Exhibit 99.(h)
[FORM OF UNDERWRITING AGREEMENT]
DECS TRUST VI
10,000,000 DECS* SM
(Representing Beneficial Interests in Contracts
Relating to Shares of Class A Common Stock, $.01 par value, of
Metromedia Fiber Network, Inc.)
Underwriting Agreement
New York, New York
November __, 1999
Xxxxxxx Xxxxx Xxxxxx Inc.
As Representative of the several Underwriters,
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
DECS Trust VI, a statutory business trust organized under the
Delaware Business Trust Act, 12 Del.C. ss. 3801 et seq. (the "DELAWARE Act"), of
the State of Delaware (such trust and the trustees thereof acting in their
capacities as such being referred to herein as the "TRUST"), proposes to issue
and to sell to the several underwriters named in Schedule I hereto (the
"UNDERWRITERS"), for whom you (the "REPRESENTATIVE") is acting as
representative, an aggregate of 10,000,000 DECS representing shares of
beneficial interest in the Trust (the "UNDERWRITTEN DECS"). In addition, the
Underwriters will have an option to purchase up to 1,500,000 DECS (the "OPTION
DECS" and, together with the Underwritten DECS, the "DECS") to cover
over-allotments, if any. The Option DECS and the Underwritten DECS, together
with the [1] DECS of the Trust subscribed for by Xxxxxxx Xxxxx Xxxxxx Inc.
("XXXXXXX XXXXX BARNEY") pursuant to the Subscription Agreement, dated October
26, 1999, between Xxxxxxx Xxxxx Xxxxxx and the Trust (the "SUBSCRIPTION DECS"),
are referred to herein as the "SECURITIES." The Securities are to be issued
under an Amended and Restated Declaration of Trust, dated as of November 9,
1999 (the "TRUST AGREEMENT"), among the initial trustee and initial sponsor of
the Trust, trustees of the Trust (the "TRUSTEES") and Xxxxxxx Xxxxx Barney, as
sponsor.
The Trust will enter into forward purchase contracts (the
"CONTRACTS") with the persons listed on Schedule II hereto (each a "SELLER" and
collectively, the "SELLERS"), pursuant to which each Seller has agreed to sell,
and the Trust has agreed to purchase, the number of shares of Class A Common
Stock, $.01 par value (the "SHARES"), of Metromedia Fiber Networks, Inc. (the
"COMPANY") specified therein on [ ], 2002 (the "EXCHANGE DATE") (subject to the
Sellers' right
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* Plus an option to purchase from DECS Trust VI up to 1,500,000
additional DECS to cover over-allotments.
to extend and accelerate the Exchange Date and to deliver cash with a value
equivalent to the Shares, or other property, as provided in the Contracts). Each
Seller's obligations under its respective Contract will be secured by a pledge
of collateral under a collateral agreement (each a "COLLATERAL AGREEMENT") among
such Seller, the Trust and The Bank of New York ("BONY"), as collateral agent
(in such capacity, the "COLLATERAL AGENT").
In connection with the foregoing, the Company has filed with
the Commission a registration statement, including a related basic prospectus,
with respect to 10,000,000 Shares in respect of the Underwritten DECS, plus an
additional [1,500,000] Shares in respect of the Option DECS and an additional
[1] Share[s] in respect of the Subscription DECS, for delivery by the Sellers
pursuant to the Securities, which registration statement is referred to in
Section 2(a) of this Agreement.
To the extent there are no additional Underwriters listed on
Schedule I other than you, the term Representative as used herein shall mean
you, as Underwriters, and the terms Representative and Underwriters shall mean
either the singular or plural as the context requires. The use of the neuter in
this Agreement shall include the feminine and masculine wherever appropriate.
Certain terms used herein are defined in Section 23 hereof.
REPRESENTATIONS AND WARRANTIES OF THE TRUST. The Trust
represents and warrants to, and agrees with, each Underwriter as set forth below
in this Section 1.
(a) The Trust meets the requirements for use of Form N-2 under
the Act and has prepared and filed with the Commission (a) a
notification on Form N-8A (the "NOTIFICATION") of registration of the
Trust as an investment company under the Investment Company Act and (b)
a registration statement on Form N-2 (file numbers 333- 89677 and 811-
09647), including a related preliminary prospectus, for the
registration of the offering and sale of the DECS under the Act. The
Trust may have filed one or more amendments thereto, including the
related preliminary prospectus, each of which has previously been
furnished to you. The Trust will next file with the Commission one of
the following: either (1) prior to the Trust Effective Date of such
registration statement, a further amendment to such registration
statement (including the form of final prospectus); or (2) after the
Trust Effective Date of such registration statement, a final prospectus
in accordance with Rules 430A and 497(h). In the case of clause (2),
the Trust has included in such registration statement, as amended at
the Trust Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to be
included in such registration statement and the Trust Prospectus. As
filed, such amendment and form of final prospectus, or such final
prospectus, shall contain all Rule 430A Information, together with all
other such required information, and, except to the extent the
Representative shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other
changes (beyond that contained in the latest Preliminary Trust
Prospectus) as the Trust has advised you, prior to the Execution Time,
will be included or made therein.
(b) On the Trust Effective Date, the Trust Registration
Statement and the Notification did or will, and when the Trust
Prospectus is first filed (if required) in accordance with Rule 497(h)
and on the Closing Date (as defined herein) and on any date on which
Option DECS are purchased, if such date is not the Closing Date (a
"SETTLEMENT
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DATE"), the Trust Prospectus (and any supplements thereto) will comply
in all material respects with the applicable requirements of the Act,
the Exchange Act and the Investment Company Act, and the respective
rules thereunder; on the Trust Effective Date and at the Execution
Time, the Trust Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Trust Effective Date,
the Trust Prospectus, if not filed pursuant to Rule 497(h), did not or
will not, and on the date of any filing pursuant to Rule 497(h) and on
the Closing Date and any Settlement Date, the Trust Prospectus
(together with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) No stop order suspending the effectiveness of the Trust
Registration Statement is in effect, no order preventing or suspending
the use of any Preliminary Trust Prospectus has been issued by the
Commission, no notice or order under Section 8(e) of the Investment
Company Act has been issued, and no proceedings for any such purpose
are pending before or threatened by the Commission.
(d) The Trust has been duly created, is validly existing as a
business trust under the Delaware Act, has the power and authority to
own or lease, as the case may be, and to operate its properties and
conduct its business as described in the Trust Prospectus and to enter
into and perform its obligations under this Agreement, the Trust
Agreement and each of the Fundamental Documents (as defined below) and
is duly qualified to do 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 would not have a material adverse effect on
the Trust or its assets. The Trust has no subsidiaries.
(e) The Trust is registered with the Commission as a
non-diversified, closed-end management investment company under the
Investment Company Act and no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or, to
the knowledge of the Trust, threatened by the Commission. No person is
serving or acting as an officer or trustee of the Trust except in
accordance with the provisions of the Investment Company Act.
(f) This Agreement has been duly authorized, executed and
delivered by the Trust.
(g) Each of the Contracts, the Collateral Agreements, the
Administration Agreement between BoNY and the Trust (the
"ADMINISTRATION AGREEMENT"), the Custodian Agreement between BoNY and
the Trust (the "CUSTODIAN AGREEMENT"), the Paying Agent Agreement
between BoNY and the Trust (the "PAYING AGENT AGREEMENT") and the Fund
Indemnity Agreement between Xxxxxxx Xxxxx Xxxxxx and the Trust (the
"FUND INDEMNITY AGREEMENT") (the Contracts, the Collateral Agreements,
the Administration Agreement, the Custodian Agreement, the Paying Agent
Agreement and the Fund Indemnity Agreement are referred to herein,
collectively, as the "FUNDAMENTAL AGREEMENTS") has been duly
authorized, executed and delivered by the Trust and, assuming due
authorization, execution and delivery by the other parties thereto, is
a valid and binding agreement of the Trust, enforceable against
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the Trust in accordance with its terms except as such enforceability
may be limited by applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and by general equitable
principles.
(h) The execution and delivery by the Trust of, and the
performance by the Trust of its obligations under, this Agreement and
each Fundamental Agreement (including the issue and sale by the Trust
of the DECS as contemplated by this Agreement) do not and will not,
whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach or violation of, or default
under, or give the holder of any indebtedness of the Trust the right to
require the repurchase, redemption or repayment of all or a portion of
such indebtedness under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Trust
pursuant to, any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which
the Trust is a party or by which it may be bound, or to which any of
the property or assets of the Trust is subject, nor will such action
result in any violation of the provisions of the Trust Agreement or any
applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Trust or any of its assets or
properties; and no consent, approval, authorization, order of, or
qualification or filing with, any governmental body or agency,
self-regulatory organization or court or other tribunal, whether
foreign or domestic, is required for the execution and delivery by the
Trust of this Agreement or the Fundamental Agreements or the
performance by the Trust of its obligations hereunder and thereunder,
except for the filing of a Certificate of Trust and the filing of one
or more Restated Certificates of Trust with the office of the Secretary
of State of the State of Delaware (which filings have been duly made)
and such as have been obtained and as may be required by the securities
or Blue Sky laws of the various states and foreign jurisdictions in
connection with the offer and sale of the DECS by the Underwriters.
(i) The DECS, the Trust Agreement and the Fundamental
Agreements conform in all material respects to the descriptions thereof
contained in the Trust Prospectus.
(j) The Trust Agreement and the Fundamental Agreements comply
with all applicable provisions of the Act, the Exchange Act and the
Investment Company Act, and all approvals of such documents required
under the Investment Company Act by the holders of the Securities and
the Trustees have been obtained and are in full force and effect.
(k) On the Closing Date, the Fundamental Agreements will be in
full force and effect and the Trust will not be in default thereunder
and, to the knowledge of the Trust, no event will have occurred which
with the passage of time or the giving of notice or both would
constitute a default thereunder. The Trust is not currently in breach
of, or in default under, the Trust Agreement or any other written
agreement or instrument to which it or its property is bound or
affected.
(l) All of the outstanding Securities have been duly
authorized and are validly issued, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust, and the form
of certificate used to evidence the Securities is in due and proper
form and complies with all provisions of applicable law.
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(m) The DECS have been duly authorized by the Trust for
issuance to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Trust in accordance with the terms of this
Agreement and the Trust Agreement against payment of the purchase price
therefor as provided herein, will be validly issued, fully paid and
nonassessable undivided beneficial interests in the assets of the
Trust, and the issuance of such DECS will not be subject to any
preemptive or similar rights. No person has rights to the registration
of any securities because of the filing of the Trust Registration
Statement, and no holder of the Securities will be subject to personal
liability by reason of being such a holder.
(n) The DECS have been approved for listing on the National
Market System of the National Association of Securities Dealers
Automated Quotation System (the "NASDAQ NATIONAL MARKET SYSTEM"),
subject to official notice of issuance. The Trust's Registration
Statement on Form 8-A under the Exchange Act is effective.
