Exhibit 1.2
EXECUTION COPY
UNDERWRITING AGREEMENT
June 13, 2001
Citizens Communications Company
0 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Dear Sirs and Mesdames:
We (the "REPRESENTATIVES" or the "UNDERWRITERS") understand that
Citizens Communications Company, a Delaware corporation (the "COMPANY"),
proposes to issue and sell 21,875,000 shares of its Common Stock, par value $.25
per share (the "SHARES") at a purchase price of $12.10 per share, such Shares to
be offered to the public at a price of $12.10 per Share, with an underwriting
commission in the amount of $0.5747 per share.
Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell to the several Underwriters
listed in Schedule II hereto, and the Underwriters agree, severally and not
jointly, to purchase from the Company the numbers of Shares set forth opposite
their names in Schedule I hereto on the terms set forth in the Prospectus dated
May 9, 2001 and the Prospectus Supplement dated June 13, 2001.
The Underwriters will pay for the Shares upon delivery thereof at the
offices of Xxxxxxx Xxxxxxx & Xxxxxxxx at 10:00 a.m. (New York City time) on June
19, 2001, or at such other time, not later than 5:00 p.m. (New York City time)
on June 26, 2001, as shall be designated by the Representatives. The time and
date of such payment and delivery are hereinafter referred to as the Closing
Date.
All provisions contained in the document entitled Citizens
Communications Company -- Underwriting Agreement Standard Provisions (Common
Stock) dated June 13, 2001, a copy of which is attached hereto, are herein
incorporated by reference in their entirety and shall be deemed to be a part of
this Agreement to the same extent as if such provisions had been set forth in
full herein, except that if any term defined in such document is otherwise
defined herein, the definition set forth herein shall control.
Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.
Very truly yours,
X.X. XXXXXX SECURITIES INC.
Acting severally on behalf of themselves and
the several Underwriters named herein
By: X.X. XXXXXX SECURITIES INC.
By: /s/ XXXXX X. XXXXX
-------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
XXXXXX XXXXXXX & CO. INCORPORATED
Acting severally on behalf of themselves and the
several Underwriters named herein
By: XXXXXX XXXXXXX & CO.
By: /s/ XXXXX XXXXXXX
-------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
Accepted:
CITIZENS COMMUNICATIONS COMPANY
By: /s/ XXXXXX X. XXXXXX
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President, Finance and Treasurer
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SCHEDULE I
Number of
Underwriter Shares To Be Purchased
X.X. Xxxxxx Securities Inc.............................. 4,630,938
Xxxxxx Xxxxxxx & Co. Incorporated....................... 4,630,938
Banc of America Securities LLC.......................... 4,630,937
Xxxxxxx Xxxxx Barney Inc................................ 4,630,937
Xxxxxx Brothers Inc..................................... 1,155,000
The Buckingham Research Group 231,875
Incorporated
Xxxx Xxxxxxxx Incorporated 288,750
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated.................... 231,875
Mizuho International plc................................ 288,750
Xxxxxxxxx Xxxxxxxx, Inc................................. 577,500
TD Securities (USA) Inc................................. 577,500
----------
Total..................................... 21,875,000
==========
CITIZENS COMMUNICATIONS COMPANY
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(COMMON STOCK)
June 13, 2001
From time to time, Citizens Communications Company, a Delaware
corporation (the "COMPANY"), may enter into one or more underwriting agreements
that provide for the sale of designated securities to the several underwriters
named therein. The standard provisions set forth herein may be incorporated by
reference in any such underwriting agreement (an "UNDERWRITING AGREEMENT"). The
Underwriting Agreement, including the provisions incorporated therein by
reference, is herein sometimes referred to as this Agreement. Terms defined in
the Underwriting Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement (File No. 333-58044), including a
prospectus, relating to Common Stock and has filed with, or transmitted for
filing to, or shall promptly hereafter file with or transmit for filing to, the
Commission a prospectus supplement (the "PROSPECTUS SUPPLEMENT") specifically
relating to the Shares pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "SECURITIES ACT"). The term "REGISTRATION STATEMENT" means the
registration statement, including the exhibits thereto, as amended to the date
of this Agreement. The term "BASIC PROSPECTUS" means the prospectus included in
the Registration Statement. The term "PROSPECTUS" means the Basic Prospectus
together with the Prospectus Supplement. The term "PRELIMINARY PROSPECTUS" means
a preliminary prospectus supplement specifically relating to the Shares,
together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus", "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"SUPPLEMENT", "AMENDMENT" and "AMEND" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT").
