EXHIBIT 1.1
WSP&R
DRAFT
11/17/97
ELECTRIC LIGHTWAVE, INC.
Class A Common Stock
U.S. UNDERWRITING AGREEMENT
New York, New York
November __, 1997
To the Representatives named in Schedule
I of each of the several U.S. Underwriters named
in Schedule II hereto
Dear Sirs:
Electric Lightwave, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell severally
and not jointly to the U.S. Underwriters named in Schedule II hereto (the "U.S.
Underwriters") for whom you are acting as representatives (the
"Representatives") (i) that number of shares of Class A Common Stock, par value
$.01 per share, of the Company ("Common Stock") specified in Schedule I hereto
and (ii) an option described in Section 2 hereof to purchase all or any part of
the number of additional shares of Common Stock to cover overallotments as is
specified in Schedule I hereto. The shares of Common Stock to be purchased
initially by the U.S. Underwriters (the "Initial Shares"), together with all or
any part of the shares of Common Stock subject to the option described in
Section 2 hereof (the "Option Shares"), are collectively hereinafter called the
"Shares".
It is understood by all parties that the Company is concurrently entering
into an agreement dated the date hereof (the "International Underwriting
Agreement") providing for the sale by the Company of 2,300,000 shares of Common
Stock (including the over-allotment option thereunder) through arrangements with
certain underwriters outside the United States and Canada (the "International
Managers"), for whom Xxxxxx Brothers International (Europe), Xxxxxxx Xxxxx
International, Xxxxxx Xxxxxxx & Co. International Limited and Xxxxxx Xxxxxxxx &
Co. Limited are acting as lead managers (the "Lead Managers"). The U.S.
Underwriters and the International Managers simultaneously are entering into an
intersyndicate agreement (the "Intersyndicate Agreement') which provides for,
among other things, the transfer of shares of Common Stock between the two
syndicates. Except as used in Sections 2, 3, 9 and 11 herein, and except as the
context may otherwise require, references herein to the Shares shall include all
the shares of the Common Stock which may be sold pursuant to either this
Agreement or the International Underwriting Agreement.
1. Representations and Warranties by the Company. The Company represents
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and warrants to each U.S. Underwriter that:
(a) A registration statement on Form S-1 with respect to the
Shares has (i) been prepared by the Company in conformity with the
requirements of the Securities Act of 1933 (the "Securities Act") and the
rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, (ii) been filed with the
Commission under the Securities Act and (iii) become effective under the
Securities Act. Copies of such registration statement have been delivered
by the Company to you as the Representatives of the U.S. Underwriters. As
used in this Agreement, "Effective Time" means the date and the time as of
which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission;
"Effective Date" means the date of the Effective Time of such registration
statement; "Preliminary Prospectus" means each prospectus included in any
such registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Representatives pursuant
to Rule 424(a) of the Rules and Regulations; "Prospectus" means such final
prospectus, as first filed with the Commission pursuant to paragraph (1) or
(4) of Rule 424(b) of the Rules and Regulations; and "Registration
Statement" means the registration statement referred to in this Section
1(a), as amended at its Effective Time, including all information contained
in the final prospectus filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations in accordance with Section 7(a) hereof and
deemed to be a part of the Registration Statement as of the Effective Time
of the Registration Statement pursuant to paragraph (b) of Rule 430A of the
Rules and Regulations. The Commission has not issued any order preventing
or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms (and the Prospectus and
any further amendments or supplements to the Registration Statement or the
Prospectus, when they become effective or are filed with the Commission, as
the case may be, will conform) in all respects to the requirements of the
Securities Act and the Rules and Regulations and do not and will not, as of
the applicable effective date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf of any
U.S. Underwriter specifically for inclusion therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate
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power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the
Company; and the Company has no subsidiaries.
(d) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth
in the Registration Statement and the Prospectus, there has not been any
material adverse change in the business, properties or financial condition
of the Company, and there have not been any transactions entered into by
the Company which is material to the Company, other than transactions in
the ordinary course of business and transactions contemplated by the
Registration Statement or Prospectus.
