EXHIBIT 1
SATELLINK COMMUNICATIONS, INC.
______________ SHARES OF COMMON STOCK
UNDERWRITING AGREEMENT
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____________, 1999
X.X. XXXXXXXX & CO.
XXXXXX XXXXXX & COMPANY, INC.
As Representatives of the several Underwriters
c/o X.X. Xxxxxxxx & Co.
X.X. Xxxxxxxx Financial Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Satellink Communications, Inc., a Georgia corporation (the "Company"),
proposes to sell to the several underwriters named in Schedule I hereto (the
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"Underwriters") for whom you are acting as the representatives (the
"Representatives") ______________ shares (the "Company Shares") of the Company's
common stock, par value $0.01 per share (the "Common Stock"), and the
shareholders of the Company named on Schedules II and III hereto (the "Inside
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Selling Shareholders" and the "Outside Selling Shareholders," respectively and,
together, the "Selling Shareholders") propose to sell to the Underwriters
___________ shares of the Common Stock (the "Selling Shareholder Shares"). The
Company Shares and the Selling Shareholder Shares are hereinafter referred to
collectively as the "Firm Shares." The Company has also agreed to grant to you
an option (the "Option") to purchase up to ____________ additional shares of
Common Stock (the "Option Shares") on the terms and for the purposes set forth
in Section 1(b) hereof. The Firm Shares and the Option Shares are hereinafter
collectively referred to as the "Shares."
The Company and the Selling Shareholders confirm as follows their agreements
with you.
1. AGREEMENT TO SELL AND PURCHASE; PUBLIC OFFERING.
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(a) On the basis of the representations, warranties, agreements and covenants
herein contained, and subject to all the terms and conditions of this
Underwriting Agreement (the "Agreement"), the Company agrees to sell to the
Underwriters an aggregate of ______________ Firm Shares, and each of the
Selling Shareholders agrees, severally and not jointly, to sell to the
Underwriters the aggregate number of Firm Shares set forth opposite such
Selling Shareholder's name in Schedule II or III hereto, and each of the
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Underwriters, severally and not jointly, agrees
to purchase at the purchase price of $______ per share the number of Firm
Shares set forth opposite such Underwriter's name in Schedule I hereto.
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(b) Subject to all the terms and conditions of this Agreement, the Company
also grants the Underwriters the Option to purchase, severally and not jointly,
up to ____________ Option Shares from the Company, each at the same price per
share as the Underwriters shall pay for the Firm Shares. The Underwriters shall
not be under any obligation to purchase any Option Shares prior to the exercise
of such option. The Option may be exercised only to cover over-allotments in the
sale of the Firm Shares and may be exercised in whole or in part at any time or
from time to time on or before the 30th day after the date of the Prospectus (as
defined below) upon written or telephonic notice (the "Option Shares Notice") by
you to the Company no later than 12:00 noon, Atlanta, Georgia time, at least two
and no more than 15 full business days before the date and time specified for
closing in the Option Shares Notice (the "Option Closing Date") setting forth
the aggregate number of Option Shares to be purchased. On the Option Closing
Date, the Company will issue and sell to the Underwriters the number of Option
Shares set forth in the Option Shares Notice, and unless otherwise adjusted by
the Representatives, each of the Underwriters will purchase such percentage of
the Option Shares as is equal to the percentage of Firm Shares that such
Underwriter is purchasing.
(c) After the Registration Statement becomes effective, upon the
authorization by you of the release of the Shares, the several Underwriters
propose to offer the Firm Shares and any Option Shares purchased by the
Underwriters for sale initially at the price per share set forth in the
Prospectus (the initial offering price) and upon the terms set forth therein.
2. DELIVERY AND PAYMENT.
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Delivery of the Firm Shares shall be made to you by or on behalf of the
Company and the Selling Shareholders against payment of the purchase price by
federal funds wire transfer payable in same day funds to the order of the
Company at the offices of X.X. Xxxxxxxx & Co., X.X. Xxxxxxxx Financial Center,
000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, or at such other place as may
be agreed upon by the Representatives and the Company, at 10:00 a.m., Nashville
time, on the third or, if the Firm Shares are priced, as contemplated by Rule
15c6-1(c) promulgated pursuant to the Securities Exchange Act of 1934, as
amended, (the "Exchange Act"), after 4:30 p.m., Washington, D.C. time, the
fourth full business day following the date of this Agreement (the "Closing
Date"), or at such other time on such date, or at such other place, as may be
agreed upon by the Company and the Representatives.
To the extent, if any, that the Option is exercised, delivery of the Option
Shares against payment therefor (in the manner specified above) will take place
at the offices specified above on the Option Closing Date (which, subject to the
requirements set forth above for the Option Shares Notice, may be the Closing
Date).
Certificates evidencing the Shares shall be in definitive form and shall be
registered in such names and in such denominations as you shall request not less
than 48 hours prior to the Closing Date or the Option Closing Date, as the case
may be, by written notice to the Company.
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For the purpose of expediting the checking and packaging of certificates for the
Shares, the Company agrees to make such certificates available for inspection at
least 24 hours prior to the Closing Date or the Option Closing Date, as the case
may be, at a location to be designated by you, which may be in New York, New
York, or elsewhere. If the Representatives so elect, delivery of the Shares may
be made by credit through full fast transfer to the accounts designated by the
Representatives at The Depository Trust Company.
The cost of original issue tax stamps, if any, in connection with the issuance
and delivery of the Company Shares and Option Shares by the Company to the
Underwriters shall be borne by the Company. The Company will pay and save each
of the Underwriters and any subsequent holder of the Shares harmless from any
and all liabilities with respect to or resulting from any failure or delay in
paying federal and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original issuance or
sale to such Underwriter of the Company Shares and Option Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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The Company represents, warrants and covenants to each of the Underwriters
that:
(a) The Company has prepared and has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (Registration No. 333-
49839) on Form S-1 relating to the Shares, including a preliminary prospectus
and such amendments to such registration statement as may have been required to
the date of this Agreement, under the provisions of the Securities Act of 1933,
as amended (the "Act"), and the rules and regulations (collectively referred to
as the "Rules and Regulations") of the Commission thereunder. The registration
statement and all amendments thereto have been duly authorized and executed by
the Company in accordance with the Rules and Regulations. The term "preliminary
prospectus" as used herein means a preliminary prospectus as contemplated by
Rule 430 or Rule 430A of the Rules and Regulations included at any time as part
of the registration statement. Copies of such registration statement and
amendments and of each related preliminary prospectus have been delivered to
you. If such registration statement has not become effective, a further
amendment to such registration statement, including a form of final prospectus
necessary to permit such registration statement to become effective, will be
filed promptly by the Company with the Commission. If such registration
statement has become effective, a final prospectus containing information
permitted to be omitted at the time of effectiveness by Rule 430A of the Rules
and Regulations will be filed promptly by the Company with the Commission in
accordance with Rule 424(b) of the Rules and Regulations, if required. The term
"Registration Statement" as used herein means the registration statement as
amended at the time it becomes or became effective (the "Effective Date"),
including financial statements and all exhibits and any information deemed to be
included by Rule 430A. The term "Prospectus" means the prospectus as first filed
with the Commission pursuant to Rule 424(b) of the Rules and Regulations or, if
no such filing is required, the form of final prospectus included in the
Registration Statement at the Effective Date.
(b) On the Effective Date, the date the Prospectus is first filed with the
Commission pursuant to Rule 424(b) (if required), at all times subsequent
thereto through and including the
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Closing Date and, if later, the Option Closing Date and when any post-effective
amendment to the Registration Statement becomes effective or any amendment or
supplement to the Prospectus is filed with the Commission, the Registration
Statement and the Prospectus (as amended or as supplemented if the Company shall
have filed with the Commission any amendment or supplement thereto), including
the financial statements included in the Prospectus, did and will comply with
all applicable provisions of the Act and the Rules and Regulations and did and
will contain all statements required to be stated therein in accordance with the
Act and the Rules and Regulations. On the Effective Date and when any post-
effective amendment to the Registration Statement becomes effective, no part of
the Registration Statement or any such amendment or supplement did or will
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. On the date any amendment or supplement to the
Prospectus is filed with the Commission and at the Closing Date and, if later,
the Option Closing Date, the Prospectus did not or will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The foregoing representations and warranties in this
Section 3(b) do not apply to any statements or omissions made in reliance on and
in conformity with information relating to the Underwriters furnished in writing
to the Company by the Representatives specifically for inclusion in the
Registration Statement or Prospectus or any amendment or supplement thereto. The
Company acknowledges that the only information relating to the Representatives
furnished in writing to the Company by the Underwriters specifically for
inclusion in the Registration Statement, any preliminary prospectus and the
Prospectus is the information in the last paragraph on the cover page, the
paragraphs relating to stabilization on the inside front cover and the
statements set forth under the heading "Underwriting" in any preliminary
prospectus or the Prospectus.
(c) The Company and each of its subsidiaries, as defined in the Rules and
Regulations (individually, a "Subsidiary" and collectively, the "Subsidiaries"),
are, and at the Closing Date and, if later, the Option Closing Date will be, a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization. The Company is the
sole legal and beneficial owner of all securities of the Subsidiaries free and
clear of all liens, charges and encumbrances. The Company and each of the
Subsidiaries has, and at the Closing Date and, if later, the Option Closing Date
will have, full power and authority to conduct all the activities conducted by
it, to own or lease all the assets owned or leased by it and to conduct its
business as described in the Registration Statement and the Prospectus. The
Company and each Subsidiary is, and at the Closing Date and, if later, the
Option Closing Date will be, duly licensed or qualified to do business and in
good standing as a foreign corporation in all jurisdictions in which the nature
of the activities conducted by it or the character of the assets owned or leased
by it makes such licensing or qualification necessary, except where the failure
to so qualify would not have a material adverse effect upon the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company and the Subsidiaries, and the Company has not received
notice of any proceeding in any jurisdiction revoking, limiting or curtailing,
or seeking to revoke, limit or curtail, the Company's or any Subsidiary's power,
authority, licensing or qualification. Except for the stock of the Subsidiaries
or as disclosed in the Registration Statement, the Company does not own, and at
the Closing Date
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and, if later, the Option Closing Date will not own, directly or indirectly, any
shares of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership, joint venture,
association or other entity. Complete and correct copies of the Restated
Articles of Incorporation (the "Restated Articles") and the Bylaws (the
"Bylaws") of the Company and the certificate of incorporation and bylaws, or the
organizational documents and operating agreements, as the case may be, of each
Subsidiary and all amendments thereto have been delivered to you, and no changes
therein will be made subsequent to the date hereof and prior to the Closing Date
or, if later, the Option Closing Date.
