Exhibit 1.1
12,500,000 SHARES
BIRCH TELECOM, INC.
COMMON STOCK
FORM OF UNDERWRITING AGREEMENT
April __, 2000
XXXXXX BROTHERS INC.
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, XXXXXX AND XXXXXXXX
SECURITIES CORPORATION
FIRST UNION SECURITIES, INC.
X. X. XXXXXX SECURITIES INC.
XXXXXX XXXXXX PARTNERS LLC
FIDELITY CAPITAL MARKETS,
A DIVISION OF NATIONAL
FINANCIAL SERVICES CORPORATION
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Birch Telecom, Inc., a Delaware corporation (the "Company"),
proposes to sell 12,500,000 shares (the "Firm Stock") of the Company's Common
Stock, par value $.001 per share (the "Common Stock"). In addition, the Company
proposes to grant to the Underwriters named in Schedule 1 hereto (the
"Underwriters") an option to purchase up to an additional 1,875,000 shares of
the Common Stock on the terms and for the purposes set forth in Section 2 (the
"Option Stock"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "Stock." This is to confirm the agreement
concerning the purchase of the Stock from the Company by the Underwriters named
in Schedule 1 hereto (the "Underwriters").
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY.
The Company represents, warrants and agrees that:
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(a) A registration statement on Form S-1, and amendments thereto,
with respect to the Stock have (i) been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended
(the "Securities Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, (ii) been filed with the Commission under the Securities Act
and (iii) become effective under the Securities Act. Copies of such
registration statement and the amendments to such registration statement
have been delivered by the Company to you as the representatives (the
"Representatives") of the Underwriters. As used in this Agreement,
"Effective Time" means the date and the time as of which such registration
statement, or the most recent post-effective amendment thereto, if any,
was declared effective by the Commission; "Effective Date" means the date
of the Effective Time of such registration statement; "Preliminary
Prospectus" means each prospectus included in such registration statement,
or amendments thereof, before it became effective under the Securities Act
and any prospectus filed with the Commission by the Company with the
consent of the Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "Registration Statement" means such registration statement,
as amended at its Effective Time, including all information contained in
the final prospectus filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations in accordance with Section 5(a) hereof and
deemed to be a part of the Registration Statement as of the Effective Time
pursuant to paragraph (b) of Rule 430A of the Rules and Regulations; and
"Prospectus" means such final prospectus, as first filed with the
Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Rules
and Regulations. If the Company has filed an abbreviated registration
statement to register additional shares of Common Stock pursuant to Rule
462(b) under the Securities Act (the "Rule 462 Registration Statement"),
then any reference herein to the term "Registration Statement" shall be
deemed to include such Rule 462 Registration Statement. The Commission has
not issued any order preventing or suspending the use of any Preliminary
Prospectus.
(b) (i) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or the
Prospectus, when they become effective or are filed with the Commission,
as the case may be, will conform, in all material respects to the
requirements of the Securities Act and the Rules and Regulations and do
not and will not, as of the applicable effective date (as to the
Registration Statement and any amendment thereto) and as of the applicable
filing date (as to the Prospectus and any amendment or supplement thereto)
contain 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; PROVIDED that no representation or
warranty is made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein.
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(ii) The Prospectus, any Preliminary Prospectus and any
further amendments or supplements thereto, at their respective times of
issuance and at the closing date, complied and will comply in all material
respects with any applicable laws or regulations of foreign jurisdictions
in which the Prospectus and Preliminary Prospectus, as amended or
supplemented, if applicable, are distributed in connection with the offer
and sale of the Directed Shares (as hereinafter defined).
(c) The Company and each of its subsidiaries (as defined in Section
16) have been duly incorporated or organized and are validly existing as
corporations, limited liability companies or limited partnerships in good
standing under the laws of their respective jurisdictions of incorporation
or organization, are duly qualified to do business and are in good
standing as foreign corporations, limited liability companies or limited
partnerships in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses requires
such qualifications except where the failure to be so qualified would not
have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries
taken as a whole (A "Material Adverse Effect") and have all corporate,
limited liability company or limited partnership power and authority
necessary to own or hold their respective properties and to conduct the
businesses as described in the Registration statement; and none of the
subsidiaries of the Company, except for Birch Telecom of Missouri, Inc.,
Birth Telecom of Kansas, Inc. and Birch Telecom of Texas Ltd., LLP, is a
"significant subsidiary" as such term is defined in Rule 405 of the Rules
and Regulations..
(d) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and validly issued, are fully paid
and non-assessable and conform to the description thereof contained in the
Prospectus; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly authorized and validly issued and
are fully paid and non-assessable and (except for directors' qualifying
shares and except as set forth in the Registration Statement with respect
to shares subject to liens under the Amended and Restated Credit
Agreement, dated as of February 2, 2000, by and among the Company, Birch
Telecom Finance, Inc., Xxxxxx Brothers Inc., Xxxxxx Commercial Paper Inc.,
Bankers Trust Company and Bank of America, Inc., as agents and lenders,
and the other lenders party thereto) are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or
claims.
(e) The unissued shares of the Stock to be issued and sold by the
Company to the Underwriters hereunder have been duly authorized and, when
issued and delivered against payment therefor as provided herein, will be
validly issued, fully paid and non-assessable; and the Stock will conform
to the description thereof contained in the Prospectus.
(f) This Agreement has been duly authorized, executed and delivered
by the Company.
(g) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement.
