3,850,000 Shares
ICON CMT CORP.
Common Stock
($.001 par value)
UNDERWRITING AGREEMENT
February , 1998
CREDIT SUISSE FIRST BOSTON CORPORATION
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION,
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Icon CMT Corp., a Delaware corporation (the "Company"),
proposes to issue and sell 3,850,000 shares of its Common Stock, par value $.001
per share (the "Securities") (such 3,850,000 shares of Securities being
hereinafter referred to as the "Firm Securities"). The Company also proposes to
sell to the Underwriters (as defined below), at the option of the Underwriters,
an aggregate of not more than [ ] additional shares of its Securities, and
certain stockholders listed in Schedule A hereto (the "Selling Stockholders")
also propose to sell to the Underwriters, at the option of the Underwriters, an
aggregate of not more than [ ] additional outstanding shares of the Company's
Securities, as set forth below (such 577,500 additional shares being hereinafter
referred to as the "Optional Securities"). The Firm Securities and the Optional
Securities are herein collectively called the "Offered Securities". The Company
and the Selling Stockholders hereby agree with the several Underwriters named in
Schedule B hereto (the "Underwriters") as follows:
2. Representations and Warranties of the Company and the Selling
Stockholders. (a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) A registration statement (No. 333-38339) relating to the Offered
Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission (the "Commission") and either (A) has
been declared effective under the Securities Act of 1933 (the "Act") and is
not proposed to be amended or (B) is proposed to be amended by amendment or
post-effective amendment. If such registration statement (the "initial
registration statement") has been
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declared effective, either (A) an additional registration statement (the
"additional registration statement") relating to the Offered Securities may
have been filed with the Commission pursuant to Rule 462(b) ("Rule 462(b)")
under the Act and, if so filed, has become effective upon filing pursuant
to such Rule and the Offered Securities all have been duly registered under
the Act pursuant to the initial registration statement and, if applicable,
the additional registration statement or (B) such an additional
registration statement is proposed to be filed with the Commission pursuant
to Rule 462(b) and will become effective upon filing pursuant to such Rule
and upon such filing the Offered Securities will all have been duly
registered under the Act pursuant to the initial registration statement and
such additional registration statement. If the Company does not propose to
amend the initial registration statement or if an additional registration
statement has been filed and the Company does not propose to amend it, and
if any post-effective amendment to either such registration statement has
been filed with the Commission prior to the execution and delivery of this
Agreement, the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the Act
or, in the case of the additional registration statement, Rule 462(b). For
purposes of this Agreement, "Effective Time" with respect to the initial
registration statement or, if filed prior to the execution and delivery of
this Agreement, the additional registration statement means (A) if the
Company has advised the Representatives that it does not propose to amend
such registration statement, the date and time as of which such
registration statement, or the most recent post-effective amendment thereto
(if any) filed prior to the execution and delivery of this Agreement, was
declared effective by the Commission or has become effective upon filing
pursuant to Rule 462(c), or (B) if the Company has advised the
Representatives that it proposes to file an amendment or post-effective
amendment to such registration statement, the date and time as of which
such registration statement, as amended by such amendment or post-effective
amendment, as the case may be, is declared effective by the Commission. If
an additional registration statement has not been filed prior to the
execution and delivery of this Agreement but the Company has advised the
Representatives that it proposes to file one, "Effective Time" with respect
to such additional registration statement means the date and time as of
which such registration statement is filed and becomes effective pursuant
to Rule 462(b). "Effective Date" with respect to the initial registration
statement or the additional registration statement (if any) means the date
of the Effective Time thereof. The initial registration statement, as
amended at its Effective Time, including all information contained in the
additional registration statement (if any) and deemed to be a part of the
initial registration statement as of the Effective Time of the additional
registration statement pursuant to the General Instructions of the Form on
which it is filed and including all information (if any) deemed to be a
part of the initial registration statement as of its Effective Time
pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is hereinafter
referred to as the "Initial Registration Statement". The additional
registration statement, as amended at its Effective Time, including the
contents of the initial registration statement incorporated by reference
therein and including all information (if any) deemed to be a part of the
additional registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "Additional Registration
Statement". The Initial Registration Statement and the Additional
Registration Statement are hereinafter referred to collectively as the
"Registration Statements" and individually as a "Registration Statement".
The form of prospectus relating to the Offered Securities, as first filed
with the Commission pursuant to and in accordance with Rule 424(b) ("Rule
424(b)") under the Act or (if no such filing is required) as included in a
Registration Statement, is hereinafter referred to as the "Prospectus". No
document has been or will be prepared or distributed in reliance on Rule
434 under the Act.
(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the Effective
Date of the Initial Registration Statement, the Initial Registration
Statement conformed in all respects to the requirements of the Act and the
rules and regulations of the Commission (the "Rules and Regulations") and
did not include any untrue
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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, (B) on the Effective Date of the Additional Registration
Statement (if any), each Registration Statement conformed or will conform,
in all respects to the requirements of the Act and the Rules and
Regulations and did not include, or will not include, any untrue statement
of a material fact and did not omit, or will not omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and (C) on the date of this Agreement,
the Initial Registration Statement and, if the Effective Time of the
Additional Registration Statement is prior to the execution and delivery of
this Agreement, the Additional Registration Statement each conforms, and at
the time of filing of the Prospectus pursuant to Rule 424(b) or (if no such
filing is required) at the Effective Date of the Additional Registration
Statement in which the Prospectus is included, each Registration Statement
and the Prospectus will conform, in all respects to the requirements of the
Act and the Rules and Regulations, and neither of such documents includes,
or will include, any untrue statement of a material fact or omits, or will
omit, to state any material fact required to be stated therein or necessary
to make the statements therein not misleading. If the Effective Time of the
Initial Registration Statement is subsequent to the execution and delivery
of this Agreement: on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement and the Prospectus will
conform in all respects to the requirements of the Act and the Rules and
Regulations, neither of such documents will include any untrue statement of
a material fact or will omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading,
and no Additional Registration Statement has been or will be filed. The two
preceding sentences do not apply to statements in or omissions from a
Registration Statement or the Prospectus based upon written information
furnished to the Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that the only
such information is that described as such in Section 7(c) hereof.
