EXHIBIT 1.2
TELEPORT COMMUNICATIONS GROUP INC.
(a Delaware corporation)
_____Shares of Class A Common Stock
(Par Value $.01 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
--------------------------------
______, 1997
Xxxxxxx Xxxxx International
Xxxxxx Brothers International (Europe)
Cazenove & Co.
Xxxxxx Xxxxxxxx & Co. Limited
UBS Limited
as Lead Managers of the several International Managers
c/o Merrill Xxxxx International
Ropemaker Place
00 Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Ladies and Gentlemen:
Teleport Communications Group Inc., a Delaware corporation (the "Company"),
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and Continental Holding Company, a Massachusetts business trust (the "Selling
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Shareholder"), confirm their respective agreements with Xxxxxxx Xxxxx
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International ("Xxxxxxx Xxxxx") and each of the other International Managers
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named in Schedule A hereto (collectively, the "International Managers," which
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term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for which Xxxxxxx Xxxxx and Xxxxxx Brothers International
(Europe), Cazenove & Co., Xxxxxx Xxxxxxxx & Co. Limited and UBS Limited are
acting as representatives (in such capacity, the "Lead Managers"), with respect
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to (i) the sale by the Company and the Selling Shareholder acting severally and
not jointly, and the purchase by the International Managers, acting severally
and not jointly, of the respective numbers of shares of Class A Common Stock,
par value $.01 per share, of the Company ("Class A Common Stock") set forth in
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Schedule A hereto, and (ii) the grant by the Company to the International
Managers, acting severally and not jointly, of the option described in Section
2(b) hereof to purchase all or any part of _____________ additional shares of
Class A Common Stock to cover over-allotments, if any. The aforesaid
_____________ shares of
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Class A Common Stock (the "Initial International Securities") to be purchased by
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the International Managers and all or any part of the ________________ shares of
Class A Common Stock subject to the option described in Section 2(b) hereof (the
"International Option Securities") are hereinafter called, collectively, the
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"International Securities."
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It is understood that the Company and the Selling Shareholder are
concurrently entering into an agreement dated the date hereof (the "U.S.
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Purchase Agreement") providing for the offering by the Company and the Selling
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Shareholder of an aggregate of _______________ shares of Class A Common Stock
(the "Initial U.S. Securities") through arrangements with certain underwriters
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in the United States and Canada (the "U.S. Underwriters") for which Xxxxxxx
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Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Xxxxxx Brothers Inc., Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation, Bear, Xxxxxxx & Co., Inc. and Deutsche
Xxxxxx Xxxxxxxx Inc. are acting as representatives (the "U.S. Representatives")
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and the grant by the Company to the U.S. Underwriters, acting severally and not
jointly, of an option to purchase all or any part of the U.S. Underwriters' pro
rata portion of up to _____________ additional shares of Class A Common Stock
solely to cover over-allotments, if any (the "U.S. Option Securities" and,
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together with the International Option Securities, the "Option Securities").
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The Initial U.S. Securities and the U.S. Option Securities are hereinafter
called the "U.S. Securities."
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It is understood that the Company and the Selling Shareholder are not
obligated to sell and the International Managers are not obligated to purchase,
any Initial International Securities unless all of the Initial U.S. Securities
are contemporaneously purchased by the U.S. Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters," the Initial International Securities and
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the Initial U.S. Securities are hereinafter collectively called the "Initial
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Securities," and the International Securities and the U.S. Securities are
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hereinafter collectively called the "Securities."
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The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
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coordination of certain transactions among the Underwriters under the direction
of Xxxxxxx Xxxxx (in such capacity, the "Global Coordinator").
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The Company and the Selling Shareholder understand that the International
Managers propose to make a public offering of the International Securities as
soon as the Lead Managers deem advisable after this Agreement has been executed
and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-37597) and ____
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amendment[s] thereto covering the registration of the Securities under the
Securities Act of 1933, as
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amended (the "1933 Act"), including the related preliminary prospectus or
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prospectuses. Promptly after execution and delivery of this Agreement, the
Company will either (i) prepare and file a prospectus in accordance with the
provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
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Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b) of
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Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has
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elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare
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and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule
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434 and Rule 424(b). Two forms of prospectus are to be used in connection with
the offering and sale of the Securities: one relating to the International
Securities (the "Form of International Prospectus") and one relating to the U.S.
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Securities (the "Form of U.S. Prospectus"). The Form of International
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Prospectus is identical to the Form of U.S. Prospectus, except for the front
cover and back cover pages and the information under the caption "Underwriting."
The information included in any such prospectus, if any, or in any such Term
Sheet, as the case may be, that was omitted from such registration statement at
the time it became effective but that is deemed to be part of such registration
statement at the time it became effective (a) pursuant to paragraph (b) of Rule
430A is referred to as "Rule 430A Information" or (b) pursuant to paragraph (d)
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of Rule 434 is referred to as "Rule 434 Information." Each Form of
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International Prospectus and Form of U.S. Prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
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statement, including the exhibits, schedules and amendment(s) thereto, if any,
and the documents incorporated by reference pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, if and as applicable, is herein called
the "Registration Statement." Any registration statement filed pursuant to Rule
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462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
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Registration Statement," and after such filing the term "Registration Statement"
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shall include the Rule 462(b) Registration Statement. The final Form of
International Prospectus and the final Form of U.S. Prospectus, including the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the forms first furnished to the Underwriters for use in
connection with the confirmation of sales of the Securities are herein called
the "International Prospectus" and the "U.S. Prospectus," respectively, and
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collectively, the "Prospectuses." If Rule 434 is relied on, the terms
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"International Prospectus" and "U.S. Prospectus" shall refer to the preliminary
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International Prospectus dated ____________, 1997 and preliminary U.S.
Prospectus dated ____________, 1997, respectively, each together with the
applicable Term Sheet and all references in this Agreement to the date of such
Prospectuses shall mean the date of the applicable Term Sheet. For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the International Prospectus, the U.S. Prospectus or any Term Sheet
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("XXXXX").
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All references in this Agreement to financial statements and schedules and
other information which is "contained," "included," "referred to" or "stated" in
the Registration Statement, any preliminary prospectus or the Prospectuses (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectuses, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectuses shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") that is
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incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectuses, as the case may be.
SECTION 1. Representations and Warranties. (a) Representations and
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Warranties by the Company. The Company represents and warrants to each
International Manager and to the Selling Shareholder, and agrees with each
International Manager and the Selling Shareholder, as follows:
(i) Compliance with Registration Requirements. The Company meets the
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requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted and are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any International Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and did not
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading. Neither of the Prospectuses nor any
amendments or supplements thereto, at the time the Prospectuses or any
amendments or supplements thereto were issued and at the Closing Time (and,
if any International Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material fact
or omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. If Rule 434 is used, the Company will comply
with the requirements of Rule 434 and the Prospectuses shall not be
5
"materially different," as such term is used in Rule 434, from the
prospectuses included in the Registration Statement at the time it became
effective. The representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration Statement or the
Prospectuses made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through the Lead
Managers or the U.S. Representatives expressly for use in the Registration
Statement or the Prospectuses.
(ii) Incorporated Documents. The documents incorporated or deemed to
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be incorporated by reference in the Registration Statement and the
Prospectuses, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations or the 1934 Act and the rules and regulations of the Commission
thereunder (the "1934 Act Regulations"), as applicable, and, when read
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together with the other information in the Prospectuses, at the time the
Registration Statement became effective, at the time the Prospectuses were
issued and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
(iii) Independent Accountants. The accountants who certified the
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financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) Financial Statements. The combined balance sheets of the Company
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and its subsidiaries and TCG Partners, a New York general partnership
(collectively, "TCG"), as of December 31, 1995 and the related combined
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statements of operations, changes in stockholders' equity and partners'
capital (deficit), and cash flows for the years ended December 31, 1994 and
1995 and the combined balance sheet of TCG as of June 30, 1996 and the
related combined statements of operations and cash flows for the six month
period ended June 30, 1996 included in the Registration Statement and the
Prospectuses, together with the related schedules and notes, present fairly
the combined financial position of TCG at the dates indicated and the
combined results, of TCG's operations and TCG's cash flows for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent
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basis throughout the periods involved. The consolidated balance sheet of
the Company and its subsidiaries as of December 31, 1996 and the related
consolidated statements of operations, changes in stockholders' equity and
partners' capital (deficit) and cash flows for the year ended December 31,
1996 and the consolidated balance sheet of the Company as of June 30,
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1997 and the related consolidated statements of operations and cash flows
for the six months ended June 30, 1997 included in the Registration
Statement and the Prospectuses, together with the related schedules and
notes, present fairly the consolidated financial position of the Company
and its consolidated subsidiaries at the dates indicated and the statements
of operations, changes in stockholders' equity and partners' capital
(deficit) and cash flows of the Company and its consolidated subsidiaries
for the periods specified; said financial statements have been prepared in
conformity with GAAP applied on a consistent basis throughout the periods
involved. The supporting schedules, if any, included in the Registration
Statement present fairly in accordance with GAAP the information required
to be stated therein. The selected financial data and the summary
financial information included in the Prospectuses present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements included in the Registration
Statement.
