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EXHIBIT 1.1
PHONETEL TECHNOLOGIES, INC.
COMMON STOCK
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UNDERWRITING AGREEMENT
December 12, 1996
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PHONETEL TECHNOLOGIES, INC.
COMMON STOCK
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UNDERWRITING AGREEMENT
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December 12, 1996
Southcoast Capital Corporation,
As the Representative of the Several
Underwriters named in Schedule I hereto
c/o Southcoast Capital Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
PhoneTel Technologies, Inc., an Ohio corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") for whom Southcoast
Capital Corporation is acting as representative (the "Representative"),
6,250,000 shares and, at the election of the Underwriters pursuant to the option
granted by the Company to cover over-allotments described in Section 2 hereof,
up to 937,500 additional shares of Common Stock, par value $0.01 per share
("Common Stock"), of the Company, and the stockholders of the Company named in
Schedule II hereto (the "Selling Stockholders") propose, subject to the terms
and conditions stated herein, to sell to the Underwriters an aggregate of
shares of Common Stock. The aggregate of 6,750,000 shares of Common Stock
to be sold by the Company and the Selling Stockholders is herein called the
"Firm Shares," and the up to 937,500 additional shares of Common Stock to be
sold by the Company is herein called the "Optional Shares." The Firm Shares and
the Optional Shares which the Underwriters elect to purchase pursuant to Section
2 hereof are herein collectively called the "Shares."
The Company is a party to that certain Agreement and Plan of Merger, dated
as of November 21, 1996, with Cherokee Communications, Inc. ("Cherokee"),
PhoneTel CCI, Inc. and all of the shareholders of Cherokee (the "Cherokee
Agreement"). The issuance and sale of the Shares is not conditioned upon the
completion of the Cherokee Acquisitions. By separate prospectus, the Company is
also offering $110,000,000 million of % Senior Notes due 2006 (the "Company
Debt Offering"). References to "the transactions contemplated by this Agreement"
exclude the Pending Acquisitions and the Company Debt Offering.
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters and each Selling Stockholder that:
(i) A registration statement on Form SB-2 (File No. 333-13767) in
respect of the Firm Shares and Optional Shares has been filed with the
Securities and Exchange Commission (the "Commission"); each of such
registration statement, as amended, and any post-effective amendment
thereto, each in the form heretofore delivered to the Representative and
each Selling Stockholder, has been declared effective by the Commission in
such form; no other document with respect to such registration statement
has heretofore been filed with the Commission; and no stop order suspending
the effectiveness of such registration statement has been issued and no
proceeding for that purpose has been initiated or, to the knowledge of the
Company, threatened by the Commission (any preliminary prospectus included
in such registration statement or any pre-effective amendment thereto or
filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Securities Act of 1933, as amended
(the "Act"), being hereinafter called a "Preliminary Prospectus"; the
various parts of such registration statement, including all financial
statements and exhibits thereto and, if applicable, including the
information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with Section
5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of
the registration statement at the time it was declared effective, each as
amended at the time such part of the registration statement became
effective, being hereinafter called the "Registration Statement"; and such
final prospectus, in the form first filed pursuant to Rule 424(b) under the
Act or, if no such filing is required to be made, in the form included in
the Registration Statement at the time of effectiveness, being hereinafter
called the "Prospectus");
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(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, complied, when so filed, in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by (1) an Underwriter
through the Representative expressly for use therein or (2) a Selling
Stockholder expressly for use in the preparation of the information
required to be presented therein pursuant to Form SB-2;
(iii) The financial statements, and the related notes thereto, included
in the Registration Statement and the Prospectus present fairly the
consolidated financial position of (1) the Company and its Subsidiaries (as
defined herein), (2) each of the Acquired Companies (as defined below) for
whom financial statements are included, and (3) to the Company's knowledge
after due inquiry, Cherokee, and the results of their respective operations
and the changes in their respective consolidated cash flows as of the dates
and for the periods indicated, and said financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved; the
"Acquired Companies" are (A) Paramount Communications Systems, Inc.
("Paramount"), (B) International Pay Phones, Inc. (South Carolina)
("IPP-SC"), (C) International Payphones, Inc. (Tennessee) ("IPP-TN"), (D)
Payphones of America, Inc. ("POA"), and (E) Amtel Communications, Inc. and
Combined Companies (Debtor-in-Possession) ("Amtel"). The summary and
selected financial and related statistical data included in the
Registration Statement and the Prospectus present fairly the information
shown therein and have been prepared and compiled on a basis consistent
with the audited financial statements included therein;
(iv) The pro forma financial statements (including the footnotes
thereto) and the other pro forma financial information included in the
Prospectus and Registration Statement (1) comply as to form in all material
respects with the applicable requirements of Item 310 of Regulation S-B
under the Act; (2) have been prepared in accordance with the Commission's
rules and guidelines with respect to pro forma financial statements and
include adjustments which give effect to events that are (A) directly
attributable to the transactions referred to therein, (B) expected to have
a continuing impact on the Company, and (C) factually supportable; and (3)
have been computed on the bases described therein; the assumptions used in
the preparation of the pro forma financial statements and other pro forma
financial information included in the Prospectus and Registration Statement
are reasonable and the adjustments used therein are appropriate to give
effect to the transactions or circumstances referred to therein;
(v) The Registration Statement complies, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will comply, in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder and do not
and will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable date of 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, in the case
of the Prospectus and any amendment or supplement thereto, in the light of
the circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by (1) an Underwriter
through the Representative expressly for use therein, or (2) a Selling
Stockholder for use in the preparation of the information to be presented
therein pursuant to Form SB-2;
(vi) Neither the Company nor any Subsidiary (as defined herein) of the
Company has (i) taken, directly or indirectly, any action designed to cause
or result in, or that has constituted or might reasonably be expected to
constitute, the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale or resale of the Shares or
(ii) since the filing of the Registration Statement (1) sold, bid for,
purchased or paid anyone any compensation for soliciting purchases of the
Shares or (2) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company, except
as contemplated by this Agreement or the Underwriting Agreement with
respect to the Company Debt Offering.