(iii) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus; and the Company is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of
its business requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the condition
(financial or other), business, properties or results of operations of the
Company (a "Material Adverse Effect").
(iv) The Company does not have any subsidiaries.
(v) The Offered Securities and all other outstanding shares of capital
stock of the Company have been duly authorized and will, after payment
therefor in accordance herewith, be validly issued, fully paid and
nonassessable and conform to the description thereof contained in the
Prospectus; and the stockholders of the Company have no preemptive rights
with respect to the Securities, other than those that have been waived.
(vi) There are no contracts, agreements or understandings between the
Company and any person that would give rise to a valid claim against the
Company or any Underwriter for a brokerage commission, finder's fee or
other like payment in connection with the offering of the Offered
Securities.
(vii) 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 a Registration
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Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Act, except as
disclosed in the Registration Statements.
(viii) The Securities have been approved for listing subject to notice
of issuance on The Nasdaq Stock Market's National Market.
(ix) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required to be obtained or
made by the Company for the consummation of the transactions contemplated
by this Agreement in connection with the offer and sale of the Offered
Securities, except such as have been obtained and made under the Act and
such as may be required under state securities laws.
(x) The execution, delivery and performance of this Agreement, and the
consummation of the transactions herein contemplated will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any statute, any rule, regulation or order of any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company or any of its properties, or any agreement or
instrument to which the Company is a party or by which the Company is bound
or to which any of the properties of the Company is subject, or the charter
or by-laws of the Company, except for such breaches, violations or defaults
under any such agreements or instruments that would not have a Material
Adverse Effect.
(xi) This Agreement has been duly authorized, executed and delivered
by the Company.
(xii) The Company has good and marketable title to all properties and
assets owned by it, in each case free from liens, encumbrances and defects
that would materially affect the value thereof or materially interfere with
the use made or to be made thereof by it; and the Company holds any leased
real or personal property under valid and enforceable leases with no
exceptions that would materially interfere with the use made or to be made
thereof by it.
(xiii) The Company possesses adequate certificates, authorities or
permits issued by appropriate governmental agencies or bodies necessary to
conduct the business now operated by it and has not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the
Company, would individually or in the aggregate have a Material Adverse
Effect.
(xiv) No labor dispute with the employees of the Company exists or, to
the knowledge of the Company, is imminent that would have a Material
Adverse Effect.
(xv) The Company owns, possesses or can acquire on reasonable terms,
adequate trademarks, trade names and other rights to inventions, know-how,
patents, copyrights, confidential information and other intellectual
property (collectively, "intellectual property rights") necessary to
conduct the business now operated by it, or presently employed by it,
except for such intellectual property rights that the failure to so own,
possess or acquire would not individually or in the aggregate have a
Material Adverse Effect, and has not received any notice of infringement of
or conflict with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company would
individually or in the aggregate have a Material Adverse Effect.
(xvi) To the Company's knowledge, the Company is not in violation of
any statute, any rule, regulation, decision or order of any governmental
agency or body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to the
5
protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, "environmental laws"), does not own or
operate any real property contaminated with any substance that is subject
to any environmental laws, is not liable for any off-site disposal or
contamination pursuant to any environmental laws, and is not subject to any
claim relating to any environmental laws, which violation, contamination,
liability or claim would individually or in the aggregate have a Material
Adverse Effect; and the Company is not aware of any pending investigation
which might lead to such a claim.
(xvii) There are no pending actions, suits or proceedings against or
affecting the Company or any of its properties that, if determined
adversely to the Company, would individually or in the aggregate have a
Material Adverse Effect, or would materially and adversely affect the
ability of the Company to perform its obligations under this Agreement; and
no such actions, suits or proceedings are, to the Company's knowledge,
threatened or contemplated.
(xviii) The Company has in effect all regulatory licenses, permits,
authorizations, consents and approvals ("Licenses") required to be obtained
in order for the Company to conduct its business as presently conducted,
except for Licenses that the failure to obtain would not have a Material
Adverse Effect. The Federal Communications Commission ("FCC") has not
actively sought to regulate the type of business that is presently
conducted by the Company. The Company is not required to obtain any
Licenses or to file any tariffs for telecommunications services in the
States of New York, New Jersey or in any other State where the Company is
currently qualified to transact business, because the Company does not
offer or provide intrastate telecommunications services within the United
States. To the Company's knowledge, the Licenses obtained by the Company
have been duly and validly issued and are in full force and effect.
(xix) The financial statements, together with the related schedules
and notes thereto, included in each Registration Statement and the
Prospectus present fairly in all material respects the financial position
of the Company as of the dates shown and its results of operations and cash
flows for the periods shown, and such financial statements have been
prepared in conformity with the generally accepted accounting principles in
the United States applied on a consistent basis and the schedules included
in each Registration Statement present fairly in all material respects the
information required to be stated therein.