(v) No Material Adverse Change in Business. Since the respective
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dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, (A) there has been no
material adverse change or no development involving a prospective material
adverse change, in the condition, financial or otherwise, or in the
earnings or business affairs of the Company and its Subsidiaries considered
as one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no transactions
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entered into by the Company or any of its Subsidiaries, other than those in
the ordinary course of business, which are material with respect to the
Company and its Subsidiaries considered as one enterprise and which are
required to be disclosed in the Registration Statement or which would have
been required to be disclosed in the Registration Statement prior to its
effectiveness, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been duly
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organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect.
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(vii) Good Standing of Subsidiaries. Schedule C lists each
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"significant subsidiary" of the Company (as such term is defined in Rule 1-
02 of Regulation S-X) and other subsidiaries not deemed "significant" but
nonetheless material (each a "Subsidiary" and, collectively, the
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"Subsidiaries"). Each Subsidiary has been duly organized or formed and is
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validly existing as a corporation, a partnership or a limited partnership
in good standing (with respect to a Subsidiary that is a corporation or
limited partnership) under the laws of the jurisdiction in which it has
been incorporated or formed, as applicable, has the necessary corporate or
partnership power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectuses and (with
respect to a Subsidiary that is a corporation or a limited partnership) is
duly qualified as a foreign corporation or limited partnership to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Registration Statement or on Schedule
C hereof, all of the issued and outstanding capital stock of each such
Subsidiary which is a corporation has been duly authorized and validly
issued, is fully paid and non-assessable and all the issued and outstanding
capital stock of each such Subsidiary which is a corporation and all the
existing partnership interests of such Subsidiary which is a partnership or
a limited partnership are owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; and none of the outstanding shares of
capital stock of any Subsidiary which is a corporation was issued in
violation of the preemptive rights of any securityholder of such
Subsidiary.
(viii) Capitalization. The authorized, issued and outstanding
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capital stock of the Company is as set forth in the Prospectuses in the
column entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectuses or pursuant to the exercise of convertible securities or
options referred to in the Prospectuses). The shares of issued and
outstanding capital stock of the Company, including the Securities to be
purchased by the International Managers and the U.S. Underwriters from the
Selling Shareholder, have been duly authorized and validly issued and are
fully paid and non-assessable; none of the outstanding shares of capital
stock of the Company, including the Securities to be purchased by the
International Managers and the U.S. Underwriters from the Selling
Shareholder, was issued in violation of the preemptive rights of any
securityholder of the Company arising under the Delaware General
Corporation Law (the "DGCL"), the Company's certificate of incorporation or
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bylaws or any agreement to which the Company is a party.
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(ix) Authorization of Agreement. This Agreement and the U.S. Purchase
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Agreement have been duly authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The Securities to be
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purchased by the International Managers and the U.S. Underwriters from the
Company have been duly authorized for issuance and sale to the
International Manager pursuant to this Agreement and the U.S. Underwriters
pursuant to the U.S. Purchase Agreement, respectively, and, when issued and
delivered by the Company pursuant to this Agreement and the U.S. Purchase
Agreement, respectively, against payment of the consideration set forth
herein and the U.S. Purchase Agreement, respectively, will be validly
issued, fully paid and non-assessable; the Class A Common Stock conforms to
all statements relating thereto contained in the Prospectuses and such
description conforms to the rights set forth in the instruments defining
the same; no holder of the Securities will be subject to personal liability
for the payment of the Company's debts except as they may be liable by
reason of their own conduct or acts and except as holders of the Securities
may be liable pursuant to Section 282 of the DGCL; and the issuance of the
Securities is not subject to preemptive or other similar rights of any
securityholder of the Company arising under the DGCL, the Company's
certificate of incorporation or bylaws or any agreement to which the
Company is a party.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any
---------------------------------
Subsidiary is in violation of its charter or by-laws or partnership
agreement, as the case may be, or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the Company or any
Subsidiary is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any Subsidiary is
subject (collectively, "Agreements and Instruments") except for such
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violations or defaults that would not reasonably be expected to result in a
Material Adverse Effect; and the execution, delivery and performance of
this Agreement and the U.S. Purchase Agreement and the consummation of the
transactions contemplated in this Agreement and the U.S. Purchase
Agreement, the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectuses
under the caption "Use of Proceeds" and compliance by the Company with its
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obligations under this Agreement and the U.S. Purchase Agreement have been
duly authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not
9
reasonably be expected to result in a Material Adverse Effect), nor will
such actions result in any violation of the provisions of the charter or
by-laws or partnership agreement, as the case may be, of the Company or any
Subsidiary or any applicable law (including the Communications Act of 1934,
as amended, and the Telecommunications Act of 1996, as amended (the "1996
----
Act"), and the rules, regulations and policies of the Federal
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Communications Commission (the "FCC") and the public utilities laws of the
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various states in which the Company and the Subsidiaries do business and
the ordinances, rules and regulations of the various local governments in
which the Company and the Subsidiaries do business), statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any Subsidiary or any of their assets, properties or operations
(except for such violations that would not reasonably be expected to result
in a Material Adverse Effect). As used herein, a "Repayment Event" means
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any event or condition which gives the holder of any note, debenture or
other evidence of indebtedness for borrowed money in principal amount in
excess of $10 million (or any person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any Subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the employees
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of the Company or any Subsidiary exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
Subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit, proceeding,
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inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any Subsidiary
(or any of the properties or assets thereof), which is required to be
disclosed in the Registration Statement (other than as disclosed therein),
or which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and adversely
affect the consummation of the transactions contemplated in this Agreement
and the U.S. Purchase Agreement or the performance by the Company of its
obligations hereunder or thereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any Subsidiary is a party
or of which any of their respective properties or assets is the subject
which are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.
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(xiv) Accuracy of Exhibits. There are no contracts or documents that
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are required by the 1993 Act, the 1933 Act Regulations, the 1934 Act or the
1934 Act Regulations to be described in the Registration Statement, the
Prospectuses or the documents incorporated by reference therein or to be
filed as exhibits thereto that have not been so described and filed as
required.
(xv) Possession of Intellectual Property. The Company and the
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Subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
---------------------
now operated by them, and neither the Company nor any of the Subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of the Subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
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authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities under this Agreement and the U.S. Purchase Agreement or the
consummation of the transactions contemplated by this Agreement and the
U.S. Purchase Agreement, (i) except such as have been already obtained or
as may be required under the 1933 Act or the 1933 Act Regulations and
foreign or state securities or blue sky laws and (ii) except for notice
filings where the failure to make such filing would not materially
adversely affect the performance by the Company of its obligations
hereunder, in connection with the offering, issuance or sale of the
Securities under this Agreement and the U.S. Purchase Agreement or the
consummation of the transactions contemplated by this Agreement and the
U.S. Purchase Agreement.
(xvii) Possession of Licenses and Permits. The Company and the
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Subsidiaries possess all permits, licenses, approvals, consents and other
authorizations issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies (including the FCC, the public utilities
commission, or any equivalent body, of each state in which the Company and
its Subsidiaries do business and any other relevant state and local
authorities (the "Local Authorities")) required for the conduct of the
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11
business now operated by them (collectively, "Governmental Licenses"),
---------------------
except where the failure to possess any such permit, license, approval,
consent or authorization would not reasonably be expected to result in a
Material Adverse Effect; the Company and the Subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses, except
where the failure so to comply would not reasonably be expected to, singly
or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are (except for the effects of the 1996 Act as
described in the Prospectuses) valid and in full force and effect, except
where the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not reasonably
be expected to have a Material Adverse Effect; there is no outstanding
adverse judgment, decree or order that has been issued by the FCC or any of
the Local Authorities against the Company or any of the Subsidiaries and
which, singly or in the aggregate, would reasonably be expected to result
in a Material Adverse Effect; and neither the Company nor any of the
Subsidiaries has received any notice of or is aware of proceedings relating
to the revocation or modification of any such Governmental Licenses or that
would otherwise affect the operations of the Company or the Subsidiaries
and which, singly or in the aggregate, would reasonably be expected to
result in a Material Adverse Effect.
(xviii) Title to Property. The Company and the Subsidiaries have
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good and marketable title to all real property owned by the Company and the
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectuses, (b) are "Permitted Liens" under the 1996
Indentures and the Revolving Credit Agreement (as such terms are defined in
the Prospectuses) or (c) would not reasonably be expected to, singly or in
the aggregate, result in a Material Adverse Effect; and all of the leases
and subleases material to the business of the Company and the Subsidiaries,
considered as one enterprise, and under which the Company or any of the
Subsidiaries holds properties described in the Prospectuses, are in full
force and effect, and neither the Company nor any Subsidiary has any notice
of any claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any Subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company or such Subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease except for such claims
that would not reasonably be expected to result in a Material Adverse
Effect.
(xix) Investment Company Act. The Company is not, and upon the
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issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses
will not be, an "investment
12
company" or an entity "controlled" by an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended (the "1940
----
Act").
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(xx) Environmental Laws. Except as described in the Registration
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Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of the
Subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance or code or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the
-------------------
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
-------------
Laws"), (B) the Company and its Subsidiaries have all permits,
----
authorizations and approvals required under any applicable Environmental
Laws and are each in compliance with their requirements, (C) there are no
pending or, to the Company's knowledge, threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
Subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
Subsidiaries relating to Hazardous Materials or the violation of
Environmental Laws.
