SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 14, 1996
Tel-Save Holdings, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-26728
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(Commission File Number)
23-2827736
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(IRS Employer Identification Number)
6805 Route 202, New Hope, Pennsylvania 18938
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(Address of Principal Executive Offices)
(215) 862-1500
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, If Changed Since Last Report)
Item 5. Other Events
On November 14, 1996, Tel-Save Holdings, Inc. ("the Company") entered into an
underwriting agreement with Salomon Brothers Inc and the selling stockholders
named therein (the "Selling Stockholders") in connection with the resale by the
Selling Stockholders of 1,200,000 shares of common stock that the Company issued
or will issue upon the exercise of warrants that the Company granted to five
firms that market the Company's services and to the managing underwriter of the
Company's initial public offering. The resale of the shares is pursuant to a
shelf registration statement under the Securities Act of 1933 (No. 333-14549).
The Company will receive no proceeds from the resale of the shares, although
$600,000 in indebtedness to the Company may be repaid from the proceeds, and the
Company will receive $7,402,961 upon the exercise of the warrants. Additional
information concerning the Underwriting Agreement which supplements the plan of
distribution included in the Registration Statement as it became effective is
included in the prospectus supplement dated November 14, 1996 and to be filed
with the Commission on the date hereof pursuant to Rules 415
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and 424(b)(3). The Underwriting Agreement is attached hereto as
Exhibit 1.1.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits
1.1 Underwriting Agreement, dated as of November 14,
1996, among Salomon Brothers Inc, Tel-Save
Holdings, Inc., and the Selling Stockholders
named therein.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TEL-SAVE HOLDINGS, INC.
By: /s/ Aloysius T. Lawn, IV
Aloysius T. Lawn, IV
General Counsel and
Secretary
Date: November 18, 1996
EXHIBIT INDEX
1.1 Underwriting Agreement, dated as of November 14, 1996,
among Salomon Brothers Inc, Tel-Save Holdings, Inc., and
the Selling Stockholders named therein.
EXECUTION COPY
Tel-Save Holdings, Inc.
1,200,000 Shares
Common Stock
($.01 par value)
Underwriting Agreement
November 14, 1996
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
The persons named on Schedule I hereto (each a "Selling
Stockholder"; collectively, the "Selling Stockholders"), propose to sell to you
(the "Underwriter"), an aggregate amount of 1,200,000 shares of Common Stock,
$.01 par value ("Common Stock"), of Tel-Save Holdings, Inc., a Delaware
corporation (the "Company"), as indicated on Schedule I hereto. The shares to be
sold by the Selling Stockholders are collectively referred to herein as the
"Securities".
1. Representations and Warranties.
(a) The Company represents and warrants to, and agrees with,
the Underwriter as set forth below in this Section 1. Certain terms used in this
Section 1 are defined in paragraph (iii) hereof.
(i) The Company meets the requirements for use of
Form S-3 under the Securities Act of 1933 (the "Act") and has filed
with the Securities and Exchange Commission (the "Commission") a
registration statement (file number 333-14549) on such Form, including
a related preliminary prospectus, for the registration under the Act of
the offering and sale of the Securities. The Company may have filed one
or more amendments thereto, including the related preliminary
prospectus, each of which has previously been furnished to you. The
Company will next file with the Commission either (A) prior to
effectiveness of such registration statement, a further amendment to
such registration statement (including the form of final prospectus),
or (B) a final prospectus in accordance with Rules 430A and 424(b)(1)
or (4), or (C) a final prospectus in accordance with Rules 415 and
424(b)(2), (3) or (5). In the case of clause (B), the Company has
included in such registration statement, as amended at the Effective
Date, all information (other than Rule 430A Information) required by
the Act and the rules thereunder to be included in the Prospectus with
respect to the Securities
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and the offering thereof. As filed, such amendment and form of final
prospectus, or such final prospectus, shall contain all Rule 430A
Information, together with all other such required information, with
respect to the Securities and the offering thereof and, except to the
extent the Underwriter shall agree in writing to a modification, shall
be in all substantive respects in the form furnished to you prior to
the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other
changes (beyond that contained in the latest Preliminary Prospectus) as
the Company has advised you, prior to the Execution Time, will be
included or made therein. If the Registration Statement contains an
undertaking specified by Regulation S-K Item 512(a), the Registration
Statement, at the Execution Time, meets the requirements set forth in
Rule 415(a)(1)(x).
(ii) On the Effective Date, the Registration
Statement did or will, and when the Prospectus is first filed (if
required) in accordance with Rule 424(b) and on the Closing Date, the
Prospectus (and any supplements thereto) will, comply in all material
respects with the applicable requirements of the Act and the Securities
Exchange Act of 1934 (the "Exchange Act") and the respective rules
thereunder; on the Effective Date, the Registration Statement did not
or will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and, on the
Effective Date, the Prospectus, if not filed pursuant to Rule 424(b),
did not or will not, and on the date of any filing pursuant to Rule
424(b) and on the Closing Date, the Prospectus (together with any
supplements thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement, or the
Prospectus (or any supplements thereto) in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of the Underwriter specifically for inclusion in the
Registration Statement or the Prospectus (or any supplements thereto).
