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EXHIBIT 1.1
RUSSIAN WIRELESS TELEPHONE COMPANY, INC.
1,650,000 Shares of Common Stock
UNDERWRITING AGREEMENT
__________ ___, 1997
J.W. Barclay & Co., Inc.
As Representative of the several Underwriters
One Battery Park Plaza
New York, New York 10004
Dear Sirs:
Russian Wireless Telephone Company, Inc., a Delaware corporation (the
"Company"), and the stockholder listed in Schedule A (the "Selling Stockholder")
of this Underwriting Agreement (the "Agreement") hereby confirm their agreement
with the Underwriters named in Schedule B of the Agreement (the "Underwriters"),
for whom you are acting as representative (the "Representative"), as follows:
1. Description of Stock.
The Company proposes to issue and sell and the Selling Stockholder
proposes to sell to the Underwriters an aggregate of 1,650,000 shares (the
"Stock") of common stock, $.01 par value per share (the "Common Stock") of the
Company, of which 1,620,000 shares are being sold by the Company and 30,000
shares by the Selling Stockholder. In addition, the Company proposes to grant to
the Underwriters (or to the Representative, individually) an option to purchase
up to 247,500 additional shares of Common Stock (the "Additional Stock"). The
offering of Stock and Additional Stock contemplated hereby may sometimes be
referred to as the "Offering."
(a) Representative's Warrants.
The Company will sell to the Representative, for $10, a warrant to
purchase one share of Common Stock for each ten shares of Common Stock sold in
this Offering excluding the Additional Stock (a maximum of 165,000 shares of
Common Stock) at a price equal to $11.55 per share of Common Stock (the
"Representative's Warrants," and collectively with the Common
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Stock underlying the Representative's Warrants, the "Representative's
Securities"). The Representative's Securities shall be non-exercisable and
non-transferrable (other than to (i) officers of the Underwriters, and (ii)
members of the selling group and their offices or partners) for a period of 12
months following the Effective Date. Thereafter, they are exercisable and
transferrable for a period of four years. The Representative's Securities shall
be registered for sale to the public and shall be included in the Registration
Statement filed in connection with the Offering.
2. Representations and Warranties of the Company.
A. The Company represents and warrants to the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission"), a registration statement on Form SB-2 (File No.
333-24177), including any related preliminary prospectus ("Preliminary
Prospectus"), for the registration of the Securities under the Securities Act of
1933 (the "Act"). The Company will file further amendments to said registration
statement in the form to be delivered to you and will not, before the
registration statement becomes effective, file any other amendment thereto to
which you shall have objected in writing after having been furnished with a copy
thereof. Except as the context may otherwise require, such registration
statement, as amended, on file with the Commission at the time the registration
statement becomes effective (including the prospectus, financial statements,
exhibits and all other documents filed as a part thereof or incorporated
therein), is hereinafter called the "Registration Statement" and the prospectus,
in the form filed with the Commission pursuant to Rule 424(b) of the General
Rules and Regulations of the Commission under the Act (the "Regulations") or, if
no such filing is made, the definitive prospectus used in the Offering, is
hereinafter called the "Prospectus." The Company has delivered to you copies of
each Preliminary Prospectus as filed with the Commission and has consented to
the use of such copies for purposes permitted by the Act.
(b) The Commission has not issued any orders preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus has conformed in all material respects with the requirements of the
Act and has not included 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, in light of the circumstances under which they were made,
not misleading, subject to the provisions set forth below and except as such
untrue statement or omission has been cured in the a subsequent preliminary
prospectus or in the final prospectus.
(c) When the Registration Statement becomes effective under the Act
and at all times subsequent thereto including the Closing Date (hereinafter
defined) and the Option Closing Date (hereinafter defined) and for such longer
periods as in the opinion of counsel for the Underwriters, a Prospectus is
required to be delivered in connection with the sale of the Securities by the
Underwriters, the Registration Statement and Prospectus, and any amendment
thereof or supplement thereto, will contain all material statements which are
required to be stated therein in accordance with the Act and the Regulations,
and will in all material respects conform
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to the requirements of the Act and the Regulations, and neither the Registration
Statement nor the Prospectus, nor any amendment or supplement thereto, will
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty does not apply to
statements or omissions made in reliance upon and in conformity with written
information furnished to the Company by you, for use in connection with the
preparation of the Registration Statement or Prospectus, or in any amendment
thereof or supplement thereto. It is understood that the statements set forth
under the heading "Underwriting" in the Prospectus with respect to (i) the
amounts of the selling concession and reallowance; (ii) the identity of counsel
to the Underwriters under the heading "Legal Matters;" and (iii) the information
concerning the NASD affiliation of the Underwriters constitute for purposes of
this Section the only information furnished in writing by or on behalf of the
Underwriters for inclusion in the Registration Statement and Prospectus, as the
case may be.
(d) The Company and each of its subsidiaries (each a "Subsidiary")
are, and at the Closing Date and the Option Closing Date will be, corporations
duly organized, validly existing and in good standing under the laws of the
jurisdiction of their incorporation. The Company and each of its Subsidiaries
are duly qualified or licensed and in good standing as foreign corporations in
each jurisdiction in which their ownership or leasing of any properties or the
character of their operations requires such qualification or licensing, except
those jurisdictions in which the failure to so qualify would not have a material
adverse effect. The Company and each of its Subsidiaries have all requisite
corporate powers and authority, and, except as set forth in the Registration
Statement, the Company and each of its Subsidiaries and their employees' have
all material and necessary authorizations, approvals, orders, licenses,
certificates and permits of and from all governmental regulatory officials and
bodies to own or lease their properties and conduct their businesses as
described in the Prospectus, and the Company and each of its Subsidiaries are
doing business and have been doing business during the period described in the
Registration Statement in compliance with all such material authorizations,
approvals, orders, licenses, certificates and permits and all material federal,
state and local laws, rules and regulations concerning the businesses in which
the Company or its Subsidiaries are engaged. The disclosures in the Registration
Statement concerning the effects of federal, state and local regulation on the
Company's or its Subsidiaries' businesses as currently conducted and as
contemplated are correct in all material respects and do not omit to state a
material fact. The Company has all corporate power and authority to enter into
this Agreement and carry out the provisions and conditions hereof, and all
consents, authorizations, approvals and orders required in connection therewith
have been obtained or will have been obtained prior to the Closing Date.