(xxi) Registration Rights. Except as described in the Registration
-------------------
Statement, the Company has not granted any registration rights or other
similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
1933 Act.
(b) Representations and Warranties by the Selling Shareholder. The
Selling Shareholder represents and warrants to each International Manager and to
the Company, and agrees with each International Manager and the Company, as
follows:
(i) Accurate Disclosure. The Selling Shareholder has reviewed and is
-------------------
familiar with the Registration Statement and the Prospectuses and neither
the Prospectuses nor any amendments or supplements thereto includes 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; and the Selling
Shareholder is not prompted to sell the
13
Securities to be sold by the Selling Shareholder hereunder by any
information concerning the Company or any subsidiary of the Company which
is not set forth in the Prospectuses.
(ii) Authorization of Agreements. The Selling Shareholder has the
---------------------------
full right, power and authority to enter into this Agreement and the U.S.
Purchase Agreement and to sell, transfer and deliver the Securities to be
sold by the Selling Shareholder hereunder and thereunder. The execution
and delivery of this Agreement and the U.S. Purchase Agreement and the sale
and delivery of the Securities to be sold by the Selling Shareholder and
the consummation of the transactions contemplated herein and compliance by
the Selling Shareholder with its obligations hereunder and under the U.S.
Purchase Agreement have been duly authorized by all necessary action of the
Selling Shareholder and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
tax, lien, charge or encumbrance upon the Securities to be sold by the
Selling Shareholder or any property or assets of the Selling Shareholder
pursuant to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, license, lease or other agreement or instrument to
which the Selling Shareholder is a party or by which the Selling
Shareholder may be bound, or to which any of the property or assets of the
Selling Shareholder is subject except for such conflicts, breaches or
defaults or liens, charges or encumbrances upon any property or assets of
the Selling Shareholder that would not reasonably be expected to result in
a material adverse change or development involving a material adverse
change, in the condition, financial or otherwise, or in the earnings or
business affairs of the Selling Shareholder, whether or not arising in the
ordinary course of business, or in its ability to perform its obligations
hereunder or under the U.S. Purchase Agreement nor will such action result
in any violation of the provisions of the organizational instrument of the
Selling Shareholder, if applicable, or any applicable treaty, law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Selling Shareholder or any of its properties.
(iii) Good and Marketable Title. The Selling Shareholder has and
-------------------------
will at the Closing Time have good and marketable title to the Securities
to be sold by the Selling Shareholder hereunder, free and clear of any
security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind, other than pursuant to this Agreement and the U.S.
Purchase Agreement; and upon delivery of such Securities and payment of the
purchase price therefor as herein contemplated, assuming each such
Underwriter has no notice of any adverse claim, each of the Underwriters
will receive good and marketable title to the Securities purchased by it
14
from the Selling Shareholder, free and clear of any security interest,
mortgage, pledge, lien, charge, claim, equity or encumbrance of any kind.
(iv) Absence of Manipulation. The Selling Shareholder has not taken,
-----------------------
and will not take, directly or indirectly, any action which is designed to
or which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(v) Absence of Further Requirements. No filing with, or consent,
-------------------------------
approval, authorization, order, registration, qualification or decree of,
any court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by the Selling Shareholder of its
obligations hereunder, or in connection with the sale and delivery of the
Securities hereunder or the consummation of the transactions contemplated
by this Agreement and the U.S. Purchase Agreement, except (a) for the
approval pursuant to the Final Judgement (as such term is defined in the
Prospectuses), which has been obtained and (b) such as may have previously
been made or obtained or as may be required under the 1933 Act or the 1933
Act Regulations or state securities laws.
(vi) Certificates Suitable for Transfer. Certificates for all of the
----------------------------------
Securities to be sold by the Selling Shareholder pursuant to this Agreement
and the U.S. Purchase Agreement, in suitable form for transfer by delivery
or accompanied by duly executed instruments of transfer or assignment in
blank with signatures guaranteed, have been placed in custody with the
Custodian with irrevocable conditional instructions to deliver such
Securities to the Underwriters pursuant to this Agreement and the U.S.
Purchase Agreement.
(vii) No Association with NASD. Neither the Selling Shareholder nor
------------------------
any of its affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, or has any other association with (within the meaning of Article I,
Section 1(m) of the By-laws of the National Association of Securities
Dealers, Inc. ("NASD")), any member firm of the NASD.
----
(c) Officer's Certificates. Any certificate signed by any officer of
the Company or any of the Subsidiaries delivered to the Global Coordinator, the
Lead Managers or to counsel for the Lead Managers pursuant to this Agreement or
otherwise in connection with the offering of the Securities shall be deemed a
representation and warranty by the Company to each International Manager as to
the matters covered thereby; and any certificate signed by or on behalf of the
Selling Shareholder as such and delivered to the Global Coordinator, the Lead
Managers or to counsel for the Lead Managers pursuant to the terms
15
of this Agreement shall be deemed a representation and warranty by the Selling
Shareholder to each International Manager as to the matters covered thereby.
SECTION 2. Sale and Delivery to International Managers; Closing. (a)
----------------------------------------------------
Initial Securities. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
and the Selling Shareholder, severally and not jointly, agree to sell to each
International Manager, severally and not jointly, and each International
Manager, severally and not jointly, agrees to purchase from the Company and the
Selling Shareholder, at the price per share set forth in Schedule B, that
proportion of the number of Initial International Securities to be sold by the
Company or the Selling Shareholder, as the case may be, which the number of
Initial International Securities set forth in Schedule A opposite the name of
such U.S. Underwriter, plus any additional number of Initial International
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof, bears to the total number of Initial
International Securities, subject, in each case, to such adjustments among the
International Managers as the Lead Managers in their sole discretion shall make
to eliminate any sales or purchases of fractional securities.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
International Managers, severally and not jointly, to purchase up to an
additional _____________ shares of Class A Common Stock at the price per share
set forth in Schedule B. The option hereby granted will expire 30 days after
the date hereof and may be exercised in whole or in part from time to time only
for the purpose of covering over-allotments which may be made in connection with
the offering and distribution of the Initial International Securities upon
notice by the Global Coordinator to the Company setting forth the number of
International Option Securities as to which the several International Managers
are then exercising the option and the time and date of payment and delivery for
such International Option Securities. Any such time and date of delivery for
the International Option Securities (a "Date of Delivery") shall be determined
----------------
by the Global Coordinator, but shall not be later than seven full business days
after the exercise of said option, nor in any event prior to the Closing Time,
as hereinafter defined. If the option is exercised as to all or any portion of
the International Option Securities, each of the International Managers, acting
severally and not jointly, will purchase that proportion of the total number of
International Option Securities then being purchased which the number of Initial
International Securities set forth in Schedule A opposite the name of such
International Manager bears to the total number of Initial International
Securities, subject in each case to such adjustments as the Global Coordinator
in its discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Shearman & Sterling, 599
00
Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, or at such other place as shall be agreed
upon by the Global Coordinator and the Company and the Selling Shareholder, at
9:00 A.M. (Eastern time) either on the third (fourth if the pricing occurs after
4:30 P.M. (Eastern time) on any given day) business day after the date hereof
(unless postponed in accordance with the provisions of Section 10 hereof), or
such other time not later than ten business days after such date as shall be
agreed upon by the Global Coordinator and the Company and the Selling
Shareholder (such time and date of payment and delivery being herein called the
"Closing Time").
------------
In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator and the Company, on each Date
of Delivery as specified in the notice from the Global Coordinator to the
Company.
Payment shall be made to the Company and the Selling Shareholder by
wire transfer of immediately available funds to separate bank accounts
designated by each of the Company and the Selling Shareholder against delivery
to the Lead Managers for the respective accounts of the International Managers
of certificates for the International Securities to be purchased by them. It is
understood that each International Manager has authorized the Lead Managers, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial International Securities and the International
Option Securities, if any, which it has agreed to purchase. Xxxxxxx Xxxxx,
individually and not as representative of the International Managers, may (but
shall not be obligated to) make payment of the purchase price for the Initial
International Securities or the International Option Securities, if any, to be
purchased by any International Manager whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such International Manager from its obligations
hereunder.
(d) Denominations; Registration. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in The City
of New York not later than 9:00 A.M. (Eastern Time) on the business day prior to
the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
International Manager as follows:
17
(a) Compliance with Securities Regulations and Commission Requests.
The Company will comply with the requirements of Rule 430A or Rule 434, as
applicable, and will notify the Global Coordinator immediately, and confirm
the notice in writing, (i) when any post-effective amendment to the
Registration Statement, shall have become effective, or any supplement to
the Prospectuses or any amended Prospectuses shall have been filed, (ii) of
the receipt of any comments from the Commission relating to the
Registration Statement or the Prospectuses, or any amendment or supplement
thereto, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectuses
or for additional information relating to the offering of the Securities,
and (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of
the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for
any of such purposes. The Company will promptly effect the filings
necessary, if any, pursuant to Rule 424(b) and will take such steps as it
deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest practicable moment.