(d) The outstanding shares of the Company's Common Stock have been, and the
Shares to be issued and sold by the Company upon such issuance and delivery and
payment therefor in the manner herein described will be, duly authorized,
validly issued, fully paid and nonassessable and will not be subject to any
preemptive or similar right. The description of the Common Stock in the
Registration Statement and the Prospectus is, and at the Closing Date and, if
later, the Option Closing Date will be, complete and accurate in all respects.
All offers and sales of securities of the Company have been at all relevant
times duly registered under or exempt from the registration requirements of the
Act and were duly registered under or exempt from the registration requirements
of all applicable state securities or Blue Sky laws. Except as set forth in the
Prospectus and except for options issued under the Company's stock option plans,
the Company does not have outstanding, and at the Closing Date and, if later,
the Option Closing Date will not have outstanding, any options to purchase, or
any rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell any shares of
Common Stock or any such warrants, convertible securities or obligations. The
description of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted and exercised thereunder,
set forth in the Prospectus accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options and
rights.
(e) The financial statements together with the related notes and schedules
included in the Registration Statement or the Prospectus are accurate in all
material respects and present fairly the financial condition of the Company and
all entities that have been acquired by the Company as of the respective dates
thereof and the results of operations and cash flows of the Company and all
entities that have been acquired by the Company for the respective periods
covered thereby, all in conformity with generally accepted accounting principles
applied on a consistent basis throughout the entire period involved, except as
otherwise disclosed in the Prospectus. The financial and statistical data set
forth in the Prospectus under the captions "Prospectus Summary," "Summary
Consolidated Financial and Operating Data," "Use of Proceeds," "Capitalization,"
"Selected Consolidated Financial and Operating Data," "Management's Discussion
and Analysis of Financial Condition and Results of Operations," "Business,"
"Management" and "Principal and Selling Shareholders" have been compiled on a
basis consistent with that of the audited financial statements contained in the
Registration Statement and Prospectus and fairly present the information set
forth therein. No other financial statements or schedules of the Company are
required by the Act, the Exchange Act or the Rules and Regulations to be
included in the Registration Statement or the Prospectus. Xxxxxx Xxxxxxxx LLP
(the "Accountants"), who have
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reported on certain of such financial statements and schedules, are independent
auditors with respect to the Company as required by the Act and the Rules and
Regulations.
(f) The Company maintains 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 accountability for assets; (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 existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. The Company's system of internal accounting controls is sufficient
to meet the broad objectives of internal accounting control insofar as those
objectives pertain to the prevention or detection of errors or irregularities in
amounts that would be material in relation to the Company's financial
statements; and, except as disclosed in the Prospectus, neither the Company nor,
to the knowledge of the Company, any employee or agent of the Company has made
any payment of funds of the Company or received or retained any funds in
violation of any law, rule or regulation, the receipt or payment of which could
have a material adverse effect on the Company.
(g) There are no outstanding loans, advances (except normal advances for
business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of the members of the families of any of them,
except as disclosed in the Registration Statement and the Prospectus.
(h) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus and prior to the Closing Date and,
if later, the Option Closing Date, except as set forth in the Registration
Statement and the Prospectus, (i) there has not been and will not have been any
material adverse change in the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company,
arising for any reason whatsoever, (ii) the Company has not incurred nor will it
incur any material liabilities or obligations, direct or contingent, except in
the ordinary course of business, (iii) the Company has not entered into any
material transaction not in the ordinary course of business, (iv) the Company
has not and will not have paid or declared any dividends or other distributions
of any kind on any class of its capital stock, (v) there has not been and will
not have been any change in the capitalization of the Company other than
pursuant to the exercise of employee stock options or the issuance of shares
under the Company's stock option plans and (vi) there has not been any loss or
damage (whether or not insured) to the property of the Company which has been
sustained or will have been sustained which has a material adverse effect on the
business, business prospects, condition (financial or otherwise) or results of
operations of the Company.
(i) The Company has timely filed all necessary federal, state and foreign
income and franchise tax returns and has paid all taxes shown thereon, and there
is no tax deficiency that has been or, to the best of the Company's knowledge,
might be asserted against the Company that might have a material adverse effect
on the business, properties, business prospects, condition
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(financial or otherwise) or results of operations of the Company, and all tax
liabilities are adequately provided for on the books of the Company.
(j) The Company is not an "investment company" or an "affiliated person" of,
or "promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended.
(k) Except as set forth in the Registration Statement and the Prospectus,
there are no actions, suits or proceedings pending or threatened against or
affecting the Company or any Subsidiary or any of their respective officers in
their capacity as such, before or by any federal or state court, commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding would materially and
adversely affect the Company or its business, properties, business prospects,
condition (financial or otherwise) or results of operations or prevent or
materially hinder the consummation of the transactions contemplated by this
Agreement.
(l) The Company has not at any time during the past five years: (i) made any
unlawful contributions to any candidate for any political office, or failed
fully to disclose any contribution in violation of law; or (ii) made any payment
to any state, federal or foreign government official, or other person charged
with similar public or quasi-public duty (other than payment required or
permitted by applicable law).
(m) The Company and each Subsidiary has, and at the Closing Date and, if
later, the Option Closing Date will have: (i) all governmental licenses,
certificates, permits, consents, orders, approvals and other authorizations,
including licenses granted by the Federal Communications Commission (the "FCC")
for and related to the provision of wireless and wireline telecommunications
services (the "FCC Licenses"), necessary to carry on the Company's business as
contemplated in the Prospectus; (ii) complied in all material respects with all
laws, regulations and orders applicable to it or its business or properties; and
(iii) performed all obligations required to be performed by it and is not, and
at the Closing Date and, if later, the Option Closing Date will not be, in
default, under any contract or other instrument material to it to which it is a
party or by which its property is bound or affected where such default would
materially and adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company and
the Subsidiaries or prevent or materially hinder the consummation of this
Agreement. To the best knowledge of the Company and each Subsidiary, as of the
date of this Agreement, the Closing Date and, if later, the Option Closing Date,
no other party under any contract or other instrument to which it is a party is
in default thereunder, nor at the Closing Date and, if later, the Option Closing
Date will any of them be, in violation of any provision of its certificate of
incorporation or bylaws. All FCC Licenses of the Company and its Subsidiaries
are in full force and effect and have been duly issued in the name of, or
validly assigned to, the Company or one of its Subsidiaries, and no default or
breach exists thereunder. No event has occurred with respect to the FCC Licenses
that permits, or after giving notice, lapse of time or both would permit,
revocation or termination of any such FCC License or would result in any
material impairment of the rights of the holder thereof. All of such FCC
Licenses are in effect for the usual FCC License terms and are unimpaired by any
condition of
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other restriction imposed by the FCC or other governmental authority (other than
restrictions and conditions generally applicable to licenses of the same or
similar type or class).
All applications necessary for renewal or extension of the FCC Licenses
have been timely filed in accordance with the requirements of the FCC or other
governmental authority issuing such FCC Licenses, except where the failure to
timely file such application would not have a material adverse effect on the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company. The Company has not been informed that
any of the FCC Licenses will not be renewed in the ordinary course, and the
Company has not received notice of any allegations, complaints, charges,
investigations, renewal or revocation hearings, or other proceedings, having
been threatened or initiated in any forum, nor, to the best of the Company's
knowledge, has any governmental authority (including, but not limited to, the
FCC) proposed, announced, used, or adopted any amendment, modification, or
change to any law or regulation, with respect to or impacting upon such FCC
Licenses.
(n) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part herein contemplated,
except such as have been obtained under the Act or the Rules and Regulations and
such as may be required under state securities or Blue Sky laws or the bylaws
and rules of the National Association of Securities Dealers, Inc. (the "NASD")
in connection with the purchase and distribution by the Underwriters of the
Shares.
(o) The filing of the Registration Statement and the execution and delivery
of this Agreement have been duly authorized by the Board of Directors of the
Company, and the Company has full corporate power and authority to enter into
this Agreement and to perform its obligations hereunder. This Agreement has been
duly executed and delivered by the Company and constitutes a valid and binding
agreement of the Company enforceable against the Company in accordance with the
terms hereof. The performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in the creation or imposition
of any material lien, charge or encumbrance upon any of the assets of the
Company or any Subsidiary pursuant to the terms or provisions of, or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, or give any other party a right to terminate any of its
obligations under, or result in the acceleration of any obligation under, the
certificate of incorporation or bylaws of the Company or the Subsidiaries, any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to which the Company or any Subsidiary
is a party or by which the Company or any Subsidiary or any of its or their
properties are bound or affected, or violate or conflict with any judgment,
ruling, decree, order, statute, rule or regulation of any court or other
governmental agency or body applicable to the business or properties of the
Company or any Subsidiary; the occurrence of which would materially and
adversely affect the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company and the
Subsidiaries or prevent or materially hinder the consummation of this Agreement.
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(p) The Company and each Subsidiary has good and valid title to all
properties and assets described in the Registration Statement and Prospectus as
owned by it, free and clear of all liens, charges, encumbrances or restrictions,
except such as are described in the Prospectus or are not material to the
business of the Company. The Company and each Subsidiary has valid, subsisting
and enforceable leases for the properties described in the Prospectus as leased
by it, and with such exceptions as are not material and do not materially
interfere with the use made and proposed to be made of such properties by the
Company and such Subsidiaries, and the Company has no notice or knowledge of any
material claim of any sort which has been, or may be, asserted by anyone adverse
to the Company's or a Subsidiary's rights as lessee or sublessee under any lease
or sublease described above, or affecting or questioning the Company's or a
Subsidiary's rights to the continued possession of the leased or subleased
premises under any such lease or sublease in conflict with the terms thereof.
The Company and each Subsidiary owns or leases all such properties as are
necessary to its operations as now conducted.
(q) Each of the Company and the Subsidiaries owns or possesses adequate
rights to use all patents, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names and copyrights which are necessary to
conduct its businesses as described in the Registration Statement and
Prospectus; the Company has not received any notice of, and has no knowledge of,
any infringement of or conflict with asserted rights of the Company by others
with respect to any patent, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names or copyrights, and the Company has not
received any notice of, and has no knowledge of, any infringement of or conflict
with asserted rights of others with respect to any patent, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade names or
copyrights owned or used by the Company, which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, could have a material
adverse effect on the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company and the
Subsidiaries.
(r) To the best of the Company's knowledge, no labor disturbance by the
employees of the Company or any of the Subsidiaries exists or is imminent; and
the Company is not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers that could be expected to result in
a material adverse change in the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company and
the Subsidiaries.