(e) This Agreement has been duly and validly authorized and executed
by the Company. The Stock, the Representative's Warrants to be issued and sold
by the Company pursuant to this Agreement and the Common Stock issuable upon
exercise of the Representative's Warrants (the "Representative's Warrant
Shares") and payment therefor, have been duly authorized (and, in the case of
the Representative's Warrant Shares, have been duly
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reserved for issuance) and, when issued and paid for in accordance with this
Agreement, will be validly issued, fully paid and non-assessable the Common
Stock, Representative's Warrants, Additional Common Stock and Representative's
Warrant Shares are not and will not be subject to the preemptive rights of any
stockholder of the Company and conform and at all times up to and including
their issuance will conform in all material respects to all statements with
regard thereto contained in the Registration Statement and Prospectus; and all
corporate action required to be taken for the authorization, issuance and sale
of the Common Stock and Representative's Warrants has been taken, and this
Agreement constitutes a valid and binding obligation of the Company, enforceable
in accordance with its terms, to issue and sell, upon exercise in accordance
with the terms thereof, the number and kind of securities called for thereby.
(f) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof will not result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
the Certificate of Incorporation, as amended, or Bylaws of the Company or any of
its Subsidiaries or of any evidence of indebtedness, lease, contract 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 or any of their
properties is bound, or under any applicable law, rule, regulation, judgment,
order or decree of any government, professional advisory body, administrative
agency or court, domestic or foreign, having jurisdiction over the Company or
any of its Subsidiaries or their properties, or result in the creation or
imposition of any lien, charge or encumbrance upon any of the properties or
assets of the Company or any of its Subsidiaries; and no consent, approval,
authorization or order of any court or governmental or other regulatory agency
or body is required for the consummation by the Company or any of its
Subsidiaries of the transactions on their part herein contemplated, except such
as may be required under the Act or under state securities or blue sky laws,
except where a breach, violation or failure to obtain such consent would not
have a material adverse effect upon the business or operation of the Company or
its Subsidiaries.
(g) Subsequent to the date hereof, and prior to the Closing Date and
the Option Closing Date, the Company will not issue or acquire any equity
securities except that the Company may make short-term investments as
contemplated in the "Use of Proceeds" section of the Prospectus. Except as
described in the Registration Statement, the Company does not have, and at the
Closing Date and at the Option Closing Date will not have, outstanding any
options to purchase or rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or sell
shares of its Preferred Stock, Common Stock or any such options, warrants,
convertible securities or obligations.
(h) The financial statements and notes thereto included in the
Registration Statement and the Prospectus fairly present the financial position
and the results of operations of the Company at the respective dates and for the
respective periods to which they apply; and such financial statements have been
prepared in conformity with generally accepted accounting principles,
consistently applied throughout the periods involved.
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(i) Except as set forth in the Registration Statement, the Company
and each Subsidiary are not, and at the Closing Date and at the Option Closing
Date will not be, in violation or breach of, or default in, the due performance
and observance of any term, covenant or condition of any indenture, mortgage,
deed of trust, note, loan or credit agreement, or any other agreement or
instrument evidencing an obligation for borrowed money, or any other agreement
or instrument to which the Company or any of its Subsidiaries are a party or by
which the Company or any of its Subsidiaries may be bound or to which any of the
property or assets of the Company or any of its Subsidiaries are subject, which
violations, breaches, default or defaults, singularly or in the aggregate, would
have a material adverse effect on the Company or any of its Subsidiaries. The
Company and each of its Subsidiaries have not and will not have taken any action
in material violation of the provisions of the Certificate of Incorporation, as
amended, or the Bylaws of the Company or its Subsidiaries or any statute or any
order, rule or regulation of any court or regulatory authority or governmental
body having jurisdiction over or application to the Company or its Subsidiaries,
their businesses or properties.
(j) The Company and each of its Subsidiaries have, and at the
Closing Date and at the Option Closing Date will have, good and marketable title
to all properties and assets described in the Prospectus as owned by them, free
and clear of all liens, charges, encumbrances, claims, security interests,
restrictions and defects of any material nature whatsoever, except such as are
described or referred to in the Prospectus and liens for taxes not yet due and
payable. All of the material leases and subleases under which the Company or any
of its Subsidiaries are the lessor or sublessor of properties or assets or under
which the Company or any of its Subsidiaries hold properties or assets as lessee
as described in the Prospectus are, and will on the Closing Date and the Option
Closing Date be, in full force and effect, and except as described in the
Prospectus, the Company and its Subsidiaries are not and will not be in default
in respect to any of the terms or provisions of any of such leases or subleases
(which would have a material adverse effect on the business, business prospects
or operations of the Company or any of its Subsidiaries taken as a whole), and
no claim has been asserted by anyone adverse to rights of the Company or any of
its Subsidiaries as lessor, sublessor, lessee or sublessee under any of the
leases or subleases mentioned above, or affecting or questioning the right of
the Company or any of its Subsidiaries to continue possession of the leased or
subleased premises or assets under any such lease or sublease except as
described or referred to in the Prospectus, and the Company and each of its
Subsidiaries owns or leases all such properties as are necessary to its
operations as now conducted and, except as otherwise stated in the Prospectus,
as proposed to be conducted set forth in the Prospectus (which would have a
material adverse effect on the business, business prospects or operations of the
Company or any of its Subsidiaries taken as a whole).
(k) The authorized, issued and outstanding capital stock of the
Company as of June 30, 1997 is as set forth in the Prospectus under
"Capitalization"; the shares of issued and outstanding capital stock of the
Company set forth thereunder have been duly authorized, validly issued and are
fully paid and non-assessable; except as set forth in the Prospectus, no
options, warrants or other rights to purchase, agreements or other obligations
to issue, or agreements or other rights to convert any obligation into, any
shares of capital stock of the
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Company have been granted or entered into by the Company; and the Common Stock,
the Warrants and all such options and warrants conform in all material respects,
to all statements relating thereto contained in the Registration Statement and
Prospectus.
