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EXHIBIT 1.1
[ ] SHARES
▇▇▇▇▇▇▇▇ COMMUNICATIONS GROUP, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
[______], 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
As Representatives of the several
Underwriters named in Schedule 1,
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE)
SALOMON BROTHERS INTERNATIONAL LIMITED
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
As Representatives of the several
Underwriters named in Schedule 2,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
▇▇▇▇▇▇▇▇ Communications Group, Inc., a Delaware corporation (the
"COMPANY"), proposes to sell [ ] shares (the "FIRM STOCK") of the Company's
Common Stock, par value $0.01 per share (the "COMMON STOCK").
It is understood that, subject to the conditions hereinafter stated, [
] shares of the Firm Stock (the "U.S. FIRM STOCK") will be sold to the several
U.S. Underwriters named in Schedule 1 hereto (the "U.S. UNDERWRITERS") in
connection with the offering and sale of such U.S. Firm Stock in the United
States and Canada to United States and Canadian Persons (as such terms are
defined in the Agreement Between U.S. and International Underwriters of even
date herewith), and [ ] shares of the Firm Stock (the "INTERNATIONAL FIRM
STOCK") will be sold to the several International Underwriters named in
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Schedule 2 hereto (the "INTERNATIONAL UNDERWRITERS") in connection with the
offering and sale of such International Firm Stock outside the United States
and Canada to persons other than United States and Canadian Persons. ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney Inc., ▇▇▇▇▇▇ Brothers Inc. and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated shall act as representatives (the "U.S. REPRESENTATIVES") of
the several U.S. Underwriters, and ▇▇▇▇▇▇ Brothers International (Europe),
Salomon Brothers International Limited and ▇▇▇▇▇▇▇ ▇▇▇▇▇ International shall
act as representatives (the "INTERNATIONAL REPRESENTATIVES") of the several
International Underwriters. The U.S. Underwriters and the International
Underwriters are hereinafter collectively referred to as the "UNDERWRITERS."
The U.S. Representatives and the International Representatives are hereinafter
collectively referred to as the "REPRESENTATIVES."
In addition, the Company proposes to grant to the U.S. Underwriters an
option to purchase up to an additional [ ] shares of the Common Stock on the
terms and for the purposes set forth in Section 3 (the "OPTION STOCK"). The
Firm Stock and the Option Stock, if purchased, are hereinafter collectively
called the "STOCK." This is to confirm the agreement concerning the purchase of
the Stock from the Company by the Underwriters.
It is understood that as of the Closing Date (as defined below), the
Company will consummate a series of transactions pursuant to which (i) the
Company will issue and sell the Stock pursuant to this Agreement and shall issue
and sell $[ ]million aggregate principal amount of its [ ]% Senior Notes due
2009 (the "NOTES") pursuant to an underwriting agreement (the "DEBT UNDERWRITING
AGREEMENT") of even date herewith and (ii) the Company will have entered into a
strategic alliance (the "STRATEGIC ALLIANCE") with SBC Communications, Inc.
("SBC") and in connection therewith will sell shares of the Common Stock to SBC
pursuant to a Securities Purchase Agreement dated as of February 8, 1999 ( the
"SECURITIES PURCHASE AGREEMENT") (all such transactions, as more fully described
in the Prospectus (as defined below), shall collectively be referred to herein
as the "TRANSACTIONS").
It is further understood that [ ] shares of the Firm Stock (the
"DIRECTED STOCK") will initially be reserved by the several Underwriters for
offer and sale, upon the terms and conditions set forth in the Prospectus and
in accordance with the rules and regulations of the National Association of
Securities Dealers, Inc. (the "DIRECTED STOCK PROGRAM"), to employees and
directors of the Company and its affiliates and subsidiaries (collectively,
"PARTICIPANTS") who have heretofore delivered to the Representatives offers or
indications of interest to
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purchase shares of Directed Stock in form satisfactory to the Representatives,
and that any allocation of such Directed Stock among such persons will be made
in accordance with timely directions received by the Representatives from the
Company; provided, that under no circumstances will the Representatives or any
Underwriter be liable to the Company or to any such person for any action taken
or omitted in good faith in connection with such offering to any Participant.
It is further understood that any shares of Directed Stock which are not orally
confirmed for purchase by any Participant by the end of the business day on
which this agreement is executed will be offered by the Underwriters to the
public upon the terms and conditions set forth in the Prospectus.
SECTION 1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-1 with respect to the Stock has
(i) been prepared by the Company in conformity in all material respects with
the requirements of the Securities Act of 1933, as amended (the "SECURITIES
ACT"), and the rules and regulations (the "RULES AND REGULATIONS") of the
Securities and Exchange Commission (the "COMMISSION") thereunder, (ii) been
filed with the Commission under the Securities Act and (iii) become effective
under the Securities Act. The registration statement contains two prospectuses
to be used in connection with the offering and sale of the Stock: the U.S.
prospectus, to be used in connection with the offering and sale of Stock in the
United States and Canada to United States and Canadian Persons, and the
international prospectus, to be used in connection with the offering and sale
of Stock outside the United States and Canada to persons other than United
States and Canadian Persons. The international prospectus is identical to the
U.S. prospectus except for the outside front cover page and the section
entitled "Underwriting". Copies of such registration statement and each of the
amendments thereto have been delivered by the Company to you. As used in this
Agreement, "EFFECTIVE TIME" means the date and the time as of which such
registration statement, or the most recent post-effective amendment thereto, if
any, was declared effective by the Commission; "EFFECTIVE DATE" means the date
of the Effective Time; "PRELIMINARY PROSPECTUS" means each prospectus included
in such registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with the Commission
by the Company with the consent of the Representatives pursuant to Rule 424(a)
of the Rules and Regulations; "REGISTRATION STATEMENT" means such registration
statement, as amended at the Effective Time, including all information
contained in the final prospectus filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations and deemed to be a part of the registration
statement as of the Effective Time pursuant to Rule 430A of the Rules and
Regulations; and "PROSPECTUS" means the U.S. prospectus and the international
prospectus in the respective forms first used to
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confirm sales of Stock. If the Company has filed an abbreviated registration
statement to register additional shares of Common Stock pursuant to Rule 462(b)
under the Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then any
reference herein to the term "REGISTRATION STATEMENT" shall be deemed to
include such Rule 462 Registration Statement. To the best of the Company's
knowledge, the Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus.
(b) The Registration Statement conforms in all material respects, and
the Prospectus and any further amendments or supplements to the Registration
Statement or the Prospectus will, when they become effective or are filed with
the Commission, as the case may be, conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations and do not and
will not, as of the applicable effective date (as to the Registration Statement
and any amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided
that no representation or warranty is made as to information contained in or
omitted from the Registration Statement or the Prospectus in reliance upon and
in conformity with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein.
