15,289,842 Shares
TIME WARNER TELECOM INC.
CLASS A COMMON STOCK
UNDERWRITING AGREEMENT
April __, 2000
April ___, 2000
Xxxxxx Brothers Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers International (Europe)
Xxxxxx Xxxxxxx & Co. International Limited
Bear, Xxxxxxx International Limited
Xxxxxxxxx, Xxxxxx & Xxxxxxxx International
c/x Xxxxxx Brothers International (Europe)
0 Xxxxxxxxx
Xxxxxx XX0X0XX
Xxxxxxx
Dear Sirs and Mesdames:
MediaOne Holdings II, Inc., a Delaware corporation (the "Selling
Stockholder"), and a shareholder of Time Warner Telecom Inc., a Delaware
corporation (the "Company"), proposes to sell to the several Underwriters (as
defined below) 15,289,892 shares of Class A Common Stock, par value $.01 per
share (the "Firm Shares"), of the Company.
It is understood that, subject to the conditions hereinafter stated,
[_______] Firm Shares (the "U.S. Firm Shares") will be sold by the Selling
Stockholder to the several U.S. Underwriters named in Schedule I hereto (the
"U.S. Underwriters") in connection with the offering and sale of such U.S. Firm
Shares in the United States and Canada to United States and Canadian Persons (as
such terms are defined in the Agreement Between U.S. and International
Underwriters of even date herewith), and [_______] Firm Shares (the
"International Shares") will be sold by the Selling Stockholder to the several
International Underwriters named in Schedule II hereto (the "International
Underwriters") in connection with the offering and sale of such International
Shares outside the United States and Canada to persons other than United States
and Canadian Persons. Xxxxxx Brothers Inc., Xxxxxx Xxxxxxx & Co. Incorporated,
Bear, Xxxxxxx & Co. Inc. and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
shall act as representatives (the "U.S. Representatives") of the several U.S.
Underwriters, and Xxxxxx
1
Brothers International (Europe), Xxxxxx Xxxxxxx & Co. International Limited,
Bear Xxxxxxx International Limited and Xxxxxxxxx, Xxxxxx & Xxxxxxxx
International shall act as representatives (the "International Representatives")
of the several International Underwriters. The U.S. Underwriters and the
International Underwriters are hereinafter collectively referred to as the
"Underwriters".
In addition, the Company proposes to issue and sell to the several
U.S. Underwriters not more than an additional 1,400,000 shares of its Class A
Common Stock, par value $.01 per share (the "Additional Shares"), if and to the
extent that the U.S. Representatives shall have determined to exercise, on
behalf of the U.S. Underwriters, the right to purchase such shares of common
stock granted to the U.S. Underwriters in Section 2 hereof. The Firm Shares and
the Additional Shares are hereinafter collectively referred to as the "Shares".
The shares of Class A Common Stock, par value $.01 per share of the Company to
be outstanding after giving effect to the sales contemplated hereby are
hereinafter referred to as the "Common Stock".
In connection with the offering of the Firm Shares, 15,277,627 shares
of Class B Common Stock, par value $.01 per share, of the Company will be
converted into an equal number of shares of Class A Common Stock. Each share of
Class B Common Stock is convertible, at the option of the holder thereof, into
one share of Class A Common Stock.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Shares. The registration statement contains two prospectuses to be used in
connection with the offering and sale of the Shares: the U.S. prospectus, to be
used in connection with the offering and sale of Shares in the United States and
Canada to United States and Canadian Persons, and the international prospectus,
to be used in connection with the offering and sale of Shares outside the United
States and Canada to persons other than United States and Canadian Persons. The
international prospectus is identical to the U.S. prospectus except for the
outside front cover page. The registration statement as amended at the time it
becomes effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement"; the U.S. prospectus and the
international prospectus in the respective forms first used to confirm sales of
Shares are hereinafter collectively referred to as the "Prospectus". If the
Company has filed an abbreviated registration statement to register additional
shares of Common Stock pursuant to Rule 462(b) under the Securities Act (the
"Rule 462 Registration Statement"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462 Registration
Statement.
1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings
2
for such purpose are pending before or, to the knowledge of the Company,
threatened by the Commission.
(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) the Registration Statement and the Prospectus
comply and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iii) the Prospectus does not
contain, and as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations
and warranties set forth in this paragraph do not apply to statements or
omissions in the Registration Statement or the Prospectus, or any amendment
or supplement thereto, based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated or,
in the case of partnerships or limited liability companies, duly organized,
is validly existing as a corporation, a partnership or a limited liability
company, as the case may be, in good standing under the laws of the
jurisdiction of its incorporation or organization, has the power and
authority to own its property and to conduct its business as described in
the Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries, taken
as a whole; all of the issued shares of capital stock of each subsidiary of
the Company that is a corporation have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims; and all of the partnership interests and membership
interests in each subsidiary of the Company that is a partnership or a
limited liability company, as the case may be, are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims.
3
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of Common Stock of the Company
have been duly and validly authorized and issued, are fully paid and non-
assessable and conform to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock".
(g) The shares of Common Stock outstanding prior to the issuance
of the Additional Shares have been duly authorized and are validly issued,
fully paid and nonassessable.
(h) The Additional Shares have been duly authorized, and, when
issued and delivered in accordance with the terms of this Agreement, will
be validly issued and fully paid and nonassessable, and the issuance of
such Additional Shares will not be subject to any preemptive or similar
rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not contravene any provision of applicable law or the certificate of
incorporation or bylaws of the Company or any agreement or other instrument
binding upon the Company or any of its subsidiaries that is material to the
Company and its subsidiaries, taken as a whole, or any judgment, order or
decree of any governmental body, agency or court having jurisdiction over
the Company or any of its subsidiaries, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations
under this Agreement, except (i) such as may have been obtained and (ii)
such as may be required by the securities or Blue Sky laws of the various
states and other jurisdictions in connection with the offer and sale of the
Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required.
4
(l) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(m) The Company is not, and, after giving effect to the offering
and sale of the Additional Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment company"
as such term is defined in the Investment Company Act of 1940, as amended
(the "Investment Company Act").