(s) The Company and the Subsidiaries maintain insurance with insurers of
recognized financial responsibility of the types and in the amounts generally
deemed adequate for their respective business and consistent with insurance
coverage maintained by similar companies in similar businesses, including, but
not limited to, insurance covering real and personal property owned or leased by
the Company or the Subsidiaries against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect; 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
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a cost that would not materially and adversely affect the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company and the Subsidiaries.
(t) Except as described in the Registration Statement and the Prospectus or
except as would not have a material adverse effect on the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company, to the best knowledge of the Company after due inquiry, there is
no factual basis for any action, suit or other proceeding involving the Company,
the Subsidiaries or any of their material assets for any failure of the Company,
the Subsidiaries or any predecessor thereof, to comply with any requirements of
federal, state, local or foreign regulation relating to air, water, solid waste
management, hazardous or toxic substances, or the protection of health or the
environment. Except as described in the Registration Statement and the
Prospectus, to the best knowledge of the Company after due inquiry, none of the
property owned or leased by the Company or the Subsidiaries is contaminated with
any waste or hazardous substances, and neither the Company nor the Subsidiaries
may be deemed an "owner or operator" of a "facility" or "vessel" which owns,
possesses, transports, generates or disposes of a "hazardous substance" as those
terms are defined in Section 9601 of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. (S)9601, et seq.
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(u) All documents or contracts required to be filed as exhibits to the
Registration Statement to which the Company or any Subsidiary is a party have
been filed as exhibits to the Registration Statement and have been duly
authorized, executed and delivered by the Company or such Subsidiary and
constitute valid and binding agreements of the Company or such Subsidiary and
are enforceable against the Company or such Subsidiary in accordance with the
terms thereof, except where the lack of authorization, execution, delivery or
enforceability of any such contract would not materially and adversely affect
the business, properties, business prospects, condition (financial or otherwise)
or results of operations of the Company and the Subsidiaries or prevent or
materially hinder the consummation of the transactions contemplated by this
Agreement.
(v) No statement, representation, warranty or covenant made by the Company in
this Agreement or made in any certificate or document required by this Agreement
to be delivered to any of the Underwriters was or will be, when made,
inaccurate, untrue or incorrect.
(w) The Company has not taken and will not take, directly or indirectly, any
action designed to or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares or the Common Stock, and the Company
is not aware of any such action taken or to be taken by affiliates of the
Company.
(x) No holder of securities of the Company has rights which have not been
exercised or waived to require the registration of any securities of the Company
because of the filing of the Registration Statement. Other than the registration
rights granted pursuant to: (i) that certain Series A Preferred Stock Purchase
Agreement and Amendment to Stockholders Agreement, dated July 25, 1989, by and
between the Company, the several purchasers and the several security holders of
the Company (the "Series A Rights"); (ii) those certain Series C Convertible
Preferred
10
Stock Purchase Agreements, dated November 17, 1995, and among the Company and
the several purchasers of Series C Convertible Preferred Stock (the "Series C
Rights"); (iii) Options to purchase Common Stock of the Company granted to
certain principals of The Breckenridge Group, Inc. (the "Breckenridge Rights");
and (iv) Preferred Stock and Warrant Purchase Agreements, dated April 3, 1998,
by and among the Company and the several purchasers of Series D Redeemable
Preferred Stock (the "Series D Rights," and collectively with the Series A
Rights, Series C Rights and Breckenridge Rights, the "Registration Rights
Agreements"), there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Act.
(y) The Company has taken such action as necessary to have the Shares
authorized for trading, and the Shares have been approved for listing, on the
National Association of Securities Dealers Automated Quotation National Market
System (the "Nasdaq National Market") upon notice of issuance.
(z) Other than as contemplated by this Agreement, there is no broker,
finder or other party that is entitled to receive from the Company any brokerage
or finder's fee or other fee or commission as a result of any of the
transactions contemplated by this Agreement.
(aa) Other than as set forth in any preliminary prospectus and the Prospectus,
the Company's internal systems and software and the network connections it
maintains are adequately programmed to address the Year 2000 issue.
(bb) Each of the Company and its Subsidiaries: (i) is in compliance with the
provisions of the Federal Communications Act of 1934, as amended (the
"Communications Act"), as implemented, interpreted, and applied by the FCC; (ii)
is in compliance with FCC requirements and restrictions relating to FCC License
ownership and will continue to be in such compliance immediately following the
Closing Date, and if applicable, the Option Closing Date; (iii) has duly and
timely filed all reports and other filings which are required to be filed by it
under the Communications Act or any other applicable law, rule or regulation of
any governmental authority; and (iv) is in compliance with all such laws, rules
and regulations, the noncompliance with which would affect the continuation of
any FCC License held by the Company or any of its Subsidiaries. All information
provided by or on behalf of the Company or any Subsidiary in any filing with the
FCC was, at the time of filing, true, complete and correct in all material
respects when made, and the FCC has been notified of any substantial or
significant changes in such information as may be required in accordance with
applicable laws, rules and regulations.
(cc) The Company is in compliance with all covenants of the Company and is not
in default or breach of any of the terms and provisions set forth in that
certain Third Amended and Restated Loan and Security Agreement, dated June 27,
1997, by and among the Company, Satellink Paging, LLC, certain named Lenders and
Creditanstalt-Bankverein, as amended by that
11
First Amendment, dated March 11, 1998, and Second Agreement, dated October 13,
1998, to the Third Amended and Restated Loan and Security Agreement by and among
the Company, Satellink Paging, LLC, certain named Lenders and Creditanstalt-
Bankverein, as amended, modified or supplemented from time to time (the "Loan
Agreement"), and after giving effect to the Offering, the Company will continue
to be in compliance with the covenants, terms and provisions of the Loan
Agreement.
(dd) Any certificate signed by any officer of the Company and delivered to you
or to counsel for the Underwriters shall be deemed a representation and
warranty to each Underwriter as to the matters covered thereby.
(ee) The Company has not distributed and will not distribute prior to the
later of (i) the Closing Date or the Option Closing Date, as the case may be, or
(ii) completion of the distribution of the Shares, any offering material in
connection with the offering and sale of the Shares other than any preliminary
prospectuses, the Prospectus, the Registration Statement and other materials, if
any, permitted by the Act.
(ff) The Company has not violated any applicable laws relating to immigration
and has employed only individuals authorized to work in the United States and
has never been the subject of any inspection or investigation relating to its
compliance with or violation of the Immigration Reform and Control Act of 1986
and all Regulations promulgated thereunder.
(gg) Other than as set forth in the Prospectus and subject to the
qualifications stated therein, the Company's products, services and internal
systems and software are adequately programmed to address the Year 2000 issue.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS.
----------------------------------------------------------
Each of the Selling Shareholders, severally and not jointly, represents,
warrants and covenants to each Underwriter that:
(a) Such Selling Shareholder at the Closing Date will have good and valid
title to the Shares set forth in Schedule II or Schedule III to be sold by such
----------- ------------
Selling Shareholder, free and clear of any liens, encumbrances, equities and
claims (other than as imposed by the Act or this Agreement), and full right,
power and authority to effect the sale and delivery of such Shares; and upon the
delivery of and payment for the Shares to be sold by such Selling Shareholder
pursuant to this Agreement, good and valid title thereto, free and clear of any
liens, encumbrances, equities and claims, will be transferred to the
Underwriters.
(b) Such Selling Shareholder has duly executed and delivered the Custody
Agreement and Power of Attorney (the "Custody Agreement") in the form previously
delivered to the Underwriters, appointing and , and each of them, as
such Selling Shareholder's attorney-in-fact (the "Attorney-in-Fact") and ,
as custodian (the "Custodian"). The Attorney-in-Fact is authorized to execute,
deliver and perform this Agreement on behalf of such Selling Shareholder, to
deliver the Shares to be sold by such Selling
12
Shareholder hereunder, to accept payment therefor and otherwise to act on behalf
of such Selling Shareholder in connection with this Agreement. Certificates, in
suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank, representing the Shares to be
sold by such Selling Shareholder hereunder have been deposited with the
Custodian pursuant to the Custody Agreement for the purpose of delivery pursuant
to this Agreement. Such Selling Shareholder agrees that the shares of Common
Stock represented by the certificates on deposit with the Custodian are subject
to the interests of the Company, the Underwriters and the other Selling
Shareholders hereunder, that the arrangements made for such custody and the
appointment of the Attorney-in-Fact are to that extent irrevocable, and that the
obligations of such Selling Shareholder hereunder shall not be terminated except
as provided in this Agreement and the Custody Agreement. If such Selling
Shareholder should die, become disabled or be declared incompetent, dissolve or
become insolvent, or if any other event should occur before the delivery of the
Shares of such Selling Shareholder hereunder, the certificates for such Shares
deposited with the Custodian shall be delivered by the Custodian in accordance
with the terms and conditions of this Agreement as if such death, disability,
incompetency, dissolution, insolvency or other event had not occurred,
regardless of whether or not the Custodian or the Attorney-in-Fact shall have
received notice thereof.
(c) Such Selling Shareholder, acting through its duly authorized Attorney-in-
Fact, has duly executed and delivered this Agreement; this Agreement constitutes
a legal, valid and binding obligation of such Selling Shareholder; all
authorizations and consents necessary for the execution and delivery of this
Agreement and the Custody Agreement on behalf of such Selling Shareholder and
for the sale and delivery of the Shares to be sold by such Selling Shareholder
hereunder have been given, except as may be required by the Act or state
securities laws or the NASD; and such Selling Shareholder has the legal capacity
and full right, power and authority to execute this Agreement and the Custody
Agreement.
(d) The performance of this Agreement and the Custody Agreement and the
consummation of the transactions contemplated hereby and thereby by each of the
Selling Shareholders will not result in a material breach or violation of, or
material conflict with, any of the terms or provisions of, or constitute a
material default by such Selling Shareholder under, any indenture, mortgage,
deed of trust (constructive or other), loan agreement, lease, franchise, license
or other agreement or instrument to which such Selling Shareholder or any of its
properties is bound, any statute, or any judgment, decree, order, rule or
regulation or any court or governmental agency or body applicable to such
Selling Shareholder or any of its properties.
(e) Such Selling Shareholder has not distributed and will not distribute any
prospectus or other offering material in connection with the offer and sale of
the Shares other than any preliminary prospectus prepared and filed by the
Company with the Commission or the Prospectus or other material permitted by the
Act.
(f) Such Selling Shareholder is not prompted to sell the Shares to be sold by
such Selling Shareholder by any material, non-public information concerning the
Company that is not fully and fairly disclosed in the preliminary prospectus or
the Prospectus.