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(h) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will
not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute (including with the giving of notice or
lapse of time of both) a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of the properties or
assets of the Company or any of its subsidiaries is subject, except for
such conflicts, breaches or violations that would not have a Material
Adverse Effect, nor will such actions result in any violation of (i) the
provisions of the charter or by-laws of the Company or any of its
subsidiaries or (ii) any statute or any order, rule or regulation of any
court, arbitrator, regulatory body, administrative agency or other
governmental body or agency (including, without limitation, the Federal
Communications Commission (the "FCC") or any state regulatory agency with
direct regulatory jurisdiction over telecommunications matters in any
state in which the Company and any of its subsidiaries provides services
(each, a "State Regulatory Agency")) having jurisdiction over the Company
or any of its subsidiaries or any of their properties or assets, except
with respect to this clause (ii) only, for such violations that would not
have a Material Adverse Effect; and except for the registration of the
Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and
applicable state securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such court
or governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby other than such consents, approvals,
authorizations, orders, filings or registrations the failure of which to
make or obtain would not have a Material Adverse Effect.
(i) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to
include 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 Securities
Act.
(j) Except as described in the Registration Statement, the Company
has not sold or issued any shares of Common Stock during the six-month
period preceding the date of the Prospectus, including any sales pursuant
to Rule 144A under, or Regulations D or S of, the Securities Act; other
than shares issued pursuant to employee benefit plans, qualified stock
option plans or other employee compensation plans or pursuant to
outstanding options, rights or warrants.
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(k) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included in the
Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus;
and, since such date, there has not been any change in the capital stock
or long-term debt of the Company on a consolidated basis or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the consolidated financial position,
results of operations or business prospects of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus.
(l) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included in the Prospectus present fairly the financial condition and
results of operations of the entities purported to be shown thereby, at
the dates and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved. The other financial
information and data filed as part of the Registration Statement or
included in the Prospectus is fairly presented and prepared on a basis
consistent with such financial statements and the books and records of the
Company.
(m) Ernst & Young LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and who
have delivered the initial letter referred to in Section 7(h) hereof, are
independent public accountants under Rule 101 the Code of Professional
Conduct of the American Institute of Certified Public Accountants and its
interpretations and rulings.
(n) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good and
indefeasible title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as would not have a Material Adverse
Effect; and all real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases, with such exceptions as would not have a Material
Adverse Effect.
(o) The Company and each of its subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in similar
businesses in similar industries.
(p) The Company and each of its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx
registrations, copyrights and licenses necessary for the conduct of their
respective businesses and have no reason to believe that the conduct of
their respective businesses will conflict with, and have not received any
notice of any claim of conflict with, any such rights of others, in each
case except as could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
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(q) There are no legal or governmental proceedings (including,
without limitation, before the FCC or any State Regulatory Agency) pending
to which the Company or any of its subsidiaries is a party or of which any
property or asset of the Company or any of its subsidiaries is the subject
which are not disclosed in the Prospectus or which, if determined
adversely to the Company or any of its subsidiaries, would have a Material
Adverse Effect; and to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(r) Each of the Company and its subsidiaries has such permits,
licenses, franchises, certificates of need and other approvals or
authorizations of any governmental or regulatory authority (including,
without limitation, any Permits required by the FCC and any State
Regulatory Agency) ("Permits"), as are necessary under applicable law to
own its properties and to conduct its business in the manner described in
the Prospectus, except to the extent that the failure to have such Permits
would not, singly or in the aggregate, have a Material Adverse Effect.
Each of such Permits is, and upon completion of the transactions
contemplated by this Agreement and the Prospectus will be, in full force
and effect. Each of the Company and its subsidiaries has fulfilled and
performed, in all material respects, all its obligations with respect to
the Permits, and no event has occurred which allows, or after notice or
lapse of time would allow, revocation or termination thereof or results in
any other material impairment of the rights of the holder of any such
Permit, subject in each case to such qualifications as may be set forth in
the Prospectus and except to the extent that any such revocation or
termination would not, singly or in the aggregate, have a Material Adverse
Effect. Except as described in the Prospectus, none of the Permits
contains any restriction that has not previously been satisfied and that
is materially burdensome to the Company or any of its subsidiaries. None
of the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of, or denial of
any application for, any such Permit, and the Company has no knowledge
that the relevant authorities have threatened any such proceeding.
(s) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted
by the Rules and Regulations.
(t) No material relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus which is not so
described.
(u) No strike, job action or labor dispute with any group of
employees of the Company exists or, to the knowledge of the Company, is
imminent which might be expected to have a Material Adverse Effect.
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(v) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "pension
plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986,
as amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the Company
would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
(w) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and has
paid all taxes due thereon, and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had (nor
does the Company have any knowledge of any tax deficiency which, if
determined adversely to the Company or any of its subsidiaries, would
have) a Material Adverse Effect.
(x) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Company has not (i) issued or granted any
securities, (ii) incurred any material liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred in
the ordinary course of business, (iii) entered into any material
transaction not in the ordinary course of business or (iv) declared or
paid any dividend on its capital stock.
(y) The Company (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted only
in accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
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(z) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default, and no event has
occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by
which it is bound or to which any of its properties or assets is subject
that would, singly or in the aggregate, have a Material Adverse Effect or
(iii) is in violation of any law, ordinance, governmental rule, regulation
or court decree to which it or its properties or assets may be subject or
has failed to obtain any license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its
properties or assets or to the conduct of its business that would, singly
or in the aggregate, have a Material Adverse Effect.
(aa) Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries, has used any
corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official
or employee from corporate funds; violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment.