(xx) Since the date of the latest audited financial statements
included in the Prospectus there has been no material adverse change, nor
any development or event involving a prospective material adverse change,
in the condition (financial or other), business, properties or results of
operations of the Company, and there has been no dividend or distribution
of any kind declared, paid or made by the Company on any class of its
capital stock, except (a) accrued dividends payable in the form of shares
(or fractions thereof) of 10% PIK Series B Convertible Participating
Preferred Stock, par value $.01 per share ("Series B Preferred Stock"), at
an annual rate of 0.10 share of Series B Preferred Stock on each share of
Series B Preferred Stock outstanding and (b) any accretion of the Series A
Convertible Participating Preferred Stock, par value $.01 per share,
through a special liquidation preference dividend, each as provided in the
Company's [Restated Certificate of Incorporation].
(xxi) The Company is not, and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, will not be, an "investment company" as
defined in the Investment Company Act of 1940.
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(b) Each Selling Stockholder severally represents and warrants to, and
agrees with, the several Underwriters that:
(i) Such Selling Stockholder has, and on each Optional Closing Date
hereinafter mentioned on which Optional Securities are purchased from the
Selling Stockholders will have, valid and unencumbered title to the
Optional Securities to be delivered by such Selling Stockholder on such
Optional Closing Date and full right, power and authority to enter into
this Agreement and to sell, assign, transfer and deliver the Optional
Securities to be delivered by such Selling Stockholder on such Optional
Closing Date hereunder; and upon the delivery of and payment for the
Optional Securities on such Optional Closing Date hereunder the several
Underwriters will acquire valid and unencumbered title to the Optional
Securities to be delivered by such Selling Stockholder on such Optional
Closing Date.
(ii) If any Optional Securities are purchased by the several
Underwriters pursuant to this Agreement: (A) if the Effective Time of the
Initial Registration Statement is prior to the execution and delivery of
this Agreement: (x) on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement conformed in all respects to
the requirements of the Act and the Rules and Regulations and did not
include 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, (y) on the Effective Date of the
Additional Registration Statement (if any), each Registration Statement
conformed, or will conform, in all respects to the requirements of the Act
and the Rules and Regulations did not include, or will not include, any
untrue statement of a material fact and did not omit, or will not omit, to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and (z) on the date of this
Agreement, the Initial Registration Statement and, if the Effective Time of
the Additional Registration Statement is prior to the execution and
delivery of this Agreement, the Additional Registration Statement each
conforms, and at the time of filing of the Prospectus pursuant to Rule
424(b) or (if no such filing is required) at the Effective Date of the
Additional Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform, in all respects to
the requirements of the Act and the Rules and Regulations, and neither of
such documents includes, or will include, any untrue statement of a
material fact or omits, or will omit, to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading; and (B) if the Effective Time of the Initial Registration
Statement is subsequent to the execution and delivery of this Agreement: on
the Effective Date of the Initial Registration Statement, the Initial
Registration Statement and the Prospectus will conform in all respects to
the requirements of the Act and the Rules and Regulations, neither of such
documents will include any untrue statement of a material fact or will omit
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading. The two preceding sentences
apply only to the extent that any statements in or omissions from a
Registration Statement or the Prospectus are based on written information
furnished to the Company by such Selling Stockholder specifically for use
therein.
(iii) There are no contracts, agreements or understandings between
such Selling Stockholder and any person that would give rise to a valid
claim against such Selling Stockholder or any Underwriter for a brokerage
commission, finder's fee or other like payment in connection with the
offering of the Optional Securities.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company, at a purchase price of $ per share, that number of Firm
Securities set forth opposite the name of such Underwriter in Schedule B hereto.
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The Company will deliver the Firm Securities to the Representatives for the
accounts of the Underwriters, against payment of the purchase price in Federal
(same day) funds by wire transfer to an account at a bank reasonably acceptable
to Credit Suisse First Boston Corporation ("CSFBC") drawn to the order of the
Company, at the office of Cravath, Swaine & Xxxxx, Worldwide Plaza, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, X.X. 00000-0000, at 10:00 a.m., New York time, on February ,
1998, or at such other time not later than seven full business days thereafter
as CSFBC and the Company determine, such time being herein referred to as the
"First Closing Date". The certificates for the Firm Securities so to be
delivered will be in definitive form, in such denominations and registered in
such names as CSFBC requests, and will be made available for checking and
packaging at the above office of Cravath, Swaine & Xxxxx at least 24 hours prior
to the First Closing Date.
In addition, upon written notice from CSFBC given to the Company and the
Selling Stockholders from time to time not more than 30 days subsequent to the
date of the Prospectus, the Underwriters may purchase all or less than all of
the Optional Securities at the purchase price per Security to be paid for the
Firm Securities; provided that, if any shares of Optional Securities are
purchased by the Underwriters, (i) up to and including an aggregate of [ ]
shares of Optional Securities shall be purchased first from the Selling
Stockholders and (ii) the remaining [ ] shares of Optional Securities shall
be purchased from the Company. The Selling Stockholders agree, severally and not
jointly, to sell to the Underwriters the respective numbers of Optional
Securities obtained by multiplying the number of shares of Optional Securities
specified in such notice(s) up to and including an aggregate of [ ] shares of
Optional Securities by a fraction the numerator of which is the number of shares
set forth opposite the names of such Selling Stockholders in Schedule A hereto
under the caption "Number of Optional Securities to be Sold" and the denominator
of which is [ ] (subject to adjustment by CSFBC to eliminate fractions); and
the Company agrees to sell to the Underwriters the number of shares of Optional
Securities specified in such notice(s) up to and including [ ] shares of
Optional Securities, provided that the Underwriters shall have purchased at such
time an aggregate of [ ] shares of Optional Securities from the Selling
Stockholders. Such Optional Securities shall be purchased from the Company and
each Selling Stockholder for the account of each Underwriter in the same
proportion as the number of Firm Securities set forth opposite such
Underwriter's name bears to the total number of Firm Securities (subject to
adjustment by CSFBC to eliminate fractions) and may be purchased by the
Underwriters only for the purpose of covering over-allotments made in connection
with the sale of the Firm Securities. No Optional Securities shall be sold or
delivered unless the Firm Securities previously have been, or simultaneously
are, sold and delivered. The right to purchase the Optional Securities or any
portion thereof may be exercised from time to time and to the extent not
previously exercised may be surrendered and terminated at any time upon notice
by CSFBC to the Company and the Selling Stockholders.
