Exhibit 1.1
2,000,000 SHARES
ECHOSTAR COMMUNICATIONS CORPORATION
__% SERIES C CUMULATIVE CONVERTIBLE PREFERRED STOCK
UNDERWRITING AGREEMENT
OCTOBER [__], 1997
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Xxxxxx Brothers Inc.
(as representatives (the "REPRESENTATIVES")
of the several Underwriters (as defined)
named in SCHEDULE I attached hereto)
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
EchoStar Communications Corporation, a Nevada corporation (the
"COMPANY"), proposes to issue and sell to the several underwriters named in
SCHEDULE I attached hereto (the "UNDERWRITERS") Two Million (2,000,000) shares
(the "FIRM SHARES") of the Company's [__] % Series C Cumulative Convertible
Preferred Stock, par value $0.01 per share (the "PREFERRED STOCK"), subject to
the terms and conditions set forth in this Underwriting Agreement (this
"AGREEMENT"). Shares of Preferred Stock may be converted to shares of class A
common stock, par value $0.01 per share, of the Company (the "COMMON STOCK") in
accordance with, and at the conversion rate specified by, the Company's [__]%
Series C Cumulative Convertible Preferred Stock Certificate of Designation (the
"CERTIFICATE OF DESIGNATION"). The Company also proposes to issue and sell to
the several Underwriters not more than Three Hundred Thousand (300,000)
additional shares of Preferred Stock (the "ADDITIONAL SHARES" and, together with
the Firm Shares, the "SHARES") if requested by the Underwriters as provided in
SECTION 2 hereof. The Shares are to be issued pursuant to the provisions of the
Certificate of Designation which conforms substantially to the description
thereof in the Registration Statement (as defined) and
delivered and purchased pursuant to the terms of this Agreement. The Shares and
the Common Stock are more fully described in the Registration Statement.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively called the "ACT"), a registration statement on Form S-3 including
a prospectus relating to the Shares, which may be amended. The registration
statement as amended at the time when it becomes effective, including a
registration statement (if any) filed pursuant to Rule 462(b) under the Act
increasing the size of the offering registered under the Act and information (if
any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A or Rule 434 under the Act, is hereinafter
referred to as the "REGISTRATION STATEMENT"; and the prospectus including any
prospectus subject to completion taken together with any term sheet meeting the
requirements of Rule 434(b) or Rule 434(c) under the Act in the form first used
to confirm sales of Shares is hereinafter referred as the "PROSPECTUS."
2. AGREEMENTS TO SELL AND PURCHASE.
(a) On the basis of the representations, warranties and covenants
contained in this Agreement, and subject to the terms and conditions contained
herein, the Company agrees to issue and sell to the Underwriters, and each of
the Underwriters, severally and not jointly, agrees to purchase from the
Company, the number of Firm Shares set forth opposite the name of each such
Underwriter on SCHEDULE I attached hereto at a price per share of [__] Dollars
($[__]) (the "PURCHASE PRICE").
(b) On the basis of the representations, warranties and covenants
contained in this Agreement, and subject to the terms and conditions contained
herein, the Company agrees to issue and sell the Additional Shares and the
Underwriters shall have the right to purchase, severally and not jointly, up to
Three Hundred Thousand (300,000) Additional Shares from the Company at the
Purchase Price. Additional Shares may be purchased solely for the purpose of
covering over-allotments made in connection with the offering of the Firm
Shares. The Underwriters may exercise their right to purchase Additional
Shares in whole or in part from time to time by giving written notice thereof to
the Company within thirty (30) days after the date of this Agreement. You shall
give any such notice on behalf of the Underwriters and such notice shall specify
the aggregate number of Additional Shares to be purchased pursuant to such
exercise and the date for payment and delivery thereof. The date specified in
any such notice shall be a business day (i) no earlier than the Closing Date (as
defined), (ii) no later than ten (10) business days after such notice has been
given and (iii) no earlier than two (2) business days after such notice has been
given. If any Additional Shares are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase from the Company the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
you may determine) which bears the same proportion to the total number of
Additional Shares to be purchased from the Company as the number of Firm Shares
set forth opposite the name of such Underwriter in SCHEDULE I bears to the total
number of Firm Shares.
(c) The Company hereby agrees and the Company shall, concurrently
with the execution of this Agreement, deliver an agreement executed by each of
the directors and officers of the Company as listed on SCHEDULE II attached
hereto, in the form attached hereto as ATTACHMENT A, pursuant to which each such
person agrees, not to offer, sell, contract to sell, grant any option to
purchase, or otherwise dispose of any capital stock of the Company or any
securities convertible into or exercisable or exchangeable for such capital
stock or in any other manner transfer all or a portion of the economic
consequences associated with the ownership of any such capital stock, except to
the Underwriters pursuant to this Agreement, for a period of One Hundred Eighty
(180) days after the date of the Prospectus without the prior written consent of
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. Notwithstanding the
foregoing, during such period (i) the Company may grant stock options pursuant
to the Company's existing stock option plan and (ii) the Company may issue
shares of its capital stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof.
3. TERMS OF PUBLIC OFFERING. The Company is advised by you that
the Underwriters propose (i) to make a public offering of their respective
portions of the Shares as soon after the effective date of the Registration
Statement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
4. DELIVERY AND PAYMENT.
(a) Delivery to the Underwriters of and payment for the Firm Shares
shall be made at 10:00 a.m., New York City time, on the third or fourth business
day (the "CLOSING DATE"), unless otherwise permitted by the Commission pursuant
to Rule 15c6-1 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), following the date of the public offering, at such place as you shall
designate. The Closing Date and the location of delivery of and the form of
payment for the Firm Shares may be varied by agreement between you and the
Company.
(b) Delivery to the Underwriters of and payment for any Additional
Shares to be purchased by the Underwriters shall be made at such place as you
shall designate at 10:00 a.m., New York City time, on the date specified in the
applicable exercise
notice given by you pursuant to SECTION 2 hereof (an "OPTION CLOSING DATE").
Any such Option Closing Date and the location of delivery of and the form of
payment for such Additional Shares may be varied by agreement between you and
the Company.
(c) Certificates for the Shares shall be registered in such names
and issued in such denominations as you shall request in writing not later than
two (2) full business days prior to the Closing Date or an Option Closing Date,
as the case may be. Such certificates shall be made available to you for
inspection not later than 9:30 a.m., New York City time, on the business day
next preceding the Closing Date or the applicable Option Closing Date, as the
case may be. Certificates in definitive form evidencing the Shares shall be
delivered to you on the Closing Date or the applicable Option Closing Date, as
the case may be, with any transfer taxes thereon duly paid by the Company, for
the respective accounts of the several Underwriters, against payment of the
Purchase Price therefor by wire or certified or official bank checks payable in
New York Clearing House/Federal funds to the order of the Company.
5. AGREEMENTS OF THE COMPANY. The Company agrees with you:
(a) To use its best efforts to cause the Registration Statement to
become effective at the earliest possible time.
(b) To advise you promptly and, if requested by you, to confirm
such advice in writing, (i) when the Registration Statement has become effective
and when any post-effective amendment to it becomes effective, (ii) of any
request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information, (iii)
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of the suspension of qualification of the
Shares for offering or sale in any jurisdiction, or the initiation of any
proceeding for such purposes, and (iv) of the happening of any event during the
period referred to in SECTION 5 (E) below which makes any statement of a
material fact made in the Registration Statement or the Prospectus untrue or
which requires the making of any additions to or changes in the Registration
Statement or the Prospectus in order to make the statements therein not
misleading. If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal or lifting of such order at the
earliest possible time.
(c) To furnish to you, without charge, three (3) signed copies of
the Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you and each
Underwriter designated by you such
number of conformed copies of the Registration Statement as so filed and of each
amendment to it, without exhibits, as you may reasonably request.
(d) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or to
make any amendment or supplement to the Prospectus (including the issuance or
filings of any term sheet within the meaning of Rule 434) of which you shall not
previously have been advised or to which you shall reasonably object; and to
prepare and file with the Commission, promptly upon your reasonable request, any
amendment to the Registration Statement or supplement to the Prospectus
(including the issuance or filings of any term sheet within the meaning of Rule
434) which may be necessary or advisable in connection with the distribution of
the Shares by you, and to use its best efforts to cause the same to become
promptly effective.