(o) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, of the Trust, or in the investment
objectives, investment policies, liabilities, business, prospects or
operations of the Trust from that set forth in the Trust Prospectus
(exclusive of any supplements thereto subsequent to the date of this
Agreement) and there have been no transactions entered into by the
Trust which are material to the Trust other than those in the ordinary
course of its business or as described in the Trust Prospectus
(exclusive of any supplements thereto subsequent to the date of this
Agreement).
(p) There are no legal or governmental proceedings pending or,
to the knowledge of the Trust, threatened against or affecting the
Trust that are required to be described in the Trust Registration
Statement or the Trust Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required
to be described in the Trust Registration Statement or the Trust
Prospectus or to be filed as exhibits to the Trust Registration
Statement that are not described or filed as required.
(q) The Trust has all necessary consents, authorizations,
approvals, orders (including exemptive orders), certificates and
permits of and from, and has made all declarations and filings with,
all governmental authorities, self-regulatory organizations and courts
and other tribunals, whether foreign or domestic, to own and use its
assets and to conduct its business in the manner described in the Trust
Prospectus, except to the extent that the failure to obtain or file the
foregoing would not have a material adverse effect on the Trust and
except such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the DECS.
(r) There are no material restrictions, limitations or
regulations with respect to the ability of the Trust to invest its
assets as described in the Trust Prospectus, other than as described
therein.
(s) The Trust has good title to all properties owned by it, in
each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Trust Prospectus or (b) do not, singly or
in the aggregate, materially affect the value of such property and do
not interfere with the use made and proposed to be made of such
property by the Trust.
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(t) There are no legal or governmental proceedings pending to
which the Trust is a party or of which any property of the Trust is the
subject which, if determined adversely to the Trust, would individually
or in the aggregate have a material adverse effect on the current or
future financial position or results of operations of the Trust; and,
to the best of the Trust's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
(u) The statement of assets, liabilities and capital included
in the Trust Registration Statement and the Trust Prospectus, together
with the notes thereto, present fairly the financial position of the
Trust at the date indicated, and such financial statement has been
prepared in conformity with generally accepted accounting principles in
the United States.
(v) The accountants who certified the financial statements and
supporting schedules included in the Trust Registration Statement are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
(w) The Trust has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result, under the Exchange Act
or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the DECS or
the Shares, and has not effected any sales of the Company's common
stock which, if effected by the Company, would be required to be
disclosed in response to Item 701 of Regulation S-K.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, each Underwriter as set forth below
in this Section 2.
(a) The Company meets the requirements for use of Form S-3
under the Act and has prepared and filed with the Commission a
Registration Statement (File No. 333-89087) on Form S-3, including a
related preliminary prospectus and a related basic prospectus, for
registration under the Act of the offering and sale of the Shares. The
Company may have filed one or more amendments thereto, including a
Preliminary Company Prospectus, each of which has previously been
furnished to you. The Company will next file with the Commission one of
the following: (1) after the Effective Date of such Registration
Statement, a final prospectus supplement relating to the Shares in
accordance with Rules 430A and 424(b), (2) prior to the Effective Date
of such Registration Statement, an amendment to such Registration
Statement (including the form of final prospectus supplement) or (3) a
final prospectus in accordance with Rules 415 and 424(b). In the case
of clause (1), the Company has included in such Registration Statement,
as amended at the Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to be
included in such Company Registration Statement and the Company
Prospectus. As filed, such final prospectus supplement or such
amendment and form of final prospectus supplement shall contain all
Rule 430A Information, together with all other such required
information, and, except to the extent the Representative shall agree
in writing to a modification, shall be in all substantive respects in
the form furnished to you prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
Company Prospectus and any Preliminary Company Prospectus) as the
Company has advised you, prior to the Execution Time, will be included
or made therein. The Company
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Registration Statement, at the Execution Time, meets the requirements
set forth in Rule 415(a)(1)(x).
(b) On the Effective Date, the Company Registration Statement
did or will, and when the Company Prospectus is first filed (if
required) in accordance with Rule 424(b) and on the Closing Date (as
defined herein), the Company Prospectus (and any supplement thereto)
will, comply in all material respects with the applicable requirements
of the Act, the Exchange Act and the respective rules thereunder; on
the Execution Time, the Company Registration Statement, as supplemented
by any prospectus supplement filed pursuant to Rule 424(b), did not or
will not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
on the Effective Date, the Company Prospectus, if not filed pursuant to
Rule 424(b), will not, and on the date of any filing pursuant to Rule
424(b) and on the Closing Date, the Company Prospectus (together with
any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; PROVIDED, HOWEVER, that the
Company and the Sellers make no representations or warranties as to the
information contained in or omitted from the Company Registration
Statement or the Company Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of any Underwriter through
the Representative specifically for inclusion therein, it being
understood and agreed that the only such information is that described
as such in Section 8(b) of this Agreement.
(c) Each document incorporated by reference in the Company
Registration Statement or the Company Prospectus, when they were filed
(or, if any amendment with respect to any such document was filed, when
such amendment was filed), conformed in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder, any further Incorporated Documents so filed will, when they
are filed, conform in all material respects with the requirements of
the Exchange Act and the rules and regulations thereunder; no such
document when it was filed (or, if an amendment with respect to any
such document was filed, when such amendment was filed), contained an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; and no such further
document, when it is filed, will contain an untrue statement of a
material fact or will omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading.
(d) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation or limited
liability company in good standing under the laws of the jurisdiction
in which it is chartered or organized with full corporate power and
authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Company
Prospectus (as then amended or supplemented), and is duly qualified to
do business as a foreign corporation or limited liability company and
is in good standing under the laws of each jurisdiction which requires
such qualification, except where the failure to be so qualified would
not have, singly or in the aggregate, a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business.
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(e) All the outstanding shares of capital stock of each
subsidiary that is a corporation have been duly and validly authorized
and issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Company Prospectus, all outstanding shares
of capital stock of the subsidiaries are owned by the Company either
directly or through wholly owned subsidiaries free and clear of any
perfected security interest and, to the knowledge of the Company, any
other security interests, claims, liens or encumbrances.
(f) The Company's authorized capitalization is as set forth in
the Company Prospectus under the heading "Capitalization".
(g) There is no franchise, contract or other document of a
character required to be described in the Company Registration
Statement or Company Prospectus, or to be filed as an exhibit thereto,
which is not described or filed as required. The statements in the
Company Prospectus under the headings "Certain United States Federal
Income Tax Considerations", "Business--Regulation,"
"Business-Franchise, License and Related Agreements,"
"Business-Regulation of International Operations," "Description of the
Notes" and "Business--Legal Proceedings" fairly summarize the matters
therein described in all material respects.
(h) This Agreement has been duly authorized, executed and
delivered by the Company; the Shares have been duly and validly
authorized by the Company; except for [ ], the holders of outstanding
shares of capital stock of the Company are not entitled to preemptive
or other rights to subscribe for the Shares; and, except as set forth
in the Company Prospectus, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to
convert any obligation into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are outstanding.
(i) The Company is not, and after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Company Prospectus, will not be, an
"investment company" required to be registered under the Investment
Company Act of 1940, as amended, [without taking account of any
exemption arising out of the number of holders of the Company's
securities. ]
(j) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as will be
obtained under the Act in connection with the registration of the
Securities and the DECS, and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the DECS by the Underwriters in the manner contemplated
herein or in the Company Prospectus.
(k) None of the execution and delivery of this Agreement nor
the consummation of any of the transactions contemplated herein or the
fulfillment of the terms hereof, will conflict with, result in a breach
or violation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries, pursuant
to (i) the charter or by-laws of the Company or any of its
subsidiaries; (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to which its
or their property is subject; or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any
of its subsidiaries of
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any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or
any of its subsidiaries or any of its or their properties, except in
the case of clauses (ii) and (iii), as could not be reasonably expected
to have, singly or in the aggregate, a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business.
(l) The Shares conform as to legal matters to the description
thereof contained in the Company Prospectus.
(m) The consolidated historical financial statements of the
Company and its consolidated subsidiaries included in the Company
Prospectus present fairly in all material respects the financial
condition, results of operations and cash flows of the Company as of
the dates and for the periods indicated and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as otherwise
noted therein). The selected financial data set forth under the caption
"Selected Consolidated Financial Data" in the Company Prospectus fairly
present, on the basis stated in the Company Prospectus, the information
included therein.
(n) The pro forma financial statements included in the Company
Prospectus include assumptions that provide a reasonable basis for
presenting the significant effects directly attributable to the
transactions and events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the pro
forma adjustments reflect the proper application of those adjustments
to the historical financial statement amounts in the pro forma
financial statements included in the Company Prospectus. The pro forma
financial statements included in the Company Prospectus comply as to
form in all material respects with the applicable accounting
requirements of Regulation S-X under the Act and the pro forma
adjustments have been properly applied to the historical amounts in the
compilation of those statements.
(o) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending
or, to the best knowledge of the Company, threatened that (i) could
reasonably be expected to have a material adverse effect on the
performance of this Agreement or the consummation of any of the
transactions contemplated hereby or thereby; or (ii) could reasonably
be expected to have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties
of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Company Prospectus (exclusive of
any amendment or supplement thereto).
(p) Except as described in the Company Prospectus, each of the
Company and each of its subsidiaries owns, licenses, leases or has
obtained rights-of-way for all such properties as are necessary to the
conduct of its operations as presently conducted. The Company and each
of its subsidiaries has good and marketable title, free and clear of
all liens or encumbrances, to all property and assets described in the
Company Prospectus as being owned by it on the date hereof and such
properties and assets are in good repair and suitable for use as so
described except as set forth in the Company Prospectus. All leases to
which the Company or its subsidiaries are a party are valid and binding
(subject to applicable
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bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance or other laws affecting creditors' rights generally from
time to time in effect and to general principles of equity) and no
default has occurred or is continuing thereunder which could have,
singly or in the aggregate, a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties
of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, and the
Company and each subsidiary enjoy peaceful and undisturbed possession
under all such leases to which any of them is a party as lessee with
such exceptions as do not interfere materially with the use made by the
Company or such subsidiary.
(q) Neither the Company nor any subsidiary is in violation or
default of (i) any provision of its charter or bylaws; (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject; or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or such subsidiary or any of its properties, as
applicable, except in the case of clauses (ii) and (iii) as could not
be reasonably expected to have, singly or in the aggregate, a material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the
ordinary course of business.
(r) Each of (i) Deloitte & Touche LLP, (ii) Ernst & Young LLP,
and (iii) PriceWaterhouseCoopers LLP, each of whom have audited certain
financial statements of the Company and its consolidated subsidiaries
or its acquired entities, as the case may be, and delivered their
report with respect to the audited consolidated financial statements
included and/or incorporated by reference in the Company Prospectus are
independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(s) The Company and each subsidiary has filed all foreign,
federal, state and local tax returns that are required to be filed or
has requested extensions thereof except in any case in which the
failure so to file would not have, singly or in the aggregate, a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, and has paid all taxes
required to be paid by it and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is
currently being contested in good faith or as would not have, singly or
in the aggregate, a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business.
(t) No labor problem or dispute with the employees of the
Company or any of its subsidiaries exists or is threatened or imminent
that could have, singly or in the aggregate, a material adverse effect
on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business.