(b) Filing of Amendments. The Company will give the Global Coordinator
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectuses
included in the Registration Statement at the time it became effective or
to the Prospectuses, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the Global Coordinator with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Global Coordinator or counsel for the International Managers shall
reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Global Coordinator and counsel for the International
Managers, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (and copies of exhibits
filed therewith or incorporated by reference therein and documents
incorporated or deemed to be incorporated by reference therein) whether
filed before or after the Registration Statement became effective, and
signed copies of all consents and certificates of experts, and will also
deliver to the Lead Managers, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for
18
each of the International Managers. If applicable, the copies of the
Registration Statement and each amendment thereto furnished to the
International Managers will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager reasonably requested, and the
Company hereby consents to the use of such copies for purposes permitted by
the 1933 Act. The Company will furnish to each International Manager,
without charge, during the period when the U.S. Prospectus is required to
be delivered under the 1933 Act or the 1934 Act such number of copies of
the U.S. Prospectus (as amended or supplemented) as such U.S. Underwriter
may reasonably request. If applicable, the U.S. Prospectus and any
amendments or supplements thereto furnished to the International Managers
will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement, the U.S. Purchase
Agreement and in the Prospectuses. If at any time when a prospectus is
required by the 1933 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Lead Managers or
for the Company, to amend the Registration Statement or amend or supplement
either of the Prospectuses in order that the Prospectuses will not include
any untrue statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at
any such time to amend the Registration Statement or amend or supplement
either of the Prospectuses in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 3(b) hereof, such amendment or
supplement as may be necessary to correct such statement or omission or to
make the Registration Statement or the Prospectuses comply with such
requirements, and the Company will furnish to the International Managers
such number of copies of such amendment or supplement as the International
Managers may reasonably request.
(f) Foreign Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering
and sale
19
under the applicable securities laws of such foreign jurisdictions as the
Lead Managers may designate and to maintain such qualifications in effect
for a period of not less than one year from the later of the effective date
of the Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to file any
-------- -------
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Securities have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earning statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received
by it from the sale of the Securities in the manner specified in the
Prospectuses under "Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect and
maintain the quotation of the Securities on the Nasdaq National Market and
will file with the Nasdaq National Market all documents and notices
required by the Nasdaq National Market to be filed by companies that have
securities that are traded in the over-the-counter market and quotations
for which are reported by the Nasdaq National Market.
(j) Restriction on Sale of Securities. During a period of 90 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of the Global Coordinator, (i) directly or indirectly,
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 or otherwise transfer or dispose of any share of
Class A Common Stock or any securities convertible into or exercisable or
exchangeable for Class A Common Stock or file any registration statement
under the 1933 Act with respect to any of the foregoing or (ii) enter into
any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership
of the Class A Common Stock, whether any such swap or transaction described
in clause (i) or (ii) above is to be settled by delivery of Class A Common
Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder and
under the International Purchase Agreement, (B) any shares of Class A
Common
20
Stock issued or options to purchase Class A Common Stock granted pursuant
to existing employee benefit plans of the Company referred to in the
Prospectuses or (C) any shares of Class A Common Stock issued pursuant to
any non-employee director stock plan or dividend reinvestment plan.
(k) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company and the
-------------------
Selling Shareholder will pay or cause to be paid, pro rata, based of the number
of Securities being sold by each, all expenses incident to the performance of
their obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the printing
and delivery to the Underwriters of this Agreement and any Agreement among
Underwriters, (iii) the preparation, issuance and delivery of the certificates
for the Securities to the Underwriters, including any stock or other transfer
taxes and any stamp or other duties payable upon the sale, issuance or delivery
of the Securities to the Underwriters, and the transfer of the Securities
between the U.S. Underwriters and International Managers, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v) the
reasonable fees and disbursements of counsel for the Underwriters in connection
with the preparation of the Blue Sky Survey and any supplement thereto, (vi) the
printing and delivery to the Underwriters of copies of each preliminary
prospectus, any Term Sheets and of the Prospectuses and any amendments or
supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii)
the fees and expenses of any transfer agent or registrar for the Securities,
(ix) the filing fees incident to, and the reasonable fees and disbursements of
counsel to the Underwriters in connection with, the review by the NASD of the
terms of the sale of the Securities, (x) the fees and expenses incurred in
connection with the inclusion of the Securities in The Nasdaq National Market
and (xi) all reasonable costs and expenses of the Underwriters.
(b) Expenses of the Selling Shareholder. The Selling Shareholder will
pay all expenses incident to the performance of its obligations under, and the
consummation of the transactions contemplated by this Agreement, including (i)
any stamp duties, capital duties and stock transfer taxes, if any, payable upon
the sale of the Securities to the Underwriters, and their transfer between the
Underwriters pursuant to an agreement between such Underwriters, and (ii) the
fees and disbursements of its counsel and accountants.
(c) Termination of Agreement. If this Agreement is terminated by the
Lead Managers in accordance with the provisions of Section 5, Section 9(a)(i) or
Section 11
21
hereof, the Company and the Selling Shareholder shall reimburse the
International Managers for all of their reasonable out-of-pocket expenses
incurred in connection with the offering and sale of the Securities, including
the reasonable fees and disbursements of counsel for the International Managers.
(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company and the Selling Shareholder may make for
the sharing of such costs and expenses.
SECTION 5. Conditions of International Managers' Obligations. The
-------------------------------------------------
obligations of the several International Managers hereunder are subject to the
accuracy as of the Closing Time of the representations and warranties of the
Company and the Selling Shareholder contained in Section 1 hereof or in
certificates of any officer of the Company or any Subsidiary of the Company or
on behalf of the Selling Shareholder delivered pursuant to the provisions
hereof, to the performance by the Company and the Selling Shareholder of their
respective covenants and other obligations hereunder, and to the following
further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at the Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission, and any request on the part of the Commission for additional
information from the Company or its agents shall have been complied with to
the reasonable satisfaction of counsel to the International Managers.
Prospectuses containing the Rule 430A Information shall have been filed
with the Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A) or, if the
Company has elected to rely upon Rule 434, a Term Sheet shall have been
filed with the Commission in accordance with Rule 424(b).
(b) Opinions of Counsel for the Company. At the Closing Time, the
Lead Managers shall have received the favorable opinions, dated as of the
Closing Time, of (i) the General Counsel of the Company and (ii) Dow,
Xxxxxx & Xxxxxxxxx, PLLC, counsel for the Company, together with signed or
reproduced copies of such letters for each of the other U.S. Underwriters
substantially in the form set forth in Exhibits A(i) and A(ii) hereto,
respectively, and to such further effect, arising as a result of changed
circumstances between the date hereof and the Closing Time, as counsel to
the International Managers may reasonably request. In giving such opinions
such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York, the federal law
of the United States and the
22
General Corporation Law of the State of Delaware, upon the opinions of
counsel reasonably satisfactory to the Lead Managers. Such counsel may
also state that, insofar as such opinions involve factual matters, they
have relied, to the extent they deem proper, upon certificates of officers
of the Company and its Subsidiaries and certificates of public officials.
Such opinions shall not state that they are to be governed or qualified by,
or that they are otherwise subject to, any treatise, written policy or
other document relating to legal opinions, including without limitation,
the Legal Opinion Accord of the ABA Section of Business Law (1991).
(c) Opinion of Counsel for the Selling Shareholder. At the Closing
Time, the Lead Managers shall have received the favorable opinion, dated as
of the Closing Time, of Xxxxxx Xxxxxx, Esq., counsel for the Selling
Shareholder, together with signed or reproduced copies of such letter for
each of the other International Managers substantially in the form set
forth in Exhibit B hereto and to such further effect, arising as a result
of changed circumstances between the date hereof and the Closing Time as
counsel to the Lead Managers may reasonably request.
(d) Opinion of Counsel for International Managers. At the Closing
Time, the Lead Managers shall have received the favorable opinion, dated as
of the Closing Time, of Shearman & Sterling, counsel for the International
Managers, together with signed or reproduced copies of such letter for each
of the other International Managers with respect to the matters set forth
in clauses (4) (solely as to preemptive rights arising under the DGCL or
the Company's certificate of incorporation or bylaws) and (14) of the form
of opinion of the General Counsel of the Company in Exhibit A(i) hereto and
with respect to the matters set forth in clauses (1), (2), (3), (4) and (7)
(solely as to the information in the Prospectuses under "Description of
Capital -- Common Stock") and clause (iii) of the paragraph immediately
following clause (10) of the form of opinion of Dow, Xxxxxx & Xxxxxxxxx,
PLLC in Exhibit A(ii) hereto. In giving such opinion such counsel may
rely, as to all matters governed by the laws of jurisdictions other than
the law of the State of New York, the federal law of the United States and
the General Corporation Law of the State of Delaware, upon the opinions of
counsel satisfactory to the Lead Managers. Such counsel may also state
that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of the
Company and its Subsidiaries and certificates of public officials.
(e) Officers' Certificate. At the Closing Time, (i) the Registration
Statement and the Prospectuses, as they may then be amended or
supplemented, shall contain all statements that are required to be stated
therein under the 1933 Act and the 1933 Act Regulations and in all material
respects shall conform to the requirements of the 1933 Act and the 1933 Act
Regulations, (ii) the Company shall have complied in all material respects
with Rule 430A (if it shall have elected to rely thereon) and
23
neither the Registration Statement nor the Prospectuses, as they may then
be amended or supplemented, shall contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (iii) there
shall not have been, since the date hereof or since the respective dates as
of which information is given in the Prospectuses, any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its Subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business, and the Lead Managers shall have received a certificate of the
Company, signed by the President or a Vice President of the Company and by
the chief financial or chief accounting officer of the Company, dated as of
the Closing Time, to such effect, with respect to clause (i), and to the
effect that (A) there has been no such material adverse change, (B) the
representations and warranties in Section 1(a) hereof are true and correct
with the same force and effect as though expressly made at and as of the
Closing Time, (C) the Company has complied with all agreements and
satisfied all conditions herein on its part to be performed or satisfied at
or prior to the Closing Time, and (D) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission.