(c) The Company and each of its significant subsidiaries (as defined
in Rule 1-02 of Regulation S-X under the Securities Act) (each, a "SIGNIFICANT
SUBSIDIARY" and collectively, "SIGNIFICANT SUBSIDIARIES"), which are listed on
Schedule 3 hereto, have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective jurisdictions
of incorporation, are duly qualified to do business and are in good standing as
foreign corporations in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses requires
such qualification, except where failure to have such qualifications would not,
singly or in the aggregate, have a material adverse effect on the consolidated
financial position, results of operation, business or prospects of the Company
and its subsidiaries, taken as a whole, and have all power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged.
(d) The Company has an authorized capitalization as set forth in the
Prospectus and all of the issued shares of capital stock of the Company have
been duly authorized and validly issued, are fully paid and non-assessable and
conform to the description thereof contained in the Prospectus; and all of the
issued shares of capital stock of each Significant Subsidiary have been duly
authorized and validly issued and are fully paid and non-assessable and (except
for directors'
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qualifying shares) are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims.
(e) The shares of the Stock to be issued and sold by the Company to
the Underwriters hereunder and the shares of Common Stock to be issued and sold
by the Company to SBC in connection with the Strategic Alliance have been duly
authorized and, when issued and delivered against payment therefor in
accordance with this Agreement and the Securities Purchase Agreement,
respectively, will be validly issued, fully paid and non-assessable; and the
Stock and the Common Stock will conform in all material respects to the
descriptions thereof contained in the Prospectus.
(f) This Agreement has been duly authorized, executed and delivered by
the Company.
(g) The execution, delivery and performance of this Agreement and each
of the other documents to be entered into in connection with the Transactions
by the Company and the consummation of the transactions contemplated hereby and
thereby will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its Significant Subsidiaries is a party or by which the
Company or any of its Significant Subsidiaries is bound or to which any of the
property or assets of the Company or any of its Significant Subsidiaries is
subject, other than such conflicts, agreements, breaches, violations or
defaults which, singly or in the aggregate, would not have a material adverse
effect on the consolidated financial position, results of operations, business
or prospects of the Company and its subsidiaries, taken as a whole, nor will
such actions result in any violation of the provisions of the charter or
by-laws of the Company or any of its Significant Subsidiaries or any statute or
any order, rule or regulation known to the Company of any court or governmental
agency or body having jurisdiction over the Company or any of its Significant
Subsidiaries or any of their properties or assets; and except for the
registration of the Stock and the Notes under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act, the Securities Act, applicable state
securities laws and securities laws of foreign jurisdictions in connection with
the purchase and distribution of the Stock by the Underwriters and the purchase
and distribution of the Notes by the underwriters named in the Debt
Underwriting Agreement, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby.
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(h) Except as described in the Prospectus, 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 Securities Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include any securities of the
Company in the securities registered pursuant to the Registration Statement.
(i) Neither the Company nor any of its Significant Subsidiaries has
sustained, since the respective dates as of which information is given in the
Prospectus, any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree that has resulted in,
or is reasonably likely to result in, a material adverse change in the
consolidated financial position, results of operations, business or prospects
of the Company and its subsidiaries, taken as a whole, otherwise than as set
forth or contemplated in the Prospectus; and, since such date, there has not
been any material change in the capital stock or long-term debt of the Company
or any of its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
consolidated financial position, results of operations, business or prospects
of the Company and its subsidiaries, taken as a whole, otherwise than as set
forth or contemplated in the Prospectus.
(j) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or included
in the Prospectus present fairly, in all material respects, the financial
condition and results of operations of the entities purported to be shown
thereby, at the dates and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved, except as may be indicated in
the notes thereto.
(k) Ernst & Young, who have certified certain financial statements of
the Company, whose report appears in the Prospectus and who have delivered one
of the initial letters referred to in Section 7(f) hereof, are independent
public accountants as required by the Securities Act and the Rules and
Regulations; and Deloitte & Touche, whose report appears in the Prospectus and
who have delivered one of the initial letters referred to in Section 7(f)
hereof, were independent accountants as required by the Securities Act and the
Rules and Regulations during the periods covered by the financial statements on
which they reported.
(l) The Company and each of its Significant Subsidiaries have good
title to all real property and good title to all personal property owned by
them, in each case free and clear of all liens, encumbrances and defects,
except such as are
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described in the Prospectus or such as do not materially affect the value of
such property and do not materially interfere with the conduct of business of
the Company and its subsidiaries, taken as a whole; and all assets held under
lease by the Company and its Significant Subsidiaries are held by them under
valid, subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the conduct of business of the Company and
its subsidiaries, taken as a whole.
(m) The Company and each of its Significant Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as the Company
believes is adequate for the conduct of their respective businesses and the
value of their respective properties and as the Company believes is customary
for companies engaged in similar businesses in similar industries.
(n) The Company and each of its Significant Subsidiaries own or
possess, or can acquire on reasonable terms, adequate rights to use all
material patents, patent applications, trademarks, service marks, trade names,
copyrights and licenses necessary for the conduct of their respective
businesses and have no reason to believe that the conduct of their respective
businesses will conflict with, and have not received any notice of any claim of
conflict with, any such rights of others which, singly or in the aggregate, in
the judgment of the Company, is reasonably likely to result in any material
adverse change in the consolidated financial position, results of operations,
business or prospects of the Company and its subsidiaries, taken as a whole.
(o) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its Significant
Subsidiaries is a party or of which any property or assets of the Company or
any of its Significant Subsidiaries is the subject which, if determined
adversely to the Company or any of its Significant Subsidiaries, might have a
material adverse effect on the consolidated financial position, results of
operations, business or prospects of the Company and its subsidiaries, taken as
a whole; and to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others.
(p) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration Statement
by the Securities Act or by the Rules and Regulations which have not been
described in the Prospectus or filed as exhibits to the Registration Statement.
(q) No business or related party transaction exists which is required
by Item 404 of Regulation S-K to be described in the Prospectus which is not so
described.
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(r) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "REPORTABLE EVENT" (as defined in ERISA) has occurred
with respect to any "PENSION PLAN" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "PENSION PLAN" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "CODE"); and each "PENSION PLAN" for
which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
(s) The Company has filed all material federal, state and local income
and franchise tax returns required to be filed through the date hereof and has
paid all taxes due thereon, other than those filings or payments being
contested in good faith, and the Company has not received notice that any tax
deficiency has been determined adversely to the Company or any of its
Significant Subsidiaries which has had or is reasonably likely to have a
material adverse effect on the consolidated financial position, results of
operations, business or prospects of the Company and its subsidiaries, taken as
a whole.
(t) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus or with respect to the subsequent issuance of shares of Common
Stock, if any, pursuant to employee or director benefit plans, the Company has
not (i) issued or granted any securities, (ii) incurred any liability or
obligation, direct or contingent, other than liabilities and obligations which
were incurred in the ordinary course of business, (iii) entered into any
transaction not in the ordinary course of business, except, in case of (ii) and
(iii), for such liabilities, obligations or transactions that have not had or
are not reasonably expected to have, a material adverse effect on the
consolidated financial conditions, results of operations, business or prospects
of the Company and its subsidiaries, taken as a whole or (iv) declared or paid
any dividend on its capital stock.