1. REPRESENTATIONS AND WARRANTIESThe Company represents and warrants to
and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus
complied when filed or will comply when so filed in all material
respects with the Exchange Act and the applicable rules and regulations
of the Commission thereunder and none of such documents (other than the
Financial Statements contained in the Current Reports on Form 8-K filed
on May 7, 2001, February 13, 2001 and November 14, 2000 (exclusive of
the pro forma financial information contained therein) (the "Excluded
Information") as to which the Company makes no representation)
contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements in such documents, in
light of the circumstances under which they were made, not misleading,
(ii) the Registration Statement, when it became effective, did not
contain, and the Registration Statement, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (iii) the
Registration Statement (as of its effective date) and the Prospectus
(as of the date of the then most recent supplement thereto) complied,
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and did not and, as amended or
supplemented, if applicable, will not contain at the time of such
amendment, any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading, and (iv) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph do
not apply (A) to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use therein or (B) to that part of the
Registration Statement that constitutes the Statement of Eligibility
(Form T-1) under the Trust Indenture Act of 1939, as amended (the
"TRUST INDENTURE ACT"), of the trustee named therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company set forth on Schedule I
attached hereto (each, a "SIGNIFICANT SUBSIDIARY") has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole;
all of the issued shares of capital stock of each Significant
Subsidiary, other than Electric Lightwave, Inc. ("XXX"), of the Company
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have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly, free and clear of all liens,
encumbrances, equities or claims; all of the shares of capital stock of
XXX that are issued to the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned
directly, free and clear of all liens, encumbrances, equities or
claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
agreement of the Company, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting creditors' rights
generally, general principles of equity and an implied covenant of good
faith and fair dealing.
(f) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement and
issuance of the Shares, as applicable, will not (i) conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to any indenture, mortgage,
deed of trust, loan agreement or other material agreement or instrument
to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, except where such violation, default, lien, charge, or
encumbrance would not have a material adverse effect on the
consolidated financial position, results of operations or business of
the Company and its subsidiaries, taken as a whole (a "MATERIAL ADVERSE
EFFECT"); (ii) contravene any provision of applicable law or the
certificate of incorporation or by-laws of the Company or any agreement
or other instrument binding upon the Company or any of its subsidiaries
that is material to the Company and its subsidiaries, taken as a whole,
or (iii) result in the violation of any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the
Company or any of its subsidiaries, and no consent, approval,
authorization or order of, or qualification with, any governmental body
or agency is required for the performance by the Company of its
obligations under this Agreement or the issuance of the Shares, except
such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Shares and
except where any such violation or failure to obtain a consent or other
approval would not cause a Material Adverse Effect or prevent the
consummation of the transaction contemplated hereby.
(g) Since the date as of which information is given in the
Registration Statement and the Prospectus (exclusive of amendments or
supplements after the date hereof) and as of the date of the
Underwriting Agreement, except as otherwise stated therein, (i) there
has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs, management or
operations of the Company and its subsidiaries, taken as a whole,
whether or not arising in the ordinary course of business, (ii) none of
the Company or any of its subsidiaries has incurred any material
liability or obligation, direct or contingent, other than in the
ordinary course of business, (iii) none of the Company or any of its
subsidiaries has entered into any material
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transaction other than in the ordinary course of business and (iv)
there has not been any change in the capital stock or long-term debt of
the Company or any of its subsidiaries, or any dividend or distribution
of any kind declared, paid or made by the Company or any of its
subsidiaries on any class of its capital stock, or any redemption in
respect thereof, except that capital stock may have changed due to the
exercise of stock options in the ordinary course of business.
(h) There are (i) no legal or governmental proceedings pending
or, to the knowledge of the Company, threatened to which the Company or
any of its subsidiaries is a party or to which any of the properties of
the Company or any of its subsidiaries is subject that are required to
be described in the Registration Statement or the Prospectus and are
not so described and which, if determined adversely to the Company or
any of its subsidiaries, would have a Material Adverse Effect or (ii)
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed or incorporated by reference as exhibits to
the Registration Statement that are not described, filed or
incorporated as required.
