EXHIBIT 1
[Form of Underwriting Agreement]
_____________ Preferred Securities
TCI COMMUNICATIONS FINANCING __
(a Delaware Business Trust)
____% Trust Preferred Securities
(Liquidation Amount $25 per Preferred Security)
guaranteed to a limited extent by TCI Communications, Inc.
PURCHASE AGREEMENT
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____________, 1996
[Underwriter]
Dear Sirs:
Each of TCI Communications Financing __ (the "Trust"), a statutory business
trust formed under the Business Trust Act (the "Delaware Act") of the State of
Delaware and TCI Communications, Inc., a Delaware corporation (the "Company"),
confirms its agreement with ____________ and each of the other Underwriters
named in Schedule A hereto (collectively, the "Underwriters," which term shall
include any underwriter substituted as hereinafter provided in Section 9
hereof), for whom ____________, ____________ and ____________ are acting as
Representatives (in such capacity, the "Representatives"), with respect to the
sale by the Trust and the purchase by the Underwriters, acting severally and not
jointly, of the respective numbers of ___% Trust Preferred Securities
(liquidation amount $25 per preferred security) of the Trust (the "Preferred
Securities") set forth in Schedule A (the "Securities"). The Preferred
Securities will be guaranteed by the Company on a limited basis to the extent
the Trust has funds available therefor pursuant to a Guarantee Agreement to be
dated as of the Closing Date (the "Guarantee"). The aforesaid Securities to be
purchased by the Underwriters, together with the Guarantee, are collectively
hereinafter called the "Offered Securities".
The entire proceeds from the sale of the Securities will be combined with
the entire proceeds from the sale by the Trust to the Company of its common
securities (the "Common Securities") and will be used by the Trust to purchase
the ___% Subordinated Deferrable Interest Notes due 20__ (the "Subordinated Debt
Securities") of the Company. The Preferred Securities and the Common Securities
will be issued pursuant to the amended and restated declaration of trust of the
Trust, to be dated as of the Closing Date (the "Declaration"), among the
Company, as Sponsor, the trustees named therein (the "Trustees") and the holders
from time to time of undivided beneficial interests in the assets of the Trust.
The Subordinated Debt Securities will be issued pursuant to an indenture, dated
as of January 29, 1996 (the "Base Indenture"), between the Company and The Bank
of New York, as trustee (the "Debt Trustee"), and a supplement to the Base
Indenture, to be dated as of the Closing Date (the "Supplemental Indenture," and
together with the Base Indenture and any other amendments or supplements
thereto, the "Indenture"), between the Company and the Debt Trustee.
Prior to the purchase and public offering of the Offered Securities by the
several Underwriters, the Trust, the Company and the Representatives, acting on
behalf of the several Underwriters, shall enter into an agreement substantially
in the form of Exhibit A hereto (the "Pricing Agreement"). The Pricing
Agreement may take the form of an exchange of any standard form of written
telecommunication between the Trust and the Company and the Representatives and
shall specify such applicable information as is indicated in Exhibit A hereto.
The offering of the Offered Securities will be governed by this Agreement, as
supplemented by the Pricing Agreement. From and after the date of the execution
and delivery of the Pricing Agreement, this Agreement shall be deemed to
incorporate the Pricing Agreement.
The Trust and the Company understand that the Underwriters propose to make
a public offering of the Offered Securities as soon as the Representatives deem
advisable after the Registration Statement becomes effective and the Pricing
Agreement has been executed and delivered.
SECTION 1. Registration Statement and Prospectus. The Trust and the
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Company have filed with the Securities and Exchange Commission (the
"Commission") a shelf registration statement on
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Form S-3 (No. 333-________) and a related preliminary prospectus and preliminary
prospectus supplement relating to the Offered Securities and the Subordinated
Debt Securities under the Securities Act of 1933, as amended (the "1933 Act"),
have filed such amendments thereto, if any, and such amended preliminary
prospectus or prospectuses and preliminary prospectus supplement or supplements
as may have been required to the date hereof, and will promptly file with the
Commission a prospectus supplement specifically relating to the Offered
Securities pursuant to Rule 424 under the 1933 Act, if necessary. The
information, if any, included in such prospectus and prospectus supplement that
was omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information". Each prospectus and prospectus supplement used before such
registration statement became effective, and any prospectus and prospectus
supplement that omitted the Rule 430A Information that was used after such
effectiveness and prior to the execution and delivery of this Agreement, is
herein called a "preliminary prospectus." Such registration statement,
including the exhibits thereto, schedules thereto, if any, and the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, at the time it became effective and including the Rule 430A Information is
herein called the "Registration Statement." The final prospectus, including the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the form first furnished to the Underwriters for use in
connection with the offering of the Securities, is herein called the
"Prospectus." For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this
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Agreement to amendments or supplements to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to mean and include the
filing of any document under the Securities Exchange Act of 1934 (the "1934
Act") which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
SECTION 2. Agreements to Sell and Purchase.
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(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Trust agrees to
sell to each Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Trust, at the price per
Preferred Security set forth in the Pricing Agreement, the number of Securities
set forth in Schedule A opposite the name of such Underwriter (except as
otherwise provided in the Pricing Agreement), plus any additional number of
Initial Securities which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 9 hereof.
(b) As compensation to the Underwriters for their commitment hereunder,
and in view of the fact that the proceeds of the sale of the Offered Securities
will be used by the Trust to purchase the Subordinated Debt Securities of the
Company, the Company hereby agrees to pay at the Closing Date and the Date of
Delivery, if any, for the account of the several Underwriters, an amount per
Preferred Security as set forth in the Pricing Agreement.
SECTION 3. Delivery and Payment.
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Payment of the purchase price for, and delivery of certificates for, the
Securities to be purchased by the Underwriter shall be made at the offices of
Xxxxx & Xxxxx, L.L.P., 000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx
00000, or at such other place as shall be agreed upon by the Representatives,
the Trust and the Company, at 10:00 A.M. on the third business day following the
date of the Pricing Agreement, or such other time not later than ten business
days after such date as shall be agreed upon by the Representatives, the Trust
and the Company (such time and date of payment and delivery being herein called
the "Closing Date"). Payment shall be made to the Trust by certified or
official bank check or checks drawn in New York Clearing House
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funds or similar next day funds payable to the order of the Trust against
delivery to the Representatives for the account of the several Underwriters of
the Preferred Securities in book-entry form through the facilities of The
Depository Trust Company. It is understood that each Underwriter has authorized
the Representatives, for its account, to accept delivery of, receipt for, and
make payment of the purchase price for, the Securities which it has agreed to
purchase. ____________, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Securities to be purchased by any Underwriter whose check has not
been received by the Closing Date, but such payment shall not relieve such
Underwriter from its obligations hereunder.
