EXHIBIT 1.1
TELEPORT COMMUNICATIONS GROUP INC.
(a Delaware corporation)
_________________ Shares of Class A Common Stock
(Par Value $.01 Per Share)
U.S. PURCHASE AGREEMENT
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, 1997
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XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxx Brothers Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Bear, Xxxxxxx & Co. Inc.
Deutsche Xxxxxx Xxxxxxxx Inc.
as U.S. Representatives of the several U.S. Underwriters
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Teleport Communications Group Inc., a Delaware corporation (the "Company"),
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and Continental Holding Company, a Massachusetts business trust (the "Selling
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Shareholder"), confirm their respective agreements with Xxxxxxx Xxxxx & Co.,
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Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") and each of
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the other U.S. Underwriters named in Schedule A hereto (collectively, the "U.S.
----
Underwriters," which term shall also include any underwriter substituted as
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hereinafter provided in Section 10 hereof), for which Xxxxxxx Xxxxx and Xxxxxx
Brothers Inc., Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, Bear,
Xxxxxxx & Co. Inc. and Deutsche Xxxxxx Xxxxxxxx Inc. are acting as
representatives (in such capacity, the "U.S. Representatives"), with respect to
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(i) the sale by the Company and the Selling Shareholder acting severally and not
jointly, and the purchase by the U.S. Underwriters, acting severally and not
jointly, of the respective numbers of shares of Class A Common Stock, par value
$.01 per share, of the Company ("Class A Common Stock") set forth in Schedule A
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hereto, and (ii) the grant by the Company to the U.S. Underwriters, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of _____________ additional shares of Class A Common
Stock
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to cover over-allotments, if any. The aforesaid _____________ shares of Class A
Common Stock (the "Initial U.S. Securities") to be purchased by the U.S.
-----------------------
Underwriters and all or any part of the ________________ shares of Class A
Common Stock subject to the option described in Section 2(b) hereof (the "U.S.
----
Option Securities") are hereinafter called, collectively, the "U.S. Securities."
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It is understood that the Company and the Selling Shareholder are
concurrently entering into an agreement dated the date hereof (the
"International Purchase Agreement") providing for the offering by the Company
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and the Selling Shareholder of an aggregate of ________________________ shares
of Class A Common Stock (the "Initial International Securities") through
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arrangements with certain underwriters outside the United States and Canada (the
"International Managers") for which Xxxxxxx Xxxxx International, Xxxxxx Brothers
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International (Europe), Cazenove & Co., Xxxxxx Xxxxxxxx & Co. Limited and UBS
Limited are acting as lead managers (the "Lead Managers") and the grant by the
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Company to the International Managers, acting severally and not jointly, of an
option to purchase all or any part of the International Managers' pro rata
portion of up to _____________ additional shares of Class A Common Stock solely
to cover over-allotments, if any (the "International Option Securities" and,
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together with the U.S. Option Securities, the "Option Securities"). The Initial
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International Securities and the International Option Securities are hereinafter
called the "International Securities."
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It is understood that the Company and the Selling Shareholder are not
obligated to sell and the U.S. Underwriters are not obligated to purchase, any
Initial U.S. Securities unless all of the Initial International Securities are
contemporaneously purchased by the International Managers.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters," the Initial U.S. Securities and the
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Initial International Securities are hereinafter collectively called the
"Initial Securities," and the U.S. Securities and the International Securities
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are hereinafter collectively called the "Securities."
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The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
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coordination of certain transactions among the Underwriters under the direction
of Xxxxxxx Xxxxx (in such capacity, the "Global Coordinator").
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The Company and the Selling Shareholder understand that the U.S.
Underwriters propose to make a public offering of the U.S. Securities as soon as
the U.S. Representatives deem advisable after this Agreement has been executed
and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-37597) and ____
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amendment[s]
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thereto covering the registration of the Securities under the Securities Act of
1933, as amended (the "1933 Act"), including the related preliminary prospectus
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or prospectuses. Promptly after execution and delivery of this Agreement, the
Company will either (i) prepare and file a prospectus in accordance with the
provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
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Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b) of
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Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has
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elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare
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and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule
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434 and Rule 424(b). Two forms of prospectus are to be used in connection with
the offering and sale of the Securities: one relating to the U.S. Securities
(the "Form of U.S. Prospectus") and one relating to the International Securities
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(the "Form of International Prospectus"). The Form of International Prospectus
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is identical to the Form of U.S. Prospectus, except for the front cover and back
cover pages and the information under the caption "Underwriting." The
information included in any such prospectus, if any, or in any such Term Sheet,
as the case may be, that was omitted from such registration statement at the
time it became effective but that is deemed to be part of such registration
statement at the time it became effective (a) pursuant to paragraph (b) of Rule
430A is referred to as "Rule 430A Information" or (b) pursuant to paragraph (d)
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of Rule 434 is referred to as "Rule 434 Information." Each Form of U.S.
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Prospectus and Form of International Prospectus used before such registration
statement became effective, and any prospectus that omitted, as applicable, the
Rule 430A Information or the Rule 434 Information, that was used after such
effectiveness and prior to the execution and delivery of this Agreement, is
herein called a "preliminary prospectus." Such registration statement,
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including the exhibits, schedules and amendment(s) thereto, if any, and the
documents incorporated by reference pursuant to Item 12 of Form S-3 under the
1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, if and as applicable, is herein called
the "Registration Statement." Any registration statement filed pursuant to Rule
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462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
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Registration Statement," and after such filing the term "Registration Statement"
---------------------- ----------------------
shall include the Rule 462(b) Registration Statement. The final Form of U.S.
Prospectus and the final Form of International Prospectus, including the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the forms first furnished to the Underwriters for use in
connection with the confirmation of sales of the Securities are herein called
the "U.S. Prospectus" and the "International Prospectus," respectively, and
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collectively, the "Prospectuses." If Rule 434 is relied on, the terms "U.S.
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Prospectus" and "International Prospectus" shall refer to the preliminary U.S.
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Prospectus dated ____________, 1997 and preliminary International Prospectus
dated ____________, 1997, respectively, each together with the applicable Term
Sheet and all references in this Agreement to the date of such Prospectuses
shall mean the date of the applicable Term Sheet. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the International Prospectus, the U.S. Prospectus or any Term Sheet
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the
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Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("XXXXX").
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All references in this Agreement to financial statements and schedules and
other information which is "contained," "included," "referred to" or "stated" in
the Registration Statement, any preliminary prospectus or the Prospectuses (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectuses, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectuses shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") that is
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incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectuses, as the case may be.
SECTION 1. Representations and Warranties. (a) Representations and
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Warranties by the Company. The Company represents and warrants to each U.S.
Underwriter and to the Selling Shareholder, and agrees with each U.S.
Underwriter and the Selling Shareholder, as follows:
(i) Compliance with Registration Requirements. The Company meets the
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requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted and are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any U.S. Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. Neither of the Prospectuses nor any amendments or
supplements thereto, at the time the Prospectuses or any amendments or
supplements thereto were issued and at the Closing Time (and, if any U.S.
Option Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit to
state a material fact necessary in order to
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make the statements therein, in the light of the circumstances under which
they were made, not misleading. If Rule 434 is used, the Company will
comply with the requirements of Rule 434 and the Prospectuses shall not be
"materially different," as such term is used in Rule 434, from the
prospectuses included in the Registration Statement at the time it became
effective. The representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration Statement or the
Prospectuses made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through the U.S.
Representatives or the Lead Managers expressly for use in the Registration
Statement or the Prospectuses.
(ii) Incorporated Documents. The documents incorporated or deemed to
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be incorporated by reference in the Registration Statement and the
Prospectuses, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations or the 1934 Act and the rules and regulations of the Commission
thereunder (the "1934 Act Regulations"), as applicable, and, when read
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together with the other information in the Prospectuses, at the time the
Registration Statement became effective, at the time the Prospectuses were
issued and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
(iii) Independent Accountants. The accountants who certified the
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financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) Financial Statements. The combined balance sheets of the Company
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and its subsidiaries and TCG Partners, a New York general partnership
(collectively, "TCG"), as of December 31, 1995 and the related combined
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statements of operations, changes in stockholders' equity and partners'
capital (deficit), and cash flows for the years ended December 31, 1994 and
1995 and the combined balance sheet of TCG as of June 30, 1996 and the
related combined statements of operations and cash flows for the six month
period ended June 30, 1996 included in the Registration Statement and the
Prospectuses, together with the related schedules and notes, present fairly
the combined financial position of TCG at the dates indicated and the
combined results, of TCG's operations and TCG's cash flows for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent
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basis throughout the periods involved. The consolidated balance sheet of
the Company and its subsidiaries as of December
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31, 1996 and the related consolidated statements of operations, changes in
stockholders' equity and partners' capital (deficit) and cash flows for the
year ended December 31, 1996 and the consolidated balance sheet of the
Company as of June 30, 1997 and the related consolidated statements of
operations and cash flows for the six months ended June 30, 1997 included
in the Registration Statement and the Prospectuses, together with the
related schedules and notes, present fairly the consolidated financial
position of the Company and its consolidated subsidiaries at the dates
indicated and the statements of operations, changes in stockholders' equity
and partners' capital (deficit) and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with GAAP applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated therein. The
selected financial data and the summary financial information included in
the Prospectuses present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement.