Certificates in negotiable form for the Optional Securities to be sold
by the Selling Stockholders hereunder have been placed, prior to the execution
of this Agreement, in custody, for delivery under this Agreement, under Custody
Agreements made with Xxxxxx Xxxxxx Flattau & Klimpl, LLP, as custodian
("Custodian"). Each Selling Stockholder agrees that the shares represented by
the certificates held in custody for the Selling Stockholders under such Custody
Agreements are subject to the interests of the Underwriters hereunder, that the
arrangements made by the Selling Stockholders for such custody are to that
extent irrevocable, and that the obligations of the Selling Stockholders
hereunder shall not be terminated by operation of law, whether by the death of
any individual Selling Stockholder or the occurrence of any other event, or in
the case of a trust, by the death of any trustee or trustees or the termination
of such trust. If any individual Selling Stockholder or any such trustee or
trustees should die, or if any other such event should occur, or if any of such
trusts should terminate, before the delivery of the Optional Securities
hereunder, certificates for such Optional Securities shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as if
such death or other event or termination had not occurred, regardless of whether
or not the Custodian shall have received notice of such death or other event or
termination.
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Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company and the Custodian
will deliver the Optional Securities being purchased on each Optional Closing
Date to the Representatives for the accounts of the several Underwriters,
against payment of the purchase price therefor in Federal (same day) funds by
wire transfer to an account at a bank reasonably acceptable to CSFBC drawn to
the order of the Company in the case of [ ] Optional Securities, Xxxxx X.
Xxxxxx in the case of [ ] Optional Securities, Xxxxxxx X. Xxxxx in the case
of [ ] Optional Securities and Xxxxx Xxxxxxxx, in the case of [ ] Optional
Securities, at the above office of Cravath, Swaine & Xxxxx. The certificates for
the Optional Securities being purchased on each Optional Closing Date will be in
definitive form, in such denominations and registered in such names as CSFBC
requests upon reasonable notice prior to such Optional Closing Date and will be
made available for checking and packaging at the above office of Cravath, Swaine
& Xxxxx at a reasonable time in advance of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several Underwriters
propose to offer the Offered Securities for sale to the public as set forth in
the Prospectus.
5. Certain Agreements of the Company and the Selling Stockholders. (a) The
Company agrees with the several Underwriters and the Selling Stockholders that:
(i) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Company will
file the Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by CSFBC,
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the
second business day following the execution and delivery of this Agreement
or (B) the fifteenth business day after the Effective Date of the Initial
Registration Statement.
The Company will advise CSFBC promptly of any such filing pursuant to
Rule 424(b). If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement and an additional
registration statement is necessary to register a portion of the Offered
Securities under the Act but the Effective Time thereof has not occurred as
of such execution and delivery, the Company will file the additional
registration statement or, if filed, will file a post-effective amendment
thereto with the Commission pursuant to and in accordance with Rule 462(b)
on or prior to 10:00 p.m., New York time, on the date of this Agreement or,
if earlier, on or prior to the time the Prospectus is printed and
distributed to any Underwriter, or will make such filing at such later date
as shall have been consented to by CSFBC.
(ii) The Company will advise CSFBC promptly of any proposal to amend
or supplement the initial or any additional registration statement as filed
or the related prospectus or the Initial Registration Statement, the
Additional Registration Statement (if any) or the Prospectus and will not
effect such amendment or supplementation without CSFBC's consent; and the
Company will also advise CSFBC promptly of the effectiveness of each
Registration Statement (if its Effective Time is subsequent to the
execution and delivery of this Agreement) and of any amendment or
supplementation of a Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect of a
Registration Statement and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(iii) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a
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result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act, the
Company will promptly notify CSFBC of such event and will promptly prepare
and file with the Commission, at its own expense, an amendment or
supplement which will correct such statement or omission or an amendment
which will effect such compliance. Neither CSFBC's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
(iv) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the Effective Date of the Initial Registration
Statement (or, if later, the Effective Date of the Additional Registration
Statement) which will satisfy the provisions of Section 11(a) of the Act.
For the purpose of the preceding sentence, "Availability Date" means the
45th day after the end of the fourth fiscal quarter following the fiscal
quarter that includes such Effective Date, except that, if such fourth
fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth fiscal
quarter.
(v) The Company will furnish to the Representatives copies of each
Registration Statement (four of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as a
prospectus relating to the Offered Securities is required to be delivered
under the Act in connection with sales by any Underwriter or dealer, the
Prospectus and all amendments and supplements to such documents, in each
case in such quantities as CSFBC requests. The Prospectus shall be so
furnished on or prior to 3:00 p.m., New York time, on the business day
following the later of the execution and delivery of this Agreement or the
Effective Time of the Initial Registration Statement. All other such
documents shall be so furnished as soon as available. The Company will pay
the expenses of printing and distributing to the Underwriters all such
documents.