(iii) The terms which follow, when used in this
Agreement, shall have the meanings indicated. The term "Effective Date"
shall mean each date that the Registration Statement and any
post-effective amendment or amendments thereto became or become
effective. "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto. "Preliminary
Prospectus" shall mean any preliminary prospectus referred to in
paragraph (i) above and any preliminary prospectus included in the
Registration Statement at the Effective Date that omits Rule 430A
Information. "Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
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"Registration Statement" shall mean the registration statement referred
to in paragraph (i) above, including incorporated documents, exhibits
and financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment thereto
becomes effective prior to the Closing Date (as hereinafter defined),
shall also mean such registration statement as so amended. Such term
shall include any Rule 430A Information deemed to be included therein
at the Effective Date as provided by Rule 430A. "Rule 415", "Rule 424,"
"Rule 430A" and "Regulation S-K" refer to such rules or regulations
under the Act. "Rule 430A Information" means information with respect
to the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A. Any reference herein to the Registration Statement, a Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of such
Preliminary Prospectus or the Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the filing of
any document under the Exchange Act after the Effective Date of the
Registration Statement, or the issue date of any Preliminary Prospectus
or the Prospectus, as the case may be, deemed to be incorporated
therein by reference.
(b) Each Selling Stockholder, severally and not jointly,
represents and warrants to, and agrees with, the Underwriter that:
(i) Such Selling Stockholder is or will be, at the time of
delivery thereof, the lawful owner of the Securities to be sold by such
Selling Stockholder hereunder and upon sale and delivery of, and
payment for, such Securities, as provided herein, such Selling
Stockholder will convey good and valid title to such Securities, free
and clear of all liens, encumbrances, equities and claims whatsoever.
(ii) The sale of Securities by such Selling Stockholder pursuant
hereto is not prompted by any material information concerning the
Company or the Subsidiary which is not set forth in the Prospectus or
any supplement thereto.
(iii) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or which has constituted
or which might reasonably be expected to cause or result, under the
Exchange Act or otherwise, in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities and has not effected any sales of shares of Common
Stock which, if effected by the issuer, would be required to be
disclosed in response to Item 701 of Regulation S-K.
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(iv) Certificates in negotiable form for such Selling
Stockholder's Securities (other than the Securities to be sold
hereunder by the Partitions (as defined in the Registration Statement),
which Securities will be obtained upon exercise of the warrants
pertaining to such Securities and will be issued in the name of, and
delivered directly by the Company to, the Underwriter) have been placed
in custody, for delivery pursuant to the terms of this Agreement, under
a Custody Agreement and Power of Attorney duly authorized, executed and
delivered by each Selling Stockholder, in the form heretofore furnished
to you (the "Custody Agreement") with PNC Bank, N.A., as Custodian (the
"Custodian"); the Securities represented by the certificates so held in
custody for each Selling Stockholder are subject to the interests
hereunder of the Underwriter, the Company and the other Selling
Stockholders; the arrangements for custody and delivery of such
certificates, made by such Selling Stockholder hereunder and under the
Custody Agreement, are not subject to termination by any acts of such
Selling Stockholder, or by operation of law, whether by the death or
incapacity of such Selling Stockholder or the occurrence of any other
event; and if any such death, incapacity or any other such event shall
occur before the delivery of such Securities hereunder, certificates
for the Securities will be delivered by the Custodian in accordance
with the terms and conditions of this Agreement and the Custody
Agreement as if such death, incapacity or other event had not occurred,
regardless of whether or not the Custodian shall have received notice
of such death, incapacity or other event.
(v) This Agreement and the Custody Agreement (if applicable) have
been duly executed and delivered by such Selling Stockholder; the
Custody Agreement (if applicable) is valid and binding on such Selling
Stockholder; and such Selling Stockholder has the full legal right,
capacity, power and authority to transfer or direct the transfer of the
Securities being sold by such Selling Stockholder hereunder in the
manner provided in this Agreement and the Custody Agreement;
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by such
Selling Stockholder of the transactions contemplated herein, except
(assuming the accuracy of the Company's representations and warranties
hereunder) such as may have been obtained under the Act and such as may
be required under the blue sky laws of any jurisdiction or the rules of
the NASD in connection with the purchase and distribution of the
Securities by the Underwriter and such other approvals as have been
obtained.
(vii) Neither the sale of the Securities being sold by such Selling
Stockholder nor the consummation of any of the other transactions
herein contemplated by such Selling Stockholder or the fulfillment of
the terms hereof by such Selling Stockholder will conflict with, result
in a breach or violation of, or constitute a default under any law, or
the charter, by-laws or the constituent documents (if applicable) of
such Selling Stockholder or any of its subsidiaries, or the terms of
any indenture or other agreement
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or instrument to which such Selling Stockholder or any of its
subsidiaries is a party or bound, or any judgment, order or decree
applicable to such Selling Stockholder of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
such Selling Stockholder or (if applicable) any of its subsidiaries.
Solely in respect of any statements in or omissions from the
Registration Statement or the Prospectus or any supplements thereto
made in reliance upon and in conformity with information furnished in
writing to the Company by such Selling Stockholder specifically for use
in connection with the preparation thereof, such Selling Stockholder
hereby makes the same representations and warranties to the Underwriter
as the Company makes to the Underwriter under paragraph (a)(ii) of this
Section.
