Exhibit 1.1
XXX COMMUNICATIONS, INC.
(a Delaware corporation)
12,500,000 PRIZES SM
Exchangeable Subordinated Debentures due 2029
PURCHASE AGREEMENT
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Dated November 22, 1999
Table of Contents
Page
SECTION 1. Representations and Warranties......................................2
(a) Representations and Warranties by the Company..............................2
(i) Compliance with Registration Requirements..................................3
(ii) Incorporated Documents....................................................3
(iii) Independent Accountants..................................................4
(iv) Financial Statements......................................................4
(v) No Material Adverse Change in Business.....................................4
(vi) Good Standing of the Company..............................................5
(vii) Good Standing of Subsidiaries............................................5
(viii) Capitalization..........................................................5
(ix) Authorization of Agreement................................................6
(x) Authorization of the Indenture.............................................6
(xi) Authorization of Securities...............................................6
(xii) Description of the Securities and the Inden..............................6
(xiii) Absence of Defaults and Conflicts.......................................6
(xiv) Absence of Labor Dispute.................................................7
(xv) Absence of Proceedings....................................................7
(xvi) Accuracy of Exhibits.....................................................7
(xvii) Possession of Intellectual Property.....................................8
(xviii) Absence of Further Requirements........................................8
(xix) Possession of Licenses and Permits.......................................8
(xx) Title to Property.........................................................8
(xxi) Investment Company Act...................................................9
(xxii) Environmental Laws......................................................9
(b) Officer's Certificates.....................................................9
SECTION 2. Sale and Delivery to Underwriters; Closing.........................10
(a) Initial Securities........................................................10
(b) Option Securities.........................................................10
(c) Payment. .................................................................10
(d) Denominations; Registration...............................................11
SECTION 3. Covenants of the Company...........................................11
(a) Compliance with Securities Regulations and Commission Requests............11
(b) Filing of Amendments......................................................11
(c) Delivery of Registration Statements.......................................11
(d) Delivery of Prospectus....................................................12
(e) Continued Compliance with Securities Laws.................................12
(f) Blue Sky Qualifications...................................................12
(g) Rule 158..................................................................13
(h) Use of Proceeds...........................................................13
(i) Listing...................................................................13
(j) Restriction on Sale of Securities.........................................13
(k) Reporting Requirements....................................................13
i
SECTION 4. Payment of Expenses................................................13
(a) Expenses..................................................................13
(b) Termination of Agreement..................................................14
SECTION 5. Conditions of Underwriters' Obligations............................14
(a) Effectiveness of Registration Statement...................................14
(b) Opinion of Counsel for Company............................................14
(c) Opinion of Counsel for Underwriters.......................................15
(d) Officers' Certificate.....................................................15
(e) Accountant's Comfort Letters..............................................15
(f) Bring-down Comfort Letters................................................15
(g) Maintenance of Rating.....................................................15
(h) Conditions to Purchase of Option Securities...............................16
(i) Additional Documents......................................................16
(j) Termination of Agreement..................................................16
SECTION 6. Indemnification....................................................17
(a) Indemnification of Underwriters...........................................17
(b) Indemnification of Company, Directors and Officers........................18
(c) Actions against Parties; Notification.....................................18
(d) Settlement without Consent if Failure to Reimburse........................19
SECTION 7. Contribution.......................................................19
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.....20
SECTION 9. Termination of Agreement...........................................20
(a) Termination; General......................................................20
(b) Liabilities. .............................................................21
SECTION 10. Default by One or More of the Underwriters........................21
SECTION 11. Notices...........................................................22
SECTION 12. Parties...........................................................22
SECTION 13. GOVERNING LAW AND TIME............................................22
SECTION 14. Effect of Headings................................................22
SECTION 15. Counterparts......................................................22
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SCHEDULES
Schedule A - List of Underwriters........................................Sch A-1
Schedule B - Pricing Information.........................................Sch B-1
Schedule C - List of Subsidiaries........................................Sch C-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel.............................A-1
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XXX COMMUNICATIONS, INC.