(vii) All offers and sales of securities of the Company prior to the
date hereof were at all relevant times duly registered under the Act or
exempt from the registration requirements of the Act, and were duly
registered or the subject of an available exemption from the registration
requirements of the applicable state securities or blue sky laws;
(viii) Neither the Company nor any of its subsidiaries listed on
Schedule III ("Subsidiary" or "Subsidiaries") has sustained since the date
of the latest audited financial statements included 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 is material to the
general affairs, management, financial position, stockholders'
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equity or results of operations of the Company and, since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, there has not been any change in the capital stock,
warrants or options (other than issuances of stock upon the exercise of
stock options or warrants which were outstanding on the date of the latest
balance sheet included in the Prospectus which in the aggregate are less
than 2% of the outstanding Common Stock), short-term debt or long-term debt
of the Company or any Subsidiary or any material adverse change, or any
development reasonably likely to become a material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and
Subsidiaries taken as a whole, otherwise than as set forth or contemplated
in the Prospectus;
(ix) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, and except as disclosed therein,
(1) there have been no transactions entered into by the Company or by any
of the Subsidiaries, other than in the ordinary course of business, which
are material to the Company and the Subsidiaries, taken as a whole; and (2)
there has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock;
(x) The Company, its Subsidiaries and, to the best of the Company's
knowledge after due inquiry, Cherokee [and Texas Coinphone] each have good
and marketable title in fee simple or, in jurisdictions outside of the
United States, the substantive equivalent thereto, to all items of real
property and good and marketable title to all assets owned by them that is
material to the business of the Company and the Subsidiaries, taken as a
whole, as currently conducted or proposed to be conducted upon consummation
of the Pending Acquisitions, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company, its Subsidiaries, Cherokee and Texas Coinphone after their
acquisition; and any real property and buildings held under lease by the
Company, its Subsidiaries and, to the best of the Company's knowledge after
due inquiry, Cherokee [and Texas Coinphone] that are material to the
business of the Company and its Subsidiaries, taken as a whole, as
currently conducted or as proposed to be conducted upon consummation of the
Pending Acquisitions, are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere materially with the use made and proposed to be made of such
property and buildings by the Company and its Subsidiaries;
(xi) The Company and each of its Subsidiaries have been duly
incorporated and are validly existing as a corporation in good standing
under the respective states of their incorporation, with power and
authority (corporate and other) to own, lease or operate their respective
properties and conduct their respective businesses as described in the
Prospectus, and they have been duly qualified as a foreign corporation for
the transaction of business and are in good standing under the laws of each
other jurisdiction in which they own or lease properties or conduct any
business, so as to require such qualification, except where the failure to
be so qualified or be in good standing would not have a Material Adverse
Effect (as defined herein);
(xii) The Company has an authorized capitalization as set forth in the
Prospectus under the column entitled "Actual" under the heading entitled
"Capitalization," and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid
and non-assessable and conform to the description thereof contained in the
Prospectus under the heading "Description of Capital Stock;" except as
described in the Prospectus, there are no outstanding rights (including,
without limitation, preemptive rights), warrants or options to acquire, or
instruments exercisable or convertible into or exchangeable for, any shares
of capital stock or other equity interest in the Company, or any contract,
commitment, agreement, understanding or arrangement of any kind relating to
the issuance of any capital stock of the Company, any such convertible or
exchangeable securities or any such rights, warrants or options; and all of
the outstanding shares of capital stock of each Subsidiary of the Company
have been duly and validly authorized and issued, and are fully paid and
non-assessable and (except for directors' qualifying shares) are
beneficially owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or adverse claims, except for such liens,
encumbrances, equities or adverse claims created pursuant to the Credit
Agreement (as defined in the Prospectus) and related loan documents;
(xiii) The unissued Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued and fully paid and nonassessable and will conform
to the description of the Common Stock contained in the Prospectus;
(xiv) The issue and sale of the Firm Shares and Optional Shares by the
Company and the compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions herein and therein
contemplated (A) will not result in any violation of the provisions of the
Articles of Incorporation or the By-laws of the Company or any
shareholders' agreements, (B) except as would not have a Material Adverse
Effect (as defined herein), will not conflict with nor result in a breach
or violation of any of the terms or provisions of, nor constitute a default
under, any shareholder agreement, indenture, mortgage, deed of trust, loan
agreement, sale/leaseback agreement or other agreement or instrument to
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which the Company or any Subsidiary is a party or by which the Company or
any Subsidiary is bound or to which any of the property or assets of the
Company or any Subsidiary is subject, or (C) except as would not have a
Material Adverse Effect and, with respect to the issuance and sale of the
Firm Shares and Optional Shares by the Company, assuming compliance with
the Act and all applicable state securities or "Blue Sky" laws, any statute
or any order, rule, or regulation of any court or government agency or body
having jurisdiction over the Company or any Subsidiary or any of their
properties, including, but not limited to, the Federal Communications
Commission ("FCC") and comparable or additional state regulatory agencies
or bodies with jurisdiction over telecommunications matters or permits or
authorizations in the states in which the Company and any of its
Subsidiaries operates or provides telecommunications services (the "State
Regulatory Agencies"); and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body, including, but not limited to, the FCC or any State
Regulatory Agency, is required for the issue and sale of the Shares being
sold by the Company or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under the Act of
the Shares and such consents, approvals, authorizations, registrations, or
qualifications as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Shares by the
Underwriters or by the rules and regulations of the National Association of
Securities Dealers, Inc. or which may have become applicable to the Company
as a result of the Underwriters' involvement in this Agreement;
(xv) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending or, to the Company's best
knowledge, threatened, including, but not limited to, any litigation,
inquiry, or investigation to which the Company or its Subsidiaries or, to
the best of the Company's knowledge after due inquiry, Cherokee [or Texas
Coinphone] is a party or of which any property, certification, consent,
approval, license, Permit or Authorization (as defined in this Agreement)
of the Company, its Subsidiaries, Cherokee [or Texas Coinphone] is the
subject which are required to be described in the Registration Statement or
Prospectus, or which, if determined adversely to the Company or its
Subsidiaries, would individually or in the aggregate have a material
adverse effect on the consolidated financial position, shareholders' equity
or results of operations of the Company and its Subsidiaries taken as a
whole (a "Material Adverse Effect");
(xvi) Price Waterhouse LLP, whose reports on the audited financial
statements of the Company and its Subsidiaries as of December 31, 1994 and
1995 and for the three years ended December 31, 1995 and the audited
financial statements of Paramount as of December 31, 1995 and for the year
then ended are included in the Registration Statement and the Prospectus,
are independent accountants with respect to the Company and its
Subsidiaries and Paramount, as required by the Act; KPMG Peat Marwick LLP,
whose report on the audited financial statements of Paramount as of
December 31, 1994 and for the year then ended is included in the
Registration Statement and Prospectus, are independent public accountants
with respect to Paramount, as required by the Act; Xxxxxx Xxxxxxxx Xxxxx
CPA PA, whose report on the audited financial statements of IPP-SC as of
December 31, 1994 and 1995 and for the two years ended December 31, 1995,
is included in the Registration Statement and Prospectus, are independent
accountants with respect to IPP-SC, as required by the Act; Xxxxxx X.