(v) No Material Adverse Change in Business. Since the respective
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dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, (A) there has been no
material adverse change or no development involving a prospective material
adverse change, in the condition, financial or otherwise, or in the
earnings or business affairs of the Company and its Subsidiaries considered
as one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no transactions
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entered into by the Company or any of its Subsidiaries, other than those in
the ordinary course of business, which are material with respect to the
Company and its Subsidiaries considered as one enterprise and which are
required to be disclosed in the Registration Statement or which would have
been required to be disclosed in the Registration Statement prior to its
effectiveness, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been duly
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organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the
7
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Schedule C lists each
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"significant subsidiary" of the Company (as such term is defined in Rule 1-
02 of Regulation S-X) and other subsidiaries not deemed "significant" but
nonetheless material (each a "Subsidiary" and, collectively, the
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"Subsidiaries"). Each Subsidiary has been duly organized or formed and is
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validly existing as a corporation, a partnership or a limited partnership
in good standing (with respect to a Subsidiary that is a corporation or
limited partnership) under the laws of the jurisdiction in which it has
been incorporated or formed, as applicable, has the necessary corporate or
partnership power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectuses and (with
respect to a Subsidiary that is a corporation or a limited partnership) is
duly qualified as a foreign corporation or limited partnership to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Registration Statement or on Schedule
C hereof, all of the issued and outstanding capital stock of each such
Subsidiary which is a corporation has been duly authorized and validly
issued, is fully paid and non-assessable and all the issued and outstanding
capital stock of each such Subsidiary which is a corporation and all the
existing partnership interests of such Subsidiary which is a partnership or
a limited partnership are owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; and none of the outstanding shares of
capital stock of any Subsidiary which is a corporation was issued in
violation of the preemptive rights of any securityholder of such
Subsidiary.
(viii) Capitalization. The authorized, issued and outstanding
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capital stock of the Company is as set forth in the Prospectuses in the
column entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectuses or pursuant to the exercise of convertible securities or
options referred to in the Prospectuses). The shares of issued and
outstanding capital stock of the Company, including the Securities to be
purchased by the U.S. Underwriters and the International Managers from the
Selling Shareholder, have been duly authorized and validly issued and are
fully paid and non-assessable; none of the outstanding shares of capital
stock of the Company, including the Securities to be purchased by the U.S.
Underwriters and the International Managers from the Selling Shareholder,
was issued in violation of the preemptive rights of any securityholder of
the Company arising under the Delaware General Corporation Law (the
"DGCL"), the Company's
----
8
certificate of incorporation or bylaws or any agreement to which the
Company is a party.
(ix) Authorization of Agreement. This Agreement and the International
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Purchase Agreement have been duly authorized, executed and delivered by the
Company.
(x) Authorization and Description of Securities. The Securities to be
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purchased by the U.S. Underwriters and the International Managers from the
Company have been duly authorized for issuance and sale to the U.S.
Underwriters pursuant to this Agreement and the International Managers
pursuant to the International Purchase Agreement, respectively, and, when
issued and delivered by the Company pursuant to this Agreement and the
International Purchase Agreement, respectively, against payment of the
consideration set forth herein and the International Purchase Agreement,
respectively, will be validly issued, fully paid and non-assessable; the
Class A Common Stock conforms to all statements relating thereto contained
in the Prospectuses and such description conforms to the rights set forth
in the instruments defining the same; no holder of the Securities will be
subject to personal liability for the payment of the Company's debts except
as they may be liable by reason of their own conduct or acts and except as
holders of the Securities may be liable pursuant to Section 282 of the
DGCL; and the issuance of the Securities is not subject to preemptive or
other similar rights of any securityholder of the Company arising under the
DGCL, the Company's certificate of incorporation or bylaws or any agreement
to which the Company is a party.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any
---------------------------------
Subsidiary is in violation of its charter or by-laws or partnership
agreement, as the case may be, or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the Company or any
Subsidiary is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any Subsidiary is
subject (collectively, "Agreements and Instruments") except for such
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violations or defaults that would not reasonably be expected to result in a
Material Adverse Effect; and the execution, delivery and performance of
this Agreement and the International Purchase Agreement and the
consummation of the transactions contemplated in this Agreement and the
International Purchase Agreement, the issuance and sale of the Securities
and the use of the proceeds from the sale of the Securities as described in
the Prospectuses under the caption "Use of Proceeds" and compliance by the
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Company with its obligations under this Agreement and the International
Purchase Agreement have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of
notice or passage of time or both,
9
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not reasonably be expected to result in a Material Adverse Effect),
nor will such actions result in any violation of the provisions of the
charter or by-laws or partnership agreement, as the case may be, of the
Company or any Subsidiary or any applicable law (including the
Communications Act of 1934, as amended, and the Telecommunications Act of
1996, as amended (the "1996 Act"), and the rules, regulations and policies
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of the Federal Communications Commission (the "FCC") and the public
---
utilities laws of the various states in which the Company and the
Subsidiaries do business and the ordinances, rules and regulations of the
various local governments in which the Company and the Subsidiaries do
business), statute, rule, regulation, judgment, order, writ or decree of
any government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their
assets, properties or operations (except for such violations that would not
reasonably be expected to result in a Material Adverse Effect). As used
herein, a "Repayment Event" means any event or condition which gives the
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holder of any note, debenture or other evidence of indebtedness for
borrowed money in principal amount in excess of $10 million (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any Subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the employees
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of the Company or any Subsidiary exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
Subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit, proceeding,
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inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any Subsidiary
(or any of the properties or assets thereof), which is required to be
disclosed in the Registration Statement (other than as disclosed therein),
or which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and adversely
affect the consummation of the transactions contemplated in this Agreement
and the International Purchase Agreement or the performance by the Company
of its obligations hereunder or thereunder; the aggregate of all pending
legal or governmental proceedings to which the Company or any Subsidiary is
a party or of
10
which any of their respective properties or assets is the subject which are
not described in the Registration Statement, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or documents that
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are required by the 1993 Act, the 1933 Act Regulations, the 1934 Act or the
1934 Act Regulations to be described in the Registration Statement, the
Prospectuses or the documents incorporated by reference therein or to be
filed as exhibits thereto that have not been so described and filed as
required.
(xv) Possession of Intellectual Property. The Company and the
-----------------------------------
Subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
---------------------
now operated by them, and neither the Company nor any of the Subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of the Subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
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authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities under this Agreement and the International Purchase
Agreement or the consummation of the transactions contemplated by this
Agreement and the International Purchase Agreement, (i) except such as have
been already obtained or as may be required under the 1933 Act or the 1933
Act Regulations and foreign or state securities or blue sky laws and (ii)
except for notice filings where the failure to make such filing would not
materially adversely affect the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities under this Agreement and the International Purchase
Agreement or the consummation of the transactions contemplated by this
Agreement and the International Purchase Agreement.
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(xvii) Possession of Licenses and Permits. The Company and the
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Subsidiaries possess all permits, licenses, approvals, consents and other
authorizations issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies (including the FCC, the public utilities
commission, or any equivalent body, of each state in which the Company and
its Subsidiaries do business and any other relevant state and local
authorities (the "Local Authorities")) required for the conduct of the
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business now operated by them (collectively, "Governmental Licenses"),
---------------------
except where the failure to possess any such permit, license, approval,
consent or authorization would not reasonably be expected to result in a
Material Adverse Effect; the Company and the Subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses, except
where the failure so to comply would not reasonably be expected to, singly
or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are (except for the effects of the 1996 Act as
described in the Prospectuses) valid and in full force and effect, except
where the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not reasonably
be expected to have a Material Adverse Effect; there is no outstanding
adverse judgment, decree or order that has been issued by the FCC or any of
the Local Authorities against the Company or any of the Subsidiaries and
which, singly or in the aggregate, would reasonably be expected to result
in a Material Adverse Effect; and neither the Company nor any of the
Subsidiaries has received any notice of or is aware of proceedings relating
to the revocation or modification of any such Governmental Licenses or that
would otherwise affect the operations of the Company or the Subsidiaries
and which, singly or in the aggregate, would reasonably be expected to
result in a Material Adverse Effect.
(xviii) Title to Property. The Company and the Subsidiaries have
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good and marketable title to all real property owned by the Company and the
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectuses, (b) are "Permitted Liens" under the 1996
Indentures and the Revolving Credit Agreement (as such terms are defined in
the Prospectuses) or (c) would not reasonably be expected to, singly or in
the aggregate, result in a Material Adverse Effect; and all of the leases
and subleases material to the business of the Company and the Subsidiaries,
considered as one enterprise, and under which the Company or any of the
Subsidiaries holds properties described in the Prospectuses, are in full
force and effect, and neither the Company nor any Subsidiary has any notice
of any claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any Subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company or such Subsidiary to the continued possession of the leased or
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subleased premises under any such lease or sublease except for such claims
that would not reasonably be expected to result in a Material Adverse
Effect.
(xix) Investment Company Act. The Company is not, and upon the
----------------------
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
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(xx) Environmental Laws. Except as described in the Registration
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Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of the
Subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance or code or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the
-------------------
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
-------------
Laws"), (B) the Company and its Subsidiaries have all permits,
----
authorizations and approvals required under any applicable Environmental
Laws and are each in compliance with their requirements, (C) there are no
pending or, to the Company's knowledge, threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
Subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
Subsidiaries relating to Hazardous Materials or the violation of
Environmental Laws.