(e) Promptly after the Registration Statement becomes effective,
and from time to time thereafter for such period as in the opinion of counsel
for the Underwriters a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, to furnish to each
Underwriter and dealer as many copies of the Prospectus (and of any amendment or
supplement to the Prospectus) as such Underwriter or dealer may reasonably
request.
(f) If during the period specified in SECTION 5(E) hereof any event
shall occur as a result of which, in the opinion of counsel for the Underwriters
it becomes 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 any law, forthwith to prepare and file
with the Commission an appropriate amendment or supplement to the Prospectus so
that the statements in the Prospectus, as so amended or supplemented, will not
in the light of the circumstances when it is so delivered, be misleading, or so
that the Prospectus will comply with law, and to furnish to each Underwriter and
to such dealers as you shall specify, such number of copies thereof as such
Underwriter or dealers may reasonably request.
(g) Prior to any public offering of the Shares, to cooperate with
you and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such qualification in effect so long as required
for distribution of the Shares and to file such consents to service of process
or other documents as may be necessary in order to effect such registration or
qualification.
(h) To mail and make generally available to its stockholders as
soon as reasonably practicable an earnings statement covering a period of at
least twelve (12) months after the effective date of the Registration Statement
(but in no event commencing later than ninety (90) days after such date) which
shall satisfy the provisions of Section 11(a) of the Act, and to advise you in
writing when such statement has been so made available.
(i) During the period of five (5) years after the date of this
Agreement, (i) to mail as soon as reasonably practicable after the end of each
fiscal year to the record holders of its capital stock a financial report of the
Company and the Subsidiaries (as defined) on a consolidated basis (and a similar
financial report of all unconsolidated subsidiaries, if any), all such financial
reports to include a consolidated balance sheet, a consolidated statement of
operations, a consolidated statement of cash flows and a consolidated statement
of shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
independent certified public accountants, and (ii) to mail and make generally
available as soon as practicable after the end of each quarterly period (except
for the last quarterly period of each fiscal year) to such holders, a
consolidated balance sheet, a consolidated statement of operations and a
consolidated statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the end of and for such period, and
for the period from the beginning of such year to the close of such quarterly
period, together with comparable information for the corresponding periods of
the preceding year.
(j) During the period referred to in SECTION 5(I) hereof, to
furnish to you as soon as available a copy of each report or other publicly
available information of the Company mailed to the holders of its capital stock
or filed with the Commission and such other publicly available information
concerning the Company and the Subsidiaries as you may reasonably request.
(k) To pay all costs, expenses, fees and taxes incident to (i) the
preparation, printing, filing and distribution under the Act of the Registration
Statement (including financial statements and exhibits), each preliminary
prospectus and all amendments and supplements to any of them prior to or during
the period specified in SECTION 5(E) hereof, (ii) the printing and delivery of
the Prospectus and all amendments or supplements to it during the period
specified in SECTION 5(E) hereof, (iii) the printing and delivery of this
Agreement, the Preliminary and Supplemental Blue Sky Memoranda and all other
agreements, memoranda, correspondence and other documents printed and delivered
in connection with the offering of the Shares (including in each case any
disbursements of counsel for the Underwriters relating to such printing and
delivery), (iv) the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of the
several states (including in each case the fees and disbursements of counsel for
the Underwriters relating to such registration or qualification and memoranda
relating thereto), (v) filings and clearance with the National Association of
Securities Dealers, Inc. (the "NASD") in connection with the offering, (vi) the
listing of the Shares on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") National Market System and (vii)
furnishing such copies of the Registration Statement, the Prospectus and all
amendments and supplements thereto as may be requested for use in connection
with the offering or sale of the Shares by the Underwriters or by dealers to
whom Shares may be sold.
(l) To use its best efforts to maintain the inclusion of the
Preferred Stock in the Nasdaq National Market System (or on a national
securities exchange) for a period of five (5) years after the effective date of
the Registration Statement.
(m) To use its best efforts to do and perform all things required
or necessary to be done and performed under this Agreement by the Company prior
to the Closing Date or any Option Closing Date, as the case may be, and to
satisfy all conditions precedent to the delivery of the Shares.
(n) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 517.075, Florida Statutes, relating to
issuers doing business with the Government of Cuba or with any person or
affiliate located in Cuba, and the Company further agrees that if it commences
engaging in business with the government of Cuba or with any person or affiliate
located in Cuba after the date the Registration Statement becomes or has become
effective with the Commission (the "EFFECTIVE DATE") or with the Florida
Department of Banking and Finance (the "DEPARTMENT"), whichever date is later,
or if the information reported in the Prospectus, if any, concerning the
Company's business with Cuba or with any person or affiliate located in Cuba
changes in any material way, the Company will provide the Department notice of
such business or change, as appropriate, in a form acceptable to the Department.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) Each part of the Registration Statement, when such part
became effective, did not contain and each such part, 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 Act
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 CLAUSE (B) do not apply to
statements or omissions in the Registration Statement or the Prospectus based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(c) 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 Act, and each Registration Statement filed
pursuant to Rule 462(b) under the Act, if any, complied when so filed in all
material respects with the Act; and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(d) Each of the Company and the Subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Prospectus and to own,
lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and the Subsidiaries, taken as
a whole (a "MATERIAL ADVERSE EFFECT").
(e) The Company has authorized capital stock as set forth in the
Registration Statement and the Prospectus under the caption "Capitalization".
All outstanding shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid, non-assessable and not subject to any
preemptive or similar rights. The certificates for the Preferred Shares and the
Common Stock are in due and proper form and the holders of each of the Preferred
Shares, the Dividend Shares, the Conversion Shares and the Deposit Shares will
not be subject to personal liability by reason of being such holders.
(f) The entities listed on SCHEDULE III attached hereto are the
only subsidiaries, direct or indirect, of the Company (collectively, the
"SUBSIDIARIES"). All of the
outstanding shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable, and are
owned by the Company, directly or indirectly through one or more of the
Subsidiaries, except as set forth in the Prospectus, free and clear of any
security interest, claim, lien, encumbrance or adverse interest of any nature
(each, a "LIEN").
(g) Each of this Agreement, the deposit agreement, among the
Company and the deposit agent set forth therein (the "DEPOSIT AGREEMENT"), the
Consent of the Series A Preferred Stockholders to the Issuance of the [__]%
Series C Cumulative Convertible Preferred Stock, the Certificate of Designation
and the instruments contemplated herein and therein (collectively, the
"OPERATIVE DOCUMENTS") has been duly and validly authorized by all necessary
corporate action on the part of the Company and has been duly executed and
delivered by the Company.
(h) The Company is duly authorized and has reserved for such
issuance a sufficient amount of duly and validly authorized securities to pay
any and all dividends or other distributions on the Preferred Stock payable in
Common Stock pursuant to the Certificate of Designation (the "Dividend Shares").
The Dividend Shares, when authorized and issued in accordance with the
Certificate of Designation, will have been duly and validly authorized and, when
executed countersigned and delivered in accordance with the Certificate of
Designation, will be duly and validly issued and outstanding, fully paid and
non-assessable and will not have been issued in violation of or subject to any
preemptive rights. On the Closing Date or any Option Closing Date, the Dividend
Shares will conform as to legal matters to the description thereof contained in
the Prospectus.
(i) The Company is duly authorized and has reserved for such
issuance a sufficient amount of duly and validly authorized securities to issue
shares of Common Stock upon the conversion of the Preferred Stock pursuant to
the Certificate of Designation (the "Conversion Shares"). The Conversion
Shares, when issued upon conversion of the Preferred Stock in accordance with
the Certificate of Designation, will have been duly and validly authorized and,
when executed countersigned and delivered against the delivery of shares of
Preferred Stock therefor in accordance with the Certificate of Designation,
will be duly and validly issued and outstanding, fully paid and non-assessable
and will not have been issued in violation of or subject to any preemptive
rights. On the Closing Date or any Option Closing Date, Conversion Shares will
conform as to legal matters to the description thereof contained in the
Prospectus.
(j) The Company is duly authorized and has reserved for such
issuance a sufficient amount of duly and validly authorized securities to issue
and sell Common Stock pursuant to the Deposit Agreement (the "DEPOSIT SHARES").
