<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 22, 1997
REGISTRATION NO. 333-16495
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
BROOKS FIBER PROPERTIES, INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 4813 43-1656187
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
------------------------------
425 Woods Mill Road South, Suite 300
Town & Country, Missouri 63017
(314) 878-1616
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
------------------------------
David L. Solomon
Executive Vice President and Chief Financial Officer
Brooks Fiber Properties, Inc.
425 Woods Mill Road South, Suite 300
Town & Country, MO 63017
(314) 878-1616
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
------------------------------
Copies to:
<TABLE>
<S> <C>
John P. Denneen, Esq. Robert E. Buckholz, Jr., Esq.
Bryan Cave LLP Sullivan & Cromwell
211 N. Broadway, Suite 3600 125 Broad Street
St. Louis, Missouri 63102-2750 New York, New York 10004
(314) 259-2000 (212) 558-4000
</TABLE>
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE> 2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 2 to this Registration Statement to be signed
on its behalf by the undersigned thereunto duly authorized, in the City of Town
& Country, State of Missouri, on January 21, 1997.
BROOKS FIBER PROPERTIES, INC.
By: /s/ JAMES C. ALLEN
-------------------------------------
James C. Allen
Vice Chairman and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to this Registration Statement has been signed by the following persons in
the capacities indicated on January 21, 1997.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- ------------------------------------- -----------------------------------------------------------
<S> <C>
* Director (Chairman of the Board)
- -------------------------------------
Robert A. Brooks
/s/ JAMES C. ALLEN Vice Chairman and Director (Chief Executive Officer)
- -------------------------------------
James C. Allen
* President and Director (Chief Operating Officer)
- -------------------------------------
D. Craig Young
/s/ DAVID L. SOLOMON Executive Vice President and Chief Financial Officer
- ------------------------------------- (Principal Financial and Accounting Officer)
David L. Solomon
* Director
- -------------------------------------
Robert F. Benbow
* Director
- -------------------------------------
William J. Bresnan
* Director
- -------------------------------------
Jonathan M. Nelson
* Director
- -------------------------------------
G. Jackson Tankersley, Jr.
</TABLE>
II-1
<PAGE> 3
<TABLE>
<CAPTION>
SIGNATURES TITLE
- ------------------------------------- -----------------------------------------------------------
<S> <C>
- ------------------------------------- Director
Ronald H. Vander Pol
* Director
- -------------------------------------
Carol deB. Whitaker
*By: /s/ DAVID L. SOLOMON
- ----------------------------------
David L. Solomon,
Attorney-in-Fact
</TABLE>
II-2
<PAGE> 4
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- -------- ---------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement (U.S. Version)
1.2 Form of Underwriting Agreement (International Version)
2.1 Agreement and Plan of Merger dated December 19, 1995 between the Company and
Brooks Telecommunications Corporation (incorporated by reference to Exhibit 2.1
to the Company's Registration Statement on Form S-1 (File No. 333-1924) filed
with the Commission on March 4, 1996 (the "IPO Form S-1"))
2.2 Agreement and Plan of Merger dated January 17, 1996 between the Company, Brooks
Fiber Communications of Michigan, Inc., City Signal, Inc. and Ronald H. Vander
Pol (incorporated by reference to Exhibit 2.2 to the IPO Form S-1)
3.1(a) Restated Certificate of Incorporation of the Company (incorporated by reference
to Exhibit 3.1(a) to the IPO Form S-1)
3.1(b) Certificate of Designation of Series C Junior Participating Preferred Stock
(incorporated by reference to Exhibit 3.1(c) to the IPO Form S-1)
3.1(c) Certificate of Amendment of Certificate of Incorporation of the Company dated as
of August 20, 1996 (incorporated by reference to Exhibit 3 to the Company's
Quarterly Report on Form 10-Q, as amended, for the Period Ended September 30,
1996 (File No. 0-28036) filed with the Commission on November 14, 1996)
3.2 By-laws of the Company (incorporated by reference to Exhibit 3.2 to the Company's
Report on Form 10-Q for the Period Ended March 31, 1996 (File No. 0-28036) filed
with the Commission on May 15, 1996)
4.1 Form of Specimen Certificate for Common Stock (incorporated by reference to Ex-
hibit 4.1 to the IPO Form S-1)
4.2 Rights Agreement dated February 29, 1996 between the Company and The Boatmen's
Trust Company, as Rights Agent (incorporated by reference to Exhibit 4.2 to the
IPO Form S-1)
4.3 Amended and Restated Stockholders Agreement dated as of June 15, 1995 (incorpo-
rated by reference to Exhibit 4.3 to the IPO Form S-1)
4.4 Amended and Restated Registration Rights Agreement dated as of June 15, 1995
(incorporated by reference to Exhibit 4.4 to the IPO Form S-1)
4.5 Indenture dated as of February 26, 1996 between the Company and The Bank of New
York, as Trustee (incorporated by reference to Exhibit 4.6 to the IPO Form S-1)
++4.6 Indenture dated as of November 7, 1996 between the Company and The Bank of New
York, as Trustee
++4.7 Exchange and Registration Rights Agreement dated as of November 7, 1996
4.8 Amended and Restated Loan and Security Agreement dated as of October 1, 1996
among AT&T Credit Corporation, the Company and certain subsidiaries of the
Company (incorporated by reference to Exhibit 4.8 to the Company's Registration
Statement on Form S-4 (File No. 333-18503) filed with the Commission on December
20, 1996)
4.9 The Company has not filed certain instruments with respect to long-term debt
since the total amount of securities authorized thereunder does not exceed 10% of
the total assets of the Company and its subsidiaries on a consolidated basis. The
Company agrees to furnish a copy of any such agreement to the Commission upon
request.
- ---------------
++ Previously filed.
</TABLE>
II-3
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- -------- ---------------------------------------------------------------------------------
<C> <S>
5.1 Opinion of Bryan Cave LLP regarding the validity of the Common Stock
10.1 1993 Stock Option Plan of the Company (incorporated by reference to Exhibit 10.1
to the IPO Form S-1)
10.2 Form of Non-Qualified Stock Option Agreement under the Company's 1993 Stock
Option Plan (incorporated by reference to Exhibit 10.2 to the IPO Form S-1)
10.3 1996 Employee Stock Purchase Plan of the Company (incorporated by reference to
Exhibit 10.3 to the IPO Form S-1)
10.4 1993 Stock Option Plan of Brooks Telecommunications Corporation ("BTC") (incorpo-
rated by reference to Exhibit 10.4 to the IPO Form S-1)
10.5 Form of Substituted Non-Qualified Stock Option Agreement under BTC's 1993 Stock
Option Plan (incorporated by reference to Exhibit 10.5 to the IPO Form S-1)
10.6 Option Agreement dated as of January 31, 1996 between the Company and Ronald H.
Vander Pol (incorporated by reference to Exhibit 10.6 to the IPO Form S-1)
++11.1 Statement Re Computation of Per Share Earnings
++21.1 Subsidiaries of the Company
23.1 Consent of Bryan Cave LLP (included in Exhibit 5.1)
++23.2 Consent of KPMG Peat Marwick LLP
++23.3 Consent of BDO Seidman, LLP
++24.1 Power of Attorney
</TABLE>
- ---------------
++ Previously filed.
II-4
<PAGE> 1
BROOKS FIBER PROPERTIES, INC.
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
UNDERWRITING AGREEMENT
(U.S. VERSION)
January , 1997
<PAGE> 2
BROOKS FIBER PROPERTIES, INC.
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
_______________________
UNDERWRITING AGREEMENT
(U.S. VERSION)
_______________________
January __, 1997
Goldman, Sachs & Co.,
Salomon Brothers Inc,
Lehman Brothers Inc.
Deutsche Morgan Grenfell Inc.
As representatives ("U.S. Representatives") of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Certain stockholders named in Schedule II hereto (the "Selling
Stockholders") of Brooks Fiber Properties, Inc., a Delaware corporation (the
"Company"), propose, subject to the terms and conditions stated herein, to sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of _________ shares of Voting Common Stock (par value $0.01 per
share) ("Stock") of the Company and the Company proposes, subject to the terms
and conditions stated herein, to sell to the Underwriters, at the election of
the Underwriters, up to _________ additional shares of Stock. The aggregate of
_________ shares to be sold by the Selling Stockholders is herein called the
"Firm Shares," and the aggregate of _______ additional shares to be sold by the
Company is herein called the "Optional Shares". The Firm Shares and the
Optional Shares that the Underwriters elect to purchase pursuant to Section 2
hereof are herein collectively called the "Shares". All references to "Firm
Shares," "Optional Shares" and "Shares" shall include the associated Preferred
Stock Purchase Rights ("Rights").
It is understood and agreed to by all parties that the Company and the
Selling Stockholders are concurrently entering into an agreement (the
"International Underwriting Agreement") providing for the sale by the Company
and the Selling Stockholders of up to a total of _________ shares of Stock (the
"International Shares"), including the overallotment option thereunder, through
arrangements with certain underwriters outside the United States (the
"International Underwriters"), for whom Goldman Sachs International and Salomon
Brothers International Limited are acting as lead managers (the "International
Representatives"). Anything herein or therein to the contrary notwithstanding,
the respective closings under this Agreement and the International Underwriting
Agreement are hereby
2
<PAGE> 3
expressly made conditional on one another. The Underwriters hereunder
and the International Underwriters are simultaneously entering into an
Agreement between U.S. and International Underwriting Syndicates (the
"Agreement between Syndicates") which provides, among other things, for the
transfer of shares of Stock between the two syndicates. Two forms of prospectus
are to be used in connection with the offering and sale of shares of Stock
contemplated by the foregoing, one relating to the Shares hereunder and the
other relating to the International Shares. The latter form of prospectus will
be identical to the former except for the front cover page, inside front cover
page, back cover page, and the text under the caption "Underwriting" and for
the addition of a section captioned "Certain United States Federal Tax
Consequences to Non-U.S. Stockholders". Except as used in Sections 2, 3, 4, 9
and 11 herein, and except as the context may otherwise require, references
hereinafter to the Shares shall include all the shares of Stock which may be
sold pursuant to either this Agreement or the International Underwriting
Agreement, and references herein to any prospectus whether in preliminary or
final form, and whether as amended or supplemented, shall include both the U.S.
and the international versions thereof.