Xxxxxx, CPA, whose report on the audited financial statements of IPP-TN as
of December 31, 1994 and 1995 and for the two years ended December 31,
1995, is included in the Registration Statement and Prospectus, is an
independent accountant with respect to IPP-TN, as required by the Act;
Xxxxxx, Xxx & Xxxxxxxx LLP, whose report on the audited financial
statements of POA as of December 31, 1994 and 1995 and for the two years
ended December 31, 1995, is included in the Registration Statement and
Prospectus, are independent accounts with respect to POA, as required by
the Act; Xxxxxx & Xxxxxxxx, CPAs, whose report on the audited financial
statements of Amtel as of December 31, 1994 and 1995 and for the two years
ended December 31, 1995, is included in the Registration Statement and
Prospectus, are independent accountants with respect to Amtel, as required
by the Act; and, to the knowledge of the Company after due inquiry,
Deloitte & Touche LLP, whose report on the audited financial statements of
Cherokee as of September 30, 1994 and 1995 and for the three years ended
September 30, 1995, is included in the Registration Statement and
Prospectus, are independent accountants with respect to Cherokee, as
required by the Act;
(xvii) The Company makes and keeps accurate books and records reflecting
its assets and maintains internal accounting controls which provide
reasonable assurance that (1) transactions are executed in accordance with
management's authorization, (2) transactions are recorded as necessary to
permit preparation of the Company's consolidated financial statements in
accordance with generally accepted accounting principles and to maintain
accountability for the assets of the Company, (3) access to the assets of
the Company is permitted only in accordance with management's
authorization, and (4) the recorded accountability for assets of the
Company is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences;
(xviii) To the best of the Company's knowledge after due inquiry,
Cherokee has duly authorized, executed and delivered the Cherokee Agreement
and such agreement is a legal, valid and binding agreement of Cherokee; [to
the best of the Company's knowledge after due inquiry, Texas Coinphone has
duly executed and delivered the Texas Coinphone Agreement and such
agreement is a legal, valid and binding agreement of Texas Coinphone;]
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(xix) Each of the Company, its Subsidiaries, and, to the best of the
Company's knowledge after due inquiry, Cherokee [and Texas Coinphone] have
obtained all certificates, consents, exemptions, orders, permits, licenses,
authorizations or other approvals (each, an "Authorization") of and from,
and have made all declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory organizations and
all courts and other tribunals, including, but not limited to, the FCC and
the State Regulatory Agencies, necessary or required to own, lease, license
and use their properties and assets and to conduct their businesses as
currently conducted in the manner described in the Prospectus, and all such
Authorizations are in full force and effect, except in each case as
otherwise disclosed in the Registration Statement or where the failure to
obtain such Authorizations or to make all declarations and filings would
not, individually or in the aggregate, have a Material Adverse Effect or,
with respect to the operations of Cherokee [and Texas Coinphone], where
such Authorizations are not required to be obtained prior to the closing of
the acquisition by the Company of Cherokee [or Texas Coinphone, as the case
may be], and none of the Company, its Subsidiaries, and, to the best of the
Company's knowledge after due inquiry, Cherokee [or Texas Coinphone] has
received any notice relating to revocation or modification of any such
Authorization, except where such revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect;
(xx) No person has the right to require the Company to register any
securities for offering and sale under the Act by reason of the filing of
the Registration Statement with the Commission or the issue and sale of the
Shares, except as disclosed in the Registration Statement and Prospectus,
by reason of the filing of the Registration Statement;
(xxi) Neither the Company nor any of its Subsidiaries is (1) in
violation of its Articles of Incorporation (or other applicable charter
document) or By-laws, (2) in violation of any statute, judgment, decree,
order, rule, or regulation applicable to any of them or any of their
respective properties or assets (including, without limitation, the
Communications Act of 1934, as amended (the "Communications Act"), the
Telecommunications Act of 1996 (the "Telecommunications Act"), the rules
and regulations of the FCC under each of the foregoing and the rules and
regulations of any State Regulatory Agency), except for any such violation
which would not individually or in the aggregate have a Material Adverse
Effect.
(xxii) There are no employment or labor disputes or negotiations with
employees of the Company which could have, individually or in the
aggregate, a Material Adverse Effect;
(xxiii) The Company is in compliance with, and not subject to any
liability under, all applicable federal, state, local and foreign laws, all
applicable federal, state, local and foreign laws, regulations, rules,
codes, ordinances, directives, and orders relating to pollution or to
protection of public or employee health or safety or to the environment,
including, without limitation, those that relate to any Hazardous Material
(as hereinafter defined) ("Environmental Laws"), except, in each case,
where noncompliance or liability, individually or in the aggregate, would
not have a Material Adverse Effect. The term "Hazardous Material" means any
pollutant, contaminant or waste, or any hazardous, dangerous, or toxic
chemical, material, waste, substance or constituent subject to regulation
under any Environmental Law;
(xxiv) This Agreement has been duly authorized, executed and delivered
by the Company;
(xxv) The Company has not done, and is not presently doing, business
with the government of Cuba or with any person or any affiliate located in
Cuba;
(xxvi) The Common Stock is listed on the American Stock Exchange;
(xxvii) The Company owns or legally possesses the patents, patent
licenses, trademarks, service marks, trade names, copyrights and know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures)
(collectively, the "Intellectual Property") employed by it in connection
with the business conducted by it as of the date hereof, except to the
extent that the failure to own or legally possess any such Intellectual
Property would not have, individually or in the aggregate, a Material
Adverse Effect, and to the best knowledge of the Company after due inquiry,
the Company has not received any notice of infringement of or conflict with
asserted rights of others with respect to any Intellectual Property;
(xxviii) The Company has no liability for any prohibited transaction or
funding deficiency or any complete or partial withdrawal liability with
respect to any pension, profit sharing or other plan which is subject to
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
to which the Company ever has made a contribution and in which any employee
of the Company has ever been a participant. The Company does not
participate in or make contributions to any pension, profit sharing or
other plan which is subject to ERISA;
(xxix) The Company has filed all necessary federal, state, local and
foreign income and franchise tax returns, and has paid all taxes shown as
due thereon, except where the failure to file such returns or pay such
taxes would not have a Material
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Adverse Effect; there is no tax deficiency that has been asserted against
the Company that would have a Material Adverse Effect; and
(xxx) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be an "investment company" or a company
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940.
(b) Each of the Selling Stockholders severally and not jointly represents
and warrants to, and agrees with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary for the
execution and delivery by such Selling Stockholder of this Agreement and
for the sale and delivery of the Shares to be sold by such Selling
Stockholder hereunder, have been obtained; and such Selling Stockholder has
the power and authority to enter into this Agreement and to sell, assign,
transfer and deliver the Shares to be sold by such Selling Stockholder
hereunder;
(ii) The sale of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with all of the
provisions of this Agreement and the consummation of the transactions
herein contemplated will not conflict with in any material respect or
result in a material breach or violation of any of the terms or provisions
of, or constitute a default under, any statute, indenture, mortgage, deed
of trust, loan agreement or other material agreement or instrument to which
such Selling Stockholder is a party or by which such Selling Stockholder is
bound or to which any of the property or assets of such Selling Stockholder
is subject, nor will such action result in any material violation of the
provisions of the Articles of Incorporation or By-laws of such Selling
Stockholder if such Selling Stockholder is a corporation, or the
partnership agreement of such Selling Stockholder if such Selling
Stockholder is a partnership, or any statute applicable to such Selling
Stockholder or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over such Selling Stockholder or the
property of such Selling Stockholder; provided, however, that such Selling
Stockholder makes no representation or warranty regarding compliance by the
Company and the Underwriters with the requirements of the Act, the Exchange
Act, the rules and regulations of the Commission and applicable state
securities or Blue Sky laws with respect to the transactions contemplated
hereby;
(iii) Such Selling Stockholder has and, immediately prior to the First
Time of Delivery (as defined in Section 4 hereof) will have, good and
marketable title to the Shares to be sold at the First Time of Delivery by
such Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities and adverse claims and, upon delivery of such Shares
and payment therefor pursuant hereto, the Underwriters will acquire such
Shares, free and clear of all liens, encumbrances, equities or adverse
claims (other than those created by the Underwriters);
(iv) Such Selling Stockholder has not taken and will not take, directly
or indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares; and
(v) Statements made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by such Selling Stockholder expressly for use therein did not, at
the time such document became effective or was filed with the Commission,
as the case may be, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they
were made, not misleading.
