UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
EchoStar Communications Corporation
(Name of Issuer)
Class A Common Stock, par value $.01 per share
(Title of Class of Securities)
278762109
(CUSIP Number)
Scott D. Sullivan, Secretary, Treasurer and Chief Financial Officer, MCI
WORLDCOM, Inc.
500 Clinton Center Drive, Clinton, MS 39056 (601) 460-5600
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
December 8, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check
the following box /_/.
Note: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
PAGE 2 of 11 PAGES
SCHEDULE 13D
CUSIP No. 278762109
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MCI WORLDCOM, INC.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /_/
(b) /_/
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) /_/
7 SOLE VOTING POWER
NUMBER
OF 4,101,880
SHARES 8 SHARED VOTING POWER
BENEFIC
IALLY -0-
OWNED 9 SOLE DISPOSITIVE POWER
BY
EACH 4,101,880
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,101,880
PAGE 3 of 11 PAGES
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.8%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SUNTERRA ATTESTATION.
PAGE 4 of 11 PAGES
SCHEDULE 13D
CUSIP No. 278762109
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MCI WORLDCOM NETWORK SERVICES, INC.
(formerly MCI TELECOMMUNICATIONS CORPORATION)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /_/
(b) /_/
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF
SHARES 4,101,880
BENEFICIALLY 8 SHARED VOTING POWER
OWNED
BY -0-
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 4,101,880
WITH
10 SHARED DISPOSITIVE POWER
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,101,880
PAGE 5 of 11 PAGES
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.8% **
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SUNTERRA ATTESTATION.
PAGE 6 of 11 PAGES
Introductory Statement
This Amendment No. 2 (this "Amendment No. 2") to the Statement on
Schedule 13D (as amended, the "Statement") relates to the Class A Common
Stock, par value $.01 per share (the "Class A Common Stock"), of EchoStar
Communications Corporation, a Nevada corporation ("EchoStar"). This
Amendment No. 2 amends and supplements the Statement originally filed by MCI
WORLDCOM, Inc. ("MCI WORLDCOM") and MNS on December 10, 1998 with the
Securities and Exchange Commission as amended and supplemented on July 12,
1999.
Except as provided herein, this Amendment No. 2 does not modify any of
the information previously reported in the Statement. This Amendment No. 2
speaks as of its date and no inference should be drawn that no change has
occurred in the facts set forth herein after the date hereof.
Item 4. Purpose of Transaction.
Item 4 of the Statement is amended and supplemented as follows:
On December 8, 1999, pursuant to an Underwriting Agreement dated
December 3, 1999, by and among EchoStar, MNS, News America Incorporated and
the Underwriters named in Schedule I thereto (the "Underwriting Agreement"),
MNS sold 2,746,200 shares of Class A Common Stock in a registered public
offering (the "Offering").
Item 5. Interest in Securities of the Issuer.
Item 5 of the Statement is amended and supplemented as follows:
PAGE 7 of 11 PAGES
As a result of the transaction described in Item 4 above, MCI
WORLDCOM and MNS each ceased to be the beneficial owner of more than 5% of
the Class A Common Stock on December 8, 1999.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
Item 6 of the Statement is amended and supplemented as follows:
In connection with the Offering, MNS entered into the Underwriting
Agreement. Pursuant to Section 2 of the Underwriting Agreement, MNS has
agreed not to sell or contract to sell any share of the Class A Common Stock
until June 5, 2000. Pursuant to Section 8 of the Underwriting Agreement, MNS
will indemnify the Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933 and the Securities Exchange Act
of 1934, and contribute to payments an indemnified party may be required to
make in respect of such liabilities.
Item 7. Material to be Filed as Exhibits.
1. Purchase Agreement, dated as of November 30, 1998, among MCI
Telecommunications Corporation, American Sky Broadcasting, LLC, The News
Corporation Limited and EchoStar Communications Corporation.
2. Letter Agreement, dated as of November 30, 1998, among MCI
Telecommunications Corporation, The News Corporation Limited and Charles
Ergen.
3. Amendment No. 1 to Purchase Agreement, dated June 23, 1999, among MCI
Telecommunications Corporation, American Sky Broadcasting, LLC, The News
Corporation Limited and EchoStar Communications Corporation.
4. Underwriting Agreement, dated December 3, 1999, by and among EchoStar
Communications Corporation, MCI WORLDCOM Network Services, Inc., News
America Incorporated and the Underwriters named in Schedule I thereto.
PAGE 8 of 11 PAGES
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this Schedule 13D is
true, complete and correct.
MCI WORLDCOM, INC.
By:/s/ Charles T. Cannada
--------------------------------
Name: Charles T. Cannada
Title: Senior Vice President
MCI WORLDCOM NETWORK SERVICES, INC.
By: /s/ Charles T. Cannada
------------------------------
Name: Charles T. Cannada
Title: Senior Vice President
DATED: December 13, 1999
PAGE 9 of 11 PAGES
INDEX TO EXHIBITS
-----------------
Exhibit Number Description of Exhibits
- -------------- -----------------------
1. Purchase Agreement, dated as of November 30, 1998, among MCI
Telecommunications Corporation, American Sky Broadcasting,
LLC, The News Corporation Limited and EchoStar Communications
Corporation.
2. Letter Agreement, dated as of November 30, 1998, among MCI
Telecommunications Corporation, The News Corporation Limited
and Charles Ergen.
3. Amendment No. 1 to Purchase Agreement, dated June 23, 1999,
among MCI Telecommunications Corporation, American Sky
Broadcasting, LLC, The News Corporation Limited and EchoStar
Communications Corporation.
4. Underwriting Agreement, dated December 3, 1999, by and among
EchoStar Communications Corporation, MCI WORLDCOM Network
Services, Inc., News America Incorporated and the Underwriters
named in Schedule I thereto.
PAGE 10 of 11 PAGES
4.____________________
5.[FN]
* On June 24, 1999, MCI WOLRDCOM Network Services, Inc. ("MNS")
acquired 1,712,020 shares of Class A Common Stock ("Common Stock")
of EchoStar Communications Corporation ("EchoStar"). On each of
July 19, 1999 and October 25, 1999, EchoStar completed a two-for-
one stock split of its Common Stock. Following the second such
split, MNS held a total of 6,848,080 shares of Common Stock. On
December 8, 1999, pursuant to the transaction described in Item 4
herein, MNS sold 2,746,200 shares of Common Stock.
On June 24, 1999, MNS acquired 1,712,020 shares of Common Stock of
EchoStar. On each of July 19, 1999 and October 25, 1999, EchoStar
completed a two-for-one stock split of its Common Stock. Following the
second such split, MNS held a total of 6,848,080 shares of Common Stock.
On December 8, 1999, pursuant to the transaction described in Item 4
herein, MNS sold 2,746,200 shares of Common Stock.
Previously filed.
Previously filed.
PAGE 11 of 11 PAGES
13,800,000 Shares
ECHOSTAR COMMUNICATIONS CORPORATION
Common Stock
UNDERWRITING AGREEMENT
----------------------
December 2, 1999
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALLEN & COMPANY INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
As representatives of the several Underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Certain stockholders of EchoStar Communications Corporation, a Nevada
corporation (the "Company"), named in Schedule II hereto (the "Sellers")
severally propose to sell to the several underwriters named in Schedule I
hereto (the "Underwriters"), the number of Firm Shares (as defined below) set
forth opposite such Seller's name in Schedule II hereto, constituting an
aggregate of 12,000,000 shares of the Class A Common Stock, par value $.01
per share, of the Company (the "Firm Shares"), all of which such Shares are
to be sold by the Sellers, each Seller selling the amount set forth opposite
such Seller's name in Schedule II hereto. The Sellers also propose to sell
to the several Underwriters not more than an additional 1,800,000 shares of
the Class A Common Stock, par value $.01 per share, of the Company (the
"Additional Shares") if requested by the Underwriters as provided in Section
2 hereof. The Firm Shares and the Additional Shares are hereinafter referred
to collectively as the "Shares". The shares of common stock of the Company to
be outstanding after giving effect to the sales contemplated hereby are
hereinafter referred to as the "Common Stock".
