Exhibit 1.4
[Form of Selling Stockholder Underwriting Agreement]
Metromedia Fiber Network, Inc.
Class A Common Stock
(par value $.01 per share)
Underwriting Agreement
New York, New York
________________, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
DEUTSCHE BANK SECURITIES INC.
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇▇▇▇▇▇▇, SACHS & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
As Representatives of the several Underwriters,
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Certain stockholders of Metromedia Fiber Network, Inc., a Delaware
corporation (the "Company"), named in Schedule I hereto (the "Selling
Stockholders") severally propose to sell to the underwriters named in Schedule
II hereto (the "Underwriters"), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., _______ and
_______ (the "Representatives") are acting as representatives, [__________]
shares of Class A Common Stock, par value $.01 per share, of the Company (the
"Underwritten Securities"). The Selling Stockholders named in Schedule I hereto
also propose to grant to the Underwriters an option to purchase up to
[_________] additional shares of Common Stock to cover over-allotments (the
"Option Securities," and together with the Underwritten Securities, the
"Securities"). To the extent there are no additional Underwriters listed on
Schedule II other than you, the term Representatives as used herein shall mean
you, as Underwriters, and the terms Representatives and Underwriters shall mean
either the singular or plural as the context requires. In addition, to the
extent that there is not more than one Selling Stockholder named in Schedule I,
the term Selling Stockholder shall mean either the singular or plural. The use
of the neuter in this Agreement shall include the feminine and masculine
wherever appropriate. Any reference herein to the Registration Statement, the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be
deemed to refer to and include the documents incorporated or deemed to be
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Exchange Act on or before the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, as the case may be (the "Incorporated
Documents"); and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, the Basic Prospectus,
any Preliminary Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference. Certain terms used
herein are defined in Section 17 hereof.
1. REPRESENTATIONS AND WARRANTIES. (i) The Company and each of the
Management Selling Stockholders jointly and severally represent and warrant to,
and agrees with, each Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3
under the Act and has prepared and filed with the Commission a
Registration Statement (File No. 333-89087) on Form S-3, including a
Basic Prospectus, for registration under the Act of the offering and
sale of the Securities. The Company may have filed one or more
amendments thereto, including a Preliminary Final Prospectus, each of
which has previously been furnished to you. The Company will next file
with the Commission one of the following: (1) after the Effective Date
of such Registration Statement, a final prospectus supplement relating
to the Securities in accordance with Rules 430A and 424(b), (2) prior
to the Effective Date of such Registration Statement, an amendment to
such Registration Statement (including the form of final prospectus
supplement) or (3) a final prospectus in accordance with Rules 415 and
424(b). In the case of clause (1), the Company has included in such
Registration Statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and
the rules thereunder to be included in such Registration Statement and
the Final Prospectus. As filed, such final prospectus supplement or
such amendment and form of final prospectus supplement shall contain
all Rule 430A Information, together with all other such required
information, and, except to the extent the Representatives shall agree
in writing to a modification, shall be in all substantive respects in
the form furnished to you prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final Prospectus) as the Company
has advised you, prior to the Execution Time, will be included or made
therein. The Registration Statement, at the Execution Time, meets the
requirements set forth in Rule 415(a)(1)(x).
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(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined
herein), the Final Prospectus (and any supplement thereto) will, comply
in all material respects with the applicable requirements of the Act,
the Exchange Act and the respective rules thereunder; on the Execution
Time, the Registration Statement, as supplemented by any prospectus
supplement filed pursuant to Rule 424(b), did not or will not contain
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; on the
Effective Date, the Final Prospectus, if not filed pursuant to Rule
424(b), will not, and on the date of any filing pursuant to Rule 424(b)
and on the Closing Date, the Final Prospectus (together with any
supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; PROVIDED, HOWEVER, that the
Company and the Selling Stockholders make no representations or
warranties as to the information contained in or omitted from the
Registration Statement or the Final Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion therein, it
being understood and agreed that the only such information is that
described as such in Section 8(b) of this Agreement.
(c) The Incorporated Documents heretofore filed, when they
were filed (or, if any amendment with respect to any such document was
filed, when such amendment was filed), conformed in all material
respects with the requirements of the Exchange Act and the rules and
regulations thereunder, any further Incorporated Documents so filed
will, when they are filed, conform in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder; no such document when it was filed (or, if an amendment
with respect to any such document was filed, when such amendment was
filed), contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
and no such further document, when it is filed, will contain an untrue
statement of a material fact or will omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading.
(d) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation or limited
liability company in good standing under the laws of the jurisdiction
in which it is chartered or organized with full corporate power and
authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Final
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Prospectus (as then amended or supplemented), and is duly qualified to
do business as a foreign corporation or limited liability company and
is in good standing under the laws of each jurisdiction which requires
such qualification, except where the failure to be so qualified would
not have, singly or in the aggregate, a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business.
(e) All the outstanding shares of capital stock of each
subsidiary that is a corporation have been duly and validly authorized
and issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Final Prospectus, all outstanding shares of
capital stock of the subsidiaries are owned by the Company either
directly or through wholly owned subsidiaries free and clear of any
perfected security interest and, to the knowledge of the Company, any
other security interests, claims, liens or encumbrances.
(f) The Company's authorized capitalization is as set forth in
the Final Prospectus under the heading "Capitalization".
(g) The statements in the Final Prospectus under the headings
"Certain United States Federal Income Tax Considerations",
"Business--Regulation," "BusinessBFranchise, License and Related
Agreements," "BusinessBRegulation of International Operations,"
"Description of the Notes" and "Business--Legal Proceedings" fairly
summarize the matters therein described in all material respects.
(h) This Agreement has been duly authorized, executed and
delivered by the Company; the Securities have been duly and validly
authorized by the Company.
(i) The Company is not, and after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Final Prospectus, will not be, an
"investment company" required to be registered under the Investment
Company Act of 1940, as amended, without taking account of any
exemption arising out of the number of holders of the Company's
securities.
(j) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as will be
obtained under the Act in connection with the registration of the
Securities, and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and
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distribution of the Securities by the Underwriters in the manner
contemplated herein or in the Final Prospectus.
(k) Neither the execution and delivery of this Agreement nor
the consummation of any of the transactions contemplated herein or the
fulfillment of the terms hereof, will conflict with, result in a breach
or violation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries, pursuant
to (i) the charter or by-laws of the Company or any of its
subsidiaries; (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to which its
or their property is subject; or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any
of its subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its subsidiaries or any of its
or their properties, except in the case of clauses (ii) and (iii), as
could not be reasonably expected to have, singly or in the aggregate, a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(l) The Securities conform as to legal matters to the
description thereof contained in the Final Prospectus.
(m) The consolidated historical financial statements of the
Company and its consolidated subsidiaries included in the Final
Prospectus present fairly in all material respects the financial
condition, results of operations and cash flows of the Company as of
the dates and for the periods indicated and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as otherwise
noted therein). The selected financial data set forth under the caption
"Selected Consolidated Financial Data" in the Final Prospectus fairly
present, on the basis stated in the Final Prospectus, the information
included therein.
(n) The pro forma financial statements included in the Final
Prospectus include assumptions that provide a reasonable basis for
presenting the significant effects directly attributable to the
transactions and events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the pro
forma adjustments reflect the proper application of those adjustments
to the historical financial statement amounts in the pro forma
financial statements included in the Final Prospectus. The pro forma
financial statements included in the Final Prospectus comply as to form
in all material respects with the applicable accounting requirements of
Regulation S-X under the
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Act and the pro forma adjustments have been properly applied to the
historical amounts in the compilation of those statements.
(o) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending
or, to the best knowledge of the Company, threatened that (i) could
reasonably be expected to have a material adverse effect on the
performance of this Agreement or the consummation of any of the
transactions contemplated hereby; or (ii) could reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Final Prospectus (exclusive of any amendment or
supplement thereto).