(vi) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC
designates and will continue such qualifications in effect so long as
required for the distribution.
(vii) During the period of 10 years hereafter, the Company will
furnish to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year; and the Company
will furnish to the Representatives (A) as soon as available, a copy of
each report and any definitive proxy statement of the Company filed with
the Commission under the Securities Exchange Act of 1934 or mailed to
stockholders, and (B) from time to time, such other information concerning
the Company as CSFBC may reasonably request.
(viii) For a period of 180 days after the date of the Prospectus, the
Company will not (A) offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, or file with the Commission a
registration statement under the Act relating to, any additional shares of
the Securities or securities convertible into or exchangeable or
exercisable for any shares of Securities, or publicly disclose the
intention to make any such offer, sale, pledge, disposition or filing, or
(B) enter into any swap or other agreement that transfers, in whole or in
part, any of the economic consequences of ownership of such shares of
Securities, whether any transaction described in clause (A) or (B) above is
to be settled by delivery of shares of Securities or such other securities,
in cash or otherwise, in each case without the prior written consent of
CSFBC,
10
except (x) issuances of Securities pursuant to the conversion or exchange
of convertible or exchangeable securities or the exercise of warrants or
options, in each case outstanding on the date hereof, and (y) grants of
employee stock options pursuant to the terms of the Company's Amended and
Restated 1995 Stock Option Plan, issuances of Securities pursuant to the
exercise of such options (the "Plan Shares") and the filing of a
registration statement on Form S-8 under the Act to register the Plan
Shares.
(ix) The Company agrees with the several Underwriters that the Company
will pay all expenses incident to the performance of the obligations of the
Company and the Selling Stockholders, as the case may be, under this
Agreement, for any filing fees and other expenses (including fees and
disbursements of counsel) in connection with qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC
designates and the printing of memoranda relating thereto, for the filing
fee incident to, and the reasonable fees and disbursements of counsel to
the Underwriters in connection with, the review by the National Association
of Securities Dealers, Inc. of the Offered Securities, for any travel
expenses of the Company's officers and employees and any other expenses of
the Company in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities, for any transfer taxes on
the sale by the Selling Stockholders of the Offered Securities to the
Underwriters and for expenses incurred in distributing preliminary
prospectuses and the Prospectus (including any amendments and supplements
thereto) to the Underwriters.
(b) Each Selling Stockholder agrees, severally and not jointly, with
the several Underwriters and the Company that:
(i) Such Selling Stockholder shall deliver to CSFBC, Attention:
Transactions Advisory Group, on or prior to the First 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).
(ii) Such Selling Stockholder shall, for a period of 180 days after
the date of the Prospectus, not (A) offer, sell, contract to sell, pledge
or otherwise dispose of, directly or indirectly, any shares of the
Securities or securities convertible into or exchangeable or exercisable
for any shares of Securities, or publicly disclose the intention to make
any such offer, sale, contract to sell, pledge or disposition, or (B) enter
into any swap or other agreement that transfers, in whole or in part, any
of the economic consequences of ownership of such shares of Securities,
whether any transaction described in clause (A) or (B) above is to be
settled by delivery of shares of Securities or such other securities, in
cash or otherwise, in each case without the prior written consent of CSFBC;
provided, however, that (x) such Selling Stockholder may sell up to the
number of Optional Securities set forth opposite such Selling Stockholder's
name in Schedule A hereto and (y) such Selling Stockholder may make bona
fide gifts or similar transfers to or for the benefit, directly or
indirectly, of members of such Selling Stockholder's family for estate
planning purposes provided that such gifts or transfers are made other than
on any securities exchange or in the over-the-counter market and that such
donees or transferees execute an agreement for the benefit of the Company
and the Underwriters containing terms substantially similar to the
foregoing.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholders herein, to
the accuracy of the statements
11
of Company officers made pursuant to the provisions hereof, to the performance
by the Company and the Selling Stockholders of their obligations hereunder and
to the following additional conditions precedent:
(a) The Representatives shall have received a letter, dated the date
of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on the date of this Agreement or, if the Effective Time
of the Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, shall be prior to the filing of the amendment
or post-effective amendment to the registration statement to be filed
shortly prior to such Effective Time), of Price Waterhouse LLP, confirming
that they are independent public accountants within the meaning of the Act
and the applicable published Rules and Regulations thereunder and stating
to the effect that:
(i) in their opinion the financial statements and schedules
examined by them and included in the Registration Statements comply as
to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
(ii) on the basis of a reading of the latest available interim
financial statements of the Company, inquiries of officials of the
Company who have responsibility for financial and accounting matters
and other specified procedures, nothing came to their attention that
caused them to believe that:
(A) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than three business days prior to the date of this Agreement,
there was any change in the capital stock or any increase in
long-term debt of the Company or, at the date of the latest
available balance sheet read by such accountants, there was any
decrease in net current assets (working capital) or stockholders'
equity, as compared with amounts shown on the latest balance
sheet included in the Prospectus; or
(B) for the period from the closing date of the latest
statement of operations included in the Prospectus to the closing
date of the latest available statement of operations read by such
accountants there were any decreases or increases, as compared
with the corresponding period of the previous year and with the
period of corresponding length ended the date of the latest
statement of operations included in the Prospectus, in total
revenues, net or total amounts of loss, respectively; and
(iii) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Registration Statements (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the regularly maintained general accounting records
of the Company subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "Registration Statements" shall mean the Initial Registration
Statement as proposed to be amended by the amendment or post-effective
amendment to be filed shortly prior to its Effective Time, (ii) if the
Effective Time of the
12
Initial Registration Statement is prior to the execution and delivery of
this Agreement but the Effective Time of the Additional Registration
Statement is subsequent to such execution and delivery, "Registration
Statements" shall mean the Initial Registration Statement and the
additional registration statement as proposed to be filed or as proposed to
be amended by the post-effective amendment to be filed shortly prior to its
Effective Time, and (iii) "Prospectus" shall mean the prospectus included
in the Registration Statements.