(c) Each Partition represents and warrants to, and agrees
with, the Underwriter that it has, or will simultaneously herewith, submit to
the Company a duly executed and completed exercise notice with respect to the
exercise of the warrants pertaining to the Securities to be sold by it
hereunder, directing the Company to issue such Securities in the name of the
Underwriter (or such other name or names and in such denominations as may be
designated by the Underwriter), and directing the Company to deliver such
Securities to, or upon the order of, the Underwriter against payment therefor by
the Underwriter.
(d) Gerard Klauer Mattison & Co., LLC ("GKM") represents and
warrants to, and agrees with, the Underwriter that it has, or will
simultaneously herewith, submit to the Company a duly executed and completed
subscription notice with respect to the exercise of the warrants pertaining to
the Securities to be sold by it hereunder, directing the Company to issue such
Securities in the name of GKM, and directing the Company to deliver such
Securities to the Custodian in accordance with the Custody Agreement.
2. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Selling Stockholders agree, severally and not jointly, to sell to the
Underwriter, and the Underwriter agrees to purchase from the Selling
Stockholders at a purchase price of $23.00 per share, the amount of the
Securities set forth opposite such Selling Shareholder's name in Schedule I
hereto.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at 10:00 AM, New York City time, on November 19, 1996,
or such later date (not later than November 26, 1996) as the Underwriter shall
designate, which date and time may be postponed by agreement among the
Underwriter, the Company and the Selling Stockholders, (such date and time of
delivery and payment for the Securities being herein called the "Closing Date").
Delivery of the Securities shall be made to the Underwriter against payment by
the Underwriter of the respective aggregate purchase prices of the Securities
being sold by each of the Selling Stockholders to or upon the order of such
Selling Stockholder by certified or official bank check or checks drawn on or by
a New York Clearing House bank and payable in same day funds. Delivery of the
Securities shall be made at such location as the Underwriter
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shall reasonably designate at least one business day in advance of the Closing
Date and payment for such Securities shall be made at the office of Cleary,
Gottlieb, Steen & Hamilton, One Liberty Plaza, New York, New York. Certificates
for the Securities shall be registered in such names and in such denominations
as the Underwriter may request not less than two full business days in advance
of the Closing Date.
Each Selling Stockholder will pay all applicable state
transfer taxes, if any, involved in the transfer to the Underwriter of the
Securities to be purchased by it from such Selling Stockholder and the
Underwriter will pay any additional stock transfer taxes involved in further
transfers.
4. Offering by The Underwriter. It is understood that the
Underwriter proposes to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements. (a) The Company agrees with the Underwriter
that:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of
the Registration Statement or supplement to the Prospectus without your
prior consent, which consent shall not be unreasonably withheld.
Subject to the foregoing sentence, if the Registration Statement has
become or becomes effective pursuant to Rule 430A, or filing of the
Prospectus is otherwise required under Rule 424(b), the Company will
cause the Prospectus, properly completed, and any supplement thereto to
be filed with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed and will provide evidence
satisfactory to the Underwriter of such timely filing. The Company will
promptly advise the Underwriter (A) when the Registration Statement, if
not effective at the Execution Time, and any amendment thereto, shall
have become effective, (B) when the Prospectus, and any supplement
thereto, shall have been filed (if required) with the Commission
pursuant to Rule 424(b), (C) when, prior to termination of the offering
of the Securities, any amendment to the Registration Statement shall
have been filed or become effective, (D) of any request by the
Commission for any amendment of the Registration Statement or
supplement to the Prospectus or for any additional information, (E) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (F) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The
Company will use its reasonable best efforts to prevent the issuance of
any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
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(ii) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a result
of which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, the Company promptly will prepare and file with the
Commission, subject to the second sentence of paragraph (a)(i) of this
Section 5, an amendment or supplement which will correct such statement
or omission or effect such compliance.
(iii) As soon as practicable, the Company will make generally
available to its security holders and to the Underwriter an earnings
statement or statements of the Company which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(iv) The Company will furnish to the Underwriter and to counsel for
the Underwriter, without charge, signed copies of the Registration
Statement (including exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as
many copies of each Preliminary Prospectus and the Prospectus and any
supplement thereto as the Underwriter may reasonably request. The
Company will pay the expenses of printing or other production of all
documents relating to the offering.
(v) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as the
Underwriter may designate, will maintain such qualifications in effect
so long as required for the distribution of the Securities and will pay
the fee of the NASD in connection with its review (if required) of the
offering.
(vi) The Company will not, for a period of 120 days following the
Execution Time, without the prior written consent of the Underwriter,
which consent shall not be unreasonably withheld, offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly, or
announce the offering of, any other shares of Common Stock or any
securities convertible into, or exchangeable for, shares of Common
Stock; provided, however, that the Company may issue and sell Common
Stock pursuant to any employee stock option plan, stock ownership plan
or dividend reinvestment plan of the Company in effect at the Execution
Time and the Company may issue Common Stock issuable upon the
conversion of securities or the exercise of warrants or options
outstanding at the Execution Time; may issue other options to employees
so long as such options shall not become exercisable until 120 days
following the Execution Time; and may issue or agree to issue Common
Stock in connection with mergers or acquisitions, or in transactions
with Partitions, where any such stock issued is subject
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to the restrictions as to disposition applicable to the Company in the
first clause of this subsection.
