of any
related Underlying Securities. In addition, if applicable, such Terms Agreement
shall specify whether the Company has agreed to grant to the Underwriters an
option to purchase additional Securities to cover over-allotments, if any, and
the number or aggregate principal amount, as the case may be, of Securities
subject to such option (the "Option Underwritten Securities"). As used herein,
the term "Underwritten Securities" shall include the Initial Underwritten
Securities and all or any portion of any Option Underwritten Securities. The
Terms Agreement, which shall be substantially in the form of Exhibit A hereto,
may take the form of an exchange of any standard form of written
telecommunication between the Company and an Underwriter, acting for itself and,
if applicable, as representative of any other Underwriters. Each offering of
Underwritten Securities through an Underwriter as sole Underwriter or through an
underwriting syndicate managed by one or more Underwriters (the
"Representatives") will be governed by this Underwriting Agreement, as
supplemented by the applicable Terms Agreement. To the extent only one
Underwriter is named in the Terms Agreement, the term Representatives as used
herein shall mean such Underwriter, and the terms Representatives shall mean
either the singular or plural as the context requires.
The Company filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-88344) for the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"). Such registration statement has been declared effective by
the Commission and each Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act"), and the Company has filed
such post-effective amendments thereto as may be required prior to the execution
of the applicable Terms Agreement and each such post-effective amendment has
been declared effective by the Commission. Such registration statement (as so
amended, if applicable), including the information, if any, deemed to be a part
thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A
Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule 434
Information"), is referred to herein as the "Registration Statement"; and the
final prospectus and the final prospectus supplement relating to the offering of
the Underwritten Securities, in the form first furnished to the Underwriters by
the Company for use in connection with the offering of the Underwritten
Securities, are collectively referred to herein as the "Prospectus"; provided,
however, that all references to the "Registration Statement" and the
"Prospectus" shall also be deemed to include all documents incorporated therein
by reference pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"), prior to the execution of the applicable Terms Agreement; provided,
further, that if the Company files a registration statement with the Commission
pursuant to Rule 462(b) of the 1933 Act Regulations (the "Rule 462(b)
Registration Statement"), then, after such filing, all references to
"Registration Statement" shall also be deemed to include the Rule 462(b)
Registration Statement; and provided, further, that if the Company elects to
rely upon Rule 434 of the 1933 Act Regulations, then all references to
"Prospectus" shall also be deemed to include the final or preliminary prospectus
and the applicable term sheet or abbreviated term sheet (the "Term Sheet"), as
the case may be, in the
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form first furnished to the Underwriters by the Company in reliance upon Rule
434 of the 1933 Act Regulations, and all references in this Underwriting
Agreement to the date of the Prospectus shall mean the date of the Term Sheet. A
"preliminary prospectus" shall be deemed to refer to any prospectus used before
the Registration Statement became effective and any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information or other
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations and was used
after such effectiveness and prior to the execution and delivery of the
applicable Terms Agreement. For purposes of this Underwriting Agreement, all
references to the Registration Statement, Prospectus, Term Sheet or preliminary
prospectus or to any amendment or supplement to any of the foregoing shall be
deemed to include any copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("XXXXX").
All references in this Underwriting Agreement to financial statements
and schedules and other information which is "contained," "included" or "stated"
(or other references of like import) in the Registration Statement, Prospectus
or preliminary prospectus shall be deemed to mean and include all such financial
statements and schedules and other information which is incorporated by
reference in the Registration Statement, Prospectus or preliminary prospectus,
as the case may be, prior to the execution of the applicable Terms Agreement;
and all references in this Underwriting Agreement to amendments or supplements
to the Registration Statement, Prospectus or preliminary prospectus shall be
deemed to mean and include the filing of any document under the 1934 Act which
is incorporated by reference in the Registration Statement, Prospectus or
preliminary prospectus, as the case may be, after the execution of the
applicable Terms Agreement.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(A) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company represents
and warrants to each Underwriter named in the applicable Terms Agreement, as of
the date thereof, as of the Closing Time (as defined below) and, if applicable,
as of each Date of Delivery (as defined below) (in each case, a "Representation
Date"), as follows:
(1) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company
meets the requirements for use of Form S-3 under the 1933 Act. The
Registration Statement (including any Rule 462(b) Registration
Statement) has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement (or such
Rule 462(b) Registration Statement) has been issued under the 1933 Act
and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for
additional information has been complied with. In addition, each
Indenture has been duly qualified under the 1939 Act.
At the respective times the Registration Statement (including
any Rule 462(b) Registration Statement) and any post-effective
amendments thereto (including the filing of the Company's most recent
Annual Report on Form 10-K with the Commission (the "Annual Report on
Form 10-K")) became effective and at each Representation Date, the
Registration Statement (including any Rule 462(b) Registration
Statement) and any
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amendments thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
the 1939 Act and the rules and regulations of the Commission under the
1939 Act (the "1939 Act Regulations") and did not and will not contain
an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading. At the date of the Prospectus, at the Closing
Time and at each Date of Delivery, if any, neither the Prospectus nor
any amendments and supplements thereto included or will include an
untrue statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. If the Company elects to rely upon Rule 434 of the 1933
Act Regulations, the Company will comply with the requirements of Rule
434. Notwithstanding the foregoing, the representations and warranties
in this subsection shall not apply to statements in or omissions from
the Registration Statement or the Prospectus made in reliance upon and
in conformity with information furnished to the Company in writing by
any Underwriter through the Representatives expressly for use in the
Registration Statement or the Prospectus.