(i) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder
and did not and, as supplemented will not contain at the time of such
supplement, any untrue statement of a material fact or omit to state a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(j) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" or a company controlled by an investment company as such term
is defined in the Investment Company Act of 1940, as amended, and the
rules and regulations of the Commission thereunder.
(k) The Company is not a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended (the
"PUBLIC UTILITY HOLDING COMPANY ACT"), and the rules and regulations of
the Commission thereunder.
(l) The Company and its subsidiaries (i) are, to the Company's
best knowledge, 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 all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are, to the Company's best knowledge,
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not have a Material Adverse Effect.
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(m) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties), which would have a Material Adverse
Effect.
(n) KPMG LLP are independent certified public accountants with
respect to the Company and its subsidiaries and, to the best of the
Company's knowledge, Xxxxxx Xxxxxxxx LLP are independent certified
public accountants with respect to GTE Minnesota Inc., Frontier
Incumbent Local Exchange Carrier Businesses and Qwest Communications
International Inc. and PricewaterhouseCoopers LLP are independent
certified public accountants with respect to Frontier Incumbent Local
Exchange Carrier Businesses each (i) as required by the Securities Act
and the rules and regulations of the Commission thereunder and (ii)
within the meaning of Rule 101 of the Code of Professional Conduct of
the American Institute of Certified Public Accountants and its
interpretations and rulings thereunder. The historical and pro forma
financial statements (including the related notes) contained or
incorporated by reference in the Prospectus comply as to form in all
material respects with the applicable requirements under the Securities
Act and the Exchange Act (except that certain supporting schedules are
omitted); such financial statements (other than the Excluded
Information as to which the Company makes no representation) have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods covered thereby and fairly
present in all material respects the financial position of the entities
purported to be covered thereby at the respective dates indicated and
the results of their operations and their cash flows for the respective
periods indicated; and the financial information contained or
incorporated by reference in the Prospectus (other than the Excluded
Information as to which the Company makes no representation) is derived
from the accounting records of the Company and its subsidiaries and
fairly present in all material respects the information purported to be
shown thereby. The other historical and pro forma financial and
statistical information and data included in the Prospectus (other than
the Excluded Information as to which the Company makes no
representation) are, in all material respects, fairly presented.
(o) The Company and each of its subsidiaries possess all
material licenses, certificates, authorizations and permits issued by,
and have made all declarations and filings with, the appropriate
federal, state or foreign regulatory agencies or bodies which are
necessary or desirable for the ownership of their respective properties
or the conduct of their respective businesses as described in the
Prospectus, except where the failure to possess or make the same would
not, singularly or in the aggregate, have a Material Adverse Effect,
and neither the Company nor any of its subsidiaries has received
notification of any revocation or modification of any such license,
certificate, authorization or permit or has any reason to believe that
any such license, certificate, authorization or permit will not be
renewed in the ordinary course in each case where such revocation,
modification or failure of renewal would have a Material Adverse
Effect.
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(p) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(q) The shares of Common Stock outstanding prior to the
issuance of the Shares have been duly authorized and are validly
issued, fully paid and non-assessable; no holder will be subject to
personal liability by reason of being such a holder.
(r) The Shares have been duly and validly authorized and
reserved for issuance; such Shares, when issued and delivered in
accordance with the provisions of this Agreement, will be validly
issued, fully paid and non-assessable; and the issuance of such shares
of Common Stock will not be subject to any preemptive or similar
rights.
(s) The shares of Common Stock outstanding prior to the
issuance of the Securities are, and upon issuance the Shares by the
Company, subject to official notice of issuance, will be, listed on the
New York Stock Exchange.
2. AGREEMENTS TO SELL AND PURCHASEThe Company hereby agrees to sell to
the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Shares (the "UNDERWRITTEN SECURITIES") set
forth in the Underwriting Agreement opposite its name at the purchase price set
forth in the Underwriting Agreement.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters up to 3,281,250 additional shares of Common Stock (the
"OPTION SHARES"), and the Underwriters shall have a one-time right to purchase,
severally and not jointly, any or all of the Option Shares at the Purchase
Price. If the Representatives, on behalf of the Underwriters, elect to exercise
such option, the Representatives shall so notify the Company in writing not
later than 30 days after the date of this Agreement, which notice shall specify
the number of Option Shares to be purchased by the Underwriters and the date on
which such Option Shares are to be purchased. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Option Shares may be
purchased as provided in Section 3 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Underwritten
Securities. If any Option Shares are to be purchased, each Underwriter agrees,
severally and not jointly, to purchase the number of Option Shares (subject to
such adjustments to eliminate fractional units as the Representatives may
determine) that bears the same proportion to the total number of Optional Shares
to be purchased as the number of Underwritten Shares set forth in the
Underwriting Agreement hereto opposite the name of such Underwriter bears to the
total number of Underwritten Shares.