In order to document the Underwriters' compliance with the reporting and
withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982
with respect to the transactions herein contemplated, each of the Selling
Stockholders agrees to deliver to the Representative prior to or at the First
Time of Delivery (as hereinafter defined) a properly completed and executed
United States Treasury Department Form W-9 (or Form W-8 if applicable, or other
applicable form or statement specified by Treasury Department regulations in
lieu thereof).
(c) ING (U.S.) Investment Corporation ("ING") and Cerberus Partners, L.P.
("Cerberus") agree, severally and not jointly, not to, directly or indirectly,
offer, sell, contract to sell or otherwise transfer or dispose of any shares of
Common Stock (other than the number of shares of Common Stock equal to the
difference between 250,000 and the number of shares of Common Stock such Selling
Stockholder sells to the Underwriters pursuant to this Agreement, which may be
sold by each such Selling Stockholder 45 days after the effective date of the
Registration Statement) or securities exercisable, convertible or exchangeable
into Common Stock, without the consent of the Representative, except as follows:
(i) up to 900,000 shares in the aggregate may be transferred, sold or otherwise
disposed of by each of ING and Cerberus during the period commencing on the
181st day following the effective date of the Registration Statement (the
"Effective Date") and ending on the 270th day following the Effective Date and
(ii) up to 1,150,000 shares in the aggregate (including any shares sold pursuant
to clause (i) above) may be transferred, sold or otherwise
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disposed of by each of ING and Cerberus during the period commencing on the
271st day following the Effective Date and ending on the 360th day following the
Effective Date. Thereafter, ING and Cerberus may transfer, sell or otherwise
dispose of any of their shares of Common Stock in accordance with applicable
securities laws.
2. Subject to the terms and conditions herein set forth, (a) the Company
and each of the Selling Stockholders agree, severally and not jointly, to sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company and each of the Selling Stockholders,
at a purchase price per share of $ , the number of Firm Shares (to be
adjusted by the Representative so as to eliminate fractional shares) determined
by multiplying the aggregate number of Firm Shares to be sold by the Company and
each of the Selling Stockholders as set forth opposite their respective names in
Schedule II hereto by a fraction, the numerator of which is the aggregate number
of Firm Shares to be purchased by such Underwriter as set forth opposite the
name of such Underwriter in Schedule I hereto and the denominator of which is
the aggregate number of Firm Shares to be purchased by all the Underwriters from
the Company and all the Selling Stockholders hereunder and (b) in the event and
to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company agrees to issue and sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per share set forth
in clause (a) of this Section 2, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by the
Representative so as to eliminate fractional shares) determined by multiplying
such number of Optional Shares by a fraction, the numerator of which is the
maximum number of Optional Shares which such Underwriter is entitled to purchase
as set forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum number of the Optional Shares which all of
the Underwriters are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election the Optional Shares, at the purchase price per share set forth in
the paragraph above, for the sole purpose of covering overallotments in the sale
of the Firm Shares. Any such election to purchase Optional Shares may be
exercised only by written notice from the Representative to the Company, given
within a period of forty-five (45) calendar days after the date of this
Agreement, setting forth the aggregate number of Optional Shares to be purchased
and the date on which such Optional Shares are to be delivered, as determined by
the Representative but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless the Representative and the Company
otherwise agree in writing, earlier than two or later than ten business days
after the date of such notice.
3. Upon the authorization by the Representative of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale upon
the terms and conditions set forth in the Prospectus.
4. Certificates in definitive form for the Shares to be purchased by each
Underwriter hereunder, and in such denominations and registered in such names as
the Representative may request upon at least 48 hours' prior notice to the
Company and the Selling Stockholders, shall be delivered by wire transfer or by
or on behalf of the Company and the Selling Stockholders to the Representative
for the account of such Underwriter against payment by such Underwriter or on
its behalf of the purchase price therefor by certified or official bank checks,
payable separately to the order of the Company and each Selling Stockholder in
same day funds, or by payment in such other manner as shall be agreed to in
writing by the Company, the Selling Stockholders and the Representative, all at
the offices of the Representative in New York, New York, or at such other place
located in New York as the Representative, the Selling Stockholders and the
Company may agree. The time and date of such delivery and payment shall be, with
respect to the Firm Shares, 9:00 a.m., New York time, on December , 1996, or
at such other time and date as the Representative and the Company and the
Selling Stockholders may agree upon in writing, and, with respect to the
Optional Shares, 9:00 a.m., New York time, on the date specified by the
Representative in the written notice given by the Representative of the
Underwriters' election to purchase such Optional Shares, or at such other time
and date as the Representative and the Company may agree upon in writing. Such
time and date for delivery of the Firm Shares is herein called the "First Time
of Delivery," such time and date for delivery of the Optional Shares, if not the
First Time of Delivery, is herein called the "Second Time of Delivery," and each
such time and date for delivery is herein called a "Time of Delivery."
5. The Company agrees with each of the Underwriters and each Selling
Stockholder:
(a) To prepare the Prospectus in a form approved by the Representative
and, if required, to file such Prospectus pursuant to Rule 424(b) under the
Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under
the Act; to make no further amendment or any supplement to the Registration
Statement or Prospectus which shall be disapproved by the Representative or
any Selling Stockholder promptly after reasonable notice thereof; to advise
the Representative and each Selling Stockholder, promptly after it receives
notice thereof, of the time when the Registration Statement, or any
amendment thereto, has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish the
Representative and each Selling Stockholder with copies thereof; to advise
the Representative and each Selling Stockholder, promptly after it receives
notice thereof, of the issuance by the
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Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(b) Promptly from time to time to take such action as the Representative
may reasonably request to qualify the Shares for offering and sale under
the securities laws of such jurisdictions as the Representative may request
and to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Shares, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) To furnish the Underwriters and the Selling Stockholders with copies
of the Prospectus in such quantities as the Representative or they may from
time to time reasonably request, and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after the time
of the issue of the Prospectus in connection with the offering or sale of
the Shares and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during
such same period to amend or supplement the Prospectus in order to comply
with the Act, to notify the Representative and the Selling Stockholders and
upon the Representative's request to prepare and furnish without charge to
each Underwriter, to any dealer in securities and to the Selling
Stockholders as many copies as the Representative or they may from time to
time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a prospectus
in connection with sales of any of the Shares at any time nine months or
more after the time of issue of the Prospectus, upon the Representative's
request but at the expense of such Underwriter, to prepare and deliver to
such Underwriter as many copies as the Representative may request of an
amended or supplemented Prospectus complying with Section 10(a)(3) of the
Act;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than 18 months after the effective
date of the Registration Statement (as defined in Rule 158(c)), an earnings
statement of the Company and its Subsidiaries (which need not be audited)
complying with Section 11(a) of the Act and the rules and regulations
thereunder (including at the option of the Company Rule 158);
(e) (i) During the period beginning from the date hereof and continuing
to and including the date one hundred eighty (180) days after the effective
date of the Prospectus, not to offer, sell, contract to sell or otherwise
dispose of Common Stock or other securities which are substantially similar
to the Common Stock or which are exercisable, convertible or exchangeable
into Common Stock or other securities which are substantially similar to
the Common Stock, without the Representative's prior written consent (other
than pursuant to stock option or purchase plans existing, or on the
exercise, conversion or exchange of convertible, exercisable or
exchangeable securities outstanding, on the date of this Agreement or as
consideration to be used in connection with any acquisitions); and (ii)
that it will use its best efforts to cause each holder of Common Stock who
had registration rights as a result of the filing of the Registration
Statement that waived such rights and entered into a lock-up agreement to
comply therewith, will not grant any waivers or consents to non-compliance
therewith and will otherwise enforce its rights under each such agreement,
in each case unless and to the extent that it shall have obtained the
Representative's prior written consent;
(f) To furnish to its stockholders as soon as practicable after the end
of each fiscal year an annual report (including a balance sheet and
statements of income, stockholders' equity and cash flow of the Company and
its consolidated subsidiaries certified by independent public accountants)
and such other reports and definitive proxy materials required to be
furnished to its stockholders pursuant to the Exchange Act;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to the Representative copies of all
reports or other communications (financial or other) furnished to
shareholders, and deliver to the Representative (i) as soon as they are
available, copies of any reports and financial statements furnished to or
filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the Company
as the Representative may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the
accounts of the Company and its Subsidiaries are consolidated in reports
furnished to its stockholders generally or to the Commission); and
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(h) To have the Shares listed on the American Stock Exchange.