(l) Except as described in the Prospectus, the Company does not own
or control any capital stock or securities of, or have any proprietary interest
in, or otherwise participate in any other corporation, partnership, joint
venture, firm, association or business organization; provided, however, that
this provision shall not be applicable to the investment, if any, of the net
proceeds from the sale of the Securities sold by the Company in certificates of
deposits, savings deposits, short-term obligations of the United States
Government, money market instruments or other short-term investments.
(m) Ernst & Young LLP, and Ernst & Young (CIS) Limited, who have
given their reports on certain financial statements filed and to be filed with
the Commission as a part of the Registration Statement, which are incorporated
in the Prospectus, are with respect to the Company, independent public
accountants as required by the Act and the Rules and Regulations.
(n) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as may otherwise
be indicated or contemplated herein or therein, the Company has not (i) issued
any securities or incurred any liability or obligation, direct or contingent,
for borrowed money; or (ii) entered into any transaction other than in the
ordinary course of business; or (iii) declared or paid any dividend or made any
other distribution on or in respect to its capital stock.
(o) There is no litigation or governmental proceeding pending or to
the knowledge of the Company or any Subsidiary threatened against, or involving
the properties or business of the Company or any Subsidiary which might
materially adversely affect the value, assets or the operation of the properties
or the business of the Company or any Subsidiary, except as referred to in the
Prospectus. Further, except as referred to in the Prospectus, there are no
pending actions, suits or proceedings related to environmental matters or
related to discrimination on the basis of age, sex, religion or race, nor is the
Company or any Subsidiary charged with or, to its knowledge, under investigation
with respect to any violation of any statutes or regulations of any regulatory
authority having jurisdiction over its business or operations, and no labor
disturbances by the employees of the Company or any Subsidiary exist or, to the
knowledge of the Company or any Subsidiary, have been threatened.
(p) The Company has, and at the Closing Date and at the Option
Closing Date will have, filed all necessary federal, state and foreign income
and franchise tax returns or has requested extensions thereof (except in any
case where the failure to so file would not have a material adverse effect on
the Company), and has paid all taxes which it believes in good faith were
required to be paid by it except for any such tax that currently is being
contested in good faith or as described in the Prospectus.
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(q) The Company has not at any time (i) made any contribution to any
candidate for political office, or failed to disclose fully any such
contribution, in violation of law, or (ii) made any payment to any state,
federal, foreign governmental or professional regulatory agency, officer or
official or other person charged with similar public, quasi-public or
professional regulatory duties, other than payments or contributions required or
allowed by applicable law.
(r) Except as set forth in the Registration Statement, to the
knowledge of the Company, neither the Company nor any officer, director,
employee or agent of the Company has made any payment or transfer of any funds
or assets of the Company or conferred any personal benefit by use of the
Company's assets or received any funds, assets or personal benefit in violation
of any law, rule or regulation, which is required to be stated in the
Registration Statement or necessary to make the statements therein not
misleading.
(s) On the Closing Date and on the Option Closing Date, all transfer
or other taxes, if any (other than income tax) which are required to be paid,
and are due and payable, in connection with the sale and transfer of the Stock
by the Company to the Underwriters will have been fully paid or provided for by
the Company as the case may be, and all laws imposing such taxes will have been
fully complied with in all material respects.
(t) There are no contracts or other documents of the Company which
are of a character required to be described in the Registration Statement or
Prospectus or filed as exhibits to the Registration Statement which have not
been so described or filed.
(u) The Company will apply the net proceeds from the sale of the
Stock sold by it for the purposes and in the manner set forth in the
Registration Statement and Prospectus under the heading "Use of Proceeds."
(v) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (1) transactions are executed in
accordance with management's general or specified authorizations; (2)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (3) access to assets is permitted only in
accordance with management's general or specific authorizations; and (4) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(w) Except as set forth in the Prospectus, no holder of any
securities of the Company has the right to require registration of any
securities because of the filing or effectiveness of the Registration Statement.
(x) The Company has not taken and at the Closing Date will not have
taken, directly or indirectly, any action designed to cause or result in, or
which has constituted or
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which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the Common Stock or the Warrants to facilitate the
sale or resale of such securities.
(y) To the Company's knowledge, there are no claims for services in
the nature of a finder's origination fee with respect to the sale of the
Securities hereunder, except as set forth in the Prospectus.
(z) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to Underwriters was, when made, or as of the
Closing Date or as of the Option Closing Date will be materially inaccurate,
untrue or incorrect.
B. The Selling Stockholder represents and warrants to the Underwriters
that:
(a) It (1) has the full right, power and authority to execute and
deliver this Agreement, the Power of Attorney, and the Custody Agreement,
hereinafter referred to, (2) is, and on the Closing Date will be, the owner of
the Selling Stockholder's Common Stock ("Stock") to be sold pursuant to the
terms hereof, free and clear of all liens, charges, encumbrances and
restrictions, (3) has paid the full purchase price required to be paid for such
Stock, (4) on the Closing Date will have paid or provided for all stock transfer
or other taxes (other than income taxes) required to be paid by such Selling
Stockholder in connection with the sale and transfer of such Selling
Stockholder's Stock and all laws imposing such taxes will have been fully
complied with, and (5) has, and on the Closing Date will have, the full legal
right, power and authority to sell, transfer and deliver such Selling
Stockholder's Stock hereunder and covey good and marketable title to such
Selling Stockholder's Stock, free and clear of all liens, charges, encumbrances,
equities, claims and restrictions, whatsoever.
(b) This Agreement, the Power of Attorney and the Custody Agreement
have been duly authorized, executed and delivered by the Selling Stockholder.
This Agreement, the Power of Attorney and the Custody Agreement constitute the
valid and binding agreements of the Selling Stockholder enforceable in
accordance with their terms.