The Company hereby agrees that, without the prior written consent of
the Representatives on behalf of the Underwriters, the Company will not, during
the period ending 90 days after the date of the final prospectus supplement
included in the Prospectus, (i) register, offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or
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exchangeable for shares of Common Stock, or (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of shares of Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Shares of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the issuance by the Company of shares
of Common Stock pursuant to, or the grant of options under the Company's
existing stock option, employee benefit or dividend reinvestment plans (as
described in the Prospectus), (B) the issuance by the Company of shares of
Common Stock in certain private sales (as described in the Prospectus) or (C)
the concurrent issuance by the Company of equity units and the underlying
securities (as described in the Prospectus).
3. TERMS OF PUBLIC OFFERINGThe Issuer is advised by the Representatives
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after this Agreement has become effective as in
the Representatives' judgment is advisable. The Company is further advised by
the Representatives that the Shares are to be offered to the public initially at
the public offering price set forth in the Underwriting Agreement (the "PUBLIC
OFFERING PRICE") and to certain dealers selected by the Representatives at the
Public Offering Price.
As compensation to the Underwriters for their commitments hereunder,
the Company hereby agrees to pay at the Closing Date to the Representatives for
the accounts of the several Underwriters a commission in the amount per Share
set forth in the Underwriting Agreement (the "UNDERWRITING COMMISSION").
4. PAYMENT AND DELIVERYPayment for the Underwritten Securities shall be
made to the Company in Federal or other funds immediately available in New York
City against delivery to the Representatives of the certificates for such
Underwritten Securities for the respective accounts of the several Underwriters,
or delivery to a securities intermediary designated by the Representatives of
such certificates and crediting to the Representatives' securities account at
such securities intermediary for the account of the several Underwriters of
security entitlements in respect of the Underwritten Securities, and payment to
the Representatives of the Underwriting Commission with respect to the
Underwritten Securities by wire transfer in immediately available funds to an
account specified by the Representatives to the Company shall be made at the
time and date set forth in the Underwriting Agreement. The time and date of such
payment are hereinafter referred to as the "CLOSING DATE".
Payment for the Option Shares shall be made to the Company in Federal
or other funds immediately available in New York City against delivery to the
Representatives of the certificates for such Option Shares for the respective
accounts of the several Underwriters, or delivery to a securities intermediary
designated by the Representatives of such certificates and crediting to the
Representatives' securities account at such securities intermediary for the
accounts of the several Underwriters of security entitlements in respect of such
Option Shares, and payment to the Representatives of the Underwriting Commission
with respect to such Option Shares in the manner set forth above shall be made
at 10:00 a.m., New York City time, on the date specified in the notice described
in Section 2 or at such other time on the same or on such other date, in any
event not later than 10 business days after the expiration of the Underwriters'
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option to purchase Option Shares as shall be designated in writing by the
Representatives. The time and date of such payment are hereinafter referred to
as the "OPTION CLOSING DATE".
The certificates, if any, for the Shares purchased by the Underwriters
shall be registered in such names and in such denominations as the
Representatives shall request in writing not later than one full business day
prior to the Closing Date or the Option Closing Date, as the case may be. The
certificates, if any, evidencing the Underwritten Securities or Option Shares
shall be delivered to the Representatives on the Closing Date or the Option
Closing Date, as the case may be, for the respective accounts of the several
Underwriters, with any transfer taxes payable in connection with the transfer of
the Underwritten Securities or Option Shares to the Underwriters duly paid,
against payment of the Purchase Price and the Underwriting Commission with
respect to such Shares.