(u) The Company (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls which provide reasonable assurance
that (A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit preparation
of its financial statements and to maintain accountability for its assets, (C)
access to its assets is
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permitted only in accordance with management's authorization and (D) the
reported accountability for its assets is compared with existing assets at
reasonable intervals.
(v) Neither the Company nor any of its Significant Subsidiaries (i) is
in violation of its charter or by-laws, (ii) is in default in any material
respect, and no event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any material indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which it is a
party or by which it is bound or to which any of its properties or assets is
subject or (iii) is in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its property or
assets may be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit necessary
to the ownership of its property or to the conduct of its business except, in
case of (ii) and (iii), for such defaults, violations, or failures to obtain
such authorizations or permits that have not had or are not reasonably expected
to have, a material adverse effect on the consolidated financial condition,
results or operations, business or prospects of the Company and its
subsidiaries, taken as a whole.
(w) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of its
Significant Subsidiaries (or, to the knowledge of the Company, any of their
predecessors in interest) at, upon or from any of the property now or
previously owned or leased by the Company or its Significant Subsidiaries in
violation of any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit or which would require remedial action under any applicable
law, ordinance, rule, regulation, order, judgment, decree or permit, except for
any violation or remedial action which would not have, or could not be
reasonably likely to have, singularly or in the aggregate with all such
violations and remedial actions, a material adverse effect on the consolidated
financial position, results of operations, business or prospects of the Company
and its subsidiaries, taken as a whole; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any kind
onto such property or into the environment surrounding such property of any
toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or any of its Significant
Subsidiaries or with respect to which the Company or any of its Significant
Subsidiaries have knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not have or would
not be reasonably likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a material adverse effect on
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the consolidated financial position, results of operations, business or
prospects of the Company and its subsidiaries, taken as a whole; and the terms
"HAZARDOUS WASTES", "TOXIC WASTES", "HAZARDOUS SUBSTANCES" and "MEDICAL WASTES"
shall have the meanings specified in any applicable local, state, federal and
foreign laws or regulations with respect to environmental protection.
(x) Neither the Company nor any subsidiary is, or, as of the Closing
Date after giving effect to the Transactions and the application of the net
proceeds therefrom as described in the Prospectus, will be, an "investment
company" as defined in the Investment Company Act of 1940, as amended.
(y) On or prior to the Closing Date, each of the documents to be
entered into in connection with the Transactions (other than this Agreement)
will have been duly authorized, executed and delivered by the Company in
substantially the form previously provided to the Underwriters and will conform
to the descriptions thereof in the Prospectus.
(z) The Registration Statement and the Preliminary Prospectus
distributed in connection with the Directed Stock Program conform in all
material respects with applicable laws or regulations of foreign jurisdictions
in which they were distributed, and any further amendments or supplements to
the Registration Statement or the Prospectus will, when they become effective
or are filed with any applicable regulatory agencies, conform in all material
respects, with applicable laws or regulations of foreign jurisdictions in which
they are distributed in connection with the Directed Stock Program.
(aa) No consent, approval, authorization or order of, or qualification
with, any governmental body or agency, other than those obtained or that will
be obtained by the Closing Date, is required in connection with the offering of
the Directed Stock in any jurisdiction where the Directed Stock is being
offered.
SECTION 2. Purchase of the Stock by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell [ ] shares of the
Firm Stock to the several Underwriters and each of the Underwriters, severally
and not jointly, agrees to purchase the number of shares of the Firm Stock set
forth opposite that Underwriter's name in Schedule 1 and 2 hereto. The
respective purchase obligations of the Underwriters with respect to the Firm
Stock shall be rounded among the Underwriters to avoid fractional shares, as
the Representatives may determine.
In addition, the Company grants to the U.S. Underwriters an option to
purchase up to [ ] shares of Option Stock. Such option is granted for the
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purpose of covering over-allotments in the sale of Firm Stock and is
exercisable as provided in Section 4 hereof. Shares of Option Stock shall be
purchased severally for the account of the U.S. Underwriters in proportion to
the number of shares of Firm Stock set forth opposite the name of such U.S.
Underwriters in Schedule 1 hereto. The respective purchase obligations of each
U.S. Underwriter with respect to the Option Stock shall be adjusted by the U.S.
Representatives so that no U.S. Underwriter shall be obligated to purchase
Option Stock other than in 100 share amounts.
The price of both the Firm Stock and any Option Stock shall be $[ ]
per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on any Delivery Date (as hereinafter defined), except upon payment
for all the Stock to be purchased on such Delivery Date as provided herein.
SECTION 3. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of the Firm
Stock, the several Underwriters propose to offer the Firm Stock for sale upon
the terms and conditions set forth in the Prospectus.
SECTION 4. Delivery of and Payment for the Stock. Delivery of and
payment for the Firm Stock shall be made at the offices of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M., New
York City time, on the fourth full business day following the date of this
Agreement or at such other date or place as shall be determined by agreement
between the Representatives and the Company. This date and time are sometimes
referred to as the "FIRST DELIVERY DATE." On the First Delivery Date, the
Company shall deliver or cause to be delivered certificates representing the
Firm Stock to the Representatives for the account of each Underwriter against
payment to or upon the order of the Company of the purchase price by wire
transfer in immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a
further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Firm Stock shall be registered in such names and in such
denominations as the Representatives shall request in writing not less than two
full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
the Company shall make the certificates representing the Firm Stock available
for inspection by the Representatives in New York, New York, not later than
2:00 P.M., New York City time, on the business day prior to the First Delivery
Date.
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The option granted in Section 2 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the U.S. Representatives. Such
notice shall set forth the aggregate number of shares of Option Stock as to
which the option is being exercised, the names in which the shares of Option
Stock are to be registered, the denominations in which the shares of Option
Stock are to be issued and the date and time, as determined by the U.S.
Representatives, when the shares of Option Stock are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the
option shall have been exercised nor later than the fifth business day after
the date on which the option shall have been exercised. The date and time the
shares of Option Stock are delivered are sometimes referred to as a "SECOND
DELIVERY DATE" and the First Delivery Date and any Second Delivery Date are
sometimes each referred to as a "DELIVERY DATE".
Delivery of and payment for the Option Stock shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the U.S.
Representatives and the Company) at 10:00 A.M., New York City time, on such
Second Delivery Date. On such Second Delivery Date, the Company shall deliver
or cause to be delivered the certificates representing the Option Stock to the
U.S. Representatives for the account of each U.S. Underwriter against payment
to or upon the order of the Company of the purchase price by wire transfer in
immediately available funds. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each U.S. Underwriter hereunder. Upon delivery, the Option
Stock shall be registered in such names and in such denominations as the U.S.
Representatives shall request in the aforesaid written notice. For the purpose
of expediting the checking and packaging of the certificates for the Option
Stock, the Company shall make the certificates representing the Option Stock
available for inspection by the U.S. Representatives in New York, New York, not
later than 2:00 P.M., New York City time, on the business day prior to such
Second Delivery Date.