At the Closing Date and the Date of Delivery, if any, the Company will pay,
or cause to be paid, the commission payable at such time to the Underwriters
under Section 2 hereof by certified or official bank check or checks payable to
____________ in New York Clearing House funds or other similar next day funds.
SECTION 4. Covenants of the Trust and the Company. Each of the Trust and
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the Company, jointly and severally, covenants with each Underwriter as follows:
(a) The Trust and the Company, subject to Section 4(c), will comply
with the requirements of Rule 430A, if applicable, and will notify the
Underwriters immediately, and confirm the notice in writing, (1) of the
effectiveness of any post-effective amendment to the Registration Statement
and of the filing of any amended Prospectus pursuant to Rule 430A, if
applicable, or Rule 424(b), (2) of any comments of the Commission regarding
the Registration Statement or the Prospectus (or any of the documents
incorporated by reference therein) or of any request by the Commission for
amendments or supplements to the Registration Statement or the Prospectus
or for additional information, (3) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement, any
order preventing or suspending the use of any preliminary prospectus or the
initiation or threatening of any proceedings for that purpose, (4) of the
receipt by the Trust or the Company of any notification with respect to the
suspension of the qualification of the Offered Securities for offer or sale
in any jurisdiction or the
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initiation or threatening of any proceedings for such purpose and (5) of
the happening of any event during the period mentioned in paragraph (d)
below which makes any statement of a material fact made in the Registration
Statement or the Prospectus (as theretofore amended or supplemented) untrue
or which requires the making of any changes in the Registration Statement
or the Prospectus (as theretofore amended or supplemented) in order to make
the statements therein, in light of the circumstances when the Prospectus
is delivered to a purchaser, not misleading. The Trust and the Company
will use their reasonable best efforts to prevent the issuance of any order
suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any preliminary prospectus or
suspending the qualification of the Offered Securities for offer or sale in
any jurisdiction, and if any such order is issued, the Trust and the
Company will make every reasonable effort to obtain the withdrawal of such
order at the earliest possible time.
(b) To furnish to each of the Underwriters, without charge, one signed
copy of the Registration Statement and any post-effective amendment
thereto, including all financial statements and schedules, exhibits and
documents incorporated therein by reference (including exhibits
incorporated therein by reference to the extent not previously furnished to
the Underwriters) and to deliver to the Underwriters the number of
conformed copies of the Registration Statement and any post-effective
amendment thereto, excluding exhibits, as the Underwriters or their counsel
may reasonably request.
(c) To give the Representatives advance notice of their intention to
file any amendment or supplement to the Registration Statement or the
Prospectus with respect to the Offered Securities, and not to file any such
amendment or supplement to which the Representatives shall reasonably
object in writing.
(d) During the period of time that the Prospectus is required by law
to be delivered, to deliver to each Underwriter, without charge, as many
copies of the Prospectus or any amendment or supplement thereto as such
Underwriter may reasonably request. Each of the Trust and the Company
consents to the use of the Prospectus or any amendment or
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supplement thereto by the several Underwriters and by all dealers to whom
the Offered Securities may be sold, both in connection with the offering or
sale of the Offered Securities and for such period of time thereafter as
the Prospectus is required by law to be delivered in connection therewith.
If during such period of time any event shall occur which in the judgment
of the Trust or the Company should be set forth (or incorporated by
reference) in the Prospectus in order to make the statements therein, in
light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if it is necessary to supplement or amend the Prospectus
to comply with law, the Trust and the Company will forthwith prepare and
duly file with the Commission an appropriate supplement or amendment
thereto, and shall in any event forthwith file all reports and any
definitive proxy statement or information statement required to be filed by
the Trust or the Company with the Commission pursuant to Section 13 or 14
of the Securities Exchange Act of 1934, as amended (the "1934 Act")
subsequent to the date of the Prospectus, and will deliver to each
Underwriter, without charge, such number of copies thereof as such
Underwriter may reasonably request. If during such period of time any
event shall occur which in the judgment of the Representatives should be so
set forth in the Prospectus, or which in the judgment of the
Representatives makes it necessary to so supplement or amend the
Prospectus, the Trust and the Company will consult with the Representatives
concerning the necessity of filing with the Commission a supplement or
amendment to the Prospectus or a report pursuant to Section 13 or 14 of the
1934 Act.
(e) Prior to any public offering of any Offered Securities by the
Underwriters, to cooperate with the Representatives and counsel retained by
the Representatives in connection with the registration or qualification of
the Offered Securities (and any securities issuable upon conversion or
exercise of the Offered Securities) for offer and sale under the securities
or Blue Sky laws of, and the determination of the eligibility of Offered
Securities for investment under the laws of, such jurisdictions as the
Underwriter may request; provided, that in no event shall either the Trust
or the Company be obligated to qualify to do business as a foreign limited
partnership or corporation, as the case may be, or as a securities dealer
in any jurisdiction
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where it is not now so qualified, to conform its capitalization or the
composition of its assets to the securities or Blue Sky laws of any
jurisdiction or to take any action which would subject it to taxation or
general service of process in any jurisdiction where it is not now so
subject. The Company will pay all reasonable fees and expenses (including
reasonable counsel fees and expenses) relating to registration or
qualification of Offered Securities (and any securities issuable upon
conversion or exercise of any Offered Securities) under such securities or
Blue Sky laws and in connection with the determination of the eligibility
of Offered Securities for investment under the laws of such jurisdictions
as the Representatives may designate. In each jurisdiction in which the
Offered Securities have been so qualified, the Trust and the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for so long as may be
required in connection with the distribution of the Offered Securities.
(f) To make generally available to their security holders and to each
Underwriter the consolidated earnings statements (which need not be
audited) that satisfy the provisions of Section 11(a) of the 1933 Act and
Rule 158 thereunder.
(g) If, at the time that the Registration Statement became effective,
any information was omitted therefrom in reliance upon Rule 430A of the
1933 Act Regulations, then, immediately following the execution of the
Pricing Agreement, to prepare, and file or transmit for filing with the
Commission in accordance with such Rule 430A and Rule 424(b) of the 1933
Act Regulations, copies of each amended Prospectus, or, if required by such
Rule 430A, a post-effective amendment to the Registration Statement
(including any amended Prospectus), containing all information so omitted.