(p) Except as described in the Final Prospectus, each of the
Company and each of its subsidiaries owns, licenses, leases or has
obtained rights-of-way for all such properties as are necessary to the
conduct of its operations as presently conducted. The Company and each
of its subsidiaries has good and marketable title, free and clear of
all liens or encumbrances, to all property and assets described in the
Final Prospectus as being owned by it on the date hereof and such
properties and assets are in good repair and suitable for use as so
described except as set forth in the Final Prospectus. All leases to
which the Company or its subsidiaries are a party are valid and binding
(subject to applicable bankruptcy, reorganization, insolvency,
moratorium, fraudulent conveyance or other laws affecting creditors'
rights generally from time to time in effect and to general principles
of equity) and no default has occurred or is continuing thereunder
which could have, singly or in the aggregate, a material adverse effect
on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business, and the Company and each subsidiary enjoy peaceful and
undisturbed possession under all such leases to which any of them is a
party as lessee with such exceptions as do not interfere materially
with the use made by the Company or such subsidiary.
(q) Neither the Company nor any subsidiary is in violation or
default of (i) any provision of its charter or bylaws; (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject; or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or such subsidiary or any
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of its properties, as applicable, except in the case of clauses (ii)
and (iii) as could not be reasonably expected to have, singly or in the
aggregate, a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(r) Each of (i) Deloitte & Touche LLP, (ii) Ernst & Young LLP,
and (iii) PriceWaterhouseCoopers LLP, each of whom have audited certain
financial statements of the Company and its consolidated subsidiaries
and delivered their report with respect to the audited consolidated
financial statements included in the Final Prospectus are independent
public accountants with respect to the Company within the meaning of
the Act and the applicable published rules and regulations thereunder.
(s) The Company and each subsidiary has filed all foreign,
federal, state and local tax returns that are required to be filed or
has requested extensions thereof except in any case in which the
failure so to file would not have, singly or in the aggregate, a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, and has paid all taxes
required to be paid by it and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is
currently being contested in good faith or as would not have, singly or
in the aggregate, a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business.
(t) No labor problem or dispute with the employees of the
Company or any of its subsidiaries exists or is threatened or imminent
that could have, singly or in the aggregate, a material adverse effect
on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business.
(u) There are no transfer taxes or other similar fees or
charges under Federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the Company
or sale by the Company of the Securities.
(v) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; all policies of insurance and
fidelity or surety bonds insuring the
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Company or any of its subsidiaries or their respective businesses,
assets, employees, officers and directors are in full force and effect;
the Company and its subsidiaries are in compliance with the terms of
such policies and instruments in all material respects; and there are
no claims by the Company or any of its subsidiaries under any such
policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; neither
the Company nor any such subsidiary has been refused any insurance
coverage sought or applied for; and neither the Company nor any such
subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have, singly or in the
aggregate, a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(w) Except as described in the Final Prospectus, no subsidiary
of the Company is currently prohibited, directly or indirectly, from
paying any dividends to the Company, from making any other distribution
on such subsidiary's capital stock, from repaying to the Company any
loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the Company
or any other subsidiary of the Company.
(x) Except as described in the Final Prospectus, the Company
and its subsidiaries (i) possess the certificates, authorizations,
approvals, franchises, licenses, rights-of-way and permits issued by
the appropriate federal, state, local or foreign regulatory authorities
necessary to conduct their respective businesses as presently
conducted, (ii) are not in violation of any such certificates,
authorizations, approvals, franchises, licenses, rights-of-way and
permits, except where such violation would not have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business and (iii) have not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization, approval, franchise, license, right-of-way or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on
the condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business.
(y) The Company and its subsidiaries possess or have applied
for the patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential
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information, systems or procedures), trademarks, service marks and
trade names (collectively, "Intellectual Property") presently employed
by them in connection with the businesses now operated by them, and
neither the Company nor any of the Subsidiaries has received any notice
of infringement of or conflict with asserted rights of others with
respect to the foregoing except as could not have, singly or in the
aggregate, a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business. To the Company's
knowledge, the use of such Intellectual Property in connection with the
business and operations of the Company and its subsidiaries does not
infringe on the rights of any person.
(z) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (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 the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(aa) The Company and its subsidiaries are (i) in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"); (ii) have received and are in
compliance with all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses as described in the Final Prospectus; and (iii) have not
received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except where
such non-compliance with Environmental Laws, failure to receive
required permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business; neither the Company nor any of the subsidiaries has been
notified that it has been named as a "potentially responsible party"
under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.
(bb) Except as described in the Final Prospectus, the Company
and its subsidiaries are implementing a comprehensive, detailed program
to analyze and
9
address the risk that the computer hardware and software used by them
may be unable to recognize and properly execute date-sensitive
functions involving certain dates prior to and any dates after December
31, 1999 (the "Year 2000 Problem"), and reasonably believe that such
risk will be remedied on a timely basis without material expense and
will not have a material adverse effect upon the financial condition
and results of operations of the Company and its subsidiaries, taken as
a whole.
(cc) Each of the Company and its subsidiaries has fulfilled
its obligations, if any, under the minimum funding standards of ▇▇▇▇▇▇▇
▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and the regulations and published
interpretations thereunder with respect to each "plan" (as defined in
Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the Company and its subsidiaries
are eligible to participate and each such plan is in compliance in all
material respects with the presently applicable provisions of ERISA and
such regulations and published interpretations; the Company and its
subsidiaries have not incurred any unpaid liability to the Pension
Benefit Guaranty Corporation (other than for the payment of premiums in
the ordinary course) or to any such plan under Title IV of ERISA.
(dd) The subsidiaries listed on Schedule III attached hereto
are the only significant subsidiaries of the Company as defined in Rule
1-02 of Regulation S-X (individually, a "Subsidiary" and collectively,
the "Subsidiaries").
(ee) None of the transactions contemplated by this Agreement
will violate or result in a violation of Section 7 of the Exchange Act,
or any regulation promulgated thereunder, including, without
limitation, Regulations T, U and X of the Board of Governors of the
Federal Reserve System.
(ff) Neither the Company nor any of the subsidiaries is a
"holding company" or a "subsidiary company" of a holding company, or an
"affiliate" thereof required to be registered under the Public Utility
Holding Company Act of 1935, as amended.
(gg) Neither the Company nor any of its subsidiaries nor, to
the Company's knowledge, any employee or agent of the Company or any
subsidiary has made any payment of funds of the Company or any
subsidiary or received or retained any funds in violation of any
provision of the Foreign Corrupt Practices Act of 1977, as amended.
(hh) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2)
under the Act has indicated to the Company that it is considering (i)
the downgrading, suspension or withdrawal of,
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or any review for a possible change that does not indicate the
direction of the possible change in, any rating assigned to the Company
or any securities of the Company or (ii) any change in the outlook for
any rating of the Company or any securities of the Company.
(ii) No relationship, direct or indirect, exists between or
among the Company or any of its subsidiaries on the one hand, and the
directors, officers, stockholders, customers or suppliers of the
Company or any of its subsidiaries on the other hand, which is required
by the Act to be described in the Final Prospectus which is not so
described.
(jj) The Company has not taken, directly or indirectly, any
action designed to cause or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
(ii) Each Selling Stockholder represents and warrants to, and agrees
with, each Underwriter that:
(a) Such Selling Stockholder is the record and beneficial
owner of the Securities to be sold by it hereunder free and clear of
all liens, encumbrances, equities and claims and has duly indorsed such
Securities in blank, and, assuming that each Underwriter acquires its
interest in the Securities it has purchased from such Selling
Stockholder without notice of any adverse claim (within the meaning of
Section 8-105 of the New York Uniform Commercial Code (AUCC@)), each
Underwriter that has purchased such Securities delivered on the Closing
Date to The Depository Trust Company or other securities intermediary
by making payment therefor as provided herein, and that has had such
Securities credited to the securities account or accounts of such
Underwriters maintained with The Depository Trust Company or such other
securities intermediary will have acquired a security entitlement
(within the meaning of Section 8-102(a)(17) of the UCC) to such
Securities purchased by such Underwriter, and no action based on an
adverse claim (within the meaning of Section 8-105 of the UCC) may be
asserted against such Underwriter with respect to such Securities.