(c) Neither the execution and delivery of this Agreement, the Power
of Attorney, nor the Custody Agreement nor the consummation of the transactions
herein or therein contemplated nor the compliance with the terms hereof or
thereof by the Selling Stockholder will conflict with, or result in a breach of
any of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, purchase agreement or other agreement or instrument to
which the Selling Stockholder is a party or by which the Selling Stockholder is
bound and no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Selling
Stockholder of the transactions on the Selling Stockholder's part herein
contemplated, except such as may be required under the Act or under state
securities or blue sky laws.
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(d) The Selling Stockholder has not, and at the Closing Date will
not have, taken, and agrees that it will not take, directly or indirectly, any
action to cause or result in, or which has constituted, or might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of any of the Stock. Other than as
permitted by the Act and the rules and regulations thereunder, the Selling
Stockholder has not distributed and will not distribute any Preliminary
Prospectus, the Prospectus or any other offering material in connection with the
offering and sale of the Stock.
(e) Certificates in negotiable form representing the Selling
Stockholder's Stock to be sold by it have been placed in custody under the
Custody Agreement, in the form heretofore furnished to the Selling Stockholder,
duly executed and delivered by the Selling Stockholder to Hall Dickler Kent
Friedman & Wood, LLP (the "Custodian"), and the Selling Stockholder has duly
executed and delivered a Power of Attorney, in the form heretofore furnished to
you, appointing Steven D. Dreyer as the Selling Stockholder's attorney-in-fact
(the "Attorney-in-Fact") with authority to execute and deliver this Agreement on
behalf of the Selling Stockholder, to authorize the delivery of the Selling
Stockholder's Stock to be sold by the Selling Stockholder hereunder and
otherwise to act on behalf of the Selling Stockholder in connection with the
transactions contemplated by this Agreement and the Custody Agreement.
(f) The Selling Stockholder's Stock represented by the certificates
held in custody for the Selling Stockholder under the Custody Agreement are
subject to the interests of the Underwriters hereunder, and the arrangements
made by the Selling Stockholder for such custody, as well as the appointment by
the Selling Stockholder of the Attorney-in-Fact, are, to that extent,
irrevocable. The Selling Stockholder specifically agrees that its obligations
hereunder shall not be terminated by operation of law, whether by the death or
incapacity of such Selling Stockholder or by the occurrence of any other event.
3. Covenants of the Company.
The Company covenants and agrees that:
(a) It will deliver to the Representative, without charge, two
conformed copies of each Registration Statement and of each amendment or
supplement thereto, including all financial statements and exhibits.
(b) The Company has delivered to each of the Underwriters, and each
of the Selected Dealers (as hereinafter defined) without charge, as many copies
as have been requested of each Preliminary Prospectus heretofore filed with the
Commission in accordance with and pursuant to the Commission's Rule 430 under
the Act and will deliver to the Underwriters and to others whose names and
addresses are furnished by the Underwriters or a Selected Dealer, without
charge, on the Effective Date of the Registration Statement, and thereafter from
time to time during such reasonable period as you may request if, in the opinion
of counsel for the Underwriters, the Prospectus is required by law to be
delivered in connection with sales by the Underwriters or a dealer, as many
copies of the Prospectus (and, in the event of any amendment
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of or supplement to the Prospectus, of such amended or supplemented Prospectus)
as the Underwriters may request for the purposes contemplated by the Act. The
Company will take all necessary actions to furnish to whomever directed by the
Underwriters, when and as requested by the Underwriters, all necessary
documents, exhibits, information, applications, instruments and papers as may be
reasonably required or, in the opinion of counsel to the Underwriters desirable,
in order to permit or facilitate the sale of the Securities.
(c) The Company has authorized the Underwriters to use, and make
available for use by prospective dealers, the Preliminary Prospectus, and
authorizes the Underwriters, all dealers selected by you in connection with the
distribution of the Securities (the "Selected Dealers") to be purchased by the
Underwriters and all dealers to whom any of such Securities may be sold by the
Underwriters or by any Selected Dealer, to use the Prospectus, as from time to
time amended or supplemented, in connection with the sale of the Securities in
accordance with the applicable provisions of the Act, the applicable Regulations
and applicable state law, until completion of the distribution of the Securities
and for such longer period as you may request if the Prospectus is required
under the Act, the applicable Regulations or applicable state law to be
delivered in connection with sales of the Securities by the Underwriters or the
Selected Dealers.
(d) The Company will use its best efforts to cause the Registration
Statement to become effective and will notify the Representative immediately,
and confirm the notice in writing: (i) when the Registration Statement or any
post-effective amendment thereto becomes effective; (ii) of the issuance by the
Commission of any stop order or of the initiation, or to the best of the
Company's knowledge, the threatening, of any proceedings for that purpose; (iii)
the suspension of the qualification of the Securities and the Representative's
Warrants, or underlying securities, for offering or sale in any jurisdiction or
of the initiating, or to the best of the Company's knowledge the threatening, of
any proceeding for that purpose; and (iv) of the receipt of any comments from
the Commission. If the Commission shall enter a stop order at any time, the
Company will make every reasonable effort to obtain the lifting of such order at
the earliest possible moment.
(e) During the time when a prospectus is required to be delivered
under the Act, the Company will comply with all requirements imposed upon it by
the Act and the Securities Exchange Act of 1934 (the "Exchange Act"), as now and
hereafter amended and by the Regulations, as from time to time in force, as
necessary to permit the continuance of sales of or dealings in the Securities in
accordance with the provisions hereof and the Prospectus. If at any time when a
prospectus relating to the Securities is required to be delivered under the Act,
any event shall have occurred as a result of which, in the opinion of counsel
for the Company or counsel for the Underwriters, the Prospectus as then amended
or supplemented includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the Prospectus
to comply with the Act, the Company will notify you promptly and prepare and
file with the
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Commission an appropriate amendment or supplement in accordance with Section 10
of the Act and will furnish to you copies thereof.