(h) The Company shall pay or cause to be paid the following: (1) all
costs and expenses incurred in connection with the preparation, printing
and filing of the Registration Statement, any preliminary prospectus, the
Prospectus and any legal investment memorandum and Blue Sky memorandum as
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contemplated by Section 4(e), (2) any filing fees incident to any required
review by the National Association of Securities Dealers, Inc. of the terms
of the sale of the Offered Securities, (3) any fees charged by securities
rating agencies for rating any of the Offered Securities, (4) all costs and
expenses incurred in connection with the preparation, issuance and delivery
of the Offered Securities (other than transfer taxes) and the execution and
delivery of the Indenture, (5) all costs and expenses incurred in
connection with furnishing such copies of the Registration Statement, the
Prospectus and any preliminary prospectus, and all amendments and
supplements thereto, as may be requested for use in connection with the
offering and sale of Offered Securities by dealers to whom Offered
Securities may be sold, (6) the fees and expenses incurred in connection
with the registration of the Offered Securities under the 1934 Act and (7)
the fees and expenses of the transfer agent for the Preferred Securities,
if any.
(i) If this Agreement is terminated by the Representatives because any
condition to the obligations of the Underwriters set forth in Section 7
hereof is not satisfied or because of any failure or refusal on the part of
the Trust or the Company to comply with the terms of this Agreement or the
applicable Pricing Agreement, or if for any reason either of the Trust or
the Company shall be unable to perform its obligations herein or therein,
the Company will reimburse the several Underwriters, for all out-of-pocket
expenses (including the fees and expenses of counsel retained by the
Underwriters) reasonably incurred by the Underwriters in connection
herewith. Neither the Trust nor the Company, however, will be liable to
any of the Underwriters for damages on account of loss of anticipated
profits.
(j) During a period of 30 days from the date of the Pricing Agreement,
neither the Trust nor the Company will, without prior written consent of
the Representatives, directly or indirectly, sell, offer to sell, contract
to sell, grant any option for the sale of, or otherwise dispose of, any
Preferred Securities, any security convertible into or exchangeable into or
exercisable for, Preferred Securities or Subordinated Debt Securities or
any debt securities substantially similar to the Subordinated Debt
Securities or any equity securities, substantially similar to the Preferred
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Securities, except for the Subordinated Debt Securities and Preferred
Securities offered hereby.
(k) To use every reasonable effort to effect and maintain the listing
of the Preferred Securities on the New York Stock Exchange and to file with
the New York Stock Exchange all documents and notices required by the New
York Stock Exchange of companies that have securities quoted on such
exchange.
SECTION 5. Representations and Warranties. (a) Each of the Trust and the
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Company, jointly and severally, represents and warrants to each Underwriter as
of the date hereof and as of the date of the Pricing Agreement (such latter date
being hereinafter referred to as the "Representation Date") as follows:
(1) The documents incorporated by reference in the Registration
Statement and the Prospectus, when they were filed (or, if an amendment
with respect to any such document was filed, when such amendment was filed)
with the Commission, conformed in all material respects to the requirements
of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
the rules and regulations of the Commission promulgated thereunder, and any
further documents so filed and incorporated by reference will, when they
are filed with the Commission, conform in all material respects to the
requirements of the 1934 Act and the rules and regulations of the
Commission promulgated thereunder; none of such documents, when it was
filed (or, if an amendment with respect to any such document was filed,
when such amendment was filed), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; and no such further document,
when it is filed, will contain an untrue statement of a material fact or
will omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they are made, not misleading.
(2) The Trust and the Company jointly meet the registrant requirements
and the transaction requirements for use of Form S-3 under the 1933 Act in
connection with the
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offering of the Offered Securities. The Registration Statement has become
effective under the 1933 Act and no stop order suspending the effectiveness
of the Registration Statement has been issued under the 1933 Act, and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Trust or the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement and any post-
effective amendments thereto became effective and at the Closing Date, the
Registration Statement and any amendments and supplements thereto complied
and will comply in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. Neither the Prospectus nor any amendments or supplements
thereto, at the time of filing thereof with the Commission, included or
will include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. The representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Trust or the Company in writing by any Underwriter through
the Representatives expressly for use in the Registration Statement or
Prospectus or to that part of the Registration Statement which consists of
the Statements of Eligibility and Qualification on Form T-1 under the Trust
Indenture Act of The Bank of New York.
Each preliminary prospectus and the 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 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations, if
applicable, and each preliminary prospectus and the Prospectus delivered to
the Underwriters for use in connection with this offering was
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identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T.
(3) This Agreement has been, and as of the date thereof, the Pricing
Agreement will have been, duly authorized, executed and delivered by the
Company.
(4) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act; all filings required
under the laws of the State of Delaware with respect to the creation and
valid existence of the Trust as a business trust have been made; under the
Delaware Act and the Declaration, the Trust has the business trust power
and authority to (x) own property and conduct its business, all as
described in the Prospectus, (y) enter into and perform its obligations
under this Agreement, and (z) issue and perform its obligations under the
Preferred Securities and the Common Securities and is not required to be
authorized to do business in any other jurisdiction; the Trust is not a
party to or otherwise bound by any agreement other than those described in
the Prospectus; the Trust does not have any consolidated or unconsolidated
subsidiaries; and the Trust is and will be treated as a consolidated
subsidiary of the Company pursuant to generally accepted accounting
principles.
(5) The Declaration has been duly and validly authorized by the
Company and, when executed and delivered by the Company and the Trustees at
the Closing Date, and assuming due authorization, execution and delivery
thereof by the Property Trustee and the Delaware Trustee (as such terms are
defined in the Declaration), will be the valid and binding obligation of
the Company and the Trustees, enforceable against the Company and the
Trustees in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles (regardless of whether the issue of
enforceability is considered in a proceeding at law or in equity); and, at
the Closing Date, the Declaration will have been duly qualified under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
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(6) Under the Delaware Act and the Declaration, the execution and
delivery by the Trust of this Agreement and the Pricing Agreement, and the
performance by the Trust of its obligations thereunder, have been duly
authorized by all necessary business trust action on the part of the Trust;
and this Agreement has been, and as of the date thereof the Pricing
Agreement will have been, duly executed and delivered by the Trust under
the law of Delaware.
(7) The Common Securities have been duly authorized by the Original
Declaration (as defined in the Declaration) and, when issued and delivered
by the Trust to the Company against payment therefor in accordance with the
Declaration, will be validly issued and fully paid and nonassessable
undivided beneficial interests in the assets of the Trust; and under the
Delaware Act and the Declaration, the issuance of the Common Securities
will not be subject to preemptive rights.
(8) The Preferred Securities have been duly authorized by the
Original Declaration and, when issued and delivered by the Trust in
accordance with the Declaration to the Underwriters and paid for in
accordance with this Agreement, will be validly issued, and fully paid and
nonassessable undivided beneficial interests in the assets of the Trust;
the holders of the Preferred Securities, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability as that
extended to stockholders of private corporations for profit organized under
the General Corporation Law of the State of Delaware; under the Delaware
Act and the Declaration, the issuance of the Preferred Securities will not
be subject to preemptive rights; and the Preferred Securities conform to
the description thereof in the Prospectus.
(9) At the Closing Date, all of the issued and outstanding Common
Securities of the Trust will be directly owned by the Company free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity.