(b) If the Effective Time of the Initial Registration Statement is not
prior to the execution and delivery of this Agreement, such Effective Time
shall have occurred not later than 10:00 p.m., New York time, on the date
of this Agreement or such later date as shall have been consented to by
CSFBC. If the Effective Time of the Additional Registration Statement (if
any) is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 p.m., New York
time, on the date of this Agreement or, if earlier, the time the Prospectus
is printed and distributed to any Underwriter, or shall have occurred at
such later date as shall have been consented to by CSFBC. If the Effective
Time of the Initial Registration Statement is prior to the execution and
delivery of this Agreement, the Prospectus shall have been filed with the
Commission in accordance with the Rules and Regulations and Section 5(a) of
this Agreement. Prior to such Closing Date, no stop order suspending the
effectiveness of a Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of any Selling Stockholder, the Company or the Representatives,
shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company which, in the
judgment of a majority in interest of the Underwriters including the
Representatives, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the public offering or the sale
of and payment for the Offered Securities; (ii) any downgrading in the
rating of any debt securities or preferred stock of the Company by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that any
such organization has under surveillance or review its rating of any debt
securities or preferred stock of the Company (other than an announcement
with positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating); (iii) any suspension or limitation
of trading in securities generally on the New York Stock Exchange, or any
setting of minimum prices for trading on such exchange, or any suspension
of trading of any securities of the Company on any exchange or in the
over-the-counter market; (iv) any banking moratorium declared by U.S.
Federal or New York authorities; or (v) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war
by Congress or any other substantial national or international calamity or
emergency if, in the judgment of a majority in interest of the Underwriters
including the Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment
for the Offered Securities.
13
(d) The Representatives shall have received written opinions, dated
such Closing Date, of Xxxxxx Xxxxxx Flattau & Klimpl, LLP, special counsel
for the Company, Wiley, Rein & Fielding, special FCC/regulatory counsel for
the Company, and Xxxxx X. Xxxxx, Vice President--Business Affairs and
General Counsel of the Company(1) to the effect that:
(i) the Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification, except where
the failure to be so qualified would not have a Material Adverse
Effect;
(ii) the Offered Securities delivered on such Closing Date and
all other outstanding shares of the Common Stock of the Company have
been duly authorized and, after payment therefor in accordance
herewith, will be validly issued, are fully paid and nonassessable and
conform to the description thereof contained in the Prospectus; and
the stockholders of the Company have no statutory preemptive rights
and, to the best of such counsel's knowledge after due inquiry, no
contractual preemptive rights with respect to the Securities, other
than those that have been waived;
(iii) there are no contracts, agreements or understandings known
to such counsel 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, except as described in the Registration Statements;
(iv) the Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940;
(v) no consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required to be
obtained or made by the Company for the consummation of the
transactions contemplated by this Agreement in connection with the
sale of the Offered Securities, except such as have been obtained and
made under the Act and except such as may be required under state
securities laws (as to which such counsel need not express any
opinion);
(vi) the execution, delivery and performance of this Agreement
and the consummation of the transactions herein or therein
contemplated will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any statute,
any rule, regulation or, to the best of such counsel's knowledge after
due inquiry, order of any governmental agency or body or any court
having jurisdiction over the Company or any of its properties, or, to
the best of such counsel's knowledge after due inquiry,
-----------------
(1) The requested opinions may be allocated among the three opinion-givers as
they see fit, provided that Xxxxxx Xxxxxx is requested at a minimum to render
the opinions in clauses (vi) and (vii) and Xx. Xxxxx is requested at a minimum
to render a "10b-5" opinion.
14
any agreement or instrument to which the Company is a party or by
which the Company is bound or to which any of the properties of the
Company is subject, or the charter or by-laws of the Company, except
for such breaches, violations and defaults under any such agreements
or instruments that would not have a Material Adverse Effect;
(vii) the Initial Registration Statement was declared effective
under the Act as of the date and time specified in such opinion, the
Additional Registration Statement (if any) was filed and became
effective under the Act as of the date and time (if determinable)
specified in such opinion, the Prospectus either was filed with the
Commission pursuant to the subparagraph of Rule 424(b) specified in
such opinion on the date specified therein or was included in the
Initial Registration Statement or the Additional Registration
Statement (as the case may be), and, to the best knowledge of such
counsel after due inquiry, no stop order suspending the effectiveness
of a Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act, and each Registration Statement and the
Prospectus, and each amendment or supplement thereto, as of their
respective effective or issue dates, complied as to form in all
material respects with the requirements of the Act and the Rules and
Regulations; such counsel have no reason to believe that any part of a
Registration Statement or any amendment thereto, as of its Effective
Date or as of such Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading (except as to the financial statements and other financial
and accounting data contained therein, as to which such counsel need
not express any opinion); or that the Prospectus or any amendment or
supplement thereto, as of its issue date or as of such Closing Date,
contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading;
(viii) the descriptions in the Registration Statements and
Prospectus of statutes, legal and governmental proceedings and
contracts and other documents, including under "Business--Governmental
Regulation", are accurate and fairly present the information required
to be shown; and to the best of such counsel's knowledge after due
inquiry, there are no legal or governmental proceedings or statutes or
regulations required to be described in a Registration Statement or
the Prospectus which are not described as required or of any contracts
or documents of a character required to be described in a Registration
Statement or the Prospectus or to be filed as exhibits to a
Registration Statement which are not described and filed as required;
(ix) this Agreement has been duly authorized, executed and
delivered by the Company; and
(x) the Company has in effect all Licenses required to be
obtained in order for the Company to conduct its business as presently
conducted, except for Licenses that the failure to obtain would not
have a Material Adverse Effect. The FCC has not actively sought to
regulate the type of business that is presently conducted by the
Company as described in the Registration Statements and the
Prospectus. The Company is not required to obtain any Licenses or to
file any tariffs for telecommunications services in the States of New
York, New Jersey or in any other State where the Company is currently
qualified to transact business, because the Company does not offer or
provide intrastate telecommunications services within the United
States. To the best of such counsel's knowledge after due inquiry, the
15
Licenses obtained by the Company have been duly and validly issued and
are in full force and effect.