(f) Certificate of Selling Shareholder. At the Closing Time, the Lead
Managers shall have received a certificate of the Selling Shareholder,
dated as of the Closing Time, to the effect that (i) the representations
and warranties of the Selling Shareholder contained in Section 1(b) hereof
are true and correct in all respects with the same force and effect as
though expressly made at and as of the Closing Time and (ii) the Selling
Shareholder has complied in all material respects with all agreements and
all conditions on its part to be performed under this Agreement at or prior
to the Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Lead Managers shall have received from Deloitte & Touche LLP
a letter dated such date, in form and substance satisfactory to the Lead
Managers, together with signed or reproduced copies of such letter for each
of the other International Managers containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectuses.
(h) Bring-down Comfort Letter. At the Closing Time the Lead Managers
shall have received from Deloitte & Touche LLP a letter, dated as of the
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished
24
pursuant to subsection (g) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to the
Closing Time.
(i) Approval of Listing. At the time of effectiveness of the
Registration Statement, the Securities shall have been approved for
inclusion in The Nasdaq National Market, subject only to official notice of
issuance.
(j) No Objection. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(k) Lock-up Agreements. At the date of this Agreement, the Lead
Managers shall have received an agreement substantially in the form of
Exhibit C hereto signed by the persons listed on Schedule D hereto.
(l) Purchase of Initial U.S. Securities. Contemporaneously with the
purchase by the International Managers of the Initial International
Securities under this Agreement, the U.S. Underwriters shall have purchased
the Initial U.S. Securities under the U.S. Purchase Agreement.
(m) Conditions to Purchase of International Option Securities. In the
event that the International Managers exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the International
Option Securities, the representations and warranties of the Company
contained herein and the statements in any certificates furnished by the
Company or any Subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery,
the Lead Managers shall have received:
(i) Company Officers' Certificate. A certificate of the Company,
-----------------------------
dated such Date of Delivery, signed by the President or a Vice
President of the Company and by the chief financial or chief
accounting officer of the Company, confirming that the certificate
delivered at the Closing Time pursuant to Section 5(e) hereof remains
true and correct as of such Date of Delivery.
(ii) Opinions of Counsel for Company. The favorable opinions of
-------------------------------
(A) the General Counsel of the Company and (B) Dow, Xxxxxx &
Xxxxxxxxx, PLLC, counsel for the Company, described in Section 5(b)
hereof, each in form and substance reasonably satisfactory to counsel
for the Underwriters, dated such Date of Delivery, relating to the
International Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinions required by
Section 5(b) hereof.
25
(iii) Opinion of Counsel for International Managers. The
---------------------------------------------
favorable opinion of Shearman & Sterling, counsel for the
International Managers, dated such Date of Delivery, relating to the
International Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(d) hereof.
(iv) Bring-down Comfort Letter. A letter from Deloitte & Touche
-------------------------
LLP, in form and substance satisfactory to the Lead Managers and dated
such Date of Delivery, substantially in the same form and substance as
the letter furnished to the Lead Managers pursuant to Section 5(h)
hereof, except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than five days
prior to such Date of Delivery.
(n) Additional Documents. At the Closing Time and at each Date of
Delivery, counsel for the International Managers shall have been furnished
with such documents as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as
herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company and the Selling
Shareholder in connection with the issuance and sale of the Securities as
herein contemplated shall be reasonably satisfactory in form and substance
to the Lead Managers and counsel for the International Managers.
(o) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of
International Option Securities on a Date of Delivery which is after the
Closing Time, the obligations of the several International Managers to
purchase the relevant Option Securities, may be terminated by the Lead
Managers by notice to the Company at any time at or prior to the Closing
Time or such Date of Delivery, as the case may be, and such termination
shall be without liability of any party to any other party except as
provided in Section 4 hereof and except that Sections 1, 6, 7 and 8 hereof
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification. (a) Indemnification of International
---------------
Managers. The Company agrees to indemnify and hold harmless each International
Manager, its directors, officers and employees, and each person, if any, who
controls any International Manager within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act to the extent and in the manner set forth in
clauses (i), (ii), and (iii) below. In addition, the Selling Shareholder agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
26
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including any Rule 430A Information and any
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectuses (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever, in any such case, based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided that
(subject to Section 6(d) below) any such settlement is effected with the
written consent of the Company and the Selling Shareholder; and
(iii) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by Xxxxxxx Xxxxx),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
-------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto), including any Rule 430A
Information and any Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto); and
provided further that, with respect to the Selling Shareholder, this indemnity
-------- -------
agreement shall apply only to any loss, liability, claim, damage or expense to
the extent arising out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and conformity with information
furnished to the Company by the Selling Shareholder expressly for use in the
Registration Statement (or any amendment thereto), including any Rule 430A
Information and any Rule 434 Information, if applicable, or preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto). The
foregoing
27
indemnity agreement with respect to any preliminary prospectus or any Prospectus
(or amendments or supplement thereto) shall not inure to the benefit of any
International Manager from whom the person asserting any such loss, liability,
claim, damage or expense purchased Securities (or any director, officer or
employee of such International Manager, or any person who controls such
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 0000 Xxx) if a copy of the applicable Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such International
Manager to such person, if such is required by law, at or prior to the written
confirmation of the sale of such Securities to such person and if such
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, liability, claim, damage or expense.
(b) Indemnification of Company, Directors and Officers and Selling
Shareholder. Each International Manager severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and the
Selling Shareholder and each person, if any, who controls the Selling
Shareholder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including any Rule 430A Information and any Rule 434
Information, if applicable, or any preliminary prospectus or the U.S. Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such International Manager
through the Lead Managers expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectuses (or
any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section
6(a) above, counsel to the indemnified parties shall be selected by Xxxxxxx
Xxxxx, and, in the case of parties indemnified pursuant to Section 6(b) above,
counsel to the indemnified parties shall be selected by the Company. If it so
elects within a reasonable time after receipt of the notice mentioned above from
an indemnified party, an indemnifying party, jointly with any other indemnifying
parties receiving such notice, may assume the defense of such action with
counsel chosen by it and reasonably satisfactory to the indemnified parties
defendant in such
28
action, unless such indemnified parties reasonably object to such assumption on
the ground that there may be legal defenses available to them which are
different from or in addition to those available to such indemnifying party. If
an indemnifying party assumes the defense of such action, the indemnifying party
shall not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) hereof effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party fails, prior to the date of such settlement, to both reimburse such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and to provide written notice to the indemnified
party substantiating any unpaid balance as unreasonable.
(e) Limitation of Selling Shareholder's Liability. The Selling
Shareholder shall not be responsible for the payment of an amount, pursuant to
this Section 6 and Section 6 of the U.S. Purchase Agreement, which exceeds the
gross proceeds (after deducting the Underwriters' discount but before deducting
expenses) received by the Selling Shareholder from the sale of the Securities by
the Selling Shareholder hereunder and under the U.S. Purchase Agreement.
(f) Other Agreements with Respect to Indemnification. The provisions
of this Section shall not affect any agreement between the Company and the
Selling Shareholder with respect to indemnification.
29
SECTION 7. Contribution. If the indemnification provided for in
------------
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Shareholder on the one hand and the International
Managers on the other hand from the offering of the Securities pursuant to this
Agreement or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Selling Shareholder on the one hand and of the International
Managers on the other hand in connection with the statements or omissions, which
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.
The relative benefits received by the Company and the Selling
Shareholder on the one hand and the International Managers on the other hand in
connection with the offering of the International Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the International Securities pursuant to this
Agreement (before deducting expenses but after deducting the underwriting
discount) received by the Company and the Selling Shareholder and the total
underwriting discount received by the International Underwriters, in each case
as set forth on the cover of the International Prospectus, or, if Rule 434 is
used, the corresponding location on the Term Sheet, bear to the aggregate
initial public offering price of the International Securities as set forth on
such cover.
The relative fault of the Company and the Selling Shareholder on the
one hand and the International Managers on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or by the Selling
Shareholder or by the International Managers and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Selling Shareholder and the International Managers
agree that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the International
Managers were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 7. The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an indemnified party and referred to
above in this Section 7 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending
30
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no International
Manager shall be required to contribute any amount in excess of the amount by
which the total price at which the International Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such International Manager has otherwise been required to pay
by reason of any such untrue or alleged untrue statement or omission or alleged
omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company or the Selling Shareholder within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company or the Selling Shareholder, as the case may be. The
International Managers' respective obligations to contribute pursuant to this
Section 7 are several in proportion to the number of Initial International
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
--------
Agreement or in certificates of the Company or the Selling Shareholder submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any International Manager or
controlling person, or by or on behalf of the Company or the Selling
Shareholder, and shall survive delivery of the International Securities to the
International Managers; provided, however, that in no event shall this Section 8
-------- -------
be construed as a waiver by the Company or the Selling Shareholder of any
statute of limitations applicable to any such representation, warranty or
agreement.