(a Delaware corporation)
12,500,000 PRIZES
Exchangeable Subordinated Debentures due 2029
PURCHASE AGREEMENT
November 22, 1999
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Credit Suisse First Boston Corporation
BANC OF AMERICA SECURITIES LLC
XXXXXXX, SACHS & cO.
X.X. XXXXXX SECURITIES INC.
XXXXXX XXXXXXX & CO. INCORPORATED
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Xxx Communications, Inc., a Delaware corporation (the "Company"), confirms its
agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx"), Credit Suisse First Boston Corporation, Banc of
America Securities LLC, Xxxxxxx, Sachs & Co., X.X. Xxxxxx Securities Inc. and
Xxxxxx Xxxxxxx & Co. Incorporated (collectively, the "Underwriters," which term
shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), with respect to the issue and sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of Exchangeable Subordinated Debentures due 2029 (the
"PRIZES") set forth in Schedule A. The aforesaid 12,500,000 PRIZES (the "Initial
Securities") to be purchased by the Underwriters and all or any part of the
PRIZES subject to the option described in Section 2(b) hereof (the "Option
Securities") are hereinafter called the "Securities". The Securities are to be
issued pursuant to an indenture dated as of June 27, 1995 (the "Indenture")
between the Company and The Bank of New York, as trustee (the "Trustee").
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Underwriters deem advisable after this
Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (Nos. 333-82575, 000-00000-00
and 333-82575-02) and pre-effective amendment nos. 1, 2 and 3 thereto for the
registration of certain securities, including the Securities, under the
Securities Act of 1933, as amended (the "1933 Act"), including the related
preliminary prospectus or prospectuses, and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations"). Such registration statement has
been declared effective by the Commission, and the Indenture has been duly
qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act").
Such registration statement, including the exhibits and schedules thereto, if
any, in the form in which it became effective, is herein called the
"Registration Statement"; and the final base prospectus contained in the
Registration Statement and the final prospectus supplement relating to the
offering of the Securities, in the form first furnished to the Underwriters by
the Company for use in connection with the offering of the Securities, are
collectively referred to herein as the "Prospectus"; provided, however, that all
references to the "Registration Statement" and the "Prospectus" shall also be
deemed to include all documents incorporated therein by reference pursuant to
the Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to the
execution and delivery of this Agreement; and provided, further, that if the
Company files a registration statement with the Commission pursuant to Section
462(b) of the 1933 Act Regulations (the "Rule 462(b) Registration Statement"),
then after such filing, all references to "Registration Statement" shall also be
deemed to include the Rule 462(b) Registration Statement. A "preliminary
prospectus" shall be deemed to refer to any prospectus used before the
Registration Statement became effective and any prospectus that omitted
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations and was used
after such effectiveness but prior to the execution and delivery of this
Agreement. If Rule 434 is relied on, the term "Prospectus" shall refer to the
preliminary prospectus dated November 16, 1999 together with the Term Sheet and
all references in this Agreement to the date of such Prospectus shall mean the
date of the Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
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SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time (as defined in Section 2(c) hereof) and, if applicable, as of each
Date of Delivery (as defined in Section 2(b) hereof) (in each case, a
"Representation Date"), and agrees with each Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the Registration
Statement and any Rule 462(b) Registration Statement has become effective under
the 1933 Act and no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendments thereto became effective and at each
Representation Date, the Registration Statement, the Rule 462(b) Registration
Statement and any amendments thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations and
the 1939 Act and the rules and regulations of the Commission under the 1939 Act
(the "1939 Act Regulations"), and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
Neither the Prospectus nor any amendments or supplements thereto, at the time
the Prospectus or any amendments or supplements thereto were issued, at the
Closing Time and at each Date of Delivery, if any, included or will include an
untrue statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434 is used,
the Company will comply with the requirements of Rule 434. The representations
and warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto) made in reliance upon and in conformity
with information furnished to the Company in writing by any Underwriter through
Xxxxxxx Xxxxx expressly for use in the Registration Statement (or such amendment
thereto) or the Prospectus (or such amendment or supplement thereto).