(vii) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, An Act Relating to Disclosure of Doing Business with Cuba, and
the Company further agrees that if it commences engaging in business
with the government of Cuba or with any person or affiliate located in
Cuba after the date the Registration Statement becomes or has become
effective with the Securities and Exchange Commission or with the
Florida Department of Banking and Finance (the "Department"), whichever
date is later, or if the information reported in the Prospectus, if
any, concerning the Company's business with Cuba or with any person or
affiliate located in Cuba changes in any material way, the Company will
provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
(viii) The Company will issue Securities in accordance with the
instructions received by it pursuant to the exercise notices submitted
to it by the Partitions and the subscription notice submitted to it by
GKM.
(b) Each Selling Stockholder agrees with the Underwriter that
he, she or it will not during the period of 120 days following the Execution
Time, without the prior written consent of the Underwriter, which consent shall
not be unreasonably withheld, offer, sell or contract to sell, or deliver
(including by selling short) or otherwise dispose of, directly or indirectly, or
announce the offering of, any other shares of Common Stock beneficially owned by
such Selling Stockholder, or any securities convertible into, or exchangeable
for, shares of Common Stock, other than shares of Common Stock disposed of as
bona fide gifts; provided, however, that, except with respect to the 300,000
shares of Common Stock beneficially owned by GKM on the date hereof, the
foregoing shall not be deemed to prevent GKM from engaging in bona fide market
making activities (which activities, except as required to fill a bona fide
unaffiliated customer or inter-dealer order in compliance with the rules of the
NASD, shall not include short sales) in the ordinary course of its business as a
Nasdaq market maker in the Company's Common Stock.
6. Conditions to the Obligations of the Underwriter. The
obligations of the Underwriter to purchase the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
and each Selling Stockholder contained herein as of the Execution Time, the
Closing Date and any settlement date pursuant to Section 3 hereof, to the
accuracy of the statements of the Company and each Selling Stockholder made in
any certificates pursuant to the provisions hereof, to the performance by the
Company and each Selling Stockholder of their respective obligations hereunder
and to the following additional conditions:
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(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Underwriter agrees in writing to a later
time, the Registration Statement will become effective not later than (i) 6:00
PM New York City time on the date of determination of the public offering price,
if such determination occurred at or prior to 3:00 PM New York City time on such
date or (ii) 12:00 Noon on the business day following the day on which the
public offering price was determined, if such determination occurred after 3:00
PM New York City time on such date; if filing of the Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b), the Prospectus, and any
such supplement, will be filed in the manner and within the time period required
by Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) The Company shall have furnished to the Underwriter the
opinion of Aloysius T. Lawn, IV, General Counsel and Secretary to the Company,
dated the Closing Date, addressing the following matters:
(i) each of the Company and Tel-Save, Inc. (the "Subsidiary") has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own its
properties and conduct its business as described in the Prospectus, and
is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the conduct of its business
requires such qualification or in which it owns or leases material
properties, in each case except for those jurisdictions where the
failure to so qualify or to be in good standing would not have a
material adverse effect on the financial condition, earnings, business
or properties of the Company and the Subsidiary on a consolidated basis
(a "Material Adverse Effect");
(ii) all the outstanding shares of capital stock of the Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectus,
all outstanding shares of capital stock of the Subsidiary are owned by
the Company free and clear of any perfected security interest and, to
the knowledge of such counsel, after due inquiry, any other security
interests, claims, liens or encumbrances;
(iii) the Company's authorized capital stock is as set forth in the
Prospectus; the capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus; the
outstanding shares of Common Stock (including the Securities being sold
hereunder by the Selling Stockholders) have been duly and validly
authorized and issued and are fully paid and nonassessable; the
certificates for the Securities comply as to form with the requirements
of Section 158 of the Delaware General Corporation Law; and the holders
of outstanding shares of Common Stock of the Company are not entitled
to preemptive or other rights to subscribe for the Securities;
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(iv) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body involving the Company or the Subsidiary of a
character required to be disclosed in the Registration Statement which
is not adequately disclosed in the Prospectus, and, to the knowledge of
such counsel, there is no contract or other document of a character
required to be described in the Registration Statement or Prospectus,
or to be filed as an exhibit, which is not described or filed as
required, and the statements in the Prospectus under the heading "Risk
Factors -- Government Regulation", insofar as such statements
constitute a summary of legal matters, documents or proceedings
referred to therein, provide a fair summary of such legal matters,
documents and proceedings;
(v) the Registration Statement has become effective under the Act;
any required filing of the Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); to the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
has been issued, no proceedings for that purpose have been instituted
or threatened and the Registration Statement and the Prospectus (other
than the financial statements, schedules and other financial, market
and statistical information contained therein and information provided
by the Underwriter for inclusion therein, as to all of which such
counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act and the Exchange
Act and the respective rules thereunder; and nothing has caused such
counsel to believe that at the Effective Date the Registration
Statement (other than the financial statements, schedules and other
financial, market and statistical information contained therein and
information provided by the Underwriter for inclusion therein, as to
all of which such counsel need express no opinion) contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus includes any untrue
statement of material fact or omits to state a material fact necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading;
(vi) this Agreement has been duly authorized, executed and delivered
by the Company;
(vii) to the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental agency or body is
required for the consummation by the Company of the transactions
contemplated herein, except such as have been obtained under the Act
and such as may be required under the blue sky laws of any jurisdiction
in connection with the purchase and distribution of the Securities by
the Underwriter and such other approvals (specified in such opinion) as
have been obtained;
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(viii) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation of, or constitute a default under any law or the
Amended and Restated Certificate of Incorporation or by-laws of the
Company or the terms of any indenture or other agreement or instrument
known to such counsel and to which the Company or the Subsidiary is a
party or bound, or any judgment, order or decree known to such counsel
to be applicable to the Company or to the Subsidiary of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Company or the Subsidiary, which breach,
violation or default is reasonably likely to have a Material Adverse
Effect; and
(ix) except for certain registration rights granted to the Selling
Stockholders, no holder of securities of the Company has any right
which has not been fully exercised or waived to require the Company to
register the offer or sale of any securities owned by such holder under
the Act in the public offering contemplated by this Agreement.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
State of New York, the General Corporation Law of the State of Delaware or the
United States, to the extent they deem proper and specified in such opinion,
upon the opinion of other counsel whom they believe to be reliable and who are
reasonably satisfactory to counsel for the Underwriter and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Company and public officials. References to the Prospectus in this paragraph
(b) include any supplements thereto at the Closing Date.