(xxi) Registration Rights. Except as described in the Registration
-------------------
Statement, the Company has not granted any registration rights or other
similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
1933 Act.
(b) Representations and Warranties by the Selling Shareholder. The
Selling Shareholder represents and warrants to each U.S. Underwriter and to the
Company, and agrees with each U.S. Underwriter and the Company, as follows:
13
(i) Accurate Disclosure. The Selling Shareholder has reviewed and is
-------------------
familiar with the Registration Statement and the Prospectuses and neither
the Prospectuses nor any amendments or supplements thereto includes any
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the Selling
Shareholder is not prompted to sell the Securities to be sold by the
Selling Shareholder hereunder by any information concerning the Company or
any subsidiary of the Company which is not set forth in the Prospectuses.
(ii) Authorization of Agreements. The Selling Shareholder has the
---------------------------
full right, power and authority to enter into this Agreement and the
International Purchase Agreement and to sell, transfer and deliver the
Securities to be sold by the Selling Shareholder hereunder and thereunder.
The execution and delivery of this Agreement and the International Purchase
Agreement and the sale and delivery of the Securities to be sold by the
Selling Shareholder and the consummation of the transactions contemplated
herein and compliance by the Selling Shareholder with its obligations
hereunder and under the International Purchase Agreement have been duly
authorized by all necessary action of the Selling Shareholder and do not
and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any tax, lien, charge or
encumbrance upon the Securities to be sold by the Selling Shareholder or
any property or assets of the Selling Shareholder pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
license, lease or other agreement or instrument to which the Selling
Shareholder is a party or by which the Selling Shareholder may be bound, or
to which any of the property or assets of the Selling Shareholder is
subject except for such conflicts, breaches or defaults or liens, charges
or encumbrances upon any property or assets of the Selling Shareholder that
would not reasonably be expected to result in a material adverse change or
development involving a material adverse change, in the condition,
financial or otherwise, or in the earnings or business affairs of the
Selling Shareholder, whether or not arising in the ordinary course of
business, or in its ability to perform its obligations hereunder or under
the International Purchase Agreement nor will such action result in any
violation of the provisions of the organizational instrument of the Selling
Shareholder, if applicable, or any applicable treaty, law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Selling Shareholder or any of its properties.
(iii) Good and Marketable Title. The Selling Shareholder has and
-------------------------
will at the Closing Time have good and marketable title to the Securities
to be sold by the Selling Shareholder hereunder, free and clear of any
security interest, mortgage,
14
pledge, lien, charge, claim, equity or encumbrance of any kind, other than
pursuant to this Agreement and the International Purchase Agreement; and
upon delivery of such Securities and payment of the purchase price therefor
as herein contemplated, assuming each such Underwriter has no notice of any
adverse claim, each of the Underwriters will receive good and marketable
title to the Securities purchased by it from the Selling Shareholder, free
and clear of any security interest, mortgage, pledge, lien, charge, claim,
equity or encumbrance of any kind.
(iv) Absence of Manipulation. The Selling Shareholder has not taken,
-----------------------
and will not take, directly or indirectly, any action which is designed to
or which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(v) Absence of Further Requirements. No filing with, or consent,
-------------------------------
approval, authorization, order, registration, qualification or decree of,
any court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by the Selling Shareholder of its
obligations hereunder, or in connection with the sale and delivery of the
Securities hereunder or the consummation of the transactions contemplated
by this Agreement and the International Purchase Agreement, except (a) for
the approval pursuant to the Final Judgement (as such term is defined in
the Prospectuses), which has been obtained and (b) such as may have
previously been made or obtained or as may be required under the 1933 Act
or the 1933 Act Regulations or state securities laws.
(vi) Certificates Suitable for Transfer. Certificates for all of the
----------------------------------
Securities to be sold by the Selling Shareholder pursuant to this Agreement
and the International Purchase Agreement, in suitable form for transfer by
delivery or accompanied by duly executed instruments of transfer or
assignment in blank with signatures guaranteed, have been placed in custody
with the Custodian with irrevocable conditional instructions to deliver
such Securities to the Underwriters pursuant to this Agreement and the
International Purchase Agreement.
(vii) No Association with NASD. Neither the Selling Shareholder nor
------------------------
any of its affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, or has any other association with (within the meaning of Article I,
Section 1(m) of the By-laws of the National Association of Securities
Dealers, Inc. ("NASD")), any member firm of the NASD.
----
(c) Officer's Certificates. Any certificate signed by any officer of
the Company or any of the Subsidiaries delivered to the Global Coordinator, the
U.S. Representatives or to counsel for the U.S. Underwriters pursuant to this
Agreement or
15
otherwise in connection with the offering of the Securities shall be deemed a
representation and warranty by the Company to each U.S. Underwriter as to the
matters covered thereby; and any certificate signed by or on behalf of the
Selling Shareholder as such and delivered to the Global Coordinator, the U.S.
Representatives or to counsel for the U.S. Underwriters pursuant to the terms of
this Agreement shall be deemed a representation and warranty by the Selling
Shareholder to each U.S. Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing. (a)
-----------------------------------------------
Initial Securities. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
and the Selling Shareholder, severally and not jointly, agree to sell to each
U.S. Underwriter, severally and not jointly, and each U.S. Underwriter,
severally and not jointly, agrees to purchase from the Company and the Selling
Shareholder, at the price per share set forth in Schedule B, that proportion of
the number of Initial U.S. Securities to be sold by the Company or the Selling
Shareholder, as the case may be, which the number of Initial U.S. Securities set
forth in Schedule A opposite the name of such U.S. Underwriter, plus any
additional number of Initial U.S. Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof, bears to
the total number of Initial U.S. Securities, subject, in each case, to such
adjustments among the U.S. Underwriters as the U.S. Representatives in their
sole discretion shall make to eliminate any sales or purchases of fractional
securities.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the U.S.
Underwriters, severally and not jointly, to purchase up to an additional
_____________ shares of Class A Common Stock at the price per share set forth in
Schedule B. The option hereby granted will expire 30 days after the date hereof
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Initial U.S. Securities upon notice by the Global
Coordinator to the Company setting forth the number of U.S. Option Securities as
to which the several U.S. Underwriters are then exercising the option and the
time and date of payment and delivery for such U.S. Option Securities. Any such
time and date of delivery for the U.S. Option Securities (a "Date of Delivery")
----------------
shall be determined by the Global Coordinator, but shall not be later than seven
full business days after the exercise of said option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is exercised as to all
or any portion of the U.S. Option Securities, each of the U.S. Underwriters,
acting severally and not jointly, will purchase that proportion of the total
number of U.S. Option Securities then being purchased which the number of
Initial U.S. Securities set forth in Schedule A opposite the name of such U.S.
Underwriter bears to the total number of Initial U.S. Securities, subject in
each case to such adjustments as the Global Coordinator in its discretion shall
make to eliminate any sales or purchases of fractional shares.
16
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, or at such other
place as shall be agreed upon by the Global Coordinator and the Company and the
Selling Shareholder, at 9:00 A.M. (Eastern time) either on the third (fourth if
the pricing occurs after 4:30 P.M. (Eastern time) on any given day) business day
after the date hereof (unless postponed in accordance with the provisions of
Section 10 hereof), or such other time not later than ten business days after
such date as shall be agreed upon by the Global Coordinator and the Company and
the Selling Shareholder (such time and date of payment and delivery being herein
called the "Closing Time").
------------
In addition, in the event that any or all of the U.S. Option
Securities are purchased by the U.S. Underwriters, payment of the purchase price
for, and delivery of certificates for, such U.S. Option Securities shall be made
at the above-mentioned offices, or at such other place as shall be agreed upon
by the Global Coordinator and the Company, on each Date of Delivery as specified
in the notice from the Global Coordinator to the Company.
Payment shall be made to the Company and the Selling Shareholder by
wire transfer of immediately available funds to separate bank accounts
designated by each of the Company and the Selling Shareholder against delivery
to the U.S. Representatives for the respective accounts of the U.S. Underwriters
of certificates for the U.S. Securities to be purchased by them. It is
understood that each U.S. Underwriter has authorized the U.S. Representatives,
for its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial U.S. Securities and the U.S. Option Securities,
if any, which it has agreed to purchase. Xxxxxxx Xxxxx, individually and not as
representative of the U.S. Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial U.S. Securities or the U.S.
Option Securities, if any, to be purchased by any U.S. Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such U.S. Underwriter from
its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives in The City of New
York not later than 9:00 A.M. (Eastern Time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
17
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
U.S. Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company will comply with the requirements of Rule 430A or Rule 434, as
applicable, and will notify the Global Coordinator immediately, and confirm
the notice in writing, (i) when any post-effective amendment to the
Registration Statement, shall have become effective, or any supplement to
the Prospectuses or any amended Prospectuses shall have been filed, (ii) of
the receipt of any comments from the Commission relating to the
Registration Statement or the Prospectuses, or any amendment or supplement
thereto, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectuses
or for additional information relating to the offering of the Securities,
and (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of
the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for
any of such purposes. The Company will promptly effect the filings
necessary, if any, pursuant to Rule 424(b) and will take such steps as it
deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest practicable moment.
(b) Filing of Amendments. The Company will give the Global Coordinator
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectuses
included in the Registration Statement at the time it became effective or
to the Prospectuses, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the Global Coordinator with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Global Coordinator or counsel for the U.S. Underwriters shall reasonably
object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Global Coordinator and counsel for the U.S.