10
(u) There are no transfer taxes or other similar fees or
charges under Federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement.
(v) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; all policies of insurance and
fidelity or surety bonds insuring the Company or any of its
subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect; the Company and
its subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the
Company or any of its subsidiaries under any such policy or instrument
as to which any insurance company is denying liability or defending
under a reservation of rights clause; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not have, singly or in the aggregate, a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(w) Except as described in the Company Prospectus, no
subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any
other distribution on such subsidiary's capital stock, from repaying to
the Company any loans or advances to such subsidiary from the Company
or from transferring any of such subsidiary's property or assets to the
Company or any other subsidiary of the Company.
(x) Except as described in the Company Prospectus, the Company
and its subsidiaries (i) possess the certificates, authorizations,
approvals, franchises, licenses, rights-of-way and permits issued by
the appropriate federal, state, local or foreign regulatory authorities
necessary to conduct their respective businesses as presently
conducted, (ii) are not in violation of any such certificates,
authorizations, approvals, franchises, licenses, rights-of-way and
permits, except where such violation would not have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business and (iii) have not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization, approval, franchise, license, right-of-way or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on
the condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business.
(y) The Company and its subsidiaries possess or have applied
for the patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively,
"INTELLECTUAL
11
PROPERTY") presently employed by them in connection with the businesses
now operated by them, and neither the Company nor any of the
Subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to the foregoing except as
could not have, singly or in the aggregate, a material adverse effect
on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business. To the Company's knowledge, the use of such Intellectual
Property in connection with the business and operations of the Company
and its subsidiaries does not infringe on the rights of any person.
(z) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(aa) The Company and its subsidiaries are (i) in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"); (ii) have received and are in
compliance with all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses as described in the Company Prospectus; and (iii) have not
received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except where
such non-compliance with Environmental Laws, failure to receive
required permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business; neither the Company nor any of the subsidiaries has been
notified that it has been named as a "potentially responsible party"
under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.
(bb) Except as described in the Company Prospectus, the
Company and its subsidiaries are implementing a comprehensive, detailed
program to analyze and address the risk that the computer hardware and
software used by them may be unable to recognize and properly execute
date-sensitive functions involving certain dates prior to and any dates
after December 31, 1999 (the "YEAR 2000 Problem"), and reasonably
believe that such risk will be remedied on a timely basis without
material expense and will not have a material adverse effect upon the
financial condition and results of operations of the Company and its
subsidiaries, taken as a whole.
(cc) Each of the Company and its subsidiaries has fulfilled
its obligations, if any, under the minimum funding standards of Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and the regulations and
12
published interpretations thereunder with respect to each "plan" (as
defined in Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the Company and its subsidiaries
are eligible to participate and each such plan is in compliance in all
material respects with the presently applicable provisions of ERISA and
such regulations and published interpretations; the Company and its
subsidiaries have not incurred any unpaid liability to the Pension
Benefit Guaranty Corporation (other than for the payment of premiums in
the ordinary course) or to any such plan under Title IV of ERISA.
(dd) The subsidiaries listed on Schedule III attached hereto
are the only significant subsidiaries of the Company as defined in Rule
1-02 of Regulation S-X (individually, a "SUBSIDIARY" and collectively,
the "SUBSIDIARIES").
(ee) None of the transactions contemplated by this Agreement
will violate or result in a violation of Section 7 of the Exchange Act,
or any regulation promulgated thereunder, including, without
limitation, Regulations T, U and X of the Board of Governors of the
Federal Reserve System.
(ff) Neither the Company nor any of the subsidiaries is a
"holding company" or a "subsidiary company" of a holding company, or an
"affiliate" thereof required to be registered under the Public Utility
Holding Company Act of 1935, as amended.
(gg) Neither the Company nor any of its subsidiaries nor, to
the Company's knowledge, any employee or agent of the Company or any
subsidiary has made any payment of funds of the Company or any
subsidiary or received or retained any funds in violation of any
provision of the Foreign Corrupt Practices Act of 1977, as amended.
(hh) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2)
under the Act has indicated to the Company that it is considering (i)
the downgrading, suspension or withdrawal of, or any review for a
possible change that does not indicate the direction of the possible
change in, any rating assigned to the Company or any securities of the
Company or (ii) any change in the outlook for any rating of the Company
or any securities of the Company.
(ii) No relationship, direct or indirect, exists between or
among the Company or any of its subsidiaries on the one hand, and the
directors, officers, stockholders, customers or suppliers of the
Company or any of its subsidiaries on the other hand, which is required
by the Act to be described in the Company Prospectus which is not so
described.
(jj) The Company has not taken, directly or indirectly, any
action designed to cause or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the DECS.
(kk) [To the knowledge of counsel to the Company, no holders
of securities of the Company have rights to the registration of such
securities under the Registration Statement.]
Any certificate signed by any officer of the Company and
delivered to the Representative or counsel for the Underwriters in connection
with the offering of the DECS shall be
13
deemed a representation and warranty by the Company, as to matters covered
thereby, to each Underwriter.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Each of the
Sellers, severally and jointly, represents and warrants to, and agrees with,
each Underwriter, the Company and the Trust that:
(a) Such Seller is now and on the Exchange Date will be the
record and beneficial owner of the Shares to be sold by it hereunder
and under its Contract free and clear of all liens, encumbrances,
equities and claims, except for those created pursuant to its
Collateral Agreement, and, assuming that the Trust acquires its
interest in such Shares without notice of any adverse claim (within
the meaning of Section 8-105 of the New York Uniform Commercial Code
("UCC")), on the Exchange Date the Trust will have acquired either
the shares free of any adverse claims (within the meaning of Section
8-105 of the UCC) or a security entitlement (within the meaning of
Section 8-102(a)(17) of the UCC) to such Shares, in which case no
action based on an adverse claim (within the meaning of Section
8-105 of the UCC) may be asserted against the Trust with respect to
such Shares. Such Seller has the full right, power and authority,
and all authorization and approval required by law to pledge and
assign the Shares to be pledged and assigned by such Seller pursuant
to its Collateral Agreement. The sale, transfer and delivery of any
Shares to be delivered by a Seller pursuant to such Seller's
Contract is not, and at the time of delivery of such Shares will not
be, subject to any right of first refusal or similar rights of any
person pursuant to any contract to which such Seller or any
shareholder of such Seller is a party or by which any of them is
bound.
(b) Such Seller has not taken, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the DECS.
(c) Certificates in negotiable form for such Seller's Shares
have been placed in custody, for delivery pursuant to the terms of such
Seller's Contract and Collateral Agreement, under a Custody Agreement
duly authorized, executed and delivered by such Seller, in the form
heretofore furnished to you (the "CUSTODY AGREEMENT") with The Bank of
New York, as Custodian (the "CUSTODIAN"); the Shares represented by the
certificates so held in custody for each Seller are subject to the
interests of the Trust pursuant to such Seller's Contract and
Collateral Agreement; the arrangements for custody and delivery of such
certificates, made by such Seller pursuant to such Seller's Contract
and Collateral Agreement and the Custody Agreement, are not subject to
termination by any acts of such Seller, or by operation of law, whether
by the death or incapacity of such Seller or the occurrence of any
other event; and if any such death, incapacity or any other such event
shall occur before the delivery of such Shares pursuant to such
Seller's Contract and Collateral Agreement, certificates for the Shares
will be delivered by the Custodian in accordance with the terms and
conditions of such Seller's Contract and Collateral Agreement and the
Custody Agreement as if such death, incapacity or other event had not
occurred, regardless of whether or not the Custodian shall have
received notice of such death, incapacity or other event.
(d) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by such
Seller of the transactions contemplated in this Agreement, each
Contract and Collateral Agreement to which such Seller is a party, and
the agreement among each of the Sellers and Xxxxxxx Xxxxx Xxxxxx
relating to expenses of the Trust (the "REIMBURSEMENT AGREEMENT"),
except such as may have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the DECs by the Underwriters and the
distribution of the Shares pursuant to the terms of the DECs in the
manner contemplated in this Agreement and in the Trust Prospectus and
the Company Prospectus and such other approvals as have been obtained.
14
(e) Neither the sale of the DECs being sold by such Seller and
the distribution of the Shares pursuant to the terms of the DECs in the
manner contemplated in this Agreement and in the Trust Prospectus and
the Company Prospectus nor the consummation of any other of the
transactions contemplated herein, or in such Seller's Contract or
Collateral Agreement by such Seller or the fulfillment of the terms
hereof or of such Seller's Contract or Collateral Agreement by such
Seller will conflict with, result in a breach or violation of, or
constitute a default under any law or the terms of any indenture or
other agreement or instrument to which such Seller or any of its
subsidiaries is a party or bound, or any judgment, order or decree
applicable to such Seller or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over such Seller or any of its subsidiaries.
(f) Such Seller has no reason to believe that the
representations and warranties of the Company contained in Section 2 of
this Agreement are not true and correct, is familiar with the Company
Prospectus and the Company Registration Statement and has no knowledge
of any material fact, condition or information not disclosed in the
Company Prospectus or the Company Registration Statement or any
supplement thereto which has adversely affected or may adversely affect
the business of the Company or any of its subsidiaries; and the sale of
Shares by such Seller pursuant to its Contract is not prompted by any
information concerning the Company or any of its subsidiaries which is
not set forth in the Company Prospectus or the Company Registration
Statement or any supplement thereto.
(g) In respect of any statements in or omissions from the
Company Registration Statement or the Company Prospectus or any
supplements thereto made in reliance upon and in conformity with
information furnished in writing to the Company by any Seller
specifically for use in connection with the preparation thereof, such
Seller hereby makes the same representations and warranties to each
Underwriter as the Company makes to such Underwriter under Section 2 of
this Agreement.
(h) This Agreement has been duly authorized, executed and
delivered by each Seller. Each Contract and Collateral Agreement to
which each Seller is a party and the Reimbursement Agreement have been
duly authorized, executed and delivered by such Seller and, assuming
due authorization, execution and delivery by the other parties thereto,
is a valid and binding agreement of such Seller, enforceable against
such Seller in accordance with its terms.
(i) Amounts received by each of the Sellers, if any, at the
Closing Date and, if any Option DECS are purchased, at the time of
delivery thereof pursuant to Section 4(b), pursuant to such Seller's
Contract will not be used by such Seller for the purpose, whether
immediate, incidental or ultimate, of buying or carrying a margin
stock, as such terms are defined in Regulation G promulgated by the
Board of Governors of the Federal Reserve System.
(j) Metromedia Company is not and, after giving effect to the
transactions contemplated in each Contract and Collateral Agreement and
the offering and sale of the DECS contemplated by this Agreement, will
not be an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment
Company Act.
15
Any certificate by any Seller or any officer of any Seller and
delivered to the Representative or counsel for the Underwriters in connection
with the sale of the DECs shall be deemed a representation and warranty by such
Seller, as to matters covered thereby, to each Underwriter.
Any certificate by or on behalf of any Seller or any officer
of any Seller, and delivered to the Representative or counsel for the
Underwriters in connection with the offering of the DECS shall be deemed a
representation and warranty by such Seller as to matters covered thereby, to
each Underwriter.