(e) the Representatives shall have received the opinion contemplated
in the Power of Attorney executed and delivered by each Selling Stockholder
and an opinion, dated such Optional Closing Date, of Xxxxxx Xxxxxx Flattau
& Klimpl, LLP, counsel for the Selling Stockholders, to the effect that:
(i) to the best of such counsel's knowledge after due inquiry,
each Selling Stockholder had valid and unencumbered title to the
Offered Securities delivered by such Selling Stockholder on such
Optional Closing Date and, assuming no knowledge by any of the several
Underwriters of any adverse claims, the several Underwriters have
acquired valid and unencumbered title to the Offered Securities
purchased by them from the Selling Stockholders on such Optional
Closing Date hereunder;
(ii) no consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required to be
obtained or made by any Selling Stockholder for the consummation of
the transactions contemplated by the Custody Agreements or this
Agreement in connection with the offer and sale of the Offered
Securities sold by the Selling Stockholders, except such as have been
obtained and made under the Act and except such as may be required
under state securities laws (as to which such counsel need not express
any opinion);
(iii) to the best of such counsel's knowledge after due inquiry,
there are no contracts, agreements or understandings between such
Selling Stockholder and any person that would give rise to a valid
claim against such Selling Stockholder or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection
with the offering of the Optional Securities;
(iv) the execution, delivery and performance of the Custody
Agreements and this Agreement, and the consummation of the
transactions therein and herein contemplated will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation, or to
the best of such counsel's knowledge after due inquiry, order of any
governmental agency or body or any court having jurisdiction over any
Selling Stockholder or any of his properties, or, to the best of such
counsel's knowledge after due inquiry, any agreement or instrument to
which any Selling Stockholder is a party or by which any Selling
Stockholder is bound or to which any of the properties of any Selling
Stockholder is subject;
(v) the Custody Agreement with respect to each Selling
Stockholder has been duly executed and delivered by such Selling
Stockholder and constitutes a valid and legally binding obligation of
each such Selling Stockholder enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and
(vi) this Agreement has been duly executed and delivered by each
Selling Stockholder.
(f) The Representatives shall have received from Cravath, Swaine &
Xxxxx, counsel for the Underwriters, such opinion or opinions, dated such
Closing Date, with respect to the
16
incorporation of the Company, the validity of the Offered Securities
delivered on such Closing Date, the Registration Statements, the Prospectus
and other related matters as the Representatives may require, and the
Selling Stockholders and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters.
(g) The Representatives shall have received a certificate, dated such
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that: the representations and warranties of the Company in this Agreement
are true and correct; the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to such Closing Date; no stop order suspending the
effectiveness of any Registration Statement has been issued and no
proceedings for that purpose have been instituted or are contemplated by
the Commission; the Additional Registration Statement (if any) satisfying
the requirements of subparagraphs (1) and (3) of Rule 462(b) was filed
pursuant to Rule 462(b), including payment of the applicable filing fee in
accordance with Rule 111(a) or (b) under the Act, prior to the time the
Prospectus was printed and distributed to any Underwriter; and, subsequent
to the date of the most recent financial statements in the Prospectus,
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company.
(h) The Representatives shall have received a letter, dated such
Closing Date, of Price Waterhouse LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred to
in such subsection will be a date not more than three business days prior
to such Closing Date for the purposes of this subsection.
The Selling Stockholders and the Company will furnish the Representatives with
such conformed copies of such opinions, certificates, letters and documents as
the Representatives reasonably request. CSFBC may in its sole discretion waive
on behalf of the Underwriters compliance with any conditions to the obligations
of the Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (c) below; and provided, further,
that, with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from any preliminary prospectus, the indemnity
agreement contained in this subsection (a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Offered Securities concerned, to the extent that a
prospectus relating to such Offered Securities was required to be delivered by
such Underwriter under the Act in connection with such purchase and any such
loss, claim, damage or liability of such Underwriter results from the fact that
there was not sent or given to such person, at or prior to the
17
written confirmation of the sale of such Offered Securities to such person, a
copy of the Prospectus if the Company had previously furnished copies thereof to
such Underwriter.
(b) Each Selling Stockholder, severally and not jointly, will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with information relating to such Selling Stockholder furnished in
writing by or on behalf of such Selling Stockholder expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that each Selling
Stockholder's liability under this subsection (b) is limited to the amount of
the proceeds of the sale of Offered Securities by such Selling Stockholder.