S1. Registration Statement and Prospectus. The Company has prepared
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3, including a related prospectus,
and each supplement thereto, relating to the Shares. The Company will cause
the prospectus, properly completed, and any supplement thereto, to be filed
with the Commission pursuant to Rule 424(b) within the time period prescribed
and will provide the Underwriters with satisfactory evidence of timely
filing. The Company has complied with the conditions for the use of Form S-3.
The registration statement, as amended, at the time it became effective,
including the exhibits thereto, the information incorporated by reference
therein and the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 461(a) under the Act,
is hereinafter referred to as the "Registration Statement"; and the
prospectus, including any prospectus supplement thereto relating to the
Shares, in the form first used to confirm sales of Shares is hereinafter
referred to as the "Prospectus". If the Company has filed or is required
pursuant to the terms hereof to file a registration statement pursuant to
Rule 462(b) under the Act registering additional shares of Common Stock (a
"Rule 462(b) Registration Statement"), then, unless otherwise specified, any
reference herein to the term "Registration Statement" shall be deemed to
include such Rule 462(b) Registration Statement.
S2. Agreements to Sell and Purchase and Lock-Up Agreements. On the
basis of the representations, warranties and covenants contained in this
Agreement, and subject to its terms and conditions, (i) each Seller agrees,
severally and not jointly, to sell the number of Firm Shares set forth
opposite such Seller's name in Schedule II hereto and (ii) each Underwriter
agrees, severally and not jointly, to purchase from each Seller at a price
per Share of $71.00 (the "Purchase Price") the number of Firm Shares (subject
to such adjustments to eliminate fractional shares as you may determine) that
bears the same proportion to the total number of Firm Shares to be sold by
such Seller as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) each Seller agrees,
severally and not jointly, to sell the Additional Shares set forth opposite
such Seller's name in Schedule II hereto and (ii) the Underwriters shall have
the right to purchase, severally and not jointly, up to 1,800,000 Additional
Shares from the Sellers at the Purchase Price. Additional Shares may be
purchased solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. The Underwriters may
exercise their right to purchase Additional Shares in whole or in part from
time to time by giving written notice thereof to the Sellers within 30 days
after the date of this Agreement. You shall give any such notice on behalf
of the Underwriters and such notice shall specify the aggregate number of
Additional Shares to be purchased pursuant to such exercise and the date for
payment and delivery thereof, which date shall be a business day (i) no
earlier than two business days after such notice has been given (and, in any
event, no earlier than the Closing Date (as hereinafter defined)) and (ii) no
later than ten business days after such notice has been given. If any
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Additional Shares are to be purchased, each Underwriter, severally and not
jointly, agrees to purchase from the Sellers the number of Additional Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) which bears the same proportion to the total number of Additional
Shares to be purchased from the Sellers as the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I bears to the total
number of Firm Shares.
Each of the Sellers agrees not to (i) 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, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other
arrangement that transfers all or a portion of the economic consequences
associated with the ownership of any Common Stock (regardless of whether any
of the transactions described in clause (i) or (ii) is to be settled by the
delivery of Common Stock, or such other securities, in cash or otherwise),
except to the Underwriters pursuant to this Agreement, for a period of 180
days after the date of the Closing Date (as defined below) without the prior
written consent of Donaldson, Lufkin & Jenrette Securities Corporation and
the Company, which consent the Company may withhold in its sole discretion.
Each Seller agrees that, for a period of 180 days after the date of the
Prospectus without the prior written consent of Donaldson, Lufkin & Jenrette
Securities Corporation, it will not make any demand for, or exercise any
right with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock.
Each Seller shall, prior to or concurrently with the execution of this
Agreement, deliver an agreement executed by such Seller to the effect that
such person will not, during the period commencing on the date such person
signs such agreement and ending 180 days after the date of the Prospectus,
without the prior written consent of Donaldson, Lufkin & Jenrette
Corporation, (A) engage in any of the transactions described in the first
sentence of this paragraph or (B) make any demand for, or exercise any right
with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock;
provided, that any such agreement shall not relieve any other obligation such
Seller otherwise has to the Company.
S3. Terms of Public Offering. The Sellers are advised by you that the
Underwriters propose (i) to make a public offering of their respective
portions of the Shares as soon after the execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
S4. Delivery and Payment. The Shares shall be represented by definitive
certificates and shall be issued in such authorized denominations and
registered in such names as Donaldson, Lufkin & Jenrette Securities
-3-
Corporation shall request no later than two business days prior to the
Closing Date or the applicable Option Closing Date (as defined below), as the
case may be. The Shares shall be delivered by or on behalf of the Sellers,
with any transfer taxes thereon duly paid by the respective Sellers, to
Donaldson, Lufkin & Jenrette Securities Corporation through the facilities of
The Depository Trust Company ("DTC"), for the respective accounts of the
several Underwriters, against payment to the Sellers of the Purchase Price
therefore by wire transfer of Federal or other funds immediately available in
New York City. The certificates representing the Shares shall be made
available for inspection not later than 9:30 A.M., New York City time, on the
business day prior to the Closing Date or the applicable Option Closing Date,
as the case may be, at the office of DTC or its designated custodian (the
"Designated Office"). The time and date of delivery and payment for the Firm
Shares shall be 9:00 A.M., New York City time, on December 8, 1999 or such
other time on the same or such other date as Donaldson, Lufkin & Jenrette
Securities Corporation and the Sellers shall agree in writing. The time and
date of delivery and payment for the Firm Shares are hereinafter referred to
as the "Closing Date". The time and date of delivery and payment for any
Additional Shares to be purchased by the Underwriters shall be 9:00 a.m., New
York City time, on the date specified in the applicable exercise notice given
by you pursuant to Section 2 or such other time on the same or such other
date as Donaldson, Lufkin & Jenrette Securities Corporation and the Sellers
shall agree in writing. The time and date of delivery and payment for any
Additional Shares are hereinafter referred to as an "Option Closing Date".
The documents to be delivered on the Closing Date or any Option Closing
Date on behalf of the parties hereto pursuant to Section 9 of this Agreement
shall be delivered at the offices of Paul, Hastings, Janofsky & Walker LLP,
399 Park Avenue, New York, New York and the Shares shall be delivered at the
Designated Office, all on the Closing Date or such Option Closing Date, as
the case may be.
S5. Agreements of the Company. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of the
suspension of qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purposes, (iii)
when any amendment to the Registration Statement becomes effective, (iv) if
the Company is required to file a Rule 462(b) Registration Statement after
the effectiveness of this Agreement, when the Rule 462(b) Registration
Statement has become effective and (v) of the happening of any event during
the period referred to in Section 5(d) below which makes any statement of a
material fact made in the Registration Statement or the Prospectus untrue or
-4-
which requires any additions to or changes in the Registration Statement or
the Prospectus in order to make the statements therein not misleading. If at
any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will use its
reasonable best efforts to obtain the withdrawal or lifting of such order at
the earliest possible time.
(b) To furnish to you five photocopies of signed copies of the
Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you and each
Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which shall be
satisfactory to you, and to file the Prospectus in such form with the
Commission within the applicable period specified in Rule 424(b) under the
Act; during the period specified in Section 5(d) below, not to file any
further amendment to the Registration Statement and not to make any amendment
or supplement to the Prospectus of which you shall not previously have been
advised or to which you shall reasonably object after being so advised;
provided, that the Company shall have the right to make such further
amendments as are required by law to be made and shall forthwith notify you
of any such amendment; and, during such period, to prepare and file with the
Commission, promptly upon your reasonable request, any amendment to the
Registration Statement or amendment or supplement to the Prospectus which may
be necessary or advisable in connection with the distribution of the Shares
by you, and to use its reasonable best efforts to cause any such amendment to
the Registration Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or
a dealer, to furnish in New York City to each Underwriter and any dealer as
many copies of the Prospectus (and of any amendment or supplement to the
Prospectus) as such Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event shall
occur or condition shall exist as a result of which, in the opinion of
counsel for the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable
law, forthwith to prepare and file with the Commission an appropriate
amendment or supplement to the Prospectus so that the statements in the
-5-
Prospectus, as so amended or supplemented, will not in the light of the
circumstances when it is so delivered, be misleading, or so that the
Prospectus will comply with applicable law, and to furnish to each
Underwriter and to any dealer as many copies thereof as such Underwriter or
dealer may reasonably request in writing.