Underwriters, without charge, signed copies of the Registration Statement
as originally filed and of each amendment thereto (and copies of exhibits
filed therewith or incorporated by reference therein and documents
incorporated or deemed to be incorporated by reference therein) whether
filed before or after the Registration Statement became effective, and
signed copies of all consents and certificates of experts, and will also
deliver to the
18
U.S. Representatives, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the U.S. Underwriters. If applicable, the copies of
the Registration Statement and each amendment thereto furnished to the U.S.
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each U.S.
Underwriter, without charge, as many copies of each preliminary prospectus
as such U.S. Underwriter reasonably requested, and the Company hereby
consents to the use of such copies for purposes permitted by the 1933 Act.
The Company will furnish to each U.S. Underwriter, without charge, during
the period when the U.S. Prospectus is required to be delivered under the
1933 Act or the 1934 Act such number of copies of the U.S. Prospectus (as
amended or supplemented) as such U.S. Underwriter may reasonably request.
If applicable, the U.S. Prospectus and any amendments or supplements
thereto furnished to the U.S. Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement, the International
Purchase Agreement and in the Prospectuses. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with
sales of the Securities, any event shall occur or condition shall exist as
a result of which it is necessary, in the opinion of counsel for the U.S.
Underwriters or for the Company, to amend the Registration Statement or
amend or supplement either of the Prospectuses in order that the
Prospectuses will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement either of the Prospectuses in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations,
the Company will promptly prepare and file with the Commission, subject to
Section 3(b) hereof, such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or
the Prospectuses comply with such requirements, and the Company will
furnish to the U.S. Underwriters such number of copies of such amendment or
supplement as the U.S. Underwriters may reasonably request.
19
(f) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earning statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(g) Use of Proceeds. The Company will use the net proceeds received
by it from the sale of the Securities in the manner specified in the
Prospectuses under "Use of Proceeds."
(h) Listing. The Company will use its best efforts to effect and
maintain the quotation of the Securities on the Nasdaq National Market and
will file with the Nasdaq National Market all documents and notices
required by the Nasdaq National Market to be filed by companies that have
securities that are traded in the over-the-counter market and quotations
for which are reported by the Nasdaq National Market.
(i) Restriction on Sale of Securities. During a period of 90 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of the Global Coordinator, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of any share of
Class A Common Stock or any securities convertible into or exercisable or
exchangeable for Class A Common Stock or file any registration statement
under the 1933 Act with respect to any of the foregoing or (ii) enter into
any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership
of the Class A Common Stock, whether any such swap or transaction described
in clause (i) or (ii) above is to be settled by delivery of Class A Common
Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder and
under the International Purchase Agreement, (B) any shares of Class A
Common Stock issued or options to purchase Class A Common Stock granted
pursuant to existing employee benefit plans of the Company referred to in
the Prospectuses or (C) any shares of Class A Common Stock issued pursuant
to any non-employee director stock plan or dividend reinvestment plan.
(j) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company and the
-------------------
Selling Shareholder will pay or cause to be paid, pro rata, based of the number
of Securities being sold by each, all expenses incident to the performance of
their obligations under this
20
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the printing and delivery
to the Underwriters of this Agreement and any Agreement among Underwriters,
(iii) the preparation, issuance and delivery of the certificates for the
Securities to the Underwriters, including any stock or other transfer taxes and
any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters, and the transfer of the Securities between the
U.S. Underwriters and International Managers, (iv) the fees and disbursements of
the Company's counsel, accountants and other advisors, (v) the reasonable fees
and disbursements of counsel for the Underwriters in connection with the
preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing
and delivery to the Underwriters of copies of each preliminary prospectus, any
Term Sheets and of the Prospectuses and any amendments or supplements thereto,
(vii) the preparation, printing and delivery to the Underwriters of copies of
the Blue Sky Survey and any supplement thereto, (viii) the fees and expenses of
any transfer agent or registrar for the Securities, (ix) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the NASD of the terms of the sale
of the Securities, (x) the fees and expenses incurred in connection with the
inclusion of the Securities in The Nasdaq National Market and (xi) all
reasonable costs and expenses of the Underwriters.
(b) Expenses of the Selling Shareholder. The Selling Shareholder will
pay all expenses incident to the performance of its obligations under, and the
consummation of the transactions contemplated by this Agreement, including (i)
any stamp duties, capital duties and stock transfer taxes, if any, payable upon
the sale of the Securities to the Underwriters, and their transfer between the
Underwriters pursuant to an agreement between such Underwriters, and (ii) the
fees and disbursements of its counsel and accountants.
(c) Termination of Agreement. If this Agreement is terminated by the
U.S. Representatives in accordance with the provisions of Section 5, Section
9(a)(i) or Section 11 hereof, the Company and the Selling Shareholder shall
reimburse the U.S. Underwriters for all of their reasonable out-of-pocket
expenses incurred in connection with the offering and sale of the Securities,
including the reasonable fees and disbursements of counsel for the U.S.
Underwriters.
(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company and the Selling Shareholder may make for
the sharing of such costs and expenses.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The
--------------------------------------------
obligations of the several U.S. Underwriters hereunder are subject to the
accuracy as of the Closing Time of the representations and warranties of the
Company and the Selling Shareholder contained in Section 1 hereof or in
certificates of any officer of the Company or any
21
Subsidiary of the Company or on behalf of the Selling Shareholder delivered
pursuant to the provisions hereof, to the performance by the Company and the
Selling Shareholder of their respective covenants and other obligations
hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at the Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission, and any request on the part of the Commission for additional
information from the Company or its agents shall have been complied with to
the reasonable satisfaction of counsel to the U.S. Underwriters.
Prospectuses containing the Rule 430A Information shall have been filed
with the Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A) or, if the
Company has elected to rely upon Rule 434, a Term Sheet shall have been
filed with the Commission in accordance with Rule 424(b).
(b) Opinions of Counsel for the Company. At the Closing Time, the
U.S. Representatives shall have received the favorable opinions, dated as
of the Closing Time, of (i) the General Counsel of the Company and (ii)
Dow, Xxxxxx & Xxxxxxxxx, PLLC, counsel for the Company, together with
signed or reproduced copies of such letters for each of the other U.S.
Underwriters substantially in the form set forth in Exhibits A(i) and A(ii)
hereto, respectively, and to such further effect, arising as a result of
changed circumstances between the date hereof and the Closing Time, as
counsel to the U.S. Underwriters may reasonably request. In giving such
opinions such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York, the federal law
of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel reasonably satisfactory to the U.S.
Representatives. Such counsel may also state that, insofar as such
opinions involve factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its Subsidiaries
and certificates of public officials. Such opinions shall not state that
they are to be governed or qualified by, or that they are otherwise subject
to, any treatise, written policy or other document relating to legal
opinions, including without limitation, the Legal Opinion Accord of the ABA
Section of Business Law (1991).
(c) Opinion of Counsel for the Selling Shareholder. At the Closing
Time, the U.S. Representatives shall have received the favorable opinion,
dated as of the Closing Time, of Xxxxxx Xxxxxx, Esq., counsel for the
Selling Shareholder, together with signed or reproduced copies of such
letter for each of the other U.S. Underwriters substantially in the form
set forth in Exhibit B hereto and to such
22
further effect, arising as a result of changed circumstances between the
date hereof and the Closing Time as counsel to the U.S. Underwriters may
reasonably request.
(d) Opinion of Counsel for U.S. Underwriters. At the Closing Time,
the U.S. Representatives shall have received the favorable opinion, dated
as of the Closing Time, of Shearman & Sterling, counsel for the U.S.
Underwriters, together with signed or reproduced copies of such letter for
each of the other U.S. Underwriters with respect to the matters set forth
in clauses (4) (solely as to preemptive rights arising under the DGCL or
the Company's certificate of incorporation or bylaws) and (14) of the form
of opinion of the General Counsel of the Company in Exhibit A(i) hereto and
with respect to the matters set forth in clauses (1), (2), (3), (4) and (7)
(solely as to the information in the Prospectuses under "Description of
Capital -- Common Stock") and clause (iii) of the paragraph immediately
following clause (10) of the form of opinion of Dow, Xxxxxx & Xxxxxxxxx,
PLLC in Exhibit A(ii) hereto. In giving such opinion such counsel may
rely, as to all matters governed by the laws of jurisdictions other than
the law of the State of New York, the federal law of the United States and
the General Corporation Law of the State of Delaware, upon the opinions of
counsel satisfactory to the U.S. Representatives. Such counsel may also
state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of
the Company and its Subsidiaries and certificates of public officials.
(e) Officers' Certificate. At the Closing Time, (i) the Registration
Statement and the Prospectuses, as they may then be amended or
supplemented, shall contain all statements that are required to be stated
therein under the 1933 Act and the 1933 Act Regulations and in all material
respects shall conform to the requirements of the 1933 Act and the 1933 Act
Regulations, (ii) the Company shall have complied in all material respects
with Rule 430A (if it shall have elected to rely thereon) and neither the
Registration Statement nor the Prospectuses, as they may then be amended or
supplemented, shall contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and (iii) there shall not have been,
since the date hereof or since the respective dates as of which information
is given in the Prospectuses, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its Subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the U.S.