4. PURCHASE AND SALE.
(a) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Trust agrees
to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Trust, at a purchase price of $[ ]
per DECS, the amount of the Underwritten DECS set forth opposite such
Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Trust hereby
grants an option to the several Underwriters to purchase, severally and
not jointly, up to 1,500,000 Option DECS at the same purchase price per
DECS as the Underwriters shall pay for the Underwritten DECS. The
option may be exercised only to cover over-allotments in the sale of
the Underwritten DECS by the Underwriters. The option may be exercised
in whole or in part at any time (but not more than once) on or before
the 30th day after the date of the Trust Prospectus upon written or
facsimile notice by the Representative to the Trust setting forth the
number of Option DECS as to which the several Underwriters are
exercising the option and the Settlement Date. Delivery of certificates
for the Option DECS by the Trust, and payment therefor to the Trust,
shall be made as provided in Section 5 hereof. The number of Option
DECS to be purchased by each Underwriter shall be the same percentage
of the total number of Option DECS to be purchased by the several
Underwriters as such Underwriter is purchasing of the Underwritten
DECS, subject to such adjustments as you in your absolute discretion
shall make to eliminate any fractional DECS.
(c) As compensation to the Underwriters for their commitment
hereunder, and in view of the fact that the proceeds of the sale of the
DECS will be used by the Trust as specified in the Contracts, the
Sellers agree, severally and jointly, to pay to Xxxxxxx Xxxxx Xxxxxx,
at the time of each delivery of DECS pursuant to Section 5, an amount
equal to $[ ] per DECS being delivered at such time, plus $[ ] per DECS
for each Subscription DECS owned by Xxxxxxx Xxxxx Barney after giving
effect to the subdivision of the Subscription DECS provided for in the
Subscription Agreement.
5. DELIVERY AND PAYMENT. Delivery of and payment for the
Underwritten DECS and the Option DECS (if the option provided for in Section
4(b) hereof shall have been exercised on or before the first Business Day prior
to the Closing Date) shall be made at 10:00 A.M., New York City time, on
November 17, 1999, or at such time on such later date not later than five
Business Days after the foregoing date as the Representative shall designate,
which date and time may be postponed by agreement among the Representative, the
Trust and the Sellers or as provided in Section 13 hereof
16
(such date and time of delivery and payment for the DECS being herein called the
"CLOSING DATE"). Delivery of the DECS shall be made to the Representative for
the respective accounts of the several Underwriters against payment by the
several Underwriters through the Representative of the purchase price thereof to
or upon the order of the Trust by wire transfer payable in immediately available
same-day funds to an account specified by the Trust in writing at least two
Business Days in advance of the Closing Date. Delivery of the DECS shall be made
through the facilities of the Depository Trust Company unless the Representative
shall otherwise instruct.
The Trust agrees to have the DECS available for inspection and
checking by the Representative in New York, New York, not later than 1:00 P.M.
on the Business Day prior to the Closing Date.
If the option provided for in Section 4(b) hereof is exercised
after the first Business Day prior to the Closing Date, the Trust will deliver
the Option DECS (at the expense of the Trust) to the Representative, at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the
Representative (which shall be within three Business Days after exercise of said
option) for the respective accounts of the several Underwriters, against payment
by the several Underwriters through the Representative of the purchase price
thereof to or upon the order of the Trust by wire transfer payable in
immediately available same-day funds to an account specified by the Trust in
writing at least two Business Days in advance of such Settlement Date. If
settlement for the Option DECS occurs after the Closing Date, the Trust, the
Company and the Sellers will deliver to the Representative on the Settlement
Date for the Option DECS, and the obligation of the Underwriters to purchase the
Option DECS shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 10 hereof.
6. OFFERING BY THE UNDERWRITERS. It is understood that the
several Underwriters propose to offer the DECS for sale to the public as set
forth in the Trust Prospectus.
7. AGREEMENTS OF THE TRUST. The Trust agrees with the several
Underwriters that:
(a) The Trust will use its best efforts to cause the Trust
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the DECS, the Trust will not file any amendment of the
Trust Registration Statement or supplement to the Trust Prospectus or
any Rule 462(b) Trust Registration Statement unless the Trust has
furnished you a copy for your review prior to filing and will not file
any such proposed amendment or supplement to which you object. Subject
to the foregoing sentence, if the Trust Registration Statement has
become or becomes effective pursuant to Rule 430A, or filing of the
Trust Prospectus is otherwise required under Rule 424(b), the Trust
will cause the Trust Prospectus, properly completed, and any supplement
thereto to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the Representative of such timely
filing. The Trust will promptly advise the Representative (1) when the
Trust Registration Statement, if not effective at the Execution Time,
shall have become effective, (2) when the Trust Prospectus, and any
supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b) Trust
Registration Statement shall have been filed with the Commission, (3)
when, prior to termination of the offering of the DECS, any amendment
to the Trust Registration Statement
17
or any Rule 462(b) Trust Registration Statement, shall have been filed
or become effective, (4) of any request by the Commission or its staff
for any amendment of the Trust Registration Statement, or any Rule
462(b) Trust Registration Statement, or for any supplement to the Trust
Prospectus or for any additional information, (5) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Trust Registration Statement or the institution or threatening of any
proceeding for that purpose and (6) of the receipt by the Trust of any
notification with respect to the suspension of the qualification of the
DECS for sale in any jurisdiction or the institution or threatening of
any proceeding for such purpose. The Trust will use its best efforts to
prevent the issuance of any such stop order or the suspension of any
such qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the DECS is
required to be delivered under the Act, any event occurs as a result of
which the Trust Prospectus as then supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Trust Registration Statement or supplement
the Trust Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Trust promptly will (1) notify the
Representative of any such event, (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this
Section 7, an amendment or supplement which will correct such statement
or omission or effect such compliance and (3) supply any supplemental
Trust Prospectus to you in such quantities as you may reasonably
request.
(c) The Trust will furnish to the Representative and counsel
for the Underwriters, without charge, signed copies of the Trust
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Trust Registration Statement (without
exhibits thereto). The Trust will furnish to the Underwriters not later
than (i) 6:00 P.M., New York City time, on the date of determination of
the public offering price of the DECS, if such determination occurred
at or prior to 12:00 noon, New York City time, on such date or (ii)
6:00 P.M., New York City time, on the Business Day following the date
on which the public offering price was determined, if such
determination occurred after 12:00 noon, New York City time, on such
date, as many copies of each Preliminary Trust Prospectus, the Trust
Prospectus and any supplement thereto as the Representative may
reasonably request; further, so long as delivery of a prospectus by an
Underwriter or any dealer may be required by the Act, as many copies of
each Preliminary Trust Prospectus and the Trust Prospectus and any
supplement thereto as the Representative may reasonably request.
(d) The Trust will arrange, if necessary, for the
qualification of the DECS and the Shares for sale under the laws of
such jurisdictions as the Representative may designate, will maintain
such qualifications in effect so long as required for the distribution
of the DECS and will pay any fee of the National Association of
Securities Dealers, Inc. (the "NASD") in connection with its review, if
any, of the Trust Registration Statement and the offering of the DECS.
8. AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters that:
18
(a)The Company will use its best efforts to cause the Company
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the DECS, the Company will not file any amendment of the
Company Registration Statement or supplement to the Company Prospectus
or any Rule 462(b) Company Registration Statement unless the Company
has furnished you a copy for your review prior to filing and will not
file any such proposed amendment or supplement without the prior
consent of the Representative, which consent shall not be unreasonably
withheld, conditioned or delayed. Subject to the foregoing sentence, if
the Company Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the Company Prospectus is otherwise
required under Rule 424(b), the Company will cause the Company
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence
satisfactory to the Representative of such timely filing. If necessary
for the sale of the DECs or the sale of the Shares in connection with
the offering of the DECs, the Company will cause the Rule 462(b)
Registration Statement, completed in compliance with the Act and the
applicable rules and regulations thereunder, to be filed with the
Commission pursuant to Rule 462(b) and will provide evidence
satisfactory to the Representative of such filing. The Company will
promptly advise the Representative (1) when the Company Registration
Statement, if not effective at the Execution Time, shall have become
effective, (2) when the Company Prospectus, and any supplement thereto,
shall have been filed (if required) with the Commission pursuant to
Rule 424(b) or when any Rule 462(b) Company Registration Statement
shall have been filed with the Commission, (3) when, prior to
termination of the offering of the DECS, any amendment to the Company
Registration Statement shall have been filed or become effective, (4)
of any request by the Commission or its staff for any amendment of the
Company Registration Statement, or any Rule 462(b) Company Registration
Statement, or for any supplement to the Company Prospectus or for any
additional information, (5) of the issuance by the Commission of any
stop order suspending the effectiveness of the Company Registration
Statement or the institution or threatening of any proceeding for that
purpose and (6) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale
in any jurisdiction or the institution or threatening of any proceeding
for such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the
withdrawal thereof. Prior to the completion of the sale of the DECs by
the Underwriters, the Company will not file any document under the
Exchange Act that is incorporated by reference in the Company
Registration Statement unless, prior to such proposed filing, the
Company has furnished the Representative with a copy of such document
for its review and the Representative has not reasonably objected to
the filing of such document within a reasonable period of time. The
Company will promptly advise the Representative when any document filed
under the Exchange Act that is incorporated by reference in the Company
Registration Statement shall have been filed with the Commission.
(b) If, at any time when a prospectus relating to the Shares
is required to be delivered under the Act (including in respect of the
offering and sale of the DECS), any event occurs as a result of which
the Company Prospectus as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it
should be necessary to amend the Company Registration Statement or
19
supplement the Company Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, the Company promptly
will (1) notify the Representative of such event, (2) prepare and file
with the Commission, subject to the second sentence of paragraph (a) of
this Section 8, an amendment or supplement which will correct such
statement or omission or effect such compliance and (3) supply any
supplemented Company Prospectus to you in such quantities as you may
reasonably request.
(c) In accordance with the requirements of the Exchange Act
and the Act applicable to the Company, the Company will make generally
available to its security holders and to the Representative an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(d) Upon your request, the Company will furnish to the
Representative and counsel for the Underwriters, without charge, signed
copies of the Company Registration Statement (including exhibits
thereto) which is filed in connection with the sale of the DECs or the
sale of the Shares in connection with the offering of the DECs, and to
each other Underwriter a copy of the Company Registration Statement
(without exhibits thereto), which is filed in connection with the sale
of the DECs or the sale of the Shares in connection with the offering
of the DECs, and, so long as delivery of a prospectus by an Underwriter
or dealer may be required by the Act, as many copies of each Company
Prospectus and any supplement thereto as the Representative may
reasonably request. The Company will pay the expenses of printing or
other production of all documents relating to the offering and sale of
the DECS or the offering and sale of the Shares in connection with the
offering and sale of the DECS as provided in Section 8(h) herein.