(c) Each Selling Stockholder shall have furnished to the
Underwriter an opinion of counsel acceptable to the Underwriter, dated the
Closing Date, to the effect that:
(i) this Agreement and the Custody Agreement (if applicable) have
been duly executed and delivered by such Selling Stockholder, the
Custody Agreement (if applicable) is valid and binding on such Selling
Stockholder; and such Selling Stockholder has the full legal right,
capacity, power and authority to transfer or direct the transfer of the
Securities being sold by such Selling Stockholder hereunder in the
manner provided in this Agreement and the Custody Agreement;
(ii) the delivery by such Selling Stockholder to the Underwriter of
certificates for the Securities being sold hereunder by such Selling
Stockholder against payment therefor as provided herein, will pass good
and marketable title to such Securities to the Underwriter, free and
clear of all liens, encumbrances, equities and claims whatsoever;
(iii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by such
Selling Stockholder of the
11
<PAGE>
transactions contemplated herein, except such as may have been obtained
under the Act and such as may be required under the blue sky laws of
any jurisdiction in connection with the purchase and distribution of
the Securities by the Underwriter and such other approvals (specified
in such opinion) as have been obtained; and
(iv) neither the sale of the Securities being sold by such Selling
Stockholder nor the consummation of any other of the transactions
herein contemplated by such Selling Stockholder or the fulfillment of
the terms hereof by such Selling Stockholder will conflict with, result
in a breach or violation of, or constitute a default under any law, or
the charter or by-laws (if any) of such Selling Stockholder, the terms
of any indenture or other material agreement or instrument known to
such counsel and to which such Selling Stockholder is a party or bound,
or any judgment, order or decree known to such counsel to be applicable
to such Selling Stockholder of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
such Selling Stockholder (such counsel being entitled to state that the
opinion in this paragraph 8(c)(iv) is based solely on a certificate of
each such Selling Stockholder in respect of matters of fact and without
such counsel having made any independent inquiry as to the existence of
indentures or other agreements or instruments, judgments, orders or
decrees).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
State of New York, the State of Delaware or the United States, to the extent
they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriter, and (B) as to matters of fact, to
the extent they deem proper, on certificates of the Selling Stockholders or
responsible officers of the Selling Stockholders.
(d) The Underwriter shall have received from Cleary, Gottlieb,
Steen & Hamilton, counsel for the Underwriter, such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the Securities, the
Registration Statement, the Prospectus (together with any supplements thereto)
and other related matters as the Underwriter may reasonably require, and the
Company and each Selling Stockholder shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(e) The Company shall have furnished to the Underwriter a
certificate of the Company, signed by the Chairman of the Board or the President
and the principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Prospectus, any supplements to the
Prospectus and this Agreement and that:
12
<PAGE>
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto), there
has been no material adverse change in the condition (financial or
other), earnings, business or properties of the Company and the
Subsidiary, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(f) Each Selling Stockholder shall have furnished to the Underwriter
a certificate, signed by, in the case of the TFG Selling Stockholders (as
defined in the Registration Statement) by such TFG Selling Stockholders, and in
the case of the other Selling Stockholders, by the Chairman of the Board or the
President and principal financial or accounting officer (if any) of such Selling
Stockholder, or such other duly authorized officer as may be acceptable to the
Underwriter, dated the Closing Date, to the effect that the representations and
warranties of such Selling Stockholder in this Agreement are true and correct in
all material respects on and as of the Closing Date to the same effect as if
made on the Closing Date.