(10) At the Closing Date, the Property Trustee will be the record
holder of Subordinated Debt Securities and no security interest, mortgage,
pledge, lien, encumbrance, claim or equity will be noted thereon or on the
register.
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(11) The Guarantee has been duly and validly authorized by the Company
and, when executed and delivered by the Company at the Closing Date, will
constitute a valid and legally binding agreement of the Company enforceable
in accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles (regardless of whether the issue of enforceability is
considered in a proceeding at law or in equity); at the Closing Date, the
Guarantee will have been duly qualified under the Trust Indenture Act; and
the Guarantee conforms to the description thereof contained in the
Prospectus.
(12) The Indenture has been duly and validly authorized by the Company
and, when executed and delivered by the Company at the Closing Date and,
assuming due authorization, execution and delivery by the Debt Trustee, at
such Closing Date will constitute a valid and legally binding agreement of
the Company enforceable in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization, moratorium and other
laws of general applicability relating to or affecting creditors' rights
and to general equity principles (regardless of whether the issue of
enforceability is considered in a proceeding at law or in equity); and at
the Closing Date, the Indenture will have been duly qualified under the
Trust Indenture Act.
(13) The Subordinated Debt Securities have been duly and validly
authorized by the Company and, when executed and authenticated in
accordance with the terms of the Indenture and delivered to and paid for by
the Trust in accordance with the Declaration, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, moratorium and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles
(regardless of whether the issue of enforceability is considered in a
proceeding at law or in equity); and the Subordinated Debt Securities
conform to the description thereof contained in the Prospectus.
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(14) The issuance and sale of the Preferred Securities by the Trust
and the performance by the Trust of its obligations under this Agreement
and the Pricing Agreement will not conflict with, result in a breach of any
of the terms or provisions of, or constitute a default under, the
Declaration or any indenture, mortgage, deed of trust or other material
agreement or instrument to which the Trust is now a party or by which it is
bound, or any order of any court or governmental agency or authority
entered in any proceeding to which the Trust was or is now a party or by
which it is bound.
(15) The issuance and sale of the Offered Securities and the
Subordinated Debt Securities and the performance by each of the Company or
the Trust, as the case may be, of its respective obligations under the
terms of this Agreement, the Pricing Agreement, the Guarantee, the
Indenture and the Declaration will not conflict with, result in a breach of
any of the terms or provisions of, or constitute a default under, the
Company's charter or by-laws, or any indenture, mortgage, deed of trust or
other material agreement or instrument to which the Company or any of its
"significant subsidiaries" (as such term is defined in Rule 1.02(v) of
Regulations S-X) is now a party or by which it is bound, or any order of
any court or governmental agency or authority entered in any proceeding to
which the Company or any of its significant subsidiaries was or is now a
party or by which it is bound.
(16) No authorization, approval, consent or order of any Delaware
court or governmental authority or agency is required to be obtained by the
Trust solely in connection with the issuance and sale of the Common
Securities and the Preferred Securities or the purchase by the Trust of the
Subordinated Debt Securities.
(17) The accountants who certified the financial statements and
supporting schedules incorporated by reference in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(18) Except to the extent set forth in the Prospectus, neither the
Trust nor the Company has received any notice of, nor does it have any
actual knowledge of, any failure by it
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or, in the case of the Company, any of its significant subsidiaries to be
in substantial compliance with all existing statutes and regulations
applicable to it or, in the case of the Company, such subsidiaries, which
failure would materially and adversely affect the conduct of the business
of the Trust or of the Company and its subsidiaries, considered as a whole.
(19) The statements set forth in the Prospectus under the caption
"Certain Federal Income Tax Consequences," insofar as they purport to
describe the provisions of the law referred to therein, are accurate and
complete in all material respects.
(20) The Trust will be classified as a "grantor trust" for United
States federal income tax purposes and is not and will not be classified as
an association taxable as a partnership or a corporation for United States
federal income tax purposes under federal income tax laws as currently in
effect.
(21) Neither the Trust nor the Company is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, and
neither the Trust nor the Company is subject to regulation under such Act.
(b) Any certificate signed by any Regular Trustee of the Trust or officer
of the Company and delivered to the Representatives or to counsel for the
Underwriters pursuant to the terms of this Agreement shall be deemed a
representation and warranty by the Trust or the Company, as the case may be, to
the Underwriters as to the matters covered thereby.
SECTION 6. Indemnification. Each of the Trust and the Company agrees,
---------------
jointly and severally, to indemnify and hold harmless each Underwriter, and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, liabilities and expenses (including reasonable
costs of investigation) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
16
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any such untrue
statement or omission or allegation thereof based upon information furnished in
writing to the Trust or the Company by any Underwriter through the
Representatives expressly for use therein; provided, however, that neither the
Trust nor the Company shall indemnify any Underwriter or any person who controls
any such Underwriter from any such losses, claims, damages or liabilities
alleged by any person who purchased Offered Securities from such Underwriter if
the untrue statement, omission or allegation thereof upon which such losses,
claims, damages or liabilities are based was made in: (i) any preliminary
prospectus, if a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Underwriter to such person at or prior to the
written confirmation of the sale of Offered Securities to such person, and if
the Prospectus (as so amended or supplemented) corrected the untrue statement or
omission giving rise to such loss, claim, damage or liability; (ii) any
Prospectus used by such Underwriter or any person who controls such Underwriter,
after such time as the Trust or the Company advised such Underwriter that the
filing of a post-effective amendment or supplement thereto was required, except
the Prospectus as so amended or supplemented; or (iii) any Prospectus used after
such time as the obligation of the Trust and the Company to keep the same
current and effective has expired. This indemnity will be in addition to any
liability which the Trust or the Company may otherwise have. All fees and
expenses which are reimbursable pursuant to this Section 6 shall be reimbursed
as they are incurred.