Each preliminary prospectus and the prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the 1933 Act, complied when so filed in all material
respects with the 1933 Act Regulations and each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with this
offering was identical in all material respects to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except
to the extent permitted by Regulation S-T.
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(ii) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the Prospectus,
when they became effective or at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations or the 1934 Act and
the rules and regulations of the Commission thereunder (the "1934 Act
Regulations"), as applicable, and, when read together with the other information
in the Prospectus, at the time the Registration Statement became effective, at
the time the Prospectus was issued, at the Closing Time and at each Date of
Delivery, if any, did not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules of the Company and its
subsidiaries, of Xxx Communications PCS, L.P. ("PCS") and its subsidiaries and
of TCA Cable TV, Inc. ("TCA") and its subsidiaries included in the Registration
Statement and the Prospectus are independent public accountants with respect to
the Company and its subsidiaries as required by the 1933 Act and the 1933 Act
Regulations.
(iv) Financial Statements. The financial statements of the Company
included in the Registration Statement and the Prospectus, together with the
related schedules and notes, present fairly the financial position of the
Company and its consolidated subsidiaries at the dates indicated and the
statement of operations, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved. The financial statements of PCS included in the Registration Statement
and the Prospectus, together with the related schedules and notes, present
fairly the financial position of PCS and its consolidated subsidiaries at the
dates indicated and the statement of operations, stockholders' equity and cash
flows of PCS and its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with GAAP applied on a
consistent basis throughout the periods involved. The financial statements of
TCA included in the Registration Statement and the Prospectus, together with the
related schedules and notes, present fairly the financial position of TCA and
its consolidated subsidiaries at the date indicated and the statement of
operations, stockholders' equity and cash flows of TCA and its subsidiaries for
the period specified; said financial statements have been prepared in conformity
with GAAP. The supporting schedules, if any, included in the Registration
Statement and the Prospectus present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and the
summary financial information included in the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with that
of the audited financial statements included in the Registration Statement. The
pro forma financial statements of the Company and its consolidated subsidiaries
and the related notes thereto included in the Registration Statement and the
Prospectus present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases described
therein, and
4
the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(v) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise, and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of the
State of Delaware and has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this Agreement;
and the Company is duly qualified as a foreign corporation to transact business
and is in good standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant subsidiary" of
the Company (as such term is defined in Rule 1-02 of Regulation S-X) (each a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly organized and
is validly existing as a corporation or limited liability company in good
standing under the laws of the jurisdiction of its incorporation or
organization, as the case may be, has corporate or other power and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of each such Subsidiary owned by the Company, directly
or through subsidiaries, has been duly authorized and validly issued, is fully
paid and non-assessable and is owned free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock of any Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder or such Subsidiary. The only
subsidiaries of the Company are (a) the subsidiaries listed on Schedule C hereto
and (b) certain other subsidiaries which, considered in the aggregate as a
single Subsidiary, do not constitute a "significant subsidiary" as defined in
Rule 1-02 of Regulation S-X.
5
(viii) Capitalization. The shares of outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the Company
was issued in violation of the preemptive or other similar rights of any
securityholder of the Company.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization of the Indenture. The Indenture has been duly
authorized, executed and delivered by the Company and, assuming due
authorization, execution and delivery by the Trustee, constitutes a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law). The Indenture has been duly qualified under
the 1939 Act.
(xi) Authorization of Securities. The Securities have been duly
authorized by the Company for issuance and sale and, at the Closing Time and
each Date of Delivery, if any, will have been duly executed by the Company and,
when authenticated, issued and delivered in the manner provided for in the
Indenture and delivered against payment of the purchase price therefor as
provided in this Agreement, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law). The Securities will be in the form contemplated by, and each registered
holder thereof will be entitled to the benefits of, the Indenture.