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONSThe several obligations
of the Underwriters are subject to the following conditions:
(a) Subsequent to the execution and delivery of the
Underwriting Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act;
(ii) there shall not have occurred any change in the
condition, financial or otherwise, or in the earnings,
business affairs, management or operations of the Company and
its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in the
judgment of the Representatives, is material and adverse and
that makes it, in the judgment of the Representatives,
impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus; and
(iii) 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, to
the knowledge of the Company, shall be threatened by the
Commission.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in Section 5(a)(i) above and to
the effect that as of the Closing Date, the representations and
warranties of the Company contained in this Agreement are true and
correct as of the Closing Date in all material respects and that the
Company has complied with all of the agreements and satisfied in all
material respects all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
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The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date
an opinion of Winston & Xxxxxx, outside counsel for the Company, dated
the Closing Date, substantially to the effect that:
(i) the Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not, singularly or in the aggregate,
have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(ii) the Company has an authorized capitalization as
set forth in the Prospectus;
(iii) each Significant Subsidiary of the Company has
been duly incorporated, is validly existing as a corporation
in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is
in good standing in its jurisdiction of incorporation except
to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(iv) the Company has full right, power and authority
to execute and deliver this Agreement and to perform its
obligations thereunder, and all corporate action required to
be taken for the due and proper authorization, execution and
delivery of this Agreement and the consummation of the
transactions contemplated thereby by the Company have been
duly and validly taken;
(v) this Agreement has been duly authorized, executed
and delivered by the Company;
(vi) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement will not contravene any provision of Applicable
Law or the certificate of incorporation or by-laws of the
Company or, to the best of such counsel's knowledge, any
agreement or other instrument binding upon the Company or any
of its subsidiaries that is set forth as an Exhibit to the
Company's then current Annual Report on Form 10-K and any
subsequently filed Current Reports on Form 8-K or Quarterly
Reports on Form 10-Q or, to the best of such counsel's
knowledge, any judgment, order or decree of any Governmental
Authority having jurisdiction
9
over the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any
Governmental Authority is required for the performance by the
Company of its obligations under this Agreement, except such
as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the
Shares and except where any such contravention (other than
with respect to the certificate of incorporation or by-laws of
the Company) or failure to obtain such consent or other
approval would not cause a Material Adverse Effect;
(vii) the descriptions in the Prospectus of statutes,
legal and governmental proceedings and contracts and other
documents are accurate in all material respects; the
statements (A) in the Prospectus under the captions "The
Offering", "Underwriters", "Description of Capital Stock" and
"Plan of Distribution" (B) in the Registration Statement under
Item 15, (C) in "Item 3 - Legal Proceedings" of the Company's
most recent annual report on Form 10-K incorporated by
reference in the Prospectus and (D) in "Item 1 - Legal
Proceedings" of Part II of the Company's quarterly reports on
Form 10-Q, if any, filed since such annual report, in each
case insofar as such statements constitute summaries of the
legal matters, documents, conclusions or proceedings referred
to therein in each case in all material respects, fairly
present the information called for with respect to such legal
matters, documents, conclusions and proceedings and fairly
summarize the matters referred to therein; and after due
inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any
of the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed or incorporated by reference as
exhibits to the Registration Statement that are not described,
filed or incorporated as required;
(viii) the Company is not and, after giving effect to
the offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be
an "investment company" within the meaning of the Investment
Company Act of 1940, as amended and the rules and regulations
of the Commission thereunder, without taking into account of
any exemption under the Investment Company Act arising out of
the number of holders of the Company's securities;
(ix) the Company is not a "holding company" within
the meaning of the Public Utility Holding Company Act and the
rules and regulations of the Commission thereunder;
(x) such counsel (A) is of the opinion that each
document, if any, filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus (except for
financial statements and schedules and other financial and
statistical data included or incorporated by reference therein
as to which such counsel need
10
not express any opinion) complied when so filed as to form in
all material respects with the Exchange Act and the applicable
rules and regulations of the Commission thereunder, (B) has no
reason to believe that (except for financial statements and
schedules and other financial and statistical data as to which
such counsel need not express any belief and except for that
part of the Registration Statement that constitutes the Form
T-1 heretofore referred to) the Registration Statement, when
it became effective, contained any untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading, (C) is of the opinion that the Registration
Statement, as of its effective date, and Prospectus, as of the
date of the then most recent supplement thereto, (except for
financial statements and schedules and other financial and
statistical data included or incorporated by reference therein
as to which such counsel need not express any opinion) comply
as to form in all material respects with the Securities Act
and the applicable rules and regulations of the Commission
thereunder and (D) has no reason to believe that (except for
financial statements and schedules and other financial and
statistical data as to which such counsel need not express any
belief) the Prospectus, as of the date such opinion is
delivered and as supplemented or amended to such date,
contains any untrue statement of a material fact or omits 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;
(xi) The Shares have been duly and validly
authorized, and when issued and delivered in accordance with
the provisions of this Agreement, will be validly issued,
fully paid and non-assessable, and the issuance of the Shares
will not be subject to any preemptive or similar rights under
Federal, Delaware or New York law or the Company's certificate
of incorporation or by-laws; and
(xii) Subject to the qualifications and limitations
stated herein, the statements set forth in the Prospectus
under the caption "Certain Material U.S. Tax Consequences to
Non-U.S. Holders" insofar as they purport to constitute
summaries of matters of United States federal tax laws and
regulations or legal conclusions with respect thereto,
constitute accurate summaries of the matters described therein
in all material respects.