(f) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters at the expense of the Sellers in connection
with the registration or qualification of the Shares for offer and sale by
the several Underwriters and by dealers under the state securities or Blue
Sky laws of such jurisdictions as you may request, to continue such
registration or qualification in effect so long as required for distribution
of the Shares and to file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification; provided, however, that the Company shall not be required in
connection therewith to register or qualify as a foreign corporation in any
jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other
than as to matters and transactions relating to the Prospectus, the
Registration Statement, any preliminary prospectus or the offering or sale of
the Shares, in any jurisdiction in which it is not now so subject.
(g) To mail and make generally available to its stockholders as soon as
practicable an earnings statement covering the twelve-month period ending
December 31, 2000 that shall satisfy the provisions of Section 11(a) of the
Act, and to advise you in writing when such statement has been so made
available.
(h) During the period of three years after the date of this Agreement,
to furnish to you upon your written request copies of all reports or other
communications furnished to the record holders of Common Stock or furnished
to or filed with the Commission or any national securities exchange on which
any class of securities of the Company is listed and such other publicly
available information concerning the Company and its subsidiaries as you may
reasonably request.
(i) To use its best efforts to list for quotation the Shares on the
Nasdaq National Market and to maintain the listing of the Shares on the
Nasdaq National Market for a period of three years after the date of this
Agreement.
(j) To use its reasonable best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the Closing Date or any Option Closing Date, as the case may
be, and to satisfy all conditions precedent to the delivery of the Shares.
-6-
(k) If the Registration Statement at the time of the effectiveness of
this Agreement does not cover all of the Shares, to file a Rule 462(b)
Registration Statement with the Commission registering the Shares not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time, on
the date of this Agreement.
S6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter and each Seller that:
(a) The Registration Statement has become effective (other than any
Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement
filed after the effectiveness of this Agreement will become effective no
later than 10:00 P.M., New York City time, on the date of this Agreement; and
no stop order suspending the effectiveness of the Registration Statement is
in effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement), when it became effective, did not contain and, as amended,
if applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) the Registration Statement
(other than any Rule 462(b) Registration Statement to be filed by the Company
after the effectiveness of this Agreement) and the Prospectus comply and, as
amended or supplemented, if applicable, will comply in all material respects
with the Act, including the conditions for use of Form S-3, (iii) if the
Company is required to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, such Rule 462(b) Registration Statement and
any amendments thereto, when they become effective (A) will not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading and (B) will comply in all material respects with the Act and (iv)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph do not
apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use
therein or with respect to the information described in Section 7(h) hereof.
(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
-7-
respects with the Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations
and warranties set forth in this paragraph do not apply to statements or
omissions in any preliminary prospectus based upon information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein or with respect to the information
described in Section 7(h) hereof.
(d) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Prospectus and to own,
lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing
of property requires such qualification, except where the failure to be in
good standing or so qualified would not have a material adverse effect on the
business, prospects, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole (a "Material Adverse Effect").
(e) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens granted or issued
by the Company or any of its subsidiaries relating to or entitling any person
to purchase or otherwise to acquire any shares of the capital stock of the
Company or any of its subsidiaries, except as otherwise disclosed in the
Registration Statement.
(f) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Sellers) have been duly authorized
and validly issued and are fully paid, non-assessable and not subject to any
preemptive or similar rights; and the Shares to be sold by the Sellers have
been duly authorized and, when issued and delivered to the Underwriters
against payment therefor as provided by this Agreement, will be validly
issued, fully paid and non-assessable.
(g) The entities listed on Schedule B hereto are the only subsidiaries,
direct or indirect, of the Company. All of the outstanding shares of capital
stock of each of the Company's subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable, and are owned by the
Company, directly or indirectly through one or more subsidiaries, free and
clear of any security interest, claim, lien, encumbrance or adverse interest
of any nature (each, a "Lien").
(h) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
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(i) Except as disclosed in the Registration Statement or Prospectus,
neither the Company nor any of its subsidiaries is in violation of its
respective charter or bylaws or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material
to the Company and its subsidiaries, taken as a whole, to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound.
(j) Each of this Agreement and the instruments contemplated herein to
which the Company is a party (collectively, the "Operative Documents") has
been duly and validly authorized by all necessary corporate action on the
part of the Company and has been executed and delivered by the Company.
(k) Each of the Operative Documents will be legal, valid and binding
agreements of the Company, enforceable against the Company in accordance with
their respective terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency, or similar laws effecting creditors'
rights generally and (ii) rights of acceleration and availability of
equitable remedies may be limited by equitable principles of general
applicability. On the Closing Date each of the Operative Documents will
conform as to legal matters at the description thereof in the Prospectus.
(l) The execution, delivery and performance of the Operative Documents
by the Company and compliance by the Company with all provisions hereof and
thereof and the consummation of the transactions contemplated hereby and
thereby will not require any consent, approval, authorization or other order
of, or qualification with, any court or governmental body or agency and will
not conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the charter or by-laws of the Company or any of its
subsidiaries or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its subsidiaries,
taken as a whole, to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or their respective
property is bound, or violate or conflict with any applicable law or any
rule, regulation, judgment, order or decree of any court or any governmental
body or agency having jurisdiction over the Company or any of its
subsidiaries or their respective property, or result in the imposition or
creation of (or the obligation to create or impose) a Lien under, any
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which it or any of them is bound, or to which any properties of
the Company or any of its subsidiaries is or may be subject, or result in the
termination or revocation of any Authorization (as defined) of the Company or
any of its subsidiaries or result in any other impairment of the rights of
the holder of any such Authorization.
-9-
(m) To the best knowledge of the Company, except as set forth in the
Prospectus, there are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is or could be a
party or to which any of their respective property is or could be subject,
which might result, singly or in the aggregate, in a Material Adverse Effect.
(n) To the best knowledge of the Company, no action has been taken and
no law, statute, rule or regulation or order has been enacted, adopted or
issued by any governmental agency or body which prevents the execution,
delivery and performance of any of the Operative Documents, the sale of the
Shares or suspends the sale of the Shares in any applicable jurisdiction; and
no injunction, restraining order or other order or relief of any nature by a
federal or state court or other tribunal of competent jurisdiction has been
issued with respect to the Company or any of its subsidiaries which would
prevent or suspend the sale of the Shares in any applicable jurisdiction.
(o) To the best knowledge of the Company, neither the Company nor any
of its subsidiaries has violated any foreign, federal, state or local law or
regulation relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), any provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or the rules and
regulations promulgated thereunder, except for such violations which, singly
or in the aggregate, would not have a Material Adverse Effect.
(p) To the best knowledge of the Company, there are no costs or
liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any
Authorization, any related constraints on operating activities and any
potential liabilities to third parties) which would, singly or in the
aggregate, have a Material Adverse Effect.
(q) Except as set forth in the Prospectus, each of the Company and its
subsidiaries has such permits, licenses, consents, exemptions, franchises,
authorizations and other approvals (each, an "Authorization") of, and has
made all filings with and notices to, all governmental or regulatory
authorities and self-regulatory organizations and all courts and other
tribunals, including, without limitation, under any applicable Environmental
Laws, as are necessary to own, lease, license and operate its respective
properties and to conduct its business, except where the failure to have any
such Authorization or to make any such filing or notice would not, singly or
in the aggregate, have a Material Adverse Effect. Except as set forth in the
Prospectus, each such Authorization is valid and in full force and effect and
each of the Company and its subsidiaries is in compliance with all the terms
and conditions thereof and with the rules and regulations of the authorities
and governing bodies having jurisdiction with respect thereto except where
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such failure to comply would not have a Material Adverse Effect; and except
as set forth in the Prospectus, no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow,
revocation, suspension or termination of any such Authorization or result or,
after notice or lapse of time or both, would result in any other impairment
of the rights of the holder of any such Authorization except where any such
event would not have a Material Adverse Effect; and such Authorizations
contain no restrictions that are burdensome to the Company or any of its
subsidiaries; except where such failure to be valid and in full force and
effect or to be in compliance, the occurrence of any such event or the
presence of any such restriction would not, singly or in the aggregate, have
a Material Adverse Effect.