(b) Such Selling Stockholder has not taken, directly or
indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result, under the Exchange Act
or otherwise, in stabilization
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or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(c) Certificates in negotiable form for such Selling
Stockholder's Securities have been placed in custody, for delivery
pursuant to the terms of this Agreement, under a Custody Agreement and
Power of Attorney duly authorized (if applicable) executed and
delivered by such Selling Stockholder, in the form heretofore furnished
to you (the "Custody Agreement") with ____________, as Custodian (the
"Custodian"); the Securities represented by the certificates so held in
custody for each Selling Stockholder are subject to the interests
hereunder of the Underwriters; the arrangements for custody and
delivery of such certificates, made by such Selling Stockholder
hereunder and under the Custody Agreement, are not subject to
termination by any acts of such Selling Stockholder, or by operation of
law, whether by the death or incapacity of such Selling Stockholder or
the occurrence of any other event; and if any such death, incapacity or
any other such event shall occur before the delivery of such Securities
hereunder, certificates for the Securities will be delivered by the
Custodian in accordance with the terms and conditions of this Agreement
and the Custody Agreement as if such death, incapacity or other event
had not occurred, regardless of whether or not the Custodian shall have
received notice of such death, incapacity or other event.
(d) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by such
Selling Stockholder of the transactions contemplated herein, except
such as may have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters and
such other approvals as have been obtained.
(e) Neither the sale of the Securities being sold by such
Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by such Selling Stockholder or the
fulfillment of the terms hereof by such Selling Stockholder will
conflict with, result in a breach or violation of, or constitute a
default under any law or the charter or by-laws of such Selling
Stockholder or the terms of any indenture or other agreement or
instrument to which such Selling Stockholder or any of its subsidiaries
is a party or bound, or any judgment, order or decree applicable to
such Selling Stockholder or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over such Selling Stockholder or any of its
subsidiaries.
(f) Such Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in this Section
1 are not true and correct, is familiar with the Registration Statement
and has no knowledge
12
of any material fact, condition or information not disclosed in the
Final Prospectus or any supplement thereto which has adversely affected
or may adversely affect the business of the Company or any of its
subsidiaries; and the sale of Securities by such Selling Stockholder
pursuant hereto is not prompted by any information concerning the
Company or any of its subsidiaries which is not set forth in the Final
Prospectus or any supplement thereto.
(g) In respect of any statements in or omissions from the
Registration Statement or the Final Prospectus or any supplements
thereto made in reliance upon and in conformity with information
furnished in writing to the Company by any Selling Stockholder
specifically for use in connection with the preparation thereof, such
Selling Stockholder hereby makes the same representations and
warranties to each Underwriter as the Company makes to such Underwriter
under paragraph (i)(b) of this Section.
Any certificate by any Selling Stockholder or any officer of any
Selling Stockholder and delivered to the Representatives or counsel for the
Underwriters in connection with the offering of the Securities shall be deemed a
representation and warranty by such Selling Stockholder, as to matters covered
thereby, to each Underwriter.
2. PURCHASE AND SALE.
(a) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Selling
Stockholders agree, severally and not jointly, to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Selling Stockholders, at a purchase price of $[____]
per share, the amount of the Underwritten Securities set forth opposite
such Underwriter's name in Schedule II hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Selling
Stockholders named in Schedule I hereby grant an option to the several
Underwriters to purchase, severally and not jointly, up to [_____]
Option Securities at the same purchase price per share as the
Underwriters shall pay for the Underwritten Securities. Said option may
be exercised only to cover over-allotments in the sale of the
Underwritten Securities by the Underwriters. Said option may be
exercised in whole or in part at any time (but not more than once) on
or before the 30th day after the date of the Final Prospectus upon
written or telegraphic notice by the Representatives to the Company and
such Selling Stockholders setting forth the number of shares of the
Option Securities as to which the several Underwriters are exercising
the option and the settlement date. The maximum number of Option
Securities which each Selling Stockholder agrees to sell is set forth
in Schedule I hereto. In the event that the Underwriters exercise less
than their full over-allotment option, the number of Option Securities
to be sold by each Selling
13
Stockholder listed on Schedule I shall be, as nearly as practicable, in
the same proportion as the maximum number of Option Securities to be
sold by each Selling Stockholder and the number of Option Securities to
be sold. The number of Option Securities to be purchased by each
Underwriter shall be the same percentage of the total number of shares
of the Option Securities to be purchased by the several Underwriters as
such Underwriter is purchasing of the Underwritten Securities, subject
to such adjustments as you in your absolute discretion shall make to
eliminate any fractional shares.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 A.M., New York City time, on
[_________], 1999, or at such time on such later date not more than three
Business Days after the foregoing date as the Representatives shall designate,
which date and time may be postponed by agreement among the Representatives and
the Selling Stockholders or as provided in Section 9 hereof (such date and time
of delivery and payment for the Securities being herein called the "Closing
Date"). Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the respective aggregate purchase
prices of the Securities being sold by each of the Selling Stockholders to or
upon the order of the Selling Stockholders by wire transfer payable in same-day
funds to the account specified by the Company and the Selling Stockholders.
Delivery of the Underwritten Securities and the Option Securities shall be made
through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
Each Selling Stockholder will pay all applicable state transfer taxes,
if any, involved in the transfer to the several Underwriters of the Securities
to be purchased by them from such Selling Stockholder and the respective
Underwriters will pay any additional stock transfer taxes involved in further
transfers.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Selling Stockholders named
in Schedule I hereto will deliver the Option Securities (at the expense of the
Company) to the Representatives, at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
the date specified by the Representatives (which shall be within three Business
Days after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Selling Stockholders named in Schedule I by wire transfer payable in same-day
funds to the accounts specified by the Selling Stockholders named in Schedule I
hereto. If settlement for the Option Securities occurs after the Closing Date,
such Selling Stockholders will deliver to the Representatives on the settlement
date for the Option Securities, and the obligation of the Underwriters to
purchase the Option Securities shall be conditioned upon receipt of,
supplemental opinions, certificates and letters confirming
14
as of such date the opinions, certificates and letters delivered on the Closing
Date pursuant to Section 6 hereof.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus.