For purposes of the foregoing opinion, Winston & Xxxxxx may
state that (a) "Applicable Law" means only the laws of the United
States, the State of New York and the General Corporation Law of the
State of Delaware which, in such counsel's experience, are normally
applicable to transactions of the type contemplated by this
Underwriting Agreement, but without such counsel having made any
special investigation as to the applicability of any specific law, rule
or regulation except as specified, and (b) "Governmental Authority"
means any New York or federal executive, legislative, judicial
administrative or regulatory body.
With respect to Section 5(c)(x) above, Winston & Xxxxxx may
state that their opinion and beliefs are based upon their participation
in the preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and
11
documents incorporated therein by reference and review and discussion
of the contents thereof, but are without independent check or
verification, except as specified.
(d) The Company shall have furnished an opinion of L. Xxxxxxx
Xxxxxx, Vice President and General Counsel of the Company, with respect
to FERC and all applicable state utility regulators' orders and/or
authorizations necessary to enable the Company to issue the Shares,
addressed to the Underwriters and dated the Closing Date, in form and
substance reasonably satisfactory to the Underwriters.
The opinions described in Sections 5(c) and 5(d) above shall
be rendered to the Underwriters at the request of the Company and shall
so state therein.
(e) The Underwriters shall have received on the Closing Date
an opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, special counsel for the
Underwriters, dated the Closing Date, covering the matters referred to
in Sections 5(c)(v) and 5(c)(vii) (but only as to the statements in the
Prospectus under "The Offering", "Underwriters" and "Plan of
Distribution") and clauses 5(c)(x)(B), 5(c)(x)(C) and 5(c)(x)(D) above.
With respect to clauses 5(c)(x)(B), 5(c)(x)(C) and 5(c)(x)(D)
above, Xxxxxxx Xxxxxxx & Xxxxxxxx may state that their opinion and
beliefs are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements
thereto (but not including documents incorporated therein by reference)
and review and discussion of the contents thereof (including documents
incorporated therein by reference), but are without independent check
or verification, except as specified.
(f) The Underwriters shall have received on the date of this
Agreement (other than from Xxxxxx Xxxxxxxx LLP with respect to GTE
Minnesota Inc.), dated the date of this Agreement, and on the Closing
Date, dated the Closing Date, letters, in form and substance
satisfactory to the Underwriters, from the Company's independent public
accountants listed in Section 1(n) of this Agreement and each of the
other accountants listed in Section 1(n) of this Agreement (except for
PricewaterhouseCoopers LLP), containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in or incorporated by reference into
the Prospectus.
(g) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between the Representatives and each of the
directors and certain executive officers of the Company relating to
sales and certain other dispositions of shares of Common Stock or
certain other securities, delivered to the Representatives on or before
the date hereof, shall be in full force and effect on the Closing Date.
(h) The Shares shall have been approved for listing, subject
only to official notice of issuance, on the New York Stock Exchange.
The several obligations of the Underwriters to purchase Option
Securities hereunder are subject to the delivery to the Representatives on the
Option Closing Date of such documents as the Representatives may reasonably
request, including those set forth above, with respect to the
12
good standing of the Company, the due authorization and issuance of the
Option Securities and other matters related to the issuance of the
Option Securities.