(f) The Company will endeavor in good faith, in cooperation with
you, at or prior to the time the Registration Statement becomes effective, to
qualify the Securities for offering and sale under the securities laws or blue
sky laws of such jurisdictions as you may reasonably designate. In each
jurisdiction where such qualification shall be effected, the Company will,
unless you agree that such action is not at the time necessary or advisable,
file and make such statements or reports at such times as are or may reasonably
be required by the laws of such jurisdiction.
(g) The Company will make generally available to its security
holders, as soon as practicable, but in no event later than the first day of the
fifteenth full calendar month following the Effective Date of the Registration
Statement, an earnings statement of the Company, which will be in reasonable
detail but which need not be audited, covering a period of at least twelve
months beginning after the Effective Date of the Registration Statement, which
earnings statements shall satisfy the requirements of Section 11(a) of the Act
and the Regulations as then in effect. The Company may discharge this obligation
in accordance with Rule 158 of the Regulations.
(h) During the period of five years commencing on the Effective Date
of the Registration Statement, the Company will furnish to its stockholders an
annual report (including financial statements audited by its independent public
accountants), in reasonable detail, and, at its expense, furnish each of the
Underwriters (i) within 90 days after the end of each fiscal year of the
Company, a consolidated balance sheet of the Company and its consolidated
subsidiaries and a separate balance sheet of each subsidiary of the Company the
accounts of which are not included in such consolidated balance sheet as of the
end of such fiscal year, and consolidated statements of operations,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries and separate statements of operations, stockholders' equity and
cash flows of each of the subsidiaries of the Company the accounts of which are
not included in such consolidated statements, for the fiscal year then ended all
in reasonable detail and all certified by independent accountants (within the
meaning of the Act and the Regulations), (ii) within 45 days after the end of
each of the first three fiscal quarters of each fiscal year, similar balance
sheets as of the end of such fiscal quarter and similar statements of
operations, stockholders' equity and cash flows for the fiscal quarter then
ended, all in reasonable detail, and subject to year end adjustment, all
certified by the Company's principal financial officer or the Company's
principal accounting officer as having been prepared in accordance with
generally accepted accounting principles applied on a consistent basis, (iii) as
soon as available, each report furnished to or filed with the Commission or any
securities exchange and each report and financial statement furnished to the
Company's shareholders generally and (iv) as soon as available, such other
material as the Representative may from time to time reasonably request
regarding the financial condition and operations of the Company.
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(i) For a period of eighteen months from the Closing Date, the
Company, at its expense, shall cause its regularly engaged independent certified
public accountants to review (but not audit), the Company's financial statements
for each of the first three quarters prior to the announcement of quarterly
financial information, the filing of the Company's 10-Q quarterly report and the
mailing of quarterly financial information to stockholders.
(j) Prior to the Closing Date or the Option Closing Date, the
Company will not issue, directly or indirectly, without your prior written
consent and that of counsel for the Representative, any press release or other
public announcement or hold any press conference with respect to the Company or
its activities with respect to this Offering.
(k) The Company will deliver to you prior to filing, any amendment
or supplement to the Registration Statement or Prospectus proposed to be filed
after the Effective Date of the Registration Statement and will not file any
such amendment or supplement to which you shall reasonably object after being
furnished such copy.
(l) During the period of 120 days commencing on the date hereof, the
Company will not at any time take, directly or indirectly, any action designed
to, or which will constitute or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of the Securities to
facilitate the sale or resale of any of the Securities.
(m) The Company will apply the net proceeds from the Offering
received by it in the manner set forth under "Use of Proceeds" in the
Prospectus.
(n) Counsel for the Company, the Company's accountants, and the
officers and directors of the Company will, respectively, furnish the opinions,
the letters and the certificates referred to in subsections of Paragraph 9
hereof, and, in the event that the Company shall file any amendment to the
Registration Statement relating to the offering of the Securities or any
amendment or supplement to the Prospectus relating to the offering of the
Securities subsequent to the Effective Date of the Registration Statement, such
counsel, such accountants, such officers and directors, respectively, will, at
the time of such filing or at such subsequent time as you shall specify, so long
as securities being registered by such amendment or supplement are being
underwritten by the Underwriters, furnish to you such opinions, letters and
certificates, each dated the date of its delivery, of the same nature as the
opinions, the letters and the certificates referred to in said Paragraph 9, as
you may reasonably request, or, if any such opinion or letter or certificate
cannot be furnished by reason of the fact that such counsel or such accountants
or any such officer or director believes that the same would be inaccurate, such
counsel or such accountants or such officer or director will furnish an accurate
opinion or letter or certificate with respect to the same subject matter.
(o) The Company will comply with all of the provisions of any
undertakings contained in the Registration Statement in all material respects.
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(p) The Company will reserve and keep available for issuance that
maximum number of its authorized but unissued shares of Common Stock which are
issuable upon exercise of the Representative's Warrants outstanding from
time to time.
(q) So long as any of the Warrants remain outstanding, the Company
shall continue to employ the services of a firm of independent certified public
accountants reasonably acceptable to the Representative in connection with the
preparation of the financial statements to be included in any registration
statement to be filed by the Company hereunder, or any amendment or supplement
thereto (it being understood that Ernst & Young, LLP is acceptable to the
Representative). During the same period, the Company shall employ the services
of a law firm(s) acceptable to the Representative in connection with all legal
work of the Company, including the preparation of any registration statement
to be filed by the Company hereunder, or any amendment or supplement thereto
(it being understood that Hall Dickler Kent Friedman & Wood, LLP is acceptable
to the Representative).