(n) The Company and its subsidiaries (i) are in compliance with
any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (iii) are in compliance
with all terms and conditions of any such permit, license or approval,
except where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(o) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for cleanup, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(p) Except as set forth in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement.
(q) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) the Company and
its subsidiaries have not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in the
ordinary course of business; (ii) the Company and its subsidiaries have not
purchased any of its outstanding capital stock, nor has the Company
declared, paid or otherwise made any dividend or distribution of any kind
on its capital stock other than ordinary and customary dividends; and (iii)
there has not been any material change in the capital stock, short-term
debt or long-term debt of the Company and
5
its subsidiaries, taken as a whole, except in each case as set forth or
described in the Prospectus.
(r) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries or such as do not, singly or in the aggregate,
have or could not result in a material adverse effect on the Company and
its subsidiaries, taken as a whole; and any real property and buildings
held under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as do not
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries or such as do not, singly or
in the aggregate, have or could not result in a material adverse effect on
the Company and its subsidiaries, taken as a whole, in each case except as
described in the Prospectus.
(s) Except as set forth in the Prospectus, the Company and its
subsidiaries own or possess, or can acquire on reasonable terms, all
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 and trade names, currently employed by them in
connection with the business now operated by them, except where the failure
to own or possess or to have the right to acquire any of the foregoing,
singly or in the aggregate, does not have a material adverse effect on the
Company and its subsidiaries, taken as a whole, and neither the Company nor
any of its subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(t) No labor dispute with the employees of the Company or any of
its subsidiaries exists, except as described in the Prospectus, or, to the
knowledge of the Company, is imminent, except for disputes that do not or
would not have a material adverse effect on the Company and its
subsidiaries taken as a whole; and the Company is not aware of any
existing, threatened or imminent labor disturbance by the employees of any
of its principal suppliers or contractors that could have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(u) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged; and neither of the Company nor any of its subsidiaries has any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain
6
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole, except as described in the
Prospectus.
(v) The Company and its subsidiaries possess all permits,
licenses, rights of way, approvals, consents and other authorizations
issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies (including the Federal Communications Commission (the
"FCC"), the public utilities commission, or any equivalent body, of each
state in which the Company does business and any other relevant State or
local governmental department, commission, board, bureau, agency, court or
other authority thereof (the "Local Authorities")) required for the conduct
of the telecommunications business now operated by the Company
(collectively, the "Governmental Licenses"), except where the failure to
possess any such Governmental Licenses would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole; the Company and its subsidiaries are in
compliance with the terms and conditions of all such Licenses, except where
the failure so to comply would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole; all of the Governmental Licenses are 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, singly or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole; 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 its subsidiaries and
which, singly or in the aggregate, would have a material adverse effect on
the Company and its subsidiaries, taken as a whole; and neither the Company
nor any of its subsidiaries has received any notice of or is aware of
proceedings relating to the revocation or modification of any such
Governmental Licenses or, except as set forth in the Prospectus, that would
otherwise affect the operations of the Company or its subsidiaries and
which, singly or in the aggregate, would have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(w) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
2. Representations and Warranties of the Selling Stockholder. The
Selling Stockholder represents and warrants to and agrees with each of the
Underwriters that:
7
(a) The Selling Stockholder has, as of the date hereof, good and
marketable title to 12,215 shares of Class A Common Stock (the "Class A
Certificated Shares") and 15,277,627 shares of Class B Common Stock. Each
share of Class B Common Stock is convertible into one share of Class A
Common Stock (such shares after conversion being the "Class A Book-Entry
Shares"). Upon conversion of the Class B Common Stock, the Selling
Stockholder will have, at the Closing Date (as defined in Section 5
hereof), good and marketable title to the Class A Book-Entry Shares, free
and clear of all liens, encumbrances, equities or claims. The Selling
Stockholder has the full right, power and authority to convert the Class B
Common Stock into Class A Book-Entry Shares to be sold by the Selling
Stockholder hereunder.
(b) The Class A Certificated Shares to be sold by the Selling
Stockholder pursuant to this Agreement will be certificated securities in
registered form and are not held in any securities account or by or through
any securities intermediary within the meaning of the Uniform Commercial
Code as in effect in the State of New York ("NYUCC"). The Selling
Stockholder has, and, at the Closing Date will have, full right, power and
authority to hold, sell, transfer and deliver the Class A Certificated
Shares to be sold by the Selling Stockholder pursuant to this Agreement;
and upon the Underwriters' acquiring possession of the Class A Certificated
Shares (or an agent's acquiring possession of the Class A Certificated
Shares on the Underwriters' behalf) and paying the purchase price therefor
as herein contemplated, the Underwriters will acquire their respective
interests in the Class A Certificated Shares (including, without
limitation, all rights that the Selling Stockholder had or has the power to
transfer in the Class A Certificated Shares) free of any adverse claim.
(c) Certificates for 12,215 Class A Certificated Shares, in
suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank, with signatures guaranteed,
and the Class A Book-Entry Shares, to be sold by the Selling Stockholder
pursuant to this Agreement, have been placed in custody with the custodian
with irrevocable conditional instructions to convert 15,277,627 shares of
Class B Common Stock into Class A Book-Entry Shares, and to deliver such
shares to the Underwriters pursuant to this Agreement.
(d) The Selling Stockholder has, and, at the Closing Time will
have, full right, power and authority to hold and transfer its interests in
its security entitlement (within the meaning of Section 8-501of the NYUCC)
with respect to the Class A Book-Entry Shares to be sold by the Selling
Stockholder hereunder. Upon the payment of the purchase price for the
Class A Book-Entry Shares and the crediting by DTC of such Class A Book-
Entry Shares to the securities accounts of the several Underwriters with
DTC, each of the Underwriters will acquire a valid security entitlement
(within the meaning of Section 8-501 of the NYUCC) in respect of such Class
A Book-Entry Shares to be purchased by it, and no action (whether framed in
conversion, replevin, constructive trust, equitable lien, or other theory)
8
based on an adverse claim to such Class A Book-Entry Shares may be asserted
against the Underwriters.