(e) Neither the issuance or sale of the Initial Shares nor the Option
Shares, nor the performance of the terms and provisions thereof and of this
Agreement and the International Underwriting Agreement, will conflict with,
result in a breach of or constitute a default under the terms of the
Certificate of Incorporation or By-Laws of the Company or any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company is a party or by which it is bound or any order or regulation
applicable to the Company of any Court, regulatory body, administrative
agency or governmental body having jurisdiction over the Company and no
consent, approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the Company
of its obligations under this Agreement, except such as may be required by
the securities or Blue Sky laws of the various states in connection with
the offer and sale of the Shares.
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and non-
assessable and conform to the description thereof contained in the
Prospectus.
(g) The Shares conform to the description thereof contained in the
Prospectus and are duly and validly authorized, and, when delivered to the
U.S. Underwriters as provided herein and the International Managers as
provided in the International Underwriting Agreement against payment of the
consideration therefor, will be validly issued and outstanding, fully paid
and non-assessable with no personal liability attaching to the ownership
thereof, and listed on The Nasdaq National Market. The issuance of such
Shares will not be subject to any preemptive or similar rights.
(h) This Agreement has been duly authorized, executed and delivered
by the Company.
(i) Except as described in the Prospectus, the Company has not sold
or issued any shares of Common Stock during the six-month period preceding
the date of the
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Prospectus, including any sales pursuant to Rule 144A under, or Regulations
D or S of, the Securities Act, other than shares issued pursuant to
employee benefit plans, qualified stock options plans, other employee
compensation plans, restricted stock grants or pursuant to outstanding
options, rights or warrants.
(j) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and who
have delivered the initial letter referred to in Section 6(a)(vi) hereof,
are independent public accountants as required by the Securities Act and
the Rules and Regulations.
(k) There are no legal or governmental proceedings pending to which
the Company is a party or of which any property or asset of the Company is
the subject which, if determined adversely to the Company might have a
material adverse effect on the consolidated financial position,
stockholders' equity, results of operations or business of the Company; and
to the best of the Company's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others.
(l) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
2. Purchase and Sale of the Shares. Subject to the terms and conditions
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and in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to you and each other U.S. Underwriter, severally and not
jointly, and you and each other U.S. Underwriter agree, severally and not
jointly, to purchase from the Company, at the purchase price set forth in
Schedule I hereto, the number of Initial Shares set forth opposite such U.S.
Underwriter's name in Schedule II hereto plus any additional number of Option
Shares which such U.S. Underwriter may become obligated to purchase pursuant to
the provisions of Section 9 hereof.
In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the U.S. Underwriters, severally and not jointly, to
purchase up to the number of additional shares of Common Stock set forth on
Schedule I hereto at the price set forth on Schedule I hereto. The option
hereby granted will expire 30 days after the date of this Underwriting
Agreement, and may be exercised in whole or in part from time to time only for
the purpose of covering overallotments which may be made in connection with the
offering and distribution of the Initial Shares upon notice by the
Representatives to the Company setting forth the number of Option Shares as to
which the U.S. Underwriters are then exercising the option and the time, date
and place of payment and delivery for such Option Shares. Any such time and
date of delivery (a "Date of Delivery") shall be determined by the
Representatives, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Date, as
hereinafter defined, unless otherwise agreed upon by the Representatives and the
Company. If the option is exercised as to all or any portion of the Option
Shares, the Option Shares shall be sold by the Company and shall be purchased by
the U.S. Underwriters, severally and not jointly, in proportion to their
respective Initial Share underwriting obligations as set forth in Schedule II.
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3. Delivery, Payment and Offering. Delivery of and payment for the
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Initial Shares shall be made at the place, date and time specified in Schedule I
hereto (or such other place, date and time not later than ten full business days
thereafter as the Representatives and the Company shall designate), which date
and time may be postponed by agreement between the Representatives and the
Company or as provided in Section 9 hereof (such date and time being herein
called the "Closing" or "Closing Date"). Delivery of the Initial Shares shall be
made to the Representatives for the respective accounts of the several U.S.
Underwriters against payment by the several U.S. Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company payable in federal (same day) funds. The Initial Shares shall be in
definitive form and shall be registered in such names and in such authorized
denominations as the Representatives may request not less than three full
business days in advance of the Closing Date. The Company agrees to have the
Initial Shares available for inspection, checking and packaging by the
Representatives in New York, New York, not later than 10:00 A.M., New York City
time, on the last business day prior to the Closing Date.