(e) The Company will arrange, if necessary, for the
qualification of the DECS and the Shares for sale under the laws of
such jurisdictions as the Representative may designate, will maintain
such qualifications in effect so long as required for the distribution
of the DECS or the Shares and will pay any fee of the NASD in
connection with its review of the offering and sale of the DECS or the
offering and sale of the Shares in connection with the offering and
sale of the DECS; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action that would subject it to service
of process in suits, in each case, other than those arising out of the
offering or sale of the DECS or the offering and sale of the Shares in
connection with the offering of the DECS in any jurisdiction where it
is not now so subject. The Company will promptly advise the
Representative of the receipt by the Company of any notification with
respect to the suspension of the qualification of the DECs or the
Shares in connection with the offering of the DECs for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company shall use its best efforts to prevent the
issuance of any order suspending the qualification or exemption of the
DECs or the Shares in connection with the offering of the DECs under
any state securities or Blue Sky laws, and, if at any time any state
securities commission or any other regulatory authority shall issue an
order suspending the qualification or exemption of the DECs or the
Shares in connection with the offering of the DECs under any state
securities or Blue Sky laws, the Company shall use every reasonable
effort to obtain the withdrawal or lifting of such order at the
earliest possible time.
20
(f) The Company will not, without the prior written consent of
Xxxxxxx Xxxxx Xxxxxx, offer, sell, contract to sell, pledge, or
otherwise dispose of, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by the Company or any affiliate of the
Company or any person in privity with the Company or any affiliate of
the Company) directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, any other shares of Common
Stock or any securities convertible into, or exercisable, or
exchangeable for, shares of Common Stock; or publicly announce an
intention to effect any such transaction, for a period of 90 days after
the date of this Agreement, provided, however, that the Company may (1)
issue and sell Common Stock pursuant to any employee stock option plan,
stock ownership plan or dividend reinvestment plan of the Company in
effect at the Execution Time, (2) issue Common Stock issuable upon the
conversion of securities or the exercise of warrants outstanding at the
Execution Time, (3) issue and sell Common Stock and convertible
subordinated notes to Xxxx Atlantic Investments Inc. pursuant to the
terms of that certain securities purchase agreement, dated October 7,
199[ ], and provided further, that, the Company will obtain the written
agreement of the stockholders listed on Schedule IV hereto that they
will not, without the prior written consent of Xxxxxxx Xxxxx Xxxxxx,
offer, sell, contract to sell, pledge, or otherwise dispose of, (or
enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual disposition
or effective economic disposition due to cash settlement or otherwise)
by the Company or any affiliate of the Company or any person in privity
with the Company or any affiliate of the Company) directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish
or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange
Act, any other shares of Common Stock or any securities convertible
into, or exercisable, or exchangeable for, shares of Common Stock; or
publicly announce an intention to effect any such transaction, for a
period of 90 days after the date of this Agreement, provided, that, the
stockholders listed on Schedule IV hereto may sell Shares pursuant to
the Underwriting Agreement dated November [ ], 1999, between Metromedia
Fiber Network, Inc., Xxxxxxx Xxxxx Barney Inc., Credit Suisse First
Boston Corporation, Deutsche Bank Securities Inc., Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation, Xxxxxxx, Xxxxx & Co. and Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated as underwriters, and the
stockholders listed on Schedule IV hereto.
(g) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the DECs.
(h) The Company agrees to pay the costs and expenses relating
to the following matters: (i) the preparation, printing or reproduction
of the Company Registration Statement and the Company Prospectus and
each amendment or supplement to either of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Company
Registration Statement and the Company Prospectus and all amendments or
supplements to either of them, as may, in each case, be reasonably
requested for use in connection with the offering and sale of the DECs
or the offering and sale of the Shares in connection with the offering
and sale of the DECs; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Shares and the DECs,
including any stamp or transfer taxes in connection with the Shares and
the DECs; (iv) the printing (or reproduction) and delivery of this
Agreement, the Custody Agreement, any blue sky memorandum and all other
agreements or documents printed (or reproduced) and delivered in
connection with the offering of the DECs or
21
the offering and sale of the Shares in connection with the offering and
sale of the DECs; (v) any registration or qualification of the Shares
and the DECs for offer and sale under the securities or blue sky laws
of the several states (including filing fees and the reasonable fees
and expenses of one counsel for the Underwriters relating to such
registration and qualification); (vi) fees and expenses of the
Custodian ; (vii) the transportation and other expenses incurred by or
on behalf of Company representatives in connection with presentations
to prospective purchasers of the DECs; (viii) the fees and expenses of
the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company; and (ix) all
other costs and expenses incident to the performance by the Company of
its obligations hereunder; PROVIDED, HOWEVER, that, except as otherwise
provided for herein, the Underwriters shall pay their own costs and
expenses, including the fees of their counsel, any advertising expenses
connected with any offers they may make.
(i) The Company agrees to do and perform all things required
to be done and performed by it under this Agreement that are within its
control on or prior to or after the Closing Date, as applicable, and to
use its best efforts to satisfy all conditions precedent on its part to
the delivery of the Shares and the DECs.
9. AGREEMENTS OF THE SELLERS. Each Seller agrees with each of
the Underwriters that:
(a) Such Seller will not, without the prior written consent of
Xxxxxxx Xxxxx Barney Inc. offer, sell, contract to sell, pledge or
otherwise dispose of, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by the Company or any affiliate of the
Company or any person in privity with the Company or any affiliate of
the Company) directly or indirectly, or file (or participate in the
filing of) a registration statement with the Commission in respect of,
or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of
the Exchange Act with respect to, any shares of capital stock of the
Company or any securities convertible into or exercisable or
exchangeable for such capital stock, or publicly announce an intention
to effect any such transaction, for a period of 90 days after the date
of this Agreement, other than (1) shares of Common Stock disposed of as
bona fide gifts approved by Xxxxxxx Xxxxx Xxxxxx Inc., (2) the Shares
sold to the Underwriters pursuant to the Underwriting Agreement between
Metromedia Fiber Network, Inc. and the Underwriters dated November [ ],
1999, and (3) the Sellers may engage in any of the transactions
described above in connection with the offering by the Trust of the
DECs or any delivery of Shares pursuant to the terms of the DECs.
(b) Such Seller will not take any action designed to or which
has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the DECs or the Shares in connection with the
offering of the DECs.
22
(c) Such Seller will advise you promptly, and if requested by
you, will confirm such advice in writing, so long as delivery of a
prospectus relating to the DECs or the Shares in connection with the
offering of the DECs by an underwriter or dealer may be required under
the Act, of (i) any material change in the Company's condition
(financial or otherwise), prospects, earnings, business or properties,
(ii) any change in information in the Company Registration Statement or
the Company Prospectus relating to such Seller or (iii) any new
material information relating to the Company or relating to any matter
stated in the Company Prospectus which comes to the attention of such
Seller.
10. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase the Underwritten DECS and the Option
DECS, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Trust, the Company and the
Sellers contained herein as of the Execution Time, the Closing Date and any
Settlement Date pursuant to Section 4(b) hereof, to the accuracy of the
statements of the Trust, the Company and the Sellers made in any certificates
pursuant to the provisions hereof, to the performance by each of the Trust, the
Company and the Sellers of their respective obligations hereunder and to the
following additional conditions:
(a) If the Trust Registration Statement or the Company
Registration Statement has not become effective prior to the Execution
Time, unless the Representative agrees in writing to a later time, such
Trust Registration Statement or Company Registration Statement will
become effective not later than (i) 6:00 P.M. New York City time on the
date of determination of the public offering price of the DECS, if such
determination occurred at or prior to 3:00 P.M. New York City time on
such date or (ii) 9:30 A.M. New York City time on the Business Day
following the day on which the public offering price of the DECS was
determined, if such determination occurred after 3:00 P.M. New York
City time on such date; if filing of the Trust Prospectus or the
Company Prospectus, or any supplement thereto, is required pursuant to
Rule 497(h) or Rule 424(b), such Trust Prospectus or Company
Prospectus, and any such supplement, will be filed in the manner and
within the time period required by such Rule; and no stop order
suspending the effectiveness of the Trust Registration Statement or the
Company Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(b) The Representative shall have received the opinion of
Xxxxxxxx, Xxxxxx & Finger, special Delaware counsel for the Trust,
dated the Closing Date and addressed to the Representative, with
respect to such matters as the Representative may reasonably request.
(c) The Company shall have requested and caused Xxxxxx X.
Xxxxxx, General Counsel of the Company, to furnish to the
Representative his opinion, dated the Closing Date and addressed to the
Representative, in the form of Exhibit A to this Agreement.
(d) The Company shall have requested and caused Xxxx, Weiss,
Rifkind, Xxxxxxx & Xxxxxxxx, counsel for the Company, to furnish to the
Representative its opinion, dated the Closing Date and addressed to the
Representative, in the form of Exhibit B to this Agreement.
(e) The Company shall have furnished to the Representative the
opinion of Xxxxx & XxXxxxxx, special regulatory counsel for the
Company, dated the Closing Date, in the form of Exhibit C to this
Agreement.
23
(f) The Sellers shall have requested and caused Xxxx, Weiss,
Rifkind, Xxxxxxx & Xxxxxxxx, counsel for the Sellers, to have furnished
to the Representative their opinion dated the Closing Date and
addressed to the Representative, in the form of Exhibit D to this
Agreement.
(g) The Representative shall have received (i) from Cleary,
Gottlieb, Xxxxx & Xxxxxxxx, counsel for the Underwriters and the Trust,
such opinion or opinions, dated the Closing Date and addressed to the
Representative, with respect to the issuance and sale of the DECS, the
Trust Registration Statement, the Trust Prospectus (together with any
supplement thereto), the Fundamental Documents and other related
matters as the Representative may reasonably require, and (ii) from
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Underwriters,
a negative assurance letter dated the Closing Date and addressed to the
Representative, the Company Registration Statement, the Company
Prospectus (together with any supplement thereto); and the Company and
the Sellers shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such
matters.
(h) The Trust shall have furnished to the Representative a
certificate of the Trust, signed by the Managing Trustee and dated the
Closing Date, to the effect that:
(i) the representations and warranties of the Trust
in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date and the Trust has complied in all
material respects with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or
prior to the Closing Date; and
(ii) no stop order suspending the effectiveness of
the Trust Registration Statement or the use of the Trust
Prospectus has been issued and no proceedings for that purpose
have been instituted or, to the Trust's knowledge, threatened.
(i) The Company shall have furnished to the Representative a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Company Registration Statement,
the Company Prospectus, any supplements to the Company Prospectus and
this Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date, and the Company has complied with
all the agreements and satisfied all the conditions on its
part to be performed or satisfied hereunder at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of
the Company Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to the
Company's knowledge, threatened; and
(iii) since the date of the most recent financial
statements included or incorporated by reference in the
Company Prospectus (exclusive of any amendment or supplement
thereto), there has been no material adverse effect on the
condition
24
(financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Company Prospectus (exclusive of any
amendment or supplement thereto).
(j) Each of the Sellers shall have furnished to the
Representative a certificate, signed by such Seller, dated the Closing
Date, to the effect that the signers of such certificate have carefully
examined the Company Registration Statement, the Company Prospectus,
any supplement to the Company Prospectus and this Agreement and that
the representations and warranties of such Seller in this Agreement are
true and correct in all material respects on and as of the Closing Date
with the same effect as if made on the Closing Date.