If any action or proceeding (including any governmental investigation)
shall be brought or asserted against any Underwriter or any person controlling
such Underwriter in respect of which indemnity may be sought from the Trust or
the Company, such Underwriter or such controlling person shall promptly notify
the Company in writing, and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Underwriter
and the payment of all expenses. Any omission so to notify the Company shall
not, however, relieve the Trust or the Company from any liability which either
such party may have to any indemnified party otherwise than under this Section
17
6. An Underwriter or any person controlling an Underwriter shall have the right
to employ separate counsel in any such action or proceeding and to participate
in the defense thereof, but the fees and expenses of such separate counsel shall
be such Underwriter's expense or the expense of such controlling person unless
(a) the Company has agreed to pay such fees and expenses or (b) the Company
shall have failed to assume the defense of such action or proceeding and employ
counsel reasonably satisfactory to such Underwriter in any such action or
proceeding or (c) the named parties to any such action or proceeding (including
any impleaded parties) include both such Underwriter or such controlling person
and either of the Trust or the Company, and such Underwriter or such controlling
person shall have been advised by counsel to such Underwriter that there may be
a conflict of interest between such Underwriter or such controlling person and
either of the Trust or the Company in the conduct of the defense of such action
(in which case, if the Underwriter or such controlling person notifies the Trust
and the Company in writing that it elects to employ separate counsel at the
expense of the Trust and the Company, neither the Trust nor the Company shall
have the right to assume the defense of such action or proceeding on behalf of
the Underwriter or such controlling person), it being understood, however, that
neither the Trust nor the Company shall, in connection with any one such action
or proceeding or separate but substantially similar or related actions or
proceedings arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (unless the members of such firm are not admitted to practice in a
jurisdiction where an action is pending, in which case the Trust and the Company
shall pay the reasonable fees and expenses of one additional firm of attorneys
to act as local counsel in such jurisdiction, provided the services of such
counsel are substantially limited to that of appearing as attorneys of record).
Neither the Trust nor the Company shall be liable for any settlement of any such
action or proceeding effected without its written consent, but if settled with
its written consent, or if there be a final judgment for the plaintiff in any
such action or proceeding, the Trust and the Company agree to indemnify and hold
harmless such Underwriter and any such controlling person from and against any
loss or liability by reason of such settlement or judgment.
Each Underwriter severally agrees to indemnify and hold harmless each of
the Trust, including its trustees, and the
18
Company, including its directors and each of its officers, and each person, if
any, who controls the Trust or the Company within the meaning of either Section
15 of the 1933 Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Trust and the Company to such Underwriter, but only
with respect to information furnished in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement, the Prospectus,
or any amendment or supplement thereto, or any preliminary prospectus. In case
any action or proceeding shall be brought against the Trust or its trustees or
the Company or the Company's directors or officers or any such controlling
person, in respect of which indemnity may be sought against an Underwriter, such
Underwriter shall have the rights and duties given to the Trust and the Company,
and the Trust or its trustees or the Company or the Company's directors or
officers or such controlling person shall have the rights and duties given to
such Underwriter by the preceding paragraph.
If the indemnification provided for in this Section 6 is unavailable to an
indemnified party under the first or third paragraph hereof in respect of any
losses, claims, damages or liabilities referred to therein (other than by reason
of such indemnified party's failure to comply with the first sentence of the
second paragraph of this Section 6), then each applicable 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, claims, damages
or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Trust and the Company on the one hand and the
Underwriters on the other hand from the offering of the Offered Securities 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 relative fault of
the Trust or Company on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Trust or the Company on
the one hand and the Underwriters on the other in connection with the offering
of the Offered Securities shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Offered Securities received by the
Trust and the Company bear to the total underwriting discounts
19
received by the Underwriters in respect thereof. The relative fault of the
Trust or the Company on the one hand and of the Underwriters on the other 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 Trust or the Company or
by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages
and liabilities referred to above shall be deemed to include, subject to the
limitations set forth in the second paragraph of this Section 6, any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.
Each of the Trust and the Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 6 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section
6, no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Offered Securities were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
The indemnity and contribution agreements contained in this Section 6 and
the representations and warranties of the Trust and the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(a) any investigation made by or on behalf of any Underwriter, by or on behalf
of any person controlling such Underwriter or by or on behalf of the Trust or
the Company, (b) acceptance of any of the Offered Securities and payment
therefor or (c) any termination of this Agreement.
SECTION 7. Conditions of the Obligations of the Underwriter.
------------------------------------------------
20
The obligations of the several Underwriters hereunder are subject to the
following conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M. on the date hereof; at the Closing Date no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened
by the Commission; and the Representatives shall have received a
certificate, dated the Closing Date and signed by (i) two Regular Trustees
of the Trust and (ii) the Chairman of the Board, the President, an
Executive Vice President or the Senior Vice President-Finance and Treasurer
of the Company (each of whom may, as to threatened proceedings, rely upon
the best of his information and belief), to such effect and to the effect
set forth in clause (f) of this Section 7. If the Trust and the Company
have elected to rely upon Rule 430A of the 1933 Act Regulations, the price
of the Offered Securities and any price-related information previously
omitted from the effective Registration Statement pursuant to such Rule
430A shall have been transmitted to the Commission for filing pursuant to
Rule 424(b) of the 1933 Act Regulations within the prescribed time period,
and prior to the Closing Date the Company shall have provided evidence
satisfactory to the Underwriter of such timely filing, or a post-effective
amendment providing such information shall have been promptly filed and
declared effective in accordance with the requirements of Rule 430A of the
1933 Act Regulations.
(b) At the Closing Date the Representatives shall have received:
(1) The opinions, dated as of the Closing Date, and reasonably
satisfactory to counsel for the Underwriters, from Messrs. Xxxx, Raywid &
Xxxxxxxxx, L.L.P. or such other special communications counsel for the
Company as may be reasonably satisfactory to the Representatives and from
the General Counsel of the Company to the following effect and covering
such additional matters as the Representatives may reasonably request:
(i) the Company and each of its significant subsidiaries is a
corporation duly organized, validly
21
existing and in good standing under the laws of the jurisdiction of
its incorporation with the corporate power and authority to carry on
its business as described in the Prospectus (as amended or
supplemented, if applicable) and the Company has the corporate power
and authority to execute and deliver, and perform its obligations
under, this Agreement, the Pricing Agreement, the Guarantee, the
Indenture and the Declaration;
(ii) the Company and each of its significant subsidiaries is
duly qualified as a foreign corporation and is in good standing in
each jurisdiction in which the failure to so qualify would, in the
aggregate, have a material adverse effect upon the financial
condition, results of operations, business or properties of the
Company and its subsidiaries taken as a whole;
(iii) all corporate proceedings legally required in connection
with the authorization and issuance of the Subordinated Debt
Securities and the Guarantee and the sale of the Subordinated Debt