The Deposit Shares, when
authorized and issued in accordance with the Deposit Agreement, will have been
duly and validly authorized and, when executed, countersigned and delivered
against payment therefor in accordance with the Deposit Agreement, will be duly
and validly issued and outstanding, fully paid and non-assessable and will not
have been issued in violation of or subject to any preemptive rights. On the
Closing Date or any Option Closing Date, the Deposit Shares will conform as to
legal matters to the description thereof contained in the Prospectus.
(k) Each of the Operative Documents will be legal, valid and
binding agreements of the Company, enforceable against the Company in accordance
with their respective terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency, or similar laws effecting creditors' rights
generally and (ii) rights of acceleration and availability of equitable remedies
may be limited by equitable principles of general applicability. On the Closing
Date or any Option Closing Date, each of the Operative Documents will conform as
to legal matters at the description thereof in the Prospectus.
(l) The Shares have been, duly and validly authorized and, when
executed, countersigned and delivered against payment therefor in accordance
with this Agreement will be duly and validly issued and outstanding, fully paid
and non-assessable and will not have been issued in violation of or subject to
any preemptive rights. On the Closing Date or any Option Closing Date, each of
the Shares, will conform as to legal matters to the descriptions thereof
contained in the Prospectus.
(m) Neither the Company nor any of the Subsidiaries is in violation
of its respective charter or by-laws or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material to
the Company and the Subsidiaries, taken as a whole, to which the Company or any
of the Subsidiaries is a party or by which the Company or any of the
Subsidiaries or their respective property is bound.
(n) The execution, delivery and performance of the Operative
Documents, by the Company and compliance by the Company with all provisions
hereof and thereof and the consummation of the transactions contemplated hereby
and thereby will not require any consent, approval, authorization or other order
of, or qualification with, any court or governmental body or agency and will not
conflict with or constitute a breach of any of the terms or provisions of, or a
default under, the charter or by-laws of the Company or any of the Subsidiaries
or any indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Company and the Subsidiaries, taken as a
whole, to which the Company or any of the Subsidiaries is a party or by which
the Company or any of the Subsidiaries or their respective property is bound, or
violate or conflict with any applicable law or any rule, regulation, judgment,
order or decree of any court or any governmental body
or agency having jurisdiction over the Company or any of the Subsidiaries or
their respective property, or result in the imposition or creation of (or the
obligation to create or impose) a Lien under, any agreement or instrument to
which the Company or any of the Subsidiaries is a party or by which it or any of
them is bound, or to which any properties of the Company or any of the
Subsidiaries is or may be subject, or result in the termination or revocation of
any Authorization (as defined) of the Company or any of the Subsidiaries or
result in any other impairment of the rights of the holder of any such
Authorization.
(o) To the best knowledge of the Company, except as set forth in
the Prospectus, there are no legal or governmental proceedings pending or
threatened to which the Company or any of the Subsidiaries is or could be a
party or to which any of their respective property is or could be subject, which
might result, singly or in the aggregate, in a Material Adverse Effect.
(p) To the best knowledge of the Company, no action has been taken
and no law, statute, rule or regulation or order has been enacted, adopted or
issued by any governmental agency or body which prevents the execution, delivery
and performance of any of the Operative Documents, the issuance of the Shares or
suspends the sale of the Shares in any applicable jurisdiction; and no
injunction, restraining order or other order or relief of any nature by a
federal or state court or other tribunal of competent jurisdiction has been
issued with respect to the Company or any of the Subsidiaries which would
prevent or suspend the issuance or sale of the Shares in any applicable
jurisdiction.
(q) Neither the Company nor any of the Subsidiaries has violated
any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS") or any
provisions of the Employee Retirement Income Security Act of 1974, as amended,
or the rules and regulations promulgated thereunder, except for such violations
which, singly or in the aggregate, would not have a Material Adverse Effect.
(r) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a Material Adverse Effect.
(s) Except as set forth in the Prospectus, each of the Company and
the Subsidiaries has such permits, licenses, consents, exemptions, franchises,
authorizations and other approvals (each, an "AUTHORIZATION") of, and has made
all filings with and notices to,
all governmental or regulatory authorities and self-regulatory organizations and
all courts and other tribunals, including without limitation, under any
applicable Environmental Laws, as are necessary to own, lease, license and
operate its respective properties and to conduct its business, except where the
failure to have any such Authorization or to make any such filing or notice
would not, singly or in the aggregate, have a Material Adverse Effect. Except
as set forth in the Prospectus, each such Authorization is valid and in full
force and effect and each of the Company and the Subsidiaries is in compliance
with all the terms and conditions thereof and with the rules and regulations of
the authorities and governing bodies having jurisdiction with respect thereto;
and, except as set forth in the Prospectus, no event has occurred (including the
receipt of any notice from any authority or governing body) which allows or,
after notice or lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or result or, after notice or lapse of
time or both, would result in any other impairment of the rights of the holder
of any such Authorization; and such Authorizations contain no restrictions that
are burdensome to the Company or any of the Subsidiaries; except where such
failure to be valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction which would
not, singly or in the aggregate, have a Material Adverse Effect.
(t) The Company and the Subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all personal
property and assets owned by them which is material to the business of the
Company and the Subsidiaries, in each case free and clear of all Liens 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 the
Subsidiaries; and any real property and buildings held under lease by the
Company and the Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and the Subsidiaries, in each case, except as described in the
Prospectus.
(u) Except as set forth in the Prospectus, the Company and the
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
("INTELLECTUAL PROPERTY") currently employed by them in connection with the
business now operated by them, except where the failure to own or possess or
otherwise be able to acquire such Intellectual Property would not, singly or in
the aggregate, have a Material Adverse Effect; and, except as set forth in the
Prospectus, neither the Company nor any of the Subsidiaries has received any
notice of infringement of or conflict with asserted rights of others with
respect to any of such
Intellectual Property which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect.
(v) Except as set forth in the Prospectus, the Company and each of
the 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 the Company nor any of
the Subsidiaries (i) has received notice from any insurer or agent of such
insurer that substantial capital improvements or other material expenditures
will have to be made in order to continue such insurance or (ii) has any reason
to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers at a cost that would not have a Material Adverse Effect.
(w) Except as set forth in the Prospectus, no relationship, direct
or indirect, exists between or among the Company or any of the Subsidiaries, on
the one hand, and the directors, officers, stockholders, customers or suppliers
of the Company or any of the Subsidiaries, on the other hand, which would be
required by the Act to be described in the Prospectus if the Prospectus were a
prospectus included in a registration statement on Form S-3 filed with the
Commission.
(x) There is no (i) significant unfair labor practice complaint,
grievance or arbitration proceeding pending or threatened against the Company or
any of the Subsidiaries before the National Labor Relations Board or any state
or local labor relations board, (ii) strike, labor dispute, slowdown or stoppage
pending or threatened against the Company or any of the Subsidiaries or (iii)
union representation question existing with respect to the employees of the
Company or any of the Subsidiaries, except in the case of CLAUSES (I), (II) AND
(III), for such actions which, singly or in the aggregate, would not have a
Material Adverse Effect. To the best knowledge of the Company, no collective
bargaining organizing activities are taking place with respect to the Company or
any of the Subsidiaries, except for such actions specified in CLAUSE (I), (II)
OR (III) above, which, singly or in the aggregate, would not have a Material
Adverse Effect.
(y) The Company and each of the Subsidiaries maintains 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.
(z) All material tax returns required to be filed by the Company
and each of the Subsidiaries in any jurisdiction have been filed, other than
those filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due pursuant to such returns or pursuant to any assessment received by the
Company or any of the Subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
(aa) All indebtedness of the Company that will be repaid with the
proceeds of the issuance and sale of the Shares, if any, was incurred for proper
corporate purposes and in good faith and, except as set forth in the Prospectus,
each of the Company and each Subsidiary was, at the time of the incurrence of
such indebtedness that will be repaid with the proceeds of the issuance and sale
of the Shares, and will be on the Closing Date or any Option Closing Date (after
giving effect to the application of the proceeds from the issuance of the
Shares), solvent, and had, at the time of the incurrence of such indebtedness
that will be repaid with the proceeds of the issuance and sale of the Shares,
and will have on the Closing Date or any Option Closing Date (after giving
effect to the application of the proceeds from the issuance of the Shares),
sufficient capital for carrying on their respective business and were, at the
time of the incurrence of such indebtedness that will be repaid with the
proceeds of the issuance and sale of the Shares, and will be on the Closing Date
or any Option Closing Date (after giving effect to the application of the
proceeds from the issuance of the Shares), able to pay their respective debts as
they mature.