Each preliminary prospectus and 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 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with the offering
of Underwritten Securities will, at the time of such delivery, be
identical to any electronically transmitted copies thereof filed with
the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(2) INCORPORATED DOCUMENTS. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read
together with the other information in the Prospectus, at the date of
the Prospectus, at the Closing Time and at each Date of Delivery, if
any, did not and will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(3) INDEPENDENT ACCOUNTANTS. The accountants who certified
the consolidated financial statements and any supporting schedules
thereto included in or incorporated by reference into the Registration
Statement and the Prospectus are independent public accountants with
respect to the Company and its consolidated subsidiaries as required
by the 1933 Act and the 1933 Act Regulations.
(4) FINANCIAL STATEMENTS. The consolidated financial
statements of the Company included in the Registration Statement and
the Prospectus, together with the related schedules and notes, as well
as those financial statements, schedules and notes of any other entity
included therein, present fairly the financial position and results of
operations
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of the Company and its subsidiaries on a consolidated basis, or such
other entities, as the case may be, at the respective dates or for the
respective periods to which they apply, and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries on a consolidated basis, or such other
entities, as the case may be, for the periods specified; such
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved; and the supporting schedules included
in the Registration Statement and the Prospectus present fairly in
accordance with GAAP the information required to be stated therein.
The selected financial data and the summary financial information
included in the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statement
and the Prospectus. In addition, any pro forma financial statements of
the Company and its subsidiaries and the related notes thereto
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 and have been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to
give effect to the transactions and circumstances referred to therein.
(5) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its consolidated subsidiaries considered
as one enterprise, whether or not arising in the ordinary course of
business, (B) there have been no transactions entered into by the
Company or any of its consolidated subsidiaries, other than those
arising in the ordinary course of business, which are material with
respect to the Company and its consolidated subsidiaries considered as
one enterprise and (C) there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its
capital stock.
(6) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under, or as contemplated under, this Underwriting
Agreement and the applicable Terms Agreement. The Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which it owns or leases substantial
properties or in which the conduct of its business requires such
qualification, except where the failure to be so qualified or in good
standing would not have a material adverse effect on the Company and
its consolidated subsidiaries considered as one enterprise.
(7) GOOD STANDING OF SUBSIDIARIES. Each consolidated
subsidiary of the Company (each, a "Subsidiary" and, collectively, the
"Subsidiaries"), has been duly incorporated and is validly existing as
a corporation in good standing under the laws of
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the jurisdiction of its incorporation, has the corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which it owns or leases substantial properties or
in which the conduct of its business requires such qualification,
except where the failure to be so qualified or in good standing would
not have a material adverse affect on the Company and its consolidated
subsidiaries considered as one enterprise; except as otherwise
disclosed in the Registration Statement, all of the issued and
outstanding capital stock of each Subsidiary has been duly authorized
and validly issued and is fully paid and non-assessable and all shares
of capital stock of such Subsidiaries owned by the Company, directly
or through one or more Subsidiaries, are owned free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity, except as set forth or incorporated by reference in the
Registration Statement and except for such security interest,
mortgage, pledge, lien, encumbrance, claim or equity the enforcement
of which, individually or in the aggregate, would not have a material
adverse affect on the Company and its consolidated subsidiaries
considered as one enterprise. The only subsidiaries that are
"significant subsidiaries" of the Company (as such term is defined in
Rule 102 of Regulation S-X promulgated under the 0000 Xxx) are United
States Cellular Operating Company and Unites States Cellular
Investment Company.
(8) CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company is as set forth in or incorporated by
reference into the Registration Statement (except for subsequent
issuances, if any, pursuant to reservations or agreements referred to
in the Prospectus); all of the issued and outstanding shares of
capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; the capital stock of the
Company conforms to the description thereof included in or
incorporated by reference into the Registration Statement and, except
as set forth in the Prospectus, is not subject to preemptive or other
similar rights.
(9) AUTHORIZATION OF THIS UNDERWRITING AGREEMENT AND TERMS
AGREEMENT. This Underwriting Agreement has been, and the applicable
Terms Agreement as of the date thereof will have been, duly
authorized, executed and delivered by the Company.
(10) AUTHORIZATION OF SECURITIES. The Underwritten Securities
have been, or as of the date of such Terms Agreement will have been,
duly authorized by the Company for issuance and sale pursuant to this
Underwriting Agreement and such Terms Agreement. Such Underwritten
Securities, when issued and authenticated in the manner provided for
in the Indenture and delivered against payment of the consideration
therefor specified in such Terms Agreement, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors rights generally
or by general principles of equity (regardless of whether enforcement
is considered in a proceeding at law or in equity) (the "Bankruptcy
Exceptions"); such Underwritten Securities will be in the form
contemplated by, and each registered holder thereof is entitled to the
benefits of, the Indenture.
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(11) AUTHORIZATION OF THE INDENTURE. The Indenture has been
duly authorized, executed and delivered by the Company and constitutes
a valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions; and
the Indenture will conform in all material respects to all statements
relating thereto contained in the Prospectus.
(12) DESCRIPTIONS OF THE UNDERWRITTEN SECURITIES. The
Underwritten Securities being sold pursuant to the applicable Terms
Agreement and the Indenture, as of each Representation Date, will
conform in all material respects to all statements relating thereto
contained in the Prospectus and will be in substantially the form
filed or incorporated by reference, as the case may be, as an exhibit
to the Registration Statement.