Securities and the Guarantee by the Company as contemplated by this
Agreement have been taken;
(iv) To the best knowledge of such counsel, there is no legal
or governmental proceeding pending or threatened against the Trust or
the Company or any of its subsidiaries which is required to be
disclosed in the Prospectus (as amended or supplemented, if
applicable) and is not so disclosed and correctly summarized therein;
(v) To the best knowledge of such counsel, there is no
contract or other document known to such counsel of a character
required to be described in the Prospectus (as amended or
supplemented, if applicable) or to be filed as an exhibit to the
Registration Statement (or to a document incorporated by reference
therein) that is not described or filed as required;
(vi) The execution and delivery by the Trust of this Agreement,
the Pricing Agreement and the Declaration, the issuance of the Offered
Securities and the fulfillment of the terms herein and therein
contained
22
do not conflict with, or result in a breach of, or constitute a
default under, the Declaration or, to the best knowledge of such
counsel, conflict in any material respect with, or result in a
material breach of or constitute a material default under any material
agreement, indenture or other instrument known to such counsel to
which the Trust is a party or by which it is bound, or result in a
violation of any law, administrative regulation or court or
governmental decree known to such counsel applicable to the Trust,
except that such counsel need not express any opinion with respect to
(i) matters opined upon by Messrs. Xxxxxxxx, Xxxxxx & Finger, P.A. or
(ii) the Blue Sky laws of any jurisdiction;
(vii) The execution and delivery by the Company of this
Agreement, the Pricing Agreement, the Guarantee, the Indenture and the
Declaration, the issuance of the Subordinated Debt Securities and the
Guarantee and the fulfillment of the terms herein and therein
contained do not conflict with, or result in a breach of, or
constitute a default under, the Company's charter or bylaws or, to the
best knowledge of such counsel, conflict in any material respect with,
or result in a material breach of or constitute a material default
under any material agreement, indenture or other instrument known to
such counsel to which the Company or any of its significant
subsidiaries is a party or by which it is bound, or result in a
violation of any law, administrative regulation or court or
governmental decree known to such counsel applicable to the Company or
any of its significant subsidiaries, except that such counsel need not
express any opinion with respect to (i) matters opined upon by special
communications counsel and Messrs. Xxxxxxx & Xxxxxx LLC or (ii) the
Blue Sky laws of any jurisdiction;
(viii) All of the issued and outstanding Common Securities of
the Trust are directly owned by the Company free and clear or any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity;
23
(ix) The Property Trustee is the record holder of Subordinated
Debt Securities and no security interest, mortgage, pledge, lien,
encumbrance, claim or equity is noted thereon or on the securities
register; and
(x) To the best knowledge of such counsel, neither the
Registration Statement nor the Prospectus, as amended or supplemented,
if applicable (expect as to the financial statements and schedules and
any other financial and statistical data contained or incorporated by
reference in the Registration Statement or Prospectus, as to which no
opinion need be expressed), contained, as of the date the Prospectus
was first filed with the Commission, or contains, as of the Closing
Date, any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, as amended or
supplemented, if applicable, in light of the circumstances under which
they were made,) not misleading.
(2) from Messrs. Xxxxxxx & Xxxxxx LLC, special counsel to the Trust
and the Company, to the following effect and covering such additional
matters as the Underwriter may reasonably request:
(i) The execution and delivery of this Agreement, the Pricing
Agreement, the Guarantee and the Indenture, the issuance of the
Offered Securities, the Subordinated Debt Securities and the Guarantee
and the fulfillment of the terms of this Agreement, the Pricing
Agreement, the Guarantee and the Indenture do not or will not, as
appropriate, result in a material breach of or constitute a material
default under any material agreement for borrowed money known to such
counsel to which the Company or any of the Company's significant
subsidiaries is a party or by which it is bound; and
(ii) the Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, and is not
subject to regulation under such Act.
24
(3) from Xxxxx & Xxxxx, L.L.P., special counsel to the Trust and the
Company, to the following effect and covering such additional matters as
the Underwriter may reasonably request:
(i) This Agreement, the Pricing Agreement, the Guarantee, the
Indenture and the Declaration have been duly authorized, executed and
delivered by the Company; and each of the Guarantee and the Indenture
is a legal, valid and binding agreement of the Company enforceable in
accordance with its terms, except (A) as such enforceability may be
limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and other laws affecting creditors' rights
generally, and (B) that the remedy of specific performance and
injunctive and other forms of equitable relief are subject to certain
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought;
(ii) Each of the Guarantee, the Indenture and the Declaration has
been duly qualified under, and complies in all material respects with
the requirements of, the Trust Indenture Act;
(iii) The Subordinated Debt Securities, when executed and
authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Trust at the Closing Date, will be
legal, valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable in accordance with their
terms, except (A) as such enforceability may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and
other laws affecting creditors' rights generally, and (B) that the
remedy of specific performance and injunctive and other forms of
equitable relief are subject to certain equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought;
(iv) The Trust and the Company jointly meet the requirements for
use of Form S-3 under the 1933 Act. The Registration Statement is
effective under the 1933 Act and, to the best of such counsel's
knowledge and
25
information, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission;
(v) Each of the Offered Securities, the Guarantee and the
Subordinated Debt Securities conforms in all material respects as to
legal matters to the descriptions thereof in the Prospectus (as
amended or supplemented, if applicable);
(vi) The Trust is not an "investment company" within the meaning
of Section 3(a) of the Investment Company Act of 1940, as amended, and
is not subject to regulation under such Act; and
(vii) The statements set forth in the Prospectus under the
caption "Certain Federal Income Tax Consequences," insofar as they
purport to describe the provisions of law referred to therein, are
accurate and complete in all material respects.
In addition, such counsel shall state that "The Registration Statement
and the Prospectus, as amended or supplemented, if applicable (except as to
(x) the financial statements and schedules and any other financial and
statistical data contained or incorporated by reference therein and (y) the
documents incorporated or deemed to be incorporated by reference therein,
as to which no opinion is expressed), complied, as of the date the
Prospectus was first filed with the Commission pursuant to Rule 424, and
comply, as of the date hereof, as to form in all material respects with the
requirements of the Act and the rules and regulations of the Commission
under the Act (the "Rules"). In passing upon the form of such documents,
we have necessarily assumed the correctness and completeness of the
statements made or included therein by the Trust or the Company and take no
responsibility for the accuracy, completeness or fairness of the statements
contained therein except insofar as such statements relate to the
description of the Offered Securities or relate to us. However, in
connection with the preparation of the Registration Statement and the
Prospectus, we had conferences with certain trustees or officers and other
26
representatives of the Trust and the Company, and our examination of the
Registration Statement and the Prospectus and our discussions in such
conferences did not disclose to us any information (relying as to the
materiality of any such information primarily upon trustees or officers and
other representatives of the Trust and the Company) which gave us reason to
believe that either the Registration Statement or the Prospectus, as
amended or supplemented, if applicable (except as to (x) the financial
statements and schedules and any other financial and statistical data
contained or incorporated by reference therein and (y) the documents
incorporated therein or deemed to be incorporated by reference therein, as
to which no belief is expressed), contained, as of the date the Prospectus
was first filed with the Commission pursuant to Rule 424, or contains, as
of the date hereof, any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or necessary
to make the statements therein (in the case of the Prospectus, as amended
or supplemented, if applicable, in light of the circumstances under which
they were made), not misleading."