(bb) The accountants, Xxxxxx Xxxxxxxx LLP, that have certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants with respect to the Company, as
required by the Act and the Exchange Act. The historical financial statements,
together with related schedules and notes, set forth in the Prospectus comply as
to form in all material respects with the requirements applicable to
registration statements on Form S-3 under the Act.
(cc) The historical financial statements, together with related
schedules and notes, forming part of the Registration Statement and the
Prospectus (and any amendment or supplement thereto) present fairly the
consolidated financial position, results of operations and changes in financial
position of the Company and the Subsidiaries on the basis stated in the
Prospectus at the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data set forth in
the Registration Statement (and any amendment or supplement thereto) is, in all
material respects, accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Company.
(dd) The pro forma financial statements included in the Registration
Statement have been prepared on a basis consistent with the historical financial
statements of the Company and the Subsidiaries and give effect to assumptions
made on a reasonable basis and in good faith and present fairly the historical
and proposed transactions contemplated by the Prospectus; and such pro forma
financial statements comply as to form in all material respects with the
requirements applicable to pro forma financial statements included in
registration statements on Form S-3 under the Act. The other pro forma
financial and statistical information and data included in the Prospectus is, in
all material respects, accurately presented and prepared on a basis consistent
with the pro forma financial statements.
(ee) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the net proceeds thereof as described
in the Prospectus and the Registration Statement, will not be, an "investment
company," as such term is defined in the Investment Company Act of 1940, as
amended.
(ff) Neither the Company nor any of the Subsidiaries nor any agent
thereof acting on the behalf of them has taken, and none of them will take, any
action that might cause this Agreement or the issuance or sale of the Shares to
violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the
Board of Governors of the Federal Reserve System.
(gg) Since the respective dates as of which information is given in
the Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not occurred any material adverse change, or any development involving
a prospective material adverse change, in the condition, financial or otherwise,
or the earnings, business, management or operations of the Company and the
Subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Company or any of the Subsidiaries
and (iii) neither the Company nor any of the Subsidiaries has incurred any
material liability or obligation, direct or contingent.
(hh) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
(ii) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be deemed to
be a representation and warranty by the Company to the Underwriters as to the
matters covered thereby.
(jj) Neither the Company nor any of the Subsidiaries has taken,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
any security of the Company or any of the Subsidiaries to facilitate the sale or
resale of the Shares.
(kk) The present fair salable value of the assets of the Company and
the Subsidiaries exceeds the amount that will be required to be paid on or in
respect of the existing debts and other liabilities (including contingent
liabilities) of the Company and the Subsidiaries as they become absolute and
matured. The assets of the Company and the Subsidiaries do not constitute
unreasonably small capital to carry out their businesses as conducted or
proposed to be conducted. Neither the Company nor any of the Subsidiaries
intends to, nor do they believe that they will, incur debts beyond their ability
to pay such debts as they mature. Upon the issuance of the Shares, the present
fair salable value of the assets of the Company and the Subsidiaries will exceed
the amount that will be required to be paid on or in respect of its existing
debts and other liabilities (including contingent liabilities) as they become
absolute and matured. The assets of the Company and the Subsidiaries, upon the
issuance of the Shares, will not constitute unreasonably small capital to carry
out their businesses as now conducted, including the capital needs of the
Company and the Subsidiaries, taking into account the projected capital
requirements and capital availability of the Company and the Subsidiaries.
(ll) Except as disclosed in the Prospectus, there are no holders of
securities of either the Company or any of the Subsidiaries who, by reason of
the filing or the execution by the Company or any of the Subsidiaries of this
Agreement or the consummation of the transactions contemplated herein, have the
right to request or demand that the Company or any of the Subsidiaries register
under the Act securities held by them.
(mm) Other than this Agreement, there are no contracts, agreements
or understandings between the Company or any of the Subsidiaries and any person
that would give rise to a valid claim against the Company, any of the
Subsidiaries or any of the Underwriters for a brokerage commission, finder's fee
or like payment in connection with the issuance, purchase or sale of the Shares.
(nn) Neither the Company nor any of the Subsidiaries (i) is entering
into the transactions contemplated under or in connection with this Agreement
(collectively, the "TRANSACTIONS") with intent to hinder, delay or defraud any
entity to which it is or will
become indebted; or (ii) (a) will receive less than reasonable equivalent value
in exchange for entering into the Transactions and (b) (1) is insolvent on the
date hereof or will become insolvent as a result of the Transactions, (2) is
engaged in a business or a transaction for which any property remaining with it
is unreasonably small capital or (3) intends to incur, or believes that it will
incur, debts that will be beyond its ability to pay as such debts mature.
(oo) The Company has filed a registration statement pursuant to
Section 12(g) of the Exchange Act to register the Shares, has filed an
application to list the Shares on the Nasdaq National Market System.
(pp) The persons listed on SCHEDULE II attached hereto constitute
each of the officers and directors of the Company.
(qq) There are no contracts, licenses, agreements, leases or
documents of a character which are required under the Act to be filed as
exhibits to the Registration Statement or to be summarized or described in the
Prospectus which have not been so filed, summarized or described.
(rr) The documents incorporated by reference in the Registration
Statement and the Prospectus, when they were filed (or, if an amendment with
respect to such document was filed, when such amendment was filed), complied as
to form in all material respects with the Exchange Act.
(ss) The form of the Certificate of Designation to be delivered
hereunder is in proper form under Nevada law.
The Company acknowledges that the Underwriters and, for purposes of
the opinions to be delivered to the Underwriters pursuant to SECTION 6 hereof,
counsel to the Company and counsel to the Underwriters will rely upon the
accuracy and truth of the foregoing representations and hereby consents to such
reliance.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, its directors, its officers and each person, if any, who controls
such Underwriters within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages,
liabilities and judgments (the "LOSSES") (including, without limitation, any
legal or other expenses incurred in connection with defending or investigating
any matter, including any action that could give rise to any such Losses) caused
by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (or any amendment or
supplement 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 are caused by
(i) any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to such Underwriters furnished in
writing to the Company by such Underwriters or (ii) the failure of the
Underwriters to deliver any such document in a timely manner.
(b) Each Underwriter agrees to indemnify and hold harmless the
Company and its respective directors and officers and each person who controls
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act)
the Company, to the same extent as the foregoing indemnity from the Company to
such Underwriters but only with reference to information relating to such
Underwriters furnished in writing to the Company by such Underwriters expressly
for use in the Registration Statement or the Prospectus.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to SECTION 7(A) OR 7(B) hereof
(the "INDEMNIFIED PARTY"), the Indemnified Party shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the Indemnifying Party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both SECTIONS 7(A) AND 7(B) hereof, each Underwriter shall
not be required to assume the defense of such action pursuant to this SECTION
7(C), but may employ separate counsel and participate in the defense thereof,
but the fees and expenses of such counsel, except as provided below, shall be at
the expense of such Underwriters). Any Indemnified Party shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the Indemnified Party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the Indemnifying Party, (ii) the
Indemnifying Party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the Indemnified Party or (iii) the
named parties to any such action (including any impleaded parties) include both
the Indemnified Party and the Indemnifying Party, and the Indemnified Party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Indemnifying Party (in which case the Indemnifying Party shall
not have the right to assume the defense of such action on behalf of the
Indemnified Party). In any such case, the Indemnifying Party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all Indemnified Parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation, in the case of the parties indemnified pursuant to SECTION 7(A)
hereof, and by the Company, in the case of parties indemnified pursuant to
SECTION 7(B) hereof. The Indemnifying Party shall indemnify and hold harmless
the Indemnified Party from and against any and all Losses by reason of any
settlement of any action (A) effected with its written consent or (B) effected
without its written consent if the settlement is entered into more than ten (10)
business days after the Indemnifying Party shall have received a request from
the Indemnified Party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the Indemnifying
Party) and, prior to the date of such settlement, the Indemnifying Party shall
have failed to comply with such reimbursement request. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in respect of which the Indemnified Party
is or could have been a party and indemnity or contribution may be or could have
been sought hereunder by the Indemnified Party, unless such settlement,
compromise or judgment (1) includes an unconditional release of the Indemnified
Party from all liability on Losses that are or could have been the subject
matter of such action and (2) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of the Indemnified
Party.