Representatives shall have received a certificate of the Company, signed by
the President or a Vice President of the Company and by the chief financial
or chief accounting officer of the Company, dated as of the Closing Time,
to such effect, with respect to clause (i), and to the effect that (A)
there has been no such material adverse change, (B) the representations and
warranties in Section 1(a) hereof are true and correct with the same force
and effect as though expressly made at and as of the
23
Closing Time, (C) the Company has complied with all agreements and
satisfied all conditions herein on its part to be performed or satisfied at
or prior to the Closing Time, and (D) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission.
(f) Certificate of Selling Shareholder. At the Closing Time, the U.S.
Representatives shall have received a certificate of the Selling
Shareholder, dated as of the Closing Time, to the effect that (i) the
representations and warranties of the Selling Shareholder contained in
Section 1(b) hereof are true and correct in all respects with the same
force and effect as though expressly made at and as of the Closing Time and
(ii) the Selling Shareholder has complied in all material respects with all
agreements and all conditions on its part to be performed under this
Agreement at or prior to the Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the U.S. Representatives shall have received from Deloitte &
Touche LLP a letter dated such date, in form and substance satisfactory to
the U.S. Representatives, together with signed or reproduced copies of such
letter for each of the other U.S. Underwriters containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectuses.
(h) Bring-down Comfort Letter. At the Closing Time the
Representatives shall have received from Deloitte & Touche LLP a letter,
dated as of the Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (g) of this
Section, except that the specified date referred to shall be a date not
more than three business days prior to the Closing Time.
(i) Approval of Listing. At the time of effectiveness of the
Registration Statement, the Securities shall have been approved for
inclusion in The Nasdaq National Market, subject only to official notice of
issuance.
(j) No Objection. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(k) Lock-up Agreements. At the date of this Agreement, the U.S.
Representatives shall have received an agreement substantially in the form
of Exhibit C hereto signed by the persons listed on Schedule D hereto.
24
(l) Purchase of Initial International Securities. Contemporaneously with
the purchase by the U.S. Underwriters of the Initial U.S. Securities under
this Agreement, the International Managers shall have purchased the Initial
International Securities under the International Purchase Agreement.
(m) Conditions to Purchase of U.S. Option Securities. In the event
that the U.S. Underwriters exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the U.S. Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company or any Subsidiary
of the Company hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the U.S. Representatives
shall have received:
(i) Company Officers' Certificate. A certificate of the Company,
-----------------------------
dated such Date of Delivery, signed by the President or a Vice
President of the Company and by the chief financial or chief
accounting officer of the Company, confirming that the certificate
delivered at the Closing Time pursuant to Section 5(e) hereof remains
true and correct as of such Date of Delivery.
(ii) Opinions of Counsel for Company. The favorable opinions of
-------------------------------
(A) the General Counsel of the Company and (B) Dow, Xxxxxx &
Xxxxxxxxx, PLLC, counsel for the Company, described in Section 5(b)
hereof, each in form and substance reasonably satisfactory to counsel
for the Underwriters, dated such Date of Delivery, relating to the
U.S. Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinions required by Section 5(b)
hereof.
(iii) Opinion of Counsel for U.S. Underwriters. The favorable
----------------------------------------
opinion of Shearman & Sterling, counsel for the U.S. Underwriters,
dated such Date of Delivery, relating to the U.S. Option Securities to
be purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(d) hereof.
(iv) Bring-down Comfort Letter. A letter from Deloitte & Touche
-------------------------
LLP, in form and substance satisfactory to the U.S. Representatives
and dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the U.S. Representatives pursuant
to Section 5(h) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than
five days prior to such Date of Delivery.
25
(n) Additional Documents. At the Closing Time and at each Date of
Delivery, counsel for the U.S. Underwriters shall have been furnished with
such documents as they may reasonably require for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company and the Selling
Shareholder in connection with the issuance and sale of the Securities as
herein contemplated shall be reasonably satisfactory in form and substance
to the U.S. Representatives and counsel for the U.S. Underwriters.
(o) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of U.S.
Option Securities on a Date of Delivery which is after the Closing Time,
the obligations of the several U.S. Underwriters to purchase the relevant
Option Securities, may be terminated by the U.S. Representatives by notice
to the Company at any time at or prior to the Closing Time or such Date of
Delivery, as the case may be, and such termination shall be without
liability of any party to any other party except as provided in Section 4
hereof and except that Sections 1, 6, 7 and 8 hereof shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification. (a) Indemnification of U.S.
---------------
Underwriters. The Company agrees to indemnify and hold harmless each U.S.
Underwriter, its directors, officers and employees, and each person, if any, who
controls any U.S. Underwriter within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act to the extent and in the manner set forth in
clauses (i), (ii), and (iii) below. In addition, the Selling Shareholder agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including any Rule 430A Information and any
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectuses (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
26
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever, in any such case, based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided that
(subject to Section 6(d) below) any such settlement is effected with the
written consent of the Company and the Selling Shareholder; and
(iii) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by Xxxxxxx Xxxxx),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
-------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
U.S. Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto), including any Rule 430A
Information and any Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto); and
provided, further, that, with respect to the Selling Shareholder, this indemnity
-------- -------
agreement shall apply only to any loss, liability, claim, damage or expense to
the extent arising out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and conformity with information
furnished to the Company by the Selling Shareholder expressly for use in the
Registration Statement (or any amendment thereto), including any Rule 430A
Information and any Rule 434 Information, if applicable, or preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto). The
foregoing indemnity agreement with respect to any preliminary prospectus or any
Prospectus (or amendments or supplement thereto) shall not inure to the benefit
of any U.S. Underwriter from whom the person asserting any such loss, liability,
claim, damage or expense purchased Securities (or any director, officer or
employee of such U.S. Underwriter, or any person who controls such U.S.
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 0000 Xxx) if a copy of the applicable Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such U.S. Underwriter to such
person, if such is required by law, at or prior to the written confirmation of
the sale of such Securities to such person and if such Prospectus (as so amended
or supplemented) would have cured the defect giving rise to such loss,
liability, claim, damage or expense.
27
(b) Indemnification of Company, Directors and Officers and Selling
Shareholder. Each U.S. Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and the
Selling Shareholder and each person, if any, who controls the Selling
Shareholder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including any Rule 430A Information and any Rule 434
Information, if applicable, or any preliminary prospectus or the U.S. Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such U.S. Underwriter through
the U.S. Representatives expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section
6(a) above, counsel to the indemnified parties shall be selected by Xxxxxxx
Xxxxx, and, in the case of parties indemnified pursuant to Section 6(b) above,
counsel to the indemnified parties shall be selected by the Company. If it so
elects within a reasonable time after receipt of the notice mentioned above from
an indemnified party, an indemnifying party, jointly with any other indemnifying
parties receiving such notice, may assume the defense of such action with
counsel chosen by it and reasonably satisfactory to the indemnified parties
defendant in such action, unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses available to them
which are different from or in addition to those available to such indemnifying
party. If an indemnifying party assumes the defense of such action, the
indemnifying party shall not be liable for any fees and expenses of counsel for
the indemnified parties incurred thereafter in connection with such action. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim
28
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) hereof effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party fails, prior to the date of such settlement, to both reimburse such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and to provide written notice to the indemnified
party substantiating any unpaid balance as unreasonable.
(e) Limitation of Selling Shareholder's Liability. The Selling
Shareholder shall not be responsible for the payment of an amount, pursuant to
this Section 6 and Section 6 of the International Purchase Agreement, which
exceeds the gross proceeds (after deducting the Underwriters' discount but
before deducting expenses) received by the Selling Shareholder from the sale of
the Securities by the Selling Shareholder hereunder and under the International
Purchase Agreement.
(f) Other Agreements with Respect to Indemnification. The provisions
of this Section shall not affect any agreement between the Company and the
Selling Shareholder with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in
------------
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Shareholder on the one hand and the U.S. Underwriters on
the other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Selling Shareholder on the one hand and of the U.S. Underwriters
on the other hand in connection with the statements or omissions, which resulted
in such losses,
29
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Selling
Shareholder on the one hand and the U.S. Underwriters on the other hand in
connection with the offering of the U.S. Securities pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the U.S. Securities pursuant to this Agreement
(before deducting expenses but after deducting the underwriting discount)
received by the Company and the Selling Shareholder and the total underwriting
discount received by the U.S. Underwriters, in each case as set forth on the
cover of the U.S. Prospectus, or, if Rule 434 is used, the corresponding
location on the Term Sheet, bear to the aggregate initial public offering price
of the U.S. Securities as set forth on such cover.
The relative fault of the Company and the Selling Shareholder on the
one hand and the U.S. Underwriters on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or by the Selling
Shareholder or by the U.S. Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Selling Shareholder and the U.S. Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation (even if the 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 Section 7. The aggregate amount of losses, liabilities, claims, damages
and expenses incurred by an indemnified party and referred to above in this
Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the U.S. Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such U.S. Underwriter has otherwise been required to pay by reason of any such
untrue or alleged untrue statement or omission or alleged omission.
30
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls a
U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company or the Selling Shareholder within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
the Company or the Selling Shareholder, as the case may be. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial U.S. Securities set forth
opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
--------
Agreement or in certificates of the Company or the Selling Shareholder submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any U.S. Underwriter or controlling
person, or by or on behalf of the Company or the Selling Shareholder, and shall
survive delivery of the U.S. Securities to the U.S. Underwriters; provided,
--------
however, that in no event shall this Section 8 be construed as a waiver by the
-------
Company or the Selling Shareholder of any statute of limitations applicable to
any such representation, warranty or agreement.