SECTION 9. Termination of Agreement. (a) Termination; General. The
------------------------
Lead Managers may terminate this Agreement, by notice to the Company and the
Selling Shareholder, at any time at or prior to the Closing Time (i) if there
has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the U.S. Prospectus, any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its Subsidiaries
31
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or the international financial markets,
any outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Lead Managers,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading in any securities of the Company has been
suspended or limited by the Commission or The Nasdaq National Market, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in The Nasdaq National Market has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or (iv) if a banking
moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6 and 7 hereof shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the International Managers. If
----------------------------------------------------
one or more of the International Managers shall fail at the Closing Time or a
Date of Delivery to purchase the Securities which it or they are obligated to
purchase under this Agreement (the "Defaulted Securities"), the Lead Managers
--------------------
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting International Managers, or any other underwriters,
to purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth; if, however,
the Lead Managers shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-
defaulting International Managers shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to
any Date of Delivery which occurs after the Closing Time, the obligation of
the Underwriters to purchase and of the Company to sell the Option
Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting International
Manager.
32
No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the obligation
of the International Managers to purchase and the Company to sell the relevant
International Option Securities, as the case may be, either the Lead Managers or
the Company shall have the right to postpone the Closing Time or the relevant
Date of Delivery, as the case may be, for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or the
Prospectuses or in any other documents or arrangements. As used herein, the
term "International Manager" includes any person substituted for a U.S.
Underwriter under this Section 10.
SECTION 11. Default by the Selling Shareholder or the Company. (a)
-------------------------------------------------
If the Selling Shareholder shall fail at Closing Time or at a Date of Delivery
to sell and deliver the number of Securities which the Selling Shareholder is
obligated to sell hereunder, then the International Managers may, at the option
of the Lead Managers, by notice from the Lead Managers to the Company, either
(a) terminate this Agreement without any liability on the part of any non-
defaulting party except that the provisions of Sections 1, 4, 6 and 7 shall
remain in full force and effect or (b) elect to purchase the Securities which
the Company has agreed to sell hereunder. No action taken pursuant to this
Section shall relieve the Selling Shareholder from liability in respect of such
default.
In the event of a default by the Selling Shareholder as referred to in
this Section, each of the Lead Managers and the Company shall have the right to
postpone the Closing Time or the relevant Date of Delivery for a period not
exceeding seven days in order to effect any required change in the Registration
Statement or Prospectus or in any other documents or arrangements.
(b) If the Company shall fail at the Closing Time or at a Date of
Delivery to sell the number of Securities that it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the part
of any non-defaulting party; provided, however, that the provisions of Sections
-------- -------
1, 4, 6 and 7 shall remain in full force and effect. No action taken pursuant
to this Section shall relieve the Company from liability in respect of such
default.
SECTION 12. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if delivered by
overnight courier or transmitted by any standard form of telecommunication.
Notices to the International Managers shall be directed to the Lead Managers at
Ropemaker Place, 00 Xxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx; notices to the
Company shall be directed to it at Xxx Xxxxxxxx Xxxxx, Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxx X. Xxxxxxx, Esq.; and
---------
33
notices to the Selling Shareholder shall be directed to Continental Holding
Company, c/o US WEST, Inc., 0000 X. Xxxxxxx Xxxxx - Xxxxx 000, Xxxxxxxxx,
Xxxxxxxx 00000, attention of Xxxxxx Xxxxxx, Esq.
SECTION 13. Parties. This Agreement shall inure to the benefit of
-------
and be binding upon the International Managers, the Company and the Selling
Shareholder and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the International Managers, the Company and the Selling
Shareholder and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 hereof and their heirs
and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the International Managers, the Company and the
Selling Shareholder and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any International Manager shall be deemed to be a successor by
reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
----------------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT
AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 15. Effect of Headings. The Article and Section headings
------------------
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the International Managers and the Company in accordance with its terms.
Very truly yours,
TELEPORT COMMUNICATIONS
GROUP INC.
By: ______________________
Name:
Title:
CONTINENTAL HOLDING
COMPANY
By: ______________________
Name:
Title: Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX INTERNATIONAL
XXXXXX BROTHERS INTERNATIONAL (EUROPE)
CAZENOVE & CO.
XXXXXX XXXXXXXX & CO. LIMITED
UBS LIMITED
By: XXXXXXX XXXXX INTERNATIONAL
By
----------------------------------
Authorized Signatory
For themselves and as Lead Managers of the other International Managers named in
Schedule A hereto.
EXHIBIT A(i)
November __, 1997
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated
Xxxxxx Brothers Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
Bear, Xxxxxxx & Co. Inc.
Deutsche Xxxxxx Xxxxxxxx Inc.
c/o Merrill Lynch, Pierce,
Xxxxxx & Xxxxx, Incorporated
World Xxxxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Xxxxxxx Xxxxx International
Xxxxxx Brothers International (Europe)
Cazenove & Co.
Xxxxxx Xxxxxxxx & Co. Limited
UBS Limited
c/o Merrill Xxxxx International
Ropemaker Place
00 Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Ladies and Gentlemen:
This opinion is being delivered to you pursuant to Section 5(b) of the U.S.
Purchase Agreement dated November __, 1997 (the "U.S. Purchase Agreement") and
Section 5(b) of the International Purchase Agreement dated November __, 1997
(the "International Purchase Agreement" and, together with the U.S. Purchase
Agreement, the "Purchase Agreements") among you, Teleport Communications Group
Inc. (the "Company") and Continental Holding Company (the "Selling
Shareholder"), providing for the sale to you on this date of an aggregate of
__________ shares of the Class A Common Stock, par value $0.01 per share, of the
Company (the "Securities"). I am the General Counsel of the Company. Capitalized
terms used herein that are not otherwise defined herein shall have the same
meaning as in the Purchase Agreements.
In this connection, I have examined:
(a) the Registration Statement on Form S-3 (No. 333-37597) relating to the
Securities filed with the Securities and Exchange Commission (the
"Commission") on October 10, 1997, under the 1933 Act, Amendment No. 1
thereto filed with the Commission on October 17, 1997, and Amendment No. 2
thereto filed with the Commission on November __, 1997 (such Registration
Statement, as so amended at the time when it became effective and including
the Rule 430A Information, and also including the Incorporated Documents
(as defined below), being hereinafter referred to as the "Registration
Statement");
(b) the final prospectus, dated November __, 1997, filed with the
Commission on November __, 1997, relating to the offering of the Securities
in the United States and Canada (including the Incorporated Documents, the
"U.S. Prospectus") and the final prospectus, dated November __, 1997, filed
with the Commission on November __, 1997, relating to the offering of the
Securities outside the United States and Canada (including the Incorporated
Documents, the "International Prospectus" and, together with the U.S.
Prospectus, the "Prospectuses"), both filed pursuant to Rule 424(b);
(c) the Purchase Agreements; and
(d) the Company's Annual Report on Form 10-K for the year ended December
31, 1996, as amended; the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1997, and June 30, 1997; the Company's Current
Reports on Form 8-K dated January 13, 1997, February 4, 1997, February 26,
1997, March 3, 1997, March 7, 1997, March 11, 1997, March 20, 1997 (as
amended), April 29, 1997, July 29, 1997, October 10, 1997, and October __,
1997; and the description of the Company's Class A Common Stock set forth
in the registration statement on Form 8-A filed pursuant to the Exchange
Act on June 21, 1996 (collectively, the "Incorporated Documents").
On _______, 1997, I was informed by telephone by a member of the staff of
the Commission that the Registration Statement had become effective under the
1933 Act at ______, New York City time, on that date.
I have also examined originals or copies, certified or otherwise identified
to my satisfaction, of all such records of the Company and all such agreements,
certificates of public officials, certificates of officers or representatives of
the Company and others, and such other documents, certificates and corporate or
other records as I have deemed necessary or
- 2 -
appropriate as a basis for the opinions set forth herein. In my examination I
have assumed the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to me as originals, the
conformity to original documents of all documents submitted to me as certified
or photostatic copies and the authenticity of the originals of such latter
documents and the due, binding and valid authorization, execution and delivery
pursuant to lawful power and legal right of applicable instruments and documents
on behalf of persons and entities other than the Company.
As to matters of law set forth below, my opinion is limited to matters of
law under the laws of the State of New York, the laws of the United States, to
the extent applicable hereto, and the Delaware General Corporation Law (the
"DGCL"), and I express no opinion as to conflicts of law rules, or the laws of
any states or jurisdictions other than as specified above.
Based upon the foregoing and subject to the other qualifications stated
herein, I am of the opinion that:
1. The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
2. Each Subsidiary has been duly incorporated or formed, as applicable,
and is validly existing as a corporation or a partnership in good standing (with
respect to a Subsidiary that is a corporation) under the laws of the
jurisdiction in which it has been incorporated or formed, as applicable, has the
necessary corporate or partnership power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectuses and
(with respect to a Subsidiary that is a corporation) is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a Material
Adverse Effect; except as otherwise disclosed in the Registration Statement or
in Schedule C to each of the Purchase Agreements, all of the issued and
outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and all the issued and
outstanding capital stock of each such Subsidiary which is a corporation and all
the existing partnership interests of each such Subsidiary which is a
partnership, to the best of my knowledge and information, is owned by the
Company, directly or through subsidiaries, free and
- 3 -
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any Subsidiary which
is a corporation was issued in violation of the preemptive rights of any
securityholder of such Subsidiary arising under the DGCL, the certificate of
incorporation or bylaws of such Subsidiary or any agreement to which such
Subsidiary is a party.