(d) To the extent the indemnification provided for in this SECTION
7 is unavailable to an Indemnified Party or insufficient in respect of any
Losses, then each Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such Losses (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company, on the one hand, and such
Underwriters, on the other hand, from the offering of the Shares or (ii) if the
allocation provided by CLAUSE (I) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in CLAUSE (I) above but also the fault of the Company and such
Underwriters in connection with the statements or omissions which resulted in
such Losses as well as any other relevant equitable considerations. The
relative benefits received by the Company and such Underwriters shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Shares (before deducting expenses) received by the Company and the total
discounts and commissions received by such Underwriters bear to the total price
to investors of the Shares, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault of the Company and each Underwriter
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 or such Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and such Underwriters agree that it would not be just and equitable
if contribution pursuant to this SECTION 7(D) 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 which does not take account of the
equitable considerations referred to in the immediately preceding sentence. The
amount paid or payable by an Indemnified Party as a result of the Losses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such Indemnified Party in connection with investigating or defending any
matter that could have given rise to such Losses. Notwithstanding the
provisions of this SECTION 7, each Underwriter shall not be required to
contribute any amount in excess of the amount by which the total price of the
Shares purchased by it were sold to investors exceeds the amount of any damages
which such Underwriters has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this SECTION 7(D) are several in proportion to the respective
principal amount of Shares purchased by each of the Underwriters hereunder and
not joint.
(e) The remedies provided for in this SECTION 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any Indemnified Party at law or in equity.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
each Underwriter to purchase the Firm Shares under this Agreement are subject to
the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained
in this Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date.
(b) The Registration Statement shall have become effective not
later than 5:00 p.m. (and in the case of a Registration Statement filed under
Rule 462(b) of the Act, not later than 10:00 p.m.), New York City time, on the
date of this Agreement or at such later date and time as you may approve in
writing, and at the Closing Date no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c) On or after the date hereof 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 outlook for the Company, by any
"nationally recognized statistical rating organization" as such term is defined
for purposes of Rule 436(g)(2) under the Act.
(d) You shall have received on the Closing Date a certificate dated
the Closing Date, signed by the Chairman, Chief Executive Officer and President
of the Company, confirming the matters set forth in CLAUSES (A), (B), (C) AND
(E) above.
(e) Since the respective dates as of which information is given in
the Registration Statement or the Prospectus other than as set forth in the
Registration Statement or the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement), (i) there shall
not have occurred any change or any development involving a prospective change
in the condition, financial or otherwise, or the earnings, business, management
or operations of the Company and the Subsidiaries, taken as a whole, (ii) there
shall not have been any change or any development involving a prospective change
in the capital stock or in the long-term debt of the Company or any of the
Subsidiaries and (iii) neither the Company nor any of the Subsidiaries shall
have incurred any liability or obligation, direct or contingent, the effect of
which, in any such case described in CLAUSE (I) THROUGH (III) above, in your
reasonable judgment, is material and adverse and, in your reasonable judgment,
makes it impracticable to market the Shares on the terms and in the manner
contemplated in the Registration Statement or the Prospectus.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Friedlob Xxxxxxxxx Xxxxxx Xxxxxxx & Xxxxxxxxxxx, LLC, counsel for the
Company, substantially to the effect set forth on ATTACHMENT B attached hereto.
In addition, such counsel will advise that it has participated in conferences
with directors, officers and other representatives of the Company and the
Subsidiaries, and representatives of the independent public accountants for the
Company, at which conferences the contents of the Registration Statement or the
Prospectus and related matters were discussed, and, although such counsel has
not independently verified and is not passing upon and assumes no responsibility
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus except as specified, no facts have come
to such counsel's attention which lead such counsel to believe that the
Registration Statement or the Prospectus on the effective date thereof (or any
amendment thereof made prior to the Closing Date, as of the date of such
amendment), contained any untrue statement of a material fact or omitted to
state any material fact necessary to make the statements contained therein, in
light of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no view with respect to the financial
statements and related notes, the financial statement schedules and other
financial, statistical and accounting data included in the Registration
Statement or the Prospectus). The opinion of Friedlob Xxxxxxxxx Xxxxxx Xxxxxxx
& Xxxxxxxxxxx, LLC described in this SECTION 8(F) shall be rendered to you at
the request of the Company and shall so state therein.
(g) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Xxxxx X. Xxxxxxxxx, Senior Vice President. General Counsel and Secretary of
the Company, substantially to the effect set forth on ATTACHMENT C attached
hereto. In addition, such counsel shall state that he has participated in
conferences with directors, officers and other representatives of the Company
and the Subsidiaries, representatives of the independent public accountants for
the Company, the Underwriters' representatives and 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 has
not independently verified and is not passing upon and assumes no responsibility
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (other than those that such counsel
must opine on pursuant to this SECTION 8(G)), no facts have come to such
counsel's attention which lead such counsel to believe that the Registration
Statement or the Prospectus on the effective date thereof (or any amendment
thereof made prior to the Closing Date, as of the date of such amendment),
contained any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements contained therein, in light of
the circumstances under which they were made, not misleading (it being
understood that such counsel need express no view with respect to the financial
statements and related notes, the financial statement schedules and other
financial, statistical and accounting data included in the Registration
Statement or the Prospectus). The opinion of Xxxxx X. Xxxxxxxxx described in
this SECTION 8(G) shall be rendered to you at the request of the Company and
shall so state therein.
(h) The Underwriters shall have received on the Closing Date an
opinion, dated the Closing Date, of Steptoe & Xxxxxxx, regulatory counsel for
the Company, in form and substance reasonably satisfactory to the Underwriters
and counsel to the Underwriters.
(i) The Underwriters shall have received on the Closing Date an
opinion, dated the Closing Date, of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP,
counsel for the Underwriters, in form and substance reasonably satisfactory to
the Underwriters.
(j) The Underwriters shall have received, at the time this
Agreement is executed and at the Closing Date, letters dated the date hereof or
the Closing Date, as the case may be, in form and substance satisfactory to the
Underwriters from Xxxxxx Xxxxxxxx LLP, independent public accountants,
containing the information and statements of the type ordinarily included in
accountants' "comfort letters" to the Underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
(k) The Shares shall have been approved by the NASD for trading on
the Nasdaq National Market System.
(l) The Company shall not have failed at or prior to the Closing
Date to perform or comply with any of the agreements herein contained and
required to be performed or complied with by the Company at or prior to the
Closing Date.
(m) The Company shall have delivered to you the agreements
specified in SECTIONS 2(C) AND 5 hereof.
(n) The Representatives shall have received copies of lock-up
letters from each of the directors and executive officers of the Company is
substantially the form attached hereto as ATTACHMENT A.
9. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
(a) This Agreement may be terminated at any time prior to the
Closing Date by the Underwriters by written notice to the Company if any of the
following has occurred: (i) any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic conditions or
in the financial markets of the United States or elsewhere that, in the
Underwriters' reasonable judgment, is material and adverse and would, in the
Underwriters' reasonable judgment, make it impracticable to market the Shares on
the terms and in the manner contemplated in the Registration Statement and the
Prospectus, (ii) the suspension or material limitation of trading in securities
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market System or limitation on prices for securities on
any such exchange or the Nasdaq National Market System, (iii) the suspension of
trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your reasonable opinion
materially and adversely
affects, or will materially and adversely affect, the business, prospects,
financial condition or results of operations of the Company and the
Subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action by
any federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your reasonable opinion has a material adverse effect on
the financial markets in the United States.