5. AGREEMENTS.
(i) The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of
the Registration Statement or supplement (including the Final
Prospectus or any Preliminary Final Prospectus) to the Basic Prospectus
or any Rule 462(b) Registration Statement unless the Company has
furnished you a copy for your review prior to filing and will not file
any such proposed amendment or supplement without the prior written
consent of the Representatives, which consent shall not be unreasonably
withheld, conditioned or delayed. Subject to the foregoing sentence, if
the Registration Statement has become or becomes effective pursuant to
Rule 430A, or filing of the Final Prospectus is otherwise required
under Rule 424(b), the Company will cause the Final Prospectus,
properly completed, and any supplement thereto to be filed with the
Commission pursuant to the applicable paragraph of Rule 424(b) within
the time period prescribed and will provide evidence satisfactory to
the Representatives of such timely filing. Upon your request, the
Company will cause the Rule 462(b) Registration Statement, completed in
compliance with the Act and the applicable rules and regulations
thereunder, to be filed with the Commission pursuant to Rule 462(b) and
will provide evidence satisfactory to the Representatives of such
filing. The Company will promptly advise the Representatives (1) when
the Registration Statement, if not effective at the Execution Time,
shall have become effective, (2) when the Final Prospectus, and any
supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration
Statement shall have been filed with the Commission, (3) when, prior to
termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (4)
of any request by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration Statement, or
for any supplement to the Final Prospectus or for any additional
information, (5) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (6)
of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for
such
15
purpose. The Company will use its best efforts to prevent the issuance
of any such stop order or the suspension of any such qualification and,
if issued, to obtain as soon as possible the withdrawal thereof. Prior
to the completion of the sale of the Securities by the Underwriters,
the Company will not file any document under the Exchange Act that is
incorporated by reference in the Registration Statement unless, prior
to such proposed filing, the Company has furnished the Representatives
with a copy of such document for their review and the Representatives
have not reasonably objected to the filing of such document within a
reasonable period of time. The Company will promptly advise the
Representatives when any document filed under the Exchange Act that is
incorporated by reference in the Registration Statement shall have been
filed with the Commission.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Final Prospectus as then amended or
supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were made
not misleading, or if it should be necessary to amend the Registration
Statement or supplement the Final Prospectus to comply with the Act or
the Exchange Act or the respective rules thereunder, the Company
promptly will (1) notify the Representatives of such event, (2) prepare
and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such compliance and (3)
supply any supplemented Final Prospectus to you in such quantities as
you may reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of each Preliminary
Final Prospectus and the Final Prospectus and any supplement thereto as
the Representatives may reasonably request. The Company will pay the
expenses of printing or other production of all documents relating to
the offering.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may
16
designate, will maintain such qualifications in effect so long as
required for the distribution of the Securities and will pay any fee of
the National Association of Securities Dealers, Inc., in connection
with its review of the offering; 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 that would
subject it to service of process in suits, other than those arising out
of the offering or sale of the Securities, in any jurisdiction where it
is not now so subject. The Company will promptly advise the
Representatives of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company shall use its best efforts to
prevent the issuance of any order suspending the qualification or
exemption of the Securities under any state securities or Blue Sky
laws, and, if at any time any state securities commission or any other
regulatory authority shall issue an order suspending the qualification
or exemption of the Securities under any state securities or Blue Sky
laws, the Company shall use every reasonable effort to obtain the
withdrawal or lifting of such order at the earliest possible time.
(f) The Company will not, and the individuals listed on
Schedule IV hereto will not, without the prior written consent of
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., offer, sell, contract to sell, pledge, or
otherwise dispose of, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by the Company or any affiliate of the
Company or any person in privity with the Company or any affiliate of
the Company) directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, any other shares of Common
Stock or any securities convertible into, or exercisable, or
exchangeable for, shares of Common Stock; or publicly announce an
intention to effect any such transaction, for a period of [90] days
after the date of the Underwriting Agreement, provided, however, that
the Company may issue and sell Common Stock pursuant to any employee
stock option plan, stock ownership plan or dividend reinvestment plan
of the Company in effect at the Execution Time and the Company may
issue Common Stock issuable upon the conversion of securities or the
exercise of warrants outstanding at the Execution Time.
(g) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
17
(h) The Company agrees to pay the costs and expenses relating
to the following matters: (i) the preparation, printing or reproduction
of the Registration Statement, the Preliminary Final Prospectus and the
Final Prospectus and each amendment or supplement to any of them; (iii)
the printing (or reproduction) and delivery (including postage, air
freight charges and charges for counting and packaging) of such copies
of the Registration Statement, the Preliminary Final Prospectus and the
Final Prospectus and all amendments or supplements to any of them, as
may, in each case, be reasonably requested for use in connection with
the offering and sale of the Securities; (iv) the preparation,
printing, authentication, issuance and delivery of certificates for the
Securities, including any stamp or transfer taxes in connection with
the Securities; (v) the printing (or reproduction) and delivery of this
Agreement, the Custody Agreement, any blue sky memorandum and all other
agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Securities; (vi) any registration
or qualification of the Securities for offer and sale under the
securities or blue sky laws of the several states (including filing
fees and the reasonable fees and expenses of one counsel for the
Underwriters relating to such registration and qualification); (vii)
fees and expenses of the Custodian ; (viii) the transportation and
other expenses incurred by or on behalf of Company representatives in
connection with presentations to prospective purchasers of the
Securities; (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; and (x) all other costs and expenses incident to the
performance by the Company of its obligations hereunder; PROVIDED,
HOWEVER, that, except as otherwise provided for herein, the
Underwriters shall pay their own costs and expenses, including the fees
of their counsel, any advertising expenses connected with any offers
they may make.
(i) The Company agrees to do and perform all things required
to be done and performed by it under this Agreement that are within its
control on or prior to or after the Closing Date, as applicable, and to
use its best efforts to satisfy all conditions precedent on its part to
the delivery of the Securities.
(ii) Each Selling Stockholder agrees with the several Underwriters
that;
(a) Such Selling Stockholder will not, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. offer, sell, contract to
sell, pledge or otherwise dispose of, (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in privity with the Company or
any affiliate of the Company) directly or indirectly, or file (or
participate in the filing of) a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the
18
Exchange Act with respect to, any shares of capital stock of the
Company or any securities convertible into or exercisable or
exchangeable for such capital stock, or publicly announce an intention
to effect any such transaction, for a period of 90 days after the date
of this Agreement, other than shares of Common Stock disposed of as
bona fide gifts approved by ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
(b) Such Selling Stockholder will not take any action designed
to or which has constituted or which might reasonably be expected to
cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(c) Such Selling Stockholder will advise you promptly, and if
requested by you, will confirm such advice in writing, so long as
delivery of a prospectus relating to the Securities by an underwriter
or dealer may be required under the Act, of (i) any material change in
the Company's condition (financial or otherwise), prospects, earnings,
business or properties, (ii) any change in information in the
Registration Statement or the Final Prospectus relating to such Selling
Stockholder or (iii) any new material information relating to the
Company or relating to any matter stated in the Final Prospectus which
comes to the attention of such Selling Stockholder.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations
of the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company and the Selling
Stockholders made in any certificates pursuant to the provisions hereof, to the
performance by the Company and the Selling Stockholders of their respective
obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time, on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or (ii)
9:30 AM on the Business Day following the day on which the public
offering price was determined, if such determination occurred after
3:00 PM New York City time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Final Prospectus, and any such supplement, will be filed in
the manner and within the time period required by Rule 424(b); and no
stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
19
(b) The Company shall have requested and caused ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, General Counsel of the Company, to furnish to the
Representatives his opinion, dated the Closing Date and addressed to
the Representatives, to the effect that:
i. each of the Company's Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own or lease, as
the case may be, and to operate, its properties and conduct its
business as described in the Final Prospectus;
ii. all the outstanding shares of capital stock of
the Company and each Subsidiary have been duly and validly authorized
and issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Final Prospectus, all outstanding shares of
capital stock of the Subsidiaries are owned by the Company either
directly or through wholly owned subsidiaries free and clear of any
security interest and, to the knowledge of such counsel, after due
inquiry, any other security interests, claims, liens or encumbrances;
iii. the Company's authorized capitalization is as
set forth in the Final Prospectus under the heading "Capitalization";
iv. to the knowledge of such counsel, without
conducting a docket search, there is no pending or threatened action,
suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
subsidiaries or its or their property that is not adequately disclosed
in the Final Prospectus, except in each case for such proceedings that,
if the subject of an unfavorable decision, ruling or finding would not,
singly or in the aggregate, result in a material adverse change in the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole; and
the statements in the Final Prospectus under the heading
"BusinessCLegal Proceedings" fairly summarize the matters therein
described;
v. neither the execution and delivery of this
Agreement nor the consummation of any other of the transactions herein
contemplated, nor the fulfillment of the terms hereof, will conflict
with, result in a breach or violation of, or imposition of any lien,
charge or encumbrance upon, any property or asset of the Company or its
subsidiaries pursuant to (i) the charter or by-laws of the Company's
subsidiaries, or (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to which its
respective property is subject which is known to such counsel;
20
vi. the statements in the Final Prospectus under the
captions "Risk Factors B The Heavy Regulation of the Telecommunications
Industry May Limit the Development of Our Networks and Affect Our
Competitive Position" and "BusinessBRegulation" to the extent that they
discuss U.S. federal, state, and local telecommunications statutes and
regulations or legal or governmental proceedings of the FCC and state
and local governments with respect to telecommunications regulatory
matters, fairly summarize the matters referred to therein in all
material respects;
vii. neither the execution and delivery of this
Agreement by the Company nor the performance by the Company of its
obligations under this Agreement will violate the Communications Act or
the State Telecommunications Laws; and
viii. to the knowledge of such counsel, (A) the
Company and its subsidiaries have in effect all the U.S. federal and
state telecommunications regulatory licenses, permits, authorizations,
consents, and approvals (hereinafter, "Licenses") required to conduct
their respective businesses as presently conducted; (B) all such
Licenses have been validly issued and are in full force and effect; (C)
no determination has been made by the FCC or any State Regulatory
Agency that the Company or any subsidiary is in violation of any such
Licenses, and no proceeding is pending before any such agency in which
any such violation has been alleged; and (D) no proceedings by the FCC
or any State Regulatory Agency to revoke or restrict any such Licenses
are pending or threatened. "Validly issued" as used in this paragraph
means that the Licenses have been issued through the means of regular
agency procedures applied in conformity with the applicable governing
statute and prior agency practice and there is no legal basis under the
applicable governing statute to conclude that the Company or any
subsidiary cannot hold one or more of the Licenses as a matter of law.