(13) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company
nor any of its Subsidiaries is in violation of its charter or by-laws
or other documents of organization, and none of the Company or any of
its Subsidiaries is in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its Subsidiaries is a party
or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its Subsidiaries is
subject; the execution, delivery and performance of this Underwriting
Agreement, the applicable Terms Agreement and the Indenture and the
consummation of the transactions contemplated herein and in the
Registration Statement and the Prospectus (including the use of the
proceeds from the sale of the Underwritten Securities as described
under the caption "Use of Proceeds") have been duly authorized by all
necessary corporate action by the Company and will not conflict with
or constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any of its Subsidiaries pursuant to the terms of, any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
other instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of them may be bound, or to which
any property or assets of the Company or any of its Subsidiaries is
subject; nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any of its
Subsidiaries or any applicable law, rule, regulation, judgment, order,
or administrative or court decree; nor will such action conflict with
or have an adverse effect on any of the certificates, authorities,
licenses or permits of the Company or any of its Subsidiaries that
enable them to carry on the business and operations now operated by
them and which are material to the business of the Company and its
Subsidiaries considered as one enterprise. As used herein, a
"Repayment Event" means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its Subsidiaries.
(14) ABSENCE OF LABOR DISPUTE. No labor dispute with the
employees of the Company or any of its Subsidiaries exists or, to the
knowledge of the Company, is
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imminent which would materially adversely effect the business
operations of the Company and its Subsidiaries considered as one
enterprise.
(15) ABSENCE OF PROCEEDINGS. There is no action, suit or
proceeding before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its
Subsidiaries which is required to be disclosed in or incorporated by
reference into the Registration Statement or, except, in the case of
(A) and (B) below, as disclosed in the Prospectus, which might (A)
result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company and its consolidated subsidiaries considered as one
enterprise, (B) materially and adversely affect the properties or
assets of the Company and its consolidated subsidiaries considered as
one enterprise, or (C) materially and adversely affect the
consummation of the transactions contemplated by this Underwriting
Agreement, the applicable Terms Agreement or the Indenture; all
pending legal or governmental proceedings to which the Company or any
of its consolidated subsidiaries is a party or of which any of their
respective properties or assets are the subject which are not
described in or incorporated by reference into the Registration
Statement and the Prospectus, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not
material to the Company and its consolidated subsidiaries considered
as one enterprise; and there are no contracts or documents of the
Company or any of its consolidated subsidiaries which are required to
be filed or incorporated by reference as exhibits to the Registration
Statement by the 1933 Act or by the 1933 Act Regulations which have
not been so filed or incorporated by reference.
(16) ACCURACY OF EXHIBITS. There are no contracts or
documents which are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by reference
therein which have not been so described as required.
(17) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency, domestic or foreign, is necessary or required for the due
authorization, execution and delivery by the Company of this
Underwriting Agreement or the applicable Terms Agreement or for the
performance by the Company of the transactions contemplated under the
Prospectus, this Underwriting Agreement, such Terms Agreement or the
Indenture, except such as have been made or obtained under the 1933
Act, the 1933 Act Regulations, the 1934 Act, the 1934 Act Regulations,
the 1939 Act and the 1939 Act Regulations or as may be required under
state securities laws.
(18) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
Subsidiaries own or possess, or can acquire on reasonable terms, the
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information), systems or procedures,
trademarks, service marks and trade names currently employed by them
in connection with the business now operated by them, and neither the
Company nor any of its Subsidiaries has received any notice of or
conflict with asserted rights of others with respect to any of the
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foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and
its Subsidiaries considered as one enterprise.
(19) POSSESSION OF LICENSES AND PERMITS. The Company and its
Subsidiaries possess such certificates, authorities, licenses or
permits issued by the appropriate local, state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them, except as disclosed in the Registration Statement or
the documents incorporated by reference therein; none of the Company
or any of its Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority, license or permit which, singly or in the aggregate, if the
subject of any unfavorable decision, ruling or finding, would
materially and adversely affect the condition, financial or otherwise,
or the earnings, business affairs or business prospects of the Company
and its consolidated subsidiaries considered as one enterprise.
(20) TITLE TO PROPERTY. The Company and its Subsidiaries have
good and marketable title to all real property owned by the Company
and its Subsidiaries and good title to all other properties owned by
them that are material to the business of the Company and its
consolidated subsidiaries considered as one enterprise, in each case,
free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind, except (A) as
otherwise stated in the Registration Statement and the Prospectus or
(B) those which do not, singly or in the aggregate, materially affect
the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company or any of its
Subsidiaries. All of the leases and subleases material to the business
of the Company and its Subsidiaries considered as one enterprise, and
under which the Company or any of its Subsidiaries holds properties
described in the Prospectus, are in full force and effect, and neither
the Company nor any of its Subsidiaries has received any notice of any
material claim of any sort that has been asserted by anyone adverse to
the rights of the Company or any of its Subsidiaries under any of the
leases or subleases mentioned above, or affecting or questioning the
rights of the Company or such Subsidiary of the continued possession
of the leased or subleased premises under any such lease or sublease.
(21) COMMODITY EXCHANGE ACT. The Underwritten Securities,
upon issuance, will be excluded or exempted under, or beyond the
purview of, the Commodity Exchange Act, as amended (the "Commodity
Exchange Act"), and the rules and regulations of the Commodity Futures
Trading Commission under the Commodity Exchange Act (the "Commodity
Exchange Act Regulations").