(r) The Company agrees that it will, upon the Closing Date, for a
period of no less than five (5) years, engage a designee of the Representative
as an advisor (the "Advisor") to its Board of Directors where such Advisor shall
attend meetings of the Board, receive all notices and other correspondence and
communications sent by the Company to members of its Board of Directors and
shall be entitled to receive compensation therefor equal to the entitlement of
all non-employee directors. Such Advisor shall also be entitled to receive
reimbursement for all reasonable costs incurred in attending such meetings
including, but not limited to, food, lodging, and transportation. The Company
further agrees that during said five (5) year period, it shall schedule no less
than four (4) formal and "in person" meetings of its Board of Directors in each
such year and fifteen (15) days advance notice of such meetings shall be given
to the Advisor. Further, during such five (5) year period, the Company shall
give notice to the Representative with respect to any proposed acquisitions,
mergers, reorganizations or other similar transactions. In lieu of the
Representative's right to designate an Advisor, the
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Representative shall have the right during such five-year period, in its sole
discretion, to designate one person for election as a Director of the Company
and the Company will utilize its best efforts to obtain the election of such
person who shall be entitled to receive the same compensation, expense
reimbursements and other benefits set forth above.
The Company agrees to indemnify and hold the Underwriters and such
Advisor or Director harmless against any and all claims, actions, damages, costs
and expenses, and judgments arising solely out of the attendance and
participation of your designee at any such meeting described herein. In the
event the Company maintains a liability insurance policy affording coverage for
the acts of its of officers and directors, it agrees, if possible, to include
the Representative's designee as an insured under such policy.
(s) Upon the Closing Date, the Company shall have entered into an
agreement with the Representative in form reasonably satisfactory to the
Representative (the "Consulting Agreement"), pursuant to which the
Representative will be retained as a management and financial consultant and
will be paid a fee of $125,000, all of which shall be paid upon the Closing
Date.
(t) The Company's Common Stock shall be listed on the OTC Electronic
Bulletin Board not later than the Effective Date, at which time at least two (2)
broker-dealers shall be approved pursuant to Rule 15c2-11 of the Exchange Act to
make a market in the Stock. The Company shall thereafter use its best efforts to
expeditiously list its Common Stock on the Nasdaq SmallCap Market ("Nasdaq"),
and upon listing on Nasdaq, maintain such listing for at least five years from
the date of this Agreement.
(u) The Company will apply for listing in Standard and Poors
Corporation Reports or Moodys OTC Guide and shall use its best efforts to have
the Company included in such publications for at least five years from the
Closing Date.
(v) For a period of twenty-four (24) months from the Closing Date,
no officer, director or holder of any securities of the Company (other than
shares that are currently publicly traded, in the case of stockholders who are
not officers, directors or 5% or greater stockholders) prior to the Offering
will, directly or indirectly, offer, sell (including any short sale), grant any
option for the sale of, acquire any option to dispose of, or otherwise dispose
of any shares of Common Stock, including shares of Common Stock issuable upon
exercise of options, warrants or any convertible securities of the Company,
without the prior written consent of the Representative, other than as set forth
in the Registration Statement. In order to enforce this covenant, the Company
shall impose stop-transfer instructions with respect to the securities owned by
every stockholder prior to the Offering until the end of such period (subject to
any exceptions to such limitation on transferability set forth in the
Registration Statement). If necessary to comply with any applicable Blue-sky
Law, the shares held by such stockholders will be escrowed with counsel for the
Company or otherwise as required.
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(w) Except for the issuance of shares of capital stock by the
Company in connection with a dividend, recapitalization, reorganization or
similar transactions or as result of the exercise of warrants or options
disclosed in or issued or granted pursuant to plans disclosed in the
Registration Statement, the Company shall not, for a period of twenty-four (24)
months following the Closing Date, directly or indirectly, offer, sell, issue or
transfer any shares of its capital stock, or any security exchangeable or
exercisable for, or convertible into, shares of the capital stock or register
any of its capital stock (under any form of registration statement, including
Form S-8), without the prior written consent of the Representative. Options
granted pursuant to plans must be exercisable at the fair market value on the
date of grant.
(x) For a period of three years from the Effective Date, the Company
shall maintain key person life insurance payable to the Company on each of the
lives of Ronald G. Nathan, its Chief Executive, and Mikhail Leibov, the Chief
Executive of Corbina Telecommunications and Comptel Ltd., the Company's
subsidiaries, each in the amount of $1,000,000, unless his employment with the
Company is earlier terminated. In such event, the Company will obtain a
comparable policy on the life of his successor for the balance of such period.
(y) The Company will use its best efforts to obtain, as soon after
the Closing Date as is reasonably possible, liability insurance covering its
officers and directors.
(z) The Company agrees that any conflict of interest arising
between a member of the Company's Board of Directors and the Company in
connection with such Director's dealing with, or obligations to, the Company,
shall be resolved by a vote of the majority of the independent members of the
Board of Directors.
(aa) The Company agrees that it will employ the services of a
financial public relations firm acceptable to the Representative for a period of
at least twelve months following the Effective Date.
(bb) The Company shall deliver to the Representative, no later than
December 31, 1997, audited financial statements of the Company as of and for the
eleven (11) months ended November 30, 1997.
4. Sale, Purchase and Delivery of Stock: Closing Date.
(a) The Company and the Selling Stockholder agree to sell to the
Underwriters, and the Underwriters, on the basis of the warranties,
representations and agreements of the Company and the Selling Stockholder
herein, and subject to the terms and conditions herein, agree to purchase the
Stock from the Company and the Selling Stockholder, as the case may be, at a
price of $7.00 per share, less an underwriting discount of nine percent (9%) of
the offering price. The Underwriters may allow a concession not exceeding
$__________ per share of Common Stock to Selected Dealers who are members of the
National Association of Securities Dealers, Inc ("NASD"), and to certain foreign
dealers.
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(b) Delivery of the Stock and payment therefor shall be made at
10:00 A.M., New York time on the Closing Date, as hereinafter defined, at the
offices of the Representative or such other location as may be agreed upon by
you and the Company. Delivery of certificates for the Common Stock (in
definitive form and registered in such names and in such denominations as you
shall request by written notice to the Company delivered at least two business
days prior to the Closing Date), shall be made to you for the account of the
Underwriters against payment of the purchase price therefor by certified or bank
check or wire transfer payable in New York Clearing House funds to the order of
the Company. The Company will make such certificates available for inspection at
least two business days prior to the Closing Date at such place as you shall
designate.