In addition, in the event that any or all of the Option Shares are
purchased by the U.S. Underwriters, delivery of and payment for the Option
Shares shall be made on the Date of Delivery at the offices designated on
Schedule I at 10:00 A.M. New York City time (or such other time and place as the
Representatives and the Company shall designate), which date and time may be
postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof and which date may also be the Closing Date.
Delivery of the Option Shares shall be made to the Representatives for the
respective accounts of the several U.S. Underwriters against payment by or on
behalf of the U.S. Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company payable in federal (same day)
funds. The Option Shares shall be in definitive form and shall be registered in
such names and in such authorized denominations as the Representatives may
request not less than three full business days in advance of the Date of
Delivery.
The Company agrees to have the Option Shares available for inspection,
checking and packaging by the Representatives in New York, New York, not later
than 10:00 a.m., New York City time, on the last business day prior to the Date
of Delivery.
It is understood that each U.S. Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Shares which it has agreed to purchase.
Subject to the terms and conditions of this Agreement, the U.S.
Underwriters agree to make a bona fide public offering of the Shares as soon as
the Representatives deem advisable after this Agreement has been executed and
delivered.
4. Agreements of the Company. The Company agrees with the several U.S.
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Underwriters that:
(a) With your consent, the Company will file the Prospectus pursuant
to Rule 424 under the Act and will notify the Representatives promptly of
such filing. During the
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period for which a prospectus relating to the Shares is required to be
delivered under the Securities Act, the Company will promptly advise the
Representatives (i) when any amendment to the Registration Statement has
been filed or becomes effective, (ii) of any request by the Commission for
any amendment of or supplement to the Registration Statement or the
Prospectus or for any additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceedings
for that purpose, and (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order and, if issued, to obtain as
soon as possible the withdrawal thereof. The Company will not file any
amendment or supplement to the Registration Statement or the Prospectus
(other than a prospectus or prospectus supplement relating to an offering
of debt or additional equity securities which offering is permitted by
Section 4(f) hereof) unless the Company has furnished to the
Representatives a copy for their review prior to filing and will not file
any such proposed amendment or supplement to which they reasonably object.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act, any event occurs as a
result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it shall be
necessary at any time to amend or supplement the Prospectus to comply with
the Securities Act or the Exchange Act or the respective rules thereunder,
the Company promptly will prepare and file with the Commission, subject to
paragraph (a) of this Section 4, an amendment or supplement which will
correct such statement or omission or an amendment or supplement which will
effect such compliance.
(c) The Company will furnish such information, execute such
instruments and take such action as may be required to qualify the Shares
for sale under the laws of those states specified in a writing heretofore
delivered by you and countersigned by the Company and such other
jurisdictions as the Representatives may designate in which there is a
change of law or regulation after the date hereof affecting the status of
the Shares as exempt Shares under such laws and will maintain such
qualifications in effect so long as required for the distribution of the
Shares; provided, however, that the Company shall not be required to
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qualify to do business in any jurisdiction where it is not now so qualified
or to take any action which would subject it to general or unlimited service of
process in any jurisdiction where it is not now so subject.
(d) The Company will furnish to the Representatives a signed copy of
the Registration Statement as originally filed and of each amendment
thereto, all powers of attorney, consents and exhibits filed therewith
(other than exhibits incorporated by reference), and will deliver to the
Representatives conformed copies of the Registration Statement as
originally filed and of each amendment thereto, the Preliminary Prospectus,
the Prospectus and, so long as delivery of a prospectus by an U.S.
Underwriter or dealer
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may be required by the Securities Act, all amendments of and supplements to
such documents, in each case as soon as available and in such quantities as
the Representatives may reasonably request.
(e) For a period of five calendar years from the date of this
Agreement, the Company will furnish (or cause to be furnished) to each of
the Representatives, upon request, copies of (i) all reports to
stockholders of the Company and (ii) all reports and financial statements
filed with the Commission or with The Nasdaq National Market.
(f) During the period beginning from the date of the Prospectus and
continuing to and including the 180th day thereafter, the Company and
Citizens Utilities Company ("Citizens") each will not, directly or
indirectly, offer, sell, or otherwise dispose of any shares of Common Stock
or any securities convertible into or exchangeable or exercisable for any
such shares of Common Stock (except for stock dividends paid in the normal
course, stock splits or stock splits carried out in the form of stock
dividends, shares issued under employee or director stock option or other
benefit plans, shares issued as consideration in connection with
acquisitions which have been disclosed to you and securities under prior
contractual commitments, if any, which have been disclosed to you), without
the prior written consent of the Xxxxxx Brothers, Inc., which consent shall
not be unreasonably withheld.