(22) INVESTMENT COMPANY ACT. The Company is not, and upon the
issuance and sale of the Underwritten Securities as herein
contemplated and the application of the net proceeds therefrom as
described in the Prospectus will not be, an "investment company" or a
company "controlled" by an investment company within the meaning of
the Investment Company Act of 1940, as amended (the "1940 Act").
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(23) ENVIRONMENTAL LAWS. To the best of the Company's
knowledge and except as otherwise stated in the Registration Statement
and the Prospectus and except as would not, singly or in the
aggregate, materially adversely affect the business operations of the
Company and its consolidated subsidiaries considered as one
enterprise, (A) neither the Company nor any of its Subsidiaries is in
violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof including any
judicial or administrative order, consent, decree or judgment,
relating to pollution, the environment, wildlife or to the use,
storage, disposal, transport or handling of hazardous materials
(collectively, "Environmental Laws"), (B) the Company and its
Subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance
with their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against
the Company or any of its Subsidiaries and (D) there are no events or
circumstances that might reasonably be expected to form the basis of
an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or
affecting the Company or any of its Subsidiaries relating to any
Environmental Laws.
(24) STABILIZATION. The Company has not taken and will not
take, directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or
manipulation of the price of the Underwritten Securities. There are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the 1933 Act with respect to any
Underwritten Securities or securities similar to the Underwritten
Securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the 1933 Act.
(b) OFFICERS' CERTIFICATES. Any certificate signed by any officer of
the Company or any of its subsidiaries and delivered to any Underwriter or to
counsel for the Underwriters in connection with the offering of the Underwritten
Securities shall be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby on the date of such certificate
and, unless subsequently amended or supplemented, at each Representation Date
subsequent thereto.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) UNDERWRITTEN SECURITIES. The several commitments of the
Underwriters to purchase the Underwritten Securities pursuant to the applicable
Terms Agreement shall be deemed to have been made on the basis of the
representations, warranties and agreements herein contained and shall be subject
to the terms and conditions herein set forth.
(b) OPTION UNDERWRITTEN SECURITIES. Subject to the terms and
conditions herein set forth, the Company may grant, if so provided in the
applicable Terms Agreement, an option to the
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Underwriters, severally and not jointly, to purchase up to the number or
aggregate principal amount, as the case may be, of the Option Underwritten
Securities set forth therein at a price per Option Underwritten Security equal
to the price per Initial Underwritten Security, less an amount equal to any
dividends or distributions declared by the Company and paid or payable on the
Initial Underwritten Securities but not payable on the Option Underwritten
Securities. Such option, if granted, will expire 30 days after the date of such
Terms Agreement, and may be exercised in whole or in part from time to time only
for the purpose of covering over-allotments which may be made in connection with
the offering and distribution of the Initial Underwritten Securities upon notice
by the Representatives to the Company setting forth the number or aggregate
principal amount, as the case may be, of Option Underwritten Securities as to
which the several Underwriters are then exercising the option and the time, date
and place of payment and delivery for such Option Underwritten Securities. Any
such time and date of payment and delivery (each, a "Date of Delivery") shall be
determined by the Representatives, but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, unless otherwise agreed upon by the Representatives and the
Company. If the option is exercised as to all or any portion of the Option
Underwritten Securities, each of the Underwriters, severally and not jointly,
will purchase that proportion of the total number or aggregate principal amount,
as the case may be, of Option Underwritten Securities then being purchased which
the number or aggregate principal amount, as the case may be, of Initial
Underwritten Securities each such Underwriter has severally agreed to purchase
as set forth in such Terms Agreement bears to the total number or aggregate
principal amount, as the case may be, of Initial Underwritten Securities,
subject to such adjustments as the Representatives in their discretion shall
make to eliminate any sales or purchases of a fractional number or aggregate
principal amount, as the case may be, of Option Underwritten Securities.
(c) PAYMENT. Payment of the purchase price for, and delivery of, the
Initial Underwritten Securities shall be made at the offices of Sidley Xxxxxx
Xxxxx & Xxxx, Bank One Plaza, 00 X. Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or
at such other place as shall be agreed upon by the Representatives and the
Company, at 10:00 A.M. (Chicago time) on the third business day after the date
of the applicable Terms Agreement (unless postponed in accordance with the
provisions of Section 10 hereof), or such other time not later than ten business
days after such date as shall be agreed upon by the Representatives and the
Company (such time and date of payment and delivery being herein called "Closing
Time"). In addition, in the event that the Underwriters have exercised their
option, if any, to purchase any or all of the Option Underwritten Securities,
payment of the purchase price for, and delivery of such Option Underwritten
Securities, shall be made at the above-mentioned offices of Sidley Xxxxxx Xxxxx
& Xxxx, or at such other place as shall be agreed upon by the Representatives
and the Company, on the relevant Date of Delivery as specified in the notice
from the Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of the
Underwritten Securities to be purchased by them. It is understood that each
Underwriter has authorized the Representatives for their account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Underwritten Securities which it has severally agreed to purchase. The
Representatives individually and not as representative of the Underwriters, may
(but shall not be obligated to) make payment of the purchase price for the
Underwritten Securities to be purchased by any Underwriter whose funds
11
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such Underwriter from its
obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Underwritten
Securities shall be in such denominations and registered in such names as the
Representatives may request in writing at least one full business day prior to
the Closing Time or the relevant Date of Delivery, as the case may be. The
certificates for the Underwritten Securities will be made available for
examination and packaging by the Representatives in The City of New York not
later than 10:00 A.M. (Eastern time) on the last business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
of the Underwriter participating in the offering of Underwritten Securities, as
follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS.
The Company, subject to Section 3(b), will comply with the requirements of Rule
430A of the 1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations, if
and as applicable, and will notify the Representatives immediately, and confirm
the notice in writing, of (i) the effectiveness of any post-effective amendment
to the Registration Statement or the filing of any supplement or amendment to
the Prospectus, (ii) the receipt of any comments from the Commission, (iii) any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, and
(iv) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Underwritten Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424 and will take such steps as it deems necessary to ascertain promptly
whether the Prospectus transmitted for filing under Rule 424 was received for
filing by the Commission and, in the event that it was not, it will promptly
file the Prospectus. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b) of the 1933 Act Regulations),
any Term Sheet or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, will
furnish the Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or counsel
for the Underwriters shall reasonably object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and as many signed copies of all consents and certificates of
experts as the Representatives have requested or shall reasonably request, and
will also deliver to
12
the Representatives without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without exhibits)
for each of the Underwriters. The Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to any electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except
to the extent permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Company will deliver to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter may reasonably request, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus as such Underwriter may reasonably request.
The Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to any electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the
Underwritten Securities as contemplated in this Underwriting Agreement and the
applicable Terms Agreement and in the Registration Statement and the Prospectus.
If at any time when the Prospectus is required by the 1933 Act or the 1934 Act
to be delivered in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement in order that the Registration Statement will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or to amend or supplement the Prospectus in order that the Prospectus will not
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriters, without
charge, such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Underwritten Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representatives may designate and to
maintain such qualifications in effect for a period of not less than one year
from the date of the applicable Terms Agreement; provided, however, that the
Company shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Underwritten Securities have been so
13
qualified, the Company will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the date of such Terms Agreement.
(g) EARNINGS STATEMENT. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally available
to its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(h) USE OF PROCEEDS. The Company will use the net proceeds received by
it from the sale of the Underwritten Securities in the manner specified in the
Prospectus under "Use of Proceeds".
(i) LISTING. The Company will use its best efforts to effect the
listing of the Underwritten Securities, prior to the Closing Time, on any
national securities exchange or quotation system if and as specified in the
applicable Terms Agreement.
(j) RESTRICTION ON SALE OF SECURITIES. Between the date of the
applicable Terms Agreement and the Closing Time or such other date specified in
such Terms Agreement, the Company and its Subsidiaries will not, without the
prior written consent of the Representatives directly or indirectly, issue,
sell, offer or contract to sell, grant any option for the sale or purchase of,
or otherwise dispose of, any debt securities; provided, however, that this
Section 3(j) shall not be applicable to borrowings under any unsecured revolving
credit agreement between the Company or any of its Subsidiaries, on the one
hand, and one or more banks, on the other hand.
(k) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. PAYMENT OF EXPENSES. (a) EXPENSES. The Company will pay all
expenses incident to the performance of its obligations under this Underwriting
Agreement and the applicable Terms Agreement, including (i) the printing and
filing of the Registration Statement as originally filed and of each amendment
thereto, (ii) the printing of this Underwriting Agreement, any Terms Agreement,
any Agreement among Underwriters, the Indenture and such other documents as may
be required in connection with the offering, purchase, sale, issuance or
delivery of the Underwritten Securities, (iii) the preparation, issuance and
delivery of the certificates for the Underwritten Securities to the
Underwriters, including any transfer taxes and any stamp or other duties payable
upon the sale, issuance or delivery of such securities to the Underwriter, (iv)
the fees and disbursements of the Company's counsel and accountants, (v) the
qualification of the Underwritten Securities under state securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Surveys and any legal investment survey, (vi) the printing and delivery to the
Underwriters of copies of the Registration Statement as originally filed and of
each amendment thereto, of each preliminary prospectus, any Term Sheet, and the
Prospectus and any amendments or supplements thereto, (vii) the fees charged by
nationally recognized statistical
14
rating organizations for the rating of the Underwritten Securities, (viii) the
fees and expenses incurred with respect to any listing of the Underwritten
Securities, (ix) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review, if
any, by the National Association of Securities Dealers, Inc. (the "NASD") of the
terms of the sale of the Underwritten Securities, and (x) the fees and expenses
of any Underwriter acting in the capacity of a "qualified independent
underwriter" (as defined in Rule 2720(b)(15) of the NASD Conduct Rules), if
applicable.
(b) TERMINATION OF AGREEMENT. If the applicable Terms Agreement is
terminated by the Representatives in accordance with the provisions of Section 5
or Section 9(b)(i) hereof, the Company shall reimburse the Underwriters for all
of their out-of-pocket expenses, including the reasonable fees and disbursements
of counsel for the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the Underwriters to purchase and pay for the Underwritten Securities pursuant to
the applicable Terms Agreement are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any of its subsidiaries
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or be pending or
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus containing information
relating to the description of the Underwritten Securities, the specific method
of distribution and similar matters shall have been filed with the Commission in
accordance with Rule 424(b)(1), (2), (3), (4) or (5), as applicable (or any
required post-effective amendment providing such information shall have been
filed and declared effective in accordance with the requirements of Rule 430A),
or, if the Company has elected to rely upon Rule 434 of the 1933 Act
Regulations, a Term Sheet including the Rule 434 Information shall have been
filed with the Commission in accordance with Rule 424(b)(7).