"Full force and effect" as used in this paragraph means (i) the orders
issuing the Licenses have become effective under the applicable
governing statute, (ii) the Licenses contain no conditions that would
have a material adverse effect on the Company's or any subsidiary's
operations except for such conditions imposed generally by the agency,
(iii) all conditions precedent set forth in the Licenses have been
satisfied where the failure to satisfy such conditions would have a
material adverse effect on the Company's or any subsidiary's ability to
conduct their respective businesses as they are presently conducted,
and (iv) no stay of effectiveness has been issued.
(c) The Company shall have requested and caused ▇▇▇▇, Weiss,
Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Company, to furnish to the
Representatives its opinion, dated the Closing Date and addressed to
the Representatives, to the effect that:
21
i. the Company and each of the Subsidiaries
incorporated (in the case of a corporation) or organized (in the case
of any other entity) under the laws of the States of Delaware or New
York has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware or
New York, as applicable, with full corporate power and authority to own
or lease, as the case may be, and to operate its properties and conduct
its business as described in the Final Prospectus;
ii. the Registration Statement has become effective
under the Act; any required filing of the Basic Prospectus, any
Preliminary Final Prospectus and the Final Prospectus, and any
supplements thereto, has been made pursuant to Rule 424(b); to the
knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened by the Commission, and the
Registration Statement and the Final Prospectus (other than the
financial statements, schedules and other financial and statistical
information contained therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the applicable
requirements of the Act, the Exchange Act and the Trust Indenture Act
and the respective rules thereunder;
iii. this Agreement has been duly authorized,
executed and delivered by the Company;
iv. To the extent that they constitute a summary of
U.S. federal law and regulations, the statements in the Final
Prospectus under the heading "Certain United States Federal Income Tax
Considerations" fairly summarize the matters therein described in all
material respects;
v. [the Company is not and, after giving effect to
the offering and sale of the Securities and the application of the
proceeds thereof as described in the Final Prospectus, will not be an
"investment company" required to be registered under the Investment
Company Act without taking account of any exemption arising out of the
number of holders of the Company's securities;]
vi. [except as described in the Final Prospectus,
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 Securities or the right to have any 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 securities of the Company;]
vii. no consent, approval, authorization, filing with
or order of any court or governmental agency or body under the Federal
laws of the United
22
States or the laws of the State of New York or under the General
Corporation Law of the State of Delaware is required in connection with
the due authorization, execution and delivery of this Agreement, except
such as will be obtained, taken or made or such, as may be required
under the blue sky or securities laws of any state or foreign
jurisdiction or the NASD (as to which such counsel need not express any
opinion) or and such other approvals (specified in such opinion) as
have been obtained (provided that such counsel need not express any
opinion with respect to any consent, approval, authorization under the
Communications Act of 1934, as amended, or any published rules,
regulations or policies of the Federal Communications Commission (the
"FCC") thereunder);
viii. neither the execution and delivery of this
Agreement nor the consummation of any other of the transactions herein
contemplated, nor the fulfillment of the terms hereof, will conflict
with, result in a breach or violation of, or imposition of any lien,
charge or encumbrance upon any property or asset of the Company or its
subsidiaries pursuant to, (i) the charter or by-laws of the Company; or
(ii) any statute, law, rule or regulation of the Federal government of
the United States (excluding the FCC) or the State of New York or under
the General Corporation Law of the State of Delaware, or to such
counsel's knowledge, any judgment, order or decree applicable to the
Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company, any of its subsidiaries or any of
their respective properties which is known to such counsel except as
described in the Final Prospectus or for such violations as could not
be reasonably expected to have, singly or in the aggregate, a material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries,
taken as a whole; and
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent accountants of the Company, the Underwriters
and counsel for the Underwriters at which the contents of the Registration
Statement and the Final Prospectus and related matters were discussed and,
although such counsel is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Final Prospectus (or any
amendments or supplements thereto) and has made no independent investigation or
verification thereof, and such counsel has not participated in the preparation
of the Incorporated Documents, on the basis of the foregoing, no facts have come
to the attention of such counsel that have led such counsel to believe that at
the Execution Time and on the Closing Date the Registration Statement and the
Final Prospectus contained or contains any untrue statement of a material fact
or omitted or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (in each case, other than the financial statements, schedules and
other financial and statistical information which are contained or incorporated
by
23
reference therein or omitted thereform, as to which such counsel need express no
opinion).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
New York, the Federal laws of the United States or the General Corporation Law
of the State of Delaware, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they believe to
be reliable and who are reasonably satisfactory to counsel for the Underwriters;
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials. References to the
Registration Statement and the Prospectus in this Section 6(c) include any
amendment or supplement thereto at the Closing Date.
(d) The Company shall have furnished to the Representatives
the opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special regulatory counsel for the
Company, dated the Closing Date, to the effect that:
i. to the extent they constitute a summary of the
regulatory matters referred to therein, the statements in the
Registration Statement and the Final Prospectus under the caption
"BusinessCRegulation of International Operations" fairly summarize the
matters referred to therein;
ii. no licenses under telecommunications legislation
in England and Wales including the Telecommunications ▇▇▇ ▇▇▇▇, the
Wireless ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ or the Wireless ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ other
than the Licenses are required by the Company, ION LLC, ION or Racal to
carry on the ION Business in the United Kingdom;
iii. no licenses under telecommunications legislation
in England and Wales including the Telecommunications ▇▇▇ ▇▇▇▇, the
Wireless ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ or the Wireless ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, other
than the Licenses that are currently required by the Company in
relation to the Company's telecommunications business as presently
conducted in the United Kingdom; and
iv. no German telecommunications licenses, other than
the class 3 license obtained by Metromedia Fiber Network GmbH, are
currently required by the Company in relation to the European Network,
the German Network, or the Company's telecommunications business as
presently conducted in Germany.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than Germany or the
United Kingdom or the regulations of the European Union.