SECTION 5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than Commission's close of business on the second
business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under the
Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted herein; to
advise the Representatives, promptly after it receives
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notice thereof, of the time when any amendment to the Registration Statement
has been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish the Representatives with
copies thereof; to advise the Representatives, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Stock for offering or
sale in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or suspending any such qualification, to use promptly its reasonable
best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to counsel
for the Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits) and
(ii) each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus; and, if the delivery of a prospectus is required at
any time after the Effective Time in connection with the offering or sale of
the Stock or any other securities relating thereto and if at such time any
events shall have occurred as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
to amend or supplement the Prospectus in order to comply with the Securities
Act, to notify the Representatives and, upon their request, to prepare and
furnish without charge to each Underwriter and to any dealer in securities as
many copies as the Representatives may from time to time reasonably request of
an amended or supplemented Prospectus which will correct such statement or
omission or effect such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representatives, be required by
the Securities Act or requested by the Commission;
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(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Representatives and counsel for the Underwriters and obtain the consent of
the Representatives to the filing, which consent shall not be unreasonably
withheld;
(f) As soon as practicable after the Effective Date, to make generally
available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Securities Act
and the Rules and Regulations (including, at the option of the Company, Rule
158);
(g) For a period of five years following the Effective Date, to
furnish to the Representatives or make publicly available copies of all
materials furnished by the Company to its shareholders and all public reports
and all reports and financial statements furnished by the Company to the
principal national securities exchange upon which the Common Stock may be
listed pursuant to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of the
Commission thereunder;
(h) Promptly from time to time to take such action, with the
cooperation of the Representatives, as the Representatives may reasonably
request to qualify the Stock for offering and sale under the securities laws of
such jurisdictions as the Representatives may reasonably request and to comply
with such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be reasonably necessary to complete the
distribution of the Stock; provided that in connection therewith the Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(i) For a period of 180 days from the date of the Prospectus, not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise dispose
of (or enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any shares of Common Stock or securities convertible into or exchangeable
for Common Stock (other than (a) the Stock, (b) shares of Common Stock issued
and sold to SBC in connection with the Strategic Alliance as described in the
Prospectus, (c) shares of the Company's Class B Common Stock issued to The
▇▇▇▇▇▇▇▇ Companies, Inc. in connection with the Company's exercise of the
Lightel Option (as defined and on the terms described in the Prospectus), (d)
shares of Common Stock issued pursuant to employee benefit plans, qualified
stock option plans or other employee compensation plans existing on the date
hereof or pursuant to currently outstanding options, warrants or rights and (e)
shares of Common Stock used as
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consideration for acquisitions or issued in connection with strategic
alliances, provided that the recipient of any such shares of Common Stock
agrees to be bound by the transfer restrictions set forth herein for the
unexpired remaining term thereof), or sell or grant options, rights or warrants
with respect to any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the grant of options pursuant to
option plans existing on the date hereof), or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or otherwise,
in each case without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and
▇▇▇▇▇▇ Brothers Inc. on behalf of the Underwriters; and to cause each
shareholder, officer and director of the Company to furnish to the
Representatives, prior to the First Delivery Date, a letter or letters,
substantially in the form of Exhibit A hereto, pursuant to which each such
person shall agree not to, directly or indirectly, (1) offer for sale, sell,
pledge or otherwise dispose of (or enter into any transaction or device which
is designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case for a period of 180 days from the date of the
Prospectus, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and
▇▇▇▇▇▇ Brothers Inc. on behalf of the Underwriters;
(j) To apply for the listing of the Stock on the New York Stock
Exchange, and to use its reasonable best efforts to complete that listing,
subject only to official notice of issuance, prior to the First Delivery Date;
(k) To apply the net proceeds from the Transactions as set forth in
the Prospectus;
(l) To take such steps as shall be necessary to ensure that neither
the Company nor any subsidiary shall become an "investment company" as defined
in the Investment Company Act of 1940, as amended;
(m) To place stop transfer orders on any Directed Stock that has been
sold to Participants subject to the three month restriction on sale, transfer,
assignment, pledge or hypothecation imposed by NASD Regulation, Inc. under its
Interpretative Material 2110-1 on free-riding and withholding to the extent
necessary to ensure compliance with the three month restrictions; and
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(n) To comply with all applicable securities and other laws, rules and
regulations in each jurisdiction in which the Directed Stock is offered in
connection with the Directed Stock Program.
SECTION 6. Expenses. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as provided in this Agreement; (d) the costs of producing and distributing
this Agreement, the Agreement Between U.S. Underwriters and International
Managers, any Supplemental Agreement Among U.S. Underwriters and any other
related documents in connection with the offering, purchase, sale and delivery
of the stock; (e) the filing fees incident to securing the review by the
National Association of Securities Dealers, Inc. of the terms of sale of the
Stock; (f) any applicable listing or other fees; (g) the fees and expenses (not
in excess, in the aggregate, of $10,000) of qualifying the Stock under the
securities laws of the several jurisdictions as provided in Section 5(h) and of
preparing, printing and distributing a Blue Sky Memorandum (including related
fees and expenses of counsel to the Underwriters); (h) all reasonable costs and
expenses of the Underwriters, including the reasonable fees and disbursements
of counsel for the Underwriters, directly attributable to the Directed Stock
Program; (i) the costs and expenses of the Company relating to investor
presentations on any "ROAD SHOW" undertaken in connection with the marketing of
the offering of the Stock, including, without limitation, expenses associated
with the production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered (with the approval of the Company) in connection
with the road show and (j) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement; provided
that, except as provided in this Section 6 and in Section 11, the Underwriters
shall pay their own costs and expenses, including the costs and expenses of
their counsel, any transfer taxes on the Stock which they may sell and the
expenses of advertising any offering of the Stock made by the Underwriters.
SECTION 7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when
made and on each Delivery Date, of the representations and warranties of the
Company
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contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a); no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise shall
have been complied with.
(b) All corporate proceedings and other legal matters incident to the
authorization of this Agreement, the Stock, the Registration Statement and the
Prospectus, and all other legal matters relating to this Agreement, the
transactions contemplated hereby and the Transactions shall be reasonably
satisfactory in all material respects to counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters.