(e) The Selling Stockholder has full right, power and authority
to enter into this Agreement; the execution, delivery and performance of
this Agreement and by the Selling Stockholder and the consummation by the
Selling Stockholder of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement, shareholder agreement or other agreement or
instrument to which the Selling Stockholder is a party or by which the
Selling Stockholder is bound or to which any of the property or assets of
the Selling Stockholder is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the Selling
Stockholder or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Selling
Stockholder or the property or assets of the Selling Stockholder; and,
except for the registration of the Firm Shares under the Securities Act and
such consents, approvals, authorizations, registrations or qualifications
as may be required under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and applicable state or foreign securities laws in
connection with the purchase and distribution of the Firm Shares by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement by
the Selling Stockholder and the consummation by the Selling Stockholder of
the transactions contemplated hereby.
(f) The Registration Statement, when it became effective, did not
contain, and as amended or supplemented, if applicable, will not contain,
and the Prospectus does not contain and, as amended or supplemented, will
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the
representations and warranties contained in this subsection (e) apply only
to statements or omissions made in reliance upon and in conformity with
information which is furnished to the Company by or on behalf of the
Selling Stockholder expressly for use in the Registration Statement or the
Prospectus.
(g) The Selling Stockholder has no knowledge that the
representations and warranties of the Company contained in Section 1 hereof
are not materially true and correct, is familiar with the Registration
Statement and the Prospectus (as amended or supplemented) and has no
knowledge of any material fact, condition or information not disclosed in
the Registration Statement, as of the effective date, or the Prospectus (or
any amendment or supplement thereto), as of the applicable filing date,
which has adversely affected or may adversely affect the business of the
Company and is not prompted to sell shares of Common Stock by any
information concerning the Company which is not set forth in the
Registration Statement and the Prospectus.
9
(h) The Selling Stockholder 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 the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares.
3. Agreements to Sell and Purchase. The Selling Stockholder hereby
agrees to sell to the several Underwriters, and each Underwriter, upon the basis
of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from the Selling Stockholder the respective numbers of Firm Shares set forth in
Schedules I and II hereto opposite its names at US$[______] a share ("Purchase
Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the U.S. Underwriters the Additional Shares, and the U.S. Underwriters shall
have a one-time right to purchase, severally and not jointly, up to 1,400,000
Additional Shares at the Purchase Price. If the U.S. Representatives, on
behalf of the U.S. Underwriters, elect to exercise such option, the U.S.
Representatives shall so notify the Company in writing not later than 30 days
after the date of this Agreement, which notice shall specify the number of
Additional Shares to be purchased by the U.S. Underwriters and the date on which
such shares are to be purchased. Such date may be the same as the Closing Date
(as defined below) but not earlier than the Closing Date nor later than ten
business days after the date of such notice. Additional Shares may be purchased
as provided in Section 5 hereof solely for the purpose of covering
overallotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each U.S. Underwriter agrees, severally
and not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as the U.S. Representatives may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of U.S. Firm Shares set forth in Schedule I
hereto opposite the name of such U.S. Underwriter bears to the total number of
U.S. Firm Shares.
The Company hereby agrees that, without the prior written consent of
each of Xxxxxx Brothers Inc. and Xxxxxx Xxxxxxx on behalf of the Underwriters,
it will not, during the period ending 90 days after the date of the Prospectus,
(1) publicly offer, pledge, sell, contract to sell, grant any option or contract
to purchase, lend, or otherwise transfer, dispose of or distribute, directly or
indirectly, any shares of Class A Common Stock or (2) enter into any public swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Class A Common Stock, whether any such
transaction described in clause (1) or (2) 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 Shares to be sold hereunder, (B)
the issuance by the Company of (i) shares of Class A Common Stock upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof of which the Underwriters have been advised in writing and (ii)
grants from time to time of stock options and other incentive compensation
pursuant to the 1998 Option Plan, provided that such options or
10
awards do not vest during the period of 90 days ending after the date of the
Prospectus, (C) the issuance by the Company of shares of Class A Common Stock
pursuant to the 2000 Stock Purchase Plan, or (D) private transactions relating
to shares of Class A Common Stock, provided that any transferee that receives
shares of Class A Common Stock in a private transaction shall be subject to the
90-day lock-up set forth in clauses (1) and (2) above to the same extent as the
Company.
4. Terms of Public Offering. The Company and the Selling Stockholder
are advised by you that the Underwriters propose to make a public offering of
their respective portions of the Shares as soon after the Registration Statement
and this Agreement have become effective as in your judgment is advisable. The
Company and the Selling Stockholder are further advised by you that the Shares
are to be offered to the public initially at U.S.$[______] a share (the "Public
Offering Price") and to certain dealers selected by you at a price that
represents a concession not in excess of U.S.$[_____] a share under the Public
Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of U.S.$[_____] a share, to any Underwriter
or to certain other dealers.
5. Payment and Delivery. Payment for the Firm Shares shall be made
to the Selling Stockholder in Federal or other funds immediately available in
New York City against delivery of such Firm Shares for the respective accounts
of the several Underwriters at 10:00 a.m., New York City time, on [_______],
2000, or at such other time on the same or such other date, not later than
[_______], 2000, as shall be designated in writing by you. The time and date of
such payment are hereinafter referred to as the "Closing Date".
Payment for any Additional Shares shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 3 or at such other time on the same or on such other
date, in any event not later than [______], 2000, as shall be designated in
writing by the U.S. Representatives. The time and date of such payment are
hereinafter referred to as the "Option Closing Date".