(g) The Company will make generally available to its security holders
and to the Representatives, as soon as practicable, but not later than
sixteen months after the "effective date" of the Registration Statement (as
such term is defined in Rule 158(c) under the Securities Act), a
consolidated earning statement (which need not be audited) of the Company,
covering a period of twelve-months beginning after such effective date
which will satisfy the provisions of Section 11(a) of the Securities Act.
5. Expenses. The Company will pay or cause to be paid the following:
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(i) the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Shares under the Act
and all other expenses in connection with the preparation, printing and
filing of the Registration Statement and the Prospectus and amendments and
supplements thereto and the furnishing of copies thereof and of any
Preliminary Prospectus to the U.S. Underwriters and dealers, all fees, if
any, payable to the National Association of Securities Dealers, Inc. or The
Nasdaq National Market;
(ii) the cost of printing this Agreement, the International
Underwriting Agreement and the Blue Sky Survey;
(iii) all expenses including fees and disbursements of counsel (up to
a maximum of $7,500) in connection with the qualification of the Shares
under the securities or Blue Sky laws of such Jurisdictions as the
Representatives and the Lead Managers shall reasonably request and the
preparation of a Blue Sky Survey;
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(iv) the cost of preparing certificates for the Shares; and
(v) all other costs and expenses incident to the performance of the
Company's obligations hereunder which are not otherwise specifically
provided for in this Section 5. Except as provided in Section 5 and Section
11 hereof, the U.S. Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of
any of the Initial Shares by them, and any advertising expenses connected
with any offers they may make. The Company shall not in any event be
liable to any of the several U.S. Underwriters for damages on account of
loss of anticipated profits.
6. (a) Conditions to the Obligations of the U.S. Underwriters. The
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obligations of the U.S. Underwriters to purchase the Initial Shares shall be
subject to the accuracy in all material respects of the representations and
warranties on the part of the Company contained herein (except insofar as such
representations and warranties have already been qualified as to materiality
therein) as of the date hereof and the Closing Date, to the accuracy of the
statements of Company officers made in any certificates given pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission;
(ii) No order of any governmental or regulatory body shall be
necessary for the issuance and sale of the Initial Shares on the terms set
forth or contemplated in this Agreement and the International Underwriting
Agreement;
(iii) At the Closing Date, the Company shall have received all
authorizations from any state regulatory commission (other than pursuant to
any state "Blue Sky" laws), necessary for the issuance and sale of the
Initial Shares and related transactions on the terms set forth or
contemplated in this Agreement and the International Underwriting Agreement
and containing no provision unacceptable to the Representatives, which such
authorizations shall be in full force and effect and no order or additional
order of any such Commission shall be necessary for such issuance and sale
which has not been obtained;
(iv) The Shares shall have been approved for listing on The Nasdaq
National Market;
(v) At the Closing Date, the Representatives shall have been
furnished with the following opinions, addressed to the U.S. Underwriters
(with conformed copies thereof for each of the other U.S. Underwriters), in
form and substance satisfactory to the Representatives, dated the Closing
Date or a date not more than three days prior thereto:
(A) Opinion of Winthrop, Stimson, Xxxxxx & Xxxxxxx, New York, New
York, counsel to the Company;
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(B) Opinions of local counsel to the Company in the states of
Washington, Oregon, California, Utah, Nevada and Arizona; and
(C) Opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, New York, New York,
counsel to the U.S. Underwriters with respect to the validity of the
Shares, the Registration Statement, the Prospectus, and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters;
(vi) On each of the date hereof and the Closing Date, the
Representatives shall have been furnished a letter dated the date hereof and
the Closing Date, as the case may be, in form and substance satisfactory to
the Representatives, from KPMG Peat Marwick, the Company's independent
public accountants, containing statements and information heretofore agreed
upon with respect to the financial statements and certain financial
information contained in the Prospectus;
(vii) At the Closing Date, the Representatives shall have received a
certificate, dated the Closing Date, signed by an officer of the Company, to
the effect that, (A) since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been any
material adverse change in the business, properties or financial condition
of the Company and (B) since such dates, there has not been any transaction
entered into by the Company other than transactions referred to in, or
contemplated by, the Registration Statement and Prospectus and transactions
which are not material to the Company; and
(viii) At the Closing Date, the Representatives shall have received a
certificate, dated the Closing Date signed by an officer of the Company, to
the effect that, since the respective dates as of which information is given
in the Registration Statement and Prospectus, the Company shall not have
sustained a loss by fire, flood, accident or other calamity which is
substantial with respect to the property of the Company. At the Closing the
Representatives shall have been furnished with certificates satisfactory to
the Representatives as to the accuracy of its representations and warranties
herein at and as of the Closing and as to the performance by the Company of
all of its obligations hereunder to be performed at or prior to the Closing,
and the Company also shall have furnished to you a certificate satisfactory
to you as to the matters set forth in subsections (i) and (ii) of this
Section 6.