(bb) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of
its subsidiaries (or, to the knowledge of the Company, any of its
predecessors in interest) at, upon or from any of the properties now or
previously owned or leased by the Company or its subsidiaries in violation
of any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit or which would require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not have,
or would not be reasonably likely to have, singularly or in the aggregate
with all such violations and remedial actions, a Material Adverse Effect;
there has been no material spill, discharge, leak, emission, injection,
escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical wastes,
solid wastes, hazardous wastes or hazardous substances due to or caused by
the Company or any of its subsidiaries or with respect to which the
Company or any of its subsidiaries have knowledge, except for any such
spill, discharge, leak, emission, injection, escape, dumping or release
which would not have or would not be reasonably likely to have, singularly
or in the aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a Material Adverse Effect; and
the terms "hazardous wastes," "toxic wastes," "hazardous substances" and
"medical wastes" shall have the meanings specified in any applicable
local, state, federal and foreign laws or regulations with respect to
environmental protection.
(cc) Neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of such term under the Investment
Company Act of 1940 and the rules and regulations of the Commission
thereunder (the "Investment Company Act").
(dd) Neither the Company, nor to its knowledge, any of its
affiliates, has taken, directly or indirectly, any action designed to
cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of
the shares of Common Stock (including the Stock) to facilitate the sale or
resale of such shares.
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(ee) Except as set forth in the Registration Statement, there are no
affiliations or associations between any member of the National
Association of Securities Dealers, Inc. ("NASD") and any of the Company's
officers or directors or stockholders that own at least five percent of
the aggregate number of outstanding shares of Common Stock.
2. PURCHASE OF THE STOCK BY THE UNDERWRITERS. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 12,500,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto. The respective
purchase obligations of the Underwriters with respect to the Firm Stock shall be
rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 1,875,000 shares of Option Stock. Such option is granted solely
for the purpose of covering over-allotments in the sale of Firm Stock and is
exercisable as provided in Section 4 hereof. Shares of Option Stock shall be
purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Stock set opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts.
The price of both the Firm Stock and any Option Stock shall be
$_____ per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on the First Delivery Date or the Second Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Stock to be
purchased on such Delivery Date as provided herein.
3. OFFERING OF STOCK BY THE UNDERWRITERS.
Upon authorization by the Representatives of the release of the Firm
Stock, the several Underwriters propose to offer the Firm Stock for sale upon
the terms and conditions set forth in the Prospectus; PROVIDED, HOWEVER, that no
Stock registered pursuant to the Rule 462(b) Registration Statement, if any,
shall be offered prior to the Effective Time thereof.
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4. DELIVERY OF AND PAYMENT FOR THE STOCK. Delivery of and payment
for the Firm Stock shall be made at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx,
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York City
time, on the fourth full business day following the date of this Agreement or at
such other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to as
the "First Delivery Date." On the First Delivery Date, the Company shall deliver
or cause to be delivered certificates representing the Firm Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer of immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Firm Stock shall be
registered in such names and in such denominations as the Representatives shall
request in writing not less than two full business days prior to the First
Delivery Date. For the purpose of expediting the checking and packaging of the
certificates for the Firm Stock, the Company shall make the certificates
representing the Firm Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement, the option granted in Section 2 may be exercised by written notice
being given to the Company by the Representatives. Such notice shall set forth
the aggregate number of shares of Option Stock as to which the option is being
exercised, the names in which the shares of Option Stock are to be registered,
the denominations in which the shares of Option Stock are to be issued and the
date and time, as determined by the Representatives, when the shares of Option
Stock are to be delivered; PROVIDED, HOWEVER, that this date and time shall not
be earlier than the First Delivery Date nor earlier than the second business day
after the date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been exercised.
The date and time the shares of Option Stock are delivered are sometimes
referred to as the "Second Delivery Date" and the First Delivery Date and the
Second Delivery Date are sometimes each referred to as a "Delivery Date".
Delivery of and payment for the Option Stock shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on the
Second Delivery Date. On the Second Delivery Date, the Company shall deliver or
cause to be delivered the certificates representing the Option Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer of immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Option Stock shall
be registered in such names and in such denominations as the Representatives
shall request in the aforesaid written notice. For the purpose of expediting the
checking and packaging of the certificates for the Option Stock, the Company
shall make the certificates representing the Option Stock available for
inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the Second Delivery Date.
5. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
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(a) To prepare the Rule 462(b) Registration Statement, if necessary,
in a form approved by the Representatives and to file such Rule 462(b)
Registration Statement with the Commission on the date hereof; to prepare
the Prospectus in a form approved by the Representatives and to file such
Prospectus pursuant to Rule 424(b) under the Securities Act not later than
10:00 A.M., New York City time, on the day following the execution and
delivery of this Agreement; to make no further amendment or any supplement
to the Registration Statement or to the Prospectus except as permitted
herein; to advise the Representatives, promptly after it receives notice
thereof, of the time when any amendment to either Registration Statement
has been filed or becomes effective or any supplement to the Prospectus or
any amended Prospectus has been filed and to furnish the Representatives
with copies thereof; to advise the Representatives, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the qualification of
the Stock for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of each of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith;
(c) To deliver promptly to the Representatives in New York City such
number of the following documents as the Representatives shall request:
(i) conformed copies of the Registration Statement as originally filed
with the Commission and each amendment thereto (in each case excluding
exhibits other than this Agreement and the computation of per share
earnings) and (ii) each Preliminary Prospectus, the Prospectus (not later
than 10:00 A.M., New York City time, on the day following the execution
and delivery of this Agreement) and any amended or supplemented Prospectus
(not later than 10:00 A.M., New York City time, on the day following the
date of such amendment or supplement); and, if the delivery of a
prospectus is required at any time after the Effective Time in connection
with the offering or sale of the Stock (or any other securities relating
thereto) and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus in order to comply with
the Securities Act, to notify the Representatives and, upon their request,
to prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as the Representatives may from time
to time request of an amended or supplemented Prospectus which will
correct such statement or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission (i) any amendment to the
Registration Statement or supplement to the Prospectus or (ii) any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to furnish a
copy thereof to the Representatives and counsel for the Underwriters and
obtain the consent of the Representatives to the filing (which consent may
not be unreasonably withheld);
12
(f) As soon as practicable after the Effective Date (it being
understood that the Company shall have until at least 410 days after the
end of the Company's current fiscal quarter), to make generally available
to the Company's security holders and to deliver to the Representatives an
earning statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Securities Act and the Rules
and Regulations (including, at the option of the Company, Rule 158);
(g) Until completion of the distribution contemplated hereby and for
a period of five years following the Effective Date, to furnish to the
Representatives copies of all materials furnished by the Company to its
stockholders and all public reports and all reports and financial
statements furnished by the Company to the principal national securities
exchange or automatic quotation system upon which the Common Stock may be
listed or quoted pursuant to requirements of or agreements with such
exchange or system or to the Commission pursuant to the Exchange Act or
any rule or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering
and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the Stock;
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service
of process in any jurisdiction;
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(i) For a period of 180 days from the date of the Prospectus, not
to, directly or indirectly (whether any transaction is to be settled by
delivery of Common Stock or other securities, in cash or otherwise) (1)
offer for sale, sell, grant any option for the sale of, pledge, make any
short sale or maintain any short position, establish or maintain a "put
equivalent position" (within the meaning of Rule 16a-1(h) under the
Exchange Act) or otherwise dispose of (or enter into any transaction or
device which is designed to, or could be expected to, result in the
disposition or purchase by any person at any time in the future of) any
shares of Common Stock (including, without limitation, shares of Common
Stock that may be deemed to be beneficially owned in accordance with the
rules or regulations of the Commission and shares of Common Stock that may
be issued upon exercise of any option or warrant) or securities
convertible into or exchangeable for Common Stock or substantially similar
securities (other than the Stock, the shares of Common Stock to be issued
concurrently with the closing of this offering upon the mandatory
conversion of the Company's outstanding preferred stock and shares of
Common Stock issued pursuant to employee benefit plans, qualified stock
option plans or other employee compensation plans existing on the date
hereof or under currently outstanding options, warrants or rights) or sell
or grant options, rights or warrants with respect to any shares of Common
Stock or securities convertible into or exchangeable for Common Stock or
substantially similar securities (other than the grant of options under
option plans existing on the date hereof), (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or other securities, in
cash or otherwise, in each case without the prior written consent of
Xxxxxx Brothers Inc. and Bear, Xxxxxxx & Co. Inc.; and to cause each
officer and director of the Company and certain stockholders of the
Company who beneficially own in the aggregate over 75% of the Company's
outstanding share capital to furnish to the Representatives, prior to the
First Delivery Date, a letter or letters, in the form of Annex A hereto (a
"Lock-up Agreement");
(j) To deliver a 180-day lock-up request to (i) each of the
stockholders of the Company parties to the Amended and Restated Purchasers
Rights Agreement by and among the Company and certain purchaser of capital
stock of the Company, dated as of March 30, 2000 (the "Purchasers Rights
Agreement"), pursuant to Section 2.10 of the Purchasers Rights Agreement,
which request shall be delivered jointly on behalf of the Company, Xxxxxx
Brothers Inc. and Bear, Xxxxxxx & Co. Inc. and (ii) all employees of the
Company who have been granted options under the Company's employee
Benefits Plans;
(k) Prior to the Effective Date, to apply for inclusion of the Stock
in the National Market System and to use its best efforts to complete that
process, subject only to official notice of issuance, prior to the First
Delivery Date;
(l) To apply the net proceeds from the sale of the Stock being sold
by the Company as set forth in the Prospectus;
(m) To take such steps as shall be necessary to ensure that neither
the Company nor any of its subsidiaries shall become an "investment
company" within the meaning of such term under the Investment Company Act;
(n) During the period of 180 days from the date of the Prospectus,
to obtain an executed letter in the form of Annex A hereto from each
officer and director who has not previously executed such a letter and to
use all reasonable efforts to obtain from each other stockholder of the
Company who exercises options to purchase shares of Common Stock and who,
upon any such exercise, would beneficially own 1% or more of the Company's
outstanding share capital, an executed Lock-up Agreement;
(o) Not to take, directly or indirectly, any action designed to
cause or result in, or which constitutes or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of
the shares of Common Stock (including the Stock) to facilitate the sale or
resale of such shares; and
(p) To take such steps as shall be necessary to ensure that the
Directed Shares are restricted as required by the NASD or the rules and
regulations of the NASD from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of this
Agreement.
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(q) During the period of 180 days from the date of the Prospectus,
not to amend or consent to, or otherwise permit the amendment of Section
2.10 of the Purchasers Rights Agreement or the lock-up or similar
provisions of the Company's employee benefit and stock option plans.