13
(g) To the extent that any statements or omissions made in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement thereto are made in reliance upon and in conformity with written
information furnished to the Company by such Selling Shareholder expressly for
use therein, such Registration Statement, preliminary prospectus and Prospectus
and any amendments or supplements thereto did not and will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading.
(h) No approval, consent, order, authorization, designation, declaration or
filing by or with any regulatory body, administrative or other governmental body
is necessary in connection with the execution and delivery of this Agreement by
such Selling Shareholder, and the consummation by it of the transactions herein
contemplated (other than as required by the Act, state securities laws and the
NASD).
(i) Any certificates signed by or on behalf of such Selling Shareholder as
such and delivered to the Representatives or to counsel for the Representatives
shall be deemed a representation and warranty by such Selling Shareholder to
each Underwriter as to the matters covered thereby.
(j) In order to document the Underwriters' compliance with the reporting and
withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982
with respect to the transactions herein contemplated such Selling Shareholder
agrees to deliver to you prior to or at the Closing Date a properly completed
and executed United States Treasury Department Form W-9 (or other applicable
form or statement specified by Treasury Department regulations in lieu thereof).
(k) Such Selling Shareholder has not taken and will not take, directly or
indirectly, any action intended to constitute or which has constituted, or which
might reasonably be expected to cause or result in, stabilization or
manipulation of the price of the Common Stock.
(l) Such Selling Shareholder is not a member of the NASD that is
participating in the distribution of the Shares or a "person associated with a
member," as that term is defined in the NASD's Review of Corporate Financing
Interpretation.
5. REPRESENTATIONS AND WARRANTIES OF THE INSIDE SELLING SHAREHOLDERS.
-----------------------------------------------------------------
Each of the Inside Selling Shareholders, severally and not jointly,
represents, warrants and covenants to each Underwriter that, to such Insider
Selling Shareholder's knowledge, the representations and warranties of the
Company contained in Section 3 of this Agreement are true and correct in all
material respects. Such Inside Selling Shareholder has reviewed and is familiar
with the Registration Statement as originally filed with the Commission and the
preliminary prospectus contained therein, and to such Selling Shareholder's
knowledge, the preliminary prospectus dos not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
14
6. COVENANTS OF THE COMPANY.
------------------------
The Company covenants and agrees with each of the Underwriters as follows:
(a) The Company will not, either prior to the Effective Date or thereafter
during such period as the Prospectus is required by law to be delivered in
connection with sales of the Shares by an underwriter or dealer, file any
amendment or supplement to the Registration Statement or the Prospectus, unless
a copy thereof shall first have been submitted to you within a reasonable period
of time prior to the filing thereof and you shall not have objected thereto in
good faith.
(b) The Company will use its reasonable best efforts to cause the
Registration Statement and any amendment thereto, if not effective at the time
and date that this Agreement is executed by the parties hereto, to become
effective as promptly as possible and will notify you promptly and confirm such
advice in writing: (i) when the Registration Statement has become effective and
when any post-effective amendment thereto becomes effective; (ii) of any request
by the Commission for amendments or supplements to the Registration Statement or
the Prospectus or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose or the threat
thereof; (iv) of the happening of any event during the period mentioned in the
second sentence of Section 6(e) that in the judgment of the Company makes any
statement made in the Registration Statement or the Prospectus untrue or that
requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances in which they are made, not misleading; and (v) of receipt by the
Company or any representatives or attorney of the Company of any other
communication from the Commission relating to the Company, the Registration
Statement, any preliminary prospectus or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will use its best efforts to obtain the
withdrawal of such order as soon as possible. If the Company has omitted any
information from the Registration Statement pursuant to Rule 430A of the Rules
and Regulations, the Company will use its best efforts to comply with the
provisions of and make all requisite filings with the Commission pursuant to
said Rule 430A and to notify the Representatives promptly of all such filings.
If the Company files a term sheet pursuant to Rule 434 of the Rules and
Regulations, the Company will provide evidence satisfactory to you that the
Prospectus and term sheet meeting the requirements of Rule 434(b) or (c), as
applicable, of the Rules and Regulations, have been filed, within the time
period prescribed, with the Commission pursuant to subparagraph (7) of Rule
424(b) of the Rules and Regulations; if for any reason the filing of the final
form of Prospectus is required under Rule 424(b)(3) of the Rules and
Regulations, the Company will provide evidence satisfactory to you that the
Prospectus contains such information and has been filed with the Commission
within the time period prescribed.
(c) The Company will furnish to you at or before the Closing Date, without
charge, four signed copies of the Registration Statement and of any post-
effective amendment thereto, including financial statements and schedules, and
all exhibits thereto, and will furnish you with
15
such number of copies of the Registration Statement, without exhibits, and all
amendments thereto as you may reasonably request.
(d) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement. The Company will, from time to time,
after the effective date of the Registration Statement file with the Commission
such reports as are required by the Act, the Exchange Act, the rules and
regulations thereunder (the "Exchange Act Rules and Regulations") and the Rules
and Regulations, and shall also file with state securities commissions in states
where the Shares have been sold by you (as you shall have advised us in writing)
such reports as are required to be filed by the securities acts and the
regulations of those states.
(e) On the Effective Date, and thereafter from time to time until
expiration of the period mentioned in the second sentence of this Section 6(e),
the Company will deliver to each of you, without charge, as many copies of the
Prospectus or any amendment or supplement thereto as you may reasonably request.
The Company consents to the use of the Prospectus or any amendment or supplement
thereto by you and by all dealers to whom the Shares may be sold, both in
connection with the offering or sale of the Shares and for any period of time
thereafter during which the Prospectus is required by law to be delivered in
connection therewith. If during such period of time any event shall occur which
in the judgment of the Company or your counsel should be set forth in the
Prospectus in order to make any statement therein, in light of the circumstances
under which it was made, not misleading, or if it is necessary to supplement or
amend the Prospectus to comply with law, the Company will forthwith prepare and
duly file with the Commission an appropriate supplement or amendment thereto,
and will deliver to each of you, without charge, such number of copies thereof
as you may reasonably request.
(f) Prior to any public offering of the Shares by you, the Company will
cooperate with you and your counsel in connection with the exemption of the
Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions as you may request; 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 which would subject it to general
service of process in any jurisdiction where it is not now so subject.
(g) During a period of three years after the date hereof, the Company will
furnish to its shareholders annual reports (including financial statements
audited by independent certified public accountants) as soon as practicable
after the end of each fiscal year and will make available to its shareholders
unaudited quarterly reports of operations for each of the first three quarters
of the fiscal year, and will furnish to you and the other several Underwriters
hereunder, upon request (i) concurrently with furnishing or making available
such reports to its shareholders, statements of operations of the Company for
each of the first three quarters in the form furnished to the Company's
shareholders, (ii) concurrently with furnishing to its shareholders, a balance
sheet of the Company as of the end of such fiscal year, together with statements
of operations, shareholders' equity and cash flows of the Company for such
fiscal year, accompanied by a copy of the certificate or report thereon of
independent certified public accountants, (iii) as soon as they are available,
copies of all reports (financial or other) mailed to shareholders, (iv) as soon
as they are available, copies of all reports and financial statements furnished
to or filed with the
16
Commission, any securities exchange or the NASD and (v) any additional
information of a public nature concerning the Company, or the Subsidiaries, or
its business which you may reasonably request.
(h) The Company will make generally available to holders of its securities as
soon as may be practicable but in no event later than the last day of the 15th
full calendar month following the calendar quarter in which the Effective Date
falls, an earnings statement (which need not be audited but shall be in
reasonable detail) for a period of 12 months ended commencing after the
Effective Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay, or reimburse
if paid by the Underwriters, all costs and expenses incident to the performance
of the obligations of the Company under this Agreement, including but not
limited to costs and expenses of or relating to: (i) the preparation, printing,
and filing of the Registration Statement and exhibits to it, each preliminary
prospectus; the Prospectus and any amendment or supplement to the Registration
Statement or the Prospectus; (ii) the preparation and delivery of certificates
representing the Shares; (iii) the printing of this Agreement and other
underwriting documents, including Underwriter's Questionnaires, Underwriter's
Powers of Attorney, Blue Sky Memorandum, Master Agreement Among Underwriters and
Master Selected Dealer Agreements; (iv) furnishing (including costs of shipping
and mailing) such copies of the Registration Statement, the Prospectus and any
preliminary prospectus, and all amendments and supplements thereto, as may be
requested for use in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold; (v) the quotation of the
Shares on the Nasdaq National Market; (vi) any filings required to be made by
you with the NASD (but not the fees and disbursements of your counsel in
connection therewith); (vii) the exemption of the Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions designated pursuant
to Section 6(f), including the fees, disbursements and other charges of your
counsel in connection therewith, and the preparation and printing of
preliminary, supplemental and final Blue Sky memoranda (subject to a maximum fee
of $2,000 assuming no unusual circumstances); and (viii) the transfer agent for
the Shares.
(j) If this Agreement shall be terminated by the Company or if for any reason
the Company shall be unable to perform its obligations hereunder, or if this
Agreement shall be terminated by the Underwriters in accordance with Section 9
hereof, the Company will reimburse you for all out-of-pocket expenses (including
the fees, disbursements and other charges of your counsel) reasonably incurred
by you in connection herewith.
(k) The Company will not at any time, directly or indirectly, take any action
designed, or which might reasonably be expected, to cause or result in, or which
will constitute, stabilization of the price of the shares of Common Stock to
facilitate the sale or resale of any of the Shares. The Company will not make
bids for or purchases of or induce bids for or purchases of, directly or
indirectly, any shares of Common Stock or securities convertible into Common
17
Stock of the Company until the distribution of all shares of Common Stock being
sold in the public offering has been completed.
(l) The Company will apply the net proceeds from the offering and sale of the
Shares to be sold by the Company in the manner set forth in the Prospectus under
"Use of Proceeds," which description complies in all respects with the
requirements of Item 504 of Regulation S-K.
(m) During the period of 180 days commencing at the Closing Date, the Company
will not, without the prior written consent of X.X. Xxxxxxxx & Co., grant
options to purchase shares of Common Stock, except in accordance with the
provisions of the Company's stock option plans as previously approved by the
Company's shareholders and except at prices equal to or greater than "fair
market value," as defined in the Company's stock option plans as in effect on
the date hereof.