3. The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectuses in the column entitled "Actual" under the
caption "Capitalization" (except for subsequent issuances, if any, pursuant to
the U.S. Purchase Agreement and the International Purchase Agreement or pursuant
to reservations, agreements or employee benefit plans referred to in the
Prospectuses or pursuant to the exercise of convertible securities or options
referred to in the Prospectuses); the shares of issued and outstanding capital
stock, including the Securities to be purchased from the Selling Shareholder,
have been duly authorized and validly issued and are fully paid and non-
assessable; and none of the outstanding shares of capital stock of the Company
was issued in violation of the preemptive rights of any securityholder of the
Company arising under the DGCL, the Company's certificate of incorporation or
bylaws or any agreement to which the Company is a party.
4. The issuance of the Securities by the Company is not subject to
preemptive rights of any securityholder of the Company arising under the DGCL,
the Company's certificate of incorporation or bylaws or any agreement to which
the Company is a party.
5. To the best of my knowledge, there are no actions, suits, proceedings,
inquiries or investigations before or brought by any court or governmental
agency or body, domestic or foreign, now pending or threatened, against or
affecting the Company or any Subsidiary, which is required to be disclosed in
the Registration Statement, or which, in the aggregate, might reasonably be
expected to result in a Material Adverse Effect, or which, in the aggregate,
might reasonably be expected to materially and adversely affect the properties
or assets thereof or the consummation of the transactions contemplated in the
U.S. Purchase Agreement and the International Purchase Agreement or the
performance by the Company of its obligations thereunder.
6. The information in the Prospectuses under "Business," to the extent
that it constitutes matters of law, summaries of legal matters, the Company's
certificate of incorporation and bylaws or legal proceedings, or legal
conclusions, has been reviewed by me and is correct in all material respects.
- 4 -
7. To the best of my knowledge, there are no statutes or regulations that
are required under the 1933 Act or the 1933 Act Regulations to be described in
the Prospectuses that are not described as required.
8. All descriptions in the Registration Statement of contracts and other
documents to which the Company or the Subsidiaries are a party are accurate in
all material respects; to the best of my knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement, the Prospectuses or the Incorporated Documents or to be filed as
exhibits thereto other than those described or referred to therein or filed as
exhibits thereto, and the descriptions thereof or references thereto are correct
in all material respects.
9. To the best of my knowledge, neither the Company nor any Subsidiary is
in violation of its charter or bylaws or partnership agreement, as the case may
be, and no default by the Company or any Subsidiary exists in the due
performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or referred to in the
Registration Statement or the Prospectuses or filed as an exhibit to the
Registration Statement except for such violations or defaults that would not
reasonably be expected to result in a Material Adverse Effect.
10. The execution, delivery and performance by the Company of the Purchase
Agreements, the consummation by the Company of the transactions contemplated in
the Purchase Agreements and the issuance and sale by the Company of the
Securities being sold by it do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute a breach
of, or default or Repayment Event (as defined in Section 1(a)(xi) of the
Purchase Agreements) under or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument, known to me, to
which the Company or any Subsidiary is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any
Subsidiary is subject (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not reasonably be expected to have a Material
Adverse Effect).
11. To the best of my knowledge, except as described in the Registration
Statement, the Company has not granted any registration rights or other similar
rights to have any
- 5 -
securities registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act.
12. The Company and the Subsidiaries possess the Governmental Licenses and
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure to so comply would not reasonably be expected
to, singly or in the aggregate, have a Material Adverse Effect, and all of the
Governmental Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not reasonably be expected to have
a Material Adverse Effect.
13. There is no outstanding adverse judgement, decree or order that has
been issued by the FCC or any of the Local Authorities against the Company and
the Subsidiaries which, singly or in the aggregate, would reasonably be expected
to result in a Material Adverse Effect and, to the best of my knowledge, neither
the Company nor any of the Subsidiaries is the object of, or threatened by, any
proceedings relating to the revocation or modification of any such Governmental
License or that would otherwise affect the operation of the Company or any of
the Subsidiaries, which, singly or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect.
14. The Incorporated Documents (other than the financial statements and
supporting schedules included therein or omitted therefrom, as to which I
express no opinion), when they were filed with the Commission complied as to
form in all material respects with the requirements of the 1933 Act, the 1933
Act Regulations, the 1934 Act and the 1934 Act Regulations.
Attorneys on my staff and I have participated in the preparation of the
Incorporated Documents. In the course of the preparation of the Registration
Statement and the Prospectuses, I participated in conferences with officers and
other representatives of the Company, representatives of the independent
certified public accountants of the Company, your representatives and your
counsel, at which conferences the contents of the Registration Statement and the
Prospectuses and related matters were discussed and, although I am not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectuses or the documents incorporated by reference in the Registration
Statement and the Prospectuses (except as expressly provided in paragraph 6) and
have not made an independent investigation, check or verification of facts for
the purpose of rendering this opinion, on the basis of my and my staff's
participation in the conferences referred to above and our examination of the
Registration Statement and the
- 6 -
Prospectuses and the Incorporated Documents, I advise you that nothing has come
to my attention that leads me to believe (i) that the Registration Statement or
any amendment thereto (except for financial statements and schedules and other
financial [and statistical] data included or incorporated by reference therein
or omitted therefrom, as to which I make no statement), at the time the
Registration Statement or any such amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
(ii) that the Prospectuses or any amendment or supplement thereto (except for
financial statements and other financial [and statistical] data included or
incorporated by reference therein or omitted therefrom), at the time the
Prospectuses were issued, at the time any such amended or supplemented
prospectuses were issued or at the Closing Time, included or includes an untrue
statement of a material fact or omitted 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 or (iii) that the
Registration Statement, the Prospectuses and each amendment or supplement to the
Registration Statement and the Prospectuses, excluding in each case the
documents incorporated by reference therein, as of their respective effective or
issue dates (other than the financial statements and other financial [and
statistical] data included therein or omitted therefrom, as to which I make no
statement) did not comply as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
The opinions set forth above are subject to the following qualifications:
(i) the enforceability of agreements, documents and instruments is subject
to general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, and the discretion of
the court before which any proceeding therefor may be brought, regardless of
whether enforcement is sought in a proceeding in equity or at law, and
bankruptcy, reorganization, insolvency, fraudulent conveyance or transfer,
moratorium (whether general or specific) and other laws affecting creditors'
rights or the relief of debtors generally.
(ii) I express no opinion concerning the enforceability of (a) waivers of
notice or of any other constitutional, statutory or common law rights, (b)
matters deemed to violate public policy, and (c) submissions to the personal
jurisdiction of any particular court.
(iii) For purposes of this opinion, any statement contained in a document
incorporated by reference into the Registration
- 7 -
Statement or the Prospectuses shall be deemed to be incorporated by reference in
the Registration Statement and the Prospectuses and to be a part thereof from
the date of filing of such document. Any statement contained in the
Registration Statement or the Prospectuses or in a document incorporated by
reference in the Registration Statement or the Prospectuses shall be deemed to
be modified or superseded for purposes thereof to the extent that a statement
contained therein, or in any other subsequently filed document which also is or
is deemed to be incorporated by reference therein, modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of the Registration Statement
or the Prospectuses.
This opinion is furnished by me as General Counsel to the Company in
connection with the closing of the above-referenced public offering occurring
today. I assume no obligation to advise you of changes which may thereafter be
brought to my attention. My opinion is based upon statutory laws and judicial
decisions in effect at the date hereof, and I do not opine with respect to any
laws, regulation, rule or governmental policy which may be enacted or adopted
after the date hereof, nor assume any responsibility to advise you of future
changes in my opinion. The opinion is solely for your benefit and is not to be
used, circulated, quoted or otherwise referred to for any other purpose, and may
not be relied upon by any other person, without my express prior written
permission.
--------------------------------
W. Xxxxxxx Xxxxxxxxx, Xx.,
General Counsel, Teleport
Communications Group Inc.
- 8 -
EXHIBIT A(ii)
November __, 1997
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated
Xxxxxx Brothers Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
Bear, Xxxxxxx & Co. Inc.
Deutsche Xxxxxx Xxxxxxxx Inc.
c/o Merrill Lynch, Pierce,
Xxxxxx & Xxxxx, Incorporated
World Xxxxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Xxxxxxx Xxxxx International
Xxxxxx Brothers International (Europe)
Cazenove & Co.
Xxxxxx Xxxxxxxx & Co. Limited
UBS Limited
c/o Merrill Xxxxx International
Ropemaker Place
00 Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Ladies and Gentlemen:
This opinion is being delivered to you pursuant to Section 5(b) of the U.S.
Purchase Agreement dated November __, 1997 (the "U.S. Purchase Agreement") and
Section 5(b) of the International Purchase Agreement dated November __, 1997
(the "International Purchase Agreement" and, together with the U.S. Purchase
Agreement, the "Purchase Agreements") among you, Teleport Communications Group
Inc. (the "Company") and Continental Holding Company (the "Selling
Shareholder"), providing for the sale to you on this date of an aggregate of
__________ shares of the Class A Common Stock, par value $0.01 per share, of the
Company (the "Securities"). We have served as counsel to the Company in
connection with the issuance and sale of the Securities. Capitalized terms used
herein that are not otherwise defined herein shall have the same meaning as in
the Purchase Agreements.