(ix) The closing under the International Underwriting Agreement shall
have occurred concurrently with the closing hereunder on the Closing Date
with respect to the Initial Shares.
(b) Option Share Closing. In the event the U.S. Underwriters
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exercise their option granted in Section 2 hereof to purchase all or any portion
of the Option Shares, the representations and warranties of the Company
contained herein and the statements in any
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certificates furnished by the Company hereunder shall be true and correct as of
each Date of Delivery, and the Representatives shall have received:
(i) A certificate of the Chairman or the President or any Vice President
and of the Treasurer or Assistant Treasurer of the Company, dated such Date
of Delivery, confirming that the certificate delivered on the Closing Date
pursuant to Section 6(a)(viii) hereof remains true as of such Date of
Delivery.
(ii) A certificate of an officer of the Company, dated such Date of
Delivery confirming that the certificate delivered on the Closing Date
pursuant to Section 6(a)(vii) hereof remains true as of such Date of
Delivery.
(iii) The opinion of Winthrop, Stimson, Xxxxxx & Xxxxxxx, counsel for
the Company, dated such Date of Delivery relating to the Option Shares and
otherwise to the same effect as the opinion required by Section 6(a)(v)(A)
hereof.
(iv) The opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the Option Shares
and otherwise to the same effect as the opinion required by Section
6(a)(v)(C) hereof.
(v) A letter from KPMG Peat Marwick, dated such Date of Delivery,
substantially the same in scope and substance as the letter furnished to
the Representatives pursuant to Section 6(a)(vi) hereof, except that the
"specified date" in the letter furnished pursuant to this Section 6(b)
shall be a date not more than six days prior to such Date of Delivery.
(vi) Prior to the Date of Delivery the Company shall have furnished to
the Representatives such further information, certificates and documents
confirming as of such date the Company's representations and warranties
contained herein as they may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled when and as required by this Agreement, this Agreement and all
obligations of the U.S. Underwriters hereunder may be canceled at, or at any
time prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Company in writing, or by telephone or
telegraph confirmed in writing.
7. Conditions of Company's Obligations. The obligations of the Company to
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sell and deliver the Shares are subject to the following conditions:
(a) Prior to 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 instituted or threatened.
(b) The conditions referred to in subsections (ii) and (iii) of
Section 6(a) shall have been met and no order or authorization referred to
therein shall contain any provision unacceptable to the Company.
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If any of the conditions specified in this Section 7 shall not have been
fulfilled, this Agreement and all obligations of the Company hereunder, except
as stated in Section 11, may be canceled on or at any time prior to the Closing
Date by the Company. Notice of such cancellation shall be given to the
Representatives in writing or by telephone or telegraph confirmed in writing.