6a EXPENSES. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of reproducing and distributing this Agreement;
(e) the costs of distributing the terms of agreement relating to the
organization of the underwriting syndicate and selling group to the members
thereof by mail, telex or other means of communication; (f) the filing fees
incident to securing any required review by the NASD of the terms of sale of the
Stock; (g) any applicable listing or other fees; (h) the fees and expenses of
qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 5(h) of preparing, printing and distributing a Blue Sky
Memorandum (including related fees and expenses of counsel to the Underwriters);
(i) all costs and expenses of the Underwriters, including the fees and
disbursements of counsel for the Underwriters, incident to the offer and sale of
shares of the Stock by the Underwriters to employees and persons having business
relationships with the Company, as described in Section 9; (j) the costs and
expenses of the Company (excluding costs and expenses of the Underwriters and
their representatives) relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Stock
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants (other than
representatives of the Underwriters) engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Company and any such
consultants, and the Company's share of the cost of any aircraft chartered in
connection with the road show and (k) all other costs and expenses incident to
the performance of the obligations of the Company under this Agreement; PROVIDED
that, except as provided in this Section 6 and in Sections 9 and 12 , the
Underwriters shall pay their own costs and expenses, including the costs and
expenses of their counsel, any transfer taxes on the Stock which they may sell
and the expenses of advertising any offering of the Stock made by the
Underwriters.
7a CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective
obligations of the Underwriters hereunder are subject to (x) the accuracy, when
made and on each Delivery Date, of the representations and warranties of the
Company contained herein (provided, that in the case of this clause (x), the
obligations of the Underwriters hereunder shall be subject to the accuracy in
all material respects of those representations and warranties that are not
qualified by material adverse effect), (y) to the performance in all material
respects by the Company of its obligations hereunder and (z) to each of the
following additional terms and conditions:
15
(a) The Rule 462(b) Registration Statement, if any, and the
Prospectus shall have been timely filed with the Commission in accordance
with Section 5(a); no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise
shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration Statement
or the Prospectus or any amendment or supplement thereto contains any
untrue statement of a fact which, in the opinion of Xxxxxxx Xxxxxxx &
Xxxxxxxx, counsel for the Underwriters, is material or omits to state any
fact which, in the opinion of such counsel, is material and is required to
be stated therein or is necessary to made the statements therein not
misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Registration
Statement and the Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be satisfactory
in all respects to counsel for the Underwriters, and the Company shall
have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) Xxxxxx & Xxxxxxx shall have furnished to the Representatives
their written opinion, as counsel to the Company, addressed to the
Underwriters and dated such Delivery Date, in form and substance
satisfactory to the Representatives, substantially in the form of Exhibit
A hereto.
(e) Xxxxxxx X. Xxxxxx, Senior Vice President of Public Policy and
General Counsel of the Company, shall have furnished to the
Representatives a written opinion, addressed to the Underwriters and dated
such Delivery Date, in form and substance satisfactory to the
Representatives, to the effect that:
(i) To the best of such counsel's knowledge, neither the
Company nor any of its subsidiaries (a) is in violation of its
charter or by-laws, (b) is in default under any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of its
properties or assets is subject or (c) is in violation of any law,
ordinance, court decree, rule or regulation of any court,
arbitrator, regulatory body, administrative agency or other
governmental body or agency (including, without limitation, the FCC
or any State Regulatory Agency) having jurisdiction over it or any
of its properties or assets, except in the case of clauses (b) and
(c) for such violations or defaults that, individually or in the
aggregate, would not have a Material Adverse Effect;
16
(ii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of
the Company (including the shares of Stock being delivered on such
Delivery Date) have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the description thereof
contained in the Prospectus; and all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and issued and are fully paid, non-assessable and (except
for directors' qualifying shares and except as set forth in the
Registration Statement with respect to shares subject to liens under
the Amended and Restated Credit Agreement, dated as of February 2,
2000, by and among the Company, Birch Telecom Finance, Inc., Xxxxxx
Brothers Inc., Xxxxxx Commercial Paper Inc., Bankers Trust Company
and Bank of America, Inc., as agents and lenders, and the other
lenders party thereto) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or
claims;
(iii) Each of the Company and its subsidiaries has such
Permits (including, without limitation, any permits required by the
FCC and any State Regulatory Agency), as are necessary under
applicable law to own its properties and to conduct its business in
the manner described in the Prospectus, except to the extent that
the failure to have such Permits would not have a Material Adverse
Effect. Each of such Permits is, and upon completion of the
transactions contemplated by this Agreement and the Prospectus will
be, in full force and effect and is fairly described in the
Prospectus. Each of the Company and its subsidiaries has fulfilled
and performed, in all material respects, all its obligations with
respect to the Permits, and to the best of such counsel's knowledge,
no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any
other material impairment of the rights of the holder of any such
Permit, subject in each case to such qualifications as may be set
forth in the Prospectus and except to the extent that any such
revocation or termination would not have a Material Adverse Effect.