In this connection, we have examined:
-2-
(a) the Registration Statement on Form S-3 (No. 333-37597) relating to the
Securities filed with the Securities and Exchange Commission (the
"Commission") on October 10, 1997, under the 1933 Act, Amendment No. 1
thereto filed with the Commission on October 17, 1997, and Amendment No. 2
thereto filed with the Commission on November __, 1997 (such Registration
Statement, as so amended at the time when it became effective and including
the Rule 430A Information, and also including the documents which are
expressly listed in clauses (a) through (d) under the caption
"Incorporation of Certain Documents by Reference" in the Prospectuses as
being incorporated by reference therein (the "Incorporated Documents"),
being hereinafter referred to as the "Registration Statement");
(b) the final prospectus, dated November __, 1997, filed with the
Commission on November __, 1997, relating to the offering of the Securities
in the United States and Canada (including the Incorporated Documents, the
"U.S. Prospectus") and the final prospectus, dated November __, 1997, filed
with the Commission on November __, 1997, relating to the offering of the
Securities outside the United States and Canada (including the Incorporated
Documents, the "International Prospectus" and, together with the U.S.
Prospectus, the "Prospectuses"), both filed pursuant to Rule 424(b); and
(c) the Purchase Agreements.
On _______, 1997, we were informed by telephone by a member of the staff of
the Commission that the Registration Statement had become effective under the
1933 Act at ______, New York City time, on that date.
We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of all such records of the Company and all such
agreements, certificates of public officials, certificates of officers or
representatives of the Company and others, and such other documents,
certificates and corporate or other records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein. In our examination we
have assumed the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified
or photostatic copies and the authenticity of the originals of such latter
documents and the due, binding and valid authorization, execution and delivery
pursuant to lawful power and legal right of applicable instruments and documents
on behalf of persons and entities other than the Company. As to any facts
material to the opinions expressed herein, we have relied upon statements and
representations of officers and other representatives of the Company and others.
-3-
As to matters of law set forth below, our opinion is limited to matters of
law under the laws of the State of New York, the laws of the United States to
the extent applicable hereto and the Delaware General Corporation Law, and we
express no opinion as to conflicts of law rules, or the laws of any States or
jurisdictions other than as specified above.
Based upon the foregoing and subject to the other qualifications stated
herein, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
2. The Company has the corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under the Purchase
Agreements.
3. The Securities to be purchased by the U.S. Underwriters and the
International Managers from the Company have been duly authorized for issuance
and sale to the Underwriters pursuant to the U.S. Purchase Agreement and the
International Purchase Agreement, respectively, and, when issued and delivered
by the Company pursuant to the U.S. Purchase Agreement and the International
Purchase Agreement, respectively, against payment of the consideration set forth
in the U.S. Purchase Agreement and the International Purchase Agreement,
respectively, will be validly issued, fully paid and non-assessable, and no
holder of the Securities in its capacity as such a holder will be subject to
personal liability for the payment of the Company's debts, except (i) as such
holder may be liable by reason of its own conduct or acts, (ii) as provided by
the Delaware General Corporation Law and (iii) for any liability that may arise
upon application of any fraudulent conveyance or transfer or other insolvency
law.
4. The Purchase Agreements have been duly authorized, executed and
delivered by the Company.
5. The Registration Statement has been declared effective under the 1933
Act; any required filing of the Prospectuses pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b); and, to
the best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no proceedings for
that purpose have been instituted or are pending or threatened by the
Commission.
6. The form of certificate used to evidence the Securities complies in
all material respects with all applicable requirements of the certificate of
incorporation and by-laws of the Company.
-4-
7. The information in the Prospectuses under the captions "Description of
Capital Stock," "Certain United States Federal Income Tax Consequences to Non-
United States Holders of Common Stock," "Risk Factors -- Federal and State
Regulation," "Risk Factors -- Governmental and Other Authorizations" and
"Business -- Regulatory and Governmental Matters" and in the Registration
Statement under Item 15, to the extent that it constitutes matters of law,
summaries of legal matters, the Company's certificate of incorporation and
bylaws or legal proceedings, or legal conclusions has been reviewed by us and is
correct in all material respects.
8. No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency (other than under the 1933 Act and the 1933 Act Regulations, which have
been obtained, or as may be required under the securities or blue sky laws of
the various states, as to which we express no opinion) is necessary or required
in connection with the due authorization, execution and delivery of the Purchase
Agreements or for the offering, issuance, sale or delivery of the Securities,
except for notice filings where the failure to make such filings would not
materially adversely affect the performance by the Company of its obligations
under the Purchase Agreements.
9. The execution, delivery and performance by the Company of the Purchase
Agreements, the consummation by the Company of the transactions contemplated in
the Purchase Agreements and the issuance and sale by the Company of the
Securities being sold by it do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute a breach
of, or default or Repayment Event (as defined in Section 1(a)(xi) of the
Purchase Agreements) under or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument that has been
filed or incorporated by reference as an exhibit to the Registration Statement
(except for such conflicts, breaches, defaults, Repayment Events, liens, charges
or encumbrances that would not reasonably be expected to result in a Material
Adverse Effect), nor will such actions result in any violation of the provisions
of the certificate of incorporation or by-laws or partnership agreement, as the
case may be, of the Company or any Subsidiary, or any applicable law, statute,
rule, regulation, judgment, order, writ or decree, known to us of any
government, government instrumentality or court having jurisdiction over the
Company or any Subsidiary or any of their respective properties, assets or
operations, except for such violations that would not reasonably be expected to
result in a Material Adverse Effect.
10. The Company is not an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the Investment Company
Act of 1940.
-5-
In the course of the preparation of the Registration Statement and the
Prospectuses (other than the Incorporated Documents), we participated in
conferences with officers and other representatives of the Company,
representatives of the independent certified public accountants of the Company,
your representatives and your counsel, at which conferences the contents of the
Registration Statement and the Prospectuses and related matters were discussed.
We have not participated in the preparation of any of the Incorporated Documents
or any other items or information incorporated by reference in the Registration
Statement or the Prospectuses. Although we are not passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectuses (except
as expressly provided in subparagraph 7) or the documents incorporated by
reference in the Registration Statement and the Prospectuses and have not made
an independent investigation, check or verification of facts for the purpose of
rendering this opinion, on the basis of the foregoing, we advise you that,
nothing has come to our attention that leads us to believe (i) that the
Registration Statement or any amendment thereto (except for financial statements
and schedules and other financial [and statistical] data included or
incorporated by reference therein or omitted therefrom, as to which we make no
statement), at the time the Registration Statement or any such amendment became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) that the Prospectuses or any amendment
or supplement thereto (except for financial statements and schedules and other
financial [and statistical] data included or incorporated by reference therein
or omitted therefrom, as to which we make no statement), at the time the
Prospectuses were issued, at the time any such amended or supplemented
prospectus was issued or at the Closing Time, included or includes an untrue
statement of a material fact or omitted 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 or (iii) that the
Registration Statement, the Prospectuses and each amendment or supplement to the
Registration Statement and the Prospectuses, excluding in each case the
documents incorporated by reference therein as of their respective effective or
issue dates (other than the financial statements and schedules and other
financial [and statistical] data included or incorporated by reference therein
or omitted therefrom, as to which we make no statement) did not comply as to
form in all material respects with the requirements of the 1933 Act and the 1933
Act Regulations.
The opinions set forth above are subject to the following qualifications:
(i) The enforceability of agreements, documents and instruments is subject
to general principles of equity, including, without limitation, concepts of
materiality,
-6-
reasonableness, good faith and fair dealing, and the discretion of the court
before which any proceeding therefor may be brought, regardless of whether
enforcement is sought in a proceeding in equity or at law, and bankruptcy,
reorganization, insolvency, fraudulent conveyance or transfer, moratorium
(whether general or specific) and other laws affecting creditors' rights or the
relief of debtors generally.
(ii) We express no opinion concerning the enforceability of (a) waivers of
notice or of any other constitutional, statutory or common law rights, (b)
matters deemed to violate public policy, and (c) submissions to the personal
jurisdiction of any particular court.
(iii) We express no opinion as to any New York state or local laws, rules
or regulations relating to the regulation of telecommunications.
(iv) For purposes of this opinion, any statement contained in a document
incorporated by reference into the Registration Statement or the Prospectuses
shall be deemed to be incorporated by reference in the Registration Statement
and the Prospectuses and to be a part thereof from the date of filing of such
document. Any statement contained in the Registration Statement or the
Prospectuses or in a document incorporated by reference in the Registration
Statement or the Prospectuses shall be deemed to be modified or superseded for
purposes thereof to the extent that a statement contained therein, or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference therein, modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of the Registration Statement or the Prospectuses.
This opinion is furnished by us as counsel to the Company in connection
with the closing of the above-referenced public offering occurring today. The
information set forth herein is as of the date hereof. We assume no obligation
to advise you of changes which may thereafter be brought to our attention. Our
opinion is based upon statutory laws and judicial decisions in effect at the
date hereof, and we do not opine with respect to any law, regulation, rule or
governmental policy which may be enacted or adopted after the date hereof, nor
assume any
-7-
responsibility to advise you of future changes in our opinion. This opinion is
solely for your benefit and is not to be used, circulated, quoted or otherwise
referred to for any other purpose, and may not be relied upon by any other
person, without our express prior written permission.
Very truly yours,
DOW, XXXXXX & XXXXXXXXX, PLLC
By:
----------------------------
Xxxxxxx X. Xxxxxx, Member