6. COVENANTS OF THE COMPANYIn further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) to advise the Underwriters promptly and, if requested,
confirm such advice in writing, of the happening of any event which
makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires the making of any
additions to or changes in the Registration Statement or the Prospectus
(as amended or supplemented from time to time) in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; to advise the Underwriters promptly of any
order preventing or suspending the use of the Prospectus, of any
suspension of the qualification of the Securities for offering or sale
in any jurisdiction and of the initiation or threatening of any
proceeding for any such purpose; and to use its best efforts to prevent
the issuance of any such order preventing or suspending the use of the
Registration Statement or the Prospectus or suspending any such
qualification and, if any such suspension is issued, to obtain the
lifting thereof at the earliest possible time;
(b) To furnish the Representatives, without charge, one
conformed copy of the Registration Statement (including exhibits
thereto) and for delivery to each other Underwriter a conformed copy of
the Registration Statement (without exhibits thereto) and to furnish
the Representatives in New York City, without charge, prior to 10:00
a.m. New York City time on the business day next succeeding the date of
this Agreement and during the period mentioned in Section 6(c) below,
as many copies of the Prospectus, any documents incorporated by
reference therein and any supplements and amendments thereto or to the
Registration Statement as the Representatives may reasonably request.
(c) Before amending or supplementing the Registration
Statement or the Prospectus with respect to the Shares, to furnish to
the Representatives a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which the Representatives reasonably object.
(d) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses the Representatives will furnish
to the Company) to which Offered Securities may have been sold by the
Representatives on behalf of the Underwriters and to any other dealers
upon request, either amendments or supplements to the Prospectus so
that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances
13
when the Prospectus is delivered to a purchaser, be misleading or so
that the Prospectus, as amended or supplemented, will comply with law.
(e) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request.
(f) To make generally available to the Company's security
holders and to the Representatives as soon as practicable an earning
statement covering a twelve-month period beginning on the first day of
the first full fiscal quarter after the date of this Agreement, which
earning statement shall satisfy the provisions of Section 11(a) of the
Securities Act and the rules and regulations of the Commission
thereunder. If such fiscal quarter is the last fiscal quarter of the
Company's fiscal year, such earning statement shall be made available
not later than 90 days after the close of the period covered thereby
and in all other cases shall be made available not later than 45 days
after the close of the period covered thereby.
(g) The Company, during the period when a Prospectus relating
to the Shares is required to be delivered under the Act, will timely
file all documents required to be filed with the Commission pursuant to
Section 13 or 14 of the Act.
(h) To apply the net proceeds from the sale of the Shares as
set forth in the Prospectus under the heading "Use of Proceeds".
(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments
and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof
to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or
other taxes payable thereon, (iii) the cost of printing or producing
any Blue Sky or legal investment memorandum in connection with the
offer and sale of the Shares under state law and all expenses in
connection with the qualification of the Shares for offer and sale
under state law as provided in Section 6(d) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection
with the Blue Sky or legal investment memorandum, (iv) all filing fees
and the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification
of the offering of the Shares by the National Association of Securities
Dealers, Inc., (v) the costs and expenses of the Company relating to
investor presentations on any "road show" undertaken in connection with
the marketing of the offering of the Shares, including, without
limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in
connection with the road show
14
presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and
any such consultants, and the cost of any aircraft chartered in
connection with the road show, and (vi) all other costs and expenses
incident to the performance of the obligations of the Company hereunder
for which provision is not otherwise made in this Section. It is
understood, however, that except as provided in this Section, Section 7
entitled "Indemnity and Contribution" and the last paragraph of Section
9 below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, and any advertising
expenses connected with any offers they may make.
(j) To use its best efforts to effect the listing of the
Shares of Common Stock on The New York Stock Exchange.
7. INDEMNITY AND CONTRIBUTION(a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either Section 7(a) or 7(b), such person (the "INDEMNIFIED
PARTY") shall promptly notify the person against whom such indemnity may be
sought (the "INDEMNIFYING PARTY") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party
15
shall have mutually agreed to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impleaded parties) include both
the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Representatives, in the case of parties indemnified
pursuant to Section 7(a) above, and by the Company, in the case of parties
indemnified pursuant to Section 7(b) above. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in Section 7(a) or
7(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause 7(d)(i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
7(d)(i) above but also the relative fault of the Company on the one hand and of
the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other hand in
connection with the offering of the Offered Securities shall be deemed to be in
the same respective proportions as the net proceeds from the offering of such
Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus Supplement, bear
to the aggregate Public Offering Price of the Shares. The relative fault of the
Company on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
16
omission to state a material fact relates to information supplied by the Company
or by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this Section
7 are several in proportion to the respective principal amounts of Shares they
have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 7 were determined by PRO RATA
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 7(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section
7 and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
the Company, its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Shares.