(n) Except pursuant to this Agreement or with the prior written consent of
X.X. Xxxxxxxx & Co., the Company will not, and the Company has provided
agreements executed by each of the Company's executive officers and directors,
each Selling Shareholder and certain other shareholders of the Company providing
that none of them will, for a period of 180 days from the date of the
Prospectus, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock (including, without limitation,
shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock which may be deemed to be beneficially owned by
the undersigned in accordance with the Rules and Regulations and the Exchange
Act Rules and Regulations) or (ii) enter into any swap or other arrangement that
transfers all or a portion of the economic consequences associated with the
ownership of any Common Stock (regardless of whether any of the transactions
described in clause (i) or (ii) is to be settled by the delivery of Common
Stock, or such other securities, in cash or otherwise); provided, however, that
-------- -------
the exercise of stock options or other purchases of Common Stock under stock
option plans or other incentive compensation arrangements for employees or
directors as previously approved by the Company's Board of Directors and as in
effect on the date hereof shall not be prohibited.
(o) The Company will maintain and keep accurate books and records reflecting
its assets and maintain internal accounting controls which provide reasonable
assurance that: (i) transactions are executed in accordance with management's
authorization; (ii) transactions are recorded as necessary to permit the
preparation of the Company's financial statements and to maintain accountability
for the assets of the Company; (iii) access to the assets of the Company is
permitted only in accordance with management's authorization; and (iv) the
recorded accounts of the assets of the Company are compared with existing assets
at reasonable intervals.
(p) If at any time during the 25-day period after the Registration
Statement is declared effective, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which, in your opinion, the
market price for the Shares has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
18
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising it as to the effect set forth above, prepare, consult
with you concerning the necessity and the substance of and disseminate a press
release or other public statement reasonably satisfactory to you responding to
or commenting on such rumor, publication or event.
(q) The Company will supply you with copies of all correspondence to and
from, and all documents issued to and by, the Commission in connection with the
registration of the Shares under the Act.
(r) Prior to the Closing Date (and, if applicable, the Option Closing Date),
the Company will furnish to you, as soon as they have been prepared, copies of
any unaudited interim financial statements of the Company for any periods
subsequent to the periods covered by the financial statements appearing in the
Registration Statement and the Prospectus.
(s) Prior to the Closing Date (and, if applicable, the Option Closing Date),
the Company will not issue any press releases or other communications directly
or indirectly and will hold no press conferences with respect to the Company,
the business, properties, assets, liabilities, financial condition or results of
operations of the Company, or the offering of the Shares, without your prior
consent which shall not be unreasonably withheld.
(t) The Company will use its best efforts to maintain the quotation of the
Shares on the Nasdaq National Market.
(u) The Company will maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar (which may be the
same entity as the transfer agent) for its Common Stock.
(v) On or prior to the Closing Date, the Company will take all steps necessary
to complete the conversion of the Series A Convertible Preferred Stock and
Series C Convertible Preferred Stock into Common Stock, and such conversion
shall have been consummated.
7. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.
-------------------------------------------------
The respective obligations of the Underwriters to purchase and pay for the
Shares shall be subject to the following conditions:
(a) Notification that the Registration Statement has become effective shall
be received by you not later than 5:30 p.m., Atlanta, Georgia time, on the date
of this Agreement or at such later date and time as shall be consented to in
writing by you and all filings required by Rule 424, Rule 430A, Rule 434 and
Rule 462(b) of the Rules and Regulations shall have been made.
19
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or, to the knowledge of the Company, threatened by the Commission, (ii)
no order suspending the effectiveness of the registration or exemption of the
Shares under the securities or Blue Sky laws of any jurisdiction shall be in
effect, and no proceeding for such purpose shall be pending before or threatened
or contemplated by the authorities of any such jurisdiction, (iii) any request
for additional information on the part of the staff of the Commission or any
such authorities shall have been complied with to the satisfaction of the staff
of the Commission or such authorities and to the satisfaction of the
Representatives, (iv) after the date hereof no amendment or supplement to the
Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to you and you did not object thereto in good faith,
(v) the NASD, upon review of the terms of the public offering of the Shares,
shall not have objected to such offering, such terms or the Underwriters'
participation in the same, and (vi) and you shall have received certificates,
dated the Closing Date and, with respect to the Option Shares, the Option
Closing Date and signed by the Chief Executive Officer and the Chief Financial
Officer of the Company (who may, as to proceedings threatened, rely upon the
best of their information and belief), to the effect of clauses (i), (ii) and
(iii).
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change, or any development involving a prospective material
adverse change, in the general affairs, business, business prospects,
properties, management, key personnel, condition (financial or otherwise) or
results of operations of the Company, whether or not arising from transactions
in the ordinary course of business, in each case other than as set forth in the
Registration Statement and the Prospectus (or, in the case of a prospective
change, other than as contemplated by the Registration Statement and the
Prospectus) and (ii) the Company shall not have sustained any material loss or
interference with its business or properties from fire, explosion, flood,
hurricane or other casualty or calamity, whether or not covered by insurance, or
from any labor dispute or any court or legislative or other governmental action,
order or decree, which is not set forth in the Registration Statement and the
Prospectus, if in your reasonable judgment any such development makes it
inadvisable to consummate the sale and delivery of the Shares by you at the
public offering price. Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
officers or directors in their capacities as such, before or by any federal,
state or local court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, in which litigation or proceeding
an unfavorable ruling, decision or finding would materially and adversely affect
the business, properties, business prospects, condition (financial or otherwise)
or results of operations of the Company.
(d) All corporate proceedings and other legal matters in connection with this
Agreement, the Registration Statement and the Prospectus, and the registration,
authorization, issue, sale and delivery of the Shares, shall have been
reasonably satisfactory to counsel to the Underwriters, and such counsel shall
have been furnished with such papers and information as they may reasonably have
requested to enable them to pass upon the matters referred to in this Section
7(d).
20
(e) Each of the representations and warranties of the Company contained
herein shall be true, accurate and correct in all material respects at the
Closing Date and, with respect to the Option Shares, at the Option Closing Date,
as if made at the Closing Date and, with respect to the Option Shares, at the
Option Closing Date, and all covenants and agreements herein contained to be
performed on the part of the Company and all conditions herein contained to be
fulfilled or complied with by the Company at or prior to the Closing Date and,
with respect to the Option Shares, at or prior to the Option Closing Date, shall
have been duly performed, fulfilled or complied with.
(f) The Underwriters shall have received an opinion, dated the Closing Date
and, with respect to the Option Shares, the Option Closing Date, satisfactory in
form and substance to your counsel, from Xxxxxx & Bird LLP, counsel to the
Company, to the effect:
(i) The Company is a corporation in good standing under the laws of the State
of Georgia, with corporate power under such laws to own and use its assets and
to conduct its business as described in the Prospectus. Each of the Company's
Subsidiaries is a corporation in good standing under the laws of the state of
its incorporation or organization, with corporate power under such laws to own
and use its assets and to conduct its business as now conducted. The
outstanding stock of each of the Subsidiaries has been duly authorized and
validly issued and is fully paid and non-assessable. Other than as disclosed
in any preliminary prospectus and the Prospectus, all of the outstanding stock
of each of the Subsidiaries is owned by the Company, free and clear of all
possessory (and, to our knowledge, other) liens, pledges, encumbrances,
equities or claims of any kind. Other than as disclosed in any preliminary
prospectus and the Prospectus, to our knowledge, no options or warrants or
other rights to purchase from the Company or any Subsidiary, agreements or
other obligations to issue or other rights to convert any obligations into any
shares of capital stock or other ownership interests in any of the Company's
Subsidiaries are outstanding.
(ii) As of the date specified therein, the Company had historical authorized
and issued capital stock as set forth in the Prospectus under the heading
"Capitalization."
(iii) The Shares being sold by the Company have been duly authorized for
issuance and sale to the Underwriters pursuant to the Underwriting Agreement
and, when issued and delivered by the Company against payment of the
consideration set forth in the Underwriting Agreement, will be validly issued,
fully paid and nonassessable and no holder thereof is or will be subject to
personal liability by reason of being such a holder.
(iv) All of the other outstanding shares of capital stock have been duly
authorized and validly issued and (upon the assumption, which such counsel
need not independently verify, that the Company has received the full
consideration for such shares) are fully paid and nonassessable; and none of
the outstanding shares of capital stock was issued in violation of any
preemptive rights or other rights to subscribe for or to purchase, or any
restriction upon the transfer of, the Shares or any other shares of Common
Stock pursuant
21
to the Company's Articles of Incorporation, Bylaws or, to the knowledge of
such counsel, any agreement (other than this Agreement) or instrument to which
the Company or any Selling Shareholder is a party or by which it may be bound.
(v) The Shares conform in all material respects as to legal matters to the
description thereof in the Prospectus under the caption "Description of
Capital Stock."
(vi) To the knowledge of such counsel, all sales of the Company's securities
prior to the Closing Date were at all relevant times duly registered under the
Securities Act and applicable state securities or "blue sky" laws or were
exempt from the registration requirements of the Securities Act and applicable
state securities or "blue sky" laws, or if such securities were not registered
or exempt in compliance with the Securities Act and applicable state
securities or "blue sky" laws, any private rights of action for rescission or
damages arising from the failure to register any such securities are time
barred by applicable statutes of limitations or equitable principles,
including laches.
(vii) To the knowledge of such counsel, neither the filing of the Registration
Statement nor the offer or sale of the Shares as contemplated thereby gives
rise to any rights for or related to the registration of any shares of Common
Stock or any other securities of the Company other than rights related to
shares included in the Shares and such rights as have been waived by the
holder or holders thereof to the date hereof.
(viii) The Company has duly authorized the execution and delivery of the
Underwriting Agreement and the performance by the Company thereunder and has
duly executed and delivered this Agreement, and assuming the due
authorization, execution and delivery of this Agreement by the Underwriters
and [ ], this Agreement is enforceable against the Company and the Selling
Shareholders.
(ix) The execution and delivery by the Company of this Agreement did not, and
the performance by the Company hereunder, the consummation by the Company of
the transactions contemplated hereby, the issuance and sale of the Shares by
the Company pursuant hereto and the compliance by the Company with all of the
provisions hereof will not (with or without the giving of notice or the
passage of time or both), result in any violation by the Company or any of the
Subsidiaries of the certificate or articles of incorporation or bylaws of the
Company or any of the Subsidiaries or, to the knowledge of such counsel, any
breach of or default under any indenture, mortgage, deed of trust, loan
agreement, lease or other written agreement or instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or any of their
respective properties or assets is bound that is an exhibit to the
Registration Statement (each a "Material Agreement") except for any such
breach or default which would not have a material adverse effect on the
condition (financial or other), business, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole, and, to the
knowledge of such counsel, did not and will not result in any creation or
imposition of a contractual lien or security interest in, on or against any
property or assets of the Company or any of the Subsidiaries pursuant to any
Material Agreement or violate in any material respect any
22
existing federal or state constitution, statute, regulation, rule, order or
law (assuming compliance with all applicable state securities or "blue sky"
laws, as to which such counsel need not express any opinion), or any judicial
or administrative decree, writ, judgment or order to which, to the knowledge
of such counsel, the Company or any of the Subsidiaries or any of their
respective properties or assets is subject; provided, however, that such
counsel may assume for purposes of this opinion that all of the documents
referred to and all of the other matters addressed in this paragraph (ix) are
governed solely by the laws of the State of Georgia and applicable federal
laws; and provided further, that such counsel need not express any opinion
under this paragraph (ix) as to compliance with federal securities laws.