(c) The "Closing Date" shall be __________ __, 1997, or such other
date not later than the fourth business day following the effective date of the
Registration Statement as you shall determine and advise the Company by at least
three full business days' notice, confirmed in writing.
(d) The cost of original issue tax stamps, if any, in connection
with the issuance and delivery of the Stock by the Company to the Underwriters
shall be borne by the Company. The Company will pay and hold the Underwriters,
and any subsequent holder of the Stock, harmless from any and all liabilities
with respect to or resulting from any failure or delay in paying federal and
state stamp taxes, if any, which may be payable or determined to be payable in
connection with the original issuance or sale to the Underwriters of the Stock
or any portions thereof.
5. Sale, Purchase and Delivery of Additional Stock: Option Closing
Date.
(a) The Company agrees to sell to the Underwriters, and upon the
basis of the representations, warranties and agreements of the Company herein
contained, subject to the satisfaction of all the terms and conditions of this
Agreement, the Underwriters shall have the option (the "Option") to purchase the
Additional Stock from the Company, at the same price per Stock as set forth in
Paragraph 4(a) above. Additional Stock may be purchased solely for the purpose
of covering over-allotments made in connection with the distribution and sale of
the Securities.
(b) The Option to purchase all or part of the Additional Stock
covered thereby is exercisable by you at any time and from time to time before
the expiration of a period of 45 calendar days from the Effective Date of the
Registration Statement (the "Option Period") by written notice to the Company
setting forth the number of shares of Additional Stock for which the Option is
being exercised, the name or names in which the certificates for such shares of
Additional Stock are to be registered and the denominations of such
certificates. Upon each exercise of the Option, the Company shall sell to the
Underwriters the aggregate number of shares of Additional Stock specified in the
notice exercising such Option.
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(c) Delivery of the Additional Stock with respect to which Options
shall have been exercised and payment therefor shall be made at 10:00 A.M., New
York time on the Option Closing Date, as hereinafter defined, at the offices of
the Representative or at such other locations as may be agreed upon by you and
the Company. Delivery of certificates for shares of Additional Stock shall be
made to you for the account of the Underwriters against payment of the purchase
price therefor by certified or bank check or wire transfer in New York Clearing
House Funds to the order of the Company. The Company will make certificates for
shares of Additional Stock to be purchased at the Option Closing Date available
for inspection at least two business days prior to such Option Closing Date at
such place as you shall designate.
(d) The "Option Closing Date" shall be the date not later than five
business days after the end of the Option Period as you shall determine and
advise the Company by at least three full business days' notice, unless some
other time is agreed upon between you and the Company.
(e) The obligations of the Underwriters to purchase and pay for
Additional Stock at such Option Closing Date shall be subject to compliance as
of such date with all the conditions specified in Paragraph 2 herein and the
delivery to you of opinions, certificates and letters, each dated such Option
Closing Date, substantially similar in scope to those specified in Paragraph 9
herein.
(f) The cost of original issue tax stamps, if any, in connection
with the issuance and delivery of the Additional Stock by the Company to the
Underwriters shall be borne by the Company. The Company will pay and hold the
Underwriters, and any subsequent holder of Additional Securities, harmless from
any and all liabilities with respect to or resulting from any failure or delay
in paying federal and state stamp taxes, if any, which may be payable or
determined to be payable in connection with the original issuance or sale to the
Underwriters of the Additional Stock or any portion thereof.
6. Representations and Warranties of the Underwriters.
The Underwriters represent and warrant to the Company that:
(a) The Underwriters are each members in good standing of the
National Association of Securities Dealers, Inc., and have complied with all
NASD requirements concerning net capital and compensation to be received in
connection with the Offering.
(b) To the Underwriters' knowledge, there are no claims for services
in the nature of a finder's origination fee with respect to the sale of the
Securities hereunder to which the Company is, or may become, obligated to pay.
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7. Payment of Expenses.
(a) The Company will pay and bear all costs, fees, taxes and
expenses incident to and in connection with: (i) the issuance, offer, sale and
delivery of the Securities, including all expenses and fees incident to the
preparation, printing, filing and mailing (including the payment of postage with
respect to such mailing) of the Registration Statement (including all exhibits
thereto), each Preliminary Prospectus, the Prospectus, and amendments and
post-effective amendments thereof and supplements thereto, and this Agreement
and related documents, Preliminary and Final Blue Sky Memoranda, including the
cost of preparing and copying all copies thereof in quantities deemed necessary
by the Underwriters; (ii) the costs of preparing and printing all "Tombstone"
and other appropriate advertisements; (iii) the printing, engraving, issuance
and delivery of the Common Stock, Additional Common Stock, Representative's
Warrants and Representative's Warrant Shares, including any transfer or other
taxes payable thereon in connection with the original issuance thereof; (iv) the
qualification of the Common Stock and Warrants under the state or foreign
securities or "Blue Sky" laws selected by the Underwriters and the Company, and
disbursements and reasonable fees of counsel for the Underwriters in connection
therewith (not to exceed $50,000) plus the filing fees for such states; (v) a
fee of $25,000 to be paid to counsel for the Underwriters for the preparation of
a secondary trading memorandum; (vi) fees and disbursements of counsel and
accountants for the Company; (vii) other expenses and disbursements incurred on
behalf of the Company (viii) the filing fees payable to the Commission and the
National Association of Securities Dealers, Inc. ("NASD"); and (ix) any listing
of the Common Stock on a securities exchange, on Nasdaq or on the OTC Electronic
Bulletin Board.
(b) In addition to the expenses to be paid and borne by the Company
referred to in Paragraph 7(a) above, the Company shall reimburse you at closing
for expenses incurred by you in connection with the Offering (for which you need
not make any accounting), in the amount of 3% of the price to the public of the
Stock and Additional Stock sold in the Offering. This 3% non-accountable expense
allowance shall cover the fees of your legal counsel, but shall not include any
expenses for which the Company is responsible under Paragraph 7(a) above,
including the reasonable fees and disbursements of your legal counsel with
respect to Blue Sky matters. As of the date hereof, $25,000 has been advanced by
the Company to the Underwriters with respect to such non-accountable expense
allowance. Any unaccounted for portion of the $25,000 so advanced will be
returned to the Company in the event the Offering is not consummated.