(g) At the Execution Time and at the Closing Date, BDO
Seidman, LLP shall have furnished to the Underwriter a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form and
substance satisfactory to the Underwriter, confirming that they are independent
accountants within the meaning of the Act and the Exchange Act and the
respective applicable published rules and regulations thereunder and stating in
effect that:
(i) in their opinion the audited financial statements and financial
statement schedules included or incorporated in the Registration
Statement and the Prospectus and reported on by them comply in form in
all material respects with the applicable accounting requirements of
the Act and the Exchange Act and the related published rules and
regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and the Subsidiary; carrying
out certain specified procedures (but not an examination in accordance
with generally accepted auditing standards) which would
13
<PAGE>
not necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of the
meetings of the stockholders and directors and the executive, option,
compensation and audit committees of the Company and the Subsidiary;
and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company and
the Subsidiary as to transactions and events subsequent to December 31,
1995, nothing came to their attention which caused them to believe
that:
(1) any unaudited financial statements included or
incorporated in the Registration Statement and the Prospectus
do not comply in form in all material respects with applicable
accounting requirements and with the published rules and
regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on
Form 10-Q under the Exchange Act; and said unaudited financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included or incorporated in the Registration Statement and the
Prospectus; or
(2) with respect to the period subsequent to
September 30, 1996, there were any changes, at a specified
date not more than five business days prior to the date of the
letter, in the long-term debt of the Company and the
Subsidiary or capital stock of the Company or decreases in the
stockholders' equity of the Company or working capital of the
Company and the Subsidiary as compared with the amounts shown
on the September 30, 1996 consolidated balance sheet included
in the Registration Statement and the Prospectus, or for the
period from October 1, 1996 to such specified date there were
any decreases, as compared with the corresponding period in
the preceding year, in net income before income taxes or in
total or per share amounts of net income of the Company and
the Subsidiary or in operating income of the Company and the
Subsidiary, except in all instances for changes or decreases
set forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by the Underwriter; and
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and the Subsidiary) set forth
in the Registration Statement and the Prospectus, including the
information set forth under the caption "Description of Capital Stock"
in the Prospectus, the information included or incorporated in Items 1,
5, 6, 7, 8 and 11 of the Company's Annual Report on Form 10-K,
incorporated in the Registration Statement and the Prospectus, and the
information included in the "Management's Discussion and Analysis of
Financial
14
<PAGE>
Condition and Results of Operations" included or incorporated in the
Company's Quarterly Reports on Form 10-Q, incorporated in the
Registration Statement and the Prospectus agrees with the accounting
records of the Company and the Subsidiary, excluding any questions of
legal interpretation.
References to the Prospectus in this paragraph (g) includes
any supplement thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (g) of this Section 6 or (ii) any change, or
any development involving a prospective change, in or affecting the business or
properties of the Company and its subsidiaries the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the judgment of the Underwriter,
so material and adverse as to make it impractical or inadvisable to proceed with
the offering or delivery of the Securities as contemplated by the Registration
Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto).
(i) At the Execution Time, each of Lawrence H. Baird, Terrence
T. Baird, Kathleen M. Brooker and Gregory M. Baird shall have furnished to the
Underwriter a letter substantially in the form of Exhibit A hereto addressed to
the Underwriter, in which such person agrees not to offer, sell or contract to
sell, or otherwise dispose of, directly or indirectly, or announce an offering
of, any shares of Common Stock beneficially owned by such person or any
securities convertible into, or exchangeable for, shares of Common Stock for a
period of 120 days following the Execution Time without the prior written
consent of the Underwriter, which consent shall not be unreasonably withheld,
other than shares of Common Stock disposed of as bona fide gifts.
(j) Prior to the Closing Date, the Company and each Selling
Shareholder shall have furnished to the Underwriter such further information,
certificates and documents as the Underwriter may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Underwriter and counsel for the
Underwriter, this Agreement and all obligations of the Underwriter hereunder may
be canceled at, or at any time prior to, the Closing Date by the Underwriter.
Notice of such cancellation shall be given to the Company and to each Selling
Stockholder in writing or by telephone or telegraph confirmed in writing.
15
<PAGE>
7. Reimbursement of Underwriter's Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriter set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company or any of the Selling
Stockholders to perform any agreement herein or comply with any provision hereof
other than by reason of a default by the Underwriter, the Company will reimburse
the Underwriter upon demand for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been incurred by it in
connection with the proposed purchase and sale of the Securities. If the Company
is required to make any payments to the Underwriter under this Section 7 because
of any Selling Stockholder's refusal, inability or failure to satisfy any
condition to the obligations of the Underwriter set forth in Section 6, the
defaulting Selling Stockholder shall reimburse the Company on demand for all
amounts so paid.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless the Underwriter, the directors, officers, employees
and agents of the Underwriter and each person who controls the Underwriter
within the meaning of either the Act or the Securities Exchange Act of 1934 (the
"Exchange Act") and each Selling Stockholder against any and all losses, claims,
damages or liabilities, to which it may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement for the registration of the Securities as originally filed or in any
amendment thereof, or in any Preliminary Prospectus or the Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will 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 any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Underwriter or any such Selling Stockholder
specifically for inclusion therein and provided, further, that the Company shall
not be liable to the Underwriter under the indemnity agreement in this
subsection (a) with respect to any Preliminary Prospectus to the extent that any
such loss, claim, damage or liability of the Underwriter results from the fact
that such Underwriter sold Securities to a person as to whom it shall be
established that there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus or of the Prospectus as then
amended or supplemented in any case where such delivery is required by the Act
if the Company has previously furnished copies thereof to the Underwriter and
the loss, claim, damage or liability of the Underwriter results from an untrue
statement or omission of a material fact contained in the Preliminary Prospectus
that was corrected in the
16
<PAGE>
Prospectus or in the Prospectus as then amended or supplemented. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) Each Selling Stockholder severally agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, the Underwriter, the directors, officers, employees
and agents of the Underwriter and each person who controls the Company or the
Underwriter within the meaning of the Act or the Exchange Act to the same extent
as the foregoing indemnity from the Company to the Underwriter and the Selling
Stockholder, but only with reference to written information furnished to the
Company by or on behalf of such Selling Stockholder specifically for use in the
preparation of documents referred to in the foregoing indemnity; provided that
such Selling Stockholder shall not be liable to the Underwriter under the
indemnity agreement in this subsection (b) with respect to any Preliminary
Prospectus to the extent that any such loss, claim, damage or liability of the
Underwriter results from the fact that the Underwriter sold Securities to a
person as to whom it shall be established that there was not sent or given, at
or prior to the written confirmation of such sale, a copy of the Prospectus or
of the Prospectus as then amended or supplemented in any case where such
delivery is required by the Act if the Company has previously furnished copies
thereof to the Underwriter and the loss, claim, damage or liability of the
Underwriter results from an untrue statement or omission of a material fact
contained in the Preliminary Prospectus that was corrected in the Prospectus or
in the Prospectus as then amended or supplemented. In no event shall a Selling
Stockholder be required to pay an amount in indemnification under this
subsection (b) and contribution under subsection (e) below in excess of the
total proceeds received by him, her or it pursuant to this Agreement. This
indemnity agreement will be in addition to any liability that any Selling
Stockholder may otherwise have.