(xii) Description of the Securities and the Indenture. The Securities
and the Indenture as of each Representation Date, conform and will conform, as
applicable, in all material respects to the respective statements relating
thereto contained in the Prospectus and will be in substantially the respective
forms filed or incorporated by reference, as the case may be, as exhibits to the
Registration Statement.
(xiii) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws or other
constitutive documents or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or any of its subsidiaries is
a party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its subsidiaries is subject
(collectively, "Agreements and Instruments") except for such defaults that would
not result in a
6
Material Adverse Effect; and the execution, delivery and performance by the
Company of this Agreement, the Indenture and the Securities and the consummation
of the transactions contemplated in this Agreement and in the Registration
Statement (including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectus under
the caption "Use of Proceeds") and compliance by the Company with its
obligations under this Agreement and under the Indenture and the Securities do
not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws or other constitutive
documents of the Company or any of its subsidiaries or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its subsidiaries or any of their assets, properties
or operations. As used herein, a "Repayment Event" means any event or condition
which gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by
the Company or any of its subsidiaries.
(xiv) Absence of Labor Dispute. No labor dispute with the employees of
the Company or any of its subsidiaries exists or, to the knowledge of the
Company, is imminent which, individually or in the aggregate, may reasonably be
expected to result in a Material Adverse Effect.
(xv) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its subsidiaries, which
is required to be disclosed in the Registration Statement (other than as
disclosed therein), or which, individually or in the aggregate, might reasonably
be expected to result in a Material Adverse Effect, or which, individually or in
the aggregate, might reasonably be expected to materially and adversely affect
the properties or assets thereof or the consummation of the transactions
contemplated in this Agreement or the performance by the Company of its
obligations hereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or any of its subsidiaries is a party or of
which any of their respective property or assets is the subject which are not
described in the Registration Statement, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result in a
Material Adverse Effect.
(xvi) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the Prospectus or
the documents incorporated by reference therein or to be filed as exhibits
thereto which have not been so described and filed as required.
7
(xvii) Possession of Intellectual Property. Except as disclosed in the
Prospectus, the Company and its subsidiaries own or possess, or can acquire on
reasonable terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business now
operated by them, other than those the absence of which would not have a
Material Adverse Effect, and neither the Company nor any of its subsidiaries has
received any notice or is otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual Property or of
any facts or circumstances which would render any Intellectual Property invalid
or inadequate to protect the interest of the Company or any of its subsidiaries
therein, and which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.
(xviii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations hereunder, in
connection with the offering, issuance or sale of the Securities under this
Agreement or the consummation of the transactions contemplated by this Agreement
or for the due execution, delivery or performance of the Indenture by the
Company, except such as have been already obtained or as may be required under
the 1933 Act or the 1933 Act Regulations or state securities laws, the laws of a
foreign jurisdiction or the by-laws and rules of the NASD and except for the
qualification of the Indenture under the 1939 Act.
(xix) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies necessary to
conduct the business now operated by them other than those the absence of which
would not have a Material Adverse Effect; the Company and its subsidiaries are
in compliance with the terms and conditions of all such Governmental Licenses,
except where the failure so to comply would not, singly or in the aggregate,
have a Material Adverse Effect; all of the Governmental Licenses are valid and
in full force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force and
effect would not have a Material Adverse Effect; and neither the Company nor any
of its subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect.
(xx) Title to Property. The Company and its subsidiaries have good and
marketable title to all material real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each case,
free and clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (a) are described in the
Prospectus or (b) do not, singly or in the aggregate, materially affect the
value of such property and do not interfere with the use
8
made and proposed to be made of such property by the Company or any of its
subsidiaries; and all of the leases and subleases material to the business of
the Company and its subsidiaries, considered as one enterprise, and under which
the Company or any of its subsidiaries holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor any
subsidiary has any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any subsidiary under
any of the leases or subleases mentioned above, or affecting or questioning the
rights of the Company or such subsidiary to the continued possession of the
leased or subleased premises under any such lease or sublease.
(xxi) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the application
of the net proceeds therefrom as described in the Prospectus will not be, an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended (the "1940 Act").
(xxii) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of its subsidiaries is
in violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental Laws
and are each in compliance with their requirements, (C) there are no pending or
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (D) there are no events or circumstances
that might reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.
(b) Officer's Certificates. Any certificate signed by any officer of the Company
delivered to the Underwriters or to counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered thereby.
9
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations, warranties
and agreements herein contained and subject to the terms and conditions herein
set forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per PRIZES set forth in Schedule B, the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Option Securities. In addition, on the basis of the
representations, warranties and agreements herein contained and subject to the
terms and conditions herein set forth, the Company hereby grants an option to
the Underwriters, severally and not jointly, to purchase from it any or all of
the Option Securities at the same price as is to be paid by the Underwriters for
the Initial Securities plus, in the case of the Option Securities, accrued
interest, if any, from the Closing Time to the Date of Delivery. The option
hereby granted will expire 30 days after the date hereof and may be exercised in
whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by Xxxxxxx Xxxxx to the
Company setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery for the
Option Securities (a "Date of Delivery") shall be determined by Xxxxxxx Xxxxx,
but shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time. If the option is exercised
as to all or any portion of the Option Securities, each of the Underwriters,
acting severally and not jointly, will purchase that proportion of the total
number of Option Securities then being purchased which the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter bears
to the total number of Initial Securities, subject in each case to such
adjustments as Xxxxxxx Xxxxx in its discretion shall make to eliminate any sales
or purchases of fractional interests in the PRIZES.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of Xxxxx & Wood
LLP, or at such other place as shall be agreed upon by the Underwriters and the
Company, at 9:00 A.M. (Eastern time) on the third business day (fourth, if the
pricing occurs after 4:30 P.M. (Eastern time) on any given day) after the date
hereof (unless postponed in accordance with the provisions of Section 10), or
such other time not later than ten business days after such date as shall be
agreed upon by the Underwriters and the Company (such time and date of payment
and delivery being herein called "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Underwriters for the respective accounts of the Underwriters of certificates
for the Securities to be purchased by them. It is understood that each
Underwriter has authorized Xxxxxxx Xxxxx, for its account, to accept delivery
of, receipt for, and make payment of the purchase price for, the Securities,
which it has agreed to purchase. Xxxxxxx Xxxxx, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Securities, to be
10
purchased by any Underwriter whose funds have not been received by the Closing
Time, but such payment shall not relieve such Underwriter from its obligations
hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities shall be in such denominations and
registered in such names as the Underwriters may request in writing at least one
full business day before the Closing Time or the relevant Date of Delivery, as
the case may be. The Initial Securities and the Option Securities will be made
available for examination and packaging by the Underwriters in The City of New
York not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
Subject to Section 3(b), the Company will notify the Underwriters immediately,
and confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
use its reasonable best efforts to prevent the issuance of any stop order and,
if any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) Filing of Amendments. The Company will give the Underwriters notice
of its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)), any Term Sheet or any amendment,
supplement or revision to either the prospectus included in the Registration
Statement at the time it became effective or to the Prospectus, whether pursuant
to the 1933 Act, the 1934 Act or otherwise, will furnish the Underwriters with
copies of any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such document to
which the Underwriters or counsel for the Underwriters shall object in writing
within three business days of receipt.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Underwriters and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents
11
incorporated or deemed to be incorporated by reference therein) and signed
copies of all consents and certificates of experts, and will also deliver to the
Underwriters, without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each of
the Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical in all material respects
to the electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectus. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical in all
material respects to the electronically transmitted copies thereof filed with
the Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations and the 1939 Act and the 1939 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required by
the 1933 Act to be delivered in connection with sales of the Securities any
event shall occur or condition shall exist as a result of which it is necessary,
in the opinion of counsel for the Underwriters or counsel for the Company, to
amend the Registration Statement or amend or supplement the Prospectus in order
that the Prospectus will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of any
such counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company will
furnish to the Underwriters, without charge, such number of copies of such
amendment or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its reasonable best
efforts, in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions as the Underwriters may designate and to maintain such
qualifications in effect for a period of not less than one year from the date of
this Agreement; provided, however, that the Company shall not be obligated to
file any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified or to subject itself to taxation in respect of doing business in
any jurisdiction in which it is
12
not otherwise so subject. In each jurisdiction in which the Securities have been
so qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the date of this Agreement.