(b) OPINION OF COUNSEL FOR COMPANY. At Closing Time, the Underwriters
shall have received the opinion, dated as of Closing Time, of each of Sidley
Xxxxxx Xxxxx & Xxxx and Xxxxxxx & Xxxxxx, each counsel for the Company, in form
and substance satisfactory to counsel for the Underwriters, together with signed
or reproduced copies of such letter for each of the other Underwriters, to the
effect set forth in Exhibits B and C hereto, respectively, and to such further
effect as counsel to the Underwriters may reasonably request.
(c) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, the
Representatives shall have received the opinion, dated as of Closing Time, of
Mayer, Brown, Xxxx & Maw, counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters, with
respect to the matters set forth in (1) (as to the Company's existence and good
standing), (2), (6) to (10), (16), (17), (20) and the third from last paragraph
of Exhibit B hereto. In giving such opinion, such counsel may rely, as to all
matters governed by the laws
15
of jurisdictions other than the law of the State of New York, the federal law of
the United States and the General Corporation Law of the State of Delaware, upon
the opinions of counsel satisfactory to the Representatives. Such counsel may
also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials.
(d) ABSENCE OF MATERIAL ADVERSE CHANGES; OFFICERS' CERTIFICATE. At
Closing Time, there shall not have been, since the date of the applicable Terms
Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representatives shall have
received a certificate of the Chairman, President or Vice President-Finance of
the Company and of the Controller or Treasurer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material adverse
change with respect to the Company and its consolidated subsidiaries considered
as one enterprise, (ii) the representations and warranties in Section 1(a) are
true and correct with the same force and effect as though expressly made at and
as of the Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
the Closing Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been received by the Company or, to the Company's
knowledge, issued and, to the Company's knowledge, no proceedings for that
purpose have been initiated or threatened by the Commission.
(e) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of the
applicable Terms Agreement, the Representatives shall have received from
PricewaterhouseCoopers LLP a letter dated such date, in form and substance
satisfactory to the Representatives together with signed or reproduced copies of
such letter for each of the other Underwriters, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(f) BRING-DOWN COMFORT LETTER. At Closing Time, the Representatives
shall have received from PricewaterhouseCoopers LLP a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section 5, except that the
specified date referred to shall be a date not more than three business days
prior to the Closing Time.
(g) RATINGS. At Closing Time and at any relevant Date of Delivery, the
Underwritten Securities shall have the ratings accorded by any "nationally
recognized statistical rating organization," as defined by the Commission for
purposes of Rule 436(g)(2) of the 1933 Act Regulations (a "NRSRO"), if and as
specified in the applicable Terms Agreement, or shall have ratings higher than
those specified in the applicable Terms Agreement.
(h) APPROVAL OF LISTING. At Closing Time, the Underwritten Securities
shall have been approved for listing, subject only to official notice of
issuance, if and as specified in the applicable Terms Agreement.
16
(i) NO OBJECTION. If the Registration Statement or an offering of
Underwritten Securities has been filed with the NASD for review, the NASD shall
not have raised any objection that remains unresolved at Closing Time with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(j) LOCK-UP AGREEMENTS. On the date of the applicable Terms Agreement,
the Representatives shall have received, in form and substance satisfactory to
it, each lock-up agreement, if any, specified in such Terms Agreement as being
required to be delivered by the persons listed therein.
(k) OVER-ALLOTMENT OPTION. In the event that the Underwriters are
granted an over-allotment option by the Company in the applicable Terms
Agreement and the Underwriters exercise their option to purchase all or any
portion of the Option Underwritten Securities, the representations and
warranties of the Company contained herein and the statements in any
certificates furnished by the Company or any of its subsidiaries hereunder shall
be true and correct as of each Date of Delivery, and, at the relevant Date of
Delivery, the Representatives shall have received:
(1) A certificate, dated such Date of Delivery, of the
Chairman, President or Vice President-Finance of the Company and the
Controller or Treasurer of the Company, confirming that the
certificate delivered at the Closing Time pursuant to Section 5(d)
hereof remains true and correct as of such Date of Delivery.
(2) The opinion of each of Sidley Xxxxxx Xxxxx & Xxxx and
Holland & Knight, each counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Underwritten Securities and otherwise
to the same effect as the opinions required by Section 5(b) hereof.
(3) The favorable opinion of Mayer, Brown, Xxxx & Maw,
counsel for the Underwriters, dated such Date of Delivery, relating to
the Option Underwritten Securities and otherwise to the same effect as
the opinion required by Section 5(c) hereof.
(4) A letter from PricewaterhouseCoopers LLP, in form and
substance satisfactory to the Representatives and dated such Date of
Delivery, substantially in the same form and substance as the letter
furnished to the Representatives pursuant to Section 5(f) hereof,
except that the "specified date" on the letter furnished pursuant to
this paragraph shall be a date not more than three business days prior
to such Date of Delivery.
(5) Since the time of execution of such Terms Agreement,
there shall not have occurred a downgrading in, or withdrawal of, the
rating assigned to the Underwritten Securities or any of the Company's
other securities by any such rating organization, and no such rating
organization shall have publicly announced that it has under
surveillance or review with possible negative implications its rating
of the Underwritten Securities or any of the Company's other
securities.
(l) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may
17
reasonably require for the purpose of enabling them to pass upon the issuance
and sale of the Underwritten Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the
Underwritten Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives and counsel for the Underwriters.