(c) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP shall have furnished to
the Representatives their written opinion, as counsel to the Company, addressed
to the Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) The Company has an authorized capitalization as set forth in
the Prospectus under the "Actual" column under the caption
"Capitalization," and all of the issued shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid
and non-assessable and conform in all material respects to the
description thereof contained in the Prospectus, provided, however,
that in rendering the preceding opinion, counsel may rely on a review
of the Restated Certificate of Incorporation and By-Laws of the
Company, minutes of the Company's Board of Directors, an officer's
certificate regarding the outstanding capital stock and a certificate
of the transfer agent for the capital stock;
(ii) The shares of the Stock being delivered on such Delivery
Date to the Underwriters hereunder and the shares of Common Stock
being delivered on such Delivery Date to SBC in connection with the
Strategic Alliance have been duly and authorized and, when issued and
delivered against payment therefor will be validly issued, fully paid
and non-assessable;
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(iii) Except as described in the Prospectus, there are no
preemptive or other rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of, any shares of the Stock
pursuant to the Company's charter or by-laws or any agreement or other
instrument listed on Schedule __ to counsel's opinion as an
"Applicable Contract";
(iv) At the time the Registration Statement became effective, the
Registration Statement, and the Prospectus, as of its date (except
for the financial statements and financial schedules and other
financial data included therein or excluded therefrom or the exhibits
to the Registration Statement, as to which such counsel need express no
belief) appear on their face to be appropriately responsive in all
material respects with the requirements of the Securities Act and the
Rules and Regulations and counsel does not assume any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus (other than as set
forth in clause (v) below);
(v) The statements contained in the Prospectus under the captions
"Description of Capital Stock," insofar as they constitute summaries of
matters of law or summaries of provisions of the Stock, fairly
summarize such laws or such provisions in all material respects; the
statements contained in the Prospectus under the captions
"Regulation--General regulatory environment"; "--Federal regulation";
"--State regulation" (with the exception of the sentences "We are
currently authorized to provide intrastate services, at least to some
extent, in 50 states," and "In a number of states, we have pending
applications for additional authority or are awaiting tariff
approval."); and "--Local regulation" (with the exception of the
sentence "In some municipalities where we have installed or anticipate
constructing networks, we are required to pay license or franchise fees
based on a percentage of gross revenue or on a per linear foot
basis."), insofar as they constitute summaries of matters of law,
fairly summarize such laws or such provisions in all material respects;
and the statements contained in the Prospectus under the caption
"Important United States Federal Tax Consequences of Our Common Stock
to Non-U.S. Holders," insofar as they purport to constitute statements
of law or legal conclusions, have been reviewed by counsel and fairly
present the information disclosed therein in all material respects;
(vi) To the best of such counsel's knowledge based solely on
discussions with officers of the Company responsible for such matters
and review by counsel of documents furnished by them, there are no
contracts or other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations which have not been
described or filed as exhibits to the Registration Statement;
(vii) This Agreement has been duly authorized, executed and
delivered by the Company; and each of the other documents listed on
Schedule __ to counsel's opinion as a "Transaction Document" has been
duly authorized, executed and delivered by the Company;
(viii) To the best of such counsel's knowledge, the issue and
sale of the shares of Stock being delivered on such Delivery Date by
the Company pursuant to this Agreement and the issue and sale of the
shares of Common
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Stock being delivered on such Delivery Date to SBC in connection with
the Strategic Alliance, and the execution, delivery and compliance by
the Company with all of the provisions of this Agreement and each of
the Transaction Documents and the consummation of the transactions
contemplated hereby and thereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any Applicable Contract, except to the
extent such conflict, breach, violation or default has not had or
would not reasonably be expected to have, a material adverse change in
the consolidated financial condition, results of operations, business
or prospects of the Company and its subsidiaries, taken as a whole,
nor will such actions result in any violation of the provisions of the
charter or by-laws of the Company or any of its Significant
Subsidiaries or any Applicable Law or Applicable Order; and, except
for the registration of the Stock and the Notes under the Securities
Act and such consents, approvals, filings authorizations, registrations
or qualifications as may be required under the Exchange Act and
applicable state securities laws, as to which counsel need express no
opinion, in connection with the purchase and distribution of the Stock
by the Underwriters and the purchase and distribution of the Notes by
the underwriters named in the Debt Underwriting Agreement, no
Governmental Approval is required for the execution, delivery and
performance of this Agreement or any of the Transaction Documents and
the consummation of the transactions contemplated hereby and thereby,
except for such Governmental Approvals as have been obtained or made;
and
(ix) The Company is not an "investment company" as defined in the
Investment Company Act of 1940, as amended.
The term "Applicable Contracts" means those agreements which are
specifically identified to counsel by the Company and listed on a Schedule to
counsel's opinion and "Applicable Laws" means the Delaware General Corporation
Law and those laws, rules and regulations of the State of New York and the
federal laws of the United States of America which, in counsel's experience,
are normally applicable to transactions of the type contemplated by this
Agreement but without counsel's having made any special investigation
concerning
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any other laws, rules or regulations; provided that the term "Applicable Laws"
does not include the securities or antifraud laws of any jurisdiction or the
rules and regulations of the National Association of Securities Dealers, Inc.
The term "Applicable Orders" means those orders or decrees of governmental
authorities specifically identified to counsel by the Company and listed on a
Schedule to counsel's opinion. The term "Transaction Documents" means those
agreements which are listed on Schedule __ to counsel's opinion. The term
"Governmental Approvals" means any consent, approval, license, authorization or
validation of, or notice to, any filing, recording or registration with, any New
York or federal executive, legislative, judicial, administrative or regulatory
body pursuant to Applicable Laws.
In rendering the opinion set forth in clause (viii) with respect to
conflicts with, defaults under, and breaches or violations of, Applicable
Contracts, counsel need not express any opinion with respect to compliance with
any covenant, restriction or provision of any Applicable Contract that requires
satisfaction of a financial ratio or test or any aspect of the financial
condition, results of operations, business or prospects of the Company or any of
its subsidiaries.
We have been advised that the Registration Statement was declared
effective under the Securities Act as of the date and time specified in such
opinion, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) of the Rules and Regulations specified in such
opinion on the date specified therein and, to the knowledge of counsel, no stop
order suspending the effectiveness of the Registration Statement has been issued
and, to the knowledge of such counsel, no proceeding for that purpose is pending
by the Commission; and
In rendering such opinion, such counsel may state that their opinion
is limited to matters governed by the Federal laws of the United States of
America, to the extent specifically referred to therein, the laws of the State
of New York and the General Corporation Law of the State of Delaware. Such
opinion shall also be to the effect that (x) such counsel has acted as special
counsel to the Company in connection with the preparation of the Registration
Statement and (y) based on the foregoing, no facts have come to the attention
of such counsel which lead them to believe that the Registration Statement
(except for the financial statements and financial schedules and other
financial data included therein, as to which such counsel need express no
belief) as of the Effective Date, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, or that the
Prospectus (except as stated above), as of its date and as of the Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The foregoing opinion and statement may be
qualified by a statement to the effect that such counsel is not passing upon
and is not assuming any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus and has not made any independent check or verification thereof
(other than as set forth in clause (v) above).