24
(e) The Selling Stockholders shall have requested and caused
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Selling
Stockholders, to have furnished to the Representatives their opinion
dated the Closing Date and addressed to the Representatives, to the
effect that:
i. this Agreement, the Custody Agreement and Power of
Attorney have been duly authorized, executed and delivered by the
Selling Stockholders, the Custody Agreement is valid and binding on the
Selling Stockholders and each Selling Stockholder has full legal right
and authority to sell, transfer and deliver in the manner provided in
this Agreement and the Custody Agreement the Securities being sold by
such Selling Stockholder hereunder;
ii. assuming that each Underwriter acquires its
interest in the Securities it has purchased from such Selling
Stockholder without notice of any adverse claim (within the meaning of
Section 8-105 of the UCC), each Underwriter that has purchased such
Securities delivered on the Closing Date to The Depository Trust
Company or other securities intermediary by making payment therefor as
provided herein, and that has had such Securities credited to the
securities account or accounts of such Underwriters maintained with The
Depository Trust Company or such other securities intermediary will
have acquired a security entitlement (within the meaning of Section
8-102(a)(17) of the UCC) to such Securities purchased by such
Underwriter, and no action based on an adverse claim (within the
meaning of Section 8-105 of the UCC) may be asserted against such
Underwriter with respect to such Securities;
iii. no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation by any Selling Stockholder of the transactions
contemplated herein, except such as may have been obtained under the
Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters and such other approvals (specified in
such opinion) as have been obtained; and
iv. neither the sale of the Securities being sold by
any Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by any Selling Stockholder or the
fulfillment of the terms hereof by any Selling Stockholder will
conflict with, result in a breach or violation of, or constitute a
default under any law or the charter or By-laws of the Selling
Stockholder or the terms of any indenture or other agreement or
instrument known to such counsel and to which any Selling Stockholder
or any of its subsidiaries is a party or bound, or any judgment, order
or decree known to such counsel to be applicable to any Selling
Stockholder or any of its subsidiaries of any court,
25
regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over any Selling Stockholder or any of its
subsidiaries.
(f) The Representatives shall have received from Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, such
opinion or opinions, dated the Closing Date and addressed to the
Representatives, with respect to the sale of the Securities, the
Registration Statement, the Final Prospectus (together with any
supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(g) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board of
Directors or the President and the principal financial or accounting
officer of the Company, dated the Closing Date, to the effect that the
signers of such certificate have carefully examined the Registration
Statement, the Final Prospectus, any supplements to the Final
Prospectus and this Agreement and that:
i. the representations and warranties of the Company
in this Agreement are true and correct in all material respects on and
as of the Closing Date with the same effect as if made on the Closing
Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date;
ii. no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
iii. since the date of the most recent financial
statements included or incorporated by reference in the Final
Prospectus (exclusive of any amendment or supplement thereto), there
has been no material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Final Prospectus (exclusive of any amendment or
supplement thereto).
(h) Each Selling Stockholder shall have furnished to the
Representatives a certificate, signed by the Chairman of the Board or
the President and the principal financial or accounting officer of such
Selling Stockholder, dated the Closing Date, to the effect that the
signers of such certificate have carefully examined the Registration
Statement, the Final Prospectus, any supplement to the Final Prospectus
and this Agreement and that
26
the representations and warranties of such Selling Stockholder in this
Agreement are true and correct in all material respects on and as of
the Closing Date to the same effect as if made on the Closing Date.
(i) At the Execution Time and at the Closing Date, the Company
shall have requested and caused Ernst & Young LLP to furnish to the
Representatives letters, dated respectively as of the Execution Time
and as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the applicable
rules and regulations thereunder, that they have performed a review of
the unaudited interim financial information of the Company for the
[_____] month period ended [_______], 1999 and as at [______], 1999 and
stating in effect that:
i. in their opinion the audited financial statements
and financial statement schedules included or incorporated in the
Registration Statement and the Final Prospectus and reported on by them
comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the related published
rules and regulations thereunder;
ii. on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; their limited review in accordance with the standards
established under Statement on Auditing Standards No. 71, of the
unaudited interim financial information for the [______] month period
ended [______], 1999, and as at [_________], 1999, as indicated in
their report included or incorporated in the Registration Statement and
the Final Prospectus; carrying out certain specified procedures (but
not an examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of significance
with respect to the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors and committees
of the Company and the Subsidiaries; and inquiries of certain officials
of the Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions and
events subsequent to [_________], 1998, nothing came to their attention
which caused them to believe that:
(1) any unaudited financial statements included or
incorporated in the Registration Statement and the Final
Prospectus do not comply in form in all material respects with
applicable accounting requirements and with the published
rules and regulations of the Commission with respect to
financial statements included or incorporated in quarterly
reports on Form 10-Q under the Exchange Act; or that said
unaudited financial statements are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
27
statements included or incorporated in the Registration
Statement and the Final Prospectus;
(2) with respect to the period subsequent to
[______], 1999, there were any changes, at a specified date
not more than three days prior to the date of the letter, in
the capital stock, increase in long-term debt of the Company
and its subsidiaries or decreases in net assets or
stockholders' equity of the Company as compared with the
amounts shown on the [______], 1999 consolidated balance sheet
included in the Final Prospectus, or for the period from
[_______], 1999 to such specified date there were any
decreases, as compared with the corresponding period in the
preceding year in revenues or in total or per share amounts of
net income of the Company and its subsidiaries, except in all
instances for changes or decreases set forth in such letter,
in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the
Representatives; or
(3) the information included under the headings
"Selected Consolidated Financial Data" and
"ManagementBExecutive Compensation" is not in conformity with
the disclosure requirements of Regulation S-K;
iii. they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature (which is
limited to accounting, financial or statistical information derived
from the general accounting records of the Company and its
subsidiaries) set forth in the Final Prospectus, including the
information set forth under the captions "Risk Factors", "Use of
Proceeds", "Capitalization", "Selected Consolidated Financial Data",
"Management's Discussion and Analysis of Financial Condition and
Results of Operations", "Business", "Management", and "Certain
Relationships and Related Transactions" in the Final Prospectus, the
information included or incorporated in Items 1, 2, 6, 7 and 11 of the
Company's Annual Report on Form 10-K incorporated in the Final
Prospectus and the information included in the "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included
or incorporated in the Company's Quarterly Reports on Form 10-Q,
incorporated in the Final Prospectus agrees with the accounting records
of the Company and its subsidiaries, excluding any questions of legal
interpretation; and
iv. on the basis of a reading of the unaudited pro
forma financial statements included or incorporated by reference in the
Registration Statement and the Final Prospectus (the "pro forma
financial statements"); carrying out certain specified procedures;
inquiries of certain officials of the
28
Company and [___________] who have responsibility for financial and
accounting matters; and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in
the pro forma financial statements, nothing came to their attention
which caused them to believe that the pro forma financial statements do
not comply as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X or that the pro
forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
(j) The Representatives shall have also received from Ernst &
Young LLP a letter stating that the Company's system of internal
accounting controls taken as a whole is sufficient to meet the broad
objectives of internal accounting control insofar as those objectives
pertain to the prevention or detection of errors or irregularities in
amounts that would be material in relation to the financial statements
of the Company and its subsidiaries.
(k) At the Execution Time and at the Closing Date, Deloitte &
Touche LLP shall have furnished to the Representatives letters, dated
respectively as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the Representatives, confirming that
they are independent accountants within the meaning of the Act and the
applicable rules and regulations thereunder, and stating in effect
that:
i. in their opinion the audited financial statements
and financial statement schedules included in the Registration
Statement and the Final Prospectus and reported on by them comply in
form in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations; and
ii. they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature (which is
limited to accounting, financial or statistical information derived
from the general accounting records of the Company and its
subsidiaries) set forth in the Registration Statement and the Final
Prospectus agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation.
References to the Final Prospectus in this paragraph (k)
include any supplement thereto at the date of the letter.