The Company will also supply the Underwriters with such information as is
necessary for the determination of the legality of the Securities for investment
under the laws of such jurisdictions as the Underwriters may request.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds".
(i) Listing. The Company will use its commercially reasonable efforts
to have the Securities approved for listing, subject only to official notice of
issuance, on the New York Stock Exchange and to cause the Securities to be
registered under the 1934 Act.
(j) Restriction on Sale of Securities. Through the 45th day after the
date of this Agreement, the Company will not, without the consent of Xxxxxxx
Xxxxx, directly or indirectly, offer, sell, offer to sell, grant an option for
the sale of or otherwise dispose of any of (i) the Securities, any securities of
the Company convertible into or exchangeable for the Securities or any
securities of the Company exchangeable for, convertible into or for which the
principal amount thereof or payment thereon is referenced to the price of or
dividend rate on shares of Sprint's PCS Common Stock - Series 1, par value $1.00
per share (the "Sprint PCS Stock"), of Sprint Corporation ("Sprint") or (ii)
shares of Sprint's PCS Common Stock Series 2 owned by the Company; provided,
however, that the foregoing shall not prohibit the Company from taking any of
the foregoing actions in connection with any exchanges or redemptions of the
Securities or in connection with any tender offer or exchange offer for all or a
portion of the outstanding shares of Sprint's PCS Common Stock - Series 2.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters, the Indenture and
13
such other documents as may be required in connection with the offering ,
purchase, sale, issuance or delivery of the Securities, (iii) the preparation,
issuance and delivery of the Securities to the Underwriters, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheets and of the Prospectus and any amendments
or supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii)
the fees and expenses of the Trustee, including the fees and disbursements of
counsel for the Trustee in connection with the Indenture and the Securities,
(ix) any fees payable in connection with the rating of the Securities, and (x)
the listing fees and related expenses incurred with respect to the listing of
the Securities on the New York Stock Exchange. Notwithstanding the foregoing,
the Underwriters have agreed to reimburse the Company for certain of its
expenses in connection with the issue of the PRIZES, in an amount up to
$2,765,625.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters to purchase and pay for the Securities pursuant to this
Agreement are subject to the accuracy of the representations and warranties of
the Company contained in Section 1 hereof or in certificates of any officer of
the Company or any subsidiary of the Company delivered pursuant to the
provisions hereof, to the performance by the Company of its covenants and other
obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time and any Date of Delivery no stop order suspending
the effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing information relating to the description of
the Securities, the specific method of distribution and similar matters shall
have been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A) or, if the
Company has elected to rely upon Rule 434, a Term Sheet shall have been filed
with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Underwriters
shall have received the favorable opinion, dated as of Closing Time, of Dow,
Xxxxxx &
14
Xxxxxxxxx, PLLC, counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, to the effect set forth in Exhibit A hereto.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of Xxxxx & Xxxx LLP, counsel for the Underwriters, in form and substance
satisfactory to the Underwriters with respect to the issuance and sale of the
Securities and other related matters as the Underwriters may reasonably require.
Such counsel may state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and its subsidiaries and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Underwriters shall have
received a certificate of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or are contemplated by the Commission.
(e) Accountant's Comfort Letters. At the time of the execution of this
Agreement, the Underwriters shall have received letters from Deloitte & Touche
LLP, in relation to the Company, and KPMG LLP, in relation to TCA, each dated
such date, in form and substance satisfactory to the Underwriters, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus.