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-16495) (the
"Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission") for the
registration under Securities Act of 1933, as amended (the "Act"), of the
Shares and the associated Rights; the Initial Registration Statement and
any post-effective amendment thereto, each in the form heretofore
delivered to you, and, excluding exhibits thereto, to you for each of the
other Underwriters, have been declared effective by the Commission in
such form; no other document (other than (i) the pre-effective amendments
thereto and (ii) a registration statement, if any, increasing the size of
the offering (a "Rule 462(b) Registration Statement"), filed pursuant to
Rule 462(b) under the Act which became effective upon filing) with
respect to the Initial Registration Statement has heretofore been filed
with the Commission; and no stop order suspending the effectiveness of
the Initial Registration Statement, any post-effective amendment thereto
or the Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Act is
hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and including the
information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be
part of the Initial Registration Statement at the time it was declared
effective or such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, each as amended at the time such
part of the registration statement became effective, are hereinafter
collectively called the "Registration Statement"; and such final
prospectus, in the form first filed pursuant to Rule 424(b) under the
Act, is hereinafter called the "Prospectus");
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<PAGE> 4
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder, 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; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of an
Underwriter through Goldman, Sachs & Co. expressly for use therein or by
a Selling Stockholder expressly for use in the preparation of the answers
therein to Items 7 and 11(l) of Form S-1;
(iii) The Registration Statement complies and will as of each Time
of Delivery comply, and the Prospectus and any further amendments or
supplements to the Registration Statement or the Prospectus will comply
as of the applicable effective or other applicable date and as of each
Time of Delivery, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder; the
Registration Statement and any further amendments or supplements thereto
do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; the Prospectus and any amendments or supplements thereto do
not and will not, as of the applicable date as to the Prospectus and any
amendment thereto, 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 light of the circumstances under which
they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of an Underwriter
through Goldman, Sachs & Co. expressly for use therein or by a Selling
Stockholder expressly for use in the preparation of the answers therein
to Items 7 and 11(l) of Form S-1;
(iv) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any change
in the capital stock of the Company or any of its subsidiaries or any
change in total consolidated debt (in excess of $2,000,000) or decrease
in total consolidated assets (in excess of $5,000,000) or working capital
(in excess of $25,000,000) of the Company and its subsidiaries or any
material adverse change, or any development that may be reasonably
expected to result in a material adverse change, in or affecting the
general affairs, management, Company and its subsidiaries on a
consolidated basis, otherwise than
4
<PAGE> 5
in each case as set forth or contemplated in the Prospectus (including the
pro forma and, in the case of capital stock, as adjusted financial
information contained therein);
(v) The Company and its subsidiaries own no real property other
than a 23 acre parcel of land in Town & Country, Missouri, on which it is
constructing its new corporate headquarters and a 42,000 square foot
office building in Grand Rapids, Michigan and, to the best of the
Company's knowledge, have good and marketable title in fee simple to such
property; the Company and its subsidiaries have good and marketable title
to all material items of personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the value
of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company and its 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 enforceable by the Company and its subsidiaries 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;
(vi) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of the States of Missouri
and California, the only jurisdictions in which its ownership or leasing
of properties or its conduct of any business requires such qualification;
and each subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(vii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid
and non-assessable, and conform to the description of the capital stock
contained in the Prospectus; and all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable, and (except as
set forth in the Prospectus in respect of minority interests described
therein) are owned directly or indirectly by the Company, free and clear
of all liens, encumbrances, equities or claims;
(viii) The Optional Shares to be issued and sold by the Company to
the Underwriters hereunder and under the International Underwriting
Agreement have been duly and validly authorized and, if and when issued
and delivered against payment therefor as provided herein, will be duly
and validly issued and fully paid and non-assessable, and will conform to
the description of the Stock contained in the Prospectus;
(ix) The issue and sale of the Optional Shares to be sold by the
Company hereunder and under the International Underwriting Agreement and
the compliance by
5
<PAGE> 6
the Company with all of the provisions of this Agreement and the
International Underwriting Agreement and the consummation of the
transactions herein and therein contemplated will not result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the Restated Certificate of
Incorporation or By-laws of the Company or any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties; and no consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Optional Shares or the
consummation by the Company of the transactions contemplated by this
Agreement and the International Underwriting Agreement, except the
registration under the Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state or foreign securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters and the
International Underwriters;
(x) Neither the Company nor any of its subsidiaries is in violation
of its Restated Certificate of Incorporation or By-laws or in default in
the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which it
is a party or by which it or any of its properties may be bound, except
for any such violation or default that individually or in the aggregate
would not have a material adverse effect on (i) the general affairs,
management, financial position, stockholders' equity or results of
operation of the Company and its subsidiaries or (ii) the rights of any
holder of Shares;
(xi) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Stock, and under the captions "Prospectus
Summary -- Recent Developments", "Risk Factors", "Business of the
Company" and "Regulatory Overview", insofar as they purport to describe
the provisions of the laws, legal proceedings, and documents referred to
therein, are accurate and fair summaries of such terms and provisions,
respectively, and are complete in all material respects;
(xii) Other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
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<PAGE> 7
(xiii) The Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company
Act");
(xiv) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes;
(xv) KPMG Peat Marwick LLP, who have certified the consolidated
financial statements of the Company, are independent public accountants
as required by the Act and the rules and regulations of the Commission
thereunder;
(xvi) No holder of any security of the Company (other than the
Selling Stockholders with respect to the Shares being sold pursuant to
this Agreement and the International Underwriting Agreement) has or will
have any right to require the registration of such security by virtue of
any transactions contemplated by this Agreement other than any such right
that has been waived either expressly or through the failure to exercise
such right in a timely manner;
(xvii) Except as set forth in or contemplated by the Prospectus
with respect to systems under development and the systems acquired from
City Signal, Inc. on January 31, 1996, each of the Company and its
subsidiaries has all material certificates, consents, exemptions, orders,
permits, licenses, authorizations, franchises or other material approvals
(each, an "Authorization") of and from, and has made all material
declarations and filings with, all Federal, state, local and other
governmental authorities, all self-regulatory organizations, and all
courts and other tribunals necessary or appropriate for the Company and
its subsidiaries to own, lease, license, use and construct its properties
and assets and to conduct its business in the manner described in the
Prospectus, except to the extent that the failure to obtain any such
Authorizations or make any such declaration or filing would not,
singularly or in the aggregate, reasonably be expected to have a material
adverse effect on the current or future consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries. All such Authorizations are in full force and effect with
respect to the Company and its subsidiaries; to the best knowledge of the
Company, no event has occurred that permits, or after notice or
lapse of time could permit, the revocation, termination or modification
of any such Authorization; the Company and its subsidiaries are in
compliance in all material respects with the terms and conditions of all
such Authorizations and with the rules and regulations of the regulatory
authorities and governing bodies having jurisdiction with respect
thereto; and, except as set forth in the Prospectus, the Company has no
knowledge that any person is contesting or intends to contest the
granting of any material Authorization; and
(xviii) Neither the execution and delivery of this Agreement by the
Company nor the consummation by the Company of the transactions
contemplated hereby will
7
<PAGE> 8
cause any suspension, revocation, impairment, forfeiture, nonrenewal or
termination of any Authorization.
(b) Each of the Selling Stockholders severally, and not jointly,
represents and warrants to, and agrees with, each of the Underwriters and the
Company that:
(i) All consents, approvals, authorizations and orders necessary
for the execution and delivery by such Selling Stockholder of this
Agreement, the International Underwriting Agreement, the Power of
Attorney and the Custody Agreement hereinafter referred to, and for the
sale and delivery of the Shares to be sold by such Selling Stockholder
hereunder and under the International Underwriting Agreement, have been
obtained; provided, however that such Selling Stockholder makes no
representation or warranty hereunder with respect to securities or Blue
Sky laws of any state or other jurisdiction; and such Selling Stockholder
has full right, power and authority to enter into this Agreement, the
International Underwriting Agreement, the Power of Attorney and the
Custody Agreement and to sell, assign, transfer and deliver the Shares to
be sold by such Selling Stockholder hereunder and under the International
Underwriting Agreement;
(ii) The sale of the Shares to be sold by such Selling Stockholder
hereunder and under the International Underwriting Agreement and the
compliance by such Selling Stockholder with all of the provisions of this
Agreement, the International Underwriting Agreement, the Power of
Attorney and the Custody Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any statute, indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which such
Selling Stockholder is a party or by which such Selling Stockholder is
bound, or to which any of the property or assets of such Selling
Stockholder is subject, nor will such action result in any violation of
the provisions of the Certificate of Incorporation or By-laws of such
Selling Stockholder if such Selling Stockholder is a corporation, the
Partnership Agreement of such Selling Stockholder if such Selling
Stockholder is a partnership, or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder;
(iii) Such Selling Stockholder has, and immediately prior to the
First Time of Delivery (as defined in Section 4 hereof) such Selling
Stockholder will have, good and valid title to the Shares to be sold by
such Selling Stockholder hereunder and under the International
Underwriting Agreement, free and clear of all liens, encumbrances,
equities or claims; and, upon delivery of such Shares and payment
therefor pursuant hereto and thereto, good and valid title to such
Shares, free and clear of all liens, encumbrances, equities or claims,
will pass to the several Underwriters or the International Underwriters,
as the case may be;
(iv) Each Selling Stockholder listed on Exhibit I hereto has
executed and delivered to the U.S. representatives a letter in the form
of Annex III hereto;
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<PAGE> 9
(v) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares;
(vi) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by such
Selling Stockholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did, and the Prospectus and any
further amendments or supplements to the Registration Statement and the
Prospectus, when they become effective or are filed with the Commission,
as the case may be, will conform in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(vii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to you prior to or at
the Time of Delivery (as hereinafter defined) a properly completed and
executed United States Treasury Department Form W-9 (or other applicable
form or statement specified by Treasury Department regulations in lieu
thereof);
(viii) Certificates in negotiable form representing all of the
Shares to be sold by such Selling Stockholder hereunder and under the
International Underwriting Agreement have been placed in custody under a
Custody Agreement, in the form heretofore furnished to you (the "Custody
Agreement"), duly executed and delivered by such Selling Stockholder to
Boatmen's Trust Company, as custodian (the "Custodian"), and such Selling
Stockholder has duly executed and delivered a Power of Attorney, in the
form heretofore furnished to you (the "Power of Attorney"), appointing
the persons indicated in Schedule II hereto, and each of them, as such
Selling Stockholder's attorneys-in-fact (the "Attorneys-in-Fact") with
authority to execute and deliver this Agreement and the International
Underwriting Agreement on behalf of such Selling Stockholder, to
determine the purchase price to be paid by the Underwriters and the
International Underwriters to the Selling Stockholders as provided in
Section 2 hereof, to authorize the delivery of the Shares to be sold by
such Selling Stockholder hereunder and otherwise to act on behalf of such
Selling Stockholder in connection with the transactions contemplated by
this Agreement, the International Underwriting Agreement and the Custody
Agreement; and
(ix) The Shares represented by the certificates held in custody for
such Selling Stockholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder and the International
Underwriters under the International Underwriting Agreement; the
arrangements made by such Selling Stockholder for such custody, and the
appointment by such Selling Stockholder of the Attorneys-in-Fact by
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the Power of Attorney, are to that extent irrevocable; the obligations
of the Selling Stockholders hereunder shall not be terminated by
operation of law, whether by the death or incapacity of any individual
Selling Stockholder or, in the case of an estate or trust, by the death
or incapacity of any executor or trustee or the termination of such
estate or trust, or in the case of a partnership or corporation, by the
dissolution of such partnership or corporation, or by the occurrence of
any other event; if any individual Selling Stockholder or any such
executor or trustee should die or become incapacitated, or if any such
estate or trust should be terminated, or if any such partnership or
corporation should be dissolved, or if any other such event should occur,
before the delivery of the Shares hereunder, certificates representing
the Shares shall be delivered by or on behalf of the Selling Stockholders
in accordance with the terms and conditions of this Agreement, of the
International Underwriting Agreement and of the Custody Agreements; and
actions taken by the Attorneys-in-Fact pursuant to the Powers of Attorney
shall be as valid as if such death, incapacity, termination, dissolution
or other event had not occurred, regardless of whether or not the
Custodian, the Attorneys-in-Fact, or any of them, shall have received
notice of such death, incapacity, termination, dissolution or other
event.
(c) Each of the Selling Stockholders and the Company agree that the
provisions contained in Section 8 of the Amended and Restated Registration
Rights Agreement dated as of June 15, 1995 between the Company and certain
stockholders of the Company shall remain in full force and effect insofar as
they relate to any indemnification or contribution as between the Company, on
the one hand, and the Selling Stockholders, on the other hand.