8. Indemnification.
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(a) The Company and Citizens jointly and severally agree to indemnify
and hold harmless each U.S. Underwriter, its officers and employees and
each person who controls any U.S. Underwriter within the meaning of either
the Securities Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or other federal
or state statutory law or regulation, at common law or otherwise insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement for
the registration of the Initial Shares as originally filed or in any
amendment thereof, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus or in any
amendment thereof or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein 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, or
(ii) any act or failure to act, or any alleged act or failure to act, by
any U.S. Underwriter in connection with, or relating in any manner to, the
Shares or the offering contemplated hereby, and which is included as part
of or referred to in any losses, claims, damages or liabilities arising out
of or based upon matters covered by clause (i) (provided that the Company
and Citizens shall not be liable in the case of any matter covered by this
clause (ii) to the extent that it is determined in a final judgment by a
court of competent jurisdiction that such losses, claims, damages or
liabilities resulted directly from any such act or failure to act
undertaken or omitted to be taken by such U.S. Underwriter through its
gross negligence or willful conduct), and agree to reimburse each such
indemnified party for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that neither the Company
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nor Citizens will be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company or Citizens as herein stated by or on
behalf of any U.S. Underwriter through the Representatives specifically for
use in connection with the preparation thereof and provided further that
such indemnity with respect to a Preliminary Prospectus included in the
registration statement or any amendment thereto shall not inure to the
benefit of any U.S. Underwriter (or any officer, employee or person
controlling such U.S. Underwriter)
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from whom the person asserting any such loss, claim, damage or liability
purchased the Shares which are the subject thereof if such person was not
sent or given by or on behalf of such U.S. Underwriter a copy of the
Prospectus as amended or supplemented at or prior to the confirmation of
the sale of such Shares to such person in any case where such delivery is
required by the Securities Act and the untrue statement or omission of a
material fact contained in the Preliminary Prospectus was corrected in the
Prospectus as amended or supplemented. This indemnity agreement will be in
addition to any liability which the Company or Citizens may otherwise have.
(b) Each U.S. Underwriter severally and not jointly agrees to
indemnify and hold harmless each of the Company and Citizens, each of their
directors, each of the Company's officers and employees and each person, if
any, who controls the Company and Citizens within the meaning of either the
Securities Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company and Citizens to the U.S. Underwriters but only
in relation to written information furnished to the Company or Citizens by
or on behalf of such U.S. Underwriter through the Representatives
specifically for use in the preparation of the Prospectus, and agrees to
reimburse each such indemnified party for any legal or other expenses,
reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which any U.S. Underwriter
may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure to so notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 8. In case any such action is
brought against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled
to participate therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided,
--------
however, if the defendants in any such action include both the indemnified
-------
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party, or parties shall
have the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
12
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by the Representatives in the case of
subsection (a), representing the indemnified parties under subsection (a) or
(b), as the case may be, who are parties to such action), (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such claims (i)
or (iii). It is understood that all such fees and expenses shall be reimbursed
as they are incurred.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in subparagraphs
(a) and (b) is due in accordance with its terms but is for any reason
unavailable from the Company, Citizens or the U.S. Underwriters or
insufficient to hold the U.S. Underwriters, the Company, Citizens or any
party covered by the foregoing indemnification harmless in respect of any
losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, the Company, Citizens and the U.S. Underwriters shall,
in lieu of indemnifying such indemnified party, contribute to the aggregate
losses, claims, damages and liabilities (or actions in respect thereof) to
which the Company, Citizens and one or more of the U.S. Underwriters may be
subject, as a result of such losses, claims, damages or liabilities (or
actions in respect thereof), in such proportion as is appropriate to
reflect the relative fault of the Company and Citizens on the one hand and
the U.S. Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other equitable considerations,
including relative benefit. The relative fault 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 untrue statement of
a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company and Citizens on the one
hand or the U.S. Underwriters on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The relative benefits received by the
Company and Citizens on the one hand and the U.S. Underwriters on the other
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 bear to the total underwriting discounts and commissions received
by the U.S. Underwriters with respect to the offering of the Shares, in
each case as set forth in the table on the cover page of the Prospectus.
Notwithstanding the foregoing, no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Company, Citizens and the U.S.
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation
(even if the U.S. 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 above in this subsection (d). The
amount paid or payable by a party entitled to contribution as a result of
the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be
13
deemed to include any legal or other expenses reasonably incurred by such
party in connection with investigating or defending any such action or
claim. The U.S. Underwriters' obligations under this subsection (d) are
several in proportion to their respective underwriting obligations and not
joint. Notwithstanding the provisions of this Section 8, no U.S.
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public exceeds the amount of any damages of the kind
described in Section 8(a) which such U.S. Underwriter has otherwise paid in
respect of such losses, liabilities, claims and damages. For purposes of
this subsection (d), each person, if any, who controls a U.S. Underwriter
within the meaning of either the Securities Act or the Exchange Act, and
each officer, director and employee of a U.S. Underwriter shall have the
same rights to contribution as such U.S. Underwriter, and each person, if
any, who controls the Company or Citizens within the meaning of either the
Securities Act or the Exchange Act, each officer, director and employee of
the Company and Citizens shall have the same rights to contribution as the
Company and Citizens, subject to the fourth sentence of this subsection
(d).