SECTION 9. Termination of Agreement. (a) Termination; General. The
------------------------
U.S. Representatives may terminate this Agreement, by notice to the Company and
the Selling Shareholder, at any time at or prior to the Closing Time (i) if
there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the U.S. Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the U.S.
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or limited by the Commission or The Nasdaq National
Market, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or in The Nasdaq National Market has been suspended or limited,
or minimum or maximum prices for trading have
31
been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the NASD or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6 and 7 hereof shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the U.S. Underwriters. If one
-----------------------------------------------
or more of the U.S. Underwriters shall fail at the Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the U.S. Representatives
--------------------
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting U.S. Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the U.S.
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-
defaulting U.S. Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to
any Date of Delivery which occurs after the Closing Time, the obligation of
the Underwriters to purchase and of the Company to sell the Option
Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting U.S.
Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
U.S. Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the obligation
of the U.S. Underwriters to purchase and the Company to sell the relevant U.S.
Option Securities, as the case may be, either the U.S. Representatives or the
Company shall have the right to postpone the Closing Time or the relevant Date
of Delivery, as the case may be, for a period not exceeding seven days in
32
order to effect any required changes in the Registration Statement or the
Prospectuses or in any other documents or arrangements. As used herein, the
term "U.S. Underwriter" includes any person substituted for a U.S. Underwriter
under this Section 10.
SECTION 11. Default by the Selling Shareholder or the Company. (a)
-------------------------------------------------
If the Selling Shareholder shall fail at Closing Time or at a Date of Delivery
to sell and deliver the number of Securities which the Selling Shareholder is
obligated to sell hereunder, then the U.S. Underwriters may, at the option of
the U.S. Representatives, by notice from the U.S. Representatives to the
Company, either (a) terminate this Agreement without any liability on the part
of any non-defaulting party except that the provisions of Sections 1, 4, 6 and 7
shall remain in full force and effect or (b) elect to purchase the Securities
which the Company has agreed to sell hereunder. No action taken pursuant to
this Section shall relieve the Selling Shareholder from liability in respect of
such default.
In the event of a default by the Selling Shareholder as referred to in
this Section, each of the U.S. Representatives and the Company shall have the
right to postpone the Closing Time or the relevant Date of Delivery for a period
not exceeding seven days in order to effect any required change in the
Registration Statement or Prospectus or in any other documents or arrangements.
(b) If the Company shall fail at the Closing Time or at a Date of
Delivery to sell the number of Securities that it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the part
of any non-defaulting party; provided, however, that the provisions of Sections
-------- -------
1, 4, 6 and 7 shall remain in full force and effect. No action taken pursuant
to this Section shall relieve the Company from liability in respect of such
default.
SECTION 12. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if delivered by
overnight courier or transmitted by any standard form of telecommunication.
Notices to the U.S. Underwriters shall be directed to the U.S. Representatives
at Xxxxx Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000; notices
to the Company shall be directed to it at Xxx Xxxxxxxx Xxxxx, Xxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxxxxx, Esq.; and notices to the
---------
Selling Shareholder shall be directed to Continental Holding Company, c/o US
WEST, Inc., 0000 X. Xxxxxxx Xxxxx - Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000,
attention of Xxxxxx Xxxxxx, Esq.
SECTION 13. Parties. This Agreement shall inure to the benefit of
-------
and be binding upon the U.S. Underwriters, the Company and the Selling
Shareholder and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the U.S. Underwriters, the Company and the Selling
Shareholder and their respective successors and the controlling
33
persons and officers and directors referred to in Sections 6 and 7 hereof and
their heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained.
This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the U.S. Underwriters, the Company and the
Selling Shareholder and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any U.S. Underwriter shall be deemed to be a successor by reason
merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
----------------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT
AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 15. Effect of Headings. The Article and Section headings
------------------
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the U.S. Underwriters and the Company in accordance with its terms.
Very truly yours,
TELEPORT COMMUNICATIONS GROUP INC.
By: ______________________
Name:
Title:
CONTINENTAL HOLDING
COMPANY
By: ______________________
Name:
Title: Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
XXXXXX BROTHERS INC.
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
BEAR, XXXXXXX & CO. INC.
DEUTSCHE XXXXXX XXXXXXXX INC.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By
----------------------------------
Authorized Signatory
For themselves and as U.S. Representatives of the other U.S. Underwriters named
in Schedule A hereto.
EXHIBIT A(i)
November __, 1997
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated
Xxxxxx Brothers Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
Bear, Xxxxxxx & Co. Inc.
Deutsche Xxxxxx Xxxxxxxx Inc.
c/o Merrill Lynch, Pierce,
Xxxxxx & Xxxxx, Incorporated
World Xxxxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Xxxxxxx Xxxxx International
Xxxxxx Brothers International (Europe)
Cazenove & Co.
Xxxxxx Xxxxxxxx & Co. Limited
UBS Limited
c/o Merrill Xxxxx International
Ropemaker Place
00 Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Ladies and Gentlemen:
This opinion is being delivered to you pursuant to Section 5(b) of the U.S.
Purchase Agreement dated November __, 1997 (the "U.S. Purchase Agreement") and
Section 5(b) of the International Purchase Agreement dated November __, 1997
(the "International Purchase Agreement" and, together with the U.S. Purchase
Agreement, the "Purchase Agreements") among you, Teleport Communications Group
Inc. (the "Company") and Continental Holding Company (the "Selling
Shareholder"), providing for the sale to you on this date of an aggregate of
__________ shares of the Class A Common Stock, par value $0.01 per share, of the
Company (the "Securities"). I am the General Counsel of the Company. Capitalized
terms used herein that are not otherwise defined herein shall have the same
meaning as in the Purchase Agreements.
In this connection, I have examined:
(a) the Registration Statement on Form S-3 (No. 333-37597) relating to the
Securities filed with the Securities and Exchange Commission (the
"Commission") on October 10, 1997, under the 1933 Act, Amendment No. 1
thereto filed with the Commission on October 17, 1997, and Amendment No. 2
thereto filed with the Commission on November __, 1997 (such Registration
Statement, as so amended at the time when it became effective and including
the Rule 430A Information, and also including the Incorporated Documents
(as defined below), being hereinafter referred to as the "Registration
Statement");
(b) the final prospectus, dated November __, 1997, filed with the
Commission on November __, 1997, relating to the offering of the Securities
in the United States and Canada (including the Incorporated Documents, the
"U.S. Prospectus") and the final prospectus, dated November __, 1997, filed
with the Commission on November __, 1997, relating to the offering of the
Securities outside the United States and Canada (including the Incorporated
Documents, the "International Prospectus" and, together with the U.S.
Prospectus, the "Prospectuses"), both filed pursuant to Rule 424(b);
(c) the Purchase Agreements; and
(d) the Company's Annual Report on Form 10-K for the year ended December
31, 1996, as amended; the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1997, and June 30, 1997; the Company's Current
Reports on Form 8-K dated January 13, 1997, February 4, 1997, February 26,
1997, March 3, 1997, March 7, 1997, March 11, 1997, March 20, 1997 (as
amended), April 29, 1997, July 29, 1997, October 10, 1997, and October __,
1997; and the description of the Company's Class A Common Stock set forth
in the registration statement on Form 8-A filed pursuant to the Exchange
Act on June 21, 1996 (collectively, the "Incorporated Documents").
On _______, 1997, I was informed by telephone by a member of the staff of
the Commission that the Registration Statement had become effective under the
1933 Act at ______, New York City time, on that date.
I have also examined originals or copies, certified or otherwise identified
to my satisfaction, of all such records of the Company and all such agreements,
certificates of public officials, certificates of officers or representatives of
the Company and others, and such other documents, certificates and corporate or
other records as I have deemed necessary or
- 2 -
appropriate as a basis for the opinions set forth herein. In my examination I
have assumed the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to me as originals, the
conformity to original documents of all documents submitted to me as certified
or photostatic copies and the authenticity of the originals of such latter
documents and the due, binding and valid authorization, execution and delivery
pursuant to lawful power and legal right of applicable instruments and documents
on behalf of persons and entities other than the Company.
As to matters of law set forth below, my opinion is limited to matters of
law under the laws of the State of New York, the laws of the United States, to
the extent applicable hereto, and the Delaware General Corporation Law (the
"DGCL"), and I express no opinion as to conflicts of law rules, or the laws of
any states or jurisdictions other than as specified above.
Based upon the foregoing and subject to the other qualifications stated
herein, I am of the opinion that:
1. The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
2. Each Subsidiary has been duly incorporated or formed, as applicable,
and is validly existing as a corporation or a partnership in good standing (with
respect to a Subsidiary that is a corporation) under the laws of the
jurisdiction in which it has been incorporated or formed, as applicable, has the
necessary corporate or partnership power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectuses and
(with respect to a Subsidiary that is a corporation) is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a Material
Adverse Effect; except as otherwise disclosed in the Registration Statement or
in Schedule C to each of the Purchase Agreements, all of the issued and
outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and all the issued and
outstanding capital stock of each such Subsidiary which is a corporation and all
the existing partnership interests of each such Subsidiary which is a
partnership, to the best of my knowledge and information, is owned by the
Company, directly or through subsidiaries, free and
- 3 -
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any Subsidiary which
is a corporation was issued in violation of the preemptive rights of any
securityholder of such Subsidiary arising under the DGCL, the certificate of
incorporation or bylaws of such Subsidiary or any agreement to which such
Subsidiary is a party.