(l) At the Execution Time and at the Closing Date,
PricewaterhouseCoopers LLP shall have furnished to the Representatives
a letter or letters, dated respectively as of the Execution Time and as
of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are
29
independent accountants within the meaning of the Act and the
applicable rules and regulations thereunder, and stating in effect
that:
i. in their opinion the audited financial statements
and financial statement schedules included in the Registration
Statement and the Final Prospectus and reported on by them comply in
form in all material respects with the accounting requirements of the
Act and the related published rules and regulations; and
ii. they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature (which is
limited to accounting, financial or statistical information derived
from the general accounting records of the Company and its
subsidiaries) set forth in the Registration Statement and the Final
Prospectus agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation.
References to the Final Prospectus in this paragraph (l)
include any supplement thereto at the date of the letter.
(m) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any amendment or supplement thereto), there shall not
have been (i) any change or decrease specified in the letter or letters
referred to in paragraph (g) of this Section 6 or (ii) any change, or
any development involving a prospective change, in or affecting the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any amendment or supplement thereto) the
effect of which, in any case referred to in clause (i) or (ii) above,
is, in the sole judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to market the
Securities as contemplated by the Registration Statement (exclusive of
any amendment thereof) and the Final Prospectus (exclusive of any
amendment or supplement thereto).
(n) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt
securities, including the Securities, by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating
that does not indicate the direction of the possible change.
30
(o) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been taken or, to the knowledge of the Company,
shall be contemplated by the Commission at or prior to the Closing
Date; (ii) there shall not have been any change in the capital stock of
the Company nor any material increase in the short-term or long-term
debt of the Company (other than in the ordinary course of business)
from that set forth or contemplated in the Registration Statement or
the Final Prospectus (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 Final
Prospectus (or any amendment or supplement thereto), except as may
otherwise be stated in the Registration Statement and Final Prospectus
(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, direct or contingent (whether or not in
the ordinary course of business), that are material to the Company and
the Subsidiaries, taken as a whole, other than those reflected in the
Registration Statement or the Final Prospectus (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 you), to the effect set forth in this
Section 6(f) hereof.
(p) 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.
(q) At the Execution Time, the Selling Stockholders shall have
furnished to the Representatives a letter substantially in the form of
Exhibit A hereto addressed to the Representatives from each individual
listed on Schedule IV.
(r) Prior to the Closing Date, the Company and Selling
Stockholders shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may
reasonably request.
(s) If any of the conditions specified in this Section 6 shall
not have been fulfilled in all material respects when and as provided
in this Agreement, or if any of the opinions and certificates mentioned
above or elsewhere in this Agreement shall not be in all material
respects reasonably satisfactory in form and
31
substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be
cancelled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the
Company in writing or by telephone or facsimile confirmed in writing.
(t) The documents required to be delivered by this Section 6
will be delivered at the office of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
LLP, counsel for the Underwriters, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, on the Closing Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company or any Selling
Stockholder to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally through ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. on demand
for all out-of-pocket expenses (including reasonable fees and disbursements of
one counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities. If the Company is required to make
any payments to the Underwriters under this Section 7 because of any Selling
Stockholder's refusal, inability or failure to satisfy any condition to the
obligations of the Underwriters set forth in Section 6, the Selling Stockholders
PRO RATA in proportion to the percentage of Securities to be sold by each shall
reimburse the Company on demand for all amounts so paid.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and the Management
Selling Stockholders jointly and severally agree to indemnify and hold harmless
each Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls any Underwriter within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the Securities
as originally filed or in any amendment thereof, or in the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or
32
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that (i) the Company and the Management Selling Stockholders will not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter through the Representatives specifically for inclusion therein
and (ii) with respect to any untrue statement or alleged untrue statement of, or
omission or alleged omission to state, a material fact made in any Preliminary
Final Prospectus, the indemnity agreement contained in this Section 8(a) shall
not inure to the benefit of any Underwriter (or any of the directors, officers,
employees and agents of such Underwriter or any controlling person of such
Underwriter) from whom the person asserting any such loss, claim, damage or
liability purchased the Securities concerned, to the extent that any such loss,
claim, damage or liability of such Underwriter occurs under the circumstances
where it shall have been determined by a court of competent jurisdiction (or
appropriate arbitral proceeding) by final and nonappealable judgment that (w)
the Company had previously furnished copies of the Final Prospectus to the
Underwriters, (x) delivery of the Final Prospectus was required by the Act or
under this Agreement to be made to such person, (y) the untrue statement or
omission of a material fact contained in the Preliminary Final Prospectus was
corrected in the Final Prospectus and (z) there was not sent or given to such
person, at or prior to the written confirmation of the sale of such Securities
to such person, a copy of the Final Prospectus. This indemnity agreement will be
in addition to any liability which the Company or the Management Selling
Stockholders may otherwise have.
(b) Each Selling Stockholder severally agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers,
employees, agents and each person who controls the Company within the
meaning of either the Act or the Exchange Act, each Underwriter, the
directors, officers, employees and agents of each Underwriter and each
person who controls the Company or any Underwriter within the meaning
of either the Act or the Exchange Act and each other Selling
Stockholder, if any, to the same extent as the foregoing indemnity from
the Company and Management Selling Stockholder to each Underwriter, but
only with reference to written information furnished to the Company by
or on behalf of such Selling Stockholder specifically for inclusion in
the documents referred to in the foregoing indemnity. This indemnity
agreement will be in addition to any liability which any Selling
Stockholder may otherwise have.
(c) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of
its officers, employees, agents and each person who controls the
Company within the meaning of either the Act or the Exchange Act and
each Selling Stockholder, to the same extent as the foregoing indemnity
to each Underwriter, but only with reference to written information
relating to such Underwriter furnished to the Company by or on behalf
of such Underwriter through the Representatives specifically for
inclusion
33
in the documents referred to in the foregoing indemnity. This indemnity
agreement will be in addition to any liability which any Underwriter
may otherwise have. The Company and each Selling Stockholder
acknowledge that the statements set forth [in the last paragraph of the
cover page regarding delivery of the Securities, the legend in block
capital letters on page [2] related to stabilization, syndicate
covering transactions and penalty bids and, under the heading
"Underwriting" or "Plan of Distribution", (i) the list of Underwriters
and their respective participation in the sale of the Securities, (ii)
the sentences related to concessions and reallowances and (iii) the
paragraph related to stabilization, syndicate covering transactions and
penalty bids in any Preliminary Final Prospectus and the Final
Prospectus constitute the only information furnished in writing by or
on behalf of the several Underwriters for inclusion in any Preliminary
Final Prospectus or the Final Prospectus.]