(c) The Underwriter agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the Registration
Statement, and each person who controls the Company within the meaning of either
the Act or Exchange Act and each Selling Stockholder, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of the Underwriter specifically for use in the
preparation of the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which the Underwriter
may otherwise have. The Company and the Selling Stockholders acknowledge that
the statements set forth in the last paragraph of the cover page and under the
heading "Underwriting" in any Preliminary Prospectus and the Prospectus
constitute the only information furnished in writing by or on behalf of the
Underwriter for inclusion in any Preliminary Prospectus or the Prospectus, and
you, as the Underwriter, confirm that such statements are correct.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the
17
<PAGE>
indemnifying party in writing of the commencement thereof; but the failure so to
notify the indemnifying party (i) will not relieve it from liability under
paragraph (a), (b) or (c) above unless and to the extent such failure results in
the forfeiture by the indemnifying party of substantial rights and defenses and
(ii) will not, in any event, relieve the indemnifying party from any obligations
to any indemnified party other than the indemnification obligation provided in
paragraph (a), (b) or (c) above. The indemnifying party shall be entitled to
appoint counsel of the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party (iii) the
indemnifying party, shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from liability arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a),
(b) or (c) of this Section 8 is unavailable to or insufficient to hold harmless
an indemnified party for any reason, the Company, the Selling Stockholders and
the Underwriter agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively, "Losses") to which the
Company, one or more of the Selling Stockholders and the Underwriter may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company, by the Selling Stockholders and by the Underwriter from
the offering of the Securities; provided, however, that in no case shall the
Underwriter be responsible for any amount in excess of the underwriting discount
applicable to the Securities purchased by the Underwriter hereunder, and
provided, further, that for purposes of this subsection (e), the benefits
received by the
18
<PAGE>
Company shall be deemed to be equal to the aggregate benefits received by the
Selling Stockholders in connection with the offering, the benefits received by
each of the Selling Stockholders shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses) received by each of them,
respectively, and the benefits received by the Underwriter shall be deemed to be
equal to the total underwriting discounts set forth on the cover page of the
Prospectus. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company, the Selling Stockholders and the
Underwriter shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company, each of
the Selling Stockholders and of the Underwriter in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Relative fault shall be determined by
reference to whether any alleged untrue statement or omission relates to
information provided by the Company, the Selling Stockholders or the
Underwriter. The Company, the Selling Stockholders and the Underwriter agree
that it would not be just and equitable if contribution were determined by pro
rata allocation or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this subsection (e), 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. For purposes
of this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as the
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this subsection (e).
9. Default by the Underwriter. Nothing contained in this
Agreement shall relieve the Underwriter of its liability, if any, to the Company
and the Selling Stockholders for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Underwriter, by notice given to
the Company and to the Selling Stockholders prior to delivery of and payment for
the Securities, if prior to such time (i) trading in the Company's Common Stock
shall have been suspended by the Commission or Nasdaq or trading in securities
generally on the New York Stock Exchange or Nasdaq shall have been suspended or
limited or minimum prices shall have been established on either of such Exchange
or Nasdaq, (ii) a banking moratorium shall have been declared either by Federal
or New York State authorities or (iii) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial
markets is such as to make it, in the judgment of the Underwriter, impracticable
to market the Securities.
19
<PAGE>
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of each of the Selling Stockholders and of the
Underwriter set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of the
Underwriter, any Selling Stockholder or the Company or any of the officers,
directors or controlling persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Underwriter, will be mailed,
delivered or telegraphed and confirmed to it, at Seven World Trade Center, New
York, New York 10048; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it, at 6805 Route 202, New Hope, Pennsylvania
18938, attention of the legal department; or, if sent to any of the Selling
Stockholders, will be mailed, delivered or telegraphed and confirmed to such
Selling Stockholder at the address set forth in Schedule II hereto.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
15. Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
20
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, the Selling Stockholders and the Underwriter.
Very truly yours,
Tel-Save Holdings, Inc.
By:________________________________
Chairman and Chief Executive Officer
Selling Stockholders:
Collective Communications Services, Inc.
By:________________________________
Title:
Eastern Telecommunications, Inc.
By:________________________________
Title:
Network Plus, Inc.
By:________________________________
Title:
The Furst Group, Inc.
By:________________________________
Title:
Anne Marie Co., LLC
By:________________________________
Title:
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, the Selling Stockholders and the Underwriter.