3. The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectuses in the column entitled "Actual" under the
caption "Capitalization" (except for subsequent issuances, if any, pursuant to
the U.S. Purchase Agreement and the International Purchase Agreement or pursuant
to reservations, agreements or employee benefit plans referred to in the
Prospectuses or pursuant to the exercise of convertible securities or options
referred to in the Prospectuses); the shares of issued and outstanding capital
stock, including the Securities to be purchased from the Selling Shareholder,
have been duly authorized and validly issued and are fully paid and non-
assessable; and none of the outstanding shares of capital stock of the Company
was issued in violation of the preemptive rights of any securityholder of the
Company arising under the DGCL, the Company's certificate of incorporation or
bylaws or any agreement to which the Company is a party.
4. The issuance of the Securities by the Company is not subject to
preemptive rights of any securityholder of the Company arising under the DGCL,
the Company's certificate of incorporation or bylaws or any agreement to which
the Company is a party.
5. To the best of my knowledge, there are no actions, suits, proceedings,
inquiries or investigations before or brought by any court or governmental
agency or body, domestic or foreign, now pending or threatened, against or
affecting the Company or any Subsidiary, which is required to be disclosed in
the Registration Statement, or which, in the aggregate, might reasonably be
expected to result in a Material Adverse Effect, or which, in the aggregate,
might reasonably be expected to materially and adversely affect the properties
or assets thereof or the consummation of the transactions contemplated in the
U.S. Purchase Agreement and the International Purchase Agreement or the
performance by the Company of its obligations thereunder.
6. The information in the Prospectuses under "Business," to the extent
that it constitutes matters of law, summaries of legal matters, the Company's
certificate of incorporation and bylaws or legal proceedings, or legal
conclusions, has been reviewed by me and is correct in all material respects.
- 4 -
7. To the best of my knowledge, there are no statutes or regulations that
are required under the 1933 Act or the 1933 Act Regulations to be described in
the Prospectuses that are not described as required.
8. All descriptions in the Registration Statement of contracts and other
documents to which the Company or the Subsidiaries are a party are accurate in
all material respects; to the best of my knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement, the Prospectuses or the Incorporated Documents or to be filed as
exhibits thereto other than those described or referred to therein or filed as
exhibits thereto, and the descriptions thereof or references thereto are correct
in all material respects.
9. To the best of my knowledge, neither the Company nor any Subsidiary is
in violation of its charter or bylaws or partnership agreement, as the case may
be, and no default by the Company or any Subsidiary exists in the due
performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or referred to in the
Registration Statement or the Prospectuses or filed as an exhibit to the
Registration Statement except for such violations or defaults that would not
reasonably be expected to result in a Material Adverse Effect.
10. The execution, delivery and performance by the Company of the Purchase
Agreements, the consummation by the Company of the transactions contemplated in
the Purchase Agreements and the issuance and sale by the Company of the
Securities being sold by it do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute a breach
of, or default or Repayment Event (as defined in Section 1(a)(xi) of the
Purchase Agreements) under or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument, known to me, to
which the Company or any Subsidiary is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any
Subsidiary is subject (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not reasonably be expected to have a Material
Adverse Effect).
11. To the best of my knowledge, except as described in the Registration
Statement, the Company has not granted any registration rights or other similar
rights to have any
- 5 -
securities registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act.
12. The Company and the Subsidiaries possess the Governmental Licenses and
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure to so comply would not reasonably be expected
to, singly or in the aggregate, have a Material Adverse Effect, and all of the
Governmental Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not reasonably be expected to have
a Material Adverse Effect.
13. There is no outstanding adverse judgement, decree or order that has
been issued by the FCC or any of the Local Authorities against the Company and
the Subsidiaries which, singly or in the aggregate, would reasonably be expected
to result in a Material Adverse Effect and, to the best of my knowledge, neither
the Company nor any of the Subsidiaries is the object of, or threatened by, any
proceedings relating to the revocation or modification of any such Governmental
License or that would otherwise affect the operation of the Company or any of
the Subsidiaries, which, singly or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect.
14. The Incorporated Documents (other than the financial statements and
supporting schedules included therein or omitted therefrom, as to which I
express no opinion), when they were filed with the Commission complied as to
form in all material respects with the requirements of the 1933 Act, the 1933
Act Regulations, the 1934 Act and the 1934 Act Regulations.
Attorneys on my staff and I have participated in the preparation of the
Incorporated Documents. In the course of the preparation of the Registration
Statement and the Prospectuses, I participated in conferences with officers and
other representatives of the Company, representatives of the independent
certified public accountants of the Company, your representatives and your
counsel, at which conferences the contents of the Registration Statement and the
Prospectuses and related matters were discussed and, although I am not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectuses or the documents incorporated by reference in the Registration
Statement and the Prospectuses (except as expressly provided in paragraph 6) and
have not made an independent investigation, check or verification of facts for
the purpose of rendering this opinion, on the basis of my and my staff's
participation in the conferences referred to above and our examination of the
Registration Statement and the
- 6 -
Prospectuses and the Incorporated Documents, I advise you that nothing has come
to my attention that leads me to believe (i) that the Registration Statement or
any amendment thereto (except for financial statements and schedules and other
financial [and statistical] data included or incorporated by reference therein
or omitted therefrom, as to which I make no statement), at the time the
Registration Statement or any such amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
(ii) that the Prospectuses or any amendment or supplement thereto (except for
financial statements and other financial [and statistical] data included or
incorporated by reference therein or omitted therefrom), at the time the
Prospectuses were issued, at the time any such amended or supplemented
prospectuses were issued or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (iii) that the
Registration Statement, the Prospectuses and each amendment or supplement to the
Registration Statement and the Prospectuses, excluding in each case the
documents incorporated by reference therein, as of their respective effective or
issue dates (other than the financial statements and other financial [and
statistical] data included therein or omitted therefrom, as to which I make no
statement) did not comply as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
The opinions set forth above are subject to the following qualifications:
(i) the enforceability of agreements, documents and instruments is subject
to general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, and the discretion of
the court before which any proceeding therefor may be brought, regardless of
whether enforcement is sought in a proceeding in equity or at law, and
bankruptcy, reorganization, insolvency, fraudulent conveyance or transfer,
moratorium (whether general or specific) and other laws affecting creditors'
rights or the relief of debtors generally.
(ii) I express no opinion concerning the enforceability of (a) waivers of
notice or of any other constitutional, statutory or common law rights, (b)
matters deemed to violate public policy, and (c) submissions to the personal
jurisdiction of any particular court.
(iii) For purposes of this opinion, any statement contained in a document
incorporated by reference into the Registration
- 7 -
Statement or the Prospectuses shall be deemed to be incorporated by reference in
the Registration Statement and the Prospectuses and to be a part thereof from
the date of filing of such document. Any statement contained in the
Registration Statement or the Prospectuses or in a document incorporated by
reference in the Registration Statement or the Prospectuses shall be deemed to
be modified or superseded for purposes thereof to the extent that a statement
contained therein, or in any other subsequently filed document which also is or
is deemed to be incorporated by reference therein, modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of the Registration Statement
or the Prospectuses.
This opinion is furnished by me as General Counsel to the Company in
connection with the closing of the above-referenced public offering occurring
today. I assume no obligation to advise you of changes which may thereafter be
brought to my attention. My opinion is based upon statutory laws and judicial
decisions in effect at the date hereof, and I do not opine with respect to any
laws, regulation, rule or governmental policy which may be enacted or adopted
after the date hereof, nor assume any responsibility to advise you of future
changes in my opinion. The opinion is solely for your benefit and is not to be
used, circulated, quoted or otherwise referred to for any other purpose, and may
not be relied upon by any other person, without my express prior written
permission.
--------------------------------
W. Xxxxxxx Xxxxxxxxx, Xx.,
General Counsel, Teleport
Communications Group Inc.
- 8 -
EXHIBIT A(ii)
November __, 1997
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated
Xxxxxx Brothers Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
Bear, Xxxxxxx & Co. Inc.
Deutsche Xxxxxx Xxxxxxxx Inc.
c/o Merrill Lynch, Pierce,
Xxxxxx & Xxxxx, Incorporated
World Xxxxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Xxxxxxx Xxxxx International
Xxxxxx Brothers International (Europe)
Cazenove & Co.
Xxxxxx Xxxxxxxx & Co. Limited
UBS Limited
c/o Merrill Xxxxx International
Ropemaker Place
00 Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Ladies and Gentlemen:
This opinion is being delivered to you pursuant to Section 5(b) of the U.S.
Purchase Agreement dated November __, 1997 (the "U.S. Purchase Agreement") and
Section 5(b) of the International Purchase Agreement dated November __, 1997
(the "International Purchase Agreement" and, together with the U.S. Purchase
Agreement, the "Purchase Agreements") among you, Teleport Communications Group
Inc. (the "Company") and Continental Holding Company (the "Selling
Shareholder"), providing for the sale to you on this date of an aggregate of
__________ shares of the Class A Common Stock, par value $0.01 per share, of the
Company (the "Securities"). We have served as counsel to the Company in
connection with the issuance and sale of the Securities. Capitalized terms used
herein that are not otherwise defined herein shall have the same meaning as in
the Purchase Agreements.