6. The Company and each of the Selling Stockholders covenant and agree
with one another and with the several Underwriters that, except as provided
below, the Company will pay or cause to be paid all costs and expenses incident
to the performance of the Company's and the Selling Stockholders' obligations
hereunder including: (i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares under
the Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriters and dealers; (ii) the cost of printing or
producing any Agreement among Underwriters, this Agreement, the Blue Sky
Memorandum and any other documents in connection with the offering, purchase,
sale and delivery of the Shares; (iii) all expenses in connection with the
qualification of the Shares for offering and sale under state securities laws as
provided in Section 5(b) hereof, including the fees and disbursements of counsel
for the Underwriters in connection with such qualification and in connection
with the Blue Sky survey; (iv) the filing fees and the fees and disbursements of
counsel for the Underwriters incident to securing any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Shares; (v) the cost of preparing stock certificates; (vi) the cost and charges
of any transfer agent or registrar; (vii) the fees and expenses of one counsel
for the Selling Stockholders (determined in accordance with Section 4(b) of the
Registration Rights Agreement dated as of March 15, 1996, between the Company
and the Selling Stockholders); (viii) the $100,000 non-accountable expense
allowance for due diligence and other out-of-pocket expenses payable to the
Representative; (ix) all expenses incurred with regard to informational
meetings; and (x) all expenses and taxes incident to the sale and delivery of
the Shares to be sold by each Selling Stockholder to the Underwriters hereunder
(other than legal fees and disbursements); provided, however, that,
notwithstanding the foregoing, all underwriters' discounts and commissions in
respect of the sale of the Shares by any Selling Stockholder shall be paid by
such Selling Stockholder. In connection with clause (x) of the preceding
sentence, the Company agrees to reimburse the Representative for associated
carrying costs if such tax payment is not rebated on the day of payment and for
any portion of such tax payment not rebated. It is understood, however, that the
Company shall bear, and the Selling Stockholders shall not be required to pay or
reimburse the Company for, the cost of any other matters not directly relating
to the sale and purchase of the Shares pursuant to this Agreement and that,
except as provided in this Section, Section 8 and Section 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholders herein are, at and as of such Time
of Delivery, true and correct in all material respects, the condition that the
Company and the Selling Stockholders shall have performed in all material
respects all of its and their obligations hereunder theretofore to be performed,
and the following additional conditions:
(a) The Prospectus, if required, shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act and
in accordance with Section 5(a) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information
on the part of the Commission shall have been complied with to the
Representative's reasonable satisfaction;
(b) Wolin, Fuller, Xxxxxx & Xxxxxx LLP, counsel for the Underwriters,
shall have furnished to the Representative such opinion or opinions, dated
such Time of Delivery, with respect to the incorporation of the Company,
this Agreement, the validity of the Shares being delivered at such Time of
Delivery, the Registration Statement, the Prospectus, and other related
matters as the Representative may reasonably request, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Xxxxx X. Xxxxxx, Esq. shall have furnished to the Representative a
written opinion, dated such Time of Delivery, in form and substance
satisfactory to the Representative, to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Ohio, with
full power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus;
(ii) The Shares to be issued and delivered by the Company have been
duly authorized and, when certificates therefor have been duly executed
and the Shares delivered by the Company pursuant to this Agreement
against payment therefor, will be validly issued, fully paid and
non-assessable;
(iii) The execution and delivery by the Company and the performance by
the Company of its obligations under this Agreement and the consummation
by the Company of the transactions contemplated herein (1) have been
duly
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authorized by all necessary corporate action on the part of the Company,
(2) do not and will not result in any violation of the Articles of
Incorporation (or other applicable charter document) or the Bylaws of
the Company, (3) except as would not have a Material Adverse Effect, do
not and will not conflict with, or result in a breach or violation of
any of the terms or provisions of, or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, or give rise to any right to accelerate the maturity or
require the prepayment of any indebtedness or the purchase of any
capital stock under, or result in the creation or imposition of any
lien, charge or encumbrance upon any properties or assets of the Company
under (A) any contract, indenture, mortgage, deed of trust, loan
agreement, note, lease, partnership agreement or other agreement or
instrument to which the Company is a party or by which it may be bound
or to which any of its properties or assets may be subject, (B) any
applicable law or statute or governmental rule or regulation (other than
the Act or the securities or Blue Sky laws of the various states of the
United States of America), or (C) any judgment, order or decree known to
such counsel of any government, governmental instrumentality, agency,
body or court, domestic or foreign, having jurisdiction over the Company
or any of its properties or assets;
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus, and the Shares being
delivered at such Time of Delivery conform in all material respects to
the description of the Common Stock contained in the Prospectus under
the caption "Description of the Capital Stock," and all the outstanding
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable;
(v) The Company has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification other than where the
failure to be so qualified or in good standing would not have a Material
Adverse Effect;
(vi) All of the issued shares of capital stock of each Subsidiary have
been duly and validly authorized and issued, are fully paid and
non-assessable, and to such counsel's knowledge such shares (except for
directors' qualifying shares and except as otherwise set forth in the
Prospectus) are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or adverse claims, except for
such liens, encumbrances, equities or adverse claims created pursuant to
the Credit Agreement and related loan documents;
(vii) To the best of such counsel's knowledge (after inquiry of the
Chief Executive Officer and Chief Financial Officer of the Company and
of counsel retained by the Company) and other than as set forth in the
Registration Statement or Prospectus, there are no legal or governmental
proceedings pending or threatened, including, but not limited to, any
litigation, inquiry or investigation to which the Company, any
Subsidiary, Cherokee or Texas Coinphone is a party or of which any
property, certification, consent, approval, license, Permit or Authority
of the Company, any Subsidiary, Cherokee or Texas Coinphone is the
subject which are required to be described in the Registration Statement
or Prospectus, or which, if determined adversely to the Company, any
Subsidiary, Cherokee or Texas Coinphone, would individually or in the
aggregate have a Material Adverse Effect; and such counsel does not know
of any contracts or other documents of a character required to be filed
as an exhibit to the Registration Statement or required to be described
or referred to in the Registration Statement or the Prospectus which are
not filed, referred to or described as required.