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The obligations of
the Selling Stockholder and the Company to sell the Shares to the Underwriters
and the several obligations of the Underwriters to purchase and pay for the
Shares on the Closing Date are subject to the
11
condition that the Registration Statement shall have become effective not later
than 12:00 noon (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or
of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's securities by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate from the Company, dated the Closing Date and signed by an
executive officer of the Company, to the effect set forth in Section
6(a)(i) above and to the effect that the representations and warranties of
the Company contained in this Agreement are true and correct as of the
Closing Date and that the Company has complied with all of the agreements
and satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date a
certificate from the Selling Stockholder, dated the Closing Date, and
signed by an executive officer of the Selling Stockholder, to the effect
that the representations and warranties of the Selling Stockholder
contained in this Agreement are true and correct as of the Closing Date and
that the Selling Stockholder has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date.
12
(d) The Underwriters shall have received on the Closing Date an
opinion of Cravath, Swaine & Xxxxx, outside counsel for the Company, dated
the Closing Date, to the effect that:
(i) the Company has been duly incorporated, and, based
solely on a certificate of good standing from the Secretary of State
of Delaware, is a corporation validly existing and in good standing
under the laws of the State of Delaware, with full corporate power and
authority to own, lease and operate its properties and conduct its
businesses as described in the Prospectus;
(ii) to such counsel's knowledge, (A) there are not any
pending or threatened governmental proceedings before any court or
governmental agency or authority or any arbitrator to which the
Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject of a
character required to be disclosed in the Registration Statement or
Prospectus which is not adequately disclosed as required, and (B)
there is no contract, indenture, mortgage, loan agreement, note, lease
or other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an exhibit,
which is not described or filed as required;
(iii) the Company's authorized equity capitalization is as
set forth in the Prospectus under the caption "Description of Capital
Stock". The Shares conform to the description thereof contained in
the Registration Agreement and Prospectus;
(iv) the Additional Shares have been duly authorized, and,
when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and nonassessable, and
the issuance of the Additional Shares will not be subject to any
statutory, or to such counsel's knowledge, contractual preemptive
rights;
(v) the Firm Shares to be sold by the Selling Stockholder
hereunder have been duly authorized and validly issued, and are fully
paid and nonassessable.
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the certificate
of incorporation or bylaws of the Company or, to such counsel's
knowledge, any agreement or other instrument binding upon the Company
or any of its subsidiaries that is material to
13
the Company and its subsidiaries, taken as a whole, or, to the best of
such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the
Company or any of its subsidiaries, and no consent, approval,
authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its
obligations under this Agreement, except such as has been obtained
under the Securities Act and such as may be required by the securities
or Blue Sky laws of the various states in connection with the offer
and sale of the Shares by the Underwriters;
(viii) the statements made in the Prospectus under the
captions "Description of Capital Stock", "Certain Relationships and
Related Transactions --Stockholders Agreement", "Description of
Certain Indebtedness -- Senior Notes", and "Certain United States
Federal Tax Consequences to Non-United States Holders of Common
Stock", in each case insofar as such statements constitute summaries
of the legal matters, documents or proceedings referred to therein,
fairly present the information required to be described with respect
to such legal matters, documents and proceedings and summarize in all
material respects the matters referred to therein; and
(ix) the Company is not and, after giving effect to the
offering and sale of the Additional Shares and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as such term is defined in the Investment Company
Act.
(e) The Underwriters shall have received on the Closing Date a
statement of Cravath, Swaine & Xxxxx, outside counsel for the Company,
dated the Closing Date, to the effect that:
Although such counsel has made certain inquiries and
investigations in connection with the preparation of the Registration
Statement and the Prospectus, the limitations inherent in the role of
outside counsel are such that such counsel cannot and does not assume
responsibility for the accuracy or completeness of the statements made in
the Registration Statement and Prospectus, except insofar as such
statements relate to such counsel and except to the extent set forth in
paragraph (viii) of such counsel's opinion to you dated the Closing Date.
Subject to the foregoing, such counsel hereby advises you that such
counsel's work in connection with this matter did not disclose any
information that gave such counsel reason to believe that: (i) the
Registration Statement at the time the Registration Statement became
effective, or the Prospectus as of the date hereof (in each case except for
the financial statements and other information of a statistical, accounting
or financial nature included therein, as to which such counsel does not
express any view) was not appropriately responsive in all material respects
to the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder, or
14
(ii) the Registration Statement at the time the Registration Statement
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 or that the Prospectus, as of
its date and as of the date hereof, included or includes an 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 (in each case except for the
financial statements and other information of a statistical, accounting or
financial nature included therein as to which such counsel does not express
any view).