In giving such opinions, such counsel may rely (x) as to matters of
fact, to the extent they deem proper, upon certificates of trustees or
officers of the Trust or the Company, public officials and others, and (y)
as to matters of law if other than the law of the United States or Colorado
(in the case of Messrs. Xxxxxxx & Xxxxxx LLC and General Counsel of the
Company) or New York (in the case of Xxxxx & Xxxxx, L.L.P.), on the
opinions of local counsel retained by them or the Trust or the Company,
provided that such counsel are satisfactory to the Representatives and
counsel retained by the Representatives on behalf of the Underwriters.
(4) from Messrs. Xxxxxxxx, Xxxxxx & Finger, P.A. special Delaware counsel
to the Trust, to the following effect and covering such additional matters
as the Underwriter may reasonably request:
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act; all filings
required under the laws of the State of Delaware with respect to the
creation and valid
27
existence of the Trust as a business trust have been made; under the
Delaware Act and the Declaration, the Trust has the business trust
power and authority to (x) own property and conduct its business, all
as described in the Prospectus, (y) enter into and perform its
obligations under this Agreement and the Pricing Agreement, and (z)
issue and perform its obligations under the Preferred Securities and
the Common Securities.
(ii) Assuming the Declaration has been duly authorized, executed
and delivered by the Trustees and the Company, the Declaration is the
valid and binding obligation of the Company and the Trustees,
enforceable against the Company and the Trustees in accordance with
its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles (regardless of whether the issue of enforceability is
considered in a proceeding at law or in equity).
(iii) Under the Delaware Act and the Declaration, the execution
and delivery by the Trust of this Agreement and the Pricing Agreement,
and the performance by the Trust of its obligations thereunder, have
been duly authorized by all necessary business trust action on the
part of the Trust; and this Agreement and the Pricing Agreement have
been duly executed and delivered by the Trust under the laws of
Delaware.
(iv) The Common Securities have been duly authorized by the
Declaration and are validly issued and represent undivided beneficial
interests in the assets of the Trust; and under the Delaware Act and
the Declaration, the issuance of the Common Securities is not subject
to preemptive rights.
(v) The Preferred Securities have been duly authorized by the
Declaration and, when delivered to and paid for pursuant to this
Agreement, will be validly issued and fully paid and nonassessable
undivided beneficial interests in the assets of the Trust; the holders
of the Preferred Securities, as beneficial owners
28
of the Trust, will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware;
and under the Delaware Act and the Declaration, the issuance of the
Preferred Securities is not subject to preemptive rights. Such counsel
may note that the Preferred Security holders may be obligated,
pursuant to the Declaration, to (i) provide indemnity and/or security
in connection with and pay taxes or governmental charges arising from
transfers of Preferred Security Certificates and the issuance of
replacement Preferred Security Certificates, and (ii) provide security
and indemnity in connection with requests of or directions to the
Property Trustee to exercise its rights and powers under the
Declaration.
(vi) The issuance and sale by the Trust of the Preferred
Securities and Common Securities; the execution, delivery and
performance by the Trust of this Agreement and the Pricing Agreement;
the consummation of the transactions contemplated herein and therein;
and compliance by the Trust with its obligations hereunder and
thereunder will not violate any of the provisions of the Certificate
of Trust or the Declaration, or any applicable Delaware law or
administrative regulation.
(vii) Assuming that the Trust derives no income from or in
connection with sources within the State of Delaware and has no
assets, activities (other than having a Delaware Trustee as required
by the Delaware Act and the filing of documents with the Delaware
Secretary of State) or employees in the State of Delaware, no
authorization, approval, consent or order of any Delaware court or
governmental authority or agency is required to be obtained by the
Trust solely in connection with the issuance and sale of the Common
Securities and the Preferred Securities or the purchase by the Trust
of the Subordinated Debt Securities and the Guarantees except such as
have been obtained and such as may be required by state securities
laws.
(c) The Underwriter shall have received on the Closing Date from
Messrs. Xxxxx & Xxxx LLP, counsel retained by the
29
Representatives on behalf of the Underwriters, an opinion with respect to
the Offered Securities, the Registration Statement and the Prospectus in
the form customarily given by such firm, including an opinion to the effect
that the Registration Statement and the Prospectus, as amended or
supplemented, if applicable (except as to the financial statements and
schedules and any other financial and statistical data contained or
incorporated by reference therein, as to which no opinion need be
expressed) comply as to form in all material respects with the Act.
(d) The opinion of Xxxxxx, Xxxxxx & Xxxxxx LLP, counsel to The Bank of
New York as Property Trustee under the Declaration, in form and substance
satisfactory to counsel to the Underwriters to the effect that:
(i) The Bank of New York is a national banking association with
trust powers, duly organized, validly existing and in good standing
under the laws of the United States, with all necessary power and
authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration.
(ii) The execution, delivery and performance by the Property
Trustee of the Declaration have been duly authorized by all necessary
corporate action on the part of the Property Trustee; the Declaration
has been duly executed and delivered by the Property Trustee, and
constitutes the valid and binding obligation of the Property Trustee,
enforceable against the Property Trustee in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles
(regardless of whether the issue of enforceability is considered in a
proceeding at law or in equity).
(iv) The execution, delivery and performance of the Declaration
by the Property Trustee does not conflict with or constitute a breach
of the Articles of Organization or Bylaws of the Property Trustee.
30
(v) No consent, approval or authorization of, or registration
with or notice to, any New York or federal banking authority is
required for the execution, delivery or performance by the Property
Trustee of the Declaration.
(vi) To the best of such counsel's knowledge, based on a review
of the certificates representing the Subordinated Debt Securities, no
security interest, mortgage, pledge, lien, encumbrance, claim or
equity is noted thereon.
In giving such opinion, such counsel may rely as to matters governed
by the laws of the State of Delaware on an opinion of Messrs. Xxxxxxxx
Xxxxxx & Finger, P.A., provided that such opinion shall be addressed to the
Underwriters, shall be dated as of such date and shall expressly permit
such counsel to rely thereon.
(e) On the Closing Date, the Representatives shall have received from
each of KPMG Peat Marwick LLP and Price Waterhouse LLP a letter, dated as
of the Closing Date, in form and substance reasonably satisfactory to the
Representatives.
(f) The representations and warranties of the Trust and the Company in
this Agreement shall be true and correct on and as of the Closing Date;
each of the Trust and the Company shall have complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to the Closing Date; and except as reflected in or contemplated by
the Registration Statement and the Prospectus, since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there shall not have been, at the Closing Date, any material
adverse change in the condition (financial or otherwise), business,
prospects or results of operations of the Trust or of the Company and its
subsidiaries, considered as a whole.
(g) Subsequent to the date hereto, there shall not have occurred any
change, or any development involving a prospective change, in or affecting
particularly the business, prospects or financial affairs of the Trust or
of the Company and its subsidiaries, considered as a whole which, in the
31
reasonable judgment of the Representatives, is so material and adverse that
it would be impracticable to proceed with the public offering or delivery
of the Offered Securities on the terms and in the manner contemplated by
the Prospectus.