(k) Each of the Sellers, other than Metromedia Company, shall
have furnished a Certificate of Spouse, in the form attached as Exhibit
F to this Agreement, signed by such Seller's spouse, stating that such
spouse will not assert any claims to the Common Stock pledged by their
spouse under the Collateral Agreement.
(l) At the Execution Time and at the Closing Date, the Company
shall have requested and caused Ernst & Young LLP to furnish to the
Representative letters, dated respectively as of the Execution Time and
as of the Closing Date, in form and substance satisfactory to the
Representative, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the applicable rules
and regulations thereunder, that they have performed a review of the
unaudited interim financial information of the Company for the nine
month period ended September 30, 1999 and as at September 30, 1999 and
stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included or incorporated in
the Company Registration Statement and the Company Prospectus
and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the
Exchange Act and the related published rules and regulations
thereunder;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its subsidiaries; their limited review in accordance with
the standards established under Statement on Auditing
Standards No. 71, of the unaudited interim financial
information for the nine month period ended September 30,
1999, and as at September 30, 1999, as indicated in their
report included or incorporated in the Company Registration
Statement and Company Final Prospectus; carrying out certain
specified procedures (but not an examination in accordance
with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and committees of
the Company and the Subsidiaries; and inquiries of certain
officials of the Company who have responsibility for financial
and accounting matters of the Company and its subsidiaries as
to transactions and events subsequent to December 31, 1998
nothing came to their attention which caused them to believe
that:
(A) (1) any unaudited financial statements
included or incorporated by reference in the Company
Registration Statement and the
25
Company Prospectus do not comply in form in all
material respects with applicable accounting
requirements and with the published rules and
regulations of the Commission with respect to
financial statements included or incorporated in
quarterly reports on Form 10-Q under the Exchange
Act; or that said unaudited financial statements are
not in conformity with generally accepted accounting
principles applied on a basis substantially
consistent with that of the audited financial
statements included or incorporated in the Company
Registration Statement and the Company Prospectus;
(2) with respect to the period subsequent to
September 30, 1999, there were any changes, at a
specified date not more than three days prior to the
date of the letter, in the capital stock, increase in
long-term debt of the Company and its subsidiaries or
decreases in net assets or stockholders' equity of
the Company as compared with the amounts shown on the
September 30, 1999 consolidated balance sheet
included in the Company Prospectus, or for the period
from October 1, 1999 to such specified date there
were any decreases, as compared with the
corresponding period in the preceding year in
revenues or in total or per share amounts of net
income of the Company and its subsidiaries, except in
all instances for changes or decreases set forth in
such letter, in which case the letter shall be
accompanied by an explanation by the Company as to
the significance thereof unless said explanation is
not deemed necessary by the Representative; or
(B) the information included under the
headings "Selected Consolidated Financial Data" and
"Management--Executive Compensation" is not in
conformity with the disclosure requirements of
Regulation S-K;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Company
Prospectus, including the information set forth under the
captions "Risk Factors", "Use of Proceeds", "Capitalization",
"Selected Consolidated Financial Data", "Management's
Discussion and Analysis of Financial Condition and Results of
Operations", "Business", "Management", and "Certain
Relationships and Related Transactions" in the Company
Prospectus, the information included or incorporated in Items
1, 2, 6, 7 and 11 of the Company's Annual Report on Form 10-K
incorporated in the Company Prospectus and the information
included in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included or
incorporated in the Company's Quarterly Reports on Form 10-Q,
incorporated in the Company Prospectus, agrees with the
accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation; and
(iv) on the basis of a reading of the unaudited pro
forma financial statements included or incorporated by
reference in the Company Registration Statement and the
Company Prospectus (the "pro forma financial statements");
carrying out certain specified procedures; inquiries of
certain officials of the Company and AboveNet Communications,
Inc. who have responsibility for financial
26
and accounting matters; and proving the arithmetic accuracy of
the application of the pro forma adjustments to the historical
amounts in the pro forma financial statements, nothing came to
their attention which caused them to believe that the pro
forma financial statements do not comply as to form in all
material respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
(m) [Intentionally Deleted]
(n) At the Execution Time and at the Closing Date, Deloitte &
Touche LLP shall have furnished to the Representative letters, dated
respectively as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the Representative, confirming that
they are independent accountants within the meaning of the Act and the
applicable rules and regulations thereunder, and stating in effect
that:
(i) in their opinion the audited financial statements
and financial statement schedules included in the Company
Registration Statement and the Company Prospectus and reported
on by them comply in form in all material respects with the
applicable accounting requirements of the Act and the related
published rules and regulations; and
(ii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Company
Registration Statement and the Company Prospectus agrees with
the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation.
References to the Company Prospectus in this paragraph (l)
include any supplement thereto at the date of the letter.
(o) At the Execution Time and at the Closing Date,
PricewaterhouseCoopers LLP shall have furnished to the Representative a
letter or letters, dated respectively as of the Execution Time and as
of the Closing Date, in form and substance satisfactory to the
Representative, confirming that they are independent accountants within
the meaning of the Act and the applicable rules and regulations
thereunder, and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included in the Company
Registration Statement and the Company Prospectus and reported
on by them comply in form in all material respects with the
accounting requirements of the Act and the related published
rules and regulations; and
(ii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set
27
forth in the Registration Statement and the Company Prospectus
agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation.
References to the Company Prospectus in this paragraph (m)
include any supplement thereto at the date of the letter.
(p) The Shares shall have been duly approved for listing
through the Nasdaq National Market System, and satisfactory evidence of
such action shall have been provided to the Representative.
(q) The DECS shall have been approved for listing on the
Nasdaq National Market System, subject only to official notice of
issuance.
(r) The NASD shall not have raised any objection with respect
to the fairness and reasonableness of the underwriting terms and
arrangements.
(s) Each Fundamental Agreement shall have been executed and
delivered by all parties thereto, and each Seller shall have delivered
to the Collateral Agent the number of Shares required by the Collateral
Agreement to which such Seller is a party to be initially pledged and
assigned by such Seller thereunder in accordance with the requirements
of such Collateral Agreement.
(t) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Company Registration Statement
(exclusive of any amendment thereof) and the Company Prospectus
(exclusive of any amendment or supplement thereto), there shall not
have been (i) any change or decrease specified in the letter or letters
referred to in paragraphs [(j), (l) or (m)] of this Section 10 or (ii)
any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Company
Prospectus (exclusive of any amendment or supplement thereto) the
effect of which, in any case referred to in clause (i) or (ii) above,
is, in the sole judgment of the Representative, so material and adverse
as to make it impractical or inadvisable to proceed with the offering
or delivery of the DECS as contemplated by the Trust Registration
Statement and the Company Registration Statement (in either case,
exclusive of any amendment thereof) and the Trust Prospectus and the
Company Prospectus (in either case, exclusive of any amendment or
supplement thereto).
(u) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt securities
by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or any notice given
of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the direction
of the possible change.
(v) (i) No stop order suspending the effectiveness of the
Company Registration Statement shall have been issued and no
proceedings for that purpose shall have been taken or, to the knowledge
of the Company, shall be contemplated by the Commission at or prior to
the Closing Date; (ii) there shall not have been any change in the
capital stock of the
28
Company nor any material increase in the short-term or long-term debt
of the Company (other than in the ordinary course of business) from
that set forth or contemplated in the Company Registration Statement or
the Company Prospectus (or any amendment or supplement thereto); (iii)
there shall not have been, since the respective dates as of which
information is given in the Company Registration Statement and the
Company Prospectus (or any amendment or supplement thereto), except as
may otherwise be stated in the Company Registration Statement and
Company Prospectus (or any amendment or supplement thereto), any
material adverse change in the condition (financial or other),
business, prospects, properties, net worth or results of operations of
the Company and the Subsidiaries taken as a whole; (iv) the Company and
the Subsidiaries shall not have any liabilities or obligations, direct
or contingent (whether or not in the ordinary course of business), that
are material to the Company and the Subsidiaries, taken as a whole,
other than those reflected in the Company Registration Statement or the
Company Prospectus (or any amendment or supplement thereto); and (v)
all the representations and warranties of the Company contained in this
Agreement shall be true and correct on and as of the date hereof and on
and as of the Closing Date as if made on and as of the Closing Date and
you shall have received a certificate, dated the Closing Date and
signed by the chief executive officer and the chief financial officer
of the Company (or such other officers as are acceptable to you), to
the effect set forth in this Section 10(u) hereof.
(w) The Company shall not have failed at or prior to the
Closing Date to have performed or complied with any of its agreements
herein contained and required to be performed or complied with by it
hereunder at or prior to the Closing Date.
(x) At the Execution Time, the Company shall have furnished to
the Representative a letter substantially in the form of Exhibit E
hereto from each executive officer of the Company addressed to the
Representative relating to sales and certain other dispositions of the
shares of common stock of the Company or certain other securities, and
such letter agreements shall be in full force and effect on the Closing
Date.
(y) Prior to the Closing Date, the Company, the Trust and each
of the Sellers shall have furnished to the Representative such further
information, certificates and documents as the Representative may
reasonably request.
(z) If any of the conditions specified in this Section 10
shall not have been fulfilled in all material respects when and as
provided in this Agreement, or if any of the opinions and certificates
mentioned above or elsewhere in this Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the
Representative and counsel for the Underwriters, this Agreement and all
obligations of the Underwriters hereunder may be canceled at, or at any
time prior to, the Closing Date by the Representative. Notice of such
cancellation shall be given to the Trust and the Company in writing or
by telephone or facsimile confirmed in writing.
(aa) The documents required to be delivered by this Section 10
shall be delivered at the office of Xxxx, Weiss, Rifkind, Xxxxxxx &
Xxxxxxxx, counsel for the Company, at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, on the Closing Date.
11. EXPENSES.
29
(a) Except as otherwise provided herein, each of the Sellers,
severally and jointly, will pay all expenses incident to the
performance by the Trust and each Seller of their respective
obligations under this Agreement and their Contracts and Collateral
Agreements, including (i) the preparation, printing and filing of the
Notification and the Trust Registration Statement (including financial
statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery of this Agreement,
the Trust Agreement, each of the Fundamental Agreements and such other
documents as may be required in connection with the offering, purchase,
sale, issuance or delivery of the DECS, (iii) the preparation, issuance
and delivery of the certificates for the DECS to the Representative,
(iv) the fees and disbursements of the Trust's counsel, accountants and
other advisors, (v) the fees and disbursements of the Sellers' counsel
and other advisors, (vi) the qualification of the DECS under state
securities laws in accordance with the provisions of Section 7(d)
hereof, including filing fees and the reasonable fees and disbursements
of the counsel for the Underwriters in connection therewith and in
connection with the preparation of the related blue sky survey and any
supplement thereto, (vii) the printing and delivery to the
Representative of copies of each Preliminary Trust Prospectus, the
Trust Prospectus and any amendments or supplements thereto, (viii) the
fees and expenses of any transfer agent or registrar for the DECS, (ix)
the filing fees incident to, and the reasonable fees and disbursements
of counsel to the Underwriters in connection with, securing any
required review by the NASD of the Trust Registration Statement and the
offering of the DECS in accordance with the provisions of Section 7(d)
hereof, (x) the fees and expenses incurred in connection with the
listing of the DECS on the Nasdaq National Market System and (xi) the
fees and expenses incurred in connection with the preparation and
filing of a registration statement under the Exchange Act relating to
the DECS. Each of the Sellers, severally and jointly, will reimburse
the Underwriters through Xxxxxxx Xxxxx Barney on the Closing Date in
immediately available funds for the Up-Front Fee Amount and the
Up-Front Expense Amount (each as defined in the Fund Expense Agreement
dated as of the Closing Date between Xxxxxxx Xxxxx Xxxxxx and BoNY) and
for the up-front fees of the trustees of the Trust paid by Xxxxxxx
Xxxxx Barney.