Except as described in the Prospectus, none of the Permits contains
any restriction that has not previously been satisfied and that is
materially burdensome to the Company or any of its subsidiaries. To
the best of such counsel's knowledge, none of the Company nor any of
its subsidiaries has received any notice of proceedings relating to
the revocation or modification of, or denial of any application for,
any such Permit;
(iv) None of the Company nor any of its subsidiaries is
subject to any pending complaint or investigation before the FCC or
any State Regulatory Agency or, to the best of such counsel's
knowledge, to any threatened complaint or investigation before the
FCC or any State Regulatory Agency, based on any alleged violation
by the Company or any of its subsidiaries in connection with their
provision of or failure to provide telecommunications services,
which complaint or investigation, if determined adversely to the
Company or any of its subsidiaries, would have a Material Adverse
Effect; and
17
(v) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property or asset of the Company or any
of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, might have a material
adverse effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company
and its subsidiaries; and, to the best of such counsel's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(f) Xxxxxxxxx Xxxxxxx Xxxxx & Xxxxxxxx LLP shall have furnished to
the Representatives its written opinion, as U.S. communications regulatory
counsel to the Company, addressed to the Underwriters and dated such
Delivery Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that the statements contained in the
Prospectus under the captions "Regulation" and "Risk Factors--Federal
Communications Commission and state regulations may limit the services we
can offer or impact our ability to conduct our business" (other than those
statements purporting to express the Company's beliefs, as to which such
counsel need express no opinion), insofar as such statements purport to
constitute summaries of matters of U.S. federal and/or state law,
constitute fair summaries of the matters described therein, which are
accurate in all material respects.
(g) The Representatives shall have received from Xxxxxxx Xxxxxxx &
Xxxxxxxx, counsel for the Underwriters, such opinion or opinions, dated
such Delivery Date, with respect to the issuance and sale of the Stock,
the Registration Statement, the Prospectus and other related matters as
the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for
the purpose of enabling them to pass upon such matters.
(h) At the time of execution of this Agreement, the Representatives
shall have received from Ernst & Young LLP a letter, in form and substance
satisfactory to the Representatives, addressed to the Underwriters and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance
with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, and (ii)
stating, as of the date hereof (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more
than five days prior to the date hereof), the conclusions and findings of
such firm with respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
18
(i) With respect to the letter of Ernst & Young LLP referred to in
the preceding paragraph and delivered to the Representatives concurrently
with the execution of this Agreement (the "initial letter"), the Company
shall have furnished to the Representatives a letter (the "bring-down
letter") of such accountants, addressed to the Underwriters and dated such
Delivery Date (i) confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the
date of the bring-down letter (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more
than five days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set forth
in the initial letter.
(j) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating
that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery Date
(provided, that such representations, warranties and agreements that
are not qualified by material adverse effect shall be true and
correct in all material respects); the Company has complied in all
material respects with all its agreements contained herein; and the
conditions set forth in Section 7(a) and 7(k) have been fulfilled;
and
(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the Effective
Date, the Registration Statement and the Prospectus did not include
any untrue statement of a material fact and did not omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading, and (B) since the Effective
Date, no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statement or the
Prospectus.
(k) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus or (ii) since such date there shall not have been any change in
the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, otherwise than
as set forth or contemplated in the Prospectus, the effect of which, in
any such case described in clause (i) or (ii), is, in the judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Stock being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
19
(l) Subsequent to the execution and delivery of this Agreement (i)
no downgrading shall have occurred in the rating accorded the Company's
debt securities by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of
Rule 436(g)(2) of the Rules and Regulations and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Company's
debt securities.
(m) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have been
suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any
other regulatory body or governmental authority having jurisdiction, (ii)
a banking moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving
the United States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have occurred
such a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment
of a majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the Stock
being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(n) The Nasdaq National Market System shall have approved the Stock
for inclusion, subject only to official notice of issuance and evidence of
satisfactory distribution.
(o) The directors and executive officers of the Company and certain
stockholders of the Company who beneficially own in the aggregate over 75%
of the Company's outstanding share capital shall have each entered into a
Lock-up Agreement, and executed originals of each Lock-up Agreement shall
have been delivered to the Representatives.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to counsel
for the Underwriters.
8a INDEMNIFICATION AND CONTRIBUTION.
20
(a) The Company shall indemnify and hold harmless each Underwriter,
its officers and employees and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that Underwriter, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any amendment or supplement thereto, (B) in
any materials or information provided to investors by, or with the approval of,
the Company in connection with the marketing of the offering of the Stock
("Marketing Materials"), including any roadshow or investor presentations made
to investors by the Company (whether in person or electronically), or (C) in any
blue sky application or other document prepared or executed by the Company (or
based upon any written information furnished by the Company) specifically for
the purpose of qualifying any or all of the Stock under the securities laws of
any state or other jurisdiction (any such application, document or information
being hereinafter called a "Blue Sky Application"), (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or in any amendment or supplement thereto, in any Marketing
Materials or in any Blue Sky Application any material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii) any
act or failure to act, or any alleged act or failure to act, by any Underwriter
in connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (PROVIDED that the Company shall not be
liable in the case of any matter covered by this clause (iii) to the extent that
it is determined in a final judgement by a court of competent jurisdiction that
such loss, claim, damage, liability or action resulted directly from any such
act or failure to act undertaken or omitted to be taken by such Underwriter
through its gross negligence or wilful misconduct), and shall reimburse each
Underwriter and each such officer, employee and controlling person promptly upon
demand for any legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; PROVIDED, HOWEVER, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any such amendment or supplement, in any Marketing Materials or in any Blue Sky
Application in reliance upon and in conformity with the written information
furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein and described in Section 8(e).
The foregoing indemnity agreement is in addition to any liability which the
Company may otherwise have to any Underwriter or to any officer, employee or
controlling person of that Underwriter.