(m) TERMINATION OF TERMS AGREEMENT. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
the applicable Terms Agreement (or, with respect to the Underwriters' exercise
of any applicable over-allotment option for the purchase of Option Underwritten
Securities on a Date of Delivery after the Closing Time, the obligations of the
Underwriters to purchase the Option Underwritten Securities on such Date of
Delivery) may be terminated by the Representatives by notice to the Company at
any time at or prior to the Closing Time (or such Date of Delivery, as
applicable), and such termination shall be without liability of any party to any
other party except as provided in Section 4 and except that Sections 1, 6, 7 and
8 shall survive any such termination and remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF UNDERWRITERS. 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 1933 Act or Section 20 of
the 1934 Act as follows:
(1) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information deemed to be part of the
Registration Statement, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(2) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(3) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements
of counsel chosen by the Representatives), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue
18
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (1) or
(2) above;
provided, however, that (A) this indemnity agreement does not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information deemed to be a part thereof, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) and (B) as to any preliminary prospectus, any preliminary prospectus
supplement, the Prospectus or any amendment or supplement thereto, this
indemnity agreement shall not inure to the benefit of any Underwriter on account
of any loss, liability, claim, damage or expense arising from the fact that such
Underwriter sold Underwritten Securities to a person to whom there was not sent
or given, at or prior to the written confirmation of such sale, a copy of the
Prospectus (excluding documents incorporated by reference) or of the Prospectus
(excluding documents incorporated by reference) as then amended or supplemented
in any case where such delivery is required by the 1933 Act if the Company has
previously furnished copies thereof to such Underwriter in the quantities
requested at a reasonable time prior to the delivery of the written confirmation
of such sale and the loss, claim, damage or liability of such Underwriter
results from an untrue statement or omission of a material fact contained in
such preliminary prospectus, preliminary prospectus supplement, Prospectus
(excluding documents incorporated by reference) or amendment or supplement
thereto, which the Company has sustained the burden of proving was corrected in
the Prospectus (excluding documents incorporated by reference) or in the
Prospectus (excluding documents incorporated by reference) as then amended or
supplemented.
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information deemed to be a part thereof, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representatives expressly for use
in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party
19
will be entitled to participate therein, and to the extent that it may elect by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party, provided,
however, that if the defendants (including any impleaded party) in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel. Upon receipt
of notice from the indemnifying party to such indemnified party of its election
so to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 6 for any legal fees or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation unless (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall not,
in connection with any one action or separate but 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
counsel (plus any local counsel) representing the indemnified parties under
Section 6(a) who are parties to such action); (ii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action; or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (i)
or (iii). No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time
an indemnified party shall have requested in writing an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(2) effected without its written consent if
(i) such settlement is entered into after the later of (A) 45 days after such
indemnified party has mailed (by registered or certified mail, postage prepaid)
the aforesaid request to each of the Notice Recipients (as defined below) and
(B) if the indemnifying party has not given written notice to such indemnified
party of the receipt by such indemnifying party of the aforesaid request, 30
days after such indemnified party has mailed (by registered or certified mail,
postage prepaid) a second such request to each of the Notice Recipients,
provided that such second request is not mailed prior to the 46th day after the
request referred to in subclause (i)(A) above is mailed, (ii) such indemnifying
party shall have received notice of the terms of such settlement
20
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(ii)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement. The Notice Recipients are the
Chairman and the Assistant General Counsel of the Company. Requests mailed
pursuant to this Section 6(d) shall be mailed to XxXxx X. Xxxxxxx, Xx.,
Chairman, United States Cellular Corporation, c/o Telephone and Data Systems,
Inc., 00 Xxxxx XxXxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, with a copy to Xxxxxxx X.
Xxxxxxx, Esq., Assistant General Counsel, United States Cellular Corporation,
c/o Sidley Xxxxxx Xxxxx & Xxxx, 00 Xxxxx Xxxxxxxx, Xxxxxxx, XX 00000.
SECTION 7. CONTRIBUTION. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (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 Underwritten Securities pursuant to the applicable Terms
Agreement or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and the Underwriters, on the other hand, in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of such Underwritten Securities (before deducting expenses)
received by the Company and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus, or, if
Rule 434 is used, the corresponding location on the Term Sheet bear to the
aggregate initial public offering price of such Underwritten Securities as set
forth on such cover.
The relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the 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 were determined by pro rata
allocation (even if the
21
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above in this Section 7. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party and
referred to above in this Section 7 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
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 Underwritten Securities 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 any 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 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number or aggregate principal amount, as the case may be, of
Initial Underwritten Securities set forth opposite their respective names in the
applicable Terms Agreement, and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Underwriting Agreement or the applicable Terms Agreement, or contained in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto or thereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive
delivery of and payment for the Underwritten Securities.
SECTION 9. TERMINATION.
(a) UNDERWRITING AGREEMENT. This Underwriting Agreement (excluding the
applicable Terms Agreement) may be terminated for any reason at any time by the
Company or by the Representatives upon the giving of 30 days' prior written
notice of such termination to the other party hereto.