(viii) This Agreement has been duly authorized, executed and delivered
by the Company.
(ix) To such counsel's knowledge after due inquiry, the Company has
obtained all consents, approvals, orders, certificates, licenses,
permits, franchises and other authorizations of and from, and have made
all declarations and filings with, all governmental and regulatory
authorities (including, without limitation, any State Regulatory
Agencies) in the State of Ohio, all self-regulatory organizations, and
all courts and other tribunals necessary to own, lease, license, use and
operate its properties and assets and to conduct its businesses in the
manner described in the Registration Statement and Prospectus, except,
in each case, as otherwise disclosed in the Prospectus or where the
failure to obtain consents, approvals, orders, certificates, licenses,
permits, franchises and other authorizations or to make declarations and
filings would not, individually or in the aggregate, have a Material
Adverse Effect; the execution and delivery by the Company of, and the
performance by the Company of, its obligations under this Agreement and
the Acquisition Agreements and the consummation by the Company of the
transactions herein and therein contemplated will not violate any such
approval, certification, license or permit, except, in all cases, as
should not have a Material Adverse Effect; and
(x) No authorization, approval, consent, order, registration,
qualification or license of, or filing with, any government,
governmental instrumentality, agency, body or court is required under
the laws of the State of Ohio in connection with the authorization,
issuance and sale and delivery of the Shares by the Company.
(d) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Company,
shall have furnished to the Representative their written opinion, dated
such Time of Delivery, in form and substance satisfactory to the
Representative, to the effect that:
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(i) To the best of such counsel's knowledge (which knowledge may be
based solely on such counsel's discussions with officers of the Company,
the Subsidiaries, and Cherokee responsible for the matters discussed
below and such counsel's review of documents furnished to them by the
Company without any search of the public docket records of any court,
governmental agency or body or administrative agency) and other than as
set forth in the Registration Statement or Prospectus, there are no
legal, regulatory or governmental proceedings pending or threatened to
which the Company, any Subsidiary or Cherokee is or may be a party or to
which any property of the Company or any Subsidiary or Cherokee is or
may be the subject which are required to be described in the
Registration Statement or Prospectus, or which, if determined adversely
to the Company or any Subsidiary, could individually or in the aggregate
be reasonably expected to have a Material Adverse Effect; and such
counsel does not know of any contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement or
required to be described or referred to in the Registration Statement or
the Prospectus which are not filed, referred to or described as
required;
(ii) The issue and sale to the Representative of the Shares being
delivered at such Time of Delivery by the Company in accordance with and
upon the terms and conditions set forth herein and the compliance by the
Company with all of the provisions of this Agreement, and the
consummation of the transactions herein contemplated, 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 document listed as an
exhibit to the Registration Statement, nor will such action result in
any violation of the provisions of the Articles of Incorporation or
By-laws;
(iii) To such counsel's knowledge after due inquiry, the Company and
each Subsidiary Coinphone have obtained all consents, approvals, orders,
certificates, licenses, permits, franchises and other authorizations of
and from, and have made all declarations and filings with, the FCC and
the State Regulatory Agencies necessary to own, lease, license, use and
operate their respective properties and assets and to conduct their
respective businesses in the manner described in the Registration
Statement and Prospectus, except where the failure to obtain consents,
approvals, orders, certificates, licenses, permits, franchises and other
authorizations or to make declarations and filings would not,
individually or in the aggregate, have a Material Adverse Effect;
(iv) No consent, approval, authorization, order, registration,
qualification or license of or filing with any government or
governmental instrumentality, agency, body, or court is required under
the laws of the State of New York or the laws of the United States of
America for the issue and sale of the Shares by the Company or the
performance by the Company of all of its obligations under this
Agreement or the consummation by the Company of the transactions
contemplated by this Agreement, except such as have been obtained. Such
counsel need not express any opinion in this paragraph (iv), however, as
to (1) the securities laws of any jurisdiction, the rules and
regulations of the National Association of Securities Dealers, Inc., and
(2) laws other than those that, in such counsel's experience, are
normally applicable to transactions of the type provided for by this
Agreement.
(v) The Registration Statement has been declared effective under the
Act, and no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto has been issued. The
Registration Statement and the Prospectus as of its date and any further
amendments and supplements thereto made by the Company prior to such
Time of Delivery as of their respective dates (other than the financial
statements and other financial or statistical information included
therein or omitted therefrom, as to which such counsel need express no
opinion) appeared on their face to be appropriately responsive in all
material respects with the requirements of the Act and the rules and
regulations thereunder, except that such counsel is not required to
assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement and the
Prospectus (other than to the extent specified in Section 7(d)( )
hereof); the Company satisfies all of the requirements to file a
Registration Statement on Form SB-2;
(vi) The Company is not and, after giving effect to the offering and
sale of the Shares by the Company and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended;
(vii) The Company is not a "public utility" or a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended;
(viii) Section 310 of the Communications Act does not apply to the
Company or the Subsidiaries; and
(ix) The statements in the Registration Statement and Prospectus under
the headings "Prospectus Summary -- Recent Developments -- Recent
Regulatory Developments," "Risk Factors -- Government Regulation," the
third and fifth paragraphs of "Business -- Industry Overview," and
"Business -- Government Regulations," insofar as such statements
constitute a summary of statutes, regulations, rules, legal matters,
documents or proceedings referred to therein,
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fairly present the information required to be set forth therein with
respect to such statutes, regulations, rules, legal matters, documents
or proceedings.
At the time the foregoing opinion is delivered, Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP shall additionally state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent auditors of the Company, representatives
of the independent auditors for each of the Company, the Acquired Companies
and Cherokee and representatives of the Underwriters, at which conferences
the contents of the Registration Statement and the Prospectus and related
matters were discussed, and although such counsel has not independently
verified and is not passing upon and assumes no responsibility for the
accuracy, completeness or fairness of the statements contained in the
Prospectus and Registration Statement (except to the extent specified in
Section 7(d)(iii), no facts have come to such counsel's attention which
lead such counsel to believe that the Registration Statement, as of its
effective date, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
or make the statements therein not misleading, or that the Prospectus as of
its date and as of such Time of Delivery, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such firm need not express an opinion
with respect to the financial statements and the other financial and
statistical data included in or omitted from the Registration Statement and
the Prospectus or the exhibits to the Registration Statement).
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the State
of New York and the federal laws of the United States.
(e) The Underwriters shall have also received on the Closing Date signed
opinions, in form and substance satisfactory to counsel to the
Underwriters, dated the Closing Date and addressed to the Underwriters,
from local counsel in each of Florida, Missouri, California and Texas with
respect to the operations of the Company and the Subsidiaries in such
state.