(e) The U.S. Underwriters severally confirm that (i) the statements
with respect to the public offering of the Shares set forth on the cover
page of the Prospectus, (ii) the last paragraph on page 2 of the
Prospectus, concerning stabilization by the U.S. Underwriters, (iii) the
statements with respect to the public offering of the Shares in the fifth
paragraph under the caption "Underwriting" in the Prospectus, (iv) the
statements with respect to the Agreement Among U.S. Underwriters and
International Managers contained in the 7th and 8th paragraphs under the
caption "Underwriting" in the Prospectus, (v) the statements concerning
certain representations made by the International Managers under the laws
of the United Kingdom contained in the 9th paragraph under the caption
"Underwriting" in the Prospectus, (vi) the statements with respect to
confirmation of sales in the 11th paragraph under the caption
"Underwriting" in the Prospectus, and (vii) the statements with respect to
transactions that stabilize the price of the Shares in the 15th, 16th,
17th, 18th and 19th paragraphs under the caption "Underwriting" in the
Prospectus, are correct and constitute the only information furnished in
writing to the Company and Citizens by or on behalf of the U.S.
Underwriters specifically for in the inclusion in the Registration
Statement and the Prospectus.
9. Default by a U.S. Underwriter. If any one or more of the U.S.
--------------------------------------------------------------
Underwriters shall fail to purchase and pay for all of the Shares agreed to be
purchased by such U.S. Underwriter or U.S. Underwriters hereunder and such
failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining U.S. Underwriters shall be
obligated severally to take up and pay for (in respective proportions which the
amount of Shares set forth opposite their names in Schedule II hereto bears to
the aggregate amount of Shares set forth opposite the names of all the remaining
U.S. Underwriters) the Shares which the defaulting U.S. Underwriter or U.S.
Underwriters agreed but failed to purchase; provided, however, that in the event
-------- -------
that the aggregate amount of Shares which the defaulting U.S. Underwriter or
U.S. Underwriters agreed but failed to purchase shall exceed 10% of the
aggregate amount of Shares set forth in Schedule II hereto, the remaining U.S.
Underwriters
14
shall have the right to purchase all, but shall not be under any obligation to
purchase any of, the Shares, and if such nondefaulting U.S. Underwriters do not
purchase all of the Shares, this Agreement will terminate without liability on
the part of any nondefaulting U.S. Underwriter or the Company. In the event of a
default by any U.S. Underwriter, as set forth in this Section, the Closing Date
shall be postponed for such period, not exceeding seven days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Nothing herein contained shall relieve any
defaulting U.S. Underwriter of its liability, if any, to the Company or any
nondefaulting U.S. Underwriter for damages occasioned by its default hereunder.
In the event of a default by a U.S. Underwriter as set forth in this
section, either the Representatives or the Company shall have the right to
postpone the Closing Date or the Date of Delivery for a period not exceeding 7
days in order that any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements may be effected.
10. Representations and Indemnities to Survive Delivery. The respective
---------------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or Citizens or their officers and of the several U.S. Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any U.S.
Underwriter or the Company or Citizens or any of their respective officers,
directors or employees or any controlling person within the meaning of the
Securities Act, and will survive delivery of and payment for the Shares.
11. Termination. This Agreement shall be subject to termination by the
-----------
U.S. Underwriters by notice given by the Representatives, to the Company prior
to the Closing Date or Date of Delivery that the Representatives elect to
terminate this Agreement on the grounds (i) trading in securities generally on
the New York Stock Exchange, the American Stock Exchange or The Nasdaq National
Market, or trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum prices shall have
been established on any such exchange or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority having
jurisdiction; (ii) a banking moratorium shall have been declared either by
federal or New York State authorities; or (iii) there shall have occurred any
new outbreak or material escalation of major hostilities or other calamity or
crisis the effect of which on the financial markets in the United States is such
as to make it, in the judgment of the Representatives, impracticable to sell the
Shares or enforce contracts for the sale of the Shares.