(f) Bring-down Comfort Letters. At Closing Time, the Underwriters shall
have received from Deloitte & Touche LLP and KPMG LLP letters, each dated as of
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the "specified
date" referred to shall be a date not more than three business days prior to
Closing Time.
(g) Maintenance of Rating. At Closing Time and at any relevant Date of
Delivery, the Securities shall be rated at least Baa2 by Xxxxx'x Investors
Service Inc. and BBB+ by Standard & Poor's Ratings Service, and the Company
shall have delivered to the Underwriters a letter, dated the Closing Time, from
each such rating agency, or other evidence satisfactory to the Underwriters,
confirming that the Securities have such ratings; and since the date of this
Agreement, there shall not have occurred a
15
downgrading in the rating assigned to the Securities or any of the Company's
other debt securities by any "nationally recognized statistical rating agency",
as that term is defined by the Commission for purposes of Rule 436(g)(2) under
the 1933 Act, and no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating of
the Securities or any of the Company's other debt securities.
(h) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company or any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery, the
Underwriters shall have received:
(i) Officers' Certificate. A certificate, dated such Date of Delivery,
of the President or a Vice President of the Company and of the chief financial
or chief accounting officer of the Company confirming that the certificate
delivered at Closing Time pursuant to Section 5(d) hereof remains true and
correct as of such Date of Delivery;
(ii) Opinion of Counsel for Company. The favorable opinion of Dow,
Xxxxxx & Xxxxxxxxx, PLLC, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(b) hereof;
(iii) Opinion of Counsel for Underwriters. The favorable opinion of
Xxxxx & Wood LLP, counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(c) hereof; and
(iv) Bring-down Comfort Letters. Letters from Deloitte & Touche LLP and
KPMG LLP, in form and substance satisfactory to the Underwriters and dated such
Date of Delivery, substantially the same in form and substance as the letters
furnished to the Underwriters pursuant to Section 5(f) hereof, except that the
"specified date" in the letter furnished pursuant to this paragraph shall be a
date not more than five days prior to such Date of Delivery.
(i) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Underwriters and counsel for the Underwriters.
16
(j) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement (or, with respect to the Underwriters' exercise of the over-allotment
option for the purchase of Option Securities on a Date of Delivery after the
Closing Time, the obligations of the Underwriters to purchase the Option
Securities on such Date of Delivery) may be terminated by the Underwriters by
notice to the Company at any time at or prior to Closing Time (or such Date of
Delivery, as applicable), and such termination shall be without liability of any
party to any other party except as provided in Section 4 and except that
Sections 6, 7 and 8 shall survive any such termination and remain in full force
and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), including the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or arising
out of any untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission referred to under (i) above; provided that (subject to
Section 6(d) below) any such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Xxxxxxx Xxxxx), reasonably
incurred in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, referred to under
(i) above, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information
17
furnished to the Company by any Underwriter through Xxxxxxx Xxxxx expressly for
use in the Registration Statement (or any amendment thereto), including the Rule
434 Information, if applicable, or any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) and provided, further, that as to any
preliminary prospectus this indemnity agreement shall not inure to the benefit
of any Underwriter or any person controlling that Underwriter on account of any
loss, claim, damage, liability or action arising from the sale of Securities to
any person by that Underwriter if that Underwriter failed to send or give a copy
of the Prospectus, as the same may be amended or supplemented, to that person
and the untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact in such preliminary
prospectus was corrected in said amended or supplemented Prospectus and the
delivery thereof was required by law and would have constituted a complete
defense to the claim of that person, unless such failure resulted from
non-compliance by the Company with Section 3(a) or (b). For purposes of the
second proviso to the immediately preceding sentence, the term Prospectus shall
not be deemed to include the documents incorporated by reference therein, and no
Underwriter shall be obligated to send or give any supplement or amendment to
any document incorporated by reference in a preliminary prospectus or supplement
thereto or the Prospectus to any person.