(h) At the Closing Date the Offered Securities shall have been
approved for quotation on the New York Stock Exchange and the Trust and the
Company shall have filed all notices and documents required by the New York
Stock Exchange of companies that have securities quoted on such exchange.
SECTION 8. Termination of Agreement. The obligation of the Underwriters
------------------------
to purchase the Offered Securities may be terminated at any time prior to the
Closing Date by notice to the Trust and the Company from the Representatives,
without liability on the part of the Underwriters to the Trust or the Company,
if, on or prior to such date, (i) additional material governmental restrictions,
not in force and effect on the date of this Agreement, shall have been imposed
upon trading in securities generally or minimum or maximum prices shall have
been generally established on the New York Stock Exchange or on the American
Stock Exchange, or trading in securities generally shall have been suspended on
either such Exchange or trading in the common stock or debt securities of the
Trust or the Company in the over-the-counter market shall have been suspended or
a general banking moratorium shall have been established by Federal or New York
authorities, or (ii) a war involving the United States of America or other
national calamity shall have occurred or shall have accelerated to such an
extent as to affect adversely the marketability of the Offered Securities.
SECTION 9. Default by One or More of the Underwriters. If one or more of
------------------------------------------
the Underwriters shall fail on the Closing Date to purchase the Offered
Securities that it or they are obligated to purchase hereunder (the "Defaulted
Securities"), the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any substitute underwriters, to purchase all, but not less than
all, of the Defaulted Securities in such amounts as may be approved by the
Representatives and upon the terms herein set forth; if, however, the
Representatives have not completed such arrangements within such 24-hour period,
then:
32
(a) if the principal amount of Defaulted Securities does not exceed
10% of the aggregate principal amount of Offered Securities, the non-
defaulting Underwriters shall be obligated to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the principal amount of Defaulted Securities exceeds 10% of
the aggregate principal amount of Offered Securities, the Company shall be
entitled for an additional 24-hour period to find one or more substitute
underwriters satisfactory to the Representatives in their reasonable
discretion to purchase such Defaulted Securities.
In the event of any such default either the Representatives or the Trust
and the Company shall have the right to postpone the Closing Date for a period
not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements
relating to the purchase of the Offered Securities.
If the principal amount of Defaulted Securities exceeds 10% of the
aggregate principal amount of Offered Securities, and neither the
Representatives nor the Company make arrangements pursuant to this Section 9
within the period stated for the purchase of the Defaulted Securities, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter to the Company except as provided in Section 6.
No action taken pursuant to this Section 9 shall relieve any defaulting
Underwriter from liability in respect of its default.
A substitute underwriter hereunder shall be an Underwriter for all purposes
of this Agreement.
SECTION 10. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommuni cation. Notices to the
Representatives shall be directed to ____________, attention __________; and
notices to each of the Trust and the Company shall be directed to it at its
office at Terrace Tower II, 0000 XXX Xxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000-0000,
33
attention: Xxxxxxx X. Xxxxxxxxx, Senior Vice President - Finance of the Company.
SECTION 11. Parties. This Agreement and the Pricing Agreement shall each
-------
inure to the benefit of and be binding upon the Underwriters, the Trust and the
Company and their respective successors and legal representatives. Nothing
expressed or mentioned in this Agreement or the Pricing Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Trust and the Company and their respective successors and
legal representatives and the controlling persons and trustees, officers and
directors referred to in Section 6 hereof and their respective successors, heirs
and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or the Pricing Agreement or any provision herein
or therein contained. This Agreement and the Pricing Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Trust and the Company and their
respective successors and legal representatives and said controlling persons,
trustees, officers and directors and their respective successors, heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Offered Securities from the Underwriter shall be
deemed to be a successor by reason merely of such purchase.
SECTION 12. Governing Law and Time. This Agreement and the Pricing
----------------------
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Specified times of day refer to New York City time.
34
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Trust and the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Trust and the Company in accordance
with its terms.
Very truly yours,
TCI COMMUNICATIONS FINANCING __
By: ------------------------------
as Regular Trustee
By: ------------------------------
as Regular Trustee
TCI COMMUNICATIONS, INC.
By: ------------------------------
TCI
CONFIRMED AND ACCEPTED,
as of the date first
above written:
[Insert rep names]
BY: [UNDERWRITER]
By: ___________________________________
Authorized Signatory
for themselves and as Representatives
of other underwriters named in Schedule A
hereto.
35
EXHIBIT A
_____________ Preferred Securities
TCI COMMUNICATIONS FINANCING __
(a Delaware Business Trust)
____% Trust Preferred Securities
(Liquidation Amount $25 per Preferred Security)
guaranteed to a limited extent by TCI Communications, Inc.
PRICING AGREEMENT
-----------------
_______________, 1996
[UNDERWRITER]
Dear Sirs:
Reference is made to the Purchase Agreement, dated __________, ____ (the
"Purchase Agreement"), relating to the purchase, by the Underwriters named in
Schedule A thereto (the "Underwriters"), of the above-referenced ___% Trust
Preferred Securities (the "Preferred Securities"), of the TCI Communications
Financing __, a business trust formed under the laws of Delaware (the "Trust").
Capitalized terms in this Pricing Agreement that are not defined herein have the
meanings assigned in the Purchase Agreement.
Pursuant to Section 2 of the Purchase Agreement, each of the Trust and the
Company agree with each of the several Underwriters as follows:
1. The initial public offering price for the Offered Securities, and
the purchase price per Offered Security for the Offered Securities to be
paid by the several Underwriters, determined as provided in said Section 2,
shall be $25.00.
A-1
2. The compensation per Preferred Security to be paid by the Company
to the several Underwriters in respect of their commitments hereunder shall
be $_____.
In view of the fact that the proceeds of the sale of the Preferred
Securities will be invested in Subordinated Debt Securities, the Company has
agreed to pay to the Underwriters, as compensation for their arranging the
investment therein of such proceeds, $_____ per Preferred Security (or $_______
in the aggregate); provided, that such compensation for sales of ______ or more
Preferred Securities to a single purchaser will be $_____ per Preferred
Security. Therefore, to the extent of such sales, the actual amount of
Underwriters' compensation will be less than the aggregate amount specified in
the preceding sentence. See "Underwriting."
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Trust and the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriter, the Trust and the Company in accordance with
its terms.
Very truly yours,
TCI COMMUNICATIONS FINANCING __
By: -----------------------------
as Regular Trustee
By: -----------------------------
as Regular Trustee
TCI COMMUNICATIONS, INC.
By: ----------------------------
CONFIRMED AND ACCEPTED,
as of the date first above written:
[Insert rep names]
By: [UNDERWRITER]
By: -----------------------------
A-2