(f) The Underwriters shall have received on the Closing Date an
opinion of Xxxx X. Xxxxx, Esq., General Counsel to the Company, dated the
Closing Date, to the effect that:
(i) the Company has been duly incorporated and is validly
existing and in good standing under the laws of the State of Delaware,
with full corporate power and authority to own its property and to
conduct its business as described in the Prospectus;
(ii) the Company is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole;
(iii) each subsidiary of the Company has been duly
incorporated or, in the case of partnerships or limited liability
companies, duly organized, is validly existing as a corporation, a
partnership or a limited liability company, as the case may be, in
good standing under the laws of the jurisdiction of its incorporation
or organization, as the case may be, has the power and authority to
own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole;
(iv) except as otherwise disclosed in the Registration
Statement or the Prospectus, all of the issued shares of capital stock
of each subsidiary of the Company that is a corporation have been duly
and validly authorized and issued, are fully paid and non-assessable
and are owned directly by the Company free and clear of all liens,
encumbrances, equities or claims; and all of the partnership interests
and membership interests in each subsidiary of the Company that is a
15
partnership or limited liability company, as the case may be, are
owned directly by the Company free and clear of all liens,
encumbrances, equities or claims;
(v) The statements contained in the Registration Statement
under the captions "Risk Factors -- Competition in local services has
also increased as a result of changing government regulations", "Risk
Factors -- We are subject to significant federal and state regulation
that can significantly affect pricing and profitability", "Risk
Factors -- We may receive less revenue if incumbent local exchange
carriers successfully challenge reciprocal compensation", "Risk
Factors -- We are dependent on governmental and other
authorizations", "Risk Factors -- We are dependent on Time Warner
Cable's permits, licenses and rights-of-way", "Business --
Competition" and "Business -- Government Regulation", insofar as such
statements constitute a summary of the legal or regulatory matters or
legal or regulatory proceedings referred to therein, are correct in
all material respects and do not omit a material fact necessary to
make the statements contained therein not misleading;
(vi) to such counsel's knowledge, the Company possesses the
Governmental Licenses and the Company is in compliance with the terms
and conditions of all such Governmental Licenses, except where the
failure to so comply would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as
a whole, 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 have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(vii) 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 and its subsidiaries which, singly or in the
aggregate, would have a material adverse effect on the Company and its
subsidiaries, taken as a whole, and, to the best of such counsel's
knowledge, neither the Company nor any of its subsidiaries is the
object of, or threatened by, any proceedings relating to the
revocation or modification of any such Governmental Licenses or,
except as set forth in the Prospectus, that would otherwise affect the
operation of the Company, which, singly or in the aggregate, would
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(viii) the Company has obtained all telecommunications,
regulatory or public utility authorizations and consents from New
York, New Jersey, [Tennessee, North Carolina and Hawaii] required for
the issuance of the Additional Shares, and no further filings with,
authorizations, approval, consent, license, order, registrations,
qualification or decree is necessary or required from
16
any other Local Authorities having jurisdiction over
telecommunications matters for the Company in connection with the due
authorization, execution and delivery of this Agreement or for the
offering, issuance, sale or delivery of the Shares, 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 this Agreement;
(ix) the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated in
this Agreement, the issuance and sale of the Additional Shares, and
the use of the proceeds from the sale of the Additional Shares to the
extent expressly described in the Prospectus under the caption "Use of
Proceeds", and compliance by the Company with its obligations under
this Agreement do not and will not, whether with or without the giving
of notice or lapse of time or both, result in any violation of any
applicable law, statute, rule, regulation, judgment, order, writ or
decree, known to such counsel of any Local Authority having
jurisdiction over the Company or any of its subsidiaries or any of its
assets or operations with respect to the provision of
telecommunications services except for such violations that would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(x) to such counsel's knowledge, there are no
telecommunications statutes or regulations that are required to be
described in the Registration Statement or the Prospectus that are not
described as required;
(xi) the statements made in the Registration Statement in
Items 14 and 15, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information required to be described with
respect to such legal matters, documents and proceedings and summarize
in all material respects the matters referred to therein; and
(xii) to such counsel's knowledge, there are no statutes or
regulations (other than federal, state or local telecommunications
statutes or regulations as to which such counsel expresses no opinion)
that are required to be disclosed in the Registration Statement or the
Prospectus that are not adequately disclosed as required.
In rendering opinion (vi) above, the General Counsel may rely, as
to matters involving the application of the laws of [California, Florida,
Hawaii, Indiana,] New York, New Jersey, [North Carolina, Texas and
Wisconsin], upon the opinions of special counsel to the Company (which
opinions shall be dated and furnished to the Underwriters on the Closing
Date and shall be satisfactory in form and substance to counsel for the
Underwriters, provided that the General Counsel shall state that such
17
opinion (vi) above is subject to the qualifications set forth in such
opinions of special counsel and provided further that the General Counsel
shall state in his opinion that he believes that he is justified in relying
upon such opinions).
(g) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx Xxxx & Xxxxxxxxx, regulatory counsel for the Company,
dated the Closing Date, to the effect that:
(i) The statements contained in the Registration Statement
under the captions "Business -- Government Regulation -- Federal
Regulation" and "Business -- Government Regulation --
Telecommunications Act of 1996" insofar as such statements constitute
a summary of the legal or regulatory matters or legal or regulatory
proceedings referred to therein, are correct in all material respects
and do not omit a material fact necessary to make the statements
contained therein not misleading.
(h) The Underwriters shall have received on the Closing Date an
opinion of Shearman & Sterling, counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in Sections 6(d)(vi) and
6(d)(viii) (but only as to the statements in the Prospectus under
"Description of Capital Stock" and "Underwriters") and 6(e) above.
With respect to Section 6(e) above, Cravath, Swaine & Xxxxx and
Shearman & Sterling may provide their statements in separate letters and
may state that their opinion and belief are based upon their participation
in the preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and review and discussion of the contents
thereof, but are without independent check or verification, except as
specified.
The opinion of Cravath, Swaine & Xxxxx described in Section 6(d)
above shall be rendered to the Underwriters at the request of the Company
and shall so state therein.
(i) The Underwriters shall have received on the Closing Date an
opinion of Xxxx Xxxxxxx & Xxxxxx LLP, counsel to the Selling Stockholder,
dated the Closing Date, to the effect that:
(i) The Selling Stockholder has full right, power and
authority to enter into this Agreement; the execution, delivery and
performance of this Agreement by the Selling Stockholder and the
performance by the Selling Stockholder of its obligations thereunder
will not conflict with or result in a breach or violate (i) any of the
terms, condition, provisions of the Certificate of Incorporation or
By-laws of the Selling Stockholder (ii) any of the terms,
18
conditions, or provisions of any documents, agreement or other
instrument to which the Selling Stockholder is a party or by which it
is bound of which we are aware (iii) any Delaware corporate, New York
or federal law or regulation (except filings and other actions
required pursuant to the Securities Act and/or the Exchange Act and
the rules of regulations thereunder and federal and state securities
or blue sky laws, as to which we express no opinion in this paragraph)
or (iv) any judgment, writ, injunction, decree, order or ruling of any
court or governmental authority binding on the Selling Stockholder of
which we are aware.