In this connection, we have examined:
-2-
(a) the Registration Statement on Form S-3 (No. 333-37597) relating to the
Securities filed with the Securities and Exchange Commission (the
"Commission") on October 10, 1997, under the 1933 Act, Amendment No. 1
thereto filed with the Commission on October 17, 1997, and Amendment No. 2
thereto filed with the Commission on November __, 1997 (such Registration
Statement, as so amended at the time when it became effective and including
the Rule 430A Information, and also including the documents which are
expressly listed in clauses (a) through (d) under the caption
"Incorporation of Certain Documents by Reference" in the Prospectuses as
being incorporated by reference therein (the "Incorporated Documents"),
being hereinafter referred to as the "Registration Statement");
(b) the final prospectus, dated November __, 1997, filed with the
Commission on November __, 1997, relating to the offering of the Securities
in the United States and Canada (including the Incorporated Documents, the
"U.S. Prospectus") and the final prospectus, dated November __, 1997, filed
with the Commission on November __, 1997, relating to the offering of the
Securities outside the United States and Canada (including the Incorporated
Documents, the "International Prospectus" and, together with the U.S.
Prospectus, the "Prospectuses"), both filed pursuant to Rule 424(b); and
(c) the Purchase Agreements.
On _______, 1997, we were informed by telephone by a member of the staff of
the Commission that the Registration Statement had become effective under the
1933 Act at ______, New York City time, on that date.
We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of all such records of the Company and all such
agreements, certificates of public officials, certificates of officers or
representatives of the Company and others, and such other documents,
certificates and corporate or other records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein. In our examination we
have assumed the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified
or photostatic copies and the authenticity of the originals of such latter
documents and the due, binding and valid authorization, execution and delivery
pursuant to lawful power and legal right of applicable instruments and documents
on behalf of persons and entities other than the Company. As to any facts
material to the opinions expressed herein, we have relied upon statements and
representations of officers and other representatives of the Company and others.
-3-
As to matters of law set forth below, our opinion is limited to matters of
law under the laws of the State of New York, the laws of the United States to
the extent applicable hereto and the Delaware General Corporation Law, and we
express no opinion as to conflicts of law rules, or the laws of any States or
jurisdictions other than as specified above.
Based upon the foregoing and subject to the other qualifications stated
herein, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
2. The Company has the corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under the Purchase
Agreements.
3. The Securities to be purchased by the U.S. Underwriters and the
International Managers from the Company have been duly authorized for issuance
and sale to the Underwriters pursuant to the U.S. Purchase Agreement and the
International Purchase Agreement, respectively, and, when issued and delivered
by the Company pursuant to the U.S. Purchase Agreement and the International
Purchase Agreement, respectively, against payment of the consideration set forth
in the U.S. Purchase Agreement and the International Purchase Agreement,
respectively, will be validly issued, fully paid and non-assessable, and no
holder of the Securities in its capacity as such a holder will be subject to
personal liability for the payment of the Company's debts, except (i) as such
holder may be liable by reason of its own conduct or acts, (ii) as provided by
the Delaware General Corporation Law and (iii) for any liability that may arise
upon application of any fraudulent conveyance or transfer or other insolvency
law.
4. The Purchase Agreements have been duly authorized, executed and
delivered by the Company.
5. The Registration Statement has been declared effective under the 1933
Act; any required filing of the Prospectuses pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b); and, to
the best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no proceedings for
that purpose have been instituted or are pending or threatened by the
Commission.
6. The form of certificate used to evidence the Securities complies in
all material respects with all applicable requirements of the certificate of
incorporation and by-laws of the Company.
-4-
7. The information in the Prospectuses under the captions "Description of
Capital Stock," "Certain United States Federal Income Tax Consequences to Non-
United States Holders of Common Stock," "Risk Factors -- Federal and State
Regulation," "Risk Factors -- Governmental and Other Authorizations" and
"Business -- Regulatory and Governmental Matters" and in the Registration
Statement under Item 15, to the extent that it constitutes matters of law,
summaries of legal matters, the Company's certificate of incorporation and
bylaws or legal proceedings, or legal conclusions has been reviewed by us and is
correct in all material respects.
8. No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency (other than under the 1933 Act and the 1933 Act Regulations, which have
been obtained, or as may be required under the securities or blue sky laws of
the various states, as to which we express no opinion) is necessary or required
in connection with the due authorization, execution and delivery of the Purchase
Agreements or for the offering, issuance, sale or delivery of the Securities,
except for notice filings where the failure to make such filings would not
materially adversely affect the performance by the Company of its obligations
under the Purchase Agreements.
9. The execution, delivery and performance by the Company of the Purchase
Agreements, the consummation by the Company of the transactions contemplated in
the Purchase Agreements and the issuance and sale by the Company of the
Securities being sold by it do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute a breach
of, or default or Repayment Event (as defined in Section 1(a)(xi) of the
Purchase Agreements) under or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument that has been
filed or incorporated by reference as an exhibit to the Registration Statement
(except for such conflicts, breaches, defaults, Repayment Events, liens, charges
or encumbrances that would not reasonably be expected to result in a Material
Adverse Effect), nor will such actions result in any violation of the provisions
of the certificate of incorporation or by-laws or partnership agreement, as the
case may be, of the Company or any Subsidiary, or any applicable law, statute,
rule, regulation, judgment, order, writ or decree, known to us of any
government, government instrumentality or court having jurisdiction over the
Company or any Subsidiary or any of their respective properties, assets or
operations, except for such violations that would not reasonably be expected to
result in a Material Adverse Effect.
10. The Company is not an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the Investment Company
Act of 1940.
-5-
In the course of the preparation of the Registration Statement and the
Prospectuses (other than the Incorporated Documents), we participated in
conferences with officers and other representatives of the Company,
representatives of the independent certified public accountants of the Company,
your representatives and your counsel, at which conferences the contents of the
Registration Statement and the Prospectuses and related matters were discussed.
We have not participated in the preparation of any of the Incorporated Documents
or any other items or information incorporated by reference in the Registration
Statement or the Prospectuses. Although we are not passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectuses (except
as expressly provided in subparagraph 7) or the documents incorporated by
reference in the Registration Statement and the Prospectuses and have not made
an independent investigation, check or verification of facts for the purpose of
rendering this opinion, on the basis of the foregoing, we advise you that,
nothing has come to our attention that leads us to believe (i) that the
Registration Statement or any amendment thereto (except for financial statements
and schedules and other financial [and statistical] data included or
incorporated by reference therein or omitted therefrom, as to which we make no
statement), at the time the Registration Statement or any such amendment became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) that the Prospectuses or any amendment
or supplement thereto (except for financial statements and schedules and other
financial [and statistical] data included or incorporated by reference therein
or omitted therefrom, as to which we make no statement), at the time the
Prospectuses were issued, at the time any such amended or supplemented
prospectus was issued or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (iii) that the
Registration Statement, the Prospectuses and each amendment or supplement to the
Registration Statement and the Prospectuses, excluding in each case the
documents incorporated by reference therein as of their respective effective or
issue dates (other than the financial statements and schedules and other
financial [and statistical] data included or incorporated by reference therein
or omitted therefrom, as to which we make no statement) did not comply as to
form in all material respects with the requirements of the 1933 Act and the 1933
Act Regulations.
The opinions set forth above are subject to the following qualifications:
(i) The enforceability of agreements, documents and instruments is subject
to general principles of equity, including, without limitation, concepts of
materiality,
-6-
reasonableness, good faith and fair dealing, and the discretion of the court
before which any proceeding therefor may be brought, regardless of whether
enforcement is sought in a proceeding in equity or at law, and bankruptcy,
reorganization, insolvency, fraudulent conveyance or transfer, moratorium
(whether general or specific) and other laws affecting creditors' rights or the
relief of debtors generally.
(ii) We express no opinion concerning the enforceability of (a) waivers of
notice or of any other constitutional, statutory or common law rights, (b)
matters deemed to violate public policy, and (c) submissions to the personal
jurisdiction of any particular court.
(iii) We express no opinion as to any New York state or local laws, rules
or regulations relating to the regulation of telecommunications.
(iv) For purposes of this opinion, any statement contained in a document
incorporated by reference into the Registration Statement or the Prospectuses
shall be deemed to be incorporated by reference in the Registration Statement
and the Prospectuses and to be a part thereof from the date of filing of such
document. Any statement contained in the Registration Statement or the
Prospectuses or in a document incorporated by reference in the Registration
Statement or the Prospectuses shall be deemed to be modified or superseded for
purposes thereof to the extent that a statement contained therein, or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference therein, modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of the Registration Statement or the Prospectuses.
This opinion is furnished by us as counsel to the Company in connection
with the closing of the above-referenced public offering occurring today. The
information set forth herein is as of the date hereof. We assume no obligation
to advise you of changes which may thereafter be brought to our attention. Our
opinion is based upon statutory laws and judicial decisions in effect at the
date hereof, and we do not opine with respect to any law, regulation, rule or
governmental policy which may be enacted or adopted after the date hereof, nor
assume any
-7-
responsibility to advise you of future changes in our opinion. This opinion is
solely for your benefit and is not to be used, circulated, quoted or otherwise
referred to for any other purpose, and may not be relied upon by any other
person, without our express prior written permission.
Very truly yours,
DOW, XXXXXX & XXXXXXXXX, PLLC
By:
----------------------------
Xxxxxxx X. Xxxxxx, Member