(b) The Company will pay all expenses incident to the
performance by it of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Company Registration
Statement (including financial statements and exhibits) as originally
filed and of each amendment thereto, (ii) the preparation, issuance and
delivery of the certificates for the Shares to the Trust, (iii) the
fees and disbursements of the Company's counsel, accountants and other
advisors, (iv) the qualification of the Shares under state securities
laws in accordance with the provisions of Section 8(e) hereof,
including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection therewith and in connection
with the preparation of any related blue sky survey and any supplement
thereto, (v) the printing and delivery to the Representative of copies
of each Preliminary Company Prospectus, the Company Prospectus and any
amendments or supplements thereto, (vi) the fees and expenses of any
transfer agent or registrar for the Shares, (vii) the filing fees
incident to, and the reasonable fees and disbursements of counsel to
the Underwriters in connection with, securing any required review by
the NASD of the Company Registration Statement and the offering of the
Shares in accordance with the provisions of Section 8(e) hereof and
(viii) the fees and expenses incurred in connection with the approval
of the Shares for listing through the Nasdaq National Market System.
30
(c) If the sale of the DECS provided for herein is not
consummated because any condition to the obligations of the
Underwriters set forth in Section 10 hereof is not satisfied, because
of any termination pursuant to Section 15 hereof or because of any
refusal, inability or failure on the part of the Company or any Seller
to perform any agreement herein or comply with any provision hereof
other than by reason of a default by the Underwriters, each of the
Sellers, jointly and severally, will reimburse the Underwriters through
Xxxxxxx Xxxxx Xxxxxx upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall
have been incurred by the Underwriters in connection with the proposed
purchase and sale of the DECS.
12. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and the Sellers jointly and severally agree to
indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each Underwriter and each person who controls
any Underwriter within the meaning of either the Act or the Exchange
Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the
Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise ("LOSSES"), insofar as such
Losses arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Company
Registration Statement as originally filed or in any amendment thereof,
or in any Preliminary Company Prospectus or the Company Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that (i) the Company
and the Sellers will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of
any Underwriter through the Representative specifically for inclusion
therein and (ii) with respect to any untrue statement or alleged untrue
statement of, or omission or alleged omission to state, a material fact
made in the Company Prospectus, the indemnity agreement contained in
this Section 12(a) shall not inure to the benefit of any Underwriter
(or any of the directors, officers, employees and agents of such
Underwriter or any controlling person of such Underwriter) from whom
the person asserting any such loss, claim, damage or liability
purchased the DECs concerned, to the extent that any such loss, claim,
damage or liability of such Underwriter occurs under the circumstances
where it shall have been determined by a court of competent
jurisdiction (or appropriate arbitral proceeding) by final and
nonappealable judgment that (w) the Company had previously furnished
copies of the Company Prospectus to the Underwriters, (x) delivery of
the Company Prospectus was required by the Act or under this Agreement
to be made to such person, (y) the untrue statement or omission of a
material fact contained in the Preliminary Company Prospectus was
corrected in the Company Prospectus and (z) there was not sent or given
to such person, at or prior to the written confirmation of the sale of
such DECS to such person, a copy of the Company Prospectus. This
indemnity agreement will be in addition to any liability which the
Company may otherwise have.
31
(b) Each Seller severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers,
employees, agents and each person who controls the Company within the
meaning of either the Act or the Exchange Act, each Underwriter, the
directors, officers, employees and agents of each Underwriter and each
person who controls the Company or any Underwriter within the meaning
of either the Act or the Exchange Act and each other Seller, if any,
against any and all Losses insofar as such Losses (or actions in
respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in
the Trust Registration Statement as originally filed or in any
amendment thereof, or in any Preliminary Trust Prospectus or the Trust
Prospectus, or in any amendment thereto or supplement thereto (each
such document a "TRUST REGISTRATION DOCUMENT") or the omission or
alleged omission to state in any Trust Registration Document a material
fact required to be stated therein or necessary to make the statements
therein not misleading; or (ii) written information furnished to the
Company by or on behalf of such Seller specifically for inclusion in
the Company Registration Statement as originally filed or in any
amendment thereof, or in any Preliminary Company Prospectus or the
Company Prospectus, or in any amendment thereof or supplement thereto.
This indemnity agreement will be in addition to any liability which any
Seller may otherwise have.
(c) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of
its officers who signs the Company Registration Statement, and each
person who controls the Company within the meaning of either the Act or
the Exchange Act and each Seller, to the same extent as the foregoing
indemnity to each Underwriter, but only with reference to written
information relating to such Underwriter furnished to the Company by or
on behalf of such Underwriter through the Representative specifically
for inclusion in the documents referred to in the foregoing
indemnities. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company and
each Seller acknowledge that the statements set forth in the last
paragraph of the cover page regarding delivery of the DECS and, under
the heading "Plan of Distribution," (i) the list of Underwriters and
their respective participation in the sale of the DECS, (ii) the
sentences related to concessions and reallowances and (iii) the
paragraph related to stabilization, syndicate covering transactions and
penalty bids in any Preliminary Company Prospectus, the Company
Prospectus, any Preliminary Trust Prospectus or the Trust Prospectus
constitute the only information furnished in writing by or on behalf of
the several Underwriters for inclusion in any Company Preliminary
Prospectus, Trust Preliminary Prospectus, the Company Prospectus or the
Trust Prospectus.
(d) Promptly after receipt by an indemnified party under this
Section 12 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 12, notify the
indemnifying party in writing of the commencement thereof; but the
failure so to notify the indemnifying party (i) will not relieve it
from liability under paragraph (a), (b) or (c) above unless and to the
extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial
rights and defenses as determined by a court of competent jurisdiction
and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a), (b) or (c) above. The
indemnifying party shall be entitled to assume the defense of such
action and appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any
action for which
32
indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate
counsel retained by the indemnified party or parties except as set
forth below); PROVIDED, HOWEVER, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying
party's election to assume the defense of such action or appoint
counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of
interest, which has not been waived; (ii) the actual or potential
defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have been reasonably advised by such counsel that there are legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying
party; (iii) the indemnifying party shall not have assumed the defense
of the action or employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action; or (iv)
the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. In any such
case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar related actions in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all
indemnified parties. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any claim, action,
suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of
each indemnified party from all liability arising out of such claim,
action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a),
(b) or (c) of this Section 12 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company and the
Selling Stockholders, jointly and severally, and the Underwriters
severally agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively
"LOSSES") to which the Company, the Sellers and one or more of the
Underwriters may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Sellers
on the one hand and by the Underwriters on the other from the offering
of the DECS; PROVIDED, HOWEVER, that in no case shall any Underwriter
(except as may be provided in any agreement among Underwriters relating
to the offering of the DECS) be responsible for any amount in excess of
the underwriting discount or commission applicable to the DECS
purchased by such Underwriter hereunder. If the allocation provided by
the immediately preceding sentence is unavailable for any reason, the
Company and the Sellers, jointly and severally, and the Underwriters
severally shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of
the Company and the Sellers on the one hand and of the Underwriters on
the other in connection with the statements or omissions or alleged
statements or omissions which resulted in such Losses as well as any
other relevant equitable considerations. Benefits received by the
Company and the Sellers shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses) received
33
by it, and benefits received by the Underwriters shall be deemed to be
equal to the total underwriting discounts and commissions, in each case
as set forth on the cover page of the Trust Prospectus. Relative fault
shall be determined by reference to, among other things, whether any
untrue or any alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information provided by the Company and the Sellers on the one hand or
the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission or alleged untrue statement
or omission. The Company, the Sellers and the Underwriters agree that
it would not be just and equitable if contribution were determined by
pro rata allocation or any other method of allocation which does not
take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (e), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this
Section 12, each person who controls an Underwriter within the meaning
of either the Act or the Exchange Act and each director, officer,
employee and agent of an Underwriter shall have the same rights to
contribution as such Underwriter, and each person who controls the
Company within the meaning of either the Act or the Exchange Act and
each officer of the Company who shall have signed the Company
Registration Statement and each director of the Company shall have the
same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (e).
(f) The liability of each Seller under the indemnity and
contribution agreements contained in Section 12(b)(ii) hereof shall be
limited to an amount equal to the public offering price of the DECS
sold by the Trust to the Underwriters. The Company and the Sellers may
agree, as among themselves and without limiting the rights of the
Underwriters under this Agreement, as to the respective amounts of such
liability for which they each shall be responsible.
13. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters
shall fail to purchase and pay for any of the DECS agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of DECS set forth
opposite their names in Schedule I hereto bears to the aggregate amount of DECS
set forth opposite the names of all the remaining Underwriters) the DECS which
the defaulting Underwriter or Underwriters agreed but failed to purchase;
PROVIDED, HOWEVER, that in the event that the aggregate amount of DECS which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate amount of DECS set forth in Schedule I hereto, the
remaining Underwriters shall have the right to make arrangements for the
purchase of the DECS which such defaulting Underwriter or Underwriters agreed
but failed to purchase by other persons satisfactory to the Selling Stockholder
and the nondefaulting Underwriters, and/or (ii) purchase all, but shall not be
under any obligation to purchase any, of the DECS, and if such nondefaulting
Underwriters do not make such arrangements and/or purchase all the DECS, this
Agreement will terminate without liability to any nondefaulting Underwriter, the
Selling Stockholders or the Company. In the event of a default by any
Underwriter as set forth in this Section 13, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the Representative shall
determine in order that the required changes in the Company Registration
Statement, the Company Prospectus, the Trust Registration Statement and the
Trust Prospectus or in any other documents or arrangements may be effected.
Nothing contained in
34
this Agreement shall relieve any defaulting Underwriter of its liability, if
any, to the Company or the Sellers and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
14. TERMINATION. This Agreement shall be subject to
termination in the absolute discretion of the Representative, by notice given to
the Trust and the Company prior to delivery of and payment for the DECS, if at
any time prior to such time (i) trading in any class of the Company's Class A
Common Stock shall have been suspended by the Commission or the Nasdaq National
Market or trading in securities generally on the New York Stock Exchange or the
Nasdaq National Market shall have been suspended or limited or minimum prices
shall have been established on such Exchange or the Nasdaq National Market, (ii)
a banking moratorium shall have been declared by either Federal or New York
State authorities or (iii) there shall have occurred any outbreak or escalation
of hostilities, declaration by the United States of a national emergency or war
or other calamity or crisis, the effect of which on financial markets of the
United States is such as to make it, in the sole judgment of the Representative,
impractical or inadvisable to proceed with the offering or delivery of the DECS
as contemplated by the Trust Prospectus (exclusive of any supplement thereto).
15. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Trust, the Company, its officers, each Seller, and of the Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter, the
Trust, the Company, any Seller, or any of the officers, directors, employees,
agents or controlling persons referred to in Section 12 hereof, and will survive
delivery of and payment for the DECS. The provisions of Sections 11, 12 and 17
hereof shall survive the termination or cancellation of this Agreement.
16. NOTICES. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representative, will be
mailed, delivered or telefaxed to Xxxxxxx Xxxxx Xxxxxx Inc. General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Xxxxxxx Xxxxx Barney
Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: General
Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
Metromedia Fiber Network Services, Inc. c/o Metromedia Fiber Network, Inc., Xxx
Xxxxx Xxxxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000, Attention: Chief Financial
Officer (fax no.: (000) 000-0000) and confirmed to it at Metromedia Company, Xxx
Xxxxxxxxxxx Xxxxx, Xxxx Xxxxxxxxxx, Xxx Xxxxxx 00000-0000, Attention: General
Counsel (fax no.: (000) 000-0000) and 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Executive Vice President (fax no.: (000) 000-0000); or if sent
to any Selling Stockholders, will be mailed, delivered or telefaxed and
confirmed to it at the address set forth in Schedule I hereto.
17. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 12 hereof,
and, except as expressly set forth in Section [8(h)] or Section 12 hereof, no
other person will have any right or obligation hereunder.
18. APPLICABLE LAW. This agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
35
19. COUNTERPARTS. This Agreement may be executed by any one or
more of the parties 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 agreement.
20. HEADINGS. The section headings used herein are for
convenience only and shall not affect the construction hereof.
21. DEFINITIONS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange
Commission.
"Closing Date" shall have the meaning assigned to it in
Section 5 of this Agreement.
"Company Effective Date" shall mean each date and time that
the Company Registration Statement, any post-effective amendment or
amendments thereto and any Rule 462(b) Company Registration Statement
became or become effective.
"Company Prospectus" shall mean the prospectus relating to the
Shares that is used in connection with the offering and sale of the
DECS and that is first filed pursuant to Rule 424(b) together with the
basic prospectus after the Execution Time, or if no filing pursuant to
Rule 424(b) is required, shall mean the form of final prospectus
relating to the Shares that is used in connection with such offering
and sale and that is included in the Company Registration Statement at
the Company Effective Date.
"Company Registration Statement" shall mean the registration
statement referred to in Section 2(a) above including incorporated
documents, exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time, in the form
in which it shall become effective) and, in the event any
post-effective amendment thereto or any Rule 462(b) Company
Registration Statement becomes effective prior to the Closing Date,
shall also mean such registration statement as so amended or such Rule
462(b) Company Registration Statement, as the case may be. Such term
shall include any Rule 430A Information deemed to be included therein
at the Company Effective Date as provided by Rule 430A.
"Communications Act" shall mean the Communications Act of
1934, as amended (including amendments made by the Telecommunications
Act of 1996), 47 U.S.C. section 151 and the rules and regulations of
the FCC.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
36
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission
promulgated thereunder.
"Organizational Documents" shall mean, in respect of any
company, corporation, trust, partnership, limited liability company,
governmental agency or other enterprise, as applicable, its founding
act, charter, articles of incorporation and by-laws, deed of trust,
memorandum and articles of association, statute, certificate of
partnership, partnership agreement, limited liability company
agreement, or similar instrument.
"Preliminary Company Prospectus" shall mean any preliminary
prospectus referred to in Section 2(a) and any preliminary prospectus
included in the Company Registration Statement at the Company Effective
Date that omits Rule 430A Information.
"Preliminary Trust Prospectus" shall mean any preliminary
prospectus referred to in Section 1(a) above and any preliminary
prospectus included in the Trust Registration Statement at the Trust
Effective Date that omits Rule 430A Information.
"Rule 415," "Rule 424," "Rule 430A," "Rule 462," "Rule
497(h)", "Regulation S-K" and "Regulation S-X" refer to such rules and
regulations under the Act.
"Rule 430A Information" shall mean information with respect to
the DECS, the Shares and the offering thereof permitted to be omitted
from the Trust Registration Statement (or, as used in Section 2 above,
the Company Registration Statement) when it becomes effective pursuant
to Rule 430A.
"Rule 462(b) Company Registration Statement" shall mean a
registration statement and any amendments thereto filed pursuant to
Rule 462(b) relating to the offering covered by the initial
registration statement referred to in Section 2(a) above.
"Rule 462(b) Trust Registration Statement" shall mean a
registration statement and any amendments thereto filed pursuant to
Rule 462(b) relating to the offering covered by the initial
registration statement referred to in Section 1(a) above.
"Xxxxxxx Xxxxx Xxxxxx" shall mean Xxxxxxx Xxxxx Barney Inc.
"State Telecommunications Laws" shall mean the comparable
state statutes of all states in which the Company and/or its
subsidiaries is certified to provide services.
"Trust Effective Date" shall mean each date and time that the
Trust Registration Statement, any post-effective amendment or
amendments thereto and any Rule 462(b) Trust Registration Statement
became or become effective.
"Trust Prospectus" shall mean the prospectus relating to the
DECS that is first filed pursuant to Rule 497(h) after the Execution
Time or, if no filing pursuant to Rule 497(h) is required, shall mean
the form of final prospectus relating to the DECS included in the Trust
Registration Statement at the Trust Effective Date.
37
"Trust Registration Statement" shall mean the registration
statement referred to in paragraph 1(a) above, including exhibits and
financial statements, as amended at the Trust Execution Time (or, if
not effective at the Trust Execution Time, in the form in which it
shall become effective) and, in the event any post-effective amendment
thereto or any Rule 462(b) Trust Registration Statement becomes
effective prior to the Closing Date, shall also mean such registration
statement as so amended or such Rule 462(b) Trust Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Trust Effective Date
as provided by Rule 430A.
As used herein, the terms "Trust Registration Statement,"
"Preliminary Trust Prospectus" and "Trust Prospectus" shall not include
the Company Prospectus attached thereto.
38
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Trust, the Company, the Sellers and the several Underwriters.
Very truly yours,
DECS Trust VI
By:
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Trustee
Metromedia Fiber Network, Inc.
By: -------------------------------
Name:
Title:
Sellers:
Metromedia Company
By: -------------------------------
Name:
Title:
Xxxxxx X. Xxxxxxxx
-------------------------------------------
Xxxxxx Xxxxxxxxx
-------------------------------------------
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
Xxxxxxx Xxxxx Barney Inc.
By:
-----------------------------
Name:
Title:
For themselves and the other several
Underwriters, if any, named in
Schedule I to the foregoing Agreement
SCHEDULE I
NUMBER OF UNDERWRITTEN
DECS TO BE
UNDERWRITERS PURCHASED
Xxxxxxx Xxxxx Xxxxxx Inc. [ ]
Credit Suisse First Boston Corporation [ ]
Deutsche Bank Securities Inc. [ ]
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation [ ]
Xxxxxxx, Sachs & Co. [ ]
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incoporated [ ]
Total................................. [10,000,000]
============
1
SCHEDULE II
List of Sellers
Underwritten Option Total
Seller Shares Shares Shares
------------------------------- ------------------ --------------- --------------------
Metromedia Company 4,880,000 [ ] [ ]
Xxxxxx X. Xxxxxxxx 4,844,000 [ ] [ ]
Xxxxxx Xxxxxxxxx 276,000 [ ] [ ]
Total 10,000,000 1,500,000 11,500,000
2
SCHEDULE III
SUBSIDIARIES OF THE COMPANY
1. Metromedia Fiber Network NYC, Inc.
2. Metromedia Fiber Network Services, Inc.
3. AboveNet Communications, Inc.
4. Metromedia Fiber Network Inc.
3
SCHEDULE IV
Xxxxxx Xxxxxxxxx
Xxxxxx X. Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxx Xxxxxx
Xxxx Xxxxx
Xxxxx Xxxxxxxxxxx
Xxxxxx Xxxxxxxxx
Xxxxxx X. Xxxxxx
4
[Exhibits A - D to Come]
A-1
Exhibit E
[Form of Lock-Up Agreement]
[Letterhead of officer, director or major stockholder of Corporation]
, 1999
Xxxxxxx Xxxxx Barney Inc.
As Representatives of the several Underwriters,
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), between
Metromedia Fiber Network, Inc., a Delaware corporation (the "Company"), the
Selling Stockholders listed in Schedule I thereto and each of you as
representatives of a group of Underwriters named therein, relating to an
underwritten public offering of Common Stock, $.01 par value (the "Common
Stock"), of the Company.
In order to induce you and the other Underwriters to enter
into the Underwriting Agreement, the undersigned will not, without the prior
written consent of Xxxxxxx Xxxxx Barney Inc., offer, sell, contract to sell,
pledge or otherwise dispose of, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company) directly or
indirectly, including the filing or participation in the filing of) a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 90 days after the date
of this Agreement, other than (1) shares of Common Stock disposed of as bona
fide gifts approved by Xxxxxxx Xxxxx Xxxxxx Inc., (2) the Securities sold to the
Underwriters pursuant to this Agreement, and (3) the Selling Stockholders may
enter into prepaid forward contracts with DECS Trust VI on the terms and
conditions set forth in those contracts to be dated November __, 1999.
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If for any reason the Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the Underwriting Agreement),
the agreement set forth above shall likewise be terminated.
Yours very truly,
By:
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Name:
Title:
Exhibit F
CERTIFICATE OF SPOUSE
Reference is made to the Collateral Agreement (the COLLATERAL
AGREEMENT"), dated as of November [ ], 1999, among the undersigned person's
husband or wife (the "PLEDGOR"), the Bank of New York, as Collateral Agent, and
DECS Trust VI (the "TRUST"), and to the related Purchase Agreement (the
"PURCHASE AGREEMENT") between the Pledgor and the Trust. Terms defined in the
Collateral Agreement or the Purchase Agreement are used herein as defined
therein.
By his or her signature below, the undersigned hereby
acknowledges and consents to the transfers of Collateral by the Pledgor as
contemplated by the Collateral Agreement and agrees that his or her legal and/or
beneficial rights, if any, in any such collateral shall be subordinate to the
rights of the Trust in such Collateral as a secured party as provided in the
Collateral Agreement and as provided by applicable law. In accordance with the
terms of the Collateral Agreement, the Trust shall be entitled to apply the
Collateral (and any proceeds thereof) to satisfy the Pledgor's obligations to
the Trust under the Collateral Agreement and the Purchase Agreement prior to any
claim or right which the undersigned may have in the Collateral.
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[Spouse]
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