1
EXHIBIT 1.2
2
2,300,000 Shares
XXXXXX COMMUNICATIONS CORPORATION
Class A Common Stock
INTERNATIONAL UNDERWRITING AGREEMENT
March __, 1996
XXXXX XXXXXX INC.
PAINEWEBBER INTERNATIONAL (U.K.) LTD.
CIBC WOOD GUNDY SECURITIES CORP.
BANKERS TRUST INTERNATIONAL PLC
As Lead Managers of the Several Managers
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxxx Communications Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell an aggregate of 2,060,000 shares of its
Class A Common Stock, $0.001 par value per share, to the several Underwriters
named in Schedule II hereto (the "Managers"), and the persons named in Part A
of Schedule I hereto (the "Selling Stockholders"), severally and not jointly,
propose to sell to the several Managers an aggregate of [ ] shares of
Class A Common Stock and the persons named in Part B of Schedule I hereto (the
"Selling Warrantholders" and, together with the Selling Stockholders, the
"Selling Securityholders"), severally and not jointly, propose to sell to the
several Managers warrants (the "Firm Warrants") to purchase [ ] shares of
Class A Common Stock (the "Firm Warrant Shares"). The Company and the Selling
Securityholders are hereinafter sometimes referred to as the "Sellers." The
Company's Class A Common Stock, $0.001 par value per share, is hereinafter
referred to as the "Class A Common Stock" and the 2,060,000 shares of Class A
Common Stock to be issued and sold to the Managers by the Company and the [
] shares of Class A Common Stock to be sold to the Managers by the Selling
Stockholders are hereinafter referred to as the "Firm Shares." The Firm Shares
and the Firm Warrants are hereinafter referred to as the "Firm Securities."
The Company and the Selling Securityholders listed in Part C of Schedule I
hereto, severally and not jointly, also propose to sell to the Managers, upon
the
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terms and conditions set forth in Section 2 hereof, up to an additional [
] shares (the "Additional Shares" and, together with the Firm Shares, the
"International Shares") of Class A Common Stock and warrants (the "Additional
Warrants" and, together with the Firm Warrants, the "International Warrants")
to purchase [ ] shares of Class A Common Stock (the "Additional Warrant
Shares" and, together with the Firm Warrant Shares, the "International Warrant
Shares"). The Additional Shares and the Additional Warrants are hereinafter
referred to as the "Additional Securities." The International Shares and the
International Warrants are hereinafter referred to as the "International
Securities."
It is understood that the Company and the Selling
Securityholders are concurrently entering into a U.S. Underwriting Agreement,
dated the date hereof (the "U.S. Underwriting Agreement" and, together with the
International Underwriting Agreement, the "Underwriting Agreements"), providing
for (i) the sale of [ ] shares of Class A Common Stock (the "Firm U.S.
Shares"), of which 8,240,000 shares will be sold by the Company and [ ]
shares will be sold by the Selling Securityholders, and warrants (the "Firm
U.S. Warrants") to purchase [ ] shares of Class A Common Stock (the "Firm
U.S. Warrant Shares") and (ii) the grant of an option to purchase up to an
additional [ ] shares of Class A Common Stock (the "Additional U.S.
Shares" and, together with the Firm U.S. Shares, the "U.S. Shares") and
warrants (the "Additional U.S. Warrants" and, together with the Firm U.S.
Warrants, the "U.S. Warrants") to purchase [ ] shares of Class A Common
Stock (the "Additional U.S. Warrant Shares" and, together with the Firm U.S.
Warrant Shares, the "U.S. Warrant Shares"), through arrangements with certain
underwriters in the United States and Canada (the "U.S. Underwriters"), for
whom Xxxxx Xxxxxx Inc., PaineWebber Incorporated, CIBC Wood Gundy Securities
Corp. and BT Securities Corporation are acting as representatives (the
"Representatives"). The U.S. Shares and the U.S. Warrants are hereinafter
referred to as the "U.S. Securities." The U.S. Shares and the International
Shares are hereinafter referred to as the "Shares." The U.S. Warrants and the
International Warrants are hereinafter referred to as the "Warrants." The U.S.
Warrant Shares and the International Warrant Shares are hereinafter referred to
as the "Warrant Shares." The U.S. Securities and the International Securities
are hereinafter referred to as the "Securities."
The Company and the Selling Securityholders understand that
the Managers and the U.S. Underwriters intend to exercise the Warrants
immediately upon their receipt and will offer the
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Warrant Shares publicly as described in the Registration Statement (as
hereinafter defined). The Shares and the Warrant Shares are hereinafter
referred to as the "Offered Shares."
The Company and the Selling Securityholders also understand
that the Managers and the U.S. Underwriters have entered into an agreement (the
"Agreement Between U.S. Underwriters and Managers") contemplating the
coordination of certain transactions between the Managers and the U.S.
Underwriters and that, pursuant thereto and subject to the conditions set forth
therein, the Managers may purchase from the U.S. Underwriters a portion of the
U.S. Securities or sell to the U.S. Underwriters a portion of the International
Securities. The Company understands that any such purchases and sales between
the Managers and the U.S. Underwriters 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 U.S. Underwriting Agreement.
The Company and the Selling Securityholders wish to confirm as
follows their respective agreements with you (the "Lead Managers") and the
other several Managers on whose behalf you are acting, in connection with the
several purchases of the International Securities by the Managers.
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- 1 under the Act
(the "Registration Statement"), including prospectuses subject to completion
relating to the Offered Shares. The term "Registration Statement" as used in
this Agreement means the Registration Statement (including all financial
schedules and exhibits) and any registration statement filed pursuant to Rule
462(b) under the Act, each 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 Offered Shares may commence,
the term "Registration Statement" as used in this Agreement means the
Registration Statement as amended by said post-effective amendment. The term
"Prospectuses" as used in this Agreement means the prospectuses in the forms
included in the Registration Statement (including
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any prospectus subject to completion meeting the requirements of Rule 434(b)
under the Act), 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 or term sheets (within the meaning of Rule 434
under the Act) 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 or term sheets (within
the meaning of Rule 434 under the Act) 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 forms included in the
Registration Statement at the time of the initial filing of the Registration
Statement with the Commission or in any amendment to the Registration Statement
filed 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 Offered Shares: a Prepricing Prospectus and a Prospectus relating to
the U.S. Shares and the U.S. Warrant 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 (as defined herein) (the "U.S. Prepricing Prospectus" and the
"U.S. Prospectus," respectively), and a Prepricing Prospectus and a Prospectus
relating to the International Shares and the International Warrant Shares which
are to be offered and sold outside the United States and 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:
"Rules and Regulations" means the rules and regulations adopted by the
Commission under the Act; "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
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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.
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 Manager and, upon the basis of the
representations, warranties and agreements of the Company, the Selling
Securityholders herein contained and subject to all the terms and conditions
set forth herein, each Manager, severally and not jointly, agrees to purchase
from the Company, at a purchase price of $[ ] 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 Manager in Schedule
II hereto (or such number of Firm Shares increased as set forth in Section 12
hereof) bears to the aggregate number of Firm Shares to be sold by the Company
and the Selling Securityholders (with respect to each Manager, such Manager's
"Pro Rata Share"). The Company agrees, upon receipt of the exercise price of
the Firm Warrants and surrender of the certificates, if any, representing such
Firm Warrants, to issue to the Managers the Firm Warrant Shares.
Subject to such adjustments as you may determine in order to
avoid fractional shares or warrants, each Selling Securityholder hereby agrees,
severally and not jointly, and subject to all the terms and conditions set
forth herein, to sell to each Manager and, upon the basis of the
representations, warranties and agreements of the Company, the Selling
Securityholders and the Managers herein contained and subject to all the terms
and conditions set forth herein, each Manager, severally and not jointly,
agrees to purchase from each Selling Securityholder (i) that number of Firm
Shares, if any, set forth opposite such Selling Securityholder's name on Part A
of Schedule I hereto multiplied by each such Manager's Pro Rata Share at the
purchase price per share and (ii) that number of Firm Warrants, if any, set
forth opposite such Selling Securityholder's name on Part B of Schedule I
hereto multiplied by each such Manager's Pro Rata Share at the warrant purchase
price. "Warrant purchase price" for any Warrant means the excess of (i) the
purchase price per share multiplied by the number of Warrant Shares issuable
upon the exercise of the Warrant over (ii) the exercise price of such Warrant.
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The Company and the Selling Securityholders listed in Part C
of Schedule I hereto also agree, severally and not jointly, and subject to all
the terms and conditions set forth herein, to sell to the Managers and, upon
the basis of the representations, warranties and agreements of the Company, the
Selling Securityholders and the Managers herein contained and subject to all
the terms and conditions set forth herein, the Managers shall have the right to
purchase from the Company and the Selling Securityholders listed in Part C of
Schedule I hereto, at the purchase price per share in the case of Additional
Shares and at the warrant purchase price in the case of any Additional
Warrants, 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 International 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), the
number of Additional Shares and Additional Warrants, if any, is set forth
opposite their respective names in Part C of Schedule I. Additional Shares and
Additional Warrants may be purchased only for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares and the
Firm Warrant Shares. The number of Additional Shares and Additional Warrants
which the Managers elect to purchase upon any exercise of the over-allotment
option shall be provided (i) by the Company in the form of Additional Shares
equal to the number of Additional Shares set forth opposite its name on Part C
of Schedule I hereto multiplied by a fraction, the numerator of which is the
aggregate number of shares of Class A Common Stock which the Managers elect to
purchase (either directly through the purchase of Additional Shares or
indirectly through the purchase and subsequent exercise of Additional Warrants)
and the denominator of which is the aggregate number of Additional Shares and
Additional Warrant Shares (such fraction, the "Purchased Percentage") and (ii)
by each Selling Securityholder in the form of Additional Shares and/or
Additional Warrants determined by multiplying the number of Additional Shares
and/or Additional Warrant Shares that would be issued upon the exercise of such
Selling Securityholder's Additional Warrants each as set forth opposite such
Selling Securityholder's name on Part C of Schedule I hereto by the Purchased
Percentage. Upon any exercise of the over-allotment option, subject to such
adjustments as you may determine in order to avoid fractional shares or
warrants, each Manager, severally and not jointly, agrees to (i) purchase from
the Company and each Selling Securityholder who has agreed to sell Additional
Shares that number of Additional Shares to be sold by the Company or such
Selling Securityholder determined pursuant to the preceding sentence multiplied
by each Manager's
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Pro Rata Share and (ii) purchase from each Selling Securityholder who has
agreed to sell Additional Warrants that number of Additional Warrants to be
sold by such Selling Securityholder determined pursuant to the preceding
sentence multiplied by each such Manager's Pro Rata Share. The Company agrees,
upon receipt of the exercise price of the Additional Warrants and surrender of
the certificates, if any, representing such Additional Warrants, to issue to
the Managers the Additional Warrant Shares.
Certificates in transferable form for the International Shares
and the International Warrants which each of the Selling Securityholders agrees
to sell pursuant to this Agreement [(other than Shares issuable upon the
exercise of options)] have been placed in custody with First Union National
Bank of North Carolina (the "Custodian") for delivery under this Agreement
pursuant to a Custody Agreement and Power of Attorney (collectively, the
"Custody Agreement") executed by each of the Selling Securityholders appointing
Xxxxxx X. Tek and Xxxxxxx X. Xxxxxxxx as agents and attorneys-in-fact (the
"Attorneys-in-Fact"). With respect to Shares issuable upon the exercise of
stock options held by certain of the Selling Securityholders, the Selling
Securityholders holding such options have deposited with the Custodian
irrevocable option exercise and payment direction letters in form and substance
satisfactory to the Lead Managers. Each Selling Securityholder agrees,
severally and not jointly, that (i) the International Shares and the
International Warrants represented by the certificates deposited by such
Selling Securityholder in custody pursuant to the Custody Agreement are subject
to the interests of the Managers, the Company and each other Selling
Securityholder, (ii) the arrangements made by such Selling Securityholder for
such custody are, except as specifically provided in the Custody Agreement,
irrevocable, and (iii) to the extent that such Selling Securityholder can, by
reliance on this clause (iii), vary the provisions of any applicable law, the
obligations of such Selling Securityholder hereunder and under the Custody
Agreement shall not be terminated by any act of such Selling Securityholder or
by operation of law, whether upon the death or incapacity of any Selling
Securityholder or the occurrence of any other event, except as specifically
provided in the Custody Agreement. Subject to the terms and conditions of the
Custody Agreement, if any Selling Securityholder shall die or be incapacitated
or if any other event referred to in clause (iii) of the immediately preceding
sentence shall occur before the delivery of the International Shares and the
International Warrants hereunder, certificates for the International Shares and
the International Warrants of such Selling Securityholder shall be delivered to
the Managers by the Attorneys-in-Fact in accordance with the terms
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and conditions of this Agreement and the Custody Agreement as if such death or
incapacity or other event had not occurred, regardless of whether or not the
Attorneys-in-Fact or any Manager shall have received notice of such death,
incapacity or other event. To the extent specifically provided in the Custody
Agreement, each Attorney-in-Fact is authorized, on behalf of such Selling
Securityholder, to execute this Agreement and certain other documents in
connection with the sale of the International Shares and the International
Warrants to be sold hereunder by such Selling Securityholder including
acknowledging, on behalf of such Selling Securityholder, receipt of the
proceeds from the sale of the International Shares and the International
Warrants. Each Attorney-in-Fact agrees to perform his duties under the Custody
Agreement.
3. Terms of Public Offering. The Sellers have been
advised by you that the Managers propose to make a public offering of their
respective portions of the Offered Shares as soon after the Registration
Statement and this Agreement have become effective as in your judgment is
advisable and initially to offer such Offered Shares upon the terms set forth
in the International Prospectus.
4. Delivery of the Securities and Payment Therefor.
Delivery to the Managers of and payment for the Firm Securities 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 March [ ], 1996 (the "Closing Date").
The place of closing for the Firm Securities and the Closing Date may be varied
by agreement among you, the Company and the Attorneys-in-Fact.
Delivery to the Managers of and payment for any Additional
Securities to be purchased by the Managers shall be made at the aforementioned
office of Xxxxx Xxxxxx Inc. at such times on such dates (each, an "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 three nor later than ten
business days after the giving of the notice hereinafter referred to, as shall
be specified in a written notice from you on behalf of the Managers to the
Company and the Attorneys-in-Fact of the Managers' determination to purchase a
number, specified in such notice, of Additional Securities. The place of
closing for any Additional Securities and the Option Closing Date for such
Additional Securities may be varied by agreement among you, the Company and the
Attorneys-in-Fact.
Certificates for the Firm Shares and the Firm Warrant Shares
and for any Additional Shares and any Additional Warrant
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Shares to be purchased hereunder (or acquired upon the exercise of Warrants
purchased hereunder) shall be registered in such names and in such
denominations as you shall request prior to 1:00 P.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 the
Firm Warrant Shares and any Additional Shares and any Additional Warrant Shares
to be purchased hereunder (or acquired upon the exercise of Warrants 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 by
certified or official bank check or checks payable in New York Clearing House
(next day) funds to the order of the Company or the Attorneys-in-Fact, as the
case may be.
5. Agreements of the Company. The Company agrees with
the several Managers 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 Offered 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 of the Prepricing Prospectuses 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
Offered 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 the first sentence of paragraph (f) of
this Section 5, of any change in the Company's or any of its
subsidiaries' condition (financial or other), business, prospects,
properties, net worth or results of operations, or of the happening of
any
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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 time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will use its
best efforts to obtain the withdrawal of such order at the earliest
possible time.
(c) The Company will furnish to you, without charge, five
signed copies of the registration statement as originally filed with
the Commission and of each amendment thereto, including financial
statements and all exhibits thereto, and will also furnish to you,
without charge, 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.
(d) The Company will not (i) file any amendment to the
Registration Statement or make any amendment or supplement to the
Prospectuses (including by way of issuance and filing under the Act of
any term sheet within the meaning of Rule 434 under the Act) of which
you shall not previously have been advised or to which you shall
reasonably object within a reasonable period of time after being so
advised or (ii) during such period as, in the reasonable opinion of
counsel for the Managers, a prospectus is required to be delivered in
connection with sales by any Manager or dealer, file any information,
documents or reports pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), without delivering a copy of such
information, documents or reports to you, as Lead Managers for the
Managers, prior to or concurrently with such filing.
(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 International 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 Offered
Shares are offered by the several Managers and by dealers, prior to
the
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date of the International Prospectus, of each International 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 in the reasonable opinion of counsel for the Managers a prospectus
is required by the Act to be delivered in connection with sales of
Offered Shares by any Manager or dealer, the Company will
expeditiously deliver to each Manager, without charge, as many copies
of the International Prospectus (and of any amendment or supplement
thereto) as you may reasonably request. The Company consents to the
use of the International 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
Offered Shares are offered by the several Managers and by all dealers
to whom Offered Shares may be sold, both in connection with the
offering and sale of the Offered Shares and for such period of time
thereafter as the International Prospectus is required by the Act to
be delivered in connection with sales by any Manager 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 Managers is
required to be set forth in the International Prospectus (as then
amended or supplemented) or should be set forth therein in order 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 International Prospectus 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, and will
expeditiously furnish to the Managers as many copies thereof as they
may reasonably request. In the event that the Company and you, as
Lead Managers for the several Managers, agree that the International
Prospectus should be amended or supplemented, the Company, if
requested by you, will promptly issue a press release announcing or
disclosing the matters to be covered by the proposed amendment or
supplement.
(g) The Company will cooperate with you and with counsel
for the Managers in connection with the registration or qualification
of the Offered Shares for offering and sale by the several Managers
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
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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 Offered Shares, in any jurisdiction
where it is not now so subject.
(h) The Company will make generally available to its
security holders a consolidated earning 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 earning statement shall satisfy the provisions of Section
11(a) of the Act and Rule 158 promulgated thereunder.
(i) During the period of five years hereafter, the
Company will furnish to you promptly after available, a copy of each
report of the Company mailed to common stockholders or filed with the
Commission or the American Stock Exchange (unless the Company has, in
good faith, requested confidential treatment with respect to such
filing).
(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 12 hereof
or by notice given by you terminating this Agreement pursuant to
Section 12 or Section 13 hereof) or if this Agreement shall be
terminated by the Managers because of any failure or refusal on the
part of the Company or the Selling Securityholders to comply with the
terms or fulfill any of the conditions of this Agreement, the Company
agrees to reimburse the Lead Managers for all reasonable out-of-pocket
expenses (including reasonable fees and expenses of counsel for the
Managers) incurred by you in connection herewith.
(k) The Company will apply the net proceeds from the sale
of the Offered Shares to be sold by it hereunder substantially in
accordance with the description set forth in the Prospectuses.
(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.
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(m) Except as provided in this Agreement and the U.S.
Underwriting Agreement, the Company will not sell, offer to sell,
solicit an offer to buy, contract to sell, grant any option to
purchase or otherwise transfer or dispose of any common stock of the
Company (the "Common Stock") or any securities convertible into or
exercisable or exchangeable for Common Stock, for a period of 180 days
after the date of the Prospectuses, without the prior written consent
of Xxxxx Xxxxxx Inc; provided, however, that the Company may
(i) repurchase from Selling Securityholders Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock, (ii)
issue Common Stock upon the exercise of currently outstanding warrants
or upon the exercise of options granted under the Company's existing
stock option grants or plans or the proposed stock option plan to be
adopted by the Company as described in the Prospectuses, (iii) issue
Class A Common Stock upon conversion or exchange of existing shares of
another class of Common Stock, (iv) grant an option, and permit the
exercise thereof, with respect to 75,000 shares of Class A Common
Stock to Xxxx Xxxxx or his designee and (v) issue shares of Common
Stock as consideration for the acquisition of additional broadcast
assets provided that in the case of this clause (v), the entity or
individual receiving such shares agrees in writing to be bound by the
terms of a lock-up letter with terms substantially similar to those
referred to in clause (n) below.
(n) Except as stated in this Agreement and in the U.S.
Underwriting Agreement and in the Prepricing Prospectuses and
Prospectuses, the Company has not taken, nor will it take, directly or
indirectly, any action designed to cause or result in stabilization or
manipulation of the price of any of the Company's capital stock (the
"Capital Stock") to facilitate the sale or resale of the Offered
Shares.
(o) The Company will use its best efforts to have the
Offered Shares listed, subject to issuance, on the American Stock
Exchange on or before the Closing Date.
6. Agreements of the Selling Securityholders. Each of
the Selling Securityholders, severally and not jointly, agrees with the several
Managers as follows:
(a) Such Selling Securityholder will use reasonable
efforts to cooperate to the extent reasonably necessary to cause the
Registration Statement or any post-effective amendment thereto to
become effective at the earliest
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possible time, to the extent that such effectiveness is contingent
upon an action to be taken by such Selling Securityholder.
(b) On the Closing Date or the Option Closing Date, as
the case may be, all stock transfer or other taxes (other than income
taxes) which are required to be paid in connection with the sale and
transfer hereunder to the several Managers by such Selling
Securityholder of the Shares or Warrants to be sold by such Selling
Securityholder to the several Managers hereunder on such date will
have been paid or provided for by such Selling Securityholder.
(c) Except as provided in this Agreement and in the U.S.
Underwriting Agreement, such Selling Securityholder will not sell,
offer to sell, solicit an offer to buy, contract to sell, grant any
option to purchase or otherwise transfer or dispose of any Common
Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, for a period of 180 days after the date
of the Prospectuses, without the prior written consent of Xxxxx Xxxxxx
Inc; provided, however, that such Selling Securityholder may (i)
transfer shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock to (x) the Company, (y)
any other Selling Securityholder who is bound by the terms of this
paragraph (c) or (z) to any Affiliate of any Selling Securityholder if
such Affiliate agrees in writing to be bound by the terms of this
paragraph (c) or (ii) exercise, exchange or convert stock options,
warrants, convertible securities or other rights entitling such
Selling Securityholder to receive shares of Common Stock or convert or
exchange shares of one class of Common Stock into shares of a
different class of Common Stock, with all the shares of Common Stock
received upon any such exercise, exchange or conversion being subject
to the terms of this paragraph (c).
(d) Except as stated in this Agreement and the U.S.
Underwriting Agreement and in the Prepricing Prospectuses and the
Prospectuses, such Selling Securityholder has not taken, nor will it
take, directly or indirectly, any action designed to cause or result
in stabilization or manipulation of the price of any Capital Stock to
facilitate the sale or resale of the Offered Shares (it being
understood that this paragraph (d) shall not apply to any
stabilization efforts of any affiliate of such Selling Securityholder
who is a U.S. Underwriter or Manager).
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(e) Such Selling Securityholder will advise you promptly,
and if requested by you, will confirm such advice in writing, within
the period of time referred to in the first sentence of paragraph (f)
of Section 5 hereof (but not in excess of nine months from the date of
this Agreement), of (i) any change in information relating to such
Selling Securityholder previously furnished to you or the Company in
writing by such Selling Securityholder specifically for use in the
Registration Statement and (ii) if, but only if, such Selling
Securityholder is an officer of the Company, any change in the
Company's or any of its subsidiaries' condition (financial or other),
business, prospects, properties, net worth or results of operations or
of any change in information relating to the Company or any such
subsidiary or any new information relating to the Company or any of
its subsidiaries or relating to any matter stated in the Prospectuses
or any amendment or supplement thereto which comes to the attention of
such Selling Securityholder who is an officer that suggests that any
statement made in the Registration Statement or the Prospectuses (as
then amended or supplemented, if amended or supplemented) is or may be
untrue in any material respect or that the Registration Statement or
Prospectuses (as then amended or supplemented, if amended or
supplemented) omit or may omit to state a material fact or a fact
necessary to be stated therein in order to make the statements therein
not misleading in any material respect, or of the necessity to amend
or supplement the Prospectuses (as then amended or supplemented, if
amended or supplemented) in order to comply with the Act or any other
law.
(f) Such Selling Securityholder agrees to deliver to you
prior to or at the Closing Date a properly completed and executed
United States Treasury Department Form W-9 (or other applicable form
or statement specified by Treasury Department regulations in lieu
thereof).
7. Representations and Warranties of the Company. The
Company represents and warrants to each Manager that:
(a) Each 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.
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-16-
(b) 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 did not
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 reliance upon and in conformity with information
relating to any Manager or U.S. Underwriter furnished to the Company
in writing by or on behalf of any Manager or U.S. Underwriter through
you expressly for use therein.
(c) All the outstanding shares of Capital Stock of the
Company have been duly authorized and validly issued, are fully paid
and nonassessable and 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 Managers and the U.S.
Underwriters against payment therefor in accordance with the terms
hereof and in the U.S. Underwriting Agreement, 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 descriptions thereof in the Registration
Statement and the Prospectuses.
(d) The warrant agreements governing the Warrants (the
"Warrant Agreements") have been duly and validly authorized by the
Company, and the Warrant Agreements have been duly executed and
delivered by the Company and constitute the valid and legally binding
agreements of the Company, enforceable against the Company in
accordance with their terms, except that the enforcement thereof may
be subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought.
(e) The Warrants have been duly and validly authorized by the
Company and have been duly executed and delivered by the Company and
constitute valid and legally binding
18
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obligations of the Company enforceable against the Company in
accordance with their terms except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought. The exercise price for the
Warrants is $.001 per Warrant.
(f) The Warrant Shares have been validly reserved for
issuance; when issued, the Warrant Shares will be duly authorized,
validly issued, fully paid and nonassessable and free of any
preemptive or similar rights.
(g) 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 could 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 (a "Material Adverse
Effect").
(h) All the Company's subsidiaries (collectively, the
"Subsidiaries") are listed in an exhibit to the Registration
Statement. Each Subsidiary is either (i) a corporation duly
incorporated or organized, validly existing and in good standing in
the jurisdiction of its incorporation or organization or (ii) a
partnership duly organized and validly existing under the applicable
laws of the State of Florida and, in each case, with full corporate or
partnership power and authority, as the case may be, 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; all the outstanding shares of capital stock
of each Subsidiary which
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is a corporation have been duly authorized and validly issued and are
fully paid and nonassessable; all of the outstanding shares of capital
stock or outstanding partnership interests of the Subsidiaries are
owned by the Company directly, or indirectly through one of the other
Subsidiaries, and, other than as set forth in the Prospectuses, are
owned free and clear of any lien, adverse claim, security interest,
equity or other encumbrance.
(i) 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 any of their respective officers
or directors, 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 that are not described or filed as required by the Act.
(j) 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, or in default in any material respect 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, except as would
not (individually or in the aggregate) have a Material Adverse Effect.
(k) Except as disclosed in the Registration Statement and
the Prospectuses, neither the issuance and sale of the Offered Shares,
the execution, delivery or performance of this Agreement or the other
Transaction Documents (as hereinafter defined) by the Company or the
Subsidiaries (to the extent a party thereto) nor the consummation by
the Company or the Subsidiaries (to the extent a party thereto) of the
transactions contemplated hereby or thereby
20
-19-
(i) requires any 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
(except (A) such as may be required for the registration of the
Offered Shares under the Act and compliance with the securities or
Blue Sky and other laws of various jurisdictions and countries, all of
which have been or will be effected in accordance with this Agreement
and (B) as would not (individually or in the aggregate) have a
Material Adverse Effect) 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 by-laws, 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 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, except as would not (individually or in the aggregate) have a
Material Adverse Effect.
(l) Each of Price Waterhouse LLP and Xxxxxx, Xxxxxx and
Company, who have certified or shall certify the financial statements
included in the Registration Statement and the Prospectuses (or any
amendment or supplement thereto), are independent public accountants
as required by the Act.
(m) The financial statements of the Company and the
Subsidiaries, together with related schedules and notes, included in
the Registration Statement and the Prospectuses (and any amendment or
supplement thereto) present fairly the consolidated financial
position, results of operations and changes in financial position of
the Company and the Subsidiaries on the basis stated in the
Registration Statement and the Prospectuses at the respective dates or
for the respective periods to which they apply; such statements and
related schedules and notes have been
21
-20-
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as
disclosed therein; and the other financial and statistical
information and data included 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.
(n) The unaudited pro forma consolidated financial
statements and other pro forma financial information (including the
notes thereto) included in the Registration Statement and the
Prospectuses (A) present fairly in all material respects the
information shown therein; (B) have been prepared in accordance with
applicable requirements of Regulation S-X promulgated under the
Exchange Act; (C) have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements; and (D) have been properly computed on the bases described
therein. The assumptions used in the preparation of the pro forma
financial statements and other pro forma condensed consolidated
financial information included in the Registration Statement and the
Prospectuses are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances
referred to therein.
(o) The execution and delivery of, and the performance by
the Company of its obligations under, this Agreement have been duly
and validly authorized by the Company, and this 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 (i) that the enforcement
hereof may be subject to bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and to
general principles of equity and the discretion of the court before
which any proceeding therefor may be brought and (ii) as any rights to
indemnity or contribution hereunder may be limited by applicable
securities laws and public policy considerations.
(p) The execution and delivery of, and the performance by
the Company and the Subsidiaries (to the extent a party thereto) of
each of its obligations under, each agreement or instrument executed
or delivered in connection with the
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Proposed Acquisitions (as defined in the Prospectuses), the exercise
of the Station Options (as defined in the Prospectuses) and the
termination of the put option on the Company's Class A and Class B
Common Stock warrants (collectively, the "Transaction Documents"),
other than this Agreement, have been duly and validly authorized by
the Company and the Subsidiaries (to the extent a party thereto), and
such Transaction Documents have been duly executed and delivered by
the Company and the Subsidiaries (to the extent a party thereto) and
constitute the valid and legally binding agreement of the Company and
the Subsidiaries (to the extent a party thereto), enforceable against
them in accordance with their terms, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and (ii)
to general principles of equity and the discretion of the court before
which any proceeding therefor may be brought.
(q) 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, contingent or otherwise, or
entered into any transaction, not in the ordinary course of business,
that is material to the Company and the Subsidiaries taken as a whole,
and there has not been any change in the capital stock (other than as
contemplated by the Underwriting Agreements or the exercise of stock
options pursuant to grants or plans described in the Prospectuses), or
material increase in the short-term debt or long-term debt, of the
Company or any of the Subsidiaries, 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, prospects, properties, net worth or
results of operations of the Company and the Subsidiaries taken as a
whole.
(r) Each of the Company and the Subsidiaries has good and
marketable title to all property (real and personal) described in the
Prospectuses as being owned by it which is 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
23
-22-
as are described in the Registration Statement and the Prospectuses or
would not (individually or in the aggregate) have a Material Adverse
Effect and all property described in the Registration Statement
(including exhibits thereto) and the Prospectuses as being held under
lease by each of the Company and the Subsidiaries which is material to
the business of the Company and the Subsidiaries, taken as a whole, is
held by it under binding leases that are in force and effect.
(s) 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 Offered Shares other
than the Registration Statement, the Prepricing Prospectuses, the
Prospectuses or other materials, if any, permitted by the Act.
(t) The Company and each of the Subsidiaries have such
permits, licenses, franchises and authorizations of governmental or
regulatory authorities, including, without limitation, permits,
licenses, franchises and authorizations from the United States Federal
Communications Commission (the "FCC") ("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 as, individually
or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect; the Company and each of the Subsidiaries has
fulfilled and performed all of their respective obligations with
respect to such Permits and no event has occurred which allows, or
after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of
the holder of any such Permit, subject in each case to such
qualifications as may be set forth in the Prospectuses and, except as,
individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect; and, except as described in the
Prospectuses, none of such Permits contains any restriction that is
materially burdensome to the Company or any of the Subsidiaries, taken
as a whole. Other than as disclosed in the Prospectuses, there are no
license renewal or rate or tariff proceedings existing, pending or, to
the best knowledge of the Company, threatened that could reasonably be
expected to have a Material Adverse Effect.
24
-23-
(u) To the extent required by the Exchange Act, each of
the Company and the Subsidiaries 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.
(v) To the Company's knowledge, neither the Company nor
any of the Subsidiaries nor any officer, director, 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.
(w) 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, other than those taxes or
assessments being contested in good faith and those taxes or
assessments for which adequate reserves or accruals have been
established in accordance with generally accepted accounting
principles, except where the failure to file such tax returns or to
pay such taxes or assessments is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect. The
Company knows of no actual or proposed additional tax assessments for
any fiscal period against the Company or any of the Subsidiaries that
would, individually or in the aggregate, be reasonably likely to have
a Material Adverse Effect.
(x) Except as disclosed in the Registration Statement or
the Prospectuses, no holder of any security of the Company has any
right to require registration of any security of the Company because
of the filing of the Registration Statement or consummation of the
transactions contemplated by this Agreement.
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(y) 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, the absence of which would have or could
reasonably be expected to have a Material Adverse Effect, 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 which claims or challenges, if the
subject of an unfavorable decision, would individually or in the
aggregate, have a Material Adverse Effect.
(z) The Company has complied with all provisions of
Florida Statutes, Section 517.075, relating to issuers doing business
with Cuba.
(aa) The Company is not now, and after sale of the Shares
to be sold by it hereunder and application of the net proceeds from
such sale as described in the Prospectuses under the caption "Use of
Proceeds" will not be, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(ab) There are no business relationships or related-party
transactions of the nature described in Item 404 of Regulation S-K
involving the Company or any of its Subsidiaries and any persons
described in such Item that are required to be disclosed in the
Prospectuses and which have not been so disclosed.
(ac) Except as stated in this Agreement and in the U.S.
Underwriting Agreement and in the Prepricing Prospectuses and the
Prospectuses, neither the Company nor any of the Subsidiaries, or any
of such entities' directors, officers or controlling persons, has
taken, or will take, directly or indirectly, any action designed to
cause or result in stabilization or manipulation of the price of any
Capital Stock of the Company to facilitate the sale or resale of the
Offered Shares.
8. Representations and Warranties of the Selling
Securityholders. Each Selling Securityholder, severally and not jointly,
represents and warrants to each Manager that:
26
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(a) Such Selling Securityholder now has, and on the
Closing Date and the Option Closing Date will have, valid and
marketable title to the Shares or the Warrants to be sold by such
Selling Securityholder hereunder, free and clear of any lien, claim,
security interest or other encumbrance, including, without limitation,
any restriction on transfer other than those arising under this
Agreement, the Custody Agreement, the Communications Act of 1934, as
amended and the policies, rules and regulations promulgated thereunder
(collectively, the "Communications Act") and any federal or state
securities laws.
(b) Such Selling Securityholder now has, and on the
Closing Date and the Option Closing Date will have, full legal right,
power and authorization to sell, assign, transfer and deliver such
Shares or Warrants in the manner and on the terms provided in and
contemplated by this Agreement. Assuming that the Managers have
purchased such Shares or Warrants for value and without notice of any
adverse claim, upon delivery of and payment for such Shares or
Warrants hereunder, the several Managers will acquire valid and
marketable title to such Shares or Warrants, as the case may be, free
and clear of any lien, claim, security interest or other encumbrance,
it being understood that no representation or warranty is being made
herein with respect to the securities or Blue Sky laws of any
jurisdiction or the Communications Act.
(c) Each of this Agreement and the Custody Agreement has
been duly authorized, executed and delivered by or on behalf or such
Selling Securityholder and assuming that each has been duly
authorized, executed and delivered by or on behalf of and constitutes
a valid and binding agreement of each other party thereto, constitutes
a valid and binding agreement of such Selling Securityholder
enforceable against such Selling Securityholder in accordance with its
terms, except (i) that the enforcement thereof may be subject to
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating
to creditors' rights generally, and to general principles of equity
and the discretion of the court before which any proceeding therefor
may be brought and (ii) as any rights to indemnity or contribution
thereunder may be limited by applicable laws and public policy
considerations.
(d) Assuming that the agreement among the Company and
certain of the Selling Securityholders setting forth certain
27
-26-
amendments to the Stockholders Agreement (as defined in the
Prospectuses) and certain other instruments and agreements are in full
force and effect, that the waivers and consents given by the other
parties thereto are valid and binding and that the Company's
representations and warranties contained herein are true and complete
in all material respects, neither the execution and delivery of this
Agreement or the Custody Agreement by or on behalf of such Selling
Securityholder nor the performance by such Selling Securityholder of
its obligations hereunder or thereunder requires any consent,
approval, authorization or order of, or filing or registration with,
any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may have been
obtained or as may be required under the Act or the Communications Act
or such as may be required under state securities or Blue Sky laws) or
conflicts with or constitutes a breach of, or default under, any
agreement, indenture or other instrument to which such Selling
Securityholder is a party or by which such Selling Securityholder is
bound, or any statute, law, rule, regulation, ruling, judgment,
injunction, order or decree applicable to such Selling Securityholder
except, in each case, as would not (individually or in the aggregate)
have a material adverse effect on such Selling Securityholder or its
ability to perform its obligations hereunder.
(e) The Registration Statement and the Prospectuses do
not contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading (in the case of the
Prospectuses, in the light of the circumstances under which such
statements were made), provided that the representations and
warranties set forth in this paragraph (e) shall apply only to
statements in or omissions from the Registration Statement or any
Prospectus made in reliance upon and in conformity with the most
recent information relating to such Selling Securityholder provided by
or on behalf of such Selling Securityholder in writing expressly for
use therein.
(f) If, but only if, such Selling Securityholder is an
officer of the Company, such Selling Securityholder does not have any
knowledge or any reason to believe that the Registration Statement or
the Prospectuses (or any amendment or supplement thereto) contains any
untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading.
28
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(g) The representations and warranties of such Selling
Securityholder in the Custody Agreement are true and correct.
9. Indemnification and Contribution. (a) The Company
and Second Xxxxxxx Xxxxxxx, L.P. (the "Indemnifying Selling Securityholder"),
jointly and severally, agree to indemnify and hold harmless each of you and
each other Manager and each person, if any, who controls any Manager 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 Prepricing Prospectus or in the Registration Statement or the Prospectuses
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 Manager
furnished in writing to the Company by or on behalf of any Manager through you
expressly for use in connection therewith; provided, however, that the
indemnification contained in this paragraph (a) with respect to any Prepricing
Prospectus and any other preliminary prospectus, the Prospectuses or any other
amendment or supplement thereto shall not inure to the benefit of any Manager
(or to the benefit of any person controlling such Manager) on account of any
such loss, claim, damage, liability or expense arising from the sale of the
Offered Shares by such Manager to any person if a copy of the International
Prospectus, as amended or supplemented, shall not have been delivered or sent
to such person within the time required by the Act and the regulations
thereunder, and the untrue statement or alleged untrue statement or omission or
alleged omission of a material fact contained in such International Prepricing
Prospectus was corrected in the International Prospectus; provided that the
Company has delivered the International Prospectus, as amended or supplemented,
to the several Managers 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 or any Indemnifying Selling Securityholder may
otherwise have. Notwithstanding the foregoing, to the extent any such loss,
claim, damage, liability or expense arises out of matters other than those
which are referred to in paragraph 9(c) hereof and which relate to the
Indemnifying Selling
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Securityholder, each Manager agrees that it shall seek indemnification or
contribution for any claim hereunder first against the Company and if, and only
if, the Company is unable to fulfill its indemnification or contribution
obligations hereunder, the Managers shall then be entitled to seek any
remaining indemnification or contribution of any claim hereunder from the
Indemnifying Selling Securityholder. The obligations and liability of the
Indemnifying Selling Securityholder, whether with respect to indemnification
pursuant to this Section 9(a) or 9(c), contribution pursuant to Section 9(e) or
otherwise, shall not in any event exceed the aggregate amount of the net
proceeds received by the Indemnifying Selling Securityholder from the sale of
Shares sold by the Indemnifying Selling Securityholder to the Managers pursuant
to this Agreement.
(b) If any action, suit or proceeding shall be brought
against any Manager or any person controlling any Manager in respect of which
indemnity may be sought against the Company or the Indemnifying Selling
Securityholder, such Manager 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
Manager 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 Manager 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 Manager or such controlling person and the
indemnifying parties and such Manager 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 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 Manager 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
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firm of attorneys (in addition to any local counsel) at any time for all such
Managers 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 shall be reasonably acceptable to the
indemnified parties, 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 Manager, 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 Selling Securityholder agrees, severally and not
jointly, to indemnify and hold harmless each of you and each other Manager and
each person, if any, who controls any Manager within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, 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 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 the Registration Statement or the Prospectuses 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, but only with respect
to the information relating to such Selling Securityholder furnished in writing
by or on behalf of such Selling Securityholder other than the Indemnifying
Selling Securityholder expressly for use in the Registration Statement or any
Prospectus, or any amendment or supplement thereto; provided, however, that (i)
such Selling Securityholder shall not be liable in any such case, whether for
indemnification pursuant to this Section 9(c), contribution pursuant to Section
9(e), or otherwise, if any such untrue statement or alleged untrue statement or
omission or alleged omission was contained in or omitted from the Registration
Statement or any Prospectus used after such time as the Company shall have been
advised by or on behalf of such Selling Securityholder of such untrue statement
or alleged untrue statement or omission or alleged omission, and (ii) the
obligations and liability of such Selling Securityholder, whether with respect
to indemnification pursuant to this Section 9(c),
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contribution pursuant to Section 9(e) or otherwise, shall not in any event
exceed in the aggregate the amount of net proceeds received by such Selling
Securityholder from the sale of the Shares or Warrants sold by such Selling
Securityholder to the Managers pursuant to this Agreement. If any action, suit
or proceeding shall be brought against any Manager, any such controlling person
of any Manager, the Company, any of its directors, any such officer, or any
such controlling person of the Company, based on the Registration Statement or
any Prospectus or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Selling Securityholder pursuant to this
paragraph (c), such Selling Securityholder 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 Selling Securityholder 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
Selling Securityholder's expense), and each Manager, each such controlling
person of any Manager, the Company, its directors, any such officer, and any
such controlling person of the Company shall have the rights and duties given
to the Managers by paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which any Selling Securityholder may
otherwise have.
(d) Each Manager agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, each Selling Securityholder, and any person who
controls the Company or any Selling Securityholder 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 and the Selling Securityholders to
each Manager, but only with respect to information relating to such Manager
furnished in writing by or on behalf of such Manager through you expressly for
use in the Registration Statement, the Prospectus or any 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,
any Selling Securityholder, or any such controlling person based on the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto, and in respect of which indemnity may be
sought against any Manager pursuant to this paragraph (d), such Manager 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 Manager shall
not be required to do so, but may employ separate counsel therein and
participate in
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the defense thereof, but the fees and expenses of such counsel shall be at
such Manager's expense), and the Company, its directors, any such officer, the
Selling Securityholders, and any such controlling person shall have the rights
and duties given to the Managers by paragraph (b) above. The foregoing
indemnity agreement shall be in addition to any liability which any Manager may
otherwise have.
(e) If the indemnification provided for in this Section 9
is unavailable to an indemnified party under paragraphs (a), (c) or (d) hereof
or is insufficient to hold an indemnified party harmless 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, the
Selling Securityholders (severally) and the Managers from the sale of the
Shares and the Warrants and the offering of the Offered 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, the
Selling Securityholders (severally) and the Managers 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, the Selling
Securityholders (severally) and the Managers shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company or such Selling Securityholders (severally)
bear to the total underwriting discounts and commissions received by the
Managers, in each case determined as set forth in the table on the cover page
of the International Prospectus; provided that, in the event that the Managers
shall have purchased any Additional Shares and/or Additional Warrants
hereunder, any determination of the relative benefits received by the Company,
the Selling Securityholders (severally) or the Managers from the offering of
the Offered Shares shall include the net proceeds (before deducting expenses)
received by the Company and the Selling Securityholders (severally), and the
underwriting discounts and commissions received by the Managers, from the sale
of such Additional Shares and Additional Warrants, 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 International Prospectus. The relative fault of the Company,
the Selling Securityholders and the Managers shall be determined by reference
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to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the Selling Securityholders or
the Managers and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. In
determining the benefit to, or the fault of, any particular Selling
Securityholder, the benefits to and fault of each other Selling Securityholder
and the Company shall not be taken into account.
(f) The Company, the Selling Securityholders and the
Managers agree that it would not be just and equitable if contribution pursuant
to this Section 9 were determined by a pro rata allocation (even if the
Managers 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 (e) 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 (e) 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 9, no Manager shall be required to contribute any amount in excess of
the amount by which the total price of the Offered Shares underwritten by it
and distributed to the public exceeds the amount of any damages which such
Manager 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 Managers' obligations to contribute pursuant
to this Section 9 are several in proportion to the respective numbers of Firm
Shares set forth opposite their names in Schedule II hereto (or such numbers of
Firm Shares increased as set forth in Section 12 hereof) and not joint. The
obligations of the Selling Securityholders to contribute pursuant to this
Section 9 are several and not joint and no Selling Securityholder shall in any
event be required to contribute any amount which is in excess of the amount by
which the total net proceeds received by such Selling Securityholder from the
sale of the Shares or Warrants sold by such Selling Securityholder to the
Managers pursuant to this Agreement exceeds the amounts that such Selling
Securityholder has otherwise been required to pay by reason of the statements
or omissions which result in such obligation to contribute.
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(g) 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.
(h) Any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification or contribution
under this Section 9 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 9 and the
representations and warranties of the Company and the Selling Securityholders
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 Manager
or any person controlling any Manager, the Company, its directors or officers
or the Selling Securityholders or any person controlling the Company or any
Selling Securityholder, (ii) acceptance of any Shares or Warrants and payment
therefor hereunder and (iii) any termination of this Agreement. A successor to
any Manager or any person controlling any Manager, to the Company, its
directors or officers, or any person controlling the Company, or to any Selling
Securityholder, its directors, officers or partners, or any person controlling
a Selling Securityholder shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 9.
10. Conditions of Managers' Obligations. The several
obligations of the Managers to purchase the Firm Shares and the Firm Warrants
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 Offered Shares may commence, the Registration
Statement or such post-effective amendment shall have become effective
not later than 5:30 P.M. (or, in the case of a Registration Statement
filed pursuant to Rule 462(b) under the Act, not later than 10:00
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
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the effectiveness of the Registration Statement shall have been issued
and be in effect and no proceeding for that purpose shall have been
instituted or, to the knowledge of the Company, any Selling
Securityholder or any Manager, 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 reasonable 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, prospects, properties, net worth, or
results of operations of the Company or the Subsidiaries not
contemplated by the Prospectuses, which in your opinion, as Lead
Managers for the several Managers, would materially, adversely affect
the market for the Offered Shares or (ii) any event or development
relating to or involving the Company or any officer or director of the
Company or any Selling Securityholder which makes any statement made
in the Prospectuses untrue or which, in the opinion of the Company and
its counsel or the Managers 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 Lead Managers for
the several Managers, materially adversely affect the market for the
Offered Shares.
(c) You shall have received on the Closing Date, an
opinion of Holland & Knight, counsel for the Company and Second
Xxxxxxx Xxxxxxx, L.P., Xxxxx X. Xxxxxx, Xxxx X. Xxxxxxx, Xxx Xxx
Xxxxx, Xxxxxx X. Tek, Xxxxxxx X. Xxxxxxxx and S. Xxxxxxx Xxxxx
(collectively, the "Management Stockholders"), dated the Closing Date
and addressed to you, as Lead Managers for the several Managers, 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 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 any
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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 does not have a Material Adverse Effect;
(ii) Each Subsidiary which is a Florida
corporation or partnership is either (i) a corporation duly
incorporated or organized, validly existing and in good
standing in Florida or (ii) a partnership duly organized and
validly existing under the applicable laws of the State of
Florida and the status of each such Subsidiary is active; to
the knowledge of such counsel, each Subsidiary has the
requisite corporate or partnership power to own and operate
its property and assets and to transact the business in which
it is engaged except where the failure to own or operate such
property or assets or transact such business would not have a
Material Adverse Effect; each Subsidiary which is a Delaware
corporation is duly incorporated, validly existing and in good
standing under the laws of the State of Delaware; and each
Subsidiary 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;
(iii) To the knowledge of such counsel after
reasonable inquiry, 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 descriptions thereof contained in
the Prospectuses under the caption "Description of Capital
Stock"; all of the outstanding shares of capital stock of or
ownership interests in each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any
preemptive or similar rights;
(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 and the
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Warrant Shares have been duly authorized and validly issued
and are fully paid and nonassessable and were not issued in
violation of any preemptive or similar rights; the Warrant
Shares have been validly reserved for issuance[; when issued
upon exercise of the Warrants, the Warrant Shares will be duly
authorized and validly issued and will be fully paid and
non-assessable and will not be issued in violation of any
preemptive or similar rights];
(v) The Offered Shares to be issued and sold to
the Managers by the Company hereunder (including the Warrant
Shares) have been duly authorized and, when issued and
delivered to the Managers 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 that entitle or will entitle any person to
acquire any securities of the Company upon the issuance
thereof by the Company;
(vi) The form of certificates for the Offered
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 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 to issue, sell and
deliver the Offered Shares, and this Agreement has been duly
authorized, executed and delivered by the Company;
(ix) Neither the offer, sale or delivery of the
Offered Shares, the execution, delivery or performance of this
Agreement, compliance by the Company with the provisions
hereof nor consummation by the Company of the transactions
contemplated hereby conflicts or will conflict with or
constitutes or will constitute a breach of, or a default
under, the certificate or articles of incorporation or by-
laws, or other organizational documents, of the Company or any
of the
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Subsidiaries or to the knowledge of such counsel after
reasonable inquiry any agreement or document relating to the
Capital Stock of the Company, nor will any such action result
in any violation of any law, regulation, rule (assuming
compliance with all applicable state securities and Blue Sky
laws) or to the knowledge of such counsel after reasonable
inquiry judgment, ruling or court decree applicable to the
Company, the Subsidiaries or any of their respective
properties;
(x) 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 or such as
may be required under state securities or Blue Sky laws
governing the purchase and distribution of the Offered Shares)
for the valid issuance and sale of the Offered Shares to the
Managers as contemplated by this Agreement;
(xi) 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;
(xii) To the knowledge of such counsel after
reasonable inquiry, (A) other than 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 that are not described or filed as required, as the
case may be;
(xiii) Other than with respect to federal, state
or local broadcasting, licensing or communications law or
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regulatory matters, 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, are accurate and
present fairly the information required to be shown;
(xiv) This Agreement and the Custody Agreement
have each been duly executed and delivered by or on behalf of
each of the Management Stockholders and are valid and binding
agreements of each Management Stockholder enforceable against
each Management Stockholder in accordance with their
respective terms;
(xv) To the knowledge of such counsel after
reasonable inquiry, each Management Stockholder has full legal
right, power and authorization, and any approval required by
law, to sell, assign, transfer and deliver good and marketable
title to the Shares which such Management Stockholder has
agreed to sell pursuant to this Agreement;
(xvi) To the knowledge of such counsel after
reasonable inquiry the execution and delivery of this
Agreement and the Custody Agreement by the Management
Stockholders and the consummation of the transactions
contemplated hereby and thereby will not conflict with,
violate, result in a breach of or constitute a default under
the terms or provisions of any agreement, indenture, mortgage
or other instrument known to such counsel to which any
Management Stockholder is a party or by which any of them or
any of their assets or property is bound, or any court order
or decree or any law, rule, or regulation applicable to any
Management Stockholder or to any of the property or assets of
any Management Stockholder;
(xvii) Upon delivery of the Offered Shares and the
Warrants pursuant to this Agreement and payment therefor as
contemplated herein, and assuming that each purchasing Manager
shall have purchased the Offered Shares and the Warrants in
good faith without notice of any adverse claim, such Manager
will acquire good and marketable title to the Offered Shares
and Warrants free and clear of any lien, claim, security
interest, or other encumbrance, restriction on transfer or
other defect in title; and
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(xviii) The Company is not an "investment company"
or a company "controlled by an investment company" within the
meaning of the Investment Company Act of 1940, as amended.
Such counsel shall also 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 or completeness of the statements in the Registration
Statement or the Prospectuses, such counsel has participated in the
preparation of the Registration Statement and the Prospectuses,
including review and discussion of the contents thereof, and nothing
has come to the attention of such counsel that has caused them to
believe that the Registration Statement 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 and statistical data included in the
Registration Statement or the Prospectuses).
(d) You shall have received on the Closing Date an
opinion of Xxxxxxx X. Xxxxxxxx, Esq., General Counsel to the Company,
dated the Closing Date and addressed to you, as Lead Managers for the
several Managers, to the effect that:
(i) The Company and each of the Subsidiaries has
full corporate or partnership power and authority, and all
necessary governmental authorizations, approvals, orders,
licenses, certificates, franchises and permits of and from all
governmental regulatory officials and bodies (except where the
failure so to have any such authorizations, approvals, orders,
licenses, certificates, franchises or permits, individually or
in the aggregate, would not have a Material Adverse Effect),
to own their respective properties and to
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conduct their respective businesses as now being conducted, as
described in the Prospectuses;
(ii) Except as disclosed in the Prospectuses, all
the outstanding shares of capital stock of each of the
Subsidiaries 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;
(iii) This Agreement is a valid, legal and
binding agreement of the Company, enforceable against the
Company in accordance with its terms (it being noted, without
expressing any opinion with regard to the federal securities
laws and regulations, that the Commission has expressed the
view that indemnification against securities law liabilities
is against public policy) and subject to the qualification
that the enforceability of the Company's obligations hereunder
may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights generally and by general
equitable principles;
(iv) Each of the Company and the Subsidiaries has
all corporate or partnership power and authority, as the case
may be, to execute, deliver and perform each of the
Transaction Documents to which it is a party, to perform all
of its obligations thereunder and to consummate the
transactions contemplated thereby;
(v) 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 to the knowledge of such counsel after reasonable inquiry,
is in default (and no event has occurred which with notice or
lapse of time, or both, would constitute a default) in the
performance of any obligation, agreement or condition
contained in any bond, debenture, note or other evidence of
indebtedness;
(vi) Except as disclosed in the Registration
Statement and the Prospectuses, to the knowledge of such
counsel after reasonable inquiry, neither the offer, sale or
delivery of the Offered Shares, the execution, delivery or
performance of this Agreement and the other Transaction
Documents, compliance by the
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Company or the Subsidiaries (to the extent a party thereto)
with the provisions hereof or thereof nor consummation by the
Company or the Subsidiaries (to the extent a party thereto) of
the transactions contemplated hereby or thereby, conflict or
will conflict with or constitute or will constitute a breach
of, or a default under the certificate or articles of
incorporation or by-laws, or other organizational documents,
of the Company or any of the Subsidiaries or any 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 is bound 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 which conflict, breach, default or lien could
reasonably be expected to have a Material Adverse Effect;
(vii) To the knowledge of such counsel
after reasonable inquiry, other than as described 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);
(viii) 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 that are not described
or filed as required, as the case may be;
(ix) To the knowledge of such counsel
after reasonable inquiry, neither the Company nor any of the
Subsidiaries is in violation 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;
(x) Except as described in the
Prospectuses, there are no outstanding options, warrants or
other
43
-42-
rights calling for the issuance of, and such counsel does not
know of any commitment, plan or arrangement to issue, any
shares of Capital Stock of the Company or any security
convertible into or exchangeable or exercisable for Capital
Stock of the Company; and
(xi) Except as described in the Prospectuses,
there is no holder of any security of the Company or any other
person who has the right, contractual or otherwise, to cause
the Company to sell or otherwise issue to them, or to permit
them to underwrite the sale of, the Offered Shares or the
right to have any Capital Stock or other securities of the
Company included in the Registration Statement or the right,
as a result of the filing of the Registration Statement, to
require registration under the Act of any shares of Capital
Stock or other securities of the Company.
(e) You shall have received on the Closing Date an
opinion of Dow, Xxxxxx & Xxxxxxxxx, special communications counsel for
the Company, dated the Closing Date and addressed to you, as Lead
Managers for the several Managers, to the effect that:
(i) Based upon a review of the FCC files, (a)
Xxxxxxxxx Media, Inc., Bradenton Broadcast Television Company,
Ltd., Xxxx Communications, Inc., Xxxxxxx Broadcasting Company
of Xxxxxxx Xxxxxx, L.P. and each subsidiary of the Company and
each subsidiary of The Christian Network, Inc. holds those
broadcast licenses issued by the FCC ("FCC Licenses")
identified as held by such entity and (b) each of the FCC
Licenses authorizes radio or television broadcast operations
by the holder thereof using the channel or frequency
assignment and serving the community of license that is
identified for each of the FCC Licenses;
(ii) To the knowledge of such counsel, based upon
the review of the publicly available records of the FCC and
inquiry to officers of the Company, except as may be disclosed
in the Prospectuses, there is no order, judgment, decree,
notice of apparent liability, or order of forfeiture
outstanding, and no petition, objection, notice of apparent
liability, order of forfeiture, investigation, complaint, or
other proceeding pending before the FCC or threatened by the
FCC against the stations listed (the "Stations") or the FCC
Licenses that reasonably could be expected to
44
-43-
result in the termination, revocation, suspension, or denial
of renewal of any of the FCC Licenses, except for rule making
and other similar proceedings generally applicable to the
radio or television broadcasting industry or substantial
segments thereof;
(iii) To the knowledge of such counsel based upon
the review of the publicly available files of the FCC and
inquiry to officers of the Company, other than as disclosed in
the Prospectuses, (a) there are no license renewal proceedings
pending for any of the FCC Licenses; and (b) except asset
forth on the FCC authorization certificates for the FCC
Licenses or imposed by the generally applicable rules of the
FCC, none of the FCC Licenses is subject to any condition
imposed by the FCC that reasonably could be expected to have
a material adverse effect on the Company's ability to conduct
its broadcast operations, taken as a whole;
(iv) The issuance, sale and delivery of the
Offered Shares and the Warrants pursuant to this Agreement (A)
does not require any consent or authorization from the FCC,
and (B) does not constitute a violation of the Communications
Act or the published rules and regulations of the FCC
promulgated thereunder;
(v) The identified applications for consent to
assignment or transfer of control of licenses issued by the
FCC in connection with the Proposed Acquisitions and the
exercise of the Station Options (each as defined in the
Prospectuses) have been filed with the FCC; and, to the
knowledge of such counsel based upon the review of the
publicly available files of the FCC and inquiry to officers of
the Company, except as identified, no petition to deny such
applications has been filed with the FCC;
(vi) The statements in the Prospectuses under the
captions "Risk Factors -- Must Carry Regulations," "--
Government Regulation," "-- Multiple Ownership Rules; Time
Brokerage Agreements" and "Business -- Federal Regulation of
Broadcasting," insofar as they constitute summaries of the
Communications Act and the published rules and regulations of
the FCC promulgated thereunder, have been reviewed by such
counsel and are accurate in all material respects;
45
-44-
(vii) The execution, delivery and
performance of (x) this Agreement by the Company and (y) this
Agreement and the Custody Agreement by the Selling
Securityholders (A) do not require any consent or
authorization from the FCC, and (B) do not and will not
violate the Communications Act and the rules and regulations
promulgated thereunder;
(viii) There are no restrictions or
limitations imposed by the FCC on the ability of the Company
to pay cash dividends on its shares of Class A Common Stock
or, except as set forth in the Prospectuses, otherwise make
distributions in cash on its shares of Capital Stock.
(f) You shall have received on the Closing Date an
opinion, to be governed by and interpreted in accordance with the
Legal Opinion Accord of the ABA Section of Business Law (1991) (the
"ABA Accord"), of (i) Xxxxx & Xxxxx L.L.P., special counsel to Sandler
Mezzanine Partners, L.P., a Delaware limited partnership, Sandler
Mezzanine Foreign Partners, L.P., a Delaware limited partnership and
Sandler Mezzanine T-E Partners, L.P., a Delaware limited partnership,
(ii) Xx. Xxxxxxx D'Alessander, counsel to National Union Fire
Insurance Company of Pittsburgh, PA, a [ ] ("National
Union"), in their capacities as Selling Securityholders, (iii) Xx.
Xxxxxxxxx Xxxxxxxxx, counsel to BT Investment Partners, Inc., and (iv)
Xx. Xxx Xxxxxx, counsel to First Union Corporation of Virginia,
[others to be provided] (in each case, the Selling Securityholder(s)
so represented, the "Stockholders"), dated the Closing Date and
addressed to you, as Lead Managers for the several Managers, to the
effect that:
(i) Each of the Stockholders has the necessary
corporate or partnership (as applicable) power and authority
to execute and deliver this Agreement and the Custody
Agreement and to sell to the Managers, in accordance with this
Agreement, the Shares or Warrants to be sold by such
Stockholder to the several Managers pursuant to this
Agreement;
(ii) This Agreement and the Custody Agreement have
been duly executed and delivered by or on behalf of each
Stockholder;
(iii) Assuming this Agreement constitutes the
legal, valid and binding obligation of each of the
46
-45-
Managers, the Company and each of the other Selling
Securityholders, this Agreement is a valid and binding
obligation of each of the Stockholders, except that no opinion
is expressed with respect to rights to indemnity or
contribution or with respect to the validity of this Agreement
under, or the effect on the validity or binding nature of this
Agreement of, the Communications Act; and
(iv) Upon the purchase by, and delivery to, the
several Managers in accordance with the terms of this
Agreement of the Shares or Warrants to be sold by a
Stockholder to the several Managers pursuant to this Agreement
(including, without limitation, payment for such Shares or
Warrants by the several Managers as provided in this
Agreement) and the registration of such Shares or Warrants in
the respective names of the several purchasing Managers, and
assuming that each purchasing Manager shall have purchased
such Shares or Warrants in good faith and without notice of
any adverse claim (within the meaning of Section 8-302 of the
Uniform Commercial Code), such purchasing Manager will have
acquired good and marketable title to such Shares or Warrants
so purchased by such Manager free of any adverse claims.
Such counsel may limit such opinion in all respects to the
laws of the State of New York and federal law (excluding the
Communications Act (and also excluding the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended)) normally applicable to similar
transactions in the experience of such counsel, to the limited
partnership or corporation statute of the jurisdiction of formation of
any Stockholder which is an entity and insofar as such opinions are
based on any such limited partnership or corporation statute, may base
such opinions solely on such counsel's reading of such statute,
without consultation of any judicial or administrative interpretations
thereof. If this Agreement shall have been executed and delivered on
behalf of any Stockholder by any Attorney-in-Fact pursuant to the
Custody Agreement, then such counsel may assume that such execution
and delivery was duly and validly made. Such opinion may be made to
any other assumptions, qualifications, exceptions and limitations as
are customary for similar opinions rendered in similar circumstances
or as are contemplated by the ABA Accord.
47
-46-
(g) You shall have received on the Closing Date an
opinion of Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Managers, dated
the Closing Date and addressed to you, as Lead Managers for the
several Managers, with respect to the matters referred to in clauses
(v), (vii), (viii) and (xi) and the final clause of the foregoing
paragraph (c) and such other related matters as you may request.
(h) You shall have received "cold comfort" letters
addressed to you, as Lead Managers for the several Managers, and dated
the date hereof and the Closing Date from Price Waterhouse LLP,
independent certified public accountants, substantially in the forms
heretofore approved by you.
(i) (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, the Selling Securityholders or the Underwriters, 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 consolidated 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, prospects, 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, contingent or otherwise (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 Statement or the Prospectuses (or any
amendment or supplement thereto); and (v) all the representations and
warranties of the Company contained in 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
48
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you), to the effect set forth in this Section 10(i) and in Section
10(j) hereof.
(j) 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.
(k) All the representations and warranties of the Selling
Securityholders contained in 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 one or
more certificates, dated the Closing Date and signed by or on behalf
of the several Selling Securityholders to the effect set forth in this
Section 10(k) and in Section 10(l) hereof.
(l) The Selling Securityholders shall not have failed at
or prior to the Closing Date to have performed or complied with any of
their agreements herein contained and required to be performed or
complied with by them hereunder at or prior to the Closing Date.
(m) Prior to the Closing Date the Offered Shares shall
have been listed, subject to issuance, on the American Stock Exchange.
(n) The Sellers shall have furnished or caused to be
furnished to you such further certificates and documents as you shall
have requested.
(o) The closing under the U.S. Underwriting Agreement
shall have occurred concurrently with the closing hereunder on the
Closing Date.
(p) The "lock-up" letters referred to in Section 5(n)
hereof shall be in full force and effect 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 or any Attorney-in-Fact or any Selling Securityholder and delivered to
you, as Lead Managers for the Managers, or to
49
-48-
counsel for the Managers, shall be deemed a representation and warranty by the
Company, the Selling Securityholders or the particular Selling Securityholder,
as the case may be, to each Manager as to the statements made therein.
The several obligations of the Managers to purchase Additional
Securities hereunder are subject to the satisfaction on and as of any Option
Closing Date of the conditions set forth in this Section 10, except that, if
any Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (l) shall be dated
the Option Closing Date in question and the opinions called for by paragraphs
(c), (d), (e), (f) and (g) shall be revised to reflect the sale of Additional
Securities.
11. Expenses. Notwithstanding any termination of this
Agreement (pursuant to Section 12, Section 13 or otherwise), the Company agrees
to pay the following costs and expenses and all other costs and expenses
incident to the performance by the Sellers of their obligations hereunder: (i)
the preparation, printing or reproduction, and filing with the Commission of
the registration statement (including financial statements and exhibits
thereto), each of the Prepricing Prospectuses, 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, and all amendments or supplements to any of them
as may be reasonably requested for use in connection with the offering and sale
of the Offered Shares; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Offered Shares, including any
stamp taxes in connection with the original issuance and sale of the Offered
Shares; (iv) the printing (or reproduction) and delivery of this Agreement, the
preliminary and supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Offered Shares; (v) the listing of the Offered Shares on the American
Stock Exchange; (vi) the registration or qualification of the Offered 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 Managers relating to the preparation, printing
or reproduction, and delivery of the preliminary and supplemental Blue Sky
Memoranda and such registration and qualification); (vii) the filing fees and
the reasonable fees and expenses of counsel for the Managers in connection with
any filings required to be made with the National Association of Securities
Dealers,
50
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Inc.; (viii) the transportation and other expenses incurred by or on behalf of
Company representatives in connection with presentations to prospective
purchasers of the Offered 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.
12. 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 Offered 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 and the Selling Securityholders, or by you, as
Lead Managers for the several Managers, by notifying the Company and the
Selling Securityholders.
If any one or more of the Managers shall fail or refuse to
purchase Shares or Warrants which it or they are obligated to purchase
hereunder on the Closing Date, and the aggregate number of Shares or Warrants
which such defaulting Manager or Managers are obligated but fail or refuse to
purchase is not more than one-tenth of the aggregate number of Shares or
Warrants, respectively, which the Managers are obligated to purchase on the
Closing Date, each non- defaulting Manager shall be obligated, severally, in
the proportion which the number of Firm Shares set forth opposite its name in
Schedule II hereto bears to the aggregate number of Firm Shares set forth
opposite the names of all non- defaulting Managers or in such other proportion
as you may specify in accordance with Section 20 of the Master Agreement Among
Underwriters of Xxxxx Xxxxxx Inc., to purchase the Firm Shares and Firm
Warrants which such defaulting Manager or Managers are obligated, but fail or
refuse, to purchase. If any one or more of the Managers shall fail or refuse
to purchase Shares or Warrants which it or they are obligated to purchase on
the Closing Date and the aggregate number of Shares or Warrants with respect to
which such default occurs is more than one-tenth of the aggregate number of
Shares or Warrants, respectively, which the Managers are obligated to purchase
on the Closing Date and arrangements satisfactory to you and the Company for
the purchase of such Shares or Warrants by one or more non-defaulting Managers
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
51
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non-defaulting Manager, the Company or the Selling Securityholders. 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 Prospectuses or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Manager from liability in respect of any such default of
any such Manager under this Agreement. The term "Manager" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule II hereto who, with your approval and the approval of the Company,
purchases Shares or Warrants which a defaulting Manager is obligated, but fails
or refuses, to purchase.
Any notice under this Section 12 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
13. Termination of Agreement. This Agreement shall be
subject to termination in your absolute discretion, without liability on the
part of any Manager to the Company or any Selling Securityholder, by notice to
the Company and the Selling Securityholders, if prior to the Closing Date or
any Option Closing Date (if different from the Closing Date and then only as to
the Additional Securities), 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 Florida
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 Offered Shares at the offering price
to the public set forth on the cover page of the Prospectuses or to enforce
contracts for the resale of the Offered Shares by the Managers. Notice of such
termination may be given to the Company and the Selling Securityholders by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
14. Information Furnished by the Managers. The
statements set forth in the last paragraph on the cover page, the stabilization
legend on the inside cover page, and the statements
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in the first, fourth, ninth, tenth, eleventh and fifteenth paragraphs under the
caption "Underwriting" in any International Prepricing Prospectus and in the
International Prospectus constitute the only information furnished by or on
behalf of the Managers through you as such information is referred to in
Sections 7(b) and 9 hereof.
15. Miscellaneous. Except as otherwise provided in
Sections 5, 12 and 13 hereof, notice given pursuant to any provision of this
Agreement shall be in writing and shall be delivered (i) if to the Company or
the Management Stockholders, at the office of the Company at 000 Xxxxxxxxxx
Xxxx Xxxx, Xxxx Xxxx Xxxxx, Xxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx,
Esq., Vice President and General Counsel; or (ii) if to the Selling
Securityholders, at [ ], Attention: [ ], with copies to be
delivered as follows: (A) Sandler Mezzanine Partners, L.P., General Motors
Building, 767 Fifth Avenue, New York, New York, Attn: Xxxxxxx X. Xxxxxxx, (B)
Xxxxxx X. Xxxxx, Xxxxx & Xxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (C)
[others?]; or (iii) if to you, as Lead Managers for the several Managers, 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 Managers, the Company, its directors and officers, the other
controlling persons referred to in Section 9 hereof and the Selling
Securityholders, their controlling persons 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 Manager of any of the Shares in his status
as such purchaser.
16. 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.
53
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Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Selling Securityholders and the several
Managers.
Very truly yours,
XXXXXX COMMUNICATIONS CORPORATION
By
---------------------------
Name:
Title:
Each of the Selling
Securityholders named in
Schedule I hereto
By
---------------------------
Name:
Title: Attorney-in-Fact
By
-----------------------------
Name:
Title: Attorney-in-Fact
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Managers named in Schedule II
hereto.
XXXXX XXXXXX INC.
PAINEWEBBER INTERNATIONAL (U.K.) LTD.
CIBC WOOD GUNDY SECURITIES CORP.
BANKERS TRUST INTERNATIONAL PLC
As Lead Managers for the Several Managers
By XXXXX XXXXXX INC.
By
--------------------------------
Name:
Title:
54
SCHEDULE I
XXXXXX COMMUNICATIONS CORPORATION
Part A - Firm Shares
Number of
Selling Securityholders Firm Shares
----------------------- -----------
-------------
Total........
=============
Part B - Firm Warrants
----------------------
Number of
Selling Securityholders Firm Warrants
----------------------- -------------
-------------
Total........
=============
Part C - Additional Shares
--------------------------
Number of Number of
Additional Additional
Selling Securityholders Shares Warrants
----------------------- ---------- ----------
----------- -----------
Total . . . . . . .
=========== ===========
55
SCHEDULE II
XXXXXX COMMUNICATIONS CORPORATION
Number of Number of
Manager Firm Shares Firm Warrants
------- ----------- -------------
Xxxxx Xxxxxx Inc. . . . . . . . . . . . . .
PaineWebber International (U.K.) Ltd. . . .
CIBC Wood Gundy Securities Corp. . . . . . .
Bankers Trust International PLC . . . . . . .
--------- -------------
Total . . . . . . . . . . . . . . .
========= =============
56
--------------------------------
(Name of Selling Securityholder)
CUSTODY AGREEMENT AND POWER OF ATTORNEY
for Sale of Class A Common Stock and/or
Warrants to Purchase Class A Common Stock of
XXXXXX COMMUNICATIONS CORPORATION
Xxxxxx X. Tek and
Xxxxxxx X. Xxxxxxxx
As Attorneys-in-Fact
000 Xxxxxxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
First Union National Bank of North Carolina
As Custodian
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn:
Gentlemen:
Xxxxxx Communications Corporation, a Delaware corporation (the
"Company"), the undersigned and certain other securityholders of the Company
(the undersigned and such other securityholders being hereinafter referred to
as the "Selling Securityholders") propose to sell certain shares of Class A
Common Stock, $.001 par value per share, of the Company ("Class A Common
Stock") and certain warrants (the "Stock Warrants") to purchase shares of Class
A Common Stock to (i) underwriters (the "U.S. Underwriters") for whom Xxxxx
Xxxxxx Inc., PaineWebber Incorporated, Wood Gundy Inc. and BT Securities
Corporation will act as representatives (the "Representatives") and (ii)
underwriters (the "Managers" and together with the U.S. Underwriters the
"Underwriters") for whom Xxxxx Xxxxxx Inc., Xxxx Xxxxx Inc., PaineWebber
International (U.K.) Ltd. and Bankers Trust International PLC will act as lead
managers (the "Lead Managers") in each case for distribution of such Class A
Common Stock and Class A Common Stock issuable upon the exercise of the Stock
57
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Warrants under a Registration Statement on Form S-1 (the "Registration
Statement") to the public at a price and on terms to be hereafter determined.
It is understood that at this time there is no commitment on the part of the
Underwriters to purchase any shares of Class A Common Stock or Stock Warrants
and no assurance that an offering of Class A Common Stock will take place and
there is and will be no commitment on the part of the undersigned to sell any
shares of Class A Common Stock or Stock Warrants other than as set forth on
Schedule I to the U.S. Underwriting Agreement and the International
Underwriting Agreement (each as hereinafter defined), respectively, from and
after the date of execution thereof. The shares of Class A Common Stock or the
Stock Warrants which the undersigned proposes to sell to the Underwriters
pursuant to the Underwriting Agreements (as hereinafter defined) are referred
to herein as the "Shares" or the "Warrants", respectively.
1. Appointment and Powers of Attorneys-in-Fact.
A. The undersigned hereby irrevocably constitutes and
appoints Xxxxxx X. Tek and Xxxxxxx X. Xxxxxxxx (the "Attorneys-in-Fact"), and
each of them, his agent and attorney-in-fact, with full power of substitution,
with the power and authority on behalf of the undersigned solely to do or cause
to be done any of the following things:
(i) negotiate, determine and agree upon (a) the per share
price at which the Shares and the shares issuable upon exercise of the Warrants
(the "Warrant Shares") will be initially offered to the public by the
Underwriters pursuant to the Underwriting Agreements, (b) the underwriting
discount with respect to the Shares and the Warrants and (c) the price at which
the Shares or Warrants will be sold to the Underwriters by the Selling
Securityholders pursuant to the Underwriting Agreements; provided, however,
that the price per Share payable to the undersigned shall not be less than the
higher of (a) $ and (b) the highest price per share to be paid by the
Underwriters to the Company for the shares of Class A Common Stock to be sold
by it or to any other Selling Securityholder for the shares of Common Stock to
be sold by them; provided, further that the price per Warrant payable to the
undersigned shall not be less than the excess of (x) the price per share as
determined in a manner consistent with the previous proviso multiplied by the
number of shares of Class A Common Stock issuable upon the exercise of such
Warrant over (y) the exercise price payable upon the issuance of such shares
pursuant to such Warrant; provided, further, that the undersigned acknowledges
that the net amounts actually received by the undersigned may be more or less,
on a per share basis,
58
-3-
than amounts received by another Selling Securityholder due to differing
expenses incurred by, or associated with, the sale by the undersigned of the
Shares and Warrants, including taxes and other amounts that may be withheld
pursuant to paragraph 3(B) hereof;
(ii) prepare, execute and deliver a U.S. Underwriting
Agreement (the "U.S. Underwriting Agreement") and an International Underwriting
Agreement (the "International Underwriting Agreement" and, together with the
U.S. Underwriting Agreement, the "Underwriting Agreements"), substantially in
the form of the proofs (the "Proofs") each dated , 1996 attached
hereto as Exhibits A and B, respectively, but with such insertions, changes,
additions or deletions as the Attorneys-in-Fact shall approve which are not,
and which could not be, materially adverse to the undersigned, including the
making of all representations and agreements provided in the Underwriting
Agreements to be made by the undersigned and the conditions to the obligations
of the Underwriters to purchase Shares or Warrants to be sold by the
undersigned pursuant thereto; provided, however, that the representations,
warranties, agreements and conditions are the same, in all material respects,
as the representations and warranties contained in the Proofs; provided,
further, that in no event will the Attorneys-in-Fact have the power or
authority to agree on the undersigned's behalf to (a) any increase or decrease
in the number of Shares or Warrants to be sold by the undersigned (whether
pursuant to any overallotment option or otherwise), (b) any change from the
terms contained in the Proofs that would have the effect, or could have the
effect, of materially increasing the amount or likelihood of any liability or
obligation of the undersigned pursuant to the Underwriting Agreements or (c)
arrangements whereby the undersigned will be treated less favorably than than
other Selling Securityholders participating in the sale of the Shares or the
Warrants or the offering of the Shares and the Warrant Shares;
(iii) sell, assign, transfer and deliver the Shares and the
Warrants to the Underwriters pursuant to the Underwriting Agreements and
deliver to the Underwriters certificates for the Shares and the Warrants so
sold;
(iv) instruct the Custodian (as hereinafter defined) on all
matters pertaining to the sale of the Shares and the Warrants and delivery of
certificates therefor;
(v) execute and deliver, on behalf of the undersigned,
such receipts and other closing documents, whether required by the Underwriting
Agreements or otherwise, typically
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executed and delivered in connection with the closing of the purchase from
selling securityholders of securities in connection with a public offering
including the acknowledgment of payment of the purchase price for the Shares
and the Warrants; provided, however, that all such receipts and other closing
documents are consistent with the transaction as currently reflected in the
Proofs and this Agreement (including, without limitation, clause (ii) of this
Section 2(A)); and
(vi) solely with respect to the individuals and entities
listed on Schedule II hereto and notwithstanding any of the limitations set
forth above, otherwise take all actions and do all things necessary or proper,
required, contemplated or deemed advisable or desirable by the
Attorneys-in-Fact in their discretion, including the execution and delivery of
any documents, and generally act for and in the name of the undersigned with
respect to the sale of the Shares and the Warrants to the Underwriters and the
reoffering of the Shares and the Warrant Shares by the Underwriters as fully as
could the undersigned if then personally present and acting.
B. Each Attorney-in-Fact may act alone in exercising the
rights and powers conferred on the Attorneys-in-Fact by this Custody Agreement
and Power of Attorney, and the act of any Attorney-in-Fact taken in accordance
herewith shall be the act of the Attorneys-in-Fact.
C. The Custodian, the Representatives, the Lead
Managers, the Company and all other persons dealing with the Attorneys-in-Fact
as such may rely and act upon any writing believed in good faith to be signed
by one or more of the Attorneys-in-Fact and to be consistent with the power and
authority granted hereby.
D. The Attorneys-in-Fact shall not be entitled to
receive any compensation for their services rendered hereunder from the
undersigned or from the proceeds of the sale of the Shares or the Warrants.
2. Appointment of Custodian; Deposit of
Shares and Warrants.
A. In connection with and to facilitate the sale of the
Shares and Warrants to the Underwriters, the undersigned hereby appoints First
Union National Bank of North Carolina as custodian (the "Custodian") and
herewith deposits with the Custodian (i) in the event the undersigned desires
to sell shares not issuable upon the exercise of options (the "Owned Shares"),
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one or more certificates for Class A Common Stock which represent not less than
the total number of such Owned Shares to be sold by the undersigned to the
Underwriters, which number is set forth on Schedule I(A) hereto and (ii) in the
event the undersigned desires to sell Warrants, one or more certificates for
the Warrants which represent not less than the total number of warrants to be
sold by the undersigned to the Underwriters, which number is set forth on
Schedule I(B) hereto. Each such certificate so deposited is in negotiable and
proper deliverable form endorsed in blank with the signature of the undersigned
thereon guaranteed by a commercial bank or trust company in the United States
or by a member firm of the New York Stock Exchange, or is accompanied by a duly
executed stock power or powers in blank, bearing the signature of the
undersigned so guaranteed. The Custodian is hereby authorized and directed (a)
to hold in custody for the account of the undersigned the certificate or
certificates deposited herewith, (b) on the Closing Date and the Option Closing
Date, if any (as defined in the Underwriting Agreements) and upon written
instruction from the Attorneys- in-Fact in accordance with this Agreement, to
deliver or to authorize the Company's Transfer Agent to deliver the certificate
or certificates deposited hereunder (or replacement certificate(s) for the
Shares and/or Warrants) to the Representatives and the Lead Managers, for the
accounts of the several Underwriters in accordance with the terms of the
Underwriting Agreements, against receipt by the Custodian, as Custodian, for
the account of the undersigned for payment as provided in Section 3(A) below,
and (c) to return or cause the Company's Transfer Agent to issue and return to
the undersigned new certificate(s) for the shares of Class A Common Stock or
Stock Warrants represented by any certificate deposited hereunder which are not
sold pursuant to the Underwriting Agreements.
B. In the event the undersigned proposes to sell Shares
issuable upon the exercise of options (the "Option Shares") as set forth on
Schedule I(C) hereto, the undersigned is delivering to the Company, with a copy
to the Custodian, an exercise letter (the "Exercise Letter"), in the form of
Exhibit C hereto.
C. Until the Shares and the Warrants have been delivered
to the Underwriters against payment therefor in accordance with this Agreement
and the Underwriting Agreements, the undersigned shall retain all rights of
ownership with respect to the Shares or Warrants deposited hereunder,
including, with respect to the Shares, the right to vote and to receive all
dividends and payment thereon, except the right to retain custody of or dispose
of such Shares or Warrants, which right shall only
61
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be subject to this Agreement and the Underwriting Agreements as provided herein
and therein.
3. Sale of Shares and Warrants; Remitting Net Proceeds.
The undersigned hereby acknowledges that the Custodian or the
Company's Transfer Agent will deliver the certificates for the Shares or the
Warrants to be sold by the undersigned to the Representatives and the Lead
Managers, as provided in the Underwriting Agreements and this Agreement,
against delivery to the Custodian for the account of the undersigned of the
purchase price of the Shares or Warrants, determined in accordance with the
Underwriting Agreements, at the time and in the funds specified in the
Underwriting Agreements. In the event the undersigned is selling Option
Shares, the Custodian is hereby authorized to withhold the exercise price for
such Option Shares and remit such amount to the Company. After reserving an
amount of such proceeds (if applicable) as provided in the immediately
preceding sentence, the Custodian shall remit to the undersigned the proceeds
from the sale of the Shares and the Warrants not later than the business day
following the Closing Date.
4. Representations, Warranties and Agreements. The undersigned
represents and warrants to, and agrees with, the other Attorneys-in-Fact and
the Custodian as follows:
A. If the undersigned is an individual the undersigned
has full legal right, power and authority to enter into and perform this
Agreement. In all other events, the undersigned has all requisite corporate or
partnership (as applicable) power and authority to enter into and perform this
Agreement.
B. The undersigned has reviewed the representations and
warranties to be made by the undersigned as a Selling Securityholder contained
in the Proofs, and will (promptly after the same becomes known to the
undersigned) notify the Attorneys-in-Fact of any development that would make
any such representation and warranty untrue.
C. The undersigned has reviewed Amendment No. 2 to the
Registration Statement, including the prospectus included therein, and the
information contained in such prospectus with respect to the undersigned is
true and correct.
D. The undersigned is not directly or indirectly an
affiliate of or associated with any member of the National Association of
Securities Dealers, Inc. except as disclosed in
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the undersigned's NASD questionnaire previously supplied to the Company.
[E. The undersigned agrees to deliver to the
Attorneys-in-Fact such documentation as the Attorneys-in-Fact, the Company or
any of their respective counsel may reasonably request in order to effectuate
any of the provisions hereof or of the Underwriting Agreements.]
5. Irrevocability of Instruments; Termination of this Agreement.
A. This Agreement, the deposit of the Shares and/or
Warrants pursuant hereto and all authority hereby conferred, is made and
conferred subject to and in consideration of the interests of the Underwriters,
the Company and the Attorneys-in-Fact in and for the purpose of completing the
transactions contemplated hereunder and by the Underwriting Agreements.
Accordingly the authority conferred upon the Attorneys-in-Fact is coupled with
an interest and this Agreement shall be irrevocable prior to , 1996,
and shall remain in full force and effect until that date. The undersigned
further agrees that this Agreement shall not be terminated by operation of law
or upon the death, disability or incompetence of the undersigned or, if the
undersigned is not a natural person, upon any dissolution, winding up,
distribution of assets or other event affecting the legal existence of the
undersigned. If any event referred to in the preceding sentence shall occur,
whether with or without notice thereof to the Attorneys-in-Fact, any of the
Underwriters or any other person, the Attorneys-in-Fact shall nevertheless be
authorized and empowered to deliver and deal with the Shares deposited under
the Agreement by the undersigned in accordance with the terms and provisions of
the U.S. Underwriting Agreement and this Agreement as if such event had not
occurred.
B. If the Underwriting Agreements do not become
effective by May 1, 1996, or if the Underwriting Agreements (other than the
provisions thereof which survive termination) shall terminate or be terminated
prior to payment and delivery of the Shares and the Warrants or if the sale of
the Shares and the Warrants pursuant thereto shall not have been consummated
prior to , 1996, this Agreement shall terminate (without affecting any
lawful action of the Attorneys-in-Fact or the Custodian prior to such
termination), and the Custodian shall return to the undersigned all
certificates for the Shares or Warrants deposited hereunder.
63
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6. Liability and Indemnification of the Attorneys-in-Fact and
Custodian. The [Attorneys-in-Fact and] the Custodian assume[s] no
responsibility or liability to the undersigned or to any other person, other
than to deal with the Shares and the warrants, the proceeds from the sale of
the Shares and the Warrants and any other shares of Class A Common Stock or
Stock Warrants deposited with the Custodian pursuant to the terms of this
Agreement in accordance with the provisions hereof. The undersigned hereby
agrees to indemnify and hold harmless the [Attorneys-in-Fact and the]
Custodian, and [their] respective officers, agents, successors, assigns and
personal representatives with respect to any act or omission of or by any of
them in good faith in connection with any and all matters contemplated, and in
accordance with, by this Agreement or the Underwriting Agreements.
7. Interpretation.
A. The representations, warranties and agreements of the
undersigned contained herein shall survive the sale and delivery of the Shares
or Warrants and the termination of this Agreement.
B. The validity, enforceability, interpretation and
construction of this Agreement shall be determined 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, and this Agreement shall inure to the benefit of,
and be binding upon, the undersigned and the undersigned's heirs, executors,
administrators, successors and assigns, as the case may be.
C. Wherever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any such provision shall be prohibited by or invalid
under applicable law, it shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
D. The use of the masculine gender in this Agreement
includes the feminine and neuter, and the use of the singular includes the
plural, wherever appropriate.
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IN WITNESS WHEREOF, the undersigned has executed this Custody
Agreement and Power of Attorney this day of , 1996.
-----------------------------
Signature of Selling (Please sign exactly as your
Securityholder Guaranteed name appears on your stock
by: certificate(s).)
Name and address to which
notices and funds shall be
sent.
------------------------------
(NAME)
------------------------------
(STREET)
------------------------------
(CITY) (STATE) (ZIP)
(NOTE: The signature must be guaranteed by a commercial bank or trust company
in the United States or by a member firm of the New York Stock Exchange.)
ACCEPTED by the Attorneys- ACCEPTED by the Custodian as
in-Fact as of the date of the date above set forth:
above set forth:
------------------------------ ------------------------------
By
------------------------------ ----------------------------
SEE THE ATTACHED INSTRUCTIONS
65
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INSTRUCTIONS
(For completing the Custody Agreement and Power of Attorney)
A. You have been sent five copies of the Custody Agreement and
Power of Attorney (the "Agreement"). Please complete and return four copies of
the Agreement and certificate(s) as set forth in paragraph D below. A fully
executed copy of the Agreement will be returned to you; a fully executed copy
of the Agreement and your certificate(s) will be retained by the Custodian; and
a fully executed copy of the Agreement will be delivered to the
Attorneys-in-Fact and to the Representatives and the Lead Managers.
B. Complete Schedule I attached hereto. In the event you are
selling shares receivable upon the exercise of options, please complete and
execute the Exercise Letter attached hereto as Exhibit C.
C. Each copy of the Agreement and each certificate or power
deposited hereunder must be executed by you with your signature on the
Agreement and the certificate(s) or the accompanying power guaranteed by a
commercial bank or trust company in the United States or any broker which is a
member firm of the New York Stock Exchange. Please sign the certificate(s) or
power and the Agreement exactly as your name appears on your certificate(s).
D. Endorsed certificate(s) or certificate(s) with powers
attached, along with all four executed copies of the completed Agreement,
should be promptly returned by hand delivery or by certified mail appropriately
insured to:
First Union National Bank of North Carolina
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn:
If sent through the mail, it is recommended that the certificate(s) not be
endorsed, but an executed power be sent under separate cover from the
certificate(s).
E. If any certificate that you submit represents a greater number
of Shares or Warrants than the aggregate number of Shares or Warrants which you
agree to sell pursuant to the Underwriting Agreements (including any Additional
Shares or Additional Warrants (as defined in the Underwriting Agreements) which
you
66
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agree to sell), the Custodian will cause to be delivered to you in due course,
but not earlier than ten days after the closing for the purchase of Firm Shares
and Firm Warrants (as defined in the Underwriting Agreements) by the
Underwriters, a certificate for the excess number of Shares or Warrants.
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--------------------------------
(Name of Selling Securityholder)
SCHEDULE I
Certificate(s)
XXXXXX COMMUNICATIONS CORPORATION
deposited under
Custody Agreement and Power of Attorney
(A) Certificate(s) for Shares:
Number of Shares of
Number of Shares of Class A Common Stock
Certificate Class A Common Stock from this Certifi-
Number Represented by Certificate cate to be Sold*
----------- -------------------------- --------------------
----------- --------------------- -------------------
----------- --------------------- -------------------
----------- --------------------- -------------------
----------- --------------------- -------------------
----------- --------------------- -------------------
----------- --------------------- -------------------
Total:
-------------------
68
(B) Certificate(s) for Warrants:
Number of Warrants
Certificate Number of Warrants from this Certifi-
Number Represented by Certificate cate to be sold*
----------- -------------------------- --------------------
----------- --------------------- -------------------
----------- --------------------- -------------------
----------- --------------------- -------------------
----------- --------------------- -------------------
----------- --------------------- -------------------
Total: -------------------
(C) Number of Shares to be sold following exercise of stock options:
**
---------------
* If fewer than all shares or warrants represented by a certificate are
to be sold, indicate below, if desired for income tax purposes, the
date of purchase or purchase price of the particular shares or
warrants to be sold.
** Note: Must include Exercise Letter relating to these shares.
69
SCHEDULE II
Selling Securityholder:
Xxxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Xxxx X. Xxxxxxx
Xxx Xxx Xxxxx
Xxxxxx D. Tek
Xxxxxxx X. Xxxxxxxx
S. Xxxxxxx Xxxxx
[National Union Fire Insurance Company]
[Union Ventures Corporation]
[PXN Investment Partnership]
[Xxxxxx X. Xxxxxxx, XX]
[Xxxxx FXN Company]