(d) ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, Senior Vice President of Law of the Company,
shall have furnished to the Representatives his written opinion, addressed to
the Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
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(i) The Company and each of its Significant Subsidiaries have
been duly incorporated and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good
standing as foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, except to the
extent such failure to be qualified or in good standing would not have
a material adverse effect on the consolidated financial position,
results of operations, business or prospects of the Company and its
subsidiaries, taken as a whole, and have all corporate power and
authority necessary to own or hold their respective properties and
conduct the businesses in which they are engaged as described in or
contemplated by the Registration Statement; and all of the issued
shares of capital stock of each Significant Subsidiary have been duly
and validly authorized and issued and are fully paid, non-assessable
and (except for directors' qualifying shares and as disclosed in the
Prospectus) are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(ii) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its Significant
Subsidiaries is a party or of which any property or assets of the
Company or any of its Significant Subsidiaries is the subject which,
if determined adversely to the Company or any of its Significant
Subsidiaries, could reasonably be expected to have a material adverse
effect on the consolidated financial position, results of operations,
business or prospects of the Company and its subsidiaries, taken as a
whole; and, to the best of such counsel's knowledge, no such
proceedings are threatened or pending by governmental authorities or
threatened by others;
(iii) Except as described in the Prospectus, to the best of such
counsel's knowledge, 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 Securities Act with respect to any 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;
(iv) The Company is in compliance in all material respects with
all presently applicable provisions of ERISA; no "reportable event"
(as defined in ERISA) has occurred with respect to any "PENSION PLAN"
(as defined in ERISA) for which the Company would have any liability;
the Company has not incurred and does not expect to incur liability
under (i)
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Title IV of ERISA with respect to termination of, or withdrawal from,
any "PENSION PLAN" or (ii) Sections 412 or 4971 of the Code; and each
"PENSION PLAN" for which the Company would have any liability that is
intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such
qualification;
(v) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes,
medical wastes, hazardous wastes or hazardous substances by the
Company or any of its Significant Subsidiaries (or, to the knowledge
of the Company, any of their predecessors in interest) at, upon or
from any of the property now or previously owned or leased (but not
including property on which the Company had or has easements or
similar rights) by the Company or its Significant Subsidiaries in
violation of any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit or which would require remedial action
under any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit, except for any violation or remedial
action which would not have, or could not be reasonably likely to
have, singularly or in the aggregate with all such violations and
remedial actions, a material adverse effect on the consolidated
financial position, results of operations, business or prospects of
the Company and its subsidiaries, taken as a whole; there has been no
material spill, discharge, leak, emission, injection, escape, dumping
or release of any kind onto such property or into the environment
surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by
the Company or any of its Significant Subsidiaries or with respect to
which the Company or any of its Significant Subsidiaries have
knowledge, except for any such spill, discharge, leak, emission,
injection, escape, dumping or release which would not have or would
not be reasonably likely to have, singularly or in the aggregate with
all such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a material adverse effect on the consolidated
financial position, results of operations, business or prospects of
the Company and its subsidiaries, taken as a whole; and
(vi) The statements contained in the Prospectus under the
captions "Relationships and Related Party Transactions," "Relationship
Between our Company and ▇▇▇▇▇▇▇▇" and "Description of Indebtedness and
Other Financing Arrangements," insofar as they constitute summaries of
legal matters, documents, proceedings, federal statutes, rules and
regulations, fairly summarize such legal matters, documents,
proceedings, federal statutes, rules and regulations in all material
respects.
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In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the Federal laws of the United States of
America, the laws of the [State of New York] and the General Corporation Law of
the State of Delaware.
(e) The Representatives shall have received from ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(f) At the time of execution of this Agreement, the Representatives
shall have received from Ernst & Young and Deloitte and Touche a letter or
letters, in form and substance satisfactory to the Representatives, addressed
to the Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act and are
in compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission and (ii)
stating, as of the date hereof (or, with respect to matters involving changes
or developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five days
prior to the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily covered by
accountants' "COMFORT LETTERS" to underwriters in connection with registered
public offerings.
(g) With respect to the letter or letters of Ernst & Young referred to
in the preceding paragraph and delivered to the Representatives concurrently
with the execution of this Agreement (the "INITIAL LETTERS"), the Company shall
have furnished to the Representatives a letter (the "BRING-DOWN LETTER") of
such accountants, addressed to the Underwriters and dated such Delivery Date
(i) confirming that they are independent public accountants within the meaning
of the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Prospectus,
as of a date not more than five days prior to the date of the bring-down
letter), the conclusions and findings of such firm with respect to the
financial information and other matters covered by the initial letters and
(iii) confirming in all material respects the conclusions and findings set
forth in the initial letters.
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(h) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President, a Vice President or its chief financial officer stating that:
(i) The representations, warranties and agreements of the Company
in Section 1 are true and correct as of such Delivery Date; the
Company has complied with all its agreements contained herein; and the
conditions set forth in Sections 7(a), 7(i) and 7 (j) have been
fulfilled; and
(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue
statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (B) since the Effective Date no event has
occurred which should have been set forth in a supplement or amendment
to the Registration Statement or the Prospectus.
(i) Since the date of the latest audited financial statements included
in the Prospectus (A) neither the Company nor any of the Significant
Subsidiaries shall have sustained any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus or (B)
there shall not have been any material change in the capital stock or long-term
debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the consolidated
financial position, results of operations, business or prospects of the Company
and its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case described
in clause (A) or (B), is, in the judgment of the Representatives, so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Stock being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (a) (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange, or
trading in any securities of the Company on any exchange, shall have been
suspended or minimum prices shall have been established on any such exchange by
the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a general banking moratorium
in New York shall have been declared by Federal or New York state authorities,
(iii) the United States shall have become engaged in hostilities, there shall
have been an escalation in hostilities involving the United States or there
shall have been a declaration of a
24
25
national emergency or war by the United States or (iv) there shall have
occurred a change in general economic, political or financial conditions (or
the effect of international conditions on the financial markets in the United
States shall be such) that in the judgment of the Representatives is material
and adverse and (b) in the case of any of the events specified in clauses
(a)(i) through (a)(iv) above, such event, singly or together with any other
such event, makes it, in the judgment of the Representatives, impracticable or
inadvisable to proceed with the public offering or delivery of the Stock being
delivered on such Delivery Date on the terms and in the manner contemplated in
the Prospectus.
(k) The New York Stock Exchange, Inc. shall have approved the Stock
for listing, subject only to official notice of issuance.