(ii) No consent, approval, authorization or other action by
or filing with any Delaware corporate, New York or federal
governmental authority is required in connection with the execution
and delivery by the Selling Stockholder of this Agreement, the
consummation by the Selling Stockholder of the transactions
contemplated thereby or the performance by the Selling Stockholder or
its obligations thereunder, except filings and other actions required
pursuant to the Securities Act and/or the Exchange Act and the rules
and regulations thereunder and federal and state securities or blue
sky laws, as to which we express no opinion in this paragraph and
those already obtained;
(iii) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder;
(iv) Immediately prior to the Closing Date, the Selling
Stockholder had good and valid title to the Firm Shares to be sold by
the Selling Stockholder under this Agreement, free and clear of all
liens, encumbrances, equities or claims;
(v) The Selling Stockholder has full right, power and
authority to sell, transfer and deliver the Class A Certificated
Shares pursuant to this Agreement. Assuming that (A) the certificate
or certificates representing the Class A Certificated Shares to be
sold by the Selling Stockholder pursuant to this Agreement have been
effectively indorsed in blank in accordance with NYUCC Article 8 and
(B) neither the Underwriters, nor the agents acquiring possession of
the Class A Certificated Shares on their behalf, have notice of any
adverse claim to the Class A Certificated Shares, then, upon the
Underwriters' acquiring possession of such certificate or certificates
for the Class A Certificated Shares (or the agent's acquiring
possession of such certificate or certificates for the Class A
Certificated Shares on the Underwriters' behalf) and paying the
purchase price therefor pursuant to this Agreement, each Underwriter
will be a "protected purchaser" of the Class A Certificated Shares to
be purchased by it (within the meaning of Section 8-303 of the NYUCC)
and will acquire its interest in the Class A Certificated Shares
(including, without limitation, all rights that the Selling
Stockholder had or has the power to transfer in the Class A
Certificated Shares) free of any adverse claim.
19
(vi) The Selling Stockholder has full right, power and
authority to hold and transfer its interests in its security
entitlement (within the meaning of Section 8-501 of the NYUCC) with
respect to the Class A Book-Entry Shares to be sold by the Selling
Stockholder under the Underwriting Agreement. Upon the payment of the
purchase price for the Class A Book-Entry Shares and the crediting by
DTC of such Class A Book-Entry Shares to the securities accounts of
the several Underwriters with DTC, each of the Underwriters will
acquire a valid security entitlement (within the meaning of Section 8-
501 of the NYUCC) in respect of such Class A Book-Entry Shares to be
purchased by it, and no action (whether framed in conversion,
replevin, constructive trust, equitable lien, or other theory) based
on an adverse claim to such Class A Book-Entry Shares may be asserted
against the Underwriters (assuming that the Underwriters are without
notice of the adverse claim).
In rendering such opinion, such counsel may (i) state that their
opinion is limited to matters governed by the Federal laws of the United
States of America, the laws of State of New York and the laws of the
jurisdiction in which the Selling Stockholder is organized and (ii) in
rendering the opinion in Section 6(i)(iii) above, rely upon a certificate
of the Selling Stockholder in respect of matters of fact as to ownership of
and liens, encumbrances, equities or claims on the Firm Shares sold by the
Selling Stockholder, provided that such counsel shall furnish copies
thereof to the Representatives and state that they believe that both the
Underwriters and they are justified in relying upon such certificate. Such
counsel shall also have furnished to the Representatives a written
statement, addressed to the Underwriters and dated the Closing Date, in
form and substance satisfactory to the Representatives, to the effect that
(x) such counsel has acted as counsel to the Selling Stockholder in
connection with the preparation of the Registration Statement, and (y) such
counsel has participated in conferences with directors, officers and other
representatives of the Company, representatives of the independent public
accountants for the Company, representatives of the Underwriters and
representatives of counsel for the Underwriters, at which conferences the
contents of the Registration Statement and the Prospectus and related
matters were discussed, and, although such counsel have not independently
verified and are not passing upon and assume no responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and Prospectus, on the basis of the foregoing
(relying as to materiality to a large extent upon the opinions of officers
and other representatives of the Company), no facts have come to the
attention of such counsel which lead such counsel to believe that the
Registration Statement, at the time it became effective, contained an
untrue statement of a material fact or omitted to share a material fact
required to be stated therein or necessary to make the statements contained
therein nor misleading or that the Prospectus, at its date of issuance or
at the Closing Date contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact required to be stated
therein or necessary to make the statements contained therein, in light of
the
20
circumstances, under which they were made, not misleading provided that
such counsel need not express any view with respect to the financial
statements (including the notes thereto), supporting schedules or any other
financial or statistical data set forth or referred to or incorporated by
reference in the Registration Statement or Prospectus.
(j) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the
Underwriters, from Ernst & Young, LLP, independent public accountants,
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 Prospectus; provided that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier than
the date hereof.
(k) The "lockup" agreements, each substantially in the form of
Exhibit A hereto, between you and each of the stockholders of the Company's
Class B Common Stock, delivered to you on or before the date hereof, shall
be in full force and effect on the Closing Date.
(l) The Common Stock shall continue to be listed on the Nasdaq
National Market.
The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the delivery to the U.S.
Representatives on the Option Closing Date of such documents as they may
reasonably request with respect to the good standing of the Company, the due
authorization and issuance of the Additional Shares and other matters related to
the issuance of the Additional Shares.
7. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, five signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in
Section 7(c) below, as many copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement
or the Prospectus, to furnish to you a copy of each such proposed amendment
or supplement and not to file any such proposed amendment or supplement to
which you reasonably object,
21
and to file with the Commission within the applicable period specified in
Rule 424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if it
is necessary to amend or supplement the Prospectus to comply with
applicable law, forthwith to prepare, file with the Commission and furnish,
at its own expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Shares may have been
sold by you on behalf of the Underwriters and to any other dealers upon
request, either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus is delivered to a purchaser,
be misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request; provided that, in connection therewith, the Company
shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction.
(e) To make generally available to the Company's security holders
and to you as soon as practicable an earning statement of the Company and
its subsidiaries that satisfies the provisions of Section 11(a) of the
Securities Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158).