21
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company its officers and employees, each of its directors and
each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, (B) any Marketing Materials or (C) in any Blue Sky Application or (ii)
the omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, in any Marketing Materials or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with the written information furnished to the Company
through the Representatives by or on behalf of that Underwriter specifically for
inclusion therein and described in Section 8(e), and shall reimburse the Company
and any such director, officer or controlling person for any legal or other
expenses reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to the Company or any such
director, officer or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, PROVIDED FURTHER, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; PROVIDED, HOWEVER, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company under this Section 8 if, in the reasonable judgment of the
Representatives, it is advisable for the Representatives and those Underwriters,
officers, employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Company. No indemnifying party shall (i) without
the prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss of liability by reason of such settlement or judgment.
22
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from
the offering of the Stock or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and the Underwriters on the
other with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Stock purchased under this Agreement (before deducting expenses)
received by the Company, on the one hand, and the total underwriting discounts
and commissions received by the Underwriters with respect to the shares of the
Stock purchased under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the shares of the Stock under this Agreement, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section 8(d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 8(d) shall be
deemed to include, for purposes of this Section 8(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Stock
underwritten by it and distributed to the public was offered to the public
exceeds the amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 8(d) are several in proportion to their respective underwriting
obligations and not joint.
23
(e) The Underwriters severally confirm that the statements with
respect to the public offering of the Stock set forth on the cover page of, and
the concession and reallowance figures and the statements concerning
over-allotments appearing under the caption "Underwriting" in the Prospectus are
correct and constitute the only information furnished in writing to the Company
by or on behalf of the Underwriters specifically for inclusion in the
Registration Statement, the Prospectus and the Marketing Materials.
9a DIRECTED SHARE PROGRAM.
It is understood that approximately 1,250,000 shares of the Firm
Stock ("Directed Shares") will initially be reserved by the Underwriters for
offer and sale to employees and persons having business relationships with the
Company and its respective subsidiaries ("Directed Share Participants") upon the
terms and conditions set forth in the Prospectus and in accordance with the
rules and regulations of the NASD (the "Directed Share Program"). Under no
circumstances will any Underwriter be liable to the Company or to any Directed
Share Participant for any action taken or omitted to be taken in good faith in
connection with such Directed Share Program. To the extent that any Directed
Shares are not affirmatively reconfirmed for purchase by any Directed Share
Participant on or immediately after the date of this Agreement, such Directed
Shares may be offered to the public as part of the public offering contemplated
hereby.
The Company agrees to cause each Directed Share Participant to
furnish to the Representatives, prior to the First Delivery Date, a Lock-up
Agreement. The Company agrees and upon notification of which persons need to be
so restricted, to direct the transfer agent, at the request of the Underwriters,
to place a stop transfer restriction upon such securities for such a period of
time, and should the Company release, or seek to release, from such restrictions
any of the Directed Shares, to reimburse the Underwriters for any reasonable
expenses (including without limitation legal expenses) they incur in connection
with such release.
The Company agrees to pay all fees and disbursements incurred by the
Underwriters in connection with the Directed Share Program, including counsel
fees and any stamp duties or other taxes incurred by the Underwriters in
connection with the Directed Share Program.
24
In connection with the offer and sale of the Directed Shares, the
Company agrees promptly upon a request in writing, to indemnify and hold
harmless the Underwriters from and against any loss, claim, damage, expense,
liability or action which (i) arises out of, or is based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
material prepared by or with the approval of the Company for distribution to
Directed Share Participants in connection with the Directed Share Program or 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, (ii)
arises out of the failure of any Directed Share Program participant to pay for
and accept delivery of Directed Shares that the Directed Share Participant
agreed to purchase, (iii) arises out of the failure of any Directed Shares
Participant that is also an employee of the Company to pay for and accept
delivery by the end of the first day after the date of this Agreement any
Directed Shares that were allocated to such employee Directed Share Participant,
(iv) arises out of, or is based upon, the violation of any applicable laws or
regulations of foreign jurisdictions where Directed Shares have been offered or
(v) is otherwise related to the Directed Share Program, other than losses,
claims, damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted directly from the bad faith or gross
negligence of such Underwriter.
10a DEFAULTING UNDERWRITERS.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
PROVIDED, HOWEVER, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the number of shares of the Stock which it agreed to purchase on such Delivery
Date pursuant to the terms of Section 2. If the foregoing maximums are exceeded,
the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Stock to be purchased on such Delivery Date. If the
remaining Underwriters or other underwriters satisfactory to the Representatives
do not elect to purchase the shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date, this Agreement
(or, with respect to the Second Delivery Date, the obligation of the
Underwriters to purchase, and of the Company to sell, the Option Stock) shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company , except that the Company will continue to be liable for the payment of
expenses to the extent set forth in Sections 6, 9 and 12. As used in this
Agreement, the term "Underwriter" includes, for all purposes of this Agreement
unless the context requires otherwise, any party not listed in Schedule 1 hereto
who, pursuant to this Section 10, purchases Firm Stock which a defaulting
Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Stock of a defaulting
or withdrawing Underwriter, either the Representatives or the Company may
postpone the First Delivery Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel for
the Underwriters may be necessary in the Registration Statement, the Prospectus
or in any other document or arrangement.
11a TERMINATION. The obligations of the Underwriters hereunder may
be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 7(k), 7(l) , 7(m) or 7(n) shall
have occurred or if the Underwriters shall decline to purchase the Stock for any
reason permitted under this Agreement.
25
12a REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) the Company
shall fail to tender the Stock for delivery to the Underwriters for any reason
permitted under this Agreement, or (b) the Underwriters shall decline to
purchase the Stock for any reason permitted under this Agreement (including the
termination of this Agreement pursuant to Section 11), the Company shall
reimburse the Underwriters for the reasonable fees and expenses of their counsel
and for such other out-of-pocket expenses as shall have been incurred by them in
connection with this Agreement and the proposed purchase of the Stock, and upon
demand the Company shall pay the full amount thereof to the Representatives. If
this Agreement is terminated pursuant to Section 10 by reason of the default of
one or more Underwriters, the Company shall not be obligated to reimburse any
defaulting Underwriter on account of those expenses.