(l) You shall have received evidence satisfactory to you that each of
the Transactions (other than the offering of the Stock and the Notes) shall have
occurred or will occur simultaneously with the offering of the Stock on the
Closing Date, including the issuance of the intercompany note to The ▇▇▇▇▇▇▇▇
Companies, Inc. and the concurrent sale of the shares of Common Stock to SBC in
connection with the Strategic Alliance, in each case as described in the
Prospectus without modification, change or waiver, except for such
modifications, changes or waivers as have been specifically identified to the
Underwriters and which in the judgment of the Underwriters do not make it
impracticable or inadvisable to proceed with the offering and delivery of the
Stock on the Closing Date on the terms and in the manner contemplated in the
Prospectus.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
SECTION 8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter,
its officers and employees and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Stock), to which that Underwriter,
officer, employee or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus,
the Registration Statement or the Prospectus or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state
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26
in any Preliminary Prospectus, the Registration Statement or the Prospectus, or
in any amendment or supplement thereto, any material fact required to be stated
therein or necessary to make the statements therein not misleading, and shall
reimburse each Underwriter and each such officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by that Underwriter, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any such amendment or supplement, in reliance upon and in
conformity with written information concerning such Underwriter furnished to
the Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein which information consists solely of the
information specified in Section 8(e); and, provided further, that the Company
will not be liable to any Underwriter with respect to any Preliminary
Prospectus to the extent the Company shall sustain the burden of proving that
any such loss, claim, damage or liability resulted from the fact that such
Underwriter, in contravention of a requirement of applicable law, sold Stock to
a person to whom such Underwriter failed to send or give, at or prior to the
Closing Date, a copy of the Prospectus, as then amended or supplemented, if:
(i) the Company has previously furnished copies thereof (sufficiently in
advance of the Closing Date to allow for distribution by the Closing Date) to
the Underwriter and the loss, claim, damage or liability of such Underwriter
resulted from an untrue statement or omission of a material fact contained in
or omitted from the Preliminary Prospectus which was corrected in the
Prospectus as, if applicable, amended or supplemented prior to the Closing Date
and such Prospectus was required by law to be delivered at or prior to the
written confirmation of sale to such person and (ii) such failure to give or
send such Prospectus by the Closing Date to the party or parties asserting such
loss, claim, damage or liability would have constituted the sole defense to the
claim asserted by such person. The foregoing indemnity agreement is in addition
to any liability which the Company may otherwise have to any Underwriter or to
any officer, employee or controlling person of that Underwriter.
Without limitation and in addition to its obligations under the other
paragraphs of this Section 8, the Company agrees to indemnify and hold harmless
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., its officers and employees and each person who
controls ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. within the meaning of the Securities Act
against any loss, claim, damage or liability, joint or several, to which they
or any of them may become subject, insofar as such loss, claim, damage or
liability (or action in respect thereof) arises out of or is based upon ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney Inc.'s acting as a "qualified independent underwriter" (within the
meaning of National
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Association of Securities Dealers, Inc. Conduct Rule 2720) in connection with
the offering contemplated by this Agreement, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage
or liability results from the gross negligence or willful misconduct of ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
The Company agrees to indemnify and hold harmless ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney
Inc. (including its officers and employees) and each person, if any, who
controls ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. within the meaning of the Securities Act
(collectively, the "SALOMON ENTITIES"), from and against any loss, claim,
damage or liability or any action in respect thereof to which any of the
Salomon Entities may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon (i) the failure of any Participant to pay for and accept delivery of
the Directed Stock sold pursuant to the Directed Stock Program which,
immediately following the effectiveness of the Registration Statement, were
subject to a properly confirmed agreement to purchase or (ii) the Directed
Stock Program, provided that, the Company shall not be responsible under this
subparagraph (ii) for any loss, claim, damage, liability or action that is
finally judicially determined to have resulted from the gross negligence or
willful misconduct of the Salomon Entities. The Company shall reimburse the
Salomon Entities promptly upon demand for any legal or other expenses
reasonably incurred by them in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action
as such expenses are incurred.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers and employees, each of its directors,
and each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus,
the Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment
or supplement thereto, any material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of that Underwriter
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specifically for inclusion therein, and shall reimburse the Company and any
such director, officer or controlling person for any legal or other expenses
reasonably incurred by the Company or any such director, officer or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any liability
which any Underwriter may otherwise have to the Company or any such director,
officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 8. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation;
provided, however, that the Representatives shall have the right to employ
counsel to represent jointly the Representatives and those other Underwriters
and their respective officers, employees and controlling persons who may be
subject to liability arising out of any claim in respect of which indemnity may
be sought by the Underwriters against the Company under this Section 8 if (i)
the employment of such counsel has been expressly authorized in writing by the
Company; (ii) the Company has not assumed the defense of and employed counsel
reasonably satisfactory to the Representatives within a reasonably time after
notice of the commencement of such action or (iii) the named parties to any
such action or proceeding (including impleaded parties) include both an
indemnified party and the Company and such indemnified party shall have been
advised in writing by counsel that there may be one or more legal defenses
available to such indemnified party, which are different from or additional to
those available to the Company, and such counsel's representation of such
indemnified party and the Company in such action or proceeding would give rise
to a conflict of interest which would make it improper for such counsel to
represent both the indemnified party and the Company (in which case the Company
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29
shall not have the right to assume the defense of such action or proceeding on
behalf of such indemnified party). The Company shall not, in connection with
any one such action or proceeding, or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm for the Underwriters and all such
indemnified parties (in addition to any local counsel), which firm will be
designated by the Representatives, as representative of the Underwriters, and
the Company shall reimburse all such reasonable fees and expenses as they are
billed. Notwithstanding anything contained herein to the contrary, if indemnity
may be sought pursuant to Section 8(a) hereof in respect of such claim or
action, then in addition to such separate firm for the indemnified parties, the
indemnifying party shall be liable for the fees and expenses of not more than
one separate firm (in addition to any local counsel) for the Salomon Entities
for the defense of any loss, claim, damage, liability or action arising out of
the Directed Stock Program. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from
the offering of the Stock 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 on the one hand and the Underwriters on
the other with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the
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one hand and the Underwriters on the other with respect to such offering shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Stock purchased under this Agreement (before deducting
expenses) received by the Company, on the one hand, and the total underwriting
discounts and commissions received by the Underwriters with respect to the
shares of the Stock purchased under this Agreement, on the other hand, bear to
the total gross proceeds from the offering of the shares of the Stock under
this Agreement, in each case as set forth in the table on the cover page of the
Prospectus. Benefits received by ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. in its capacity as
"qualified independent underwriter" (within the meaning of National Association
of Securities Dealers, Inc. Conduct Rule 2720) shall be deemed to be equal to
the compensation received by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney for acting in such capacity.
The relative fault shall be determined by reference to whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative 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 contributions pursuant to this Section were to be 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 into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section shall be deemed to
include, for purposes of this Section 8(d), 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 8(d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Stock underwritten
by it and distributed to the public was offered to the public exceeds the
amount of any damages which such Underwriter has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission
or alleged omission, nor shall ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. in its capacity as
"qualified independent underwriter" be responsible for any amount in excess of
the compensation received by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. for acting in such
capacity. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 8(d) are
several in proportion to their respective underwriting obligations and not
joint.
(e) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the public offering of the Stock by the
Underwriters set forth on the cover page of, the legend concerning
over-allotments and the concession and reallowance figures appearing under the
caption
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31
"Underwriting" in, the Prospectus are correct and constitute the only
information concerning such Underwriters furnished in writing to the Company by
or on behalf of the Underwriters specifically for inclusion in the Registration
Statement and the Prospectus.
SECTION 9. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1 or
Schedule 2 hereto bears to the total number of shares of the Firm Stock set
opposite the names of all the remaining non-defaulting Underwriters in Schedule
1 or Schedule 2 hereto; provided, however, that the remaining non-defaulting
Underwriters shall not be obligated to purchase any of the Stock on such
Delivery Date if the total number of shares of the Stock which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such date exceeds
9.09% of the total number of shares of the Stock to be purchased on such
Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of shares of the Stock which
it agreed to purchase on such Delivery Date pursuant to the terms of Section 3.