(f) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause
to be paid certain expenses incident to the performance of its and the
Selling Stockholder's obligations under this Agreement, including: (i) the
fees, disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the Shares
under the Securities Act and certain other fees or expenses in connection
with the preparation and filing of the Registration Statement, any
preliminary prospectus, the Prospectus and amendments and supplements to
any of the foregoing, including normal and customary printing costs
associated therewith (which shall not include any printing costs incurred
as a result of expedited or overtime printing services), and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) the cost of printing or producing
any Blue Sky or Legal Investment memorandum in connection with the offer
and sale of the Shares under state securities laws and all expenses in
connection with the qualification of the Shares for offer and sale under
state securities laws as provided in Section 7(d) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such
22
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iii) all filing fees incurred in connection with the offering
of the Shares by the National Association of Securities Dealers, Inc. (the
"NASD"), (iv) the cost of printing certificates representing the Shares,
(v) the costs and charges of any transfer agent, registrar or depositary,
(vi) all expenses in connection with any offer and sale of the Shares
outside of the United States, including all filing fees and (vii) all other
costs and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this
Agreement. It is understood, however, that except as provided in this
Section, Section 9 entitled "Indemnity and Contribution", and the last
paragraph of Section 11 below, the Underwriters will pay all of their costs
and expenses, including fees and disbursements of their counsel, stock
transfer taxes payable on resale of any of the Shares by them and any
advertising expenses connected with any offers they may make.
8. Covenants of the Selling Stockholder. The Selling Stockholder
agrees:
(a) For a period of 90 days from the date of the Prospectus, not
to, directly or indirectly, (i) effect any public sale or other
distribution of any shares of Common Stock or securities convertible into
or exchangeable for Common Stock (other than the Shares) or (ii) enter into
any swap or other derivatives transaction that transfers to another, in
whole or in part, any of the economic benefits or risks of ownership of
such shares of Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or
other securities, in cash or otherwise, in each case without the prior
written consent of Xxxxxx Brothers Inc. and Xxxxxx Xxxxxxx.
(b) That the Firm Shares to be sold by the Selling Stockholder
hereunder are subject to the interest of the Underwriters and that, except
as otherwise set forth herein, the obligations of the Selling Stockholder
hereunder shall not be terminated by any act of the Selling Stockholder, by
operation of law or the occurrence of any other event.
(c) To deliver to the Representatives prior to the Closing Date a
properly completed and executed United States Treasury Department on Form
W-9.
(d) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid certain expenses incident to the performance of its and the Company's
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Selling Stockholder's counsel and the Selling Stockholder's
accountants in connection with the registration and delivery of the Shares under
the Securities Act and certain other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including any expedited or overtime printing costs associated
therewith and such other fees or expenses as may be agreed upon between the
Company and the Selling Stockholder, (ii) all costs and expenses related to the
transfer and delivery of the Shares
23
to the Underwriters, including any transfer or other taxes payable thereon,
(iii) all fees and disbursements of counsel to the Underwriters incurred in
connection with the review and qualification of the offering of the Shares by
the NASD, and (iv) all costs and expenses relating to any "road show" undertaken
in connection with the marketing of the offering of the Shares, including,
without limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in connection with
the road show presentations with the prior approval of the Selling Stockholder,
travel and lodging expenses of the representatives and officers of the Company,
the Selling Stockholder and any such consultants, and the cost of any aircraft
chartered in connection with the road show, provided that the Underwriters will
reimburse the Selling Stockholder for the Underwriters' pro rata share of the
cost of such chartered aircraft.
9. Indemnity and Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
(b) The Selling Stockholder agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages or liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in defending or investigating any such action or claim), caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or the omission or alleged omission to state in
any Preliminary Prospectus, Registration Statement or the Prospectus, or in any
amendment or supplement thereto, any material fact required to be stated therein
or necessary to make the statements therein not misleading; provided, however,
that the Selling Stockholder will only be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged omission
from any such documents in reliance upon and in conformity with written
information furnished to the Company by such Selling Stockholder specifically
for use therein; provided further, that with respect to any untrue statement or
omission made in any preliminary prospectus, the indemnity agreement contained
in this Section 9(b) shall not inure to
24
the benefit of any Underwriter (or any person that controls such Underwriter)
that sold the Firm Shares concerned to the person asserting any such loss,
claim, damage or liability of such Underwriter results from the fact that there
was not sent or given to such person, at or prior to the written confirmation of
sale of Firm Shares to such person, a copy of the Prospectus (exclusive of any
documents incorporated by reference therein) if the Company had previously
furnished copies thereof to such Underwriter; and provided further, that the
indemnification provided by the Selling Stockholder under this Section 9(b)
shall be limited to the actual net proceeds (before deducting expenses) received
by the Selling Stockholder from the sale by the Selling Stockholder of Firm
Shares hereunder. The Company and the Underwriters acknowledge that the
statements set forth in footnote (1) under the caption "The Offering" and the
information on the Selling Stockholder appearing in the chart and in footnote
(8) under the caption "Principal and Selling Stockholders" constitute the only
information furnished by the Selling Stockholder by or on behalf of the Selling
Stockholder expressly for use in the Registration Statement, any related
Preliminary Prospectus and the Prospectus.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(d) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 9(a) or 9(b) or 9(c), such person (the "indemnified
party") shall promptly notify the person against whom such indemnity may be
sought (the "indemnifying party") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Xxxxxx Brothers, in the case of parties indemnified
pursuant to Section 8(a) and 8(b), and by the Company, in the case of parties
indemnified pursuant to Section 8(c).
25
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(e) To the extent the indemnification provided for in Section 9(a),
9(b) or 9(c) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Stockholder on the one hand and
the Underwriters on the other hand from the offering of the Shares or (ii) if
the allocation provided by clause 9(e)(i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 9(e)(i) above but also the relative fault of the
Company and the Selling Stockholder on the one hand and of the Underwriters on
the other hand in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Stockholder on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by the Company and the Selling Stockholders
and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate Public Offering Price of the Shares. The
relative fault of the Company and the Selling Stockholder on the one hand and
the Underwriters on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Stockholder or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section 9
are several in proportion to the respective number of Shares they have purchased
hereunder, and not joint.
26
(f) The Company, the Selling Stockholder and the Underwriters agree
that it would not be just or equitable if contribution pursuant to this Section
9 were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in Section 9(e).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 9 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in this
Section 9 and the representations, warranties and other statements of the
Company and the Selling Stockholder contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter or by or on behalf of the Company, the
Selling Stockholder, their respective officers or directors or any person
controlling the Company or the Selling Stockholder and (iii) acceptance of and
payment for any of the Shares.