(b) TERMS AGREEMENT. The Representatives may terminate the applicable
Terms Agreement, by notice to the Company, at any time at or prior to the
Closing Time or any relevant Date of Delivery, if (i) there has been, since the
time of execution of such Terms Agreement or
22
since the respective dates as of which information is given in the Prospectus
(exclusive of any supplement thereto, after the date of the applicable Terms
Agreement), any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its consolidated subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business, or (ii) there has occurred
any material adverse change in the financial markets in the United States or, if
the Underwritten Securities include Debt Securities denominated or payable in,
or indexed to, one or more foreign or composite currencies, in the international
financial markets, or any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the reasonable judgment
of the Representatives impracticable or inadvisable to market the Underwritten
Securities or to enforce contracts for the sale of the Underwritten Securities,
or (iii) trading in any securities of the Company has been suspended or
materially limited by the Commission or the American Stock Exchange, or if
trading generally on the New York Stock Exchange or the American Stock Exchange
or in the Nasdaq National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by either of said exchanges or by such system or by
order of the Commission, the NASD or any other governmental authority, or a
material disruption has occurred in commercial banking or securities settlement
or clearance services in the United States, or (iv) a banking moratorium has
been declared by either Federal or New York authorities or, if the Underwritten
Securities include Debt Securities denominated or payable in, or indexed to, one
or more foreign or composite currencies, by the relevant authorities in the
related foreign country or countries, or (v) there has occurred, since the time
of execution of such Terms Agreement, a downgrading in, or withdrawal of, the
rating assigned to the Underwritten Securities or any of the Company's other
securities by a NRSRO, or since the time of execution of such Terms Agreement,
any such NRSRO shall have publicly announced that it has under surveillance or
review with possible negative implications its rating of the Underwritten
Securities or any of the Company's other securities.
(c) LIABILITIES. If this Underwriting Agreement or the applicable
Terms Agreement is terminated pursuant to this Section 9, such termination shall
be without liability of any party to any other party except as provided in
Section 4 hereof, and provided further that Sections 1, 6, 7 and 8 shall survive
such termination and remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more
of the Underwriters shall fail at the Closing Time or the relevant Date of
Delivery, as the case may be, to purchase the Underwritten Securities which it
or they are obligated to purchase under the applicable Terms Agreement (the
"Defaulted Securities"), then the Representatives and the Company shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters reasonably acceptable to
the Representatives, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Representatives shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number or aggregate principal amount, as the case may be,
of Defaulted Securities does not exceed 10% of the number or aggregate principal
amount, as the case may be, of Underwritten Securities to be purchased on such
date pursuant to such Terms Agreement, the
23
non-defaulting Underwriters shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations under such Terms Agreement bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the number or aggregate principal amount, as the case may be,
of Defaulted Securities exceeds 10% of the number or aggregate principal amount,
as the case may be, of Underwritten Securities to be purchased on such date
pursuant to such Terms Agreement, such Terms Agreement (or, with respect to the
Underwriters' exercise of any applicable over-allotment option for the purchase
of Option Underwritten Securities on a Date of Delivery after the Closing Time,
the obligations of the Underwriters to purchase, and the Company to sell, such
Option Underwritten Securities on such Date of Delivery) shall terminate without
liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in (i) a
termination of the applicable Terms Agreement or (ii) in the case of a Date of
Delivery after the Closing Time, a termination of the obligations of the
Underwriters and the Company with respect to the related Option Underwritten
Securities, as the case may be, either the Representatives or the Company shall
have the right to postpone the Closing Time or the relevant Date of Delivery, as
the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or the Prospectus or in any other
documents or arrangements.
SECTION 11. NOTICES. Except as otherwise provided in Section 6(d), all
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed to the
Representatives as follows: Xxxxxx Xxxxxxx & Co. Incorporated, Attention:
Xxxxxxx Xxxxx, Executive Director, Global Capital Markets, 0000 Xxxxxxxx, Xxx
Xxxx, XX 00000; notices to the Company shall be directed to XxXxx X. Xxxxxxx,
Xx., Chairman, United States Cellular Corporation, c/o Telephone and Data
Systems, Inc., 00 Xxxxx XxXxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, with a copy to
Xxxxxxx X. Xxxxxxx, Esq., Assistant General Counsel, United States Cellular
Corporation, c/o Sidley Xxxxxx Xxxxx & Xxxx, 00 Xxxxx Xxxxxxxx, Xxxxxxx, XX
00000.
SECTION 12. PARTIES. This Underwriting Agreement and the applicable
Terms Agreement shall each inure to the benefit of and be binding upon the
Company, the Representatives and, upon execution of such Terms Agreement, any
other Underwriters and their respective successors. Nothing expressed or
mentioned in this Underwriting Agreement or such Terms Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Underwriting Agreement or such Terms Agreement or
any provision herein or therein contained. This Underwriting Agreement and such
Terms Agreement and all conditions and provisions hereof and thereof are
intended to be for the sole and exclusive benefit of the parties hereto and
thereto and their respective successors, and said controlling persons and
officers and directors
24
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Underwritten Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS UNDERWRITING AGREEMENT AND
ANY APPLICABLE TERMS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS OTHERWISE SET FORTH HEREIN,
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. EFFECT OF HEADINGS. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
25
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this Underwriting Agreement, along with all counterparts, will become a binding
agreement between the Representatives and the Company in accordance with its
terms.
Very truly yours,
UNITED STATES CELLULAR CORPORATION
By: /s/ XxXxx X. Xxxxxxx, Xx.
Name: XxXxx X. Xxxxxxx, Xx.
Title: Chairman
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
(Chief Financial Officer) and Treasurer
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL, LYNCH, XXXXXX, XXXXXX & XXXXX INCORPORATED
XXXXXX XXXXXXX & CO. INCORPORATED
UBS WARBURG LLC
BY: XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxxxxx Xxxxx
Authorized Signatory
Acting on behalf of itself and the other named Underwriters.
[Signature Page to the Underwriting Agreement]