(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through Xxxxxxx Xxxxx expressly for
use in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall give
notice as promptly as reasonably practicable to each indemnifying party of any
action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action. If it so
elects within a reasonable time after receipt of notice, an indemnifying party,
jointly with any other indemnifying parties receiving such notice, may assume
the defense of such action with counsel chosen by it and approved by the
indemnified parties defendant in such action, unless such indemnified parties
reasonably object to such assumption on the ground that there may be legal
defenses available to them which are different from or in addition to those
available to such indemnifying party. If an indemnifying party assumes the
defense of such action, the
18
indemnifying parties shall not be liable for any fees and expenses of counsel
for the indemnified parties thereafter in connection with such action. In no
event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or xxxxxxxxxxxxx.Xx indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 90 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 45 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then the Company and the Underwriters shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Securities pursuant to this Agreement or (ii) if the allocation provided
by clause (i) 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 of the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, 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 hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount or commission received by the Underwriters,
in each case as set forth on the cover of the Prospectus, or, if Rule 434 is
used, the corresponding location on the Term Sheet, bear to the aggregate
initial public offering price of the Securities as set forth on such cover.
19
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such 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 by the Underwriters and the parties' relative intent,
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 contribution pursuant to this Section 7 were 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 account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Securities set forth opposite their respective names
in Schedule A hereto, and not joint.
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SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Underwriters may terminate this Agreement, by
notice to the Company, at any time at or prior to Closing Time (i) if there has
been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise or of Sprint and its subsidiaries considered as one enterprise,
in each case whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Underwriters, impracticable to market
the Securities or to enforce contracts for the sale of the Securities, or (iii)
if trading in any securities of the Company or in the Sprint PCS Stock has been
suspended or limited by the Commission or the New York Stock Exchange, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
6, 7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or the relevant Date of Delivery,
as the case may be, to purchase the Securities which it or they are obligated to
purchase under this Agreement (the "Defaulted Securities"), then Xxxxxxx Xxxxx
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, Xxxxxxx
Xxxxx shall not have completed such arrangements within such 24-hour period,
then:
(a) if the number of Defaulted Securities does not exceed 10% of the
total number of Securities to be purchased on such date pursuant to this
Agreement, each of the non-defaulting Underwriters shall be obligated, severally
and not jointly, to purchase the
21
full amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the total number of
Securities to be purchased on such date pursuant to this Agreement, this
Agreement (or, with respect to the Underwriters' exercise of the over-allotment
option for the purchase of Option Securities on a Date of Delivery after the
Closing Time, the obligations of the Underwriters to purchase, and the Company
to sell, such Option Securities on such Date of Delivery) shall terminate
without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in (i) a termination of
this Agreement, or (ii) in the case of a Date of Delivery after the Closing
Time, a termination of the obligations of the Underwriters and the Company with
respect to the related Option Securities, as the case may be, either Xxxxxxx
Xxxxx or the Company shall have the right to postpone the Closing Time or the
relevant Date of Delivery, as the case may be, for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
the Prospectus or in any other documents or arrangements.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Underwriters c/o Merrill Xxxxx at North
Tower, World Financial Center, New York, New York 10281-1201, attention of
Xxxxxx Xxxxxxxx, Managing Director; and notices to the Company shall be directed
to it at 0000 Xxxx Xxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000, attention of Xxxxxx X.
Xxxxxx.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon each of the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED WHOLLY IN SUCH STATE. SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
22
SECTION 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 15. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts hereof shall constitute a single instrument.
23
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
XXX COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President and Treasurer
CONFIRMED AND ACCEPTED, as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
BANC OF AMERICA SECURITIES LLC
XXXXXXX, SACHS & cO.
X.X. XXXXXX SECURITIES INC.
XXXXXX XXXXXXX & CO. INCORPORATED
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxxxxxx Xxxxxxx
------------------------
Authorized Signatory
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