2. Subject to the terms and conditions herein set forth, including Section
9(b) of this Agreement, (a) each of the Selling Stockholders agrees, severally
and not jointly, to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from each of the
Selling Stockholders, at a purchase price per share of $_____, the number of
Firm Shares (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying the aggregate number of Firm Shares to be sold by
each of the Selling Stockholders as set forth opposite their respective names
in Schedule II hereto by a fraction, the numerator of which is the aggregate
number of Firm Shares to be purchased by such Underwriter as set forth opposite
the name of such Underwriter in Schedule I hereto and the denominator of which
is the aggregate number of Firm Shares to be purchased by all of the
Underwriters from all of the Selling Stockholders hereunder and (b) in the
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares as provided below, the Company agrees to sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per share set
forth in clause (a) of this Section 2, that portion of the number of Optional
Shares as to which such election shall have been exercised (to be adjusted by
you so as to eliminate fractional shares) determined by multiplying such number
of Optional Shares by a fraction the numerator of which is the maximum number
of Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
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The Company hereby grants to the Underwriters the right to purchase at
their election up to _______ Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised not more than once and only by written notice
from Goldman, Sachs & Co. to the Company, given within a period of 30 calendar
days after the date of this Agreement and setting forth the aggregate number of
Optional Shares to be purchased and the date on which such Optional Shares are
to be delivered, as determined by you but in no event earlier than the First
Time of Delivery (as defined in Section 4 hereof) or, unless you and the
Company otherwise agree in writing, earlier than two or later than ten business
days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Goldman, Sachs & Co. may request upon at least forty-eight hours'
prior written notice to the Company and the Selling Stockholders shall be
delivered by or on behalf of the Company and the Selling Stockholders to
Goldman, Sachs & Co., through the facilities of The Depository Trust Company
("DTC"), for the account of such Underwriter, against payment by or on behalf
of such Underwriter of the purchase price therefor by wire transfer of same day
funds, payable to the order of the Company and the Custodian on behalf of each
of the Selling Stockholders, as their respective interests may appear. The
Company and the Selling Stockholders will cause the certificates representing
the Shares to be made available for checking and packaging at least twenty-four
hours prior to the Time of Delivery (as defined below) with respect thereto at
the office of DTC or its designated custodian (the "Designated Office"). The
time and date of such delivery and payment shall be, with respect to the Firm
Shares, 9:30 a.m., New York City time, on January __, 1997 or such other time
and date as Goldman, Sachs & Co. and the Company may agree upon in writing,
and, with respect to the Optional Shares, 9:30 a.m., New York City time, on the
date specified by Goldman, Sachs & Co. in the written notice given by Goldman,
Sachs & Co. of the Underwriters' election to purchase such Optional Shares
pursuant to Section 2 hereof, or such other time and date as Goldman, Sachs &
Co. and the Company may agree upon in writing. Such time and date for delivery
of the Firm Shares is herein called the "First Time of Delivery", such time and
date for delivery of the Optional Shares, if not the First Time of Delivery,
is herein called the "Second Time of Delivery", and each such time and date for
delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(m) hereof, will be delivered at the offices
of Sullivan & Cromwell, 125 Broad Street, New York, New York 10004 (the
"Closing Location"), and the Shares will be delivered at the Designated Office,
all at each Time of Delivery. A meeting will be held at the Closing Location at
2:30 p.m., New York City time, on the New York Business Day next preceding each
Time of Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review by
the parties hereto. For the purposes of this
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Section 4, "New York Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus which
shall be disapproved by you in writing promptly after reasonable notice
thereof; to advise you, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has
been filed and to furnish you copies thereof; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus or
prospectus, of the suspension of the qualification of the Shares for offering
or sale in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
prospectus or suspending any such qualification, promptly to use its best
efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale, and the Rights
for issuance, under the securities laws of such jurisdictions as you may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Shares, provided that in connection therewith
the Company shall not be required by the Underwriters to qualify as a foreign
corporation or a securities dealer, to file a general consent to service of
process in any jurisdiction or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to
furnish the Underwriters with copies of the Prospectus in New York City in such
quantities as you may reasonably request, and, if the delivery of a prospectus
is required at any time prior to the expiration of nine months after the time
of issue of the Prospectus in connection with the offering or sale of the
Shares and if at such time any events shall have occurred as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such period to amend or
supplement the Prospectus in order to comply with the Act, to notify you and
upon your request to prepare and furnish without charge to each Underwriter and
to any
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dealer in securities as many copies as you may reasonably request of an
amended Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance, and in case any Underwriter is
required to deliver a prospectus in connection with sales of any of the Shares
at any time nine months or more after the time of issue of the Prospectus, upon
your request but at the expense of such Underwriter, to prepare and deliver to
such Underwriter as many copies as you may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Act), an earnings statement of the Company and its subsidiaries (which need
not be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);
(e) The Company has agreed that, for a period of 90 days after the
date of the Prospectus, it will not offer, sell, contract to sell or otherwise
dispose of any shares of Stock or any securities which are convertible or
exchangeable into Stock without the prior written consent of the designated
representative of the Underwriters, except for shares of Stock (i) offered or
sold in connection with the concurrent U.S. and International Offerings, (ii)
issued pursuant to any employee stock plan in effect on the date of the
Prospectus or (iii) issued upon exercise of warrants outstanding on the date of
the Prospectus;
(f) To furnish to its stockholders as soon as practicable after the end
of each fiscal year an annual report (including a balance sheet and statements
of income, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries certified by independent public accountants) and, as
soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective date
of the Registration Statement), consolidated summary financial information of
the Company and its subsidiaries for such quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to the U.S. Representatives copies of all
reports or other communications (financial or other) furnished to stockholders,
and to deliver to the U.S. Representatives (i) as soon as they are available,
copies of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of securities
of the Company is listed; and (ii) such additional information concerning the
business and financial condition of the Company as the U.S. Representatives may
from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission);
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(h) To use its best efforts to list for quotation the Shares on the
Nasdaq Market ("NASDAQ");
(i) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
6. (a) The Company covenants and agrees with the several Underwriters
that (a) the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the International
Underwriting Agreement, the Agreement between Syndicates, the Selling
Agreements, the Blue Sky Memorandum, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Shares; (iii) all expenses in connection
with the qualification of the Shares for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the reasonable
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey; (iv) all fees and
expenses in connection with listing the Shares on the NASDAQ; (v) the filing
fees incident to, and the reasonable fees and disbursements of counsel for the
Underwriters in connection with, securing any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the Shares;
(vi) the cost of preparing stock certificates; (vii) the cost and charges of
any transfer agent or registrar; (viii) fees and disbursements of Bryan Cave
representing all Selling Stockholders who have requested Bryan Cave to
represent them; and (ix) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section; and (b) each Selling Stockholder covenants and
agrees that it will pay or cause to be paid all costs and expenses incident to
the performance of such Selling Stockholder's obligations hereunder which are
not otherwise specifically provided for in this Section or which the Company is
not expressly obligated to pay under the Amended and Restated Registration
Rights Agreement, including (i) any fees and expenses of counsel for such
Selling Stockholder except as otherwise provided for in clause (a)(viii) above,
(ii) such Selling Stockholder's pro rata share of the fees and expenses of the
Attorneys-in-Fact and the Custodian and (iii) all expenses and taxes incident
to the sale and delivery of the Shares to be sold by such Selling Stockholder
to the Underwriters hereunder and under the International Underwriting
Agreement. In connection with Clause (b) (iii) of the preceding sentence,
Goldman, Sachs & Co. agrees to pay New York State stock transfer tax, and the
Selling Stockholder agrees to reimburse Goldman, Sachs & Co. for associated
carrying costs if such tax payment is not rebated on the day of payment and for
any portion of such tax payment not rebated. It is understood, however, that,
except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees
of their counsel, stock transfer taxes on
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<PAGE> 15
resale of any of the Shares by them, and any advertising expenses connected
with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholders herein are, at and as of such Time
of Delivery, true and correct, the condition that the Company and the Selling
Stockholders shall have performed all of its and their obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on
the part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated such Time of Delivery, with
respect to the matters covered in paragraphs (i), (ii), (iv) and (vii) of
subsection (c) below as well as such other related matters as you may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Bryan Cave LLP, counsel for the Company, shall have furnished to
you their written opinion, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company (including the Shares being delivered at such Time of Delivery)
have been duly and validly authorized and issued and are fully paid and
non-assessable; and the Shares conform in all material respects to the
description of the Stock contained in the Prospectus under the caption
"Description of Capital Stock";
(iii) Each subsidiary of the Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, provided that with respect to
subsidiaries incorporated under the laws of the State of Michigan or
Nevada, such counsel need only state that each such
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<PAGE> 16
subsidiary is a corporation validly existing in good standing under the
laws of its jurisdiction of incorporation; and all of the issued shares
of capital stock of each such subsidiary have been duly and validly
authorized and issued, are fully paid and non-assessable, and are
owned of record by the Company directly or indirectly through one or more
subsidiaries of the Company, free and clear of any pledge noted on the
stock records of such subsidiary (except for pledges securing the
indebtedness described in the Prospectus (such counsel being entitled to
rely in respect of the opinion in this clause upon opinions of local
counsel, provided that such counsel shall state that they believe that
both you and they are justified in relying upon such opinions);
(iv) This Agreement and the International Underwriting Agreement
have been duly authorized, executed and delivered by the Company;
(v) The issue and sale of the Shares being delivered at such Time
of Delivery to be sold by the Company and the compliance by the Company
with all of the provisions of this Agreement and the International
Underwriting Agreement and the consummation of the transactions herein
and therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or any order, rule
or regulation known to such counsel of any court or governmental agency
or body having jurisdiction over the Company or any of its subsidiaries
or any of their properties (such counsel shall be entitled to state that
it is expressing no opinion with respect to state or foreign securities
or Blue Sky laws in connection with the purchase and distribution of the
Shares by the Underwriters and the International Underwriters);
(vi) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the consummation by the
Company of the transactions contemplated by this Agreement and the
International Underwriting Agreement, except the registration under the
Act of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state or foreign
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters and the International
Underwriters;
(vii) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Stock and the Rights are accurate summaries
of such terms in all material respects;
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<PAGE> 17
(viii) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act;
(ix) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to such Time
of Delivery (other than the financial statements and related schedules
and any other financial data therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations thereunder.
Such counsel shall also state that, during the course of the preparation
by the Company of the Registration Statement and the Prospectus, such counsel
has participated in conferences with your representatives and counsel and with
officers and representatives of the Company, at which conferences the contents
of the Registration Statement and the Prospectus were discussed, reviewed and
revised, and, although (except for the statements referred to in subsection
(vii) of this Section 7(c)) such counsel is not passing upon, and does not
assume any responsibility for, the accuracy, completeness or fairness of the
statements made in the Registration Statement and the Prospectus, on the basis
of the information that was developed during the course thereof, considered
in the light of such counsel's understanding of applicable law and the
experience it has gained through its practice thereunder, that such counsel has
no reason to believe that, as of its effective date, the Registration Statement
or any further amendment thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related schedules and any
other financial data therein, as to which such counsel need express no belief)
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that, as of its date, the Prospectus or any further amendment
or supplement thereto made by the Company prior to such Time of Delivery (other
than the financial statements and related schedules and any other financial
data therein, as to which such counsel need express no belief) contained an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading or that, as of such Time of
Delivery, either the Registration Statement or the Prospectus or any further
amendment or supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related schedules and any
other financial data therein, as to which such counsel need express no belief)
contains an untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and they do not know
of any amendment to the Registration Statement required to be filed or of any
contracts or other documents of a character required to be filed as an exhibit
to the Registration Statement or required to be described in the Registration
Statement or the Prospectus which are not filed or described as required.
In rendering such opinion, such counsel may state that they express no
opinion as to (i) any compliance by the Company and its subsidiaries with any
statute, rule, regulation, order or other requirement dealing with the
regulation of telecommunications carriers, per se, or with the terms or
provisions of any Authorization, as to which such counsel may state that
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it is their understanding that the U.S. Underwriters and International
Underwriters are relying upon the opinions of Gregory J. Christoffel, Esq. and
John C. Shapleigh, Esq. being delivered pursuant to this Agreement and the
International Agreement and (ii) the laws of any jurisdiction outside the
United States;
(d) Gregory J. Christoffel, Esq., Senior Vice President and General
Counsel of the Company, shall have furnished to you his written opinion, dated
the Time of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the consolidated financial position, stockholders'
equity, results of operations or general affairs of the Company and its
subsidiaries; and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(ii) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of
the States of Missouri and California;
(e) John C. Shapleigh, Esq., Executive Vice President -- Regulatory and
Corporate Development of the Company, shall have furnished to you his written
opinion, dated the Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) To the best knowledge of such counsel and except as set forth
in or contemplated by the Prospectus with respect to systems under
development, (a) each of the Company and its subsidiaries has all
Authorizations of and from, and has made all declarations and filings
with, all Federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, which
are necessary or appropriate for the Company and its subsidiaries to own,
lease, license, use and construct its properties and assets and to
conduct its business in the manner described in the Prospectus, except to
the extent that the failure to obtain any such Authorizations or make any
such declaration or filing would not, singularly or in the aggregate,
reasonably be expected to have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations or general affairs of the Company and its subsidiaries, (b)
all such Authorizations are in full force and effect with respect to the
Company and its subsidiaries, (c) no event has occurred that permits, or
after notice or lapse of time could permit, the revocation, termination
or modification of any such Authorization and (d) the Company and its
subsidiaries are in compliance in all material respects with the terms
and conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities and governing bodies having
jurisdiction with respect thereto;
18
<PAGE> 19
(ii) To the best knowledge of such counsel, neither the execution
and delivery of this Agreement and the International Underwriting
Agreement, nor the issuance and sale of the Optional Shares by the
Company, nor the consummation by the Company of the transactions
contemplated hereby nor compliance with the terms, conditions and
provisions hereof by the Company will cause any suspension, revocation,
impairment, forfeiture, nonrenewal or termination of any Authorization;
(iii) No consent, approval, authorization, order, registration or
qualification of or with any governmental agency or body dealing with the
regulation of telecommunications carriers, per se, is required for the
issuance and sale of the Optional Shares as contemplated by this
Agreement, the International Underwriting Agreement and the Prospectus or
the consummation by the Company of the other transactions contemplated by
this Agreement and the International Underwriting Agreement;
(iv) The issuance and sale of the Shares by the Company pursuant to
this Agreement and the International Underwriting Agreement and the
compliance by the Company with the provisions of this Agreement and the
International Underwriting Agreement and the consummation by the Company
of the transactions herein and therein contemplated will not result in a
breach or violation of any of the terms or provisions of, or constitute a
default under or any violation of, or any statute, rule or regulation, or
any order known to me, of any court or governmental agency or body
dealing with the regulation of telecommunications carriers, per se; and
(v) The statements set forth in the Prospectus under the captions
"Summary -- Recent Developments" and "Regulatory Overview", insofar as
they purport to describe certain of the provisions of the laws, legal
proceedings and documents referred to therein, are accurate summaries of
such provisions in all material respects.
[(f) The respective counsel for each of the Selling Stockholders, as
indicated in Schedule II hereto, each shall have furnished to you their written
opinion with respect to each of the Selling Stockholders for whom they are
acting as counsel, dated the First Time of Delivery, in form and substance
satisfactory to you, as indicated in Schedule II hereto;]
(g) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, (i) KPMG Peat Marwick
LLP shall have furnished to you a letter or letters, dated the respective dates
of delivery thereof, in form and substance satisfactory to you, to the effect
set forth in Annex I hereto; and (ii) BDO Seidman LLP shall have furnished to
you a letter or letters, dated the respective dates of delivery thereof, in the
form of Annex II hereto;
(h) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not
19
<PAGE> 20
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus, and (ii) since the respective dates as of which information is
given in the Prospectus there shall not have been any change in the capital
stock of the Company or any of its subsidiaries or any change in total
consolidated debt (in excess of $2,000,000), or decrease in total consolidated
assets (in excess of $5,000,000) or working capital (in excess of $25,000,000)
of the Company and its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations
of the Company and its subsidiaries, in each case otherwise than as set forth
or contemplated in the Prospectus (including the pro forma and, in the case of
capital stock, as adjusted financial information contained therein), the effect
of which, in any such case described in Clause (i) or (ii), is in the judgment
of the Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(i) On or after the date hereof (i) no downgrading shall have occurred
in the rating, if any, accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating, if
any, of any of the Company's debt securities;
(j) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on the NASDAQ National Market; (ii)
a suspension or material limitation in trading in the Company's securities on
the NASDAQ National Market; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; or (iv)
the outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this Clause (iv) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered at such Time of
Delivery on the terms and in the manner contemplated in the Prospectus;
(k) The Shares to be sold by the Company and the Selling Stockholders
at such Time of Delivery shall have been duly approved for quotation on NASDAQ,
subject to notice of issuance;
(l) The Company has obtained and delivered to the Underwriters executed
copies of an agreement from the stockholders of the Company, listed on Exhibit
I hereto in the form of Annex III hereto;
(m) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of copies of the Prospectus on the
business day next succeeding the date of this Agreement; and
20
<PAGE> 21
(n) The Company and the Selling Stockholders shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of officers
of the Company and of the Selling Stockholders, respectively, satisfactory to
you as to the accuracy of the representations and warranties of the Company and
the Selling Stockholders, respectively, herein at and as of such Time of
Delivery, as to the performance by the Company and the Selling Stockholders of
all of their respective obligations hereunder to be performed at or prior to
such Time of Delivery, and as to such other matters as you may reasonably
request, and the Company shall have furnished or caused to be furnished
certificates as to the matters set forth in subsections (a) and (g) of this
Section, and as to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter through Goldman, Sachs & Co. expressly for use therein.
(b) Each of the Selling Stockholders will, severally and not jointly,
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Selling Stockholder expressly for
use therein; and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the liability of a Selling Stockholder
pursuant to this subsection 8(b) shall not exceed the product of the number of
Shares sold by such Selling
21
<PAGE> 22
Stockholder and the initial public offering price (less underwriting discount)
of the Shares as set forth in the Prospectus.
(c) Each Underwriter will indemnify and hold harmless the Company and
each Selling Stockholder against any losses, claims, damages or liabilities to
which the Company or such Selling Stockholder may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Underwriter
through Goldman, Sachs & Co. expressly for use therein; and will reimburse the
Company and each Selling Stockholder for any legal or other expenses reasonably
incurred by the Company or such Selling Stockholder in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (which shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party
which consent shall not be unreasonably withheld, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is
an actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party. In no event shall any
indemnifying party be liable for the fees and expenses of more than one firm or
counsel (except to the extent that local counsel, in addition to such firm or
counsel, is required for effective
22
<PAGE> 23
representation) to represent all indemnified parties with respect to a single
action or separate but substantially similar actions in the same jurisdiction
arising out of the same general allegations, which firm or counsel shall be
designated in writing by Goldman, Sachs & Co., on behalf of any Underwriters
and controlling persons, and by the Company, on behalf of itself and any of its
officers, directors or controlling persons and on behalf of any Selling
Stockholders.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Selling Stockholders on
the one hand and the Underwriters on the other from the offering of the Shares.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (d) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and the Selling Stockholders on the one
hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and/or the
Selling Stockholders on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Shares purchased under this Agreement (before deducting expenses)
received by the Company in connection with the Shares sold by the Company and
received by each Selling Stockholder in connection with the Shares sold by such
Selling Stockholder, as the case may be, bear to the total underwriting
discounts and commissions received by the Underwriters with respect to the
Shares purchased under this Agreement, in each case as set forth in the table
on the cover page of the Prospectus. 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 Company or the Selling
Stockholders on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, each of the Selling
Stockholders and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (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 above in this subsection (e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (e) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (e), 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
23
<PAGE> 24
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint. Notwithstanding the provisions of this
subsection (e), no Selling Stockholder shall be required to contribute any
amount in excess of the amount by which the product of the number of Shares
sold by such Selling Stockholder and the initial public offering price (less
underwriting discount) of the Shares as set forth in the Prospectus exceeds the
amount of any damages which such Selling Stockholder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. The Selling Stockholders' obligations in this
subsection (e) are several, not joint.
(f) The obligations of the Company and the Selling Stockholders under
this Section 8 shall be in addition to any liability which the Company and the
respective Selling Stockholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company or any Selling Stockholder within the meaning of
the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Company and the Selling Stockholders shall be entitled to
a further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Shares on such terms. In the
event that, within the respective prescribed periods, you notify the Company
and the Selling Stockholders that you have so arranged for the purchase of such
Shares, or the Company and the Selling Stockholders notify you that they have
so arranged for the purchase of such Shares, you or the Company and the Selling
Stockholders shall have the right to postpone such Time of Delivery for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or
in any other documents or arrangements, and the Company agrees to file promptly
any amendments to the Registration Statement or the Prospectus which in your
opinion may thereby be made necessary. The term "Underwriter" as used in this
Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all of the Shares to be purchased at such Time of
Delivery, then the Company and the Selling Stockholders shall have the right to
require each non-defaulting Underwriter to purchase the number of Shares which
such Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements
24
<PAGE> 25
have not been made; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of Delivery,
or if the Company and the Selling Stockholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters (or, with respect
to the Second Time of Delivery, the obligations of the Underwriters to purchase
and of the Company to sell the Optional Shares), then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company or the Selling Stockholders, except for the expenses
to be borne by the Company and any Selling Stockholder and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Company, or any of the Selling Stockholders, or any
officer or director or controlling person of the Company, or any controlling
person of any Selling Stockholder, and shall survive delivery of and payment
for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor any Selling Stockholder shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof;
but, if for any other reason any Shares are not delivered by or on behalf of
the Company and the Selling Stockholders as provided herein, the Company will
reimburse the Underwriters through you for all out-of-pocket expenses approved
in writing by you, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of the Shares not so delivered, but the Company and each of the
Selling Stockholders shall then be under no further liability to any
Underwriter in respect of the Shares not so delivered except as provided in
Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives; and in all dealings with any Selling Stockholder hereunder,
you and the Company shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of such Selling Stockholder made or
given by any or all of the Attorneys-in-Fact for such Selling Stockholder.
25
<PAGE> 26
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to you as the representatives in care of Goldman,
Sachs & Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; if to any Selling Stockholder shall be delivered or sent by mail,
telex or facsimile transmission to the Attorneys-in-Fact for such Selling
Stockholder at its address set forth in Schedule II hereto; and if to the
Company shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Company set forth in the Registration Statement, Attention:
Chief Executive Officer; provided, however, that any notice to an Underwriter
pursuant to Section 8(d) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Underwriter at its address set forth in
its Underwriters' Questionnaire or telex constituting such Questionnaire, which
address has been supplied to the Company or the Selling Stockholders. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and each Selling Stockholder and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company, any Selling Stockholder or
any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement among each of the Underwriters, the
Company and each of the Selling Stockholders. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is pursuant to
the authority set forth in a form of Agreement among Underwriters (U.S.
Version), the form of which shall be submitted to the Company and the Selling
Stockholders for examination upon request, but without warranty on your part as
to the authority of the signers thereof.
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Stockholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by
26
<PAGE> 27
such Selling Stockholder pursuant to a validly existing and binding Power of
Attorney which authorizes such Attorney-in-Fact to take such action.
Very truly yours,
Brooks Fiber Properties, Inc.
By:
--------------------------------
Name:
Title:
EACH OF THE SELLING STOCKHOLDERS
NAMED IN SCHEDULE II TO THIS AGREEMENT
By:
--------------------------------
Name:
Title:
As Attorney-in-Fact acting on behalf of
each of the Selling Stockholders named in
Schedule II to this Agreement.
Accepted as of the date hereof
at New York, New York
Goldman, Sachs & Co.
Salomon Brothers Inc
Lehman Brothers Inc.
Deutsche Morgan Grenfell Inc.
By:
----------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
27
<PAGE> 28
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
- ------------------------ --------------- ------------------
<S> <C> <C>
Goldman, Sachs & Co....................
Salomon Brothers Inc...................
Lehman Brothers Inc....................
Deutsche Morgan Grenfell Inc...........
Total................................ 5,379,983 806,998
</TABLE>
28
<PAGE> 29
SCHEDULE II
<TABLE>
<CAPTION>
Number of
Optional Shares
Total Number of to be Sold if
Firm Shares Maximum Option
to be Sold Exercised
-------------- ----------------
<S> <C> <C>
The Company . . . . . . . . . . . . . . . . . . . . . . . N/A 806,998
The Selling Stockholders(a): . . . . . . . . . . . . . . . 5,379,983 N/A
The Centennial Funds . . . . . . . . . . . . . . . . . N/A
Media Communications Partners II Limited . . . . . . . N/A
Providence Media Partners, L.P. . . . . . . . . . . . . N/A
Robert A. Brooks . . . . . . . . . . . . . . . . . . . N/A
James C. Allen . . . . . . . . . . . . . . . . . . . . N/A
D. Craig Young . . . . . . . . . . . . . . . . . . . . N/A
The AB III, LLC . . . . . . . . . . . . . . . . . . . . N/A
ABS Employees Venture Fund Limited Partnership . . . . N/A
Alex Brown & Sons Incorporated . . . . . . . . . . . . N/A
Amberbrook LLC . . . . . . . . . . . . . . . . . . . . N/A
Reiko Anderson . . . . . . . . . . . . . . . . . . . . N/A
Franklin Antonio . . . . . . . . . . . . . . . . . . . N/A
Susan E. Arndt . . . . . . . . . . . . . . . . . . . . N/A
Jesse and Lillian Beim Revocable Trust
Dated 1/11/89 (Jesse and Lillian Beim Trustees) . . . N/A
Boston Capital Ventures III Limited Partnership . . . . N/A
James A. Brasunas . . . . . . . . . . . . . . . . . . . N/A
Taylor R. Briggs . . . . . . . . . . . . . . . . . . . N/A
John K. Brooks . . . . . . . . . . . . . . . . . . . . N/A
Matthew Q. Brooks Gift Trust -- 1996 . . . . . . . . . N/A
Richard E.T. Brooks (IRA) . . . . . . . . . . . . . . . N/A
Richard E.T. Brooks Jr. Irrevocable Trust -- 1983 . . . N/A
Tracy A. Brooks Irrevocable Trust -- 1983 . . . . . . . N/A
The Brooks Family Trust . . . . . . . . . . . . . . . . N/A
Brooks GST Trust . . . . . . . . . . . . . . . . . . . N/A
Chestnut Street Partners, Inc. . . . . . . . . . . . . N/A
Chisholm Partners II, L.P. . . . . . . . . . . . . . . N/A
Frank M. Drendel . . . . . . . . . . . . . . . . . . . N/A
EOS Partners, SBIC, L.P. . . . . . . . . . . . . . . . N/A
Equity-Linked Investors, L.P. . . . . . . . . . . . . . N/A
Equity-Linked Investors - II . . . . . . . . . . . . . N/A
FG - BRKS . . . . . . . . . . . . . . . . . . . . . . . N/A
Fiber Fund . . . . . . . . . . . . . . . . . . . . . . N/A
Fleet Equity Partners V, L.P. . . . . . . . . . . . . . N/A
Fleet Growth Resources, Inc. . . . . . . . . . . . . . N/A
Fleet Venture Resources, Inc. . . . . . . . . . . . . . N/A
Gilde Investment Fund B.V. . . . . . . . . . . . . . . N/A
Thomas F. Gillett . . . . . . . . . . . . . . . . . . . N/A
The Goldman Sachs Group, L.P. . . . . . . . . . . . . . N/A
GPA VIE . . . . . . . . . . . . . . . . . . . . . . . . N/A
HCC Investments, Inc. . . . . . . . . . . . . . . . . . N/A
U/A/T Dated August 28, 1968 for Audrey
Hilliard Hillman (C.G. Grefenstette and Thomas G.
Bigley, Trustees) . . . . . . . . . . . . . . . . . . N/A
Henry L. Hillman Trust U/A Dated November 18, 1985
(Henry L. Hillman, Elsie Hilliard Hillman and C.G.
Grefenstette, Trustees . . . . . . . . . . . . . . . N/A
U/A/T Dated August 28, 1968 for Henry Lea Hillman, Jr.
(C.G. Grefenstette and Thomas G. Bigley, Trustees) . .
U/A/T Dated August 28, 1969 for Juliet Lea Hillman N/A
(C.G. Grefenstette and Thomas G. Bigley, Trustees) . . N/A
U/A/T Dated August 28, 1968 for William Talbot Hillman
(C.G. Grefenstette and Thomas G. Bigley, Trustees) . . N/A
Kane & Co., nominee for SMALL CAP World Fund, Inc. . . N/A
Lahey Hitchcock Clinic Foundation . . . . . . . . . . . N/A
Lipitz Family Foundation . . . . . . . . . . . . . . . N/A
Richard W. Loftus . . . . . . . . . . . . . . . . . . . N/A
Robert E. McIlvane . . . . . . . . . . . . . . . . . . N/A
Media/Communications Investors Limited Partnership . . N/A
Jim A. Moffit . . . . . . . . . . . . . . . . . . . . . N/A
Morgan Holland Fund II, L.P. . . . . . . . . . . . . . N/A
James Morrison IRA . . . . . . . . . . . . . . . . . . N/A
Osiris Investments Ltd. Partnership . . . . . . . . . . N/A
Quince Associates, L.P. . . . . . . . . . . . . . . . . N/A
Rainbow Trading Partners, Ltd. . . . . . . . . . . . . N/A
Rainbow Trading Systems, Inc. . . . . . . . . . . . . . N/A
Rainbow Venture . . . . . . . . . . . . . . . . . . . . N/A
John K. Reinke (Rollover IRA) . . . . . . . . . . . . . N/A
Mary L. Staudenmaier (IRA) . . . . . . . . . . . . . . N/A
Strauch/Kulhanjian Family Trust . . . . . . . . . . . . N/A
Von Graffenreid AG, Private Bank . . . . . . . . . . . N/A
Westminster Telecom Investors, Inc. . . . . . . . . . . N/A
Willou & Co. . . . . . . . . . . . . . . . . . . . . . N/A
Total . . . . . . . . . . . . . . . 5,379,983
</TABLE>
(a) Unless otherwise indicated, each Selling Stockholder is represented
by Bryan Cave LLP, One Metropolitan Square, 211 North Broadway, Suite 3600, St.
Louis, Missouri 63102-2750, (which will on behalf of such Selling Stockholder
deliver an opinion on the form of Annex II-A) and has appointed James C. Allen
and David L. Solomon, and each of them, as the Attorneys-in-Fact for such
Selling Stockholder.
29
<PAGE> 30
ANNEX I
Pursuant to Section 7(g) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial forecasts
and/or pro forma financial information) examined by them and included in the
Prospectus or the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act and the
related published rules and regulations thereunder; and, if applicable, they
have made a review in accordance with standards established by the American
Institute of Certified Public Accountants of the unaudited consolidated
interim financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been [separately] furnished to the representatives of the
Underwriters (the "Representatives")[and are attached hereto];
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus as
indicated in their reports thereon copies of which [have been separately
furnished to the Representatives][are attached hereto]; and on the basis of
specified procedures including inquiries of officials of the Company who
have responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in all material respects with
the applicable accounting requirements of the Act and the related published
rules and regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for
the five most recent fiscal years included in the Prospectus agrees with the
corresponding amounts (after restatements where applicable) in the audited
consolidated financial statements for such five fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis
of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects with
the disclosure requirements of Items 301, 302, 402 and 503(d), respectively,
of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the
<PAGE> 31
Company and its subsidiaries since the date of the latest audited
financial statements included in the Prospectus, inquiries of officials of
the Company and its subsidiaries responsible for financial and accounting
matters and such other inquiries and procedures as may be specified in such
letter, nothing came to their attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which such
data and items were derived, and any such unaudited data and items were
not determined on a basis substantially consistent with the basis for
the corresponding amounts in the audited consolidated financial
statements included in the Prospectus;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived any unaudited condensed
financial statements referred to in Clause (A) and any unaudited income
statement data and balance sheet items included in the Prospectus and
referred to in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited consolidated financial
statements included in the Prospectus;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Act
and the published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical amounts in
the compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest financial statements
included in the Prospectus) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or other items
specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with amounts
shown in the latest balance sheet included in the Prospectus, except
in each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial statements
included in the Prospectus to the specified date referred to in Clause
(E) there were any decreases in consolidated net revenues or operating
profit or the total or per share amounts of consolidated net income or
other items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as compared with
the comparable period of the preceding year and with any other period
of corresponding length specified by
2
<PAGE> 32
the Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by
the Representatives, except in each case for decreases or increases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and
(vi) above, they have carried out certain specified procedures, not
constituting an examination in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives, which are derived from the
general accounting records of the Company and its subsidiaries, which appear
in the Prospectus, or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives, and have compared
certain of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found them
to be in agreement.
3
<PAGE> 33
Annex II
[Form of BDO Seidman Letter]
4
<PAGE> 34
ANNEX III
LOCK-UP AGREEMENT
January __, 1997
Goldman, Sachs & Co.
Salomon Brothers Inc
Lehman Brothers Inc.
Deutsche Morgan Grenfell Inc.
as representatives of the several U.S. Underwriters
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Goldman Sachs International
Salomon Brothers International Limited
Lehman Brothers International (Europe)
Morgan Grenfell & Co., Limited
as representatives of the several
International Underwriters
c/o Goldman Sachs International
133 Peterborough Court
London, EC4A 2BB, England
Ladies and Gentlemen:
The undersigned has been advised that certain stockholders (the "Selling
Stockholders") of Brooks Fiber Properties, Inc., a Delaware corporation (the
"Company"), propose to sell shares of the voting common stock, par value $0.01
per share ("Common Stock"), of the Company to a group of U.S. underwriters for
whom Goldman, Sachs & Co., Salomon Brothers Inc, Lehman Brothers Inc. and
Deutsche Morgan Grenfell Inc. propose to act as representatives (the "U.S.
Representatives"), and a group of international underwriters (the U.S. and
international underwriters being collectively referred to herein as the
"Underwriters") for whom Goldman Sachs International, Salomon Brothers
International Limited, Lehman Brothers International (Europe) and Morgan
Grenfell & Co., Limited propose to act as representatives (together with the
U.S. Representatives, the "Representatives"), pursuant to underwriting
agreements to be entered into among the Company, the Selling Stockholders and
the Underwriters in such form or forms as the parties thereto may hereafter
execute and deliver (the "Underwriting Agreements"). The forms, terms and
conditions of these agreements, including the number of shares of Common Stock
to be sold in the offerings (the "Shares"), the Underwriters' purchase price
<PAGE> 35
Goldman, Sachs & Co. -2-
and the initial offering price, as well as the numbers and identities of the
Underwriters, are to be determined by the Company, the Selling Stockholders and
the Underwriters at a later date, and references herein to the "Underwriting
Agreements" mean such documents in the forms in which they will eventually be
executed and delivered by the parties thereto.
The undersigned, to facilitate the marketing of the Shares and in
consideration of the Company and the Underwriters entering into the
Underwriting Agreements, hereby irrevocably confirms and agrees for the benefit
of the Company, the Selling Stockholders and the Underwriters as follows:
During the period beginning on and including the date of the Prospectus
relating to the offering of the Shares (the "Offering Date") and continuing to
and including the 180th day after the Offering Date, the undersigned will not,
directly or indirectly, offer, sell, contract to sell, or otherwise dispose of
any Covered Securities (as defined below) without the prior written consent of
Goldman, Sachs & Co. "Covered Securities" means any Common Stock (other than
any Shares sold by the undersigned in the offering), any securities which are
substantially similar to the Common Stock and any securities convertible into
or exchangeable or exercisable for Common Stock or substantially similar
securities, which Common Stock and other securities are, on the Offering Date,
or become, at any time thereafter, registered in the name of, or beneficially
owned or controlled by, the undersigned, provided, however, that the
undersigned may transfer any Covered Securities (i) for the purposes of
effecting the undersigned's estate planning and charitable bequests and (ii) to
any entity or person that controls, is controlled by or is under common control
with the undersigned, provided further that, in the case of any transfer
pursuant to (i) or (ii), the transferee shall agree to be bound by the
provisions of this agreement. The conversion, exercise or exchange of Covered
Securities in accordance with their terms shall not be restricted by this
agreement, it being understood that any Covered Securities issued in respect of
any such conversion, exercise or exchange shall be subject to the provisions of
this agreement.
The agreements set forth herein will terminate on the 180th day after the
Offering Date or on the date of termination of the Underwriting Agreements,
whichever is sooner. Neither the Company nor any Underwriter makes any
<PAGE> 36
Goldman, Sachs & Co. -3-
representations as to whether the offerings will be completed.
This agreement is to be governed by and construed in accordance with the
laws of the State of New York. Neither you nor any of the Underwriters is
under any obligation with respect to either of the Underwriting Agreements or
otherwise with respect to the Common Stock by reason of this agreement.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed
as of the date of this letter.
By: ____________________________
Name:
Title:
Acknowledged:
__________________________
(Goldman, Sachs & Co.)
<PAGE> 37
EXHIBIT I
PRINCIPAL STOCKHOLDERS AND AFFILIATED DIRECTORS
The Centennial Funds
G. Jackson Tankersley, Jr. (Director)
Ronald H. Vander Pol (Director)
Media/Communications Partners II Limited Partnership
Putnam Investment Management, Inc.
Providence Media Partners L.P.
Jonathan M. Nelson (Director)
BROOKS FIBER PROPERTIES, INC. SENIOR OFFICERS
<TABLE>
<S> <C>
Robert A. Brooks Chairman, Brooks Fiber Properties, Inc.
James C. Allen Vice Chairman and Chief Executive Officer, BFP
D. Craig Young President and Chief Operating Officer, BFP
John C. Shapleigh Executive Vice President - Regulatory and Corporate
Development, BFP
David L. Solomon Executive Vice President and Chief Financial Officer, BFP
John K. Brooks Senior Vice President, BFP and President, JB Telecom
Gregory J. Christoffel Senior Vice President and General Counsel, BFP
Marilou Crum Senior Vice President, Marketing and Carrier/Resale Sales, BFP
Jim A. Moffit Senior Vice President and Managing Director, GLA International
Mark W. Senda Senior Vice President - Operations, BFP
Wayman R. Tipton Senior Vice President - Corporate Communications and
Strategic Development, BFP
Gerald J. Howe Vice President - Finance, BFP, and Senior Vice President and
Chief Financial Officer - JB Telecom, Inc.
</TABLE>
6
<PAGE> 1
BROOKS FIBER PROPERTIES, INC.
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
-------------------------------------------
UNDERWRITING AGREEMENT
(INTERNATIONAL VERSION)
January , 1997
<PAGE> 2
BROOKS FIBER PROPERTIES, INC.
Common Stock
(par value $0.01 per share)
UNDERWRITING AGREEMENT
(INTERNATIONAL VERSION)
January __, 1997
Goldman Sachs International,
Salomon Brothers International Limited,
Lehman Brothers International (Europe),
Morgan Grenfell & Co., Limited,
As representatives
of the several Underwriters named in Schedule I hereto,
c/o Goldman Sachs International,
Peterborough Court,
133 Fleet Street,
London EC4A 2BB, England.
Ladies and Gentlemen:
Certain stockholders named in Schedule II hereto (the "Selling
Stockholders") of Brooks Fiber Properties, Inc., a Delaware corporation (the
"Company"), propose, subject to the terms and conditions stated herein, to sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of _________ shares of Voting Common Stock (par value $0.01 per
share) ("Stock") of the Company, and the Company proposes, subject to the terms
and conditions stated herein, to sell to the Underwriters, at the election of
the Underwriters, up to _________ additional shares of Stock. The aggregate of
_________ shares to be sold by the Selling Stockholders is herein called the
"Firm Shares" and the aggregate of _______ additional shares to be sold by the
Company is herein called the "Optional Shares". The Firm Shares and the
Optional Shares which the Underwriters elect to purchase pursuant to Section 2
hereof are herein collectively called the "Shares". All references to "Firm
Shares," "Optional Shares" and "Shares" shall include the associated Preferred
Stock Purchase Rights ("Rights").
It is understood and agreed to by all parties that the Company and the
Selling Stockholders are concurrently entering into an agreement, a copy of
which is attached hereto (the "U.S. Underwriting Agreement"), providing for the
sale by the Company and the Selling Stockholders of up to a total of _________
shares of Stock (the "U.S. Shares"), including the overallotment option
thereunder, through arrangements with certain underwriters in the United States
(the "U.S. Underwriters"), for whom Goldman, Sachs & Co. and Salomon Brothers
Inc are acting as representatives (the "U.S. Representatives"). Anything
herein or therein to the contrary notwithstanding, the respective closings
under this Agreement and the U.S. Underwriting Agreement are hereby expressly
made conditional on one another. The
<PAGE> 3
Underwriters hereunder and the U.S. Underwriters are simultaneously entering
into an Agreement between U.S. and International Underwriting Syndicates (the
"Agreement between Syndicates") which provides, among other things, for the
transfer of shares of Stock between the two syndicates and for consultation by
the Lead Managers hereunder with Goldman, Sachs & Co. prior to exercising the
rights of the Underwriters under Section 7 hereof. Two forms of prospectus are
to be used in connection with the offering and sale of shares of Stock
contemplated by the foregoing, one relating to the Shares hereunder and the
other relating to the U.S. Shares. The latter form of prospectus will be
identical to the former except for the front cover page, inside front cover
page, back cover page, and the text under the caption "Underwriting," the
addition of a section captioned "Additional Information" and the deletion of a
section captioned "Certain United States Federal Tax Consequences to Non-U.S.
Stockholders". Except as used in Sections 2, 3, 4, 9 and 11 herein, and except
as the context may otherwise require, references hereinafter to the Shares
shall include all of the shares of Stock which may be sold pursuant to either
this Agreement or the U.S. Underwriting Agreement, and references herein to any
prospectus whether in preliminary or final form, and whether as amended or
supplemented, shall include both the U.S. and the international versions
thereof.
In addition, this Agreement incorporates by reference certain
provisions from the U.S. Underwriting Agreement (including the related
definitions of terms, which are also used elsewhere herein) and, for purposes
of applying the same, references (whether in these precise words or their
equivalent) in the incorporated provisions to the "Underwriters" shall be to
the Underwriters hereunder, to the "Shares" shall be to the Shares hereunder as
just defined, to "this Agreement" (meaning therein the U.S. Underwriting
Agreement) shall be to this Agreement (except where this Agreement is already
referred to or as the context may otherwise require) and to the representatives
of the Underwriters or to Goldman, Sachs & Co. shall be to the addressees of
this Agreement and to Goldman Sachs International ("GSI"), and, in general, all
such provisions and defined terms shall be applied mutatis mutandis as if the
incorporated provisions were set forth in full herein having regard to their
context in this Agreement as opposed to the U.S. Underwriting Agreement.
1. The Company and each of the several Selling Stockholders,
severally and not jointly, hereby make to the Underwriters the same respective
representations, warranties and agreements as are set forth in Section 1(a) and
Section 1(b), respectively, of the U.S. Underwriting Agreement, which Sections
are incorporated herein by this reference. Section 1(c) of the U.S.
Underwriting Agreement is also incorporated herein by this reference.
2. Subject to the terms and conditions herein set forth, (a) each
of the Selling Stockholders agrees, severally and not jointly, to sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from each of the Selling Stockholders, at a purchase price
per share of $_____, the number of Firm Shares (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying the aggregate number of
Firm Shares to be sold by each of the Selling Stockholders as set forth
opposite their respective names in Schedule II hereto by a fraction, the
numerator of which is the aggregate number of Firm Shares to be purchased by
such Underwriter as set forth opposite the name of such Underwriter in Schedule
I hereto and the denominator of which is the aggregate number of Firm Shares to
be purchased by all the Underwriters from all the Selling
-3-
<PAGE> 4
Stockholders hereunder and (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional Shares as
provided below, the Company agrees to sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase from
the Company, at the purchase price per share set forth in clause (a) of this
Section 2, that portion of the number of Optional Shares as to which such
election shall have been exercised (to be adjusted by you so as to eliminate
fractional shares) determined by multiplying such number of Optional Shares by
a fraction the numerator of which is the maximum number of Optional Shares
which such Underwriter is entitled to purchase as set forth opposite the name
of such Underwriter in Schedule I hereto and the denominator of which is the
maximum number of Optional Shares that all of the Underwriters are entitled to
purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to _______ Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company
given within a period of 30 calendar days after the date of this Agreement and
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you
but in no event earlier than the First Time of Delivery (as defined in Section
4 hereof) or, unless you and the Company otherwise agree in writing, earlier
than two or later than ten business days after the date of such notice.
3. Upon the authorization by GSI of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale upon
the terms and conditions set forth in the Prospectus and in the forms of
Agreement among Underwriters (International Version) and Selling Agreements,
which have been previously submitted to the Company by you. Each Underwriter
hereby makes to and with the Company and the Selling Stockholders the
representations and agreements of such Underwriter as a member of the selling
group contained in Sections 3(d) and 3(e) of the form of Selling Agreements.
4. (a) The Shares to be purchased by each Underwriter hereunder,
in definitive form, and in such authorized denominations and registered in such
names as GSI may request upon at least forty-eight hours' prior written notice
to the Company and the Selling Stockholders, shall be delivered by or on behalf
of the Company and the Selling Stockholders to GSI, through the facilities of
The Depository Trust Company ("DTC"), for the account of such Underwriter,
against payment by or on behalf of such Underwriter of the purchase price
therefor in same day funds, payable to the order of the Company and the
Custodian on behalf of each of the Selling Stockholders, as their respective
interests may appear, in same day funds. The Company and the Selling
Stockholders will cause the certificates representing the Shares to be made
available for checking and packaging at least twenty-four hours prior to the
Time of Delivery (as defined below) with respect thereto at the office of DTC
or its designated custodian (the "Designated Office"). The time and date of
such delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m.,
New York City time, on January __, 1997 or such other time and date as GSI, the
Company and the Selling Stockholders may agree upon in writing, and, with
respect to the Optional Shares, 9:30 a.m., New York time, on the date specified
by GSI in the written notice given by GSI of the Underwriters' election
-4-
<PAGE> 5
to purchase such Optional Shares pursuant to Section 2 hereof, or such other
time and date as Goldman, Sachs & Co. and the Company may agree upon in
writing. Such time and date for delivery of the Firm Shares is herein called
the "First Time of Delivery", such time and date for delivery of the Optional
Shares, if not the First Time of Delivery, is herein called the "Second Time of
Delivery", and each such time and date for delivery is herein called a "Time of
Delivery".
(b) The documents to be delivered at each Time of Delivery by
or on behalf of the parties hereto pursuant to Section 7 of the U.S.
Underwriting Agreement, including the cross-receipt for the Shares and any
additional documents requested by the Underwriters pursuant to Section 7(m) of
the U.S. Underwriting Agreement, will be delivered at the offices of Sullivan &
Cromwell, 125 Broad Street, New York, NY 10004 (the "Closing Location"), and
the Shares will be delivered at the Designated Office, all at such Time of
Delivery. A meeting will be held at the Closing Location at 2:30 p.m., New
York City time, on the New York Business Day next preceding such Time of
Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 4, "New York Business Day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in New York are generally authorized or obligated by
law or executive order to close.
5. The Company hereby makes with the Underwriters the same
agreements as are set forth in Section 5 of the U.S. Underwriting Agreement,
which Section is incorporated herein by this reference.
6. The Company, each of the Selling Stockholders, and the
Underwriters hereby agree with respect to certain expenses on the same terms as
are set forth in Section 6 of the U.S. Underwriting Agreement, which Section is
incorporated herein by this reference.
7. Subject to the provisions of the Agreement between Syndicates,
the obligations of the Underwriters hereunder shall be subject, in their
discretion, at each Time of Delivery to the condition that all representations
and warranties and other statements of the Company and the Selling Stockholders
herein are, at and as of such Time of Delivery, true and correct, the condition
that the Company and the Selling Stockholders shall have performed all of their
respective obligations hereunder theretofore to be performed, and additional
conditions identical to those set forth in Section 7 of the U.S. Underwriting
Agreement, which Section is incorporated herein by this reference. The opinion
of Bryan Cave to be delivered to the Underwriters shall also include an opinion
to the effect that the statements set forth in the Prospectus under the caption
"Certain United States Federal Tax Consequences to Non-U.S. Stockholders",
insofar as they purport to constitute a summary of the provisions of laws and
regulations referred to therein, are accurate summaries of such provisions in
all material respects.
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged
-5-
<PAGE> 6
untrue statement of a material fact contained in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter through GSI expressly for use
therein.
(b) Each of the Selling Stockholders will, severally and not jointly,
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Selling Stockholder expressly for
use therein; and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the liability of a Selling Stockholder
pursuant to this subsection 8(b) shall not exceed the product of the number of
Shares sold by such Selling Stockholder and the initial public offering price
(less underwriting discount) of the Shares as set forth in the Prospectus.
(c) Each Underwriter will indemnify and hold harmless the Company and
each Selling Stockholder against any losses, claims, damages or liabilities to
which the Company or such Selling Stockholder may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Underwriter through GSI
expressly for use therein; and will reimburse the Company and each Selling
Stockholder for any legal or other expenses
-6-
<PAGE> 7
reasonably incurred by the Company or such Selling Stockholder in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(d) Promptly after receipt by an indemnified party under subsection
(a) (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party
which consent shall not be unreasonably withheld, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is
an actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party. In no event shall any
indemnifying party be liable for the fees and expenses of more than one firm or
counsel (except to the extent that local counsel, in addition to such firm or
counsel, is required for effective representation) to represent all indemnified
parties with respect to a single action or separate but substantially similar
actions in the same jurisdiction arising out of the same general allegations,
which firm or counsel shall be designated in writing by GSI, on behalf of any
Underwriters and controlling persons, and by the Company, on behalf of itself
and any of its officers, directors or controlling persons and on behalf of any
Selling Stockholders.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Selling Stockholders on
the one hand and the Underwriters on the other from the offering of the Shares.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (d) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and the
-7-
<PAGE> 8
Selling Stockholders on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company and/or the Selling Stockholders on the one hand and the Underwriters on
the other shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares purchased under this Agreement (before
deducting expenses) received by the Company in connection with the Shares sold
by the Company and received by each Selling Stockholder in connection with the
Shares sold by such Selling Stockholder, as the case may be, bear to the total
underwriting discounts and commissions received by the Underwriters with
respect to the Shares purchased under this Agreement, in each case as set forth
in the table on the cover page of the Prospectus. 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 Company or the
Selling Stockholders on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, each of the
Selling Stockholders and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (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 above in this subsection (e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (e) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (e), 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. 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 in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint. Notwithstanding the provisions of this subsection
(e), no Selling Stockholder shall be required to contribute any amount in
excess of the amount by which the product of the number of Shares sold by such
Selling Stockholder and the initial public offering price (less underwriting
discount) of the Shares as set forth in the Prospectus exceeds the amount of
any damages which such Selling Stockholder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. The Selling Stockholders' obligations in this subsection (e) are
several, not joint.
(f) The obligations of the Company and the Selling Stockholders under
this Section 8 shall be in addition to any liability which the Company and the
respective Selling Stockholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company or any Selling Stockholder within the meaning of
the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party or other
parties to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not
-8-
<PAGE> 9
arrange for the purchase of such Shares, then the Company and the Selling
Stockholders shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties satisfactory to you to purchase
such Shares on such terms. In the event that, within the respective prescribed
periods, you notify the Company and the Selling Stockholders that you have so
arranged for the purchase of such Shares, or the Company and the Selling
Stockholders notify you that they have so arranged for the purchase of such
Shares, you or the Company and the Selling Stockholders shall have the right to
postpone such Time of Delivery for a period of not more than seven days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person
had originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by you and the
Company and the Selling Stockholders as provided in subsection (a) above, the
aggregate number of such Shares which remains unpurchased does not exceed
one-eleventh of the aggregate number of all the Shares to be purchased at such
Time of Delivery, then the Company and the Selling Stockholders shall have the
right to require each non-defaulting Underwriter to purchase the number of
shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by you and the
Company and the Selling Stockholders as provided in subsection (a) above, the
aggregate number of such Shares which remains unpurchased exceeds one-eleventh
of the aggregate number of all the Shares to be purchased at such Time of
Delivery, or if the Company and the Selling Stockholders shall not exercise the
right described in subsection (b) above to require non-defaulting Underwriters
to purchase Shares of a defaulting Underwriter or Underwriters, then this
Agreement (or, with respect to the Second Time of Delivery, the obligations of
the Underwriters to purchase and of the Company to sell the Optional Shares)
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company or the Selling Stockholders, except for the expenses
to be borne by the Company and any Selling Stockholder and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company, the Selling Stockholders and
the several Underwriters, as set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall remain in full
force and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter or any controlling
person of any Underwriter, or the Company or any of the Selling Stockholders,
or
-9-
<PAGE> 10
any officer or director or controlling person of the Company or any controlling
person of any Selling Stockholders, and shall survive delivery of and payment
for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, neither the Company nor any Selling Stockholder shall then be under any
liability to any Underwriter except as provided in Section 6 and Section 8
hereof; but, if for any other reason, any Shares are not delivered by or on
behalf of the Company and the Selling Stockholders as provided herein, the
Company and each of the Selling Stockholders pro rata (based on the number of
Shares to be sold by the Company and such Selling Stockholder hereunder), will
reimburse the Underwriters through GSI for all out-of-pocket expenses approved
in writing by GSI, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of the Shares not so delivered, but the Company and each of the
Selling Stockholders shall then be under no further liability to any
Underwriter in respect of the Shares not so delivered except as provided in
Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of
the Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made
or given by you jointly or by GSI on behalf of you as the representatives of
the Underwriters; and in all dealings with any Selling Stockholder hereunder,
you and the Company shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of such Selling Stockholder made or
given by any or all of the Attorneys-in-Fact for such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to the Underwriters in care of GSI, Peterborough
Court, 133 Fleet Street, London EC4A 2BB, England, Attention: Equity Capital
Markets, Telex No. 94012165, facsimile transmission No. (071) 774-1550; if to
any Selling Stockholder shall be delivered or sent by mail, telex or facsimile
transmission to the Attorneys-in-Fact for such Selling Stockholder at its
address set forth in Schedule II hereto; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of
the Company set forth in the Registration Statement, Attention: Chief Executive
Officer; provided, however, that any notice to an Underwriter pursuant to
Section 8(d) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address has been
supplied to the Company or the Selling Stockholders. Any such statements,
requests, notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and each Selling Stockholder and, to
the extent provided in Sections 8 and 10 hereof, the officers and directors of
the Company and each person who controls the Company, any Selling Stockholder
or any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
-10-
<PAGE> 11
14. Time shall be of the essence of this Agreement.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA.
16. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us six counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters, the
Company and each of the Selling Stockholders. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is pursuant to
the authority set forth in a form of Agreement among Underwriters
(International Version), the form of which shall be furnished to the Company
and the Selling Stockholders for examination upon request, but without warranty
on your part as to the authority of the signers thereof.
-11-
<PAGE> 12
Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Stockholder represents by so doing that he has been duly
appointed as Attorney-in-Fact by such Selling Stockholder pursuant to a validly
existing and binding Power of Attorney which authorizes such Attorney-in-Fact
to take such action.
Very truly yours,
Brooks Fiber Properties, Inc.
By: ...................................
Name:
Title:
EACH OF THE SELLING STOCKHOLDERS NAMED
IN SCHEDULE II TO THIS AGREEMENT
By: ...................................
Name:
Title:
As Attorney-in-Fact acting on behalf of
each of the Selling Stockholders named
in Schedule II to this Agreement.
Accepted as of the date hereof at New York,
New York:
Goldman Sachs International
Salomon Brothers International Limited
Lehman Brothers International (Europe)
Morgan Grenfell & Co., Limited
BY: GOLDMAN SACHS INTERNATIONAL
By: ................................
(Attorney-in-fact)
On behalf of each of the Underwriters
-12-
<PAGE> 13
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
<S> <C> <C>
Goldman Sachs International . . . . . . .
Salomon Brothers International Limited .
Lehman Brothers International (Europe) .
Morgan Grenfell & Co., Limited . . . . .
Total . . . . . . . . . . . . . . . . . . 1,344,996 201,749
</TABLE>
-13-
<PAGE> 14
SCHEDULE II
<TABLE>
<CAPTION>
Number of
Optional Shares
Total Number of to be Sold if
Firm Shares Maximum Option
to be Sold Exercised
------------- ------------------
<S> <C> <C>
The Company . . . . . . . . . . . . . . . . . . . . . . . N/A 201,749
The Selling Stockholders(a): . . . . . . . . . . . . . . . 1,344,996 N/A
The Centennial Funds . . . . . . . . . . . . . . . . . N/A
Media Communications Partners II Limited . . . . . . . N/A
Providence Media Partners, L.P. . . . . . . . . . . . . N/A
Robert A. Brooks . . . . . . . . . . . . . . . . . . . N/A
James C. Allen . . . . . . . . . . . . . . . . . . . . N/A
D. Craig Young . . . . . . . . . . . . . . . . . . . . N/A
The AB III, LLC . . . . . . . . . . . . . . . . . . . . N/A
ABS Employees Venture Fund Limited Partnership . . . . N/A
Alex Brown & Sons Incorporated . . . . . . . . . . . . N/A
Amberbrook LLC . . . . . . . . . . . . . . . . . . . . N/A
Reiko Anderson . . . . . . . . . . . . . . . . . . . . N/A
Franklin Antonio . . . . . . . . . . . . . . . . . . . N/A
Susan E. Arndt . . . . . . . . . . . . . . . . . . . . N/A
Jesse and Lillian Beim Revocable Trust
Dated 1/11/89 (Jesse and Lillian Beim Trustees) . . . N/A
Boston Capital Ventures III Limited Partnership . . . . N/A
James A. Brasunas . . . . . . . . . . . . . . . . . . . N/A
Taylor R. Briggs . . . . . . . . . . . . . . . . . . . N/A
John K. Brooks . . . . . . . . . . . . . . . . . . . . N/A
Matthew Q. Brooks Gift Trust -- 1996 . . . . . . . . . N/A
Richard E.T. Brooks (IRA) . . . . . . . . . . . . . . . N/A
Richard E.T. Brooks Jr. Irrevocable Trust -- 1983 . . . N/A
Tracy A. Brooks Irrevocable Trust -- 1983 . . . . . . . N/A
The Brooks Family Trust . . . . . . . . . . . . . . . . N/A
Brooks GST Trust . . . . . . . . . . . . . . . . . . . N/A
Chestnut Street Partners, Inc. . . . . . . . . . . . . N/A
Chisholm Partners II, L.P. . . . . . . . . . . . . . . N/A
Frank M. Drendel . . . . . . . . . . . . . . . . . . . N/A
EOS Partners, SBIC, L.P. . . . . . . . . . . . . . . . N/A
Equity-Linked Investors, L.P. . . . . . . . . . . . . . N/A
Equity-Linked Investors - II . . . . . . . . . . . . . N/A
FG - BRKS . . . . . . . . . . . . . . . . . . . . . . . N/A
Fiber Fund . . . . . . . . . . . . . . . . . . . . . . N/A
Fleet Equity Partners V, L.P. . . . . . . . . . . . . . N/A
Fleet Growth Resources, Inc. . . . . . . . . . . . . . N/A
Fleet Venture Resources, Inc. . . . . . . . . . . . . . N/A
Gilde Investment Fund B.V. . . . . . . . . . . . . . . N/A
Thomas F. Gillett . . . . . . . . . . . . . . . . . . . N/A
The Goldman Sachs Group, L.P. . . . . . . . . . . . . . N/A
GPA VIE . . . . . . . . . . . . . . . . . . . . . . . . N/A
HCC Investments, Inc. . . . . . . . . . . . . . . . . . N/A
U/A/T Dated August 28, 1968 for Audrey
Hilliard Hillman (C.G. Grefenstette and Thomas G.
Bigley, Trustees) . . . . . . . . . . . . . . . . . . N/A
Henry L. Hillman Trust U/A Dated November 18, 1985
(Henry L. Hillman, Elsie Hilliard Hillman and C.G.
Grefenstette, Trustees . . . . . . . . . . . . . . . N/A
U/A/T Dated August 28, 1968 for Henry Lea Hillman, Jr.
(C.G. Grefenstette and Thomas G. Bigley, Trustees) . .
U/A/T Dated August 28, 1969 for Juliet Lea Hillman N/A
(C.G. Grefenstette and Thomas G. Bigley, Trustees) . . N/A
U/A/T Dated August 28, 1968 for William Talbot Hillman
(C.G. Grefenstette and Thomas G. Bigley, Trustees) . . N/A
Kane & Co., nominee for SMALL CAP World Fund, Inc. . . N/A
Lahey Hitchcock Clinic Foundation . . . . . . . . . . . N/A
Lipitz Family Foundation . . . . . . . . . . . . . . . N/A
Richard W. Loftus . . . . . . . . . . . . . . . . . . . N/A
Robert E. McIlvane . . . . . . . . . . . . . . . . . . N/A
Media/Communications Investors Limited Partnership . . N/A
Jim A. Moffit . . . . . . . . . . . . . . . . . . . . . N/A
Morgan Holland Fund II, L.P. . . . . . . . . . . . . . N/A
James Morrison IRA . . . . . . . . . . . . . . . . . . N/A
Osiris Investments Ltd. Partnership . . . . . . . . . . N/A
Quince Associates, L.P. . . . . . . . . . . . . . . . . N/A
Rainbow Trading Partners, Ltd. . . . . . . . . . . . . N/A
Rainbow Trading Systems, Inc. . . . . . . . . . . . . . N/A
Rainbow Venture . . . . . . . . . . . . . . . . . . . . N/A
John K. Reinke (Rollover IRA) . . . . . . . . . . . . . N/A
Mary L. Staudenmaier (IRA) . . . . . . . . . . . . . . N/A
Strauch/Kulhanjian Family Trust . . . . . . . . . . . . N/A
Von Graffenreid AG, Private Bank . . . . . . . . . . . N/A
Westminster Telecom Investors, Inc. . . . . . . . . . . N/A
Willou & Co. . . . . . . . . . . . . . . . . . . . . . N/A
Total . . . . . . . . . . . . . . . 1,344,996
</TABLE>
(a) Unless otherwise indicated, each Selling Stockholder is represented
by Bryan Cave LLP, One Metropolitan Square, 211 North Broadway, Suite 3600, St.
Louis, Missouri 63102-2750, (which will on behalf of such Selling Stockholder
deliver an opinion on the form of Annex II-A) and has appointed James C. Allen
and David L. Solomon, and each of them, as the Attorneys-in-Fact for such
Selling Stockholder.
<PAGE> 15
EXHIBIT I
PRINCIPAL STOCKHOLDERS AND AFFILIATED DIRECTORS
The Centennial Funds
G. Jackson Tankersley, Jr. (Director)
Ronald H. Vander Pol (Director)
Media/Communications Partners II Limited Partnership
Putnam Investment Management, Inc.
Providence Media Partners L.P.
Jonathan M. Nelson (Director)
BROOKS FIBER PROPERTIES, INC. SENIOR OFFICERS
<TABLE>
<S> <C>
Robert A. Brooks Chairman, Brooks Fiber Properties, Inc.
James C. Allen Vice Chairman and Chief Executive Officer, BFP
D. Craig Young President and Chief Operating Officer, BFP
John C. Shapleigh Executive Vice President - Regulatory and Corporate
Development, BFP
David L. Solomon Executive Vice President and Chief Financial Officer, BFP
John K. Brooks Senior Vice President, BFP and President, JB Telecom
Gregory J. Christoffel Senior Vice President and General Counsel, BFP
Marilou Crum Senior Vice President, Marketing and Carrier/Resale
Sales, BFP
Jim A. Moffit Senior Vice President and Managing Director, GLA
International
Mark W. Senda Senior Vice President - Operations, BFP
Wayman R. Tipton Senior Vice President - Corporate Communications and
Strategic Development, BFP
Gerald J. Howe Vice President - Finance, BFP, and Senior Vice President
and Chief Financial Officer - JB Telecom, Inc.
</TABLE>
-2-
<PAGE> 1
January 22, 1997
Board of Directors
Brooks Fiber Properties, Inc.