10. Termination. This Agreement shall be subject to termination by
notice given by you to the Company and the Selling Stockholder, if (a) after the
execution and delivery of this Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on or by, as
the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the NASD, the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 10(a)(i) through 10(a)(iv), such event, singly
or together with any other such event, makes it, in your judgment, impracticable
to market the Shares on the terms and in the manner contemplated in the
Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
27
If, on the Closing Date or the Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
that it has or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I or Schedule
II bears to the aggregate number of Firm Shares set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as you may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 11 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you and the Selling Stockholder for the purchase of
such Firm Shares are not made within 36 hours after such default, this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter,
the Company or the Selling Stockholder. In any such case either you, the
Company or the Selling Stockholder shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. If, on the Option Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased, the non-defaulting Underwriters shall have
the option to (i) terminate their obligation hereunder to purchase Additional
Shares or (ii) purchase not less than the number of Additional Shares that such
non-defaulting Underwriters would have been obligated to purchase in the absence
of such default. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company or the
Selling Stockholder to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason the Company or the Selling Stockholder
shall be unable to perform its obligations under this Agreement, the Company and
the Selling Stockholder will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
28
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
29
14. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
Very truly yours,
TIME WARNER TELECOM INC.
By:
-------------------------------
Name:
Title:
THE SELLING STOCKHOLDER:
Accepted as of the date hereof
MEDIA ONE HOLDINGS II, INC.
XXXXXX BROTHERS INC. By: MEDIA ONE GROUP, INC.
XXXXXX XXXXXXX & CO.
INCORPORATED
BEAR XXXXXXX & CO. INC.
XXXXXXXXX, XXXXXX & By:
XXXXXXXX SECURITIES -------------------------------
CORPORATION Name:
Title:
Acting severally on behalf of themselves
and the several U.S. Underwriters
named in Schedule I hereto.
By: Xxxxxx Brothers Inc.
By:
-------------------------------
Name:
Title:
XXXXXX BROTHERS INTERNATIONAL (EUROPE)
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
BEAR, XXXXXXX INTERNATIONAL LIMITED
XXXXXXXXX, XXXXXX &
XXXXXXXX INTERNATIONAL
Acting severally on behalf of themselves
and the several International Underwriters
30
named in Schedule II hereto.
By: Xxxxxx Brothers International (Europe)
By:
-------------------------------
Name:
Title:
31
SCHEDULE I
U.S. UNDERWRITERS
Number of
Firm Shares
Underwriter To Be Purchased
---------------
Xxxxxx Brothers Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
Total U.S. Firm Shares ..............
SCHEDULE II
INTERNATIONAL UNDERWRITERS
Number of
Firm Shares
Underwriter To Be Purchased
---------------
Xxxxxx Brothers International (Europe)
Xxxxxx Xxxxxxx & Co. International Limited
Bear, Xxxxxxx International Limited
Xxxxxxxxx, Xxxxxx & Xxxxxxxx International
Total International Firm Shares ......
33
EXHIBIT A
[FORM OF LOCK-UP LETTER]
[.], 1999
Xxxxxx Brothers Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers International (Europe)
Xxxxxx Xxxxxxx & Co. International Limited
Bear, Xxxxxxx International Limited
Xxxxxxxxx, Xxxxxx & Xxxxxxxx International
c/x Xxxxxx Brothers International (Europe)
0 Xxxxxxxxx
Xxxxxx XX0X0XX
Xxxxxxx
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Brothers Inc. ("Xxxxxx Brothers"),
Xxxxxx Brothers International (Europe) ("LBIE"), Xxxxxx Xxxxxxx & Co.
Incorporated ("Xxxxxx Xxxxxxx"), Xxxxxx Xxxxxxx & Co. International Limited
("MSIL"), Bear, Xxxxxxx & Co. Inc. ("Bear Xxxxxxx"), Bear, Xxxxxxx International
Limited ("BSIL"), Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation ("DLJ"),
and Xxxxxxxxx, Lufkin & Xxxxxxxx International ("DLJI") propose to enter into an
Underwriting Agreement (the "Underwriting Agreement") with Time Warner Telecom
Inc., a Delaware corporation (the "Company") and MediaOne Holdings II, Inc. (the
"Selling Stockholder"), providing for the public offering (the "Public
Offering") by the several underwriters, including Xxxxxx Brothers, LBIE, Xxxxxx
Xxxxxxx, MSIL, Bear Xxxxxxx, BSIL, DLJ and DLJI (the "Underwriters"), of
15,289,842 shares (plus 1,400,000 shares subject to the Underwriters' over-
allotment option) (the "Shares") of the Class A Common Stock, par value $.01 per
share, of the Company (the "Class A Common Stock").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of each of Xxxxxx Brothers
and Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during the period
ending 90 days after the date of the final prospectus relating to the Public
Offering (the "Prospectus"), (1) publicly offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer, dispose of or distribute, directly or indirectly, any shares of Class
A Common Stock or (2) enter into any public swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the Class A Common Stock, whether any such transaction described in
clause (1) or (2) 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 sale of any Shares to the Underwriters pursuant to the
Underwriting Agreement, (b) transactions relating to shares of Class A Common
Stock or other securities acquired in open market transactions after the
completion of the Public Offering (c) the surrender of unexercised options or
shares upon a "cashless exercise" of options or other incentive compensation
awards or (d) private transactions relating to shares of Class A Common Stock,
provided that the undersigned shall ensure that any transferee that receives
--------
shares of Class A Common Stock in a private transaction shall be subject to the
same 90-day lock-up period set forth in clauses (1) and (2) above. In addition,
the undersigned agrees that, without the prior written consent of Xxxxxx
Brothers and Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during
the period commencing on the date hereof and ending 90 days after the date of
the Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Class A Common Stock.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company, the Selling Stockholder and the Underwriters.
Very truly yours,
-------------------------
(Name)
-------------------------
(Address)
A-2