(r) The Company and its subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and
the its subsidiaries, in each case free and clear of all Liens and defects,
except such as are described in the Prospectus or such others as do not,
singly or in the aggregate, materially affect the value of such property and
do not interfere with the use made and proposed to be made of such property
by the Company and the Company's subsidiaries; and any real property and
buildings held under lease by the Company and its subsidiaries are held by
them under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its subsidiaries, in
each case, except as described in the Prospectus.
(s) Except as set forth in the Prospectus, the Company and its
subsidiaries own or possess, or can acquire on reasonable terms, all patents,
patent rights, licenses, inventions, copyrights, knowhow (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade
names ("intellectual property") currently employed by them in connection with
the business now operated by them, except where the failure to own or possess
or otherwise be able to acquire such intellectual property would not, singly
or in the aggregate, have a Material Adverse Effect; and, except as set forth
in the Prospectus, neither the Company nor any of the Company's subsidiaries
has received any notice of infringement of or conflict with asserted rights
of others with respect to any of such intellectual property which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect.
(t) Except as set forth in the Prospectus, the Company and each of its
subsidiaries is insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and
customary in the businesses in which they are engaged; and neither the
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Company nor any of its subsidiaries (i) has received notice from any insurer
or agent of such insurer that substantial capital improvements or other
material expenditures will have to be made in order to continue such
insurance or (ii) has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers at a cost that would not have a
Material Adverse Effect.
(u) Except as set forth in the Prospectus, no relationship, direct or
indirect, exists between or among the Company or any of its subsidiaries, on
the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company or any of its subsidiaries, on the other hand, which
are required by the Act to be described in the Prospectus.
(v) To the best knowledge of the Company there is no (i) significant
unfair labor practice complaint, grievance or arbitration proceeding pending
or threatened against the Company or any of its subsidiaries before the
National Labor Relations Board or any state or local labor relations board,
(ii) strike, labor dispute, slowdown or stoppage pending or threatened
against the Company or any of its subsidiaries or (iii) union representation
question existing with respect to the employees of the Company or any of its
subsidiaries, except in the case of clauses (i), (ii) and (iii) for such
actions which, singly or in the aggregate, would not have a Material Adverse
Effect. To the best knowledge of the Company, no collective bargaining
organizing activities are taking place with respect to the Company or any of
its subsidiaries, except for such actions specified in clause (i), (ii) or
(iii) above, which, singly or in the aggregate, would not have a Material
Adverse Effect.
(w) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(x) All material tax returns required to be filed by the Company and
each of its subsidiaries in any jurisdiction have been filed, other than
those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees and
other charges due pursuant to such returns or pursuant to any assessment
received by the Company or any of its subsidiaries have been paid, other than
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those being contested in good faith and for which adequate reserves have been
provided.
(y) The accountants, Arthur Andersen LLP, that have certified the
financial statements and supporting schedules incorporated by reference in
the Registration Statement are independent public accountants with respect to
the Company, as required by the Act and the Exchange Act. The historical
financial statements, together with related schedules and notes, incorporated
by reference in the Prospectus comply as to form in all material respects
with the requirements applicable to registration statements on Form S-3 under
the Act.
(z) The consolidated financial statements incorporated by reference in
the Registration Statement and the Prospectus (and any amendment or
supplement thereto), together with related schedules and notes, present
fairly the consolidated financial position, results of operations and changes
in financial position of the Company and its subsidiaries on the basis stated
therein at the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data set forth in the Registration
Statement and the Prospectus (and any amendment or supplement thereto) are,
in all material respects, accurately presented and prepared on a basis
consistent with the financial statements and books and records of the
Company.
(aa) The Company is not an "investment company", as such term is defined
in the Investment Company Act of 1940, as amended.
(ab) Neither the Company nor any of its subsidiaries nor any agent
thereof acting on the behalf of them has taken, and none of them will take,
any action that might cause this Agreement or the sale of the Shares to
violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the
Board of Governors of the Federal Reserve System.
(ac) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement),
(i) there has not occurred any material adverse change or any development
involving a prospective material adverse change in the condition, financial
or otherwise, or the earnings, business, management or operations of the
Company and its subsidiaries, taken as a whole, (ii) there has not been any
material adverse change or any development involving a prospective material
adverse change in the capital stock or in the longterm debt of the Company or
any of its subsidiaries and (iii) neither the Company nor any of its
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subsidiaries has incurred any material liability or obligation, direct or
contingent.
(ad) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
(ae) Each certificate signed by any officer of the Company and delivered
to the Underwriters or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to the Underwriters as to the
matters covered thereby.
(af) Neither the Company nor any of the Company's subsidiaries has
taken, directly or indirectly, any action designed to, or that might
reasonably be expected to, cause or result in stabilization or manipulation
of the price of any security of the Company or any of the Company's
subsidiaries to facilitate the sale or resale of the Shares.
(ag) Other than this Agreement and as set forth on Exhibit A, there are
no contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company or to
require the Company to include such securities with the Shares registered
pursuant to the Registration Statement.
(ah) Except for the Shares being offered by the Sellers pursuant to this
Agreement, there are no holders of securities of either the Company or any of
its subsidiaries who, by reason of the filing or the execution by the Company
of this Agreement or the consummation of the transactions contemplated
herein, have the right to request or demand that the Company or any
subsidiary of the Company register under the Act securities held by them.
(ai) To the best knowledge of the Company and its subsidiaries and
except as set forth in the Registration Statement and the Prospectus, all
Information Systems and Equipment (defined below) are either Year 2000
Compliant (as defined below), or any reprogramming, remediation, or any other
corrective action, including the internal testing of all such Information
Systems and Equipment, will be completed by December 31, 1999 except for any
failure to be Year 2000 Compliant and any reprogramming, remediation or other
corrective action not completed by December 31, 1999, that could not
reasonably be expected to have a Material Adverse Effect. To the best
knowledge each of the Company and its subsidiaries and except as set forth in
the Registration Statement and the Prospectus, to the extent that such
reprogramming/remediation and testing action is required, the cost thereof,
as well as the cost of the reasonably foreseeable consequences of failure to
become Year 2000 Compliant, to the Company and its subsidiaries (including,
without limitation, reprogramming errors and the failure of other systems or
-14-
equipment) could not reasonably be expected to have a Material Adverse
Effect.
"Year 2000 Compliant" means that all Information Systems and Equipment
accurately process date data (including, but not limited to, calculating,
comparing and sequencing), before, during and after the Year 2000, as well as
same and multi-century dates, or between the years 1999 and 2000, taking into
account all leap years, including the fact that the year 2000 is a leap year,
and further, that when used in combination with, or interfacing with, other
Information Systems and Equipment, shall accurately accept, release and
exchange date data, and shall in all material respects continue to function
in the same manner as it performs today and shall not otherwise impair in any
material respect the accuracy or functionality of Information Systems and
Equipment.
"Information Systems and Equipment" shall mean all computer hardware,
firmware and software, as well as other information processing systems, or
any equipment containing embedded microchips, whether directly owned,
licensed, leased, operated or otherwise controlled by the Company and its
subsidiaries, including through third-party service providers, and which, in
whole or in part, are used, operated, relied upon, or integral to, the
conduct of the business of the Company or its subsidiaries; provided that
Information Systems and Equipment does not include any of the foregoing of
any third party customer or vendor which is not owned, licensed, leased,
operated or otherwise controlled by the Company and its subsidiaries.
The Company acknowledges that the Underwriters and, for purposes of the
opinions to be delivered to the Underwriters pursuant to Section 9 hereof,
counsel to the Company and counsel to the Underwriters will rely upon the
accuracy and truth of the foregoing representations and hereby consents to
such reliance.
S7. Representations and Warranties of the Sellers. Each Seller,
severally and not jointly, represents and warrants to each Underwriter and
the Company that:
(a) Such Seller is the lawful owner of the Shares to be sold by such
Seller pursuant to this Agreement and has, and on the Closing Date will have,
good and clear title to such Shares, free of all restrictions on transfer,
liens, encumbrances, security interests, equities and claims whatsoever.
(b) Such Seller has, and on the Closing Date will have, full legal
right, power and authority, and all authorizations and approvals required by
law, to enter into this Agreement, and to sell, assign, transfer and deliver
the Shares to be sold by such Seller in the manner provided herein.
-15-
(c) This Agreement has been duly authorized, executed and delivered by
or on behalf of such Seller.
(d) [intentionally omitted].
(e) [intentionally omitted].
(f) Upon delivery of and payment for the Shares to be sold by such
Seller pursuant to this Agreement, good and clear title to such Shares will
pass to the Underwriters, free of all restrictions on transfer, liens,
encumbrances, security interests, equities and claims whatsoever.
(g) The execution, delivery and performance of this Agreement, the
compliance by such Seller with all the provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby will not (i)
require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except such as
may be required under the securities or Blue Sky laws of the various states),
(ii) conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the organizational documents of such Seller, or any
material indenture, loan agreement, mortgage, lease or other material
agreement or instrument to which such Seller is a party or by which such
Seller or any property of such Seller is bound or (iii) violate or conflict
with any applicable law or any rule, regulation, judgment, order or decree of
any court or any governmental body or agency having jurisdiction over such
Seller or any property of such Seller.
(h) The information in the Registration Statement or the Prospectus
under the caption "Selling Shareholders", "Plan of Distribution" and
"Underwriting" which specifically relates to such Seller does not, and will
not on the Closing Date, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(i) At any time during the period described in Section 5(d), if there
is any change in the information referred to in Section 7(h), such Seller
will immediately notify you of such change.
(j) Each certificate signed by or on behalf of such Seller and
delivered to the Underwriters or counsel for the Underwriters shall be deemed
to be a representation and warranty by such Seller to the Underwriters as to
the matters covered thereby.
S8. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Underwriter, its directors, its officers and each person, if
any, who controls such Underwriters within the meaning of Section 15 of the
-16-
Act or Section 20 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), from and against any and all losses, claims, damages,
liabilities and judgments (the "Losses") (including, without limitation, any
legal or other expenses incurred in connection with defending or
investigating any matter, including any action that could give rise to any
such Losses) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (or
any amendment or supplement thereto) or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as
such Losses are caused by (i) any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to such
Underwriters furnished in writing to the Company by such Underwriters (or the
failure of the Underwriters to deliver any such document in a timely manner)
or (ii) any such untrue statement or omission or alleged untrue statement or
omission based upon the information described in Section 7(h) hereof.
(b) Each of the Sellers, severally and not jointly, agrees to indemnify
and hold harmless each Underwriter, its directors, its officers and each
person, if any, who controls any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, from and against any and all
Losses caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, but only insofar as such Losses
are caused by any such untrue statement or omission or alleged untrue
statement or based upon information relating to such Seller furnished in
writing to the Company by or on behalf of such Seller expressly for use
therein; provided that the aggregate liability of any Seller pursuant to this
Section 8(b) shall be limited to an amount equal to the total proceeds (after
deducting underwriting discounts and commissions and expenses) received by
such Seller from the Underwriters for the sale of the Shares sold by such
Seller hereunder. Notwithstanding the foregoing, the indemnity of the Sellers
contained in this Section 8(b) shall not inure to the benefit of any
Underwriter (or other indemnified party, as defined below) if the untrue
statement or omission of material fact contained in the preliminary
prospectus was corrected on a timely basis in the Prospectus.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company and its respective directors and officers and
each person who controls (within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act) the Company, each Seller and each person, if
any, who controls such Seller within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to such Underwriters but only with reference to information
-17-
relating to such Underwriters furnished in writing to the Company by such
Underwriters expressly for use in the Registration Statement or the
Prospectus.
(d) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
(the "indemnified party"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying party")
in writing and the indemnifying party shall assume the defense of such
action, including the employment of counsel reasonably satisfactory to the
indemnified party and the payment of all fees and expenses of such counsel,
as incurred (except that in the case of any action in respect of which
indemnity may be sought pursuant to Section 8(c) and either or both of
Section 8(a) and Section 8(b), the Underwriter shall not be required to
assume the defense of such action pursuant to this Section 8(d), but may
employ separate counsel and participate in the defense thereof, but the fees
and expenses of such counsel, except as provided below, shall be at the
expense of such Underwriter). Any indemnified party shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment of such counsel shall have
been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include
both the indemnified party and the indemnifying party, and the indemnified
party shall have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or additional to
those available to the indemnifying party (in which case the indemnifying
party shall not have the right to assume the defense of such action on behalf
of the indemnified party). In any such case, the indemnifying party shall
not, in connection with any one action or separate but substantially similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for (i) the fees and expenses of more
than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the
Underwriters, their officers and directors and such control persons of any
Underwriters, such firm shall be designated in writing by Donaldson, Lufkin &
Jenrette Securities Corporation. In the case of any such separate firm for
the Company and such directors, officers and control persons of the Company,
such firm shall be designated in writing by the Company. In the case of any
such separate firm for the Sellers and such control persons of any Sellers,
such firm shall be designated in writing by the Sellers. The indemnifying
party shall indemnify and hold harmless the indemnified party from and
against any and all Losses by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written
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consent if the settlement is entered into more than twenty business days
after the indemnifying party shall have received a request from the
indemnified party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the indemnifying
party) and, prior to the date of such settlement, the indemnifying party
shall have failed to comply with such reimbursement request. No indemnifying
party shall, without the prior written consent of the indemnified party,
effect any settlement or compromise of, or consent to the entry of judgment
with respect to, any pending or threatened action in respect of which the
indemnified party is or could have been a party and indemnity or contribution
may be or could have been sought hereunder by the indemnified party, unless
such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability on claims that are or
could have been the subject matter of such action 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 the indemnified party.
(e) To the extent the indemnification provided for in this Section 8 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such Losses (i) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and the indemnified
party on the other hand in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or judgments, as well
as any other relevant equitable considerations or (ii) if the allocation
provided by clause 8(e)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative fault referred
to in clause 8(e)(i) above but also the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other
hand from the offering of the Shares. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the indemnifying party or
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
As between each Seller and the Underwriters, the relative benefits received
by such parties shall be deemed to be in the same proportion as the total net
proceeds from the offering (after deducting expenses) received by such
Seller, and the total underwriting discounts and commissions received by the
Underwriters, bear to the total price to the public of such Shares, in each
case as set forth in the table on the cover page of the Prospectus. As
between the Company and the Underwriters, the relative benefits shall be
evaluated in the context, among other things, of the services performed by
the Underwriters pursuant to this Agreement allowing the Company to fulfill
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its contractual obligations to the Sellers and the aggregate benefits
received by the Company therefrom.
The Sellers, the Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 8(e) were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the Losses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses incurred by such indemnified
party in connection with investigating or defending any matter, including any
action, that could have given rise to such Losses. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the
Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission, and no Seller shall be required to contribute
any amount in excess of the amount equal to the total proceeds (after
deducting underwriting discounts and commissions and expenses) received by
such Seller from the Underwriters for the sale of the Shares sold by such
Seller hereunder, less the amount of any indemnification payment made
pursuant to Section 8(b) herein. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 8(e) are several in proportion to the respective
number of Shares purchased by each of the Underwriters hereunder and not
joint.
(f) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity, and, as between each of the
Sellers and the Company, shall not supersede or otherwise affect any
agreement between such parties with respect to indemnification or
contribution.
(g) News Corporation hereby designates Arthur M. Siskind, Senior
Executive Vice President and General Counsel, News America Incorporated, 1211
Avenue of the Americas, New York, New York 10036, and MCI WorldCom Network
Services, Inc. hereby designates Michael Salsbury, Esq., General Counsel, MCI
Telecommunications Corporation, 1801 Pennsylvania Avenue, N.W., Washington,
D.C. 20006, as its authorized agent, upon which process may be served in any
action which may be instituted in any state or federal court in the State of
New York by any Underwriter, any director or officer of any Underwriter or
-20-
any person controlling any Underwriter asserting a claim for indemnification
or contribution under or pursuant to this Section 8, and each Seller will
accept the jurisdiction of such court in such action, and waives, to the
fullest extent permitted by applicable law, any defense based upon lack of
personal jurisdiction or venue. A copy of any such process shall be sent or
given to such Seller, at the address for notices specified in Section 12
hereof.
S9. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters to purchase the Shares under this Agreement are subject
to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York
City time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by the President and the Chief Executive Officer of the
Company, confirming the matters set forth in Sections 6(cc), 9(a) and 9(b)
and that the Company has complied with all of the agreements and satisfied
all of the conditions herein contained and required to be complied with or
satisfied by the Company on or prior to the Closing Date.
(d) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement),
(i) there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken
as a whole, (ii) there shall not have been any change or any development
involving a prospective change in the capital stock or in the longterm debt
of the Company or any of its subsidiaries and (iii) neither the Company nor
any of its subsidiaries shall have incurred any liability or obligation,
direct or contingent, the effect of which, in any such case described in
clause 9(d)(i), 9(d)(ii) or 9(d)(iii), in your judgment, is material and
adverse and, in your judgment, makes it impracticable to market the Shares on
the terms and in the manner contemplated in the Prospectus.
-21-
(e) All the representations and warranties of each Seller contained in
this Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date and you shall have
received on the Closing Date a certificate dated the Closing Date from each
Seller to such effect and to the effect that such Seller has complied with
all of the agreements and satisfied all of the conditions herein contained
and required to be complied with or satisfied by such Seller on or prior to
the Closing Date.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of Friedlob Sanderson Raskin Paulson & Tourtillott, LLC (who may rely,
as to matters governed by Nevada law, on the opinion of Hale Lane Peek
Dennison Howard and Anderson), counsel for the Company, to the effect that:
(i) The Company and each of its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as described in
the Prospectus and to own, lease and operate its properties as described
therein;
(ii) The Company and each its subsidiaries is duly qualified and is
in good standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of its business or its ownership
or leasing of property requires such qualification, except where the
failure to be so qualified would not have a Material Adverse Effect;
(iii) All the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights;
(iv) All the outstanding shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued and
are fully paid and non-assessable, and are owned by the Company,
directly or indirectly through one or more subsidiaries, and are free
and clear of any Lien;
(v) This Agreement has been duly authorized, executed and
delivered by the Company and this Agreement (assuming the due execution
and delivery thereof by the Underwriters) is the legally valid and
binding agreement of the Company;
(vi) The Registration Statement has become effective under the Act,
no stop order suspending its effectiveness has been issued and no
proceedings for that purpose are, to the best of such counsel's
-22-
knowledge after due inquiry, pending before or contemplated by the
Commission;
(vii) The statements under the captions "Description of our
capital stock" and "Plan of Distribution" in the Prospectus and Items 14
and 15 of Part II of the Registration Statement, insofar as such
statements constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present the information called
for with respect to such legal matters, documents and proceedings;
(viii) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws and, to the best of such
counsel's knowledge and except as would not have a Material Adverse
Effect, neither the Company nor any of its subsidiaries is in default in
the performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound or to which any of
its properties is subject, or is in violation of any law, statute, rule,
regulation, judgment or court decree applicable to the Company or any
Company subsidiary; and to the best of such counsel's knowledge, there
exists no condition that, with notice, the passage of time or otherwise,
would constitute such a default under any such document or instrument;
(ix) The execution, delivery and performance of this Agreement and
the other Operative Documents and compliance by the Company with all the
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not require, to such counsel's
knowledge, any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except,
with respect to the Operative Documents, such as may be required under
the securities or Blue Sky laws of the various states) and will not
conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the charter or by-laws of the Company or any of
the Company's subsidiaries or any indenture, loan agreement, mortgage,
lease or other agreement or instrument identified on a schedule to such
opinion that is material to the Company and any of the Company's
subsidiaries, taken as a whole, to which the Company or any of the
Company's subsidiaries is a party or by which the Company or any of the
Company's subsidiaries or their respective property is bound, or violate
or conflict with any applicable law or any rule or regulation or, to
such counsel's knowledge, any judgment, order or decree of any court or
any governmental body or agency having jurisdiction over the Company,
any of the Company's subsidiaries or their respective property, or
result in the imposition or creation of (or the obligation to create or
-23-
impose) a Lien under, any agreement or instrument identified on such
schedule to which the Company or any of the Company's subsidiaries is a
party or by which it or any of them is bound, or to which any properties
of the Company or any of the Company's subsidiaries is or may be
subject;
(x) Except as disclosed in the Prospectus, such counsel does not
know of any legal or governmental proceedings pending or threatened to
which the Company or any of Company's subsidiaries is or could be a
party or to which any of their respective property is or could be
subject, which might result, singly or in the aggregate, in a Material
Adverse Effect.
(xi) The Company is not an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(xii) Except as disclosed in the Prospectus or Exhibit A to
this Agreement, such counsel is aware of no holders of securities of
either the Company or any of the Company's subsidiaries of this
Agreement or the consummation of the transactions contemplated herein
that have the right to request or demand that the Company or any of the
Company's subsidiaries register under the Act securities held by them.
(xiii) The Registration Statement (including any Registration
Statement filed under 462(b) of the Act, if any) and the Prospectus and
any supplement or amendment thereto (except for financial statements as
to which no opinion need be expressed) comply as to form in all material
respects with the Act. At the time of filing the Registration Statement,
and as of the date of this opinion, the Company complied with the
conditions for use of Form S-3.
(xiv) To the best of such counsel's knowledge, there are no
contracts, licenses, agreements, leases or documents of a character
which are required under the Act to be filed as exhibits to the
Registration Statement or to be summarized or described in the
Prospectus which have not been filed, summarized or described.
(xv) The documents incorporated by reference in the Registration
Statement and the Prospectus, when they were filed (or, if an amendment
with respect to such document has been filed, when such amendment was
filed), complied as to form in all material respects with the Exchange
Act.
In addition, such counsel will advise that it has participated in
conferences with directors, officers and other representatives of the Company
and the Subsidiaries, and representatives of the independent public
accountants for the Company, at which conferences the contents of the
-24-
Registration Statement or the Prospectus and related matters were discussed,
and, although such counsel has not independently verified and is not passing
upon and assumes no responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement or the Prospectus
except as specified, no facts have come to such counsel's attention which
lead such counsel to believe that the Registration Statement or the
Prospectus on the effective date thereof (or any amendment thereof made prior
to the Closing Date, as of the date of such amendment), contained any untrue
statement of a material fact or omitted to state any material fact necessary
to make the statements contained therein, in light of the circumstances under
which they were made, not misleading (it being understood that such counsel
need express no view with respect to the financial statements and related
notes, the financial statement schedules and other financial, statistical and
accounting data included in the Registration Statement or the Prospectus or
any information regarding the Sellers). The opinion of Friedlob Sanderson
Raskin Paulson & Tourtillott, LLC described in this Section 9(f) shall be
rendered to you at the request of the Company and shall so state therein.
(g) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of counsel for each Seller, which may include in-house counsel, to the
effect that:
(i) Such Seller is the lawful owner of the Shares to be sold by
such Seller pursuant to this Agreement and, to our knowledge, has good
and clear title to such Shares, free of all restrictions on transfer,
liens, encumbrances, security interests, equities and claims whatsoever;
(ii) Such Seller has full legal right, power and authority, and all
authorization and approval required by law, to enter into this Agreement
and to sell, assign, transfer and deliver the Shares to be sold by such
Seller in the manner provided herein and therein;
(iii) [intentionally omitted];
(iv) [intentionally omitted];
(v) Assuming the Underwriters are "bona fide purchasers" within
the meaning of Section 8-302 of the Uniform Commercial Code as in effect
in the State of New York, upon delivery of and payment for the Shares to
be sold by such Seller pursuant to this Agreement, good and clear title
to such Shares will pass to the Underwriters, free of all restrictions
on transfer, liens, encumbrances, security interests, equities and
claims whatsoever; and
(vi) The execution, delivery and performance of this Agreement by
such Seller, the compliance by such Seller with all the provisions
-25-
hereof and thereof and the consummation of the transactions contemplated
hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (ii) conflict with
or constitute a breach of any of the terms or provisions of, or a
default under, the organizational documents of such Seller or any
material indenture, loan agreement, mortgage, lease or other material
agreement or instrument to which such Seller is a party or by which any
property of such Seller is bound or (iii) violate or conflict with any
New York or federal law, rule or regulation, or, to the best of such
counsel's knowledge, any judgment, order or decree of any court or any
governmental body or agency having jurisdiction over such Seller or any
property of such Seller.
(h) [intentionally omitted].
(i) The Underwriters shall have received on the Closing Date an
opinion, dated the Closing Date, of Steptoe & Johnson, regulatory counsel for
the Company, in form and substance reasonably satisfactory to the
Underwriters and counsel to the Underwriters.
(j) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Paul, Hastings, Janofsky & Walker LLP, counsel for the
Underwriters, in form and substance reasonably satisfactory to the
Underwriters.
(k) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be,
in form and substance satisfactory to you, from Arthur Andersen LLP,
independent public accountants, containing the information and statements of
the type ordinarily included in accountants' "comfort letters" to
Underwriters with respect to the financial statements and certain financial
information contained in the Prospectus.
(l) The Sellers shall have delivered to you the agreements specified in
Section 2 hereof which agreements shall be in full force and effect on the
Closing Date.
(m) The Shares shall have been duly listed for quotation on the Nasdaq
National Market.
(n) The Company and the Sellers shall not have failed on or prior to
the Closing Date to perform or comply with any of the agreements herein
contained and required to be performed or complied with by the Company or the
Sellers, as the case may be, on or prior to the Closing Date.
-26-
(o) You shall have received on the Closing Date, a certificate of each
Seller who is not a U.S. Person (as defined under applicable U.S. federal tax
legislation) to the effect that such Seller is not a U.S. Person, which
certificate may be in the form of a properly completed and executed United
States Treasury Department Form W-8 (or other applicable form or statement
specified by Treasury Department regulations in lieu thereof).
(p) Each of the opinions described in Section 9(f) and 9(i) and the
letter described in Section 9(k) shall have been received by, and shall be
addressed to, each of the Sellers. The Underwriters shall not have the power
to waive compliance with the conditions set forth in this Section 9(p)
without the prior written consent of the Sellers.
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to
the good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such
Additional Shares.
S10. Effectiveness of Agreement and Termination. This Agreement shall
become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Sellers if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment,
is material and adverse and, in your judgment, makes it impracticable to
market the Shares on the terms and in the manner contemplated in the
Prospectus, (ii) the suspension or material limitation of trading in
securities or other instruments on the New York Stock Exchange, the American
Stock Exchange, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange, the Chicago Board of Trade or the Nasdaq National Market or
limitation on prices for securities or other instruments on any such exchange
or the Nasdaq National Market, (iii) the suspension of trading of any
securities of the Company on any exchange or in the over-the-counter market,
(iv) the enactment, publication, decree or other promulgation of any federal
or state statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and adversely
affects, or will materially and adversely affect, the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (v) the declaration of a banking moratorium
by either federal or New York State authorities or (vi) the taking of any
action by any federal, state or local government or agency in respect of its
-27-
monetary or fiscal affairs which in your opinion has a material adverse
effect on the financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase the Firm
Shares or Additional Shares, as the case may be, which it has or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not
more than one-tenth of the total number of Firm Shares or Additional Shares,
as the case may be, to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion
which the number of Firm Shares set forth opposite its name in Schedule I
bears to the total number of Firm Shares which all the non-defaulting
Underwriters have agreed to purchase, or in such other proportion as you may
specify, to purchase the Firm Shares or Additional Shares, as the case may
be, which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number
of Firm Shares or Additional Shares, as the case may be, which any
Underwriter has agreed to purchase pursuant to Section 2 hereof be increased
pursuant to this Section 10 by an amount in excess of one-ninth of such
number of Firm Shares or Additional Shares, as the case may be, without the
written consent of such Underwriter. If on the Closing Date any Underwriter
or Underwriters shall fail or refuse to purchase Firm Shares and the
aggregate number of Firm Shares with respect to which such default occurs is
more than one-tenth of the aggregate number of Firm Shares to be purchased by
all Underwriters and arrangements satisfactory to you, the Company and the
Sellers for purchase of such Firm Shares are not made within 48 hours after
such default, this Agreement will terminate without liability on the part of
any non-defaulting Underwriter, the Company or the Sellers. In any such case
which does not result in termination of this Agreement, either you or the
Sellers shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in
the Registration Statement and the Prospectus or any other documents or
arrangements may be effected. If, on an Option Closing Date, any Underwriter
or Underwriters fails or refuses to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Additional Shares to
be purchased on such date, the non-defaulting Underwriters shall have the
option to (i) terminate their obligation hereunder to purchase such
Additional Shares or (ii) purchase not less than the number of Additional
Shares that such non-defaulting Underwriters would have been obligated to
purchase on such date in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of any such Underwriter under this Agreement.
S11. Agreements of the Sellers. Each Seller agrees with you and the
Company:
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(a) To pay or to cause to be paid all transfer taxes payable in
connection with the transfer of the Shares to be sold by such Seller to the
Underwriters.
(b) To do and perform all things to be done and performed by such
Seller under this Agreement prior to the Closing Date and to take such action
as is required by this Agreement to satisfy all conditions precedent (which
conditions are required to be satisfied by such Seller) to the delivery of
the Shares to be sold by such Seller pursuant to this Agreement.
(c) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the Company's, and to the extent
relevant hereto, the Sellers' obligations under this Agreement, including:
(i) the reasonable fees, disbursements and expenses of the Company's counsel,
the Company's accountants and any Seller's counsel (in addition to the
Company's counsel) in connection with the registration and delivery of the
Shares under the Act and all other fees and expenses in connection with the
preparation, printing, filing and distribution of the Registration Statement
(including financial statements and exhibits), any preliminary prospectus,
the Prospectus and all amendments and supplements to any of the foregoing,
including the mailing and delivering of copies thereof to the Underwriters
and dealers in the quantities specified herein, (ii) all costs and expenses
related to the transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) all costs of
printing or producing this Agreement and any other agreements or documents in
connection with the offering, purchase, sale or delivery of the Shares, (iv)
all expenses in connection with the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws of the
several states and all costs of printing or producing any Preliminary and
Supplemental Blue Sky Memoranda in connection therewith (including the filing
fees and fees and disbursements of counsel for the Underwriters in connection
with such registration or qualification and memoranda relating thereto), (v)
the cost of printing certificates representing the Shares, (vi) the costs and
charges of any transfer agent, registrar and/or depositary, and (vii) all
other costs and expenses incident to the performance of the obligations of
the Company and the Sellers hereunder for which provision is not otherwise
made in this Section, including payment to the Commission the filing fee for
any Rule 462(b) Registration Statement at the time of the filing thereof or
to give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act. The provisions of this Section shall not supersede or
otherwise affect any agreement that the Company and the Sellers may otherwise
have for allocation of such expenses among themselves.
S12. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Company, to EchoStar
Communications Corporation, 5701 South Santa Fe Drive, Littleton, Colorado
-29-
80120, Attention: General Counsel, telephone number (303) 799-8222, (ii) if
to MCI WorldCom Network Services, Inc., 1801 Pennsylvania Avenue, N.W.,
Washington, D.C. 20006, Attention: General Counsel, telephone number (202)
887-3373, (iii) if to News America Incorporated, News America Incorporated,
1211 Avenue of the Americas, New York, New York 10036, Attention: Arthur M.
Siskind, Senior Executive Vice President and General Counsel, and (iv) if to
any Underwriter or to you, to you c/o Donaldson, Lufkin & Jenrette Securities
Corporation, 277 Park Avenue, New York, New York 10172, Attention: Syndicate
Department, or in any case to such other address as the person to be notified
may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Sellers and the several
Underwriters set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and
payment for the Shares, regardless of (i) any investigation, or statement as
to the results thereof, made by or on behalf of any Underwriter, the officers
or directors of any Underwriter, any person controlling any Underwriter, the
Company, the officers or directors of the Company, any person controlling the
Company, any Seller or any person controlling such Seller, (ii) acceptance of
the Shares and payment for them hereunder and (iii) termination of this
Agreement.
If for any reason the Shares are not delivered by or on behalf of any
Seller as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 10), the Sellers agree, jointly and severally,
to reimburse the several Underwriters for all out-of-pocket expenses
(including the fees and disbursements of counsel) incurred by them.
Notwithstanding any termination of this Agreement, the Sellers shall be
liable for all expenses which they have agreed to pay pursuant to Section
11(c) hereof. The Sellers also agree, jointly and severally, to reimburse
the several Underwriters, their directors and officers and any persons
controlling any of the Underwriters for any and all fees and expenses
(including, without limitation, the fees disbursements of counsel) incurred
by them in connection with enforcing their rights hereunder (including,
without limitation, pursuant to Section 8 hereof).
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Sellers, the
Underwriters, the Underwriters' directors and officers, any controlling
persons referred to herein, the Company's directors and the Company's
officers who sign the Registration Statement and their respective successors
and assigns, all as and to the extent provided in this Agreement, and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser
of any of the Shares from any of the several Underwriters merely because of
such purchase.
-30-
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
-31-
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Sellers and the several Underwriters.
Very truly yours,
ECHOSTAR COMMUNICATIONS CORPORATION
/s/ David Moskowitz
-------------------------------
By: David Moskowitz
Title: Senior Vice President,
General Counsel and Secretary
NEWS AMERICA INCORPORATED
/s/ Lawrence A. Jacobs
-------------------------------
By: Lawrence A. Jacobs
Title: Senior Vice President
MCI WORLDCOM NETWORK SERVICES, INC.
/s/ Sunit S. Petel
---------------------------------
By: Sunit S. Petel
Title: Treasurer
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALLEN & COMPANY INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
MERRILL, LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
Acting severally on behalf of themselves and the several
Underwriters named in Schedule I hereto
By DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
/s/ J. Tracy Mehr
- --------------------------
By: J. Tracy Mehr
Title: Vice President
-32-
SCHEDULE I
----------
Number of Firm Shares
Underwriters to be Purchased
Donaldson, Lufkin & Jenrette
Securities Corporation 7,200,000
Allen & Company Incorporated 1,600,000
Credit Suisse First Boston 1,600,000
Corporation
Merrill Lynch, Pierce, Fenner &
Smith Incorporated 1,600,000
---------
Total 12,000,000
-33-
SCHEDULE II
-----------
Sellers
-------
Number of Firm Shares Being
Name Sold
News America Incorporated 9,612,000
MCI WorldCom Network Services, Inc. 2,388,000
----------
Total 12,000,000
-34-
ATTACHMENT A
FORM OF LOCK-UP LETTER
[LETTERHEAD OF NEWS AMERICA INCORPORATED
AND MCI WORLDCOM NETWORK SERVICES, INC.]
December [ ], 1999
EchoStar Communications Corporation
5701 South Santa Fe Drive
Littleton, Colorado 80120
Donaldson, Lufkin & Jenrette Securities Corporation
Allen & Company Incorporated
Credit Suisse First Boston Corporation
Merrill, Lynch, Pierce, Fenner & Smith Incorporated
(as representatives of the several Underwriters (as defined)
named in Schedule I attached hereto)
c/o Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Re: Public Offering of Common Stock
Ladies and Gentlemen:
The undersigned understands that Donaldson, Lufkin &
Jenrette Securities Corporation, Allen & Company Incorporated, Credit Suisse
First Boston Corporation and Merrill Lynch, Pierce, Fenner & Smith
Incorporated (collectively, the "Representatives"), as representatives of the
several underwriters (the "Underwriters"), propose to enter into an
Underwriting Agreement with EchoStar Communications Corporation, a Nevada
corporation (the "Company"), News America Incorporated and MCI WorldCom
Network Services, Inc. providing for the public offering (the "Public
Offering") by the Underwriters, including the Representatives, of up to
Thirteen Million Eight Hundred Thousand (13,800,000) shares of class A common
stock, par value $0.01 per share, of the Company (the "Common Stock").
In consideration of the Underwriters' agreement to
purchase and undertake the Public Offering of the Company's Common Stock and
for other good and valuable consideration, receipt of which is hereby
acknowledged, the undersigned agrees not to, directly or indirectly, offer,
sell, contact to sell, grant any portion to purchase or otherwise dispose of
any shares of the Company's capital stock (including, without limitation,
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shares of the Company's capital stock which may be deemed to be beneficially
owned by the undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission and shares of the Company's capital stock
which may be issued upon exercise of a stock option or warrant) or any
securities convertible into or exercisable or exchangeable for such shares of
the Company's capital stock or, in any manner, transfer all or a portion of
the economic consequences associated with the ownership of the Company's
capital stock, without the prior written consent of Donaldson, Lufkin &
Jenrette Securities Corporation and the Company, which consent the Company
may withhold in its sole discretion, for a period of One Hundred Eighty (180)
days after the commencement of the Public Offering.
In addition, the undersigned agrees that the Company
may, and that the undersigned will, (i) with respect to any shares of the
Company's capital stock for which the undersigned is the record holder, cause
the transfer agent for the Company's capital stock to note stop transfer
instructions with respect to such shares of the Company's capital stock on
the transfer books and records of the Company and (ii) with respect to any
shares of the Company's capital stock for which the undersigned is the
beneficial holder but not the record holder, cause the record holder of such
shares of the Company's capital stock to cause the transfer agent for the
Company to note stop transfer instructions with respect to such shares of the
Company's capital stock on the transfer books and records of the Company.
The undersigned hereby represents and warrants that
the undersigned has full power and authority to enter into this letter
agreement, and that, upon request, the undersigned will execute any
additional documents necessary or desirable in connection with the
enforcement hereof. All authority herein conferred or agreed to be conferred
shall survive the death or incapacity of the undersigned and any obligation
of the undersigned shall be binding upon the heirs, personal representatives,
successors, and assigns of the undersigned.
Very truly yours,
________________________________________
(Signature)
________________________________________
(Name - Please Type)
________________________________________
________________________________________
________________________________________
(Address)
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________________________________________
(Social Security or Taxpayer
Identification No.)
Number of shares owned or subject to
warrants, options or convertible
securities:
Certificate number:_____________________
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EXHIBIT A
[insert any contracts, agreements granting any
person the right to require the Company to file a registration statement or
to include securities with shares under registration statement in connection
with this agreement]
Registration Rights Agreement dated as of June 24,
1999, by and among EchoStar Communications Corporation, MCI
Telecommunications Corporation, MCI WorldCom Network Services, Inc., American
Sky Broadcasting, LLC and News America Incorporated
Registration Rights Agreement to be dated as of
December 8, 1999, between EchoStar Communications Corporation and Donaldson,
Lufkin & Jenrette Securities Corporation
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