(b) If on the Closing Date or on any Option Closing Date any one or
more of the Underwriters shall fail or refuse to purchase the Shares which it or
they have agreed to purchase hereunder on such date and the aggregate principal
amount of the Shares which such defaulting Underwriter or Underwriters, as the
case may be, agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of the Shares to be purchased on such date by
all Underwriters, each non-defaulting Underwriter shall be obligated severally,
in the proportion which the principal amount of the Shares set forth opposite
its name in SCHEDULE I bears to the aggregate principal amount of the Shares
which all the non-defaulting Underwriters, as the case may be, have agreed to
purchase, or in such other proportion as you may specify, to purchase the Shares
which such defaulting Underwriter or Underwriters, as the case may be, agreed
but failed or refused to purchase on such date; PROVIDED, that in no event shall
the aggregate principal amount of the Shares which any Underwriter has agreed to
purchase pursuant to SECTION 2 hereof be increased pursuant to this SECTION 9 by
an amount in excess of one-tenth of such principal amount of the Shares without
the written consent of such Underwriter. If on the Closing Date or on any
Option Closing Date any Underwriter or Underwriters shall fail or refuse to
purchase the Shares and the aggregate principal amount of the Shares with
respect to which such default occurs is more than one-tenth of the aggregate
principal amount of the Shares to be purchased by all Underwriters and
arrangements satisfactory to the Underwriters and the Company for purchase of
such the Shares are not made within forty-eight (48) hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter and the Company. In any such case which does not
result in termination of this Agreement, either you or the Company shall have
the right to postpone the Closing Date any Option Closing Date, as applicable,
but in no event for longer than seven (7) days, in order that the required
changes, if any, in the Registration Statement or the Prospectus or any other
documents or arrangements may be effected. Any action taken under this SECTION
9 shall not relieve any defaulting Underwriter from liability in respect of any
default of any such Underwriter under this Agreement.
10. MISCELLANEOUS.
(a) Notices given pursuant to any provision of this Agreement shall
be addressed as follows: (i) if to the Company, to 00 Xxxxxxxxx Xxxxxx Xxxx,
Xxxxxxxxx,
Xxxxxxxx 00000, Attention: General Counsel and (ii) if to any of the
Underwriters, to such Underwriter, c/x Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate
Department, or in any case to such other address as the person to be notified
may have requested in writing.
(b) The respective indemnities, representations, warranties and
other statements of the Company and the Underwriters set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
and will survive delivery of and payment for the Shares, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
the Underwriters, the officers or directors of the Underwriters, any person
controlling the Underwriters, the Company, the officers or directors of the
Company, or any person controlling the Company , (ii) acceptance of the Shares
and payment for them hereunder and (iii) termination of this Agreement.
(c) If for any reason the Shares are not delivered by or on behalf
of the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to SECTION 9 hereof), the Company agrees to reimburse
the Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them. Notwithstanding any
termination of this Agreement, the Company shall be liable for all expenses
which it has agreed to pay pursuant to SECTION 5(K) hereof. The Company also
agrees to reimburse each Underwriter and its officers, directors and each
person, if any, who controls such Underwriters within the meaning of Section 15
of the Act or Section 20 of the Exchange Act for any and all fees and expenses
(including without limitation the fees and expenses of counsel) incurred by them
in connection with enforcing their rights under this Agreement (including
without limitation its rights under this SECTION 10(C)).
(d) Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Underwriters, the Underwriters' directors and officers, any controlling persons
referred to herein, the directors of the Company and their respective successors
and assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement.
The term "SUCCESSORS AND ASSIGNS" shall not include a purchaser of any of the
Shares from any of the Underwriters merely because of such purchase.
(e) This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
(f) This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
[Signature Page Follows]
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
ECHOSTAR COMMUNICATIONS CORPORATION
By: ______________________________
Name: Xxxxx X. Xxxxxxxxx, Esq.
Title: Senior Vice President,
General Counsel and Secretary
Accepted and agreed to as of the date first above written by each of
the Representatives acting severally on behalf of themselves and the
Underwriters named above.
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES
CORPORATION
XXXXXX BROTHERS INC.
BY: XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By: ______________________________
Name:
Title:
SCHEDULE I
UNDERWRITERS(1)
UNDERWRITER Firm Shares
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
Xxxxxx Brothers Inc.
TOTAL 2,000,000
______________________________
1. Note: Conform to Final Prospectus
SCHEDULE II
OFFICERS AND DIRECTORS
Xxxxxxx X. Xxxxx Chairman, Chief Executive Officer, President and
Director
R. Xxxxx Xxxxxx Vice Chairman and Vice President
Xxxxx XxXxxxxx Executive Vice President and Director
Xxxxxx X. Xxxxxxx Chief Operating Officer and Chief Financial Officer
Xxxxx X. Xxxxxxxxx Senior Vice President, General Counsel and Secretary
Xxxx X. Xxxxxxxx Director
Xxxxxxx X. Xxxxxxxx Director
Xxxxxxx X. Xxxxx Senior Vice President, Consumer Products Division
Xxxx X. Xxxxx Treasurer and Controller
SCHEDULE III
SUBSIDIARIES
Direct Broadcasting Satellite Corporation
DirectSat Corporation
Dish Network Credit Corporation
Dish, Ltd.
E-Sat, Inc. (80% owned by Dish, Ltd.)
Echo Acceptance Corporation
Echonet Business Network, Inc.
Echosphere Corporation
Echosphere de Mexico, S. de X.X. de C.V.
EchoStar Capacity Corporation
EchoStar DBS Corporation
EchoStar Indonesia, Inc.
EchoStar International Corporation
EchoStar International (Mauritius) Limited
EchoStar Manufacturing and Distribution Private Limited (India)
EchoStar North America Corporation
EchoStar Real Estate Corporation
EchoStar Satellite Broadcasting Corporation
EchoStar Satellite Corporation
EchoStar Space Corporation
FlexTracker Sdn. Bhd.
Houston Tracker Systems, Inc.
HT Ventures, Inc.
Xxxxxx Xxxxx USA, Ltd. (a partnership)
Satellite Source, Inc.
Satrec Mauritius Limited (40% owned by EchoStar International Corporation)
ATTACHMENT A
FORM OF LOCK-UP LETTER
[LETTERHEAD OF OFFICER OR DIRECTOR
OF ECHOSTAR COMMUNICATIONS CORPORATION]
October [__], 1997
EchoStar Communications Corporation
00 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
Xxxxxx Brothers Inc.
(as representatives (the "REPRESENTATIVES")
of the several Underwriters (as defined)
named in SCHEDULE I attached hereto)
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Public Offering of Preferred Stock
----------------------------------
Dear Ladies and Gentlemen:
The undersigned understands that Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation and Xxxxxx Brothers Inc. (together, the
"REPRESENTATIVES"), as representatives of the several underwriters (the
"UNDERWRITERS"), propose to enter into an Underwriting Agreement with EchoStar
Communications Corporation, a Nevada corporation (the "COMPANY"), providing for
the public offering (the "PUBLIC OFFERING") by the Underwriters, including the
Representatives, of Two Million (2,000,000) shares of [____]% Series C
Cumulative Convertible Preferred Stock, par value $0.01 per share, of the
Company (the "PREFERRED STOCK"). Shares of Preferred Stock may be converted to
shares of class A common stock, par value $0.01 per share, of the Company (the
"COMMON STOCK") in accordance with, and at the conversion rate specified by, the
Company's [___]% Series C Cumulative Convertible Preferred Stock Certificate of
Designation.
In consideration of the Underwriters' agreement to purchase and
undertake the Public Offering of the Company's Preferred Stock and for other
good and valuable consideration, receipt of which is hereby acknowledged, the
undersigned agrees not to, directly or indirectly, offer, sell, contact to sell,
grant any portion to purchase or otherwise dispose of any shares of the
Company's capital stock (including, without limitation, shares of the Company's
capital stock which may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations of the Securities and Exchange
Commission and shares of the Company's capital stock which may be issued upon
exercise of a stock option or warrant) or any securities convertible into or
exercisable or exchangeable for such shares of the Company's capital stock or,
in any manner, transfer all or a portion of the economic consequences associated
with the ownership of the Company's capital stock, without the prior written
consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, for a period of
One Hundred Eighty (180) days after the commencement of the Public Offering.
In addition, the undersigned agrees that the Company may, and that the
undersigned will, (i) with respect to any shares of the Company's capital stock
for which the undersigned is the record holder, cause the transfer agent for the
Company's capital stock to note stop transfer instructions with respect to such
shares of the Company's capital stock on the transfer books and records of the
Company and (ii) with respect to any shares of the Company's capital stock for
which the undersigned is the beneficial holder but not the record holder, cause
the record holder of such shares of the Company's capital stock to cause the
transfer agent for the Company to note stop transfer instructions with respect
to such shares of the Company's capital stock on the transfer books and records
of the Company.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this letter agreement, and that, upon
request, the undersigned will execute any additional documents necessary or
desirable in connection with the enforcement hereof. All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of the
undersigned and any obligation of the undersigned shall be binding upon the
heirs, personal representatives, successors, and assigns of the undersigned.