425 Woods Mill Road South, Suite 300
Town & Country, Missouri 63017
Ladies and Gentlemen:
We are acting as special counsel for Brooks Fiber Properties, Inc., a
Delaware corporation (the "Company"), in connection with various legal matters
relating to the filing of a Registration Statement on Form S-1, No. 333-16495
(the "Registration Statement"), with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Act"), covering the offering
and sale of shares of the Company's Common Stock, par value $.01 per
share ("Common Stock"), and associated Preferred Stock Purchase Rights (the
"Rights") by certain Selling Stockholders identified in the Registration
Statement (the "Selling Stockholders") and, in the event the Underwriters named
in the Registration Statement exercise their over-allotment options, by the
Company. The Rights, if and when they become exercisable, would entitle the
registered holders thereof (with certain exceptions) to purchase from the
Company one one-thousandth of a share of the Company's Series C Junior
Participating Preferred Stock, par value $.01 per share ("Series C Preferred
Stock"), at a price of $100.00 per one one-thousandth of a share of Series C
Preferred Stock, subject to adjustment. The Rights have been authorized and
distributed pursuant to the Rights Agreement dated as of February 29, 1996
("Rights Agreement") between the Company and The Boatmen's Trust Company, as
Rights Agent, to which Rights Agreement reference is made for the terms and a
description of the Rights.
In connection herewith, we have examined and relied without independent
investigation as to matters of fact upon such certificates of public officials,
such statements and certificates of officers of the Company and the Selling
Stockholders and originals or copies certified to our satisfaction of the
Registration Statement, the Restated Certificate of Incorporation and By-laws
of the Company, proceedings of the Board of Directors of the Company and such
other corporate records, documents, certificates and instruments as we have
deemed necessary or appropriate in order to enable us to render the opinions
expressed below. In rendering this opinion, we have assumed the genuineness of
all signatures on all documents examined by us, the authenticity of all
documents submitted to us as originals and the conformity to authentic
originals of all documents submitted to us as certified or photostatted copies.
Based upon the foregoing and in reliance thereon, and upon our review of
applicable statutes and case law, and subject to the qualifications and
limitations stated herein, we are of the opinion that:
(1) The Company is a corporation validly existing in good
standing under the laws of the State of Delaware;
(2) When,
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Board of Directors
Brooks Fiber Properties, Inc.
January 22, 1997
Page 2
(i) the Registration Statement, including any
amendments thereto, shall have become effective under the Act;
(ii) the shares of Common Stock being offered and sold
by the Company shall have been duly issued and sold as
contemplated by the Registration Statement in accordance with
the terms of the form of Underwriting Agreement (U.S. Version)
filed as Exhibit 1.1 to the Registration Statement and the
form of Underwriting Agreement (International Version)
filed as Exhibit 1.2 to the Registration Statement
(collectively, the "Underwriting Agreements"); and
(iii) the shares of Common Stock being offered and
sold by the Selling Stockholders shall have been duly sold and
transferred as contemplated by the Registration Statement in
accordance with the terms of the Underwriting Agreements;
then such shares of Common Stock will be legally issued, fully paid
and non-assessable; and
(3) The Company, as a Delaware corporation, has the authority to
issue the Rights without stockholder approval as a matter properly
within the business judgment of the Board of Directors of the
Company, and, assuming that such judgment has been exercised in good
faith (which we know of no reason to question), the Rights will
have been duly authorized and validly issued.
The basis for our opinion in clause (3) above is described below.
The General Corporation Law of the State of Delaware (the "DGCL")
expressly authorizes a Delaware corporation, subject to any provisions in its
certificate of incorporation, to create and issue rights entitling the holders
thereof to purchase from the corporation any shares of its capital stock of any
class or classes (DGCL, Section 157). The Board of Directors of the
Corporation may, by resolution, determine the terms upon which, including
the time or times at or within which, and the price or prices at which, any
such shares may be purchased from the corporation upon exercise of any of such
rights. In the absence of actual fraud in the transaction, the judgment of the
directors as to the consideration for the issuance of such rights and the
sufficiency thereof shall be conclusive (DGCL, Section 157). The DGCL does
not require stockholder approval for the issuance of rights.
The Company's Restated Certificate of Incorporation does not contain any
restriction or limitation on the authority of the Board of Directors of the
Company to authorize, or of the Company to issue rights. However, the Company
must have sufficient authorized but unissued shares available in the event that
the Rights are exercised. Based on the number of outstanding shares of Common
Stock at January 9, 1997, following the exercise of the Company's then
outstanding warrants and options, the Company would have 34,820,721 shares of
Common Stock issued and outstanding and 15,179,279 shares of Common Stock and
1,040,012 shares of Preferred Stock, par value $.01 per share (including 50,000
shares designated as Series C Preferred Stock), authorized but not outstanding.
Accordingly, following such exercises, the Company would have sufficient
authorized but not outstanding shares of Series C Preferred Stock to fulfill
its obligations in the event the Rights were then exercised. The Rights
<PAGE> 3
Board of Directors
Brooks Fiber Properties, Inc.
January 22, 1997
Page 3
Agreement contains provisions which obligate the Company to reserve sufficient
shares of Series C Preferred Stock to permit exercise in full of all
outstanding Rights.
Delaware courts have, on a number of occasions, concluded that
corporations organized in Delaware are authorized to issue rights having terms
and conditions similar to those set out in the Rights Agreement. These cases
have supported the authority of the board of directors of a corporation to
adopt rights plans and issue the rights in the absence of any stockholder
approval. See, e.g., Moran v. Household International, Inc., 500 A.2d 1346
(Del. 1985) ("Household") (the Delaware Supreme Court held that a Delaware
corporation had sufficient authority to adopt a flip-over rights plan under
Delaware corporate law); Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc.,
506 A.2d 173, 181 (Del. 1986) (the Delaware Supreme Court spoke approvingly of
a flip-in rights plan in dicta); American Gen. Corp. v. Unitrin, Inc., C.A.
Nos. 13656 and 13699, Del. Ch. LEXIS 187, *26-7 (1994), rev'd on other grounds,
651 A.2d 1361 (Del. 1995) (Delaware Chancery Court refused to enjoin a
shareholder rights plan with flip-in and flip-over provisions after determining
the Delaware corporation's board adopted the plan upon concluding in good faith
that a bidder's cash offer for all shares was inadequate); Tate & Lyle PLC v.
Staley Continental Inc., CCH Fed. Sec. L. Rep. 1988 Dec. Paragraph 93,674
(Del. Ch. 1988) (Delaware Chancery Court refused to enjoin shareholder rights
plan with both flip-over and flip-in provisions and refused to order redemption
of rights under plan); BNS Inc. v Koppers Co., 683 F. Supp. 458 (D.C. Del.
1988) (U.S. District Court for the District of Delaware refused to order
directors of Delaware corporation to redeem rights under plan that had both
flip-in and flip-over rights); CRTF Corp. v. Federated Dept. Stores, Inc., 683
F. Supp. 422 (S.D.N.Y. 1988) (U.S. District Court for the Southern District of
New York rejected a request for a preliminary injunction based, inter alia,
upon a challenge to the validity under Delaware law of rights plan containing
both flip-in and flip-over provisions and refused to order board of directors to
redeem rights); Moore Corp. v. Wallace Computer Servs., 907 F. Supp. 1545 (D.
Del. 1995) (Delaware District Court held that Board's decision not to redeem
poison pill as part of a "just say no" defense against hostile tender offer was
a valid exercise of its business judgment).
Some courts have granted injunctions requiring a board of directors to
redeem rights of the sort discussed in this letter. See, e.g., City Capital
Assocs. L.P. v. Interco Inc., 551 A. 2d 787 (Del. Ch. 1988); and Grand Met. PLC
v. The Pillsbury Co., 558 A.2d 1049 (Del. Ch. 1988). However, we do not
interpret these decisions as undermining the validity of the rights there
involved themselves or the adoption or issuance thereof. Rather, these cases
relate to the propriety of a decision by a board of directors to leave existing
rights outstanding under certain circumstances after an acquisition offer has
been made.
Several courts in other jurisdictions have granted preliminary injunctions
against the implementation by certain corporations of various rights plans
because the court viewed the corporation laws under which those corporations
were formed as forbidding discrimination in rights between holders of shares of
the same series and class, and thus as precluding provisions such as flip-in
terms that may be characterized as discriminatory against certain holders.1/
The
- -------------------------
1/ Asarco Inc. v. Court, 611 F.Supp. 468 (D. N.J. 1985) (holding that New
Jersey corporate law proscribed discrimination between voting power
within a class of
<PAGE> 4
Board of Directors
Brooks Fiber Properties, Inc.
January 22, 1997
Page 4
Delaware Supreme Court held in the Household case, however, that
discrimination between shareholders, as opposed to discrimination between
shares, was permissible, and thus the flip-over rights plan in question was
valid.
A number of cases have held that exercise by a board of directors of
authority such as the power to authorize and issue rights is governed by the
business judgment rule which provides that a court will not interfere with a
good faith decision by adequately informed disinterested directors which the
directors reasonably believe is in and not opposed to the best interests of the
corporation. See, e.g., Household. However, certain courts have held that the
traditional business judgment rule should be modified when a board of directors
adopts measures that could have an anti-takeover effect. These courts have
required that, before the business judgment rule is applied in a takeover
context, the directors must carry the burden of demonstrating that there was a
danger to corporate policy and effectiveness and that the action taken was
reasonable in relation to the threat imposed. See, e.g., Unocal Corp. v. Mesa
Petroleum Co., 493 A. 2d 946, 954 (Del. 1985) ("Unocal") and Household. If the
plaintiff can succeed in proving that the sole or primary purpose of the
anti-takeover measure was entrenchment of management, good faith is negated,
and the business judgment rule will not apply. The directors then must prove
the intrinsic fairness of the measure. See, e.g., Mills Acquisition Co. v.
Macmillan, Inc., 559 A.2d 1261, 1280 (Del. 1989) (finding a lack of candor in
communications during an auction process involving a management buyout group,
the court enjoined an asset lock-up agreement and stated "[w]hen faced with
such divided loyalties, directors have the burden of establishing the entire
fairness of the transaction to survive careful scrutiny by the courts.").
In deciding whether to sustain anti-takeover measures adopted by a board
of directors, three elements recur in the case law. First, the board must be
reasonably diligent in the process by which it selects the anti-takeover
measure. Second, the measure adopted by the board must be a suitable response
to the threat posed. And finally, the board must carefully structure
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preferred stock); Amalgamated Sugar Co. v. NL Indus., Inc., 644 F.Supp.
1229 (S.D. N.Y. 1986) (holding that a rights plan with flip-in provisions
which operated to dilute the equity and voting power of acquiring
shareholder was ultra vires as a matter of New Jersey law since the New
Jersey Business Corporation Act did not allow discrimination among
shareholders of same class and series of stock); R.D. Smith & Co. v.
Preway, Inc., 644 F.Supp. 868 (W.D. Wis. 1986) (denying preliminary
injunction to party opposing rights plan despite probability that plan
would be held invalid under Wisconsin law because it discriminated by
according different voting powers to shareholders within the same class of
stock); Bank of New York Co. v. Irving Bank Corp., 536 N.Y.S.2d 923 (Sup.
Ct. N.Y. Co. 1988) (holding a flip-in provision to be a discrimination
between shareholders of the same class that was not permissible under the
New York Business Corporation Law). The state legislatures in these and
certain other states whose statutes have been similarly construed have
subsequently amended their statutes to explicitly authorize rights plans
with discriminatory provisions (see, e.g., N.J. Bus. Corp. Act Section
14A:7-7; N.Y. Bus. Corp. Law Section 505(a)(2) and Wis. Bus. Corp. Law
Section 180.0624).
<PAGE> 5
Board of Directors
Brooks Fiber Properties, Inc.
January 22, 1997
Page 5
any rights plan it may adopt in order to minimize potential abuses, particularly
abuses in the nature of actions which would prevent any takeover offer from
succeeding.
In rendering the opinion expressed in clause (3) above, we have assumed
that the Company's Board of Directors, in considering and approving the
distribution of the Rights described herein, addressed matters responsive to
the requirements set out above. Nothing has come to our attention which would
cause us to question the good faith of the directors in approving the
distribution of the Rights or which would lead us to believe that we are not
justified in relying on the assumptions referred to above.
Taking the foregoing into account, it is our opinion that rights with
terms and conditions of the sort included in the Rights Agreement are valid
under Delaware law and may thus be lawfully authorized and issued by the
Company. It is also our opinion that approval of the Rights is a matter
properly within the business judgment of the Company's Board of Directors and,
assuming that such judgment has been exercised in good faith (which we know of
no reason to question), is thus consistent with the fiduciary obligations of
the Board of Directors to the Company and its stockholders.
This opinion is not rendered with respect to any laws other than the
General Corporation Law of the State of Delaware and the Act.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption
"Validity of Common Stock" in the Prospectus filed as a part thereof. We also
consent to your filing copies of this opinion as an exhibit to the Registration
Statement with agencies of such states as you deem necessary in the course of
complying with the laws of such states regarding the offering and sale of such
shares of Common Stock. In giving this consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act or
the rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
BRYAN CAVE LLP