(f) King & Spalding and Xxxxxxxxxx, Sandler, Kohl, Xxxxxx & Xxxxxx,
counsel for ING and Cerberus, respectively, shall have furnished to the
Representative their written opinions, dated the First Time of Delivery, in
form and substance satisfactory to the Representative, to the effect that:
(i) This Agreement has been duly authorized, executed and delivered by
or on behalf of each such Selling Stockholder; and the sale of the
Shares to be sold by each such Selling Stockholder hereunder and the
compliance by each such Selling Stockholder with all of the provisions
of this Agreement and the consummation of the transactions herein and
therein contemplated will not (a) conflict with the federal laws of the
United States by which such Selling Stockholder is bound, or (b) result
in a material breach or violation of any order, rule or regulation known
to such counsel of any court or governmental agency or body which, to
such counsel's knowledge, has jurisdiction over such Selling Stockholder
or the Common Stock of such Selling Stockholder;
(ii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement in connection with the
Shares to be sold by such Selling Stockholder hereunder, except such as
have been obtained under the Act and such as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of such Shares by the Underwriters; and
(iii) The Underwriters shall acquire the Shares, free of all adverse
claims, assuming they purchased such Shares in good faith and without
notice of any such adverse claim, within the meaning of the Uniform
Commercial Code.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the State
of New York (excluding conflict of law rules) and the federal laws of the
United States. Such counsel may rely as to factual matters (1) upon
certificates of the Selling Stockholders and (2) the representations of the
Selling Stockholders contained in this Agreement.
(g) At 9:00 a.m., New York time, on the effective date of the
Registration Statement and the effective date of the most recently filed
post-effective amendment to the Registration Statement and also at each
Time of Delivery, Price Waterhouse LLP and all accountants named in Section
1(xiii) shall have furnished to the Representative a letter or letters,
dated the respective date of delivery thereof, in form and substance
satisfactory to the Representative;
(h) (i) Neither the Company nor any Subsidiary shall have sustained
since the date of the latest audited financial statements included 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, otherwise
than as set forth or contemplated in the Prospectus, and (ii) since the
respective dates as of which information is given in the Prospectus there
shall not have been any change in the capital stock (other than issuances
of stock upon the exercise of stock
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options or warrants which were outstanding on the date of the latest
balance sheet included in the Prospectus), short-term or long-term debt of
the Company or any Subsidiary or any material adverse change, or any
development reasonably likely to become a material adverse change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations 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 (i) or (ii), is in the Representative's judgment so material and
adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered at such Time
of Delivery on the terms and in the manner contemplated in the Prospectus;
(i) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or the American Stock Exchange;
(ii) a general moratorium on commercial banking activities in New York
declared by either federal or New York authorities; or (iii) the outbreak
or escalation of hostilities involving the United States or the declaration
by the United States of a national emergency or war, if the effect of any
such event specified in this clause (iii) in the Representative's judgment
makes it impracticable or inadvisable to proceed with the public offering
or delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated by the Prospectus;
(j) The Shares to be sold by the Company and the Selling Stockholders at
such Time of Delivery shall have been listed, subject to notice of
issuance, on the American Stock Exchange;
(k) The Company and the Selling Stockholders shall have furnished or
caused to be furnished to the Representative at such Time of Delivery
certificates of officers of the Company and of the Selling Stockholders,
respectively, satisfactory to the Representative as to the accuracy of the
representations and warranties of the Company and the Selling Stockholders,
respectively, herein at and as of such Time of Delivery, as to the
performance by the Company and the Selling Stockholders of all of their
respective obligations hereunder to be performed at or prior to such Time
of Delivery, and as to such other matters as the Representative may
reasonably request and the Company shall have furnished or caused to be
furnished certificates as to the matters set forth in this Section and as
to such other matters as the Representative may reasonably request; and,
with respect to the Company, to the effect that, since the respective dates
as of which information is given in the Prospectus, there has not occurred
any Material Adverse Change, otherwise than as set forth in the Prospectus,
and that such officer(s) is knowledgeable with respect to regulatory
compliance matters affecting the operations of the Company, and the
approvals, certificates, licenses and permits obtained by the Company and
listed on a schedule attached to such certificate constitute all such
approvals, certificates, licenses and permits required by the FCC or State
Regulatory Agencies, except such as the failure to obtain would not,
individually or in the aggregate, have a Material Adverse Effect;
(l) On or prior to the First Time of Delivery, each of the Selling
Stockholders shall have entered into a Lock-up Agreement with the
Representative of the Underwriters containing the terms and provisions set
forth in Section 1(c); and
(m) On or prior to the First Time of Delivery, each executive officer
and director of the Company listed under the caption "Management" in the
Prospectus shall have entered into a lock-up agreement with the
Representative that, during the period beginning from the date hereof and
continuing to and including the date one hundred eighty (180) days after
the date of the Prospectus, he or she will not offer, sell, contract to
sell or otherwise dispose of any Common Stock or securities exercisable,
convertible or exchangeable into Common Stock other than pursuant to bona
fide gifts to persons who agree in writing with the Representative to be
bound by the terms of such agreement.
8. (a) The Company will indemnify and hold harmless each Underwriter and
each Selling Stockholder against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or Selling Stockholder may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus (subject to Section 8(d) hereof), the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter and each Selling
Stockholder for any legal or other expenses reasonably incurred by such
Underwriter or Selling Stockholder, as the case may be, in connection with
investigating or defending any such action or claim 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 or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by (i) any
Underwriter through the Representative or (ii) either Selling Stockholder, in
each case, expressly for use therein.
(b) Each of the Selling Stockholders, severally and not jointly, will
indemnify and hold harmless the Company and each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which the Company and such
Underwriter may
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become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse the Company and each Underwriter for any legal or other
expenses reasonably incurred by the Company and such Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that (i) the Selling Stockholders shall only be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus or any such amendment or supplement
in reliance upon and in conformity with written information furnished by the
Selling Stockholder to the Company or any Underwriter expressly for use therein
and (ii) in no event shall the liability of any Selling Stockholder under this
subsection (b) exceed the total net proceeds from the sale of Shares by such
Selling Stockholder hereunder.
(c) Each Underwriter will indemnify and hold harmless the Company and each
Selling Stockholder against any losses, claims, damages or liabilities to which
the Company or such Selling Stockholder may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through the Representative expressly for use therein; and will
reimburse the Company and each Selling Stockholder for any legal or other
expenses reasonably incurred by the Company or such Selling Stockholder in
connection with investigating or defending any such action or claim as such
expenses are incurred. For purposes of this Section 8, and Sections 1(a)(ii) and
1(a)(v) hereof, the only written information furnished by the Underwriters to
the Company expressly for use in the Prospectus and the Registration Statement
is the information in (i) the last paragraph on the cover page of the
Prospectus, (ii) the paragraph regarding stabilization in the first paragraph on
the inside cover page of the Prospectus, and (iii) in the section entitled
"Underwriting" in the Prospectus, the paragraph preceding the table and the
first and sixth paragraphs following the table.
(d) With respect to any untrue statement or omission of a material fact or
alleged untrue statement or omission of a material fact made in any Preliminary
Prospectus, the indemnity contained in this Section 8 shall not inure to the
benefit of the indemnified party, if such untrue statement or omission of a
material fact or alleged untrue statement or omission of a material fact in the
Preliminary Prospectus was corrected in the Prospectus.
(e) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation.