17
8. TERMINATIONThis Agreement shall be subject to termination by notice
given by the Representatives to the Company, if (a) after the execution and
delivery of the Underwriting Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Representatives, is material and
adverse and (b) in the case of any of the events specified in clauses 8(a)(i)
through 8(a)(iv), such event, singly or together with any other such event,
makes it, in the judgment of the Representatives, impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus.
9. DEFAULTING UNDERWRITERSIf, on the Closing Date or the Option Closing
Date, any one or more of the Underwriters shall fail or refuse to purchase
Underwriters' Shares that it has or they have agreed to purchase hereunder on
such date, and the aggregate amount of Underwriters' Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate amount of the Underwriters'
Securities to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the amount of Underwriters' Shares
set forth opposite their respective names in the Underwriting Agreement bears to
the aggregate amount of Underwriters' Shares set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as the
Representatives may specify, to purchase the Underwriters' Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; PROVIDED that in no event shall the amount of Underwriters'
Securities that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 10 by an amount in excess of
one-ninth of such amount of Underwriters' Shares without the written consent of
such Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Underwriters' Shares and the aggregate amount of
Underwriters' Shares with respect to which such default occurs is more than
one-tenth of the aggregate amount of Underwriters' Shares to be purchased on
such date, and arrangements satisfactory to the Representatives and the Company
for the purchase of such Underwriters' Shares are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Company. In any such case either the
Representatives or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. If, on the Option Closing Date,
any Underwriter or Underwriters shall fail or refuse to purchase Option Shares
and the aggregate number of Option Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Option Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Option Shares or (ii) purchase
not less than the number of Option Shares that such non-defaulting Underwriters
would have been obligated to purchase in the absence of such default. Any action
taken under this paragraph
18
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
10. COUNTERPARTSThis Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. APPLICABLE LAWThis Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
12. HEADINGSThe headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
19
SCHEDULE I
SIGNIFICANT SUBSIDIARIES
Electric Lightwave, Inc.
Citizens Telecommunications Company of California, Inc.
Citizens Telecommunications Company
Citizens Utilities Rural Company, Inc.
Citizens Telecommunications Company of New York, Inc.
Citizens Telecommunications Company of Tennessee L.L.C.
Citizens Telecommunications Company of West Virginia, Inc.
Citizens Telecommunications Company of the White Mountains, Inc.
Citizens Directory Services Company, Inc.
Citizens Utilities Capital L.P.
20
EXHIBIT A
[FORM OF LOCK-UP LETTER]
[Date]
X.X. Xxxxxx Securities Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
Banc of America Securities LLC
Xxxxxxx Xxxxx Barney Inc
Xxxxxx Brothers Inc.
The Buckingham Research Group Incorporated
Xxxx Xxxxxxxx Incorporated
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Mizuho International plc
Xxxxxxxxx Xxxxxxxx, Inc.
TD Securities (USA) Inc.
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that X.X. Xxxxxx Securities Inc.
("JPMORGAN") and Xxxxxx Xxxxxxx & Co. Incorporated ("XXXXXX XXXXXXX") propose to
enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT") with
Citizens Communications Company, a Delaware corporation (the "COMPANY"),
providing for the public offering (the "PUBLIC OFFERING") by the several
Underwriters, including JPMorgan and Xxxxxx Xxxxxxx (the "UNDERWRITERS"), of
Common Stock, par value $.25 per share of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of JPMorgan
and Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 90 days after the date of the final
prospectus relating to the Public Offering (the "PROSPECTUS"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (a) the sale of any Common Stock to the Underwriters pursuant to the
Underwriting Agreement or (b) transactions relating to shares of Common Stock or
other securities acquired in open market transactions after the completion of
the Public Offering. In
21
addition, the undersigned agrees that, without the prior written consent of
JPMorgan and Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during
the period commencing on the date hereof and ending 90 days after the date of
the Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
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(Name)
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(Address)
2