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
in writing of the commencement thereof; but the failure so to notify
the indemnifying party (i) will not relieve it from liability under
paragraph (a), (b) or (c) above unless and to the extent it did not
otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses
as determined by a court of competent jurisdiction and (ii) will not,
in any event, relieve the indemnifying party from any obligations to
any indemnified party other than the indemnification obligation
provided in paragraph (a), (b) or (c) above. The indemnifying party
shall be entitled to assume the defense of such action and appoint
counsel of the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate
counsel retained by the indemnified party or parties except as set
forth below); PROVIDED, HOWEVER, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying
party's election to assume the defense of such action or appoint
counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of
interest, which has not been waived; (ii) the actual or potential
defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have been reasonably advised by such counsel that there are legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying
party; (iii) the indemnifying party shall not have assumed the
34
defense of the action or employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action; or (iv)
the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. In any such
case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar related actions in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all
indemnified parties. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified parties are actual or potential parties to such claim
or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a),
(b) or (c) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company and the
Selling Stockholders, jointly and severally, and the Underwriters
severally agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively
"Losses") to which the Company, the Selling Stockholders and one or
more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company
and the Selling Stockholders on the one hand and by the Underwriters on
the other from the offering of the Securities; PROVIDED, HOWEVER, that
in no case shall any Underwriter (except as may be provided in any
agreement among Underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such
Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the
Selling Stockholders, jointly and severally, and the Underwriters
severally shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of
the Company and the Management Selling Stockholder on the one hand and
of the Underwriters on the other in connection with the statements or
omissions or alleged statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits
received by the Company and the Selling Stockholders shall be deemed to
be equal to the total net proceeds from the offering (before deducting
expenses) received by it, and benefits received by the Underwriters
shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover
35
page of the Final Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged
untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the Company
and the Selling Stockholders on the one hand or the Underwriters on the
other, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such untrue
statement or omission or alleged untrue statement or omission. The
Company, the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro
rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (e), 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. For purposes of this
Section 8, each person who controls an Underwriter within the meaning
of either the Act or the Exchange Act and each director, officer,
employee and agent of an Underwriter shall have the same rights to
contribution as such Underwriter, and each person who controls the
Company within the meaning of either the Act or the Exchange Act and
each officer, director, employee and agent of the Company shall have
the same rights to contribution as the Company, subject in each case to
the applicable terms and conditions of this paragraph (e).
(f) The liability of each Selling Stockholder under such
Selling Stockholder's representations and warranties contained in
Section 1 hereof and under the indemnity and contribution agreements
contained in this Section 8 shall be limited to an amount equal to the
public offering price of the Securities sold by such Selling
Stockholder to the Underwriters. The Company and the Selling
Stockholders may agree, as among themselves and without limiting the
rights of the Underwriters under this Agreement, as to the respective
amounts of such liability for which they each shall be responsible.
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate amount
of Securities set forth opposite the names of all the remaining Underwriters)
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; PROVIDED, HOWEVER, that in the event that the aggregate
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Securities set
forth in Schedule II hereto, the remaining Underwriters shall have the right to
(i) make arrangements for the purchase of the Securities which such defaulting
Underwriter or Underwriters agreed but failed to
36
purchase by other persons satisfactory to the Selling Stockholder and the
non-defaulting Underwriters, and/or (ii) purchase all, but shall not be under
any obligation to purchase any, of the Securities, and if such nondefaulting
Underwriters do not make such arrangements and/or purchase all the Securities,
this Agreement will terminate without liability to any nondefaulting
Underwriter, the Selling Stockholders or the Company. In the event of a default
by any Underwriter as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Final Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company, the Selling
Stockholders or any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the NASDAQ National Market or trading in securities generally on
the New York Stock Exchange or the NASDAQ National Market shall have been
suspended or limited or minimum prices shall have been established on such
Exchange or the NASDAQ National Market; (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities; or (iii) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war, or other calamity or crisis
the effect of which on financial markets is such as to make it, in the sole
judgment of the Representatives, impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Final Prospectus
(exclusive of any amendment or supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of each Selling Stockholder and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter,
any Selling Stockholder or the Company or any of the officers, directors,
employees, agents or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. General Counsel (fax no.:
(▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.,
at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: General Counsel;
or, if sent to the Company, will be mailed, delivered or telefaxed to Metromedia
Fiber Network Services, Inc. c/o
37
Metromedia Fiber Network, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and
confirmed to it at Metromedia Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: General Counsel (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Executive Vice
President (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇); or if sent to any Selling Stockholders,
will be mailed, delivered or telefaxed and confirmed to it at the address set
forth in Schedule I hereto.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and,
except as expressly set forth in Section 5(h) or Section 8 hereof, no other
person will have any right or obligation hereunder.
14. APPLICABLE LAW. This Agreement will 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.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
16. HEADINGS. The section headings used herein are for convenience only
and shall not affect the construction hereof.
17. DEFINITIONS. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended and the rules
and regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in paragraph
1(a) above contained in the Registration Statement at the Effective Date
including any Preliminary Final Prospectus.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Communications Act" shall mean the Communications Act of 1934, as
amended (including amendments made by the Telecommunications Act of 1996), 47
U.S.C. section 151 and the rules and regulations of the FCC.
38
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating to the
Securities that was first filed pursuant to Rule 424(b) after the Execution
Time, together with the Basic Prospectus.
"Management Selling Stockholders" shall mean to include ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus, together
with the Basic Prospectus.
"Registration Statement" shall mean the registration statement referred
to in paragraph 1(a) above, including exhibits and financial statements, as
amended at the Execution Time (or, if not effective at the Execution Time, in
the form in which it shall become effective) and, in the event any
post-effective amendment thereto or any Rule 462(b) Registration Statement
becomes effective prior to the Closing Date, shall also mean such registration
statement as so amended or such Rule 462(b) Registration Statement, as the case
may be. Such term shall include any Rule 430A Information deemed to be included
therein at the Effective Date as provided by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating to
the offering covered by the registration statement referred to in Section 1(a)
hereof.
"State Telecommunications Laws" shall mean the comparable state
statutes of the following states governing the regulation of telecommunication
service in [California,
39
Connecticut, Delaware, District of Columbia, Illinois, Maryland, Massachusetts,
New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Virginia and
Washington].
40
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement and your acceptance shall represent a binding agreement among the
Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
METROMEDIA FIBER NETWORK, INC.,
By:
--------------------------------------
Name:
Title:
[SELLING STOCKHOLDER]
By:
--------------------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule II hereto.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
[NAME OF COMANAGER, IF ANY]
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
By:
---------------------------------
Name:
Title:
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
[or
41
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
By:
---------------------------------
Name:
Title:
For itself and the other
several Underwriters, if any,
named in Schedule II to the
foregoing
42
SCHEDULE I
Number of Underwritten Maximum Number of
Selling Stockholders: Securities to be Sold Option Securities to be Sold
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
[address, fax no.]
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
[address, fax no.]
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
[address, fax no.]
▇▇▇▇▇▇ ▇▇▇▇▇▇
[address, fax no.]
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
[address, fax no.]
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
[address, fax no.]
▇▇▇▇ ▇▇▇▇▇
[address, fax no.]
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
[address, fax no.]
Metromedia Company
[address, fax no.]
-------------- ---------------
Total ................
============== ===============
SCHEDULE II
NUMBER OF UNDERWRITTEN
UNDERWRITERS SECURITIES TO BE PURCHASED
------------ --------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
-------------
Total ................
SCHEDULE III
SUBSIDIARIES OF THE COMPANY
1. Metromedia Fiber Network NYC, Inc.
2. Metromedia Fiber Network of New Jersey, Inc.
3. Metromedia Fiber Network Services, Inc.
4. Metromedia Fiber Network of Illinois, Inc.
5. MFN of VA, L.L.C.
6. MFN Purchasing, Inc.
7. AboveNet Communications Inc.
SCHEDULE IV
INDIVIDUALS TO PROVIDE LOCK-UP AGREEMENTS
1. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
2. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
3. ▇▇▇▇▇ ▇▇▇▇
4. ▇▇▇▇▇▇▇ ▇▇▇▇
Exhibit A
[Letterhead of officer, director or major stockholder of Corporation]
, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
[NAME OF COMANAGERS, IF ANY]
As Representatives of the several Underwriters,
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between Metromedia Fiber
Network, Inc., a Delaware corporation (the "Company"), the Selling Stockholders
listed in Schedule I thereto and each of you as representatives of a group of
Underwriters named therein, relating to an underwritten public offering of
Common Stock, $.01 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., offer, sell, contract to sell, pledge or
otherwise dispose of, (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company) directly or
indirectly, including the filing or participation in the filing of) a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 90 days after the date
of this Agreement, other than shares of Common Stock disposed of as bona fide
gifts approved by ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
Yours very truly,
By:
----------------------------------
Name:
Title:
