EXHIBIT 1.1
__________ Shares
TELEPHONE AND DATA SYSTEMS, INC.
TDS Telecommunications Group Shares
UNDERWRITING AGREEMENT
____________, 1998
XXXXX XXXXXX INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX, SACHS & CO.
As Representatives of the Several Underwriters
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Telephone and Data Systems, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell an aggregate of _________ shares (the
"Firm Shares") of its TDS Telecommunications Group Shares, $0.01 par value
per share (the "TDS Telecom Group Common Stock"), to the several Underwriters
named in Schedule I hereto (the "U.S. Underwriters") for whom Xxxxx Xxxxxx
Inc. and Credit Suisse First Boston Corporation are acting as representatives
(the "Representatives"). The Company also proposes to sell to the U.S.
Underwriters, upon the terms and conditions set forth in Section 2 hereof, up
to an additional shares (the "Additional Shares") of Common
Stock. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "Shares."
It is understood that the Company is concurrently entering into an
International Underwriting Agreement, dated the date hereof (the
"International Underwriting Agreement"), providing for the sale of __________
shares of the TDS Telecom Group Common Stock (the "International Shares")
through arrangements with certain underwriters outside the United States and
Canada (the "Managers"), for whom Xxxxx Xxxxxx Inc. and Credit Suisse First
Boston Corporation are acting as lead Managers (the "Lead Managers"). The
International Shares and the Shares, collectively, are herein called the
"Underwritten Shares."
The Company also understands that the Representatives and the Lead
Managers have entered into an agreement (the "Agreement Between U.S.
Underwriters and Managers") contemplating the coordination of certain
transactions between the U.S. Underwriters and the Managers and that,
pursuant thereto and subject to the conditions set forth therein, the U.S.
Underwriters may purchase from the Managers a
portion of the International Shares or sell to the Managers a portion of the
Shares. The Company understands that any such purchases and sales between
the U.S. Underwriters and the Managers shall be governed by the Agreement
Between U.S. Underwriters and Managers and shall not be governed by the terms
of this Agreement or the International Underwriting Agreement.
The Company wishes to confirm as follows its agreements with you and the
other several U.S. Underwriters on whose behalf you are acting, in connection
with the several purchases of the Shares by the U.S. Underwriters.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 under the Act (the "registration
statement"), including prospectuses subject to completion relating to the
Underwritten Shares. The term "Registration Statement" as used in this
Agreement means the registration statement (including all financial schedules
and exhibits), as amended at the time it becomes effective, or, if the
registration statement became effective prior to the execution of this
Agreement, as supplemented or amended prior to the execution of this
Agreement. If it is contemplated, at the time this Agreement is executed,
that a post-effective amendment to the registration statement will be filed
and must be declared effective before the offering of the Shares may
commence, the term "Registration Statement" as used in this Agreement means
the registration statement as amended by said post-effective amendment. If
an abbreviated registration statement is prepared and filed with the
Commission in accordance with Rule 462(b) under the Act (an "Abbreviated
Registration Statement"), the term "Registration Statement" as used in this
Agreement includes the Abbreviated Registration Statement. The term
"Prospectuses" as used in this Agreement means the prospectuses in the form
included in the Registration Statement, or, if the prospectuses included in
the Registration Statement omit information in reliance on Rule 430A under
the Act and such information is included in the prospectuses filed with the
Commission pursuant to Rule 424(b) under the Act, the term "Prospectuses" as
used in this Agreement means the prospectuses in the form included in the
Registration Statement as supplemented by the addition of the Rule 430A
information contained in the prospectuses filed with the Commission pursuant
to Rule 424(b). The term "Prepricing Prospectuses" as used in this Agreement
means the prospectuses subject to completion in the form included in the
registration statement at the time of the initial filing of the registration
statement with the Commission, and as such prospectuses shall have been
amended from time to time prior to the date of the Prospectuses.
It is understood that two forms of Prepricing Prospectus and two forms
of Prospectus are to be used in connection with the offering and sale of the
Underwritten Shares: a Prepricing
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Prospectus and a Prospectus relating to the Shares that are to be offered and
sold in the United States (as defined herein) or Canada (as defined herein)
to U.S. or Canadian Persons (the "U.S. Prepricing Prospectus" and the "U.S.
Prospectus," respectively) and a Prepricing Prospectus and a Prospectus
relating to the International Shares which are to be offered and sold outside
the United States or Canada to persons other than U.S. or Canadian Persons
(the "International Prepricing Prospectus" and the "International
Prospectus," respectively). The U.S. Prospectus and the International
Prospectus are herein collectively called the "Prospectuses," and the U.S.
Prepricing Prospectus and the International Prepricing Prospectus are herein
called the "Prepricing Prospectuses." For purposes of this Agreement: "U.S.
or Canadian Person" means any resident or national of the United States or
Canada, any corporation, partnership or other entity created or organized in
or under the laws of the United States or Canada or any estate or trust the
income of which is subject to United States or Canadian income taxation
regardless of the source of its income (other than the foreign branch of any
U.S. or Canadian Person), and includes any United States or Canadian branch
of a person other than a U.S. or Canadian Person; "United States" means the
United States of America (including the states thereof and the District of
Columbia) and its territories, its possessions and other areas subject to its
jurisdiction; and "Canada" means Canada and its territories, its possessions
and other areas subject to its jurisdiction.
Any reference in this Agreement to the registration statement, the
Registration Statement, any Prepricing Prospectus or the Prospectuses shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Act, as of the date of the
registration statement, the Registration Statement, such Prepricing
Prospectus or the Prospectuses, as the case may be, and any reference to any
amendment or supplement to the registration statement, the Registration
Statement, any Prepricing Prospectus or the Prospectus shall be deemed to
refer to and include any documents filed after such date under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") which, upon filing, are
incorporated by reference therein, as required by paragraph (b) of Item 12 of
Form S-3. As used herein, the term "Incorporated Documents" means the
documents which at the time are incorporated by reference in the registration
statement, the Registration Statement, any Prepricing Prospectus, the
Prospectuses, or any amendment or supplement thereto.
2. AGREEMENTS TO SELL AND PURCHASE. Subject to such adjustments as
you may determine in order to avoid fractional shares, the Company hereby
agrees, subject to all the terms and conditions set forth herein, to issue
and sell to each U.S. Underwriter and, upon the basis of the representations,
warranties and agreements of the Company herein contained and subject to all
the terms and conditions set forth herein, each U.S. Underwriter agrees,
severally and not jointly, to purchase from the Company, at a purchase price
of
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$ per Share (the "purchase price per share"), the number of Firm Shares
which bears the same proportion to the aggregate number of Firm Shares to be
issued and sold by the Company as the number of Firm Shares set forth
opposite the name of such U.S. Underwriter in Schedule I hereto (or such
number of Firm Shares increased as set forth in Section 10 hereof) bears to
the aggregate number of Firm Shares to be sold by the Company.
The Company also agrees, subject to all the terms and conditions set
forth herein, to sell to the U.S. Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company herein contained
and subject to all the terms and conditions set forth herein, the U.S.
Underwriters shall have the right to purchase from the Company, at the
purchase price per share, pursuant to an option (the "over-allotment option")
which may be exercised at any time and from time to time prior to 9:00 P.M.,
New York City time, on the 30th day after the date of the U.S. Prospectus
(or, if such 30th day shall be a Saturday or Sunday or a holiday, on the next
business day thereafter when the American Stock Exchange is open for
trading), up to an aggregate of Additional Shares. Additional Shares
may be purchased only for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. Upon any exercise of the
over-allotment option, each U.S. Underwriter, severally and not jointly,
agrees to purchase from the Company the number of Additional Shares (subject
to such adjustments as you may determine in order to avoid fractional shares)
which bears the same proportion to the number of Additional Shares as the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto (or such number of Firm Shares increased as set forth in
Section 10 hereof) bears to the aggregate number of Firm Shares.
3. TERMS OF PUBLIC OFFERING. The Company has been advised by you that
the U.S. Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and
initially to offer the Shares upon the terms set forth in the U.S.
Prospectus.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the U.S.
Underwriters of and payment for the Firm Shares shall be made at the office
of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, at 10:00
A.M., New York City time, on , 1998 (the "Closing Date"). The
place of closing for the Firm Shares and the Closing Date may be varied by
agreement between you and the Company.
Delivery to the U.S. Underwriters of and payment for any Additional
Shares to be purchased by the U.S. Underwriters shall be made at the
aforementioned office of Xxxxx Xxxxxx Inc. at such time on such date (the
"Option Closing Date"), which may be the same as the Closing Date but shall
in no event be earlier than the Closing Date nor earlier than two nor later
than ten business days after the giving of the notice hereinafter referred
to, as shall be specified
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in a written notice from you on behalf of the U.S. Underwriters to the
Company of the U.S. Underwriters' determination to purchase a number,
specified in such notice, of Additional Shares. The place of closing for any
Additional Shares and the Option Closing Date for such Shares may be varied
by agreement between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such
denominations as you shall request prior to 9:30 A.M., New York City time, on
the second business day preceding the Closing Date or any Option Closing
Date, as the case may be. Such certificates shall be made available to you
in New York City for inspection and packaging not later than 9:30 A.M., New
York City time, on the business day next preceding the Closing Date or the
Option Closing Date, as the case may be. The certificates evidencing the
Firm Shares and any Additional Shares to be purchased hereunder shall be
delivered to you on the Closing Date or the Option Closing Date, as the case
may be, against payment of the purchase price therefor in immediately
available funds.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the several
U.S. Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it
is necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may
commence, the Company will endeavor to cause the Registration Statement or
such post-effective amendment to become effective as soon as possible and
will advise you promptly and, if requested by you, will confirm such advice
in writing, when the Registration Statement or such post-effective amendment
has become effective.
(b) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectuses or for additional information; (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the suspension of qualification of the
Shares for offering or sale in any jurisdiction or the initiation of any
proceeding for such purpose; and (iii) within the period of time referred to
in paragraph (f) below, of any change in the Company's condition (financial
or other), business, properties, net worth or results of operations, or of
the happening of any event, which makes any statement of a material fact made
in the Registration Statement or the Prospectuses (as then amended or
supplemented) untrue or which requires the making of any additions to or
changes in the Registration Statement or the Prospectuses (as then amended or
supplemented) in order to state a material fact required by the Act or the
regulations thereunder to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Prospectuses (as then amended or supplemented) to comply with the Act or
any other law. If at any
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time the Commission shall issue any stop order suspending the effectiveness
of the Registration Statement, the Company will make every reasonable effort
to obtain the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you, without charge (i) five
signed copies of the registration statement as originally filed with the
Commission and of each amendment thereto, including financial statements and
all exhibits to the registration statement, (ii) such number of conformed
copies of the registration statement as originally filed and of each
amendment thereto, but without exhibits, as you may reasonably request, (iii)
such number of copies of the Incorporated Documents, without exhibits, as you
may reasonably request, and (iv) five copies of the exhibits to the
Incorporated Documents.
(d) The Company will not file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectuses or, prior
to the end of the period of time referred to in the first sentence in
paragraph (f) below, file any document which, upon filing becomes an
Incorporated Document, of which you shall not previously have been advised or
to which, after you shall have received a copy of the document proposed to be
filed, you shall reasonably object.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered to you, without charge, in such quantities as you have
reasonably requested, copies of each form of the U.S. Prepricing Prospectus.
The Company consents to the use, in accordance with the provisions of the Act
and with the securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by the several U.S. Underwriters and by dealers, prior to
the date of the U.S. Prospectus, of each U.S. Prepricing Prospectus so
furnished by the Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as a prospectus is
required by the Act to be delivered in connection with sales by any U.S
Underwriter or dealer, the Company will deliver to each U.S. Underwriter and
each dealer, without charge, as many copies of the U.S. Prospectus (and of
any amendment or supplement thereto) as you may reasonably request. The
Company consents to the use of the U.S. Prospectus (and of any amendment or
supplement thereto) in accordance with the provisions of the Act and with the
securities or Blue Sky laws of the jurisdictions in which the Shares are
offered by the several U.S. Underwriters and by all dealers to whom Shares
may be sold, both in connection with the offering and sale of the Shares and
for such period of time thereafter as the U.S. Prospectus is required by the
Act to be delivered in connection with sales by any U.S. Underwriter or
dealer. If during such period of time any event shall occur that in the
judgment of the Company or in the opinion of counsel for the U.S.
Underwriters is required to be set forth in the U.S. Prospectus (as then
amended or supplemented) or should be set forth therein in order
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to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or if it is necessary to supplement or amend
the U.S. Prospectus (or to file under the Exchange Act any document which,
upon filing, becomes an Incorporated Document) in order to comply with the
Act or any other law, the Company will forthwith prepare and, subject to the
provisions of paragraph (d) above, file with the Commission an appropriate
supplement or amendment thereto (or to such document), and will furnish to
the U.S. Underwriters and dealers a reasonable number of copies thereof.
(g) The Company will cooperate with you and with counsel for the
U.S. Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several U.S. Underwriters and by dealers
under the securities or Blue Sky laws of such jurisdictions as you may
designate and will file such consents to service of process or other
documents necessary or appropriate in order to effect such registration or
qualification; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified
or to take any action which would subject it to service of process in suits,
other than those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject.
(h) The Company will make generally available to its security
holders a consolidated earnings statement, which need not be audited,
covering a twelve-month period commencing after the effective date of the
Registration Statement and ending not later than 15 months thereafter, as
soon as practicable after the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section ll(a) of the Act.
(i) During the period of three years hereafter, the Company will
furnish to you (i) as soon as available, a copy of each report of the Company
mailed to stockholders or filed with the Commission, and (ii) from time to
time such other information concerning the Company as you may reasonably
request.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 10 hereof or by notice given by you terminating
this Agreement pursuant to Section 10 or Section 11 hereof) or if this
Agreement shall be terminated by the U.S. Underwriters because of any failure
or refusal on the part of the Company to comply with the terms or fulfill any
of the conditions of this Agreement, the Company agrees to reimburse the
Representatives for all reasonable out-of-pocket expenses (including fees and
expenses of counsel for the U.S. Underwriters) incurred by you in connection
herewith.
(k) The Company will apply the net proceeds from the sale of the
Underwritten Shares substantially in accordance with the description set
forth in the Prospectuses.
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(l) If Rule 430A of the Act is employed, the Company will timely
file the Prospectuses pursuant to Rule 424(b) under the Act and will advise
you of the time and manner of such filing.
(m) Except as provided in this Agreement, the Company will not
sell, contract to sell or otherwise dispose of any TDS Telecom Group Common
Stock or any securities convertible into or exercisable or exchangeable for
TDS Telecom Group Common Stock, or grant any options or warrants to purchase
TDS Telecom Group Common Stock, except as permitted as described in the
Prospectuses under the heading "Underwriting," for a period of 180 days after
the date of the U.S. Prospectus, without the prior written consent of the
Representatives.
(n) The Company has furnished or will furnish to you "lock-up"
letters, in form and substance satisfactory to you, signed by each of its
current executive officers and directors and by the trustee of the TDS Voting
Trust.
(o) Except as stated in this Agreement and in the Prepricing
Prospectuses and Prospectuses, the Company has not taken, nor will it take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of
any class of Common Stock to facilitate the sale or resale of the Shares.
(p) The Company will use its best efforts to have the shares of
Common Stock which it agrees to sell under this Agreement listed, subject to
notice of issuance, on the American Stock Exchange on or before the Closing
Date.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each U.S. Underwriter that:
(a) Each U.S. Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied
when so filed in all material respects with the provisions of the Act. The
Commission has not issued any order preventing or suspending the use of any
Prepricing Prospectus.
(b) The Company and the transactions contemplated by this
Agreement meet the requirements for using Form S-3 under the Act. The
registration statement in the form in which it became or becomes effective
and also in such form as it may be when any post-effective amendment thereto
shall become effective and the prospectuses and any supplement or amendment
thereto when filed with the Commission under Rule 424(b) under the Act,
complied or will comply in all material respects with the provisions of the
Act and will not at any such times 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, except that this
representation and warranty does not apply to statements in or omissions from
the registration statement or the prospectuses made in
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reliance upon and in conformity with information relating to any U.S.
Underwriter or Manager furnished to the Company in writing by or on behalf of
any U.S. Underwriter or Manager through you expressly for use therein.
(c) The Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed, when
such amendment was filed), conformed in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder,
any further Incorporated Documents so filed will, when they are filed,
conform in all material respects with the requirements of the Exchange Act
and the rules and regulations thereunder; no such document when it was filed
(or, if an amendment with respect to any such document was filed, when such
amendment was filed), contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading; and no such further
document, when it is filed, will contain an untrue statement of a material
fact or will omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading.
(d) All the outstanding shares of each class of Common Stock of
the Company have been duly authorized and validly issued, are fully paid and
nonassessable and, except for the Series A Common Shares, are free of any
preemptive or similar rights; the Shares to be issued and sold by the Company
have been duly authorized and, when issued and delivered to the U.S.
Underwriters against payment therefor in accordance with the terms hereof,
will be validly issued, fully paid and nonassessable and free of any
preemptive or similar rights; and the capital stock of the Company conforms
in all material respects to the description thereof in the Registration
Statement and the Prospectuses.
(e) The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectuses, and is duly registered and qualified to conduct its business
and is in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not
have a material adverse effect on the condition (financial or other),
business, properties, net worth or results of operations of the Company and
the Subsidiaries (as hereinafter defined) taken as a whole.
(f) All the Company's subsidiaries required to be listed in an
exhibit are listed in an exhibit to the Company's Annual Report on Form 10-K
which is incorporated by reference into the Registration Statement. Each of
the Company's subsidiaries (the "Subsidiaries") is a corporation duly
organized, validly existing and in good standing in the jurisdiction of its
incorporation, with full
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corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectuses, and is duly registered and qualified to conduct its business
and is in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not
have a material adverse effect on the condition (financial or other),
business, properties, net worth or results of operations of the Company and
its Subsidiaries taken as a whole; all the outstanding shares of capital
stock of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable, and are owned by the Company
directly, or indirectly through one of the other Subsidiaries, free and clear
of any lien, adverse claim, security interest, equity or other encumbrance.
(g) There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened, against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries, or to which
any of their respective properties is subject, that are required to be
described in the Registration Statement or the Prospectuses but are not
described as required, and there are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Prospectuses or to be filed as an exhibit to
the Registration Statement or any Incorporated Document that are not
described or filed as required by the Act or the Exchange Act.
(h) Neither the Company nor any of the Subsidiaries is in
violation of its certificate or articles of incorporation or by-laws, or
other organizational documents, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of the
Subsidiaries or of any decree of any court or governmental agency or body
having jurisdiction over the Company or any of the Subsidiaries, which
violation would not have a material adverse effect on the condition
(financial or other), business, prospects, net worth or results of operations
of the TDS Telecommunications Group or the Company and the Subsidiaries taken
as a whole; or in default, in any respect material to the TDS
Telecommunications Group or the Company and the Subsidiaries taken as a whole
or the Company's ability to perform its olbigations under this Agreement, in
the performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
material agreement, indenture, lease or other instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound.
(i) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement or the International Underwriting
Agreement by the Company nor the consummation by the Company of the
transactions contemplated hereby or thereby (i) requires any consent,
approval, authorization or other order of or registration or filing with, any
court, regulatory body,
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administrative agency or other governmental body, agency or official (except
such as may be required for the registration of the Shares under the Act and
the Exchange Act and compliance with the securities or Blue Sky laws of
various jurisdictions) or conflicts or will conflict with or constitutes or
will constitute a breach of, or a default under, the certificate or articles
of incorporation or bylaws, or other organizational documents, of the Company
or any of the Subsidiaries or (ii) conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, any material
agreement, indenture, lease or other instrument to which the Company or any
of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound, or violates or will violate any statute,
law, regulation or filing or judgment, injunction, order or decree applicable
to the Company or any of the Subsidiaries or any of their respective
properties, or will result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to the terms of any agreement or instrument to which
any of them is a party or by which any of them may be bound or to which any
of the property or assets of any of them is subject.
(j) The accountants, Xxxxxx Xxxxxxxx LLP, who have certified or
shall certify the financial statements included or incorporated by reference
in the Registration Statement and the Prospectuses (or any amendment or
supplement thereto) are independent public accountants as required by the
Act.
(k) The financial statements, together with related schedules and
notes, included or incorporated by reference in the Registration Statement
and the Prospectuses (and any amendment or supplement thereto), present
fairly the financial position, results of operations and changes in financial
position of each of (i) the Company and its consolidated Subsidiaries and
(ii) the TDS Telecommunications Group on the basis stated in the Registration
Statement at the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial information and data included or incorporated by reference in the
Registration Statement and the Prospectuses (and any amendment or supplement
thereto) are accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Company and the
Subsidiaries.
(l) The execution and delivery of, and the performance by the
Company of its obligations under, each of this Agreement and the
International Underwriting Agreement have been duly and validly authorized by
the Company, and each of this Agreement and the International Underwriting
Agreement has been duly executed and delivered by the Company and constitutes
the valid and legally binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws.
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(m) Except as disclosed in the Registration Statement and the
Prospectuses (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectuses (or any amendment or supplement thereto),
neither the Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the TDS Telecommunications
Group or the Company and the Subsidiaries taken as a whole, and there has not
been any change in the capital stock, or material increase in the short-term
debt or long-term debt, of the TDS Telecommunications Group or the Company
and the Subsidiaries taken as a whole, or any material adverse change, or any
development involving or which may reasonably be expected to involve, a
prospective material adverse change, in the condition (financial or other),
business, net worth or results of operations of the Company and the
Subsidiaries taken as a whole.
(n) Each of the Company and the Subsidiaries has good and
marketable title to all real property described in the Prospectuses as being
owned by it and good title to all other properties described in the
Prospectuses as being owned by it that are material to the business of the
Company and the Subsidiaries taken as a whole, free and clear of all liens,
claims, security interests or other encumbrances except such as are described
in the Registration Statement and the Prospectuses or in a document filed as
an exhibit to the Registration Statement or those which do not individually
or in the aggregate materially affect the value of such property and do not
interfere with the use of such property by the Company or the Subsidiaries
and all the property described in the Prospectuses as being held under lease
by each of the Company and the Subsidiaries is held by it under valid,
subsisting and enforceable leases.
(o) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of the
Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the
Prepricing Prospectuses, the Prospectuses or other materials, if any,
permitted by the Act.
(p) The Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits") as are necessary to own its respective properties and
to conduct its business in the manner described in the Prospectuses, subject
to such qualifications as may be set forth in the Prospectuses and except for
such permits, licenses, franchises and authorizations, the failure of which
to obtain would not, individually or in the aggregate, have a material
adverse effect on the condition (financial or other), business, prospects,
net worth or results of operations of the TDS Telecommunications Group or the
Company and the Subsidiaries taken as a whole; the Company and each of the
Subsidiaries has fulfilled and performed all its material obligations with
respect to such permits
12
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 which such
revocation, termination or impairment would have a material adverse effect on
the condition (financial or other), business, prospects, net worth or results
of operations of the TDS Telecommunications Group or the Company and the
Subsidiaries taken as a whole, subject in each case to such qualification as
may be set forth in the Prospectuses; and, except as described in the
Prospectuses, none of such permits contains any restriction that is
materially burdensome to the TDS Telecommunications Group or the Company and
the Subsidiaries taken as a whole.
(q) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets
is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(r) To the Company's knowledge, neither the Company nor any of its
Subsidiaries nor any employee or agent of the Company or any Subsidiary has
made any payment of funds of the Company or any Subsidiary or received or
retained any funds in violation of any law, rule or regulation, which
payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectuses.
(s) The Company and each of the Subsidiaries have filed all tax
returns required to be filed, which returns are complete and correct, and
neither the Company nor any Subsidiary is in default in the payment of any
taxes which were payable pursuant to said returns or any assessments with
respect thereto.
(t) No holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security of the
Company because of the filing of the registration statement or consummation
of the transactions contemplated by this Agreement.
(u) The Company and the Subsidiaries own or possess all patents,
trademarks, trademark registrations, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, trade secrets
and rights described in the Prospectuses as being owned by them or any of
them or necessary for the conduct of their respective businesses, and the
Company is not aware of any claim to the contrary or any challenge by any
other person to the rights of the Company and the Subsidiaries with respect
to the foregoing.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees
13
to indemnify and hold harmless each of you and each other U.S. Underwriter
and each person, if any, who controls any U.S. Underwriter within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act from and
against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained
in any U.S. Prepricing Prospectus or in the Registration Statement or the
U.S. Prospectus or in any amendment or supplement thereto, or arising out of
or based upon 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, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any untrue statement
or omission or alleged untrue statement or omission which has been made
therein or omitted therefrom in reliance upon and in conformity with the
information relating to such U.S. Underwriter furnished in writing to the
Company by or on behalf of any U.S. Underwriter through you expressly for use
in connection therewith; provided, however, that the indemnification
contained in this paragraph (a) with respect to any U.S. Prepricing
Prospectus shall not inure to the benefit of any U.S. Underwriter (or to the
benefit of any person controlling such U.S. Underwriter) on account of any
such loss, claim, damage, liability or expense arising from the sale of the
Shares by such U.S. Underwriter to any person if a copy of the U.S.
Prospectus shall not have been delivered or sent to such person on or prior
to written confirmation of such sale, and the untrue statement or alleged
untrue statement or omission or alleged omission of a material fact contained
in such U.S. Prepricing Prospectus was corrected in the U.S. Prospectus,
provided that the Company has delivered the U.S. Prospectus to the several
U.S. Underwriters in requisite quantity on a timely basis to permit such
delivery or sending. The foregoing indemnity agreement shall be in addition
to any liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
U.S. Underwriter or any person controlling any U.S. Underwriter in respect of
which indemnity may be sought against the Company, such U.S. Underwriter or
such controlling person shall promptly notify the parties against whom
indemnification is being sought (the "indemnifying parties"), and such
indemnifying parties shall assume the defense thereof, including the
employment of counsel and payment of all fees and expenses. Such U.S.
Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action, suit or proceeding and to participate in
the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such U.S. Underwriter or such controlling person unless (i)
the indemnifying parties have agreed in writing to pay such fees and
expenses, (ii) the indemnifying parties have failed to assume the defense and
employ counsel, or (iii) the named parties to any such action, suit or
proceeding (including any impleaded parties) include both such U.S.
Underwriter or such controlling person and the indemnifying parties and such
U.S. Underwriter or such controlling person shall have been advised by its
counsel that representation of such indemnified party and any indemnifying
party by the same counsel
14
would be inappropriate under applicable standards of professional conduct
(whether or not such representation by the same counsel has been proposed)
due to actual or potential differing interests between them (in which case
the indemnifying party shall not have the right to assume the defense of such
action, suit or proceeding on behalf of such U.S. Underwriter or such
controlling person). It is understood, however, that the indemnifying
parties shall, in connection with any one such action, suit or proceeding or
separate but substantially similar or related actions, suits or proceedings
in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
all such U.S. Underwriters and controlling persons not having actual or
potential differing interests with you or among themselves, which firm shall
be designated in writing by Xxxxx Xxxxxx Inc., and that all such fees and
expenses shall be reimbursed as they are incurred. The indemnifying parties
shall not be liable for any settlement of any such action, suit or proceeding
effected without their written consent, but if settled with such written
consent, or if there be a final judgment for the plaintiff in any such
action, suit or proceeding, the indemnifying parties agree to indemnify and
hold harmless any U.S. Underwriter, to the extent provided in the preceding
paragraph, and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
(c) Each U.S. Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, and any person who controls the Company within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, to
the same extent as the foregoing indemnity from the Company to each U.S.
Underwriter, but only with respect to information relating to such U.S.
Underwriter furnished in writing by or on behalf of such U.S. Underwriter
through you expressly for use in the Registration Statement, the U.S.
Prospectus or any U.S. Prepricing Prospectus, or any amendment or supplement
thereto. If any action, suit or proceeding shall be brought against the
Company, any of its directors, any such officer, or any such controlling
person based on the Registration Statement, the U.S. Prospectus or any U.S.
Prepricing Prospectus, or any amendment or supplement thereto, and in respect
of which indemnity may be sought against any U.S. Underwriter pursuant to
this paragraph (c), such U.S. Underwriter shall have the rights and duties
given to the Company by paragraph (b) above (except that if the Company shall
have assumed the defense thereof such U.S. Underwriter shall not be required
to do so, but may employ separate counsel therein and participate in the
defense thereof, but the fees and expenses of such counsel shall be at such
U.S. Underwriter's expense), and the Company, its directors, any such
officer, and any such controlling person shall have the rights and duties
given to the U.S. Underwriters by paragraph (b) above. The foregoing
indemnity agreement shall be in addition to any liability which any U.S.
Underwriter may otherwise have.
15
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraph (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or expenses
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the U.S. Underwriters on the
other hand from the offering of the Shares, 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 U.S. Underwriters on the other in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and the U.S. Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts
and commissions received by the U.S. Underwriters, in each case as set forth
in the table on the cover page of the U.S. Prospectus; provided that, in the
event that the U.S. Underwriters shall have purchased any Additional Shares
hereunder, any determination of the relative benefits received by the
Company, or the U.S. Underwriters from the offering of the Shares shall
include the net proceeds (before deducting expenses) received by the Company,
and the underwriting discounts and commissions received by the U.S.
Underwriters, from the sale of such Additional Shares, in each case computed
on the basis of the respective amounts set forth in the notes to the table on
the cover page of the U.S. Prospectus. The relative fault of the Company on
the one hand and the U.S. Underwriters on the other hand shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand
or by the U.S. Underwriters on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(e) The Company and the U.S. Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 7 were
determined by a pro rata allocation (even if the U.S. Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
paragraph (d) above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to
in paragraph (d) above shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating any claim or defending any
such action, suit or proceeding. Notwithstanding the provisions of this
Section 7, no U.S. Underwriter
16
shall be required to contribute any amount in excess of the amount by which
the total price of the Shares underwritten by it and distributed to the
public exceeds the amount of any damages which such U.S. Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The U.S. Underwriters' obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective numbers of Firm Shares set forth opposite their names in Schedule
I hereto (or such numbers of Firm Shares increased as set forth in Section 10
hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under
this Section 7 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred.
The indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any U.S. Underwriter or any person
controlling any U.S. Underwriter, the Company, its directors or officers or
any person controlling the Company, (ii) acceptance of any Shares and payment
therefor hereunder, and (iii) any termination of this Agreement. A successor
to any U.S. Underwriter or any person controlling any U.S. Underwriter, or to
the Company, its directors or officers, or any person controlling the
Company, shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 7.
8. CONDITIONS OF U.S. UNDERWRITERS' OBLIGATIONS. The several
obligations of the U.S. Underwriters to purchase the Firm Shares hereunder
are subject to the following conditions:
(a) If, at the time this Agreement is executed and delivered, it
is necessary for the registration statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may
commence, the registration statement or such post-effective amendment shall
have become effective not later than 5:30 P.M., New York City time, on the
date hereof, or at such later date and time as shall be consented to in
writing by you, and all filings, if any, required by Rules 424 and 430A under
the Act shall have been timely made; no stop order suspending the
17
effectiveness of the registration statement shall have been issued and no
proceeding for that purpose shall have been instituted or, to the knowledge
of the Company or any U.S. Underwriter, threatened by the Commission, and any
request of the Commission for additional information (to be included in the
registration statement or the prospectuses or otherwise) shall have been
complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth, or results of operations of the Company or
the Subsidiaries not contemplated by the Prospectuses, which in your opinion,
as Representatives of the several U.S. Underwriters, would materially
adversely affect the market for the Shares, or (ii) any event or development
relating to or involving the Company or any officer or director of the
Company which makes any statement made in the Prospectuses untrue or which,
in the opinion of the Company and its counsel or the U.S. Underwriters and
their counsel, requires the making of any addition to or change in the
Prospectuses in order to state a material fact required by the Act or any
other law to be stated therein or necessary in order to make the statements
therein not misleading, if amending or supplementing the Prospectuses to
reflect such event or development would, in your opinion, as Representatives
of the several U.S. Underwriters, materially adversely affect the market for
the Shares.
(c) You shall have received on the Closing Date, an opinion of
Sidley & Austin, counsel for the Company, dated the Closing Date and
addressed to you, as Representatives of the several U.S. Underwriters, to the
effect that:
(i) The Company is a corporation duly incorporated and
validly existing in good standing under the laws of the State of Delaware
with corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement and
the Prospectuses (and any amendment or supplement thereto), and is duly
registered and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or the conduct
of its business requires such registration or qualification, except where the
failure so to register or qualify could not be reasonably expected to have a
material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole;
(ii) Each of United States Cellular Corporation, United States
Cellular Operating Company, United States Cellular Investment Company, TDS
Telecommunications Corporation and Aerial Communications, Inc. (the
"Significant Subsidiaries") is a corporation duly organized and validly
existing in good standing under the laws of the jurisdiction of its
organization, with full corporate power and authority to own, lease, and
operate its
18
properties and to conduct its business as described in the Registration
Statement and the Prospectuses (and any amendment or supplement thereto); and
all the outstanding shares of capital stock of each of the Significant
Subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable, and are owned by the Company directly, or indirectly through
one of the other Subsidiaries, free and clear of any perfected security
interest, or, to the knowledge of such counsel, any other security interest,
lien, adverse claim, equity or other encumbrance;
(iii) The authorized and outstanding capital stock of
the Company is as set forth under the caption "Capitalization" in the
Prospectuses; and the authorized capital stock of the Company conforms in all
material respects as to legal matters to the description thereof contained in
the Prospectuses under the caption "Description of Capital Stock";
(iv) All the shares of capital stock of the Company
outstanding prior to the issuance of the Shares to be issued and sold by the
Company hereunder, have been duly authorized and validly issued, and are
fully paid and nonassessable;
(v) The Underwritten Shares to be issued and sold to the
U.S. Underwriters and the Managers by the Company hereunder and under the
International Underwriting Agreement have been duly authorized and, when
issued and delivered to the U.S. Underwriters and the Managers against
payment therefor in accordance with the terms hereof and the terms of the
International Underwriting Agreement, will be validly issued, fully paid and
nonassessable and free of any preemptive, or to the knowledge of such
counsel, similar rights that entitle or will entitle any person to acquire
any Shares upon the issuance thereof by the Company;
(vi) The form of certificates for the Shares conforms to
the requirements of the Delaware General Corporation Law;
(vii) The Registration Statement and all post-effective
amendments, if any, have become effective under the Act and, to the best
knowledge of such counsel after reasonable inquiry, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose are pending before or contemplated by the
Commission; and any required filing of the Prospectuses pursuant to Rule
424(b) has been made in accordance with Rule 424(b);
(viii) The Company has corporate power and authority to
enter into this Agreement and the International Underwriting Agreement and to
issue, sell and deliver the Underwritten Shares to be sold by it to the U.S.
Underwriters and the Managers as provided herein and therein, and each of
this Agreement and the International Underwriting Agreement has been duly
authorized, executed and delivered by the Company;
(ix) To the knowledge of such counsel, neither the
19
Company nor any of the Significant Subsidiaries is in violation of its
respective certificate or articles of incorporation or bylaws, or other
organizational documents, or is in default in the performance of any material
obligation, agreement or condition contained in any bond, debenture, note or
other evidence of indebtedness, except as may be disclosed in the
Prospectuses;
(x) Neither the offer, sale or delivery of the Shares,
the execution, delivery or performance of this Agreement or the International
Underwriting Agreement, compliance by the Company with the provisions hereof
or thereof nor consummation by the Company of the transactions contemplated
hereby or thereby conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational documents, of the Company or
any of the Significant Subsidiaries or any agreement, indenture, lease or
other instrument to which the Company or any of the Significant Subsidiaries
is a party or by which any of them or any of their respective properties is
bound that is an exhibit to the Registration Statement or to any Incorporated
Document, or is known to such counsel, or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of the Subsidiaries, nor will any such action result in
any violation of any existing law, regulation, ruling (assuming compliance
with all applicable state securities and Blue Sky laws), judgment,
injunction, order or decree known to such counsel, applicable to the Company,
the Significant Subsidiaries or any of their respective properties;
(xi) No consent, approval, authorization or other order
of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or official is
required on the part of the Company (except as have been obtained under the
Act and the Exchange Act or such as may be required under state securities or
Blue Sky laws governing the purchase and distribution of the Shares) for the
valid issuance and sale of the Underwritten Shares to the U.S. Underwriters
and the Managers as contemplated by this Agreement and the International
Underwriting Agreement;
(xii) The Registration Statement and the Prospectuses
and any supplements or amendments thereto (except for the financial
statements and the notes thereto and the schedules and other financial and
statistical data included therein, as to which such counsel need not express
any opinion) comply as to form in all material respects with the requirements
of the Act; and each of the Incorporated Documents (except for the financial
statements and the notes thereto and the schedules and other financial and
statistical data included therein, as to which counsel need not express any
opinion) complied as to form in all material respects with the Exchange Act
and the rules and regulations of the Commission thereunder at the time filed;
(xiii) To the knowledge of such counsel, (A) other
than
20
as described or contemplated in the Prospectuses (or any supplement thereto),
there are no legal or governmental proceedings pending or threatened against
the Company or any of the Subsidiaries, or to which the Company or any of the
Subsidiaries, or any of their property, is subject, which are required to be
described in the Registration Statement or Prospectuses (or any amendment or
supplement thereto) and (B) there are no agreements, contracts, indentures,
leases or other instruments, that are required to be described in the
Registration Statement or the Prospectuses (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration Statement or any
Incorporated Document that are not described or filed as required, as the
case may be;
(xiv) The statements in the Registration Statement and
Prospectuses, insofar as they are descriptions of contracts, agreements or
other legal documents, or refer to statements of law or legal conclusions,
including, but not limited to, the statements under the heading "Federal
Income Tax Consequences", are accurate in all material respects and present
fairly the information required to be shown;
(xv) Upon delivery of the Underwritten Shares pursuant to
this Agreement and the International Underwriting Agreement and payment
therefor as contemplated herein the Underwriters and the Managers will
acquire good and marketable title to the Shares free and clear of any lien,
claim, security interest, or other encumbrance, restriction on transfer or
other defect in title; and
Such opinion shall additionally state that although counsel has not
undertaken, except as otherwise indicated in their opinion, to determine
independently, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements in the Registration Statement,
such counsel has participated in the preparation of the Registration
Statement and the Prospectuses, including review and discussion of the
contents thereof (including review and discussion of the contents of all
Incorporated Documents), and nothing has come to the attention of such
counsel that has caused them to believe that the Registration Statement
(including the Incorporated Documents) at the time the Registration Statement
became effective, or the Prospectuses, as of their date and as of the Closing
Date or the Option Closing Date, as the case may be, contained an untrue
statement of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein not misleading
or that any amendment or supplement to the Prospectuses, as of its respective
date, and as of the Closing Date or the Option Closing Date, as the case may
be, contained any untrue statement of a material fact or omitted 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 (it being
understood that such counsel need express no opinion with respect to the
financial statements and the notes thereto and the schedules and other
financial data included in the Registration Statement or the Prospectuses or
any Incorporated Document).
21
Such opinion shall be limited to the laws of the State of New York, the
State of Illinois, the General Corporation Law of the State of Delaware and
the federal law of the United States (other than the Communications Act of
1934, as amended (the "Communications Act"), and the rules and regulations
thereunder).
(d) You shall have received on the Closing Date, an opinion of Xxxxxx
and Xxxxxxxx, special counsel for the Company, dated the Closing Date and
addressed to you, as Representatives of the several U.S. Underwriters, to the
effect that:
(i) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, the Federal Communications
Commission (the "FCC"), is necessary or required for the due authorization,
execution or delivery by the Company of this Agreement or the International
Underwriting Agreement or for the performance by the Company of the
transactions contemplated under the Prospectuses, this Agreement, or the
International Underwriting Agreement.
(ii) The execution and delivery of this Agreement and the
International Underwriting Agreement, the issuance of the Underwritten
Shares, the compliance by the Company with all of the provisions of this
Agreement and the International Underwriting Agreement, and the consummation
of the transactions contemplated herein, therein and in the Registration
Statement and the Prospectuses (including the issuance and sale of the
Underwritten Shares) do not and will not, to such counsel's knowledge,
conflict with or result in any violation of, or the creation of any lien,
charge or encumbrance upon, the property or assets of the Company or, to such
counsel's knowledge, its Subsidiaries, under the Communications Act or any
rule, regulation, judgment, order or administrative or court decree issued,
enacted or promulgated thereunder; neither will any such action conflict with
or have a material adverse effect on any of the certificates, authorities,
licenses or permits, if any, issued or to be issued by the FCC to the Company
or, to such counsel's knowledge, any of the Company's Subsidiaries that
enable them to carry on the business and operations now operated by them and
which are material to the business of the Company and its consolidated
subsidiaries considered as one enterprise.
(iii) The information in the Registration Statement or the
Prospectuses purporting to describe FCC regulatory matters or the
Communications Act, to the extent that it constitutes matters of law,
summaries of legal matters or legal conclusions, has been reviewed by such
counsel and is correct in all material respects.
(iv) Although counsel has not undertaken, except as otherwise
indicated in their opinion, to determine independently, and does not assume
any responsibility for, the accuracy or completeness of the statements in the
Registration Statement, nothing has come to
22
the attention of such counsel that has caused them to believe that the
descriptions of FCC regulatory matters and the Communications Act contained
in the Registration Statement (including the Incorporated Documents) at the
time the Registration Statement became effective, or the Prospectuses, as of
their date and as of the Closing Date or the Option Closing Date, as the case
may be, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the descriptions of FCC regulatory
matters and the Communications Act contained in any amendment or supplement
to the Prospectuses, as of its respective date, and as of the Closing Date or
the Option Closing Date, as the case may be, contained any untrue statement
of a material fact or omitted 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 (it being understood that such counsel need
express no opinion with respect to the financial statements and the notes
thereto and the schedules and other financial data included in the
Registration Statement or the Prospectuses or any Incorporated Document).
(e) You shall have received on the Closing Date an opinion of Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the U.S. Underwriters, dated the
Closing Date and addressed to you, as Representatives of the several U.S.
Underwriters, with respect to such matters as you may reasonably request.
(f) You shall have received letters addressed to you, as
Representatives of the several U.S. Underwriters, and dated the date hereof
and the Closing Date from Xxxxxx Xxxxxxxx LLP, independent certified public
accountants, substantially in the forms heretofore approved by you.
(g)(i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been taken or, to the knowledge of the Company, shall be contemplated by
the Commission at or prior to the Closing Date; (ii) there shall not have
been any change in the capital stock of the Company nor any material increase
in the short-term or long-term debt of the Company (other than in the
ordinary course of business) from that set forth or contemplated in the
Registration Statement or the Prospectuses (or any amendment or supplement
thereto); (iii) there shall not have been, since the respective dates as of
which information is given in the Registration Statement and the Prospectuses
(or any amendment or supplement thereto), except as may otherwise be stated
in the Registration Statement and Prospectuses (or any amendment or
supplement thereto), any material adverse change in the condition (financial
or other), business, properties, net worth or results of operations of the
Company and the Subsidiaries taken as a whole; (iv) the Company and the
Subsidiaries shall not have any liabilities or obligations, direct or
contingent (whether or not in the ordinary course of business), that are
material to the Company and the Subsidiaries, taken as a whole, other than
those reflected in the Registration
23
Statement or the Prospectuses (or any amendment or supplement thereto); and
(v) all the representations and warranties of the Company contained in
Section 6 of this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date, and you shall have received a certificate, dated the Closing Date and
signed by the chief executive officer and the chief financial officer of the
Company (or such other officers as are acceptable to you), to the effect set
forth in this Section 8(g) and in Section 8(h) hereof.
(h) The Company shall not have failed at or prior to the Closing Date
to have performed or complied with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or prior to the
Closing Date.
(i) Prior to the Closing Date the Underwritten Shares shall have been
listed, subject to notice of issuance, on the American Stock Exchange.
(j) The closing under the International Underwriting Agreement shall
have occurred concurrently with the closing hereunder on the Closing Date.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form
and substance to you and your counsel.
Any certificate or document signed by any officer of the Company and
delivered to you, as Representatives of the U.S. Underwriters, or to counsel
for the U.S. Underwriters, shall be deemed a representation and warranty by
the Company to each U.S. Underwriter as to the statements made therein.
The several obligations of the U.S. Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of any Option
Closing Date of the conditions set forth in this Section 8, except that, if
any Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (g) shall be dated
the Option Closing Date in question and the opinions called for by paragraphs
(c), (d) and (e) shall be revised to reflect the sale of Additional Shares.
9. EXPENSES. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it
of its obligations hereunder: (i) the preparation, printing or reproduction,
and filing with the Commission of the registration statement (including
financial statements and exhibits thereto), each Prepricing Prospectus, the
Prospectuses, and each amendment or supplement to any of them; (ii) the
printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the
registration statement, each Prepricing Prospectus, the Prospectuses, the
Incorporated Documents, and all amendments or supplements to any of them, as
may be reasonably requested for use in connection with
24
the offering and sale of the Shares; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares,
including any stamp taxes in connection with the original issuance and sale
of the Shares; (iv) the printing (or reproduction) and delivery of this
Agreement, the Blue Sky Memorandum and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of the
Shares; (v) the listing of the Shares on the American Stock Exchange; (vi)
the registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states as provided in Section 5(g)
hereof (including the reasonable fees, expenses and disbursements of counsel
for the U.S. Underwriters relating to the preparation, printing or
reproduction, and delivery of the Blue Sky Memorandum and such registration
and qualification); (vii) the filing fees and the fees and expenses of
counsel for the U.S. Underwriters in connection with any filings required to
be made with the National Association of Securities Dealers, Inc.; (viii) the
transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective purchasers of
the Shares; and (ix) the fees and expenses of the Company's accountants and
the fees and expenses of counsel (including local and special counsel) for
the Company.
10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto;
or (ii) if, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may
commence, when notification of the effectiveness of the registration
statement or such post-effective amendment has been released by the
Commission. Until such time as this Agreement shall have become effective,
it may be terminated by the Company, by notifying you, or by you, as
Representatives of the several U.S. Underwriters, by notifying the Company.
If any one or more of the U.S. Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting U.S.
Underwriter or U.S. Underwriters are obligated but fail or refuse to purchase
is not more than one-tenth of the aggregate number of Shares which the U.S.
Underwriters are obligated to purchase on the Closing Date, each
non-defaulting U.S. Underwriter shall be obligated, severally, in the
proportion which the number of Firm Shares set forth opposite its name in
Schedule I hereto bears to the aggregate number of Firm Shares set forth
opposite the names of all non-defaulting U.S. Underwriters or in such other
proportion as you may specify in accordance with Section 20 of the Master
Agreement Among U.S. Underwriters of Xxxxx Xxxxxx Inc., to purchase the
Shares which such defaulting U.S. Underwriter or U.S. Underwriters are
obligated, but fail or refuse, to purchase. If any one or more of the U.S.
Underwriters shall fail or refuse to purchase Shares which it or they are
obligated to purchase on the Closing Date and the aggregate number of Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares which
25
the U.S. Underwriters are obligated to purchase on the Closing Date and
arrangements satisfactory to you and the Company for the purchase of such
Shares by one or more non-defaulting U.S. Underwriters or other party or
parties approved by you and the Company are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of
any non-defaulting U.S. Underwriter or the Company. In any such case which
does not result in termination of this Agreement, either you or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the
Registration Statement and the U.S. Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall
not relieve any defaulting U.S. Underwriter from liability in respect of any
such default of any such U.S. Underwriter under this Agreement. The term
"U.S. Underwriter" as used in this Agreement includes, for all purposes of
this Agreement, any party not listed in Schedule I hereto who, with your
approval and the approval of the Company, purchases Shares which a defaulting
U.S. Underwriter is obligated, but fails or refuses, to purchase.
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
U.S. Underwriter to the Company, by notice to the Company, if prior to the
Closing Date or any Option Closing Date (if different from the Closing Date
and then only as to the Additional Shares), as the case may be, (i) trading
in securities generally on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market shall have been suspended or
materially limited, (ii) a general moratorium on commercial banking
activities in New York or Illinois shall have been declared by either federal
or state authorities, or (iii) there shall have occurred any outbreak or
escalation of hostilities or other international or domestic calamity, crisis
or change in political, financial or economic conditions, the effect of which
on the financial markets of the United States is such as to make it, in your
judgment, impracticable or inadvisable to commence or continue the offering
of the Shares at the offering price to the public set forth on the cover page
of the U.S. Prospectus or to enforce contracts for the resale of the Shares
by the U.S. Underwriters. Notice of such termination may be given to the
Company by telegram, telecopy or telephone and shall be subsequently
confirmed by letter.
12. INFORMATION FURNISHED BY THE U.S. UNDERWRITERS. The statements set
forth in the last paragraph on the cover page, the stabilization legend on
the inside cover page, and the statements in the first, second and twelfth
paragraphs under the caption "Underwriting" in any Prepricing Prospectus and
in the U.S. Prospectus, constitute the only information furnished by or on
behalf of the U.S. Underwriters through you as such information is referred
to in Sections 6(b) and 7 hereof.
26
13. MISCELLANEOUS. Except as otherwise provided in Sections 5, 10 and
11 hereof, notice given pursuant to any provision of this Agreement shall be
in writing and shall be delivered (i) if to the Company, at the office of the
Company at , Attention: ; or (ii) if to you,
as Representatives of the several U.S. Underwriters, care of Xxxxx Xxxxxx
Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Manager,
Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
several U.S. Underwriters, the Company, its directors and officers, and the
other controlling persons referred to in Section 7 hereof and their
respective successors and assigns, to the extent provided herein, and no
other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and
assigns" as used in this Agreement shall include a purchaser from any U.S.
Underwriter of any of the Shares in his status as such purchaser.
14. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
27
Please confirm that the foregoing correctly sets forth the agreement
between the Company, and the several U.S. Underwriters.
Very truly yours,
TELEPHONE AND DATA SYSTEMS, INC.
By __________________________________
Chairman of the Board
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
XXXXX XXXXXX INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES
CORPORATION
XXXXXXX, SACHS & CO.
As Representatives of the Several U.S. Underwriters
By XXXXX XXXXXX INC.
By _____________________________
Managing Director
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SCHEDULE I
NAME OF COMPANY
NUMBER OF NUMBER OF
UNDERWRITER FIRM SHARES UNDERWRITER FIRM SHARES
------------------------- ------------ -----------------------
Xxxxx Xxxxxx Inc. ...............
Credit Suisse First
Boston Corporation ...........
Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities
Corporation ...................
Xxxxxxx, Sachs & Co. ............
Total ....................
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