(c) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company and each Selling Stockholder against any losses, claims,
damages or liabilities to which the Company or such Selling Stockholder may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company by such Underwriter through the Representatives specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company and each Selling Stockholder in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred, it being understood and agreed that the only such information
furnished by any Underwriter consists of the following information in the
Prospectus furnished on behalf of each Underwriter: the last paragraph at the
bottom of the cover page concerning the terms of the offering by the
Underwriters, the legend concerning over-allotments and stabilizing on the
inside front cover page, the concession and reallowance figures appearing in the
fourth paragraph under the caption "Underwriting".
(d) Promptly after receipt by an indemnified party under this Section 7 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under
subsection (a), (b) or (c) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party,
except to the extent that the failure or delay in giving such notification
materially prejudices the indemnifying party's defense of such claim or action
or is otherwise provided under subsections (a), (b) or (c) above. In case any
such action is brought against any indemnified party and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel chosen by such indemnifying party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under
18
this Section 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that if the indemnified party
concludes that there are legal defenses available to the indemnified party that
conflict with those available to the indemnifying party, the indemnified party
shall be entitled to select separate counsel to assert such legal defenses and
to otherwise participate in the defense of the indemnified party and the
indemnifying party shall be liable to the indemnified party under this Section 7
for any legal or other expenses incurred by the indemnified party in connection
with the defense thereof. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(e) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a), (b) or
(c) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a), (b) or (c) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other from the offering of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholders on
the one hand and the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Company and the Selling Stockholders bear to the total underwriting discounts
and commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Selling
Stockholders or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (e).
Notwithstanding the provisions of this subsection (e), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(e) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders under this
Section shall be in addition to any liability which the Company and the Selling
Stockholders may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company, to each officer of the Company who has signed a
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
19
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Company and the Selling Stockholders for
the purchase of such Offered Securities by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate number of shares of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements satisfactory to
CSFBC, the Company and the Selling Stockholders for the purchase of such Offered
Securities by other persons are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Stockholders, except as
provided in Section 9 (provided that if such default occurs with respect to
Optional Securities after the First Closing Date, this Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). As used in this Agreement, the term "Underwriter" includes
any person substituted for an Underwriter under this Section. Nothing herein
will relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Selling Stockholders, of the Company or its officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, any Selling
Stockholder, the Company or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If this Agreement is terminated pursuant to Section
8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by them pursuant to Section 5, and the
respective obligations of the Company, the Selling Stockholders, and the
Underwriters pursuant to Section 7 shall remain in effect, and if any Offered
Securities have been purchased hereunder the representations and warranties in
Section 2 and all obligations under Section 5 shall also remain in effect. If
the purchase of the Offered Securities by the Underwriters is not consummated
for any reason other than solely because of the termination of this Agreement
pursuant to Section 8 or the occurrence of any event specified in clause (iii),
(iv) or (v) of Section 6(c), the Company will reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representatives, c/o Credit Suisse First Boston Corporation, Eleven Madison
Avenue, New York, N.Y. 10010-3629, Attention: Investment Banking
Department--Transactions Advisory Group, or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at Icon CMT Corp., 0000
Xxxxxx Xxxxxxxxx, Xxxxxxxxx, X.X. 00000, Attention: Chief Executive Officer, or,
if sent to any Selling Stockholder, will be mailed, delivered or telegraphed and
confirmed to such Selling Stockholder at Icon CMT Corp., 0000 Xxxxxx Xxxxxxxxx,
Xxxxxxxxx, X.X. 00000, and in the case of any communications hereunder sent to
the Company or to any Selling Stockholder, with a copy to Xxxxxxx Xxxxxxxx,
Esq., Xxxxxx Xxxxxx Flattau & Klimpl, LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, X.X. 00000; provided, however, that any notice to an Underwriter pursuant
to Section 7 will be mailed, delivered or telegraphed and confirmed to such
Underwriter.
20
11. Successors. This Agreement will enure to the benefit of and be binding
upon the parties hereto and their respective personal representatives and
successors and the officers and directors and controlling persons referred to in
Section 7, and no other person will have any right or obligation hereunder.
12. Representation. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Representatives jointly or by
CSFBC will be binding upon all the Underwriters. [Attorney-in-Fact] will act for
the Selling Stockholders in connection with such transactions, and any action
under or in respect of this Agreement taken by [Attorney-in-Fact] will be
binding upon all the Selling Stockholders.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.
The Company hereby submits to the nonexclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement among the Selling
Stockholders, the Company and the several Underwriters in accordance with its
terms.
Very truly yours,
ICON CMT CORP.,
By
--------------------------------
Name:
Title:
SELLING STOCKHOLDERS,
----------------------------------
Xxxxx X. Xxxxxx
----------------------------------
Xxxxxxx X. Xxxxx
----------------------------------
Xxxxx Xxxxxxxx
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
21
CREDIT SUISSE FIRST BOSTON CORPORATION
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES
CORPORATION
Acting on behalf of themselves and as
the Representatives of the several
Underwriters.
By CREDIT SUISSE FIRST BOSTON CORPORATION
By
-------------------------------------
Name:
Title:
SCHEDULE A
Number of Optional
Selling Stockholder Securities to be Sold
------------------- ---------------------
Xxxxx X. Xxxxxx .....................................
Xxxxxxx X. Xxxxx....................................
Xxxxx Xxxxxxxx ......................................
--------------
Total ...............................
==============
SCHEDULE B
Number of
Firm Securities
Underwriter to be Purchased
----------- ---------------
Credit Suisse First Boston Corporation ................
BancAmerica Xxxxxxxxx Xxxxxxxx.........................
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation ...
--------------
Total .................................
==============