If this Agreement shall be terminated pursuant to Section 9 hereof, the
Company shall not then be under any liability to any U.S. Underwriter except as
provided in Sections 5, 8 and 10 hereof; but if for any other reason the Shares
are not delivered by or on behalf of the Company as provided herein, the Company
will reimburse the U.S. Underwriters, through you for all out-of-pocket expenses
approved in writing by you (up to a maximum of $ ), including fees and
--------
disbursements of counsel, reasonably incurred by the U.S. Underwriters in making
preparation for the purchase, sale and delivery of the Shares, but the Company
shall then be under no further liability to any U.S. Underwriter except as
provided in Sections 5, 8 and 10 hereof.
15
12. Representation of the U.S. Underwriters. The Representatives
---------------------------------------
represent and warrant to the Company that they are authorized to act as the
representatives of the U.S. Underwriters in connection with this financing and
that the Representatives' execution and delivery of this Agreement and any
action under this Agreement taken by such Representatives will be binding upon
all U.S. Underwriters.
13. Notices. All communications hereunder shall be in writing and, if
-------
sent to the Representatives, shall be mailed, delivered or telegraphed and
confirmed to them at their address set forth for that purpose in Schedule I
hereto or, if sent to the Company or Citizens, will be mailed, delivered or
telegraphed and confirmed to them at 0000 X.X. Xxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxxxx 00000, attention of Xxxxxx X. XxXxxxxx, Vice President and
Treasurer.
----------
14. Parties in Interest. This Agreement shall be binding upon, and inure
-------------------
solely to the benefit of, the U.S. Underwriters, the Company and Citizens and,
to the extent provided in Section 9 and Section 10 hereof, the officers and
directors and controlling persons referred to in Section 8 hereof, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right or by virtue of this Agreement. No
purchase of any of the Shares from any U.S. Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
15. Applicable Law. This Agreement will be governed by and construed in
--------------
accordance with the laws of the State of New York.
16. Counterparts. This Agreement may be executed in counterparts, all of
------------
which, taken together, shall constitute a single agreement among the parties to
such counterparts.
17. Interpretation When No Representatives. In the event no U.S.
--------------------------------------
Underwriters are named in Schedule II hereto, the term "U.S. Underwriters" shall
be deemed for all purposes of this Agreement to be the U.S. Underwriter or U.S.
Underwriters named as such in Schedule I hereto, the number of the Shares to be
purchased by any such U.S. Underwriter shall refer to that set opposite its name
in Schedule I hereto and all references to the "Representatives" shall be deemed
to refer to the U.S. Underwriter or U.S. Underwriters named in Schedule I.
16
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the
Company, Citizens and the several U.S. Underwriters.
Very truly yours,
ELECTRIC LIGHTWAVE, INC.
By__________________________________
Name: Xxxxxx X. XxXxxxxx
Title: Vice President and Treasurer
CITIZENS UTILITIES COMPANY
By__________________________________
Name: Xxxxxx X. XxXxxxxx
Title: Vice President and Treasurer
The foregoing Agreements hereby
confirmed and accepted as of the
date first above written.
XXXXXX BROTHERS INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXX XXXXXXX & CO. INCORPORATED
DEUTSCHE XXXXXX XXXXXXXX INC.
By Xxxxxx Brothers Inc.
By:________________________________
Name:
Title:
For themselves and as Representatives
of the several an U.S. Underwriters named in
Schedule II to the foregoing Agreement.
17
ELECTRIC LIGHTWAVE, INC.
SCHEDULE I
U.S. Underwriting Agreement dated ____________, 1997
Registration Statement No. 333-35227
Representatives and Address:
Xxxxxx Brothers Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
World Financial Center, North Tower
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Deutsche Xxxxxx Xxxxxxxx Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Security:
Designation: Class A Common Stock
Number of Initial Shares to be purchased by U.S. Underwriters: ___________.
Number of Option Shares to be purchased by U.S. Underwriters: ___________.
Initial Public Offering Price: $________
Purchase Price: $_________ per share being an amount equal to the initial
public offering price set forth above less $ _____ per share.
Closing Date, Time and Location: ___________________, 1997, at the offices of
Winthrop, Stimson, Xxxxxx & Xxxxxxx, Xxx Xxxxxxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000.
SCHEDULE II
Number of Shares
Names of Underwriters to be Purchased
--------------------- -----------------
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
Deutsche Xxxxxx Xxxxxxxx Inc.
Total . . . . . . . . . . . . . . . . . . __________________