(x) No consent, approval, authorization or other action by, or filing with,
any governmental authority of the United States or the State of Georgia is
required on the part of the Company for the performance by the Company of this
Agreement and the offering, issuance and sale of the Shares, except such as
have been obtained under the Securities Act and the Exchange Act and the rules
and regulations of the Commission thereunder and such as may be required under
state securities or "blue sky" laws in connection with the offer, sale and
distribution of such Shares by the Underwriters (as to which such counsel need
not express any opinion).
(xi) The Shares have been approved for listing on The Nasdaq Stock Market's
National Market upon notice of issuance.
(xii) The descriptions in the Registration Statement and Prospectus of the
Company's Articles of Incorporation and Bylaws, and of statutes, legal and
governmental proceedings and contracts and other documents are accurate in all
material respects and fairly present the information required to be shown.
(xiii) The Registration Statement [including any Rule 462(b) Registration
Statement] and the Prospectus [and each amendment or supplement to the
Registration Statement and the Prospectus] (other than the financial
statements and the notes thereto and the related schedule and other financial
and statistical data included therein or omitted therefrom and the section
therein captioned "Underwriting," as to all of which such counsel need not
express any opinion), as of their respective effective or issue dates,
complied as to form in all material respects with the applicable requirements
of the Securities Act and the rules and regulations of the Commission
thereunder. To the knowledge of such counsel, there are no contracts or other
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required.
(xiv) The Registration Statement, [including any Rule 462(b) Registration
Statement,] has been declared effective under the Securities Act, and, to the
knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or threatened
by the Commission. Any required filing of the Prospectus pursuant to Rules
424(b) and 430A has been made in the manner and within the time period
required.
23
(xv) Neither the Company nor any of its subsidiaries is, or will be as a
result of the consummation of the transactions contemplated by this Agreement,
an "investment company" or an entity "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
In addition, such counsel shall confirm the following:
(1) The Company and each of its subsidiaries is qualified to transact business
as a foreign corporation in all states in which it is required to be so
qualified, except where the failure to be so qualified would not have a material
adverse effect upon the business, financial condition or results of operations
of the Company.
(2) To the knowledge of such counsel, there is no litigation or governmental
proceeding pending or overtly threatened by a written communication against the
Company or any of the Subsidiaries, or to which the Company or any of the
Subsidiaries or any of their respective properties or assets is subject, that is
required to be described in the Prospectus but is not described as required.
In addition, such counsel shall state that such counsel has participated in
conferences with officials and other representatives of the Company, the
Representatives, counsel for the Underwriters and the Accountants, at which such
conferences the contents of the Registration Statement and Prospectus and
related matters were discussed, and although they have not verified the accuracy
or completeness of the statements contained in the Registration Statement or the
Prospectus, nothing has come to the attention of such counsel which leads them
to believe that, at the time the Registration Statement became effective and at
all times subsequent thereto up to and on the Closing Date and on the Option
Closing Date, the Registration Statement and any amendment or supplement thereto
(other than the financial statements including supporting schedules and other
financial and statistical information derived therefrom, as to which such
counsel need express no comment) contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or at the Closing Date
or the Option Closing Date, as the case may be, the Registration Statement, the
Prospectus and any amendment or supplement thereto (except as aforesaid)
contained any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
Counsel rendering the foregoing opinion may rely as to questions of law not
involving the laws of the United States or the State of Georgia upon opinions of
local counsel, and as to questions of fact upon representations or certificates
of officers of the Company or the Selling Shareholders or officers of Selling
Shareholders (when the Selling Shareholder is not a natural person), and of
government officials, in which case their opinion is to state that they are so
relying and that they have no knowledge of any material misstatement or
inaccuracy in any such opinion.
(g) The Underwriters shall have received two opinions, each one dated the
Closing Date and satisfactory in form and substance to your counsel, one from
Xxxxxx & Bird LLP, counsel to the Selling Shareholders (except for
______________), and the second from Xxxxxxxx Xxxxxxx LLP with respect to
_____________ to the effect:
(i) The Shares being sold by the Selling Shareholders have been duly
authorized and validly issued and (upon the assumption, which such counsel
need not independently verify, that the Company has received the full
consideration for such shares) are fully paid and nonassessable; no holder
thereof is or will be subject to personal liability by reason of being such a
holder; and none of such Shares was issued in violation of the preemptive
rights of any shareholder of the Company.
24
(ii) Each of the Selling Shareholders has duly authorized, executed and
delivered each of this Agreement, the Power of Attorney and the Custody
Agreement, and assuming the due authorization, execution and delivery of this
Agreement, the Power of Attorney and the Custody Agreement by the other
parties thereto, each of this Agreement, the Power of Attorney and the Custody
Agreement is enforceable against such Selling Shareholder.
(iii) The execution and delivery by each Selling Shareholder of this
Agreement, the Power of Attorney and the Custody Agreement did not, and the
performance by such Selling Shareholder hereunder, the consummation by such
Selling Shareholder of the transactions contemplated hereby, the sale of the
Shares being sold by such Selling Shareholder pursuant hereto and the
compliance by such Selling Shareholder with all of the provisions hereof will
not, to the knowledge of such counsel (with or without the giving of notice or
the passage of time or both), result in any violation by such Selling
Shareholder of any certificate or articles of incorporation, bylaws or
partnership agreement of such Selling Shareholder or, to the knowledge of such
counsel, any breach of or default under any indenture, mortgage, deed of
trust, loan agreement, lease or other written agreement or instrument known to
us and to which such Selling Shareholder is a party or by which it or any of
its properties or assets is bound, and, to the knowledge of such counsel, did
not and will not result in any creation or imposition of a contractual lien or
security interest in, on or against any property or assets of such Selling
Shareholder or violate in any material respect any existing federal or state
constitution, statute, regulation, rule, order or law (assuming compliance
with all applicable state securities or "blue sky" laws, as to which such
counsel need not express any opinion), or any judicial or administrative
decree, writ, judgment or order to which, to the knowledge of such counsel,
such Selling Shareholder or any of its properties or assets is subject;
provided, however, that such counsel may assume for purposes of this opinion
that all of the documents referred to and all of the other matters addressed
in this paragraph (xviii) are governed solely by the laws of the State of
Georgia and applicable federal laws; and provided further, that such counsel
need not express any opinion under this paragraph (xviii) as to compliance
with federal securities laws.
(iv) To the knowledge of such counsel, no consent, approval, authorization or
other action by, or filing with, any governmental authority of the United
States or the State of Georgia is required on the part of such Selling
Shareholder for the performance by such Selling Shareholder of this Agreement,
the Power of Attorney or the Custody Agreement and the offering and sale of
the Shares being sold by such Selling Shareholder, except such as have been
obtained under the Securities Act and the Exchange Act and the rules and
regulations of the Commission thereunder and such as may be required under
state securities or "blue sky" laws in connection with the offer, sale and
distribution of such Shares by the Underwriters (as to which such counsel need
not express any opinion).
(v) To the knowledge of such counsel, each of the Selling Shareholders is the
sole registered owner of the Shares to be sold by such Selling Shareholder,
and upon delivery, duly endorsed,
25
of such Shares to or for the account of the Underwriters against payment
therefor as provided in this Agreement (assuming the Underwriters are
purchasing such Shares as bona fide purchasers as defined in Section 8-302 of
the Uniform Commercial Code), the Underwriters will have acquired all of the
rights and interests of the Selling Shareholders in the respective Shares sold
by them free of any and all liens, pledges, encumbrances, charges, agreements,
equities, claims, security interests, restrictions, shareholder agreements or
voting trusts. The owner of the Shares sold by each Selling Shareholder, if
other than such Selling Shareholder, is precluded from asserting against the
Underwriters the ineffectiveness of any unauthorized endorsement."
In rendering such opinion, such counsel may rely as to matters of fact, to the
extent proper, on certificates of the Selling Shareholders and the
representations and warranties contained in the Custody Agreement executed by
such Selling Shareholder. Such counsel also may rely as to matters of fact, to
the extent proper, on certificates of responsible officers of the Company and
public officials.
(h) You shall have received on the Closing Date and, with respect to the
Option Shares, the Option Closing Date, an opinion, dated the Closing Date and
the Option Closing Date, respectively, of Xxxxxxxx Xxxxxxxxxx, special FCC
counsel for the Company, in the form attached hereto as Exhibit A.
---------
(i) You shall have received an opinion, dated the Closing Date and, if
applicable, the Option Closing Date, from Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx,
L.L.P., as your counsel, with respect to the Registration Statement, the
Prospectus and this Agreement, which opinion shall be satisfactory in all
respects to you, and the Company and the Selling Shareholders shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(j) You shall have received at or prior to the Closing Date from Xxxxxx
Xxxxxxx Xxxxx & Scarborough, L.L.P. a memorandum or memoranda, in form and
substance satisfactory to you, with respect to the exemption for offering and
sale by the Underwriters of the Shares under state securities or Blue Sky laws
of such jurisdictions as the Underwriters may have designated to the Company.
(k) The Representatives shall have received from the Accountants a letter
dated the date hereof, and at the Closing Date a second letter dated the Closing
Date (and, if applicable, the Option Closing Date), in form and substance
satisfactory to the Representatives stating that they are independent public
accountants with respect to the Company within the meaning of the Act and the
applicable Rules and Regulations, and the answer to Item 509 of Regulation S-K
set forth in the Registration Statement is correct insofar as it relates to
them, and stating that:
(i) In their opinion, the financial statements and schedules examined
by them and included in the Registration Statement or Prospectus comply as to
form in all material respects with the applicable accounting requirements of
the Act and the Rules and Regulations and are presented in accordance with
generally accepted accounting
26
principles; and they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of the
interim financial statements, selected financial and operating data, and/or
condensed financial statements derived from audited financial statements of
the Company.
(ii) The financial information included in the Preliminary Prospectus
and the Prospectus under the captions "Prospectus Summary - Summary Financial
and Operating Data" and "Selected Financial and Operating Data" for each of
the fiscal years ended July 31, 1994, 1995, 1996, 1997 and 1998, and the six
months ended January 31, 1999 agrees with the corresponding amounts in the
audited financial statements included in the Prospectus or previously reported
on by them.