13a NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxx Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: 000-000-0000) and Bear, Xxxxxxx & Co. Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention _________; and
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Xxxxxxx X. Xxxxxx (Fax:
000-000-0000);
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc. and Bear, Xxxxxxx
& Co. Inc. on behalf of the Representatives.
14a PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the officers and
employees of each Underwriter and the person or persons, if any, who control
each Underwriter within the meaning of Section 15 of the Securities Act and (B)
the indemnity agreement of the Underwriters contained in Section 8(b) of this
Agreement shall be deemed to be for the benefit of directors, officers and
employees of the Company and any person controlling the Company within the
meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 14, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
26
15a SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Stock and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
16a DEFINITION OF THE TERMS "BUSINESS DAY"AND "SUBSIDIARY". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
17a GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK.
18a COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
19a HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
27
If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
BIRCH TELECOM, INC.
By:
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
and Chief Financial Officer
Accepted:
XXXXXX BROTHERS INC.
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, LUFKIN AND XXXXXXXX
SECURITIES CORPORATION
FIRST UNION SECURITIES, INC.
X. X. XXXXXX SECURITIES INC.
XXXXXX XXXXXX PARTNERS LLC
FIDELITY CAPITAL MARKETS,
A DIVISION OF NATIONAL
FINANCIAL SERVICES CORPORATION
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By XXXXXX BROTHERS INC.
By
-------------------------------
AUTHORIZED REPRESENTATIVE
By BEAR, XXXXXXX & CO. INC.
By
-------------------------------
AUTHORIZED REPRESENTATIVE
SCHEDULE 1
Number of
Underwriters Shares
------------ ------
Xxxxxx Brothers Inc...........................
Bear, Xxxxxxx & Co. Inc.......................
Xxxxxxxxx, Lufkin and Xxxxxxxx Securities
Corporation...................................
First Union Securities, Inc...................
X. X. Xxxxxx Securities Inc...................
Xxxxxx Xxxxxx Partners LLC....................
Fidelity Capital Markets, a division of __________
National Financial
Services Corporation.......................... 12,500,000
==========
SCHEDULE 2
LIST OF SUBSIDIARIES
Birch Telecom of Kansas, Inc.
Birch Texas Holdings, Inc.
Birch Telecom of the Great Lakes, Inc.
Birch Internet Services, Inc.
Birch Telecom Finance, Inc.
Birch Equipment, Inc.
Birch Kansas Holdings, Inc.
Birch Telecom of Missouri, Inc.
Birch Telecom of Arizona, Inc.
Birch Telecom of Arkansas, Inc.
Birch Telecom of Oklahoma, Inc.
Birch Telecom of Nebraska, Inc.
ANNEX A
LOCK-UP LETTER AGREEMENT
XXXXXX BROTHERS INC.
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, XXXXXX AND XXXXXXXX SECURITIES CORPORATION
FIRST UNION SECURITIES, INC.
X. X. XXXXXX SECURITIES INC.
XXXXXX XXXXXX PARTNERS LLC
FIDELITY CAPITAL MARKETS,
A DIVISION OF NATIONAL FINANCIAL SERVICES CORPORATION
as Representatives of the several Underwriters
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands that you and certain other firms propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (the "Underwriters") of shares (the
"Shares") of Common Stock, par value $.001 per share (the "Common Stock"), of
Birch Telecom, Inc. (the "Company") and that the Underwriters propose to reoffer
the Shares to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc. and Bear, Xxxxxxx & Co., Inc., the undersigned will not, directly
or indirectly, (1) offer for sale, sell, grant any option for the sale of,
pledge, make any short sale or maintain any short position, establish or
maintain a "put equivalent position" (within the meaning of Rule 16a-1(h) under
the Securities Exchange Act of 1934, as amended) or otherwise dispose of (or
enter into any transaction or device that is designed to, or could be expected
to, result in the disposition by any person at any time in the future of) any
shares of Common Stock (including, without limitation, shares of Common Stock
that may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations of the Securities and Exchange Commission and
shares of Common Stock that may be issued upon exercise of any option or
warrant) or securities convertible into or exchangeable for Common Stock, or (2)
enter into any swap or other derivatives transaction that transfers to another,
in whole or in part, any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Common Stock or other securities, in
cash or otherwise, for a period of 180 days after the date of the final
Prospectus relating to the Offering.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement, and in
the case of any securities for which the undersigned is the beneficial but not
the record holder, the undersigned agrees to cause the record holder to cause
the Company and its Transfer Agent to decline to make any transfer of securities
if such transfer would constitute a violation or breach of this Lock-Up
Agreement.
It is understood that, if the Company notifies you that it does not intend
to proceed with the Offering, if the Underwriting Agreement does not become
effective, or if the Underwriting Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for
and delivery of the Shares, the undersigned will be released from his, her or
its obligations under this Lock-Up Letter Agreement. This Lock-up Letter
Agreement shall terminate if the Offering is not completed by ___________, 2000.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
The undersigned further agrees, from the date hereof until the end of the
Lock-Up period, that the undersigned will not exercise and will waive his, her
or its rights, if any, to require the Company to register its Common Stock and
to receive notice thereof.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
Dated: March __, 2000