If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Stock to be purchased
on such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives and the Company do not elect to purchase
the shares which the defaulting Underwriter or Underwriters agreed but failed
to purchase on such Delivery Date, this Agreement (or, with respect to the
Second Delivery Date, the obligation of the Underwriters to purchase, and of
the Company to sell, the Option Stock) shall terminate without liability on the
part of any non-defaulting Underwriter or the Company, except that the Company
will continue to be liable for the payment of expenses to the extent set forth
in Sections 6 and 11. As used in this Agreement, the term "UNDERWRITER"
includes, for all purposes of this Agreement unless the context requires
otherwise, any party not listed in Schedule 1 or 2 hereto who, pursuant to this
Section 9, purchases which a defaulting Underwriter agreed but failed to
purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Stock of a defaulting
or withdrawing Underwriter, either the Representatives or the Company may
postpone the Delivery Date for up to seven full business days in order to
effect any
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32
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
SECTION 10. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 7(i) or 7(j), shall have occurred
or if the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement.
SECTION 11. Reimbursement of Underwriters' Expense. If the Company
shall fail to tender the Stock for delivery to the Underwriters by reason of
any failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company
(including, without limitation, with respect to the transactions) is not
fulfilled, the Company will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred
by the Underwriters in connection with this Agreement and the proposed purchase
of the Stock, and upon demand the Company shall pay the full amount thereof to
the Representatives. If this Agreement is terminated pursuant to Section 9 by
reason of the default of one or more Underwriters, the Company shall not be
obligated to reimburse any defaulting Underwriter on account of those expenses.
SECTION 12. Notices, Etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to (i) ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: [ ] with a copy, in the case of
any notice pursuant to Section 8(c), to [ ] and (ii) ▇▇▇▇▇▇ Brothers Inc.,
Three World Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy, in the case of any notice pursuant
to Section 8(c), to the Director of Litigation, Office of the General Counsel,
▇▇▇▇▇▇ Brothers Inc., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇;
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: General Counsel (Fax: (▇▇▇) ▇▇▇-▇▇▇▇);
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
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33
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by
the Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement
given or made on behalf of the Underwriters by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. and
▇▇▇▇▇▇ Brothers Inc. on behalf of the Representatives.
SECTION 13. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the
Company, and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(A) the representations, warranties, indemnities and agreements of the Company
contained in this Agreement shall also be deemed to be for the benefit of the
person or persons, if any, who control any Underwriter within the meaning of
Section 15 of the Securities Act and (B) the indemnity agreement of the
Underwriters contained in Section 8(b) of this Agreement shall be deemed to be
for the benefit of directors of the Company, officers of the Company who have
signed the Registration Statement and any person controlling the Company within
the meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 13, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
SECTION 14. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Stock and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
SECTION 15. Definition of the Terms "BUSINESS DAY" and "SUBSIDIARY".
For purposes of this Agreement, (a) "BUSINESS DAY" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "SUBSIDIARY" has the meaning set forth in Rule 405 of the Rules
and Regulations.
SECTION 16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
SECTION 17. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
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34
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
SECTION 18. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
▇▇▇▇▇▇▇▇ COMMUNICATIONS GROUP, INC.
By
--------------------------------
Name:
Title:
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Accepted:
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE,
▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
By
---------------------------------------
Authorized Representative
▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE)
SALOMON BROTHERS INTERNATIONAL LIMITED
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
For themselves and as Representatives
of the several Underwriters named
in Schedule 2 hereto
By ▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE)
By
---------------------------------------
Authorized Representative
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SCHEDULE 1
Number of Shares of Firm
U.S. Underwriters Stock to be Purchased
----------------- ------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc......................................
▇▇▇▇▇▇ Brothers Inc...........................................
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated.........................................
Banc of America Securities LLC................................
CIBC World Markets Corp. .....................................
Credit Suisse First Boston Corporation........................
▇▇▇▇▇▇▇▇▇, Lukfin & ▇▇▇▇▇▇▇▇ Securities
Corporation................................................
▇▇▇▇▇▇▇, Sachs & Co. ........................................
Total......................................................... ===================
38
SCHEDULE 2
Number of Shares of
International Underwriters Firm Stock to be Purchased
-------------------------- --------------------------
▇▇▇▇▇▇ Brothers International (Europe)........................
Salomon Brothers International Limited........................
▇▇▇▇▇▇▇ ▇▇▇▇▇ International...................................
Cazenove & Co. ...............................................
Bank of America International Limited.........................
CIBC World Markets International Limited......................
Credit Suisse First Boston Corporation........................
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ International....................
▇▇▇▇▇▇▇ Sachs International...................................
Total.................................................................... ===================
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SCHEDULE 3
Significant Subsidiaries
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EXHIBIT A
LOCK-UP LETTER AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
As Representatives of the several
Underwriters named in Schedule 1,
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE)
SALOMON BROTHERS INTERNATIONAL LIMITED
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
As Representatives of the several
Underwriters named in Schedule 2,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
The undersigned understands that you and certain other firms propose
to enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT")
providing for the purchase by you and such other firms (the "UNDERWRITERS") of
shares (the "SHARES") of Common Stock, par value $0.01 per share (the "COMMON
STOCK"), of ▇▇▇▇▇▇▇▇ Communications Group, Inc., a Delaware corporation (the
"COMPANY"), and that the Underwriters propose to reoffer the Shares to the
public (the "OFFERING").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney Inc. and ▇▇▇▇▇▇ Brothers Inc., on behalf of the Underwriters, the
undersigned will not, directly or indirectly, (1) offer for sale, sell, pledge,
or otherwise dispose of (or enter into any transaction or device that is
designed to, or could be expected to, result in the disposition by any person
at any time in the future of) any shares of
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Common Stock (including, without limitation, shares of Common Stock that may be
deemed to be beneficially owned by the undersigned in accordance with the rules
and regulations of the Securities and Exchange Commission and shares of Common
Stock that may be issued upon exercise of any option or warrant) or securities
convertible into or exchangeable for Common Stock (other than the Shares) owned
by the undersigned on the date of execution of this Lock-Up Letter Agreement or
on the date of the completion of the Offering, or (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, for a period of 180 days after the date of the final Prospectus
relating to the Offering.
In furtherance of the foregoing, the Company and its Transfer Agent
are hereby authorized to decline to make any transfer of securities if such
transfer would constitute a violation or breach of this Lock-Up Letter
Agreement.
It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares, we will be released from our
obligations under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant
to an Underwriting Agreement, the terms of which are subject to negotiation
between the Company and the Underwriters.
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The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this Lock-Up Letter Agreement and
that, upon request, the undersigned will execute any additional documents
necessary in connection with the enforcement hereof. Any obligations of the
undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
Very truly yours,
By:
-------------------------------
Name:
Title:
Dated:
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