(iii) On the basis of a reading of the latest available interim
consolidated financial statements (unaudited) of the Company and its
Subsidiaries, a reading of the minute books of the Company and its
Subsidiaries, inquiries of officials of the Company responsible for financial
and accounting matters and other specified procedures, all of which have been
agreed to by the Representatives, nothing came to their attention that caused
them to believe that:
a. the unaudited financial statements included in the
Registration Statement do not comply as to form in all material respects
with the accounting requirements of the federal securities laws and the
related published rules and regulations thereunder or are not in
conformity with generally accepted accounting principles applied on a
basis consistent with the basis for the audited financial statements
contained in the Registration Statement;
b. any other unaudited financial statement data included in the
Prospectus do not agree with the corresponding items in the unaudited
financial statements from which data was derived and any such unaudited
data were not determined on a basis consistent with the basis for the
corresponding amounts in the audited financial statements included in the
Prospectus;
c. at a specified date not more than five days prior to the
date of delivery of such respective letter, there was any change in the
capital stock, decline in shareholders' equity or increase in long-term
debt of the Company, or any decreases in working capital, net current
assets or net assets or other items specified by the Underwriters, in
each case as compared with amounts shown in the latest balance sheets
included in the Prospectus, except in each case for changes, decreases or
increases which the Prospectus discloses have occurred or may occur or
which are described in such letters; and
d. for the period from the closing date of the latest
statements of operations included in the Prospectus to a specified date
not more than five days prior to the date of delivery of such respective
letter, there were any decreases in net revenues or net income of the
Company, or other items appearing on the face
27
of the statement of operations specified by the Representatives, or any
increases in any items appearing on the face of the statement of
operations specified by the Representatives, in each case as compared
with the corresponding period of the preceding year, except in each case
for decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter.
(iv) They have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information specified by you which are derived from the general
accounting records of the Company, which appear in the Prospectus and
have compared such amounts, percentages and financial information with
the accounting records of the Company and have found them to be in
agreement.
In the event that the letters to be delivered referred to above set
forth any such changes, decreases or increases, it shall be a further condition
to the obligations of the Underwriters that the Underwriters shall have
reasonably determined, after discussions with officers of the Company
responsible for financial and accounting matters and with the Accountants, that
such changes, decreases or increases as are set forth in such letters do not
reflect a material adverse change in the shareholders' equity or long-term debt
of the Company as compared with the amounts shown in the latest balance sheet of
the Company included in the Prospectus, or a material adverse change in total
net revenues or net income of the Company, in each case as compared with the
corresponding period of the prior year.
(l) At the Closing Date and, as to the Option Shares, the Option Closing
Date, there shall be furnished to you a certificate, dated the date of its
delivery, signed by each of the Chief Executive Officer and Chief Financial
Officer of the Company, in form and substance satisfactory to you, to the effect
that:
(i) Each of the representations and warranties of the Company
contained in Section 3 of this Agreement were, when originally made, and
are, at the time such certificate is delivered, true and correct in all
material respects;
(ii) Each of the covenants required herein to be performed by the
Company on or prior to the delivery of such certificate has been duly,
timely and fully performed, and each condition herein required to be
complied with by the Company on or prior to the date of such certificate
has been duly, timely and fully complied with by the Company.
(m) On or prior to the Closing Date, you shall have received the
executed agreements referred to in Section 6(n).
(n) The Shares shall be registered or qualified for offer and sale, or
exempt from registration or qualification, in such states as you may reasonably
request, and each such registration, qualification or exemption shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
or the Option Closing Date.
28
(o) The Shares shall have been duly authorized for quotation and shall
have been approved for listing on the Nasdaq National Market upon official
notice of issuance.
(p) No Underwriter shall have advised the Company that the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement thereto contains an untrue statement of fact which, in your
reasonable judgment, is material, or omits to state a fact which, in your
reasonable judgment, is material and is required to be stated therein or
necessary to make the statements therein not misleading and the Company shall
not have cured such untrue statement of fact or stated a statement of fact
required to be stated therein.
(q) The Company shall have furnished to you such certificates, in
addition to those specifically mentioned herein, as you may have reasonably
requested as to the accuracy and completeness at the Closing Date and the Option
Closing Date, if any, of any statement in the Registration Statement or the
Prospectus, as to the accuracy at the Closing Date and the Option Closing Date,
if any, of the representations and warranties of the Company herein, as to the
performance by the Company of its obligations hereunder, or as to the
fulfillment of the conditions concurrent and precedent to your obligations
hereunder.
(r) The Selling Shareholders or the Attorney-in-Fact shall deliver to
the Underwriters a certificate dated the Closing Date and the Option Closing
Date, if any, and executed by each Selling Shareholder or the Attorney-in-Fact
to the effect that the representations and warranties of the Selling
Shareholders shall be true and correct in all material respects as of the
Closing Date and the Option Closing Date, if any.
All such opinions, certificates, letters and documents will be in
compliance with the provisions of this Agreement only if they are reasonably
satisfactory to you and counsel for the Underwriters. The Company will furnish
you with such conformed copies of such opinions, certificates, letters and
documents as you may request.
If any of the conditions specified in this Section 7 shall not have been
satisfied at or prior to the Closing Date (and, if applicable, the Option
Closing Date) or waived by you in writing, this Agreement may be terminated by
you pursuant to Section 9 hereof.
8. INDEMNIFICATION AND CONTRIBUTION.
--------------------------------
(a) The Company will indemnify and hold harmless each Underwriter
(including, without limitation, in its capacity as an Underwriter or as a
"qualified independent underwriter" within the meaning of Rule 2700 of the
NASD), the directors, officers, employees and agents of each Underwriter and
each person, if any, who controls each Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, liabilities, expenses and damages (including any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), 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, insofar as such losses, claims, liabilities, expenses
or damages arise
29
out of or are based in whole or in part upon (i) any inaccuracy in the
representations and warranties of the Company contained herein, (ii) any failure
of the Company to perform its obligations hereunder or under law or (iii) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus or the
omission or alleged omission to state in such document a material fact required
to be stated therein or necessary to make the statements therein not misleading;
provided, however, that the foregoing indemnity agreement with respect to any
-------- -------
preliminary prospectus or the Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased Shares, or any person controlling such Underwriter, if a
copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such loss, claim, damage or
liability; and further provided, that the Company will not be liable to the
------- --------
extent that such loss, claim, liability, expense or damage arises from the sale
of the Shares in the public offering to any person by an Underwriter and is
based on an untrue statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information relating to an
Underwriter furnished in writing to the Company by an Underwriter expressly for
inclusion in the Registration Statement, any preliminary prospectus or the
Prospectus. The Company acknowledges that the information in the last paragraph
on the cover page, the paragraphs relating to stabilization on the inside front
cover and the statements set forth under the heading "Underwriting" in any
preliminary prospectus and the Prospectus constitute the only information
relating to any Underwriter furnished in writing to the Company by you expressly
for inclusion in the Registration Statement, any preliminary prospectus or the
Prospectus. This indemnity agreement will be in addition to any liability that
the Company might otherwise have.
(b) Each Selling Shareholder agrees, severally and not jointly, to
indemnify and hold harmless each Underwriter (including, without limitation, in
its capacity as an Underwriter or as a "qualified independent underwriter"
within the meaning of Rule 2700 of the NASD), and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act, or any blue sky application or filing, and the
Company, its directors, its officers who sign the Registration Statement and
each person, if any who controls the Company within the meaning of either such
Section, provided, however, that the indemnification obligation of each Selling
Shareholder shall be limited to the net proceeds received by such Selling
Shareholder with respect to the Shares sold, from and against any and all
losses, claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendment or supplement thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to such
Selling Shareholder furnished in writing by or on behalf of such Selling
Shareholder expressly for use in the Registration Statement or the Prospectus or
in any preliminary prospectus; provided, however, that the foregoing indemnity
-------- -------
30
agreement shall be effective only if Selling Shareholder Shares are sold
pursuant to this Agreement; further provided, that the foregoing
------- --------
indemnity agreement with respect to any preliminary prospectus or the Prospectus
shall not inure to the benefit of any Underwriter from whom the person asserting
any such losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
loss, claim, damage or liability; and further provided, that the Selling
------- --------
Shareholders will not be liable to the extent that such loss, claim, liability,
expense or damage arises from the sale of the Shares in the public offering to
any person by an Underwriter and is based on an untrue statement or omission or
alleged untrue statement or omission made in reliance on and in conformity with
information relating to an Underwriter furnished in writing to the Company by an
Underwriter expressly for inclusion in the Registration Statement, any
preliminary prospectus or the Prospectus. The Selling Shareholders acknowledge
that the information in the last paragraph on the cover page, the paragraphs
relating to stabilization on the inside front cover and the statements set forth
under the heading "Underwriting" in any preliminary prospectus and the
Prospectus constitute the only information relating to any Underwriter furnished
in writing to the Company by you expressly for inclusion in the Registration
Statement, any preliminary prospectus or the Prospectus. This indemnity
agreement will be in addition to any liability that each Selling Shareholder
might otherwise have.
(c) Each Underwriter will indemnify and hold harmless the Company,
each Selling Shareholder, each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, each
director of the Company and each officer of the Company who signs the
Registration Statement to the same extent as the foregoing indemnity from the
Company to the Underwriters, but only insofar as losses, claims, liabilities,
expenses or damages arise out of or are based on any untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to you furnished in writing to the Company
by you expressly for use in the Registration Statement, any preliminary
prospectus or the Prospectus; provided, however,that such indemnity shall
-------- -------
not be applicable to any Selling Shareholder if no Selling Shareholder Shares
are sold pursuant to this Agreement. The Company acknowledges that the
information set forth in the last paragraph on the cover page, the paragraphs
relating to stabilization on the inside front cover and the statements set forth
under the heading "Underwriting" in any preliminary prospectus and the
Prospectus constitute the only information relating to the Underwriters
furnished in writing to the Company by the Underwriters expressly for inclusion
in the Registration Statement, any preliminary prospectus or the Prospectus.
This indemnity will be in addition to any liability that the Underwriters might
otherwise have.
(d) Any party that proposes to assert the right to be indemnified
under this Section 8 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 8, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
31
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 8 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (i) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (ii) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (iii) a
conflict of interests exists (based on advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (iv) the indemnifying party has
not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent (which consent will not be unreasonably
withheld).