Very truly yours,
________________________________________
(Signature)
________________________________________
(Name - Please Type)
________________________________________
________________________________________
________________________________________
(Address)
________________________________________
(Social Security or Taxpayer
Identification No.)
Number of shares owned or subject to
warrants, options or convertible
securities:
Certificate number:_____________________
ATTACHMENT B
OPINION OF FSRP&T
1. The Company and each of the Subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Prospectus and to own,
lease and operate its properties as described therein.
2. The Company and each of the Subsidiaries is duly qualified and
is in good standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect.
3. All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid, non-assessable and
are not subject to any preemptive or similar rights. The certificates for the
Preferred Shares and the Common Stock, in due and proper form and the holders of
each of the Preferred Shares, the Conversion Shares and the Deposit Shares will
not be subject to personal liability by reason of being such holders.
4. All of the outstanding shares of capital stock of the
Subsidiaries has been duly authorized and validly issued and are fully paid and
non-assessable, and, in the case of the Subsidiaries, are owned by the Company,
free and clear of any Lien except that share of DBS Corp. have been pledged as
security for the repayment of the 1997 Notes; the shares of DBS Corp have been
pledged as security for the repayment of the 1997 Notes; the shares of Dish have
been pledged as security for the repayment of the 1996 Notes; and the shares of
DirectSat Merger Corporation, EchoStar Acceptance Corporation, Echonet Business
Network, Inc., Echosphere Corporation, EchoStar International Corporation, HT
Ventures, Inc., EchoStar Satellite Corporation, Houston Tracker Systems, Inc.
and Satellite Source, Inc. have been pledged as security for the repayment of
the 1994 Notes.
5. The Shares have been, duly and validly authorized and, when
executed, countersigned and delivered against payment therefor in accordance
with this Agreement, will be duly and validly issued and outstanding, fully paid
and non-assessable and will not have been issued in violation of or subject to
any preemptive rights.
6. The Company has all requisite corporate power and authority (i)
to enter into this Agreement and the other Operative Documents, and to adopt
the Certificate
of Designation establishing the Shares and to file such certificates with the
Secretary of State of the State of Nevada, (ii) and is duly authorized to issue
and sell the Shares as contemplated hereby and in the Prospectus (iii) and is
duly authorized to (a) authorize, declare and pay the Dividend shares, (b) issue
the Conversion Shares and (c) authorize, issue and sell the Deposit Shares , and
in the case of each of clauses (a) through (c), has reserved for such issuance
a sufficient amount of duly and validly authorized securities to (1) pay the
Dividend Shares pursuant to the Certificates of Designation, (2) when and if
authorized, issue the Conversion Shares pursuant to the Certificate of
Designation and (3) when and if authorized, issue and sell the Deposit Shares
pursuant to the Deposit Agreement. With respect (A) to CLAUSES (A) AND (C),
when authorized, or (B) to CLAUSES (A) THROUGH (C), when paid, issued or sold,
then in each such case, such securities will have been duly authorized and
validly issued and fully paid, non-assessable and not subject to any preemptive
or similar rights, and (iv) to consummate the transactions contemplated by this
Agreement. The Operative Documents have been duly and validly authorized by all
necessary corporate action on the part of the Company, has been duly executed
and delivered by the Company and constitutes a legal, valid and binding
agreement of the Company enforceable against the Company in accordance with
their respective terms. Each of the Operative Documents conforms as to legal
matters to the description thereof in the Prospectus.
7. The Common Stock, the Preferred Stock, the Firm Shares, the
Additional Shares, the Dividend Shares, the Conversion Shares and the Deposit
Shares conform to the descriptions thereof contained in the Registration
Statement and the Prospectus under the caption "Description of EchoStar Capital
Stock" and "Description of the Preferred Stock." The form of the Certificate of
Designation to be delivered hereunder is in proper form under Nevada law.
8. The Company has filed a registration statement pursuant to
Section 12(g) of the Exchange Act to register the Shares, the Conversion Shares,
the Dividend Shares and the Deposit Shares. The Common Stock and the Preferred
Stock are duly authorized for quotation on the Nasdaq National Market System.
The Conversion Shares have been included in an additional listing application
filed with the Nasdaq National Market System.
9. The Registration Statement has become effective under the Act,
no stop order suspending its effectiveness has been issued and no proceedings
for that purpose are, to the knowledge of such counsel, pending before or
contemplated by the Commission.
10. The statements under the captions "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources", "Certain Relationships and Related Transactions", "Management",
"Description of EchoStar Capital Stock" and "Underwriting" in the Prospectus and
Items 14 and 15 of Part
II of the Registration Statement, insofar as such statements constitute a
summary of the legal matters, documents or proceedings referred to therein,
fairly present the information called for with respect to such legal matters,
documents and proceedings.
11. Such counsel is of the opinion that the statements in the
Prospectus under the caption "Certain Federal Income Tax Consequences" are
accurate and fairly summarize the matters referred to therein in all material
respects.
12. Neither the Company nor any of the Subsidiaries is in violation
of its respective charter or by-laws and, to the best of such counsel's
knowledge, neither the Company nor any of the Subsidiaries is in default in the
performance of any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and the Subsidiaries, taken as a whole, to which the
Company or any of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries or their respective property is bound.
13. The execution, delivery and performance of this Agreement, the
other Operative Documents, and the consummation of the transactions contemplated
thereby by the Company and compliance by the Company with all the provisions
hereof and thereof and the consummation of the transactions contemplated hereby
and thereby will not require, to such counsel's knowledge, any consent,
approval, authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the securities
or Blue Sky laws of the several states) and will not conflict with or constitute
a breach of any of the terms or provisions of, or a default under, the charter
or by-laws of the Company or any of the Subsidiaries or any indenture, loan
agreement, mortgage, lease or other agreement or instrument known to such
counsel that is material to the Company and any of the Subsidiaries, taken as a
whole, to which the Company or any of the Subsidiaries is a party or by which
the Company or any of the Subsidiaries or their respective property is bound, or
violate or conflict with any applicable law or any rule, regulation, judgment,
order or decree of any court or any governmental body or agency having
jurisdiction over the Company or any of the Subsidiaries or their respective
property, or result in the imposition or creation of (or the obligation to
create or impose) a Lien under, any agreement or instrument to which the Company
or any of the Subsidiaries is a party or by which it or any of them is bound, or
to which any properties of the Company or any of the Subsidiaries is or may be
subject, or result in the termination or revocation of any Authorization of the
Company or any of the Subsidiaries or result in any other impairment of the
rights of the holder of any such Authorization.
14. Except as disclosed in the Prospectus, such counsel does not
know of any legal or governmental proceedings pending or threatened to which the
Company or any
of the Subsidiaries is or could be a party or to which any of their respective
property is or could be subject, which might result, singly or in the aggregate,
in a Material Adverse Effect.
15. The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the net proceeds thereof as described
in the Prospectus and the Registration Statement, will not be, an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
16. Except as disclosed in the Prospectus, there are no holders of
securities of either the Company or any of the Subsidiaries who, by reason of
the filing or the execution by the Company or any of the Subsidiaries of this
Agreement or the consummation of the transactions contemplated herein, have the
right to request or demand that the Company or any of the Subsidiaries register
under the Act securities held by them.
17. The Registration Statement (including any Registration
Statement filed under 462(b) of the Act, if any) and the Prospectus and any
supplement or amendment thereto (except for financial statements as to which no
opinion need be expressed) comply as to form in all material respects with the
Act.
18. To the best of such counsel's knowledge, there are no
contracts, licenses, agreements, leases or documents of a character which are
required under the Act to be filed as exhibits to the Registration Statement or
to be summarized or described in the Prospectus which have not been filed,
summarized or described.
19. The documents incorporated by reference in the Registration
Statement and the Prospectus, when they were filed (or, if an amendment with
respect to such document was filed, when such amendment was filed), complied as
to form in all material respects with the Exchange Act.
ATTACHMENT C
OPINION OF IN-HOUSE COMPANY COUNSEL
1. The Company and each of the Subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Prospectus and to own,
lease and operate its properties as described therein.