Individual Selling Stockholders: Gerard Klauer Mattison & Co., LLC
* By:________________________________
________________________________ Title:
James D. Kaylor
*
________________________________
John S. Streep
*
________________________________
Kristin M. Streep
*
________________________________
J. Ryan Streep
*
________________________________
Jeffrey L. Bockol
*
________________________________
Leslie J. Bockol
*
________________________________
Matthew A. Bockol
*
________________________________
Marcia L. Bockol
*
________________________________
Wayne C. Phipps
*
________________________________
Hubert A. Streep
_______________
*The undersigned, by signing his name hereto, does hereby sign
this Agreement on behalf of each of the above indicated Selling Stockholders
pursuant to the Custody Agreement and Power of Attorney dated November 14, 1996.
By:__________________________
Attorney-in-Fact
<PAGE>
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc
By:_________________________
Title:
<PAGE>
SCHEDULE I
Number of Shares
of the Securities
Selling Stockholder To Be Sold
- ------------------- -----------------
Collective Communications Services, Inc....................... 120,000
Network Plus, Inc............................................. 100,000
Anne Marie Co., LLC........................................... 30,000
Eastern Telecommunications Incorporated....................... 300,000
The Furst Group, Inc.......................................... 100,000
James D. Kaylor............................................... 186,000
John S. Streep................................................ 177,316
Kristin M. Streep............................................. 4,342
J. Ryan Streep................................................ 4,342
Jeffrey L. Bockol............................................. 6,974
Leslie J. Bockol.............................................. 4,342
Matthew A. Bockol............................................. 4,342
Marcia L. Bockol.............................................. 4,342
Wayne C. Phipps............................................... 4,000
Hubert A. Streep.............................................. 4,000
Gerard Klauer Mattison & Co., LLC............................ 150,000
_________
Total 1,200,000
<PAGE>
SCHEDULE II
NOTICES TO SELLING STOCKHOLDERS
All communications to the Selling Stockholders pursuant to
Section 12 of the Underwriting Agreement will be mailed, delivered or
telegraphed and confirmed to the Selling Stockholders at their respective
addresses set forth below:
If to Collective Communications Services, Inc., to:
Collective Communications Services, Inc.
112 Fayette Street
Conshohocken, Pennsylvania 19424
Attention: Jeffrey Earhart
Phone: 610-834-4186
Facsimile: 800-781-6055
If to Eastern Telecommunications Incorporated, to:
Eastern Telecommunications Incorporated
17 John Street, 16th Floor
New York, New York 10038
Attention: Avrohom Oustacher
Phone: 212-227-2510
Facsimile: 212-608-3891
If to Network Plus, Inc., to:
Network Plus, Inc.
234 Copland Street
Quincy, Massachusetts 02169
Attention: Rob Hale
Phone: 617-786-4000
Facsimile: 617-786-4075
<PAGE>
If to The Furst Group, Inc., to:
The Furst Group, Inc.
Furst Commerce Center
459 Oakshade Road
Shamong, New Jersey 08088
Attention: Jeffrey L. Bockol
Phone: 800-818-4736
Facsimile: 609-268-7058
If to Anne Marie Co., LLC, to:
Anne Marie Co., LLC
Twin County Grocers
145 Talmadge Road
Edison, New Jersey 08818
Attention: Mary Louise Filomeno
Phone: 908-248-6802
Facsimile: 908-248-6899
If to Gerard Klauer Mattison & Co., LLC, to:
Gerard Klauer Mattison & Co., LLC
529 Fifth Avenue
New York, New York 10017
Attention: Manny Gerard
Phone: 212-885-4000
Facsimile: 212-885-4072
<PAGE>
If to any of the following Selling Stockholders, to Jeffrey
Bockol or John Streep, as Attorney-in-Fact under the Custody Agreement, c/o The
Furst Group, Inc. at the address therefor set forth above:
James D. Kaylor
John S. Streep
Kristin M. Streep
J. Ryan Streep
Jeffrey L. Bockol
Leslie J. Bockol
Matthew A. Bockol
Marcia L. Bockol
Wayne C. Phipps
Hubert A. Streep
<PAGE>
EXHIBIT A
[Letterhead of Selling Stockholder]
Tel-Save Holdings, Inc.
Public Offering of Common Stock
___________________, 1996
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), between Tel-Save
Holdings, Inc., a Delaware corporation (the "Company"), certain Selling
Stockholders named therein and you, relating to an underwritten public offering
of Common Stock, $.01 par value (the "Common Stock"), of the Company.
In order to induce you to enter into the Underwriting
Agreement, the undersigned agrees not to offer, sell or contract to sell, or
deliver (including, by selling short) or otherwise dispose of, directly or
indirectly, or announce the offering of, any shares of Common Stock beneficially
owned by the undersigned, or any securities convertible into, or exchangeable
for, shares of Common Stock for a period of 120 days following the day on which
the Underwriting Agreement is executed without your prior written consent, which
consent shall not be unreasonably withheld, other than shares of Common Stock
disposed of as bona fide gifts.
If for any reason the Underwriting Agreement shall be
terminated prior to Closing Date (as defined in the Underwriting Agreement), the
agreement set forth above shall likewise be terminated.
Yours very truly,
[Signature of Selling Stockholder]
[Name and address of
Selling Stockholder]