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 8 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company, the Underwriters or the
Selling Shareholders, then the Company, the Underwriters and the Selling
Shareholders will contribute to the total losses, claims, liabilities, expenses
and damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters and the Selling
Shareholders, such as persons who control the Company within the meaning of the
Act, officers of the Company who signed the Registration Statement and directors
of the Company, who may be liable for contribution) to which the Company, the
Underwriters and the Selling Shareholders may be subject in such proportion as
shall be appropriate to reflect the
32
relative benefits received by the Company, the Underwriters and the Selling
Shareholders. The relative benefits received by the Company on the one hand and
the Underwriters on the other hand shall be deemed to be in the same respective
proportions as the total net proceeds from the offering (before deducting
expenses) received by the Company bears to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative benefits received by the
Selling Shareholders shall be deemed to be in proportion to the net proceeds to
be received by them in the offering, as set forth in the table on the cover page
of the Prospectus. If, but only if, the allocation provided by the foregoing
sentences is not permitted by applicable law, the allocation of contribution
shall be made in such proportion as is appropriate to reflect not only the
relative benefits referred to in the foregoing sentences but also the relative
fault of the Company, the Underwriters and the Selling Shareholders with respect
to the statements or omissions which resulted in such loss, claim, liability,
expense or damage, or action in respect thereof, as well as any other relevant
equitable considerations with respect to such offering. Such relative fault
shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company, the Underwriters or the
Selling Shareholders, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the Underwriters and the Selling Shareholders agree that
it would not be just and equitable if contributions pursuant to this Section
8(d) were to be determined by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, liability, expense or damage, or action in respect
thereof, referred to above in this Section 8(d) shall be deemed to include, for
purpose of this Section 8(d), any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), an
Underwriter shall not be required to contribute any amount in excess of the
underwriting discounts received by it (less the aggregate amount of any damages
which such Underwriter and its controlling persons have otherwise been required
to pay in respect of the same or any similar claim), and no person found guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 8(d) are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section 8(d), any
person who controls a party to this Agreement within the meaning of the Act will
have the same rights to contribution as that party, and each officer and
director of the Company who signed the Registration Statement will have the same
rights to contribution as the Company, subject in each case to the provisions
hereof. Any party entitled to contribution, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim for
contribution maybe made under this Section 8(d), will notify any such party or
parties from whom contribution may be sought, but the omission to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have under this Section 8(d). No party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
33
(f) The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Company and the Selling
Shareholders contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any investigation made by the Underwriters or
on their behalf, (ii) acceptance of any of the Shares and payment therefor or
(iii) any termination of this Agreement.
(g) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 8, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 8 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement and Prospectus as required by the Act.
9. TERMINATION.
-----------
The Underwriters' obligations under this Agreement may be terminated at
any time on or prior to the Closing Date (or, with respect to the Option Shares,
on or prior to the Option Closing Date), by notice to the Company from the
Representatives, without liability on the part of any of the Underwriters to the
Company (provided, however, that this Section 9 and Sections 6(h), 6(i) and 8
shall be and always remain effective), if, prior to delivery and payment for the
Firm Shares (or the Option Shares, as the case may be), in your reasonable
judgment, (i) the Company shall have failed, refused or been unable to perform
any material agreement on its part to be performed, or because of such condition
the Underwriters' obligations hereunder required to be fulfilled are not
fulfilled, including, but not limited to, any change in the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company from that set forth in the Registration Statement or
Prospectus which, in your reasonable judgment, is material and adverse; (ii) any
condition specified in Section 7 of this Agreement shall not have been
satisfied; (iii) trading in any of the equity securities of the Company shall
have been suspended by the Commission, by an exchange that lists the Shares or
by the Nasdaq National Market; (iv) trading in securities generally on the New
York Stock Exchange or the Nasdaq National Market shall have been suspended or
limited or minimum or maximum prices shall have been generally established on
such exchange, or additional material governmental restrictions, not in force on
the date of this Agreement, shall have been imposed upon trading in securities
generally by such exchange or by order of the Commission or any court of other
governmental authority; (v) a general banking moratorium shall have been
declared by either federal or state authorities; or (vi) any material adverse
change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any outbreak
or material escalation of hostilities or declaration by the United States of a
national emergency or war or other calamity, crisis, act of God or hostile act
against the United States shall have occurred the effect of any of which is such
as to make it, in your reasonable judgment, impracticable or inadvisable to
market the Shares on the terms and in the manner contemplated by the Prospectus.
10. SUBSTITUTION OF UNDERWRITERS.
----------------------------
34
If any Underwriter shall fail or refuse to purchase any of the Firm
Shares which it has agreed to purchase hereunder, and the aggregate number of
Firm Shares which such defaulting Underwriter agreed but failed or refused to
purchase is not more than one-tenth of the aggregate number of Firm Shares, the
other Underwriters shall be obligated, severally, to purchase the Firm Shares
that such defaulting Underwriter agreed but failed or refused to purchase, in
the proportions which the number of Firm Shares which they have respectively
agreed to purchase pursuant to Section 1 bears to the aggregate number of Firm
Shares which all such non-defaulting Underwriters have so agreed to purchase, or
in such other proportions as you may specify; provided, that in no event shall
--------
the maximum number of Firm Shares which an Underwriter has been obligated to
purchase pursuant to Section 1 be increased pursuant to this Section 10 by more
than one-ninth of such number of Firm Shares without the prior written consent
of such Underwriter. If an Underwriter shall fail or refuse to purchase any Firm
Shares and the aggregate number of Firm Shares which such defaulting Underwriter
agreed but failed or refused to purchase exceeds one-tenth of the aggregate
number of the Firm Shares and arrangements satisfactory to the non-defaulting
Underwriters or the Company for the purchase of such Firm Shares are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company for the
purchase or sale of any Shares under this Agreement. In any such case the
Underwriters or the Company shall have the right to postpone the Closing Date or
Option Closing Date, but in no event for longer than seven days, in order that
the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken pursuant to this Section 10 shall not relieve any defaulting Underwriter
from liability in respect to any default of such Underwriter under this
Agreement.
11. DEFAULT BY A SELLING SHAREHOLDER.
--------------------------------
If any of the Selling Shareholders shall fail to sell and deliver the number
of Selling Shareholder Shares that such Selling Shareholder is obligated to
sell, the Underwriters may, at their option, by notice to the Company, either
(a) require the Company to sell and deliver such number of shares of Common
Stock as to which the Selling Shareholders have defaulted, (b) elect to purchase
the Firm Shares that the Company and the non-defaulting Selling Shareholders
have agreed to sell pursuant to this Agreement or (c) terminate this Agreement
if the Company shall have refused to sell and deliver to the Underwriters the
shares of Common Stock referred to in clause (a) of this Section 11.
In the event of a default under this Section 11 that does not result in the
termination of this Agreement, either the Underwriters or the Company shall have
the right to postpone the Closing Date for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements. No action taken pursuant to this
Section 11 shall relieve the Company or the Selling Shareholder so defaulting
from liability, if any, in respect of such default.
12. MISCELLANEOUS.
-------------
35
All communications hereunder shall be in writing and, if sent to any of the
Underwriters, shall be mailed, first class postage prepaid, sent via reliable
overnight delivery service, sent by facsimile (and by one of the two preceding
methods), delivered by hand or telegraphed and confirmed in writing to the
Representatives in care of X.X. Xxxxxxxx & Co., One Buckhead Plaza, 0000
Xxxxxxxxx Xx., X.X., Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, Attention: Xxx Xxxx
Xxxxxx, or if sent to the Company shall be sent by one of the foregoing methods
to the Company at 0000 Xxxxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000,
Attention: Xxxxxx X. Xxxxxxxx.
This Agreement has been and is made solely for the several Underwriters' and
the Company's and the Selling Shareholders' benefits and of the controlling
persons, directors and officers referred to in Section 8, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" as used in this Agreement shall not include a
purchaser, as such purchaser, of Shares from an Underwriter.
This Agreement shall be governed by and construed in accordance with the laws
of the State of Georgia.
This Agreement may be signed in two or more counterparts with the same effect
as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
THE COMPANY, EACH SELLING SHAREHOLDER AND YOU EACH HEREBY IRREVOCABLY WAIVE
ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
You hereby represent and warrant to the Company and each Selling Shareholder
that you have authority to act hereunder on behalf of the several Underwriters,
and any action hereunder taken by you will be binding upon all the Underwriters.
36
Please confirm that the foregoing correctly sets forth the agreement among
the Company, the Selling Shareholders and you.
Very truly yours,
SATELLINK COMMUNICATIONS, INC.
By:
---------------------------
Name:
Title:
SELLING SHAREHOLDERS:
By:
---------------------------
[ ], as Attorney-in-Fact
for each of the Selling
Shareholders identified
on Schedules II and III
------------ ---
Confirmed and accepted as of the
date first above written.
X.X. XXXXXXXX & CO.
XXXXXX XXXXXX & COMPANY, INC.
By: X.X. Xxxxxxxx & Co.
By:
----------------------------
Name:
Title:
37
SCHEDULE I
----------
Underwriters
Number of
Name of Underwriter Firm Shares
------------------------- --------------
X.X. Xxxxxxxx & Co...............................
Xxxxxx Xxxxxx & Company, Inc.....................
--------------------
Total....................................
====================
38
SCHEDULE II
-----------
Inside Selling Shareholders
Number of
Firm
Name of Selling Shareholder Shares
--------------------------- ---------------
[ ]...........................................
[ ]...........................................
[ ]...........................................
[ ]...........................................
-----------------
Total............................................
=================
39
SCHEDULE III
OUTSIDE SELLING SHAREHOLDERS
Number of
Firm
Name of Selling Shareholder Shares
--------------------------- ---------------
[ ]............................................
[ ]............................................
[ ]............................................
[ ]............................................
[ ]............................................
[ ]............................................
[ ]............................................
-----------------
Total.............................................
=================
40
EXHIBIT A
[FORM OF OPINION OF FCC COUNSEL]
1. The Company has obtained all authorizations, consents and approvals from the
FCC and from state public utility commissions ("PUCs") necessary for the
conduct of its business as described in the Registration Statement. All such
authorizations, consents and approvals have been duly and validly issued and
are in full force and effect, and neither the Company, nor any of its
Subsidiaries, are in violation of any of the terms and conditions of any
such authorizations, consents or approvals.
2. There is no outstanding adverse judgment, decree or order that has been
issued by the FCC or any state PUC against the Company or any of its
Subsidiaries or any action, proceeding or investigation pending or
threatened by the FCC or any state PUC against the Company or its
Subsidiaries that would materially and adversely affect the operation of the
Company's business as described in the Registration Statement.
3. The statements in the Registration Statement under the captions "Risk
Factors Regulation" and "Business Government Regulation," insofar as such
statements purport to describe certain provisions of the Communications Act
and rules and regulations of the FCC promulgated thereunder, have been
reviewed by us and are correct in all material respects.