2. (i) Neither the Company nor any of the Subsidiaries is in
violation of its respective certificate of incorporation or by-laws; (ii) to the
best of such counsel's knowledge and except as would not have a Material Adverse
Effect, neither the Company nor any of the Subsidiaries is in default in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any other material
agreement, indenture, mortgage or deed of trust to which it is a party or by
which it is bound or to which any of its properties is subject, or is in
violation of any law, statute, rule, regulation, judgment or court decree
applicable to the Company or any of the Subsidiaries; and (iii) to the best of
such counsel's knowledge, there exists no condition that, with notice, the
passage of time or otherwise, would constitute such a default under any such
document or instrument.
3. To the best of such counsel's knowledge, and except as set
forth in the Prospectus, there is (i) no action, suit or proceeding before or by
any court, arbitrator or governmental agency, body or official, domestic or
foreign, now pending, threatened or contemplated to which the Company or any of
the Subsidiaries is or may be a party or to which the business or property of
the Company or any of the Subsidiaries is or may be subject, (ii) no statute,
rule, regulation or order that has been enacted, adopted or issued by any
governmental agency or that has been proposed by any governmental body and (iii)
no injunction, restraining order or order of any nature by a federal or state
court or competent jurisdiction has been or may be issued that, in the case of
CLAUSES (I), (II) AND (III) above, (a) is required to be disclosed in the
Prospectus and that is not so disclosed, (b) would materially adversely affect
the Company or any of the Subsidiaries or the property of any of them, (c) would
interfere with or adversely affect the issuance or marketability of the Shares
or (d) in any manner draw into question the validity of this Agreement or any
other Operative Document; to the best of such counsel's knowledge, no contract,
agreement, instrument or document of a character required to be described in the
Prospectus in order to make the statements therein not misleading is not so
described.
4. There are no holders of securities of either the Company or any
of the Subsidiaries who, by reason of the filing or the execution by the Company
or any of the
Subsidiaries of this Agreement or te consummation of the transactions
contemplated herein have the right to request or demand that the Company or any
of the Subsidiaries register under the Act securities held by them.
5. The Company and the Subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all personal
property and assets owned by them which is material to the business of the
Company and the Subsidiaries, in each case, to such counsel's knowledge, free
and clear of all Liens 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 the Subsidiaries; and any real property and buildings held under
lease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with, to such counsel's knowledge, such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and the
Subsidiaries, in each case except as described in the Prospectus.
6. Neither the Company nor any of the Subsidiaries has violated
any Environmental Law or any provisions of ERISA, or the rules and regulations
promulgated thereunder, except for such violations which, singly or in the
aggregate, would not have a Material Adverse Effect.
7. Except as set forth in the Prospectus, each of the Company and
the Subsidiaries has such Authorizations of, and has made all filings with and
notices to, all governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including without limitation,
under any applicable Environmental Laws, as are necessary to own, lease, license
and operate its respective properties and to conduct its business, except where
the failure to have any such Authorization or to make any such filing or notice
would not, singly or in the aggregate, have a Material Adverse Effect; except as
set forth in the Prospectus, each such Authorization is valid and in full force
and effect and each of the Company and the Subsidiaries is in compliance with
all the terms and conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect thereto;
except as set forth in the Prospectus, no event has occurred (including the
receipt of any notice from any authority or governing body) which allows or,
after notice or lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or result or, after notice or lapse of
time or both, would result in any other impairment of the rights of the holder
of any such Authorization; such Authorizations contain no restrictions that are
burdensome to the Company or any of the Subsidiaries; and, except where such
failure to be valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction which would
not, singly or in the aggregate, have a Material Adverse Effect.
8. The Company and/or any parties thereto that are subsidiaries or
affiliates of the Company have duly and validly authorized, executed and
delivered each of the satellite and launch contracts described in the Prospectus
and (assuming due execution and delivery thereof by the other parties thereto)
each of such satellite and launch contracts is the legally valid and binding
agreement of such corporations enforceable against them in accordance with their
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
9. The Subsidiaries are the only subsidiaries, direct or indirect,
of the Company. Except as otherwise described in the Prospectus or on SCHEDULE
III of the Underwriting Agreement, the Company owns One Hundred Percent (100%)
of the outstanding capital stock or other equity interests evidencing equity
ownership of each of the Subsidiaries free and clear of any Lien; and all of
such equity interests have been duly authorized, validly issued and are fully
paid and nonassessable and, to the best of such counsel's knowledge, were not
issued in violation of any preemptive or similar rights; there are no
outstanding rights, warrants or options to acquire, or instruments convertible
into or exchangeable for, any such shares of capital stock or other equity
interest of such Subsidiaries.
10. To the best of such counsel's knowledge, except as set forth in
the Prospectus, the Company, and each Subsidiary (i) has operated in substantial
compliance with the Communications Act of 1934, as amended (the "COMMUNICATIONS
ACT") and the rules of the Federal Communications Commission (the "FCC")
promulgated thereunder (the "FCC RULES") insofar as the Communications Act and
the FCC Rules pertain to direct broadcast satellite services and coverage and to
the manufacture and distribution of equipment subject to FCC Rules governing
acceptance, certification and verification thereof, and (ii) has made all
filings, reports, applications and submissions required thereunder for the
provision of direct broadcast satellite services and coverage and for the
manufacture and distribution of equipment subject to FCC Rules governing
certification and verification of communications signals, which filings,
reports, applications and submissions are true, complete and correct in all
material respects; except where such failure to be in compliance or to make such
filings would not, singly or in the aggregate, have a Material Adverse Effect.
11. Except as set forth in the Prospectus, there are no actions,
suits or proceedings pending or, to the best of such counsel's knowledge,
threatened by or before the FCC against or affecting the Company or any of the
Subsidiaries or the business, property, business prospects, condition (financial
or otherwise) or results of operations of the Company or any of the
Subsidiaries, in which an unfavorable ruling, decision or finding is likely to
have a Material Adverse Effect.
12. Each of the FCC licenses is valid and in effect on the date
hereof, and to the best of such counsel's knowledge, based on inquiry of the
Company and review of the FCC documents, the FCC licenses constitute the only
licenses or other authorizations of the FCC as are presently required of the
Company and the Subsidiaries under the Communications Act and the FCC Rules in
order to provide the direct broadcast satellite services and coverage and
related ground operations (including, without limitation, telemetry, tracking
and control functions) proposed to be provided by the Company and the
Subsidiaries, subject to continued performance of the terms of the FCC licenses
and the continued satisfaction of the conditions specified in the FCC licenses
and the FCC Rules pertaining to direct broadcast satellites services and
coverage proposed to be provided by the Company and the Subsidiaries and timely
application for and obtaining of additional FCC licenses, permits, consents,
orders, approvals and other FCC authorizations as may be required by the FCC in
the future.
13. Except as set forth in the Prospectus, the Company and the
Subsidiaries own or possess, or can acquire on reasonable terms, all
Intellectual Property currently employed by them in connection with the business
now operated by them except where the failure to own or possess or otherwise be
able to acquire such Intellectual Property would not, singly or in the
aggregate, have a Material Adverse Effect on the business, prospects, financial
condition or results of operation of the Company and the Subsidiaries, taken as
a whole; and, to the best of such counsel's knowledge after due inquiry, except
as set forth in the Prospectus, neither the Company nor any of the Subsidiaries
has received any notice of infringement of or conflict with asserted rights of
others with respect to any of such Intellectual Property which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a Material Adverse Effect.
14. To the best of such counsel's knowledge, after due inquiry,
neither the Company nor any of the Subsidiaries has violated any Environmental
Laws, nor any federal or state law relating to discrimination in the hiring,
promotion or pay of employees nor any applicable federal or state wages and
hours laws, nor any provisions of the Employee Retirement Income Security Act of
1974, as amended, or the rules and regulations promulgated thereunder, which in
each case might result in any material adverse change in the business,
prospects, financial condition or results of operation of the Company and the
Subsidiaries, taken as a whole.
15. The Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("PERMITS"), including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease and operate its respective
properties and to conduct its business in the manner described in the
Prospectus; to the best of such counsel's knowledge, after due inquiry, the
Company and each of the Subsidiaries has fulfilled and performed all of its
material obligations with respect to such Permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the rights of
the holder of any such Permit, subject in each case to such qualification as may
be set forth in the Prospectus; and, except as described in the Prospectus, such
Permits contain no restrictions that are materially burdensome to the Company or
any of the Subsidiaries.