(f) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a), (b)
or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (e) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Selling Stockholders on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions
14
16
in respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Shares purchased
under this Agreement (before deducting expenses) received by the Company and the
Selling Stockholders, respectively, bear to the total underwriting discounts and
commissions received by the Underwriters with respect to the Shares purchased
under this Agreement, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Stockholders on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, each of the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
subsection (f) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purposes) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (f). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (f) shall be deemed to
include 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 subsection (f), (i) no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission and (ii) no Selling Stockholder shall
be required to contribute any amount in excess of the net proceeds received by
such Selling Stockholder from the sale of Shares by such Selling Stockholder
hereunder. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (f) to contribute are several in proportion to
their respective underwriting obligations and not joint. The Selling
Stockholders' obligations in this subsection (f) to contribute are several in
proportion to the Shares sold by each and not joint.
(g) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his consent, is named in the Registration Statement as about to
become a director of the Company) and to each person, if any, who controls the
Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at the Time of Delivery, the
Representative may in its discretion arrange for the Representative or another
party or other parties to purchase such Shares on the terms contained herein.
If, within 36 hours after such default by any Underwriter, the Representative
does not arrange for the purchase of such Shares, then the Company and the
Selling Stockholders shall be entitled to a further period of 36 hours within
which to procure another party or other parties satisfactory to the
Representative to purchase such Shares on such terms. In the event that, within
the respective prescribed periods, the Representative notifies the Company and
the Selling Stockholders that the Representative has so arranged for the
purchase of such Shares, or the Company and the Selling Stockholders notify the
Representative that they have so arranged for the purchase of such Shares, the
Representative or the Company and the Selling Stockholders shall have the right
to postpone such Time of Delivery for a period of not more than seven days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in the Representative's opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the Representative and the
Company and the Selling Stockholders as provided in subsection (a) above, the
aggregate number of such Shares which remains unpurchased does not exceed
one-eleventh of the aggregate number of all the Shares to be purchased at such
Time of Delivery, then the Company and the Selling Stockholders shall have the
right to require each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the Representative and the
Company and the Selling Stockholders as provided in subsection (a) above, the
aggregate number of Shares
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which remains unpurchased exceeds one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, or if the Company and the
Selling Stockholders shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase Shares of a defaulting
Underwriter or Underwriters, then this Agreement (or, with respect to the Second
Time of Delivery, the obligations of the Underwriters to purchase and of the
Company to sell the Optional Shares) shall thereupon terminate, without
liability on the part of any nondefaulting Underwriter or the Company or the
Selling Stockholders, except for the expenses to be borne by the Company and the
Selling Stockholders and the Underwriters as provided in Section 6 hereof and
the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or any of the Selling Stockholders or any officer
or director or controlling person of the Company, or controlling person of any
Selling Stockholder, and shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholders shall be under any liability to
any Underwriter except as provided in Section 6 and Section 8 hereof; but, if
for any other reason any Shares are not delivered by on behalf of the Company
and the Selling Stockholders as provided herein, the Company will reimburse the
Underwriters through the Representative for all out-of-pocket expenses approved
in writing by the Representative, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Shares not so delivered, but the Company and the
Selling Stockholders shall then be under no further liability to any Underwriter
in respect of the Shares not so delivered except as provided in Section 6 and
Section 8 hereof. Notwithstanding any other provision of this Agreement, if this
Agreement is terminated for any reason, the Company shall have no obligation to
pay a non-accountable expense allowance to the Representative.
12. In all dealings hereunder, the Representative shall act on behalf of
each of the Underwriters, and the parties hereto shall be entitled to act and
rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by the Representative.
All statements, requests, notices, and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the Representative in care of Southcoast Capital
Corporation at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate
Syndicate Department; if to any Selling Stockholder shall be delivered or sent
by mail, telex or facsimile transmission to counsel for such Selling Stockholder
at its address set forth in Schedule II hereto; and 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: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 8(e) hereof shall
be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire or telex
constituting such Questionnaire, which address will be supplied to the Company
or the Selling Stockholders by the Representative on request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and the Selling Stockholders and, to the
extent provided in Section 8 and Section 10 hereof, the officers and directors
of the Company and each person who controls the Company, any Selling Stockholder
(or the officers, directors and partners thereof) or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right by virtue of this Agreement. No
purchaser of any of the Shares from any Underwriter shall be deemed a successor
or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, DC is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS
PROVISIONS THEREOF.
16. The Company and the Underwriter agree that it is the intent of the
parties to this Agreement that the Underwriter be entitled to rely on the
representations and warranties of the Company contained in the Underwriting
Agreement relating to the Company Debt Offering and the representations and
warranties of Cherokee as set forth in the Cherokee Agreement, on the same terms
and conditions as the Company.
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17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with the Representative's understanding,
please sign and return to us seven counterparts hereof, and upon the acceptance
hereof by the Representative, on behalf of each of the Underwriters, this letter
and such acceptance hereof shall constitute a binding agreement among each of
the Underwriters, the Company and each of the Selling Stockholders. It is
understood that the Representative's acceptance of this letter on behalf of each
of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company and the Selling Stockholders for examination, upon request, but without
warranty on the Representative's part as to the authority of the signers
thereof.
Very truly yours,
PhoneTel Technologies, Inc.
By:
----------------------------------------
Name: Xxxxx X. Xxxx
Title: Chief Executive Officer
SELLING STOCKHOLDERS:
ING (U.S.) Investment Corporation
By:
----------------------------------------
Name:
Title:
Cerberus Partners, L.P.
By:
----------------------------------------
Name:
Title:
Accepted as of the date hereof:
SOUTHCOAST CAPITAL CORPORATION
By:
------------------------------------------------------------
On behalf of each of the Underwriters
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SCHEDULE I
NUMBER OF
OPTIONAL
TOTAL SHARES TO BE
NUMBER OF PURCHASED IF
FIRM MAXIMUM
SHARES TO BE OPTION
UNDERWRITER PURCHASED EXERCISED
-------------------------------------------------------------------------------- ------------ ------------
Southcoast Capital Corporation.................................................. 000,000 000,000
................................................................................
--------- -------
Total................................................................. 6,750,000 937,500
========= =======
20
SCHEDULE II
NUMBER OF
OPTIONAL
TOTAL SHARES TO BE
NUMBER OF SOLD IF
FIRM MAXIMUM
SHARES TO BE OPTION
UNDERWRITER SOLD EXERCISED
-------------------------------------------------------------------------------- ------------ ------------
The Company
The Selling Stockholders:....................................................... 6,250,000 937,500
ING (U.S.) Investment Corporation(1).......................................... ,000 --
Cerberus Partners, L.P.(2).................................................... ,000 --
--------- -------
Total:................................................................ 6,750,000 937,500
========= =======
---------------
(1) 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(2) 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
21
SCHEDULE III
SUBSIDIARIES OF THE COMPANY
JURISDICTION OF
NAME INCORPORATION
------------------------------------------------------------------------------------------- ----------------
Northern Florida Telephone Corporation..................................................... Florida
Paramount Communications Systems, Inc...................................................... Florida
Payphones of America, Inc.................................................................. Ohio
Public Telephone Corporation............................................................... Indiana
World Communications, Inc.................................................................. Missouri
PhoneTel CCI, Inc.......................................................................... Texas