(c) In the event that the Company does not or cannot, for any reason
whatsoever other than a default by the Underwriters, expeditiously proceed with
the Offering, or if any of the Company's representations, warranties or
covenants contained in this Agreement are not materially correct or cannot be
complied with by the Company, or business prospects or obligations of the
Company are adversely affected and the Company does not commence or continue
with the Offering at any time or terminates the proposed transaction prior to
the Closing Date, the Company shall reimburse the Underwriters on an accountable
basis for all out-of-pocket expenses actually incurred in connection with the
Underwriting, this Agreement
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and all of the transactions hereby contemplated, including, without limitation,
your legal fees and expenses, up to an aggregate total of $100,000 less such
sums which have already been paid.
8. Conditions of Underwriters' Obligations.
The obligations of the Underwriters to consummate the transactions
contemplated by this Agreement shall be subject to the continuing accuracy of
the representations and warranties of the Company contained herein as of the
date hereof and as of the Closing Date, the accuracy of the statements of the
Company and its officers and directors made pursuant to the provisions hereof,
and to the performance by the Company of its covenants and agreements hereunder
and under each certificate, opinion and document contemplated hereunder and to
the following additional conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 p.m., New York time, on the date following the date of this Agreement,
or such later date and time as shall be consented to in writing by you and, on
or prior to the Closing Date, no stop order suspending the effectiveness of the
Registration Statement or the qualification or registration of the Stock under
the securities laws of any jurisdiction shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending or
to your knowledge or the knowledge of the Company, shall be contemplated by the
Commission or any such authorities of any jurisdiction and any request on the
part of the Commission or any such authorities for additional information shall
have been complied with to the reasonable satisfaction of the Commission or such
authorities and counsel to the Underwriters and after the date hereof no
amendment or supplement shall have been filed to the Registration Statement or
Prospectus without your prior consent.
(b) The Registration Statement or the Prospectus or any amendment
thereof or supplement thereto shall not contain an untrue statement of a fact
which is material, or omit to state a fact which is material and is required to
be stated therein or is necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(c) Between the time of the execution and delivery of this Agreement
and the Closing Date, there shall be no litigation instituted against the
Company or any of its officers or directors and between such dates there shall
be no proceeding instituted or, to the Company's knowledge, threatened against
the Company or any of its officers or directors before or by any federal, state
or county commission, regulatory body, administrative agency or other
governmental body, domestic or foreign, in which litigation or proceeding an
unfavorable ruling, decision or finding would have a material adverse effect on
the Company or its business, business prospects or properties, or have a
material adverse effect on the financial condition or results of operation of
the Company.
(d) Each of the representations and warranties of the Company
contained herein and each certificate and document contemplated under this
Agreement to be delivered to
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you shall be true and correct at the Closing Date as if made at the Closing
Date, and all covenants and agreements contained herein and in each such
certificate and document to be performed on the part of the Company, and all
conditions contained herein and in each such certificate and document to be
fulfilled or complied with by the Company at or prior to the Closing Date shall
be fulfilled or complied with.
(e) At the Closing Date, you shall have received the opinion of Hall
Dickler Kent Friedman & Wood, LLP, counsel to the Company, dated as of such
Closing Date, addressed to the Underwriters and in form and substance
satisfactory to counsel to the Underwriters, to the effect that:
(i) The Company and each of its Subsidiaries are corporations
duly organized, validly existing and in good standing under the laws of the
jurisdiction of their incorporation with full corporate power and authority, and
all licenses, permits, certifications, registrations, approvals, consents and
franchises to own or lease and operate their properties and to conduct their
businesses as described in the Registration Statement. The Company and each of
its Subsidiaries are duly qualified to do business as foreign corporations and
are in good standing in all jurisdictions wherein such qualification is
necessary and failure so to qualify could have a material adverse effect on the
financial condition, results of operations, business or properties of the
Company and each of its Subsidiaries;
(ii) The Company has full corporate power and authority to
execute, deliver and perform the Underwriting Agreement, the Consulting
Agreement and the Representative's Warrants and to consummate the transactions
contemplated thereby. The execution, delivery and performance of the
Underwriting Agreement, the Consulting Agreement and the Representative's
Warrants by the Company, the consummation by the Company of the transactions
therein contemplated and the compliance by the Company with the terms of the
Underwriting Agreement, the Consulting Agreement and the Representative's
Warrants have been duly authorized by all necessary corporate action, and each
of the Underwriting Agreement, the Consulting Agreement and the Representative's
Warrants have been duly executed and delivered by the Company. Each of the
Underwriting Agreement, the Consulting Agreement and the Representative's
Warrants is a valid and binding obligation of the Company, enforceable in
accordance with their respective terms, subject, as to enforcement of remedies,
to applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the rights of creditors generally and the discretion of courts in
granting equitable remedies and except that enforceability of the
indemnification provisions and the contribution provisions set forth in the
Underwriting Agreement may be limited by the federal securities laws or public
policy underlying such laws;
(iii) The execution, delivery and performance of the
Underwriting Agreement, the Consulting Agreement and the Representative's
Warrants by the Company, the consummation by the Company of the transactions
therein contemplated and the compliance by the Company with the terms of the
Underwriting Agreement, the Consulting Agreement and the Representative's
Warrants do not, and will not, with or without the giving of notice or the lapse
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of time, or both, (A) result in a violation of the Certificate of Incorporation,
as the same may be amended, or Bylaws of the Company or any of its Subsidiaries,
(B) to the best of our knowledge, result in a breach of, or conflict with, any
terms or provisions of or constitute a default under, or result in the
modification or termination of, or result in the creation or imposition of any
lien, security interest, charge or encumbrance upon any of the properties or
assets of the Company or any of its Subsidiaries pursuant to, any indenture,
mortgage, note, contract, commitment or other material agreement or instrument
to which the Company or any of its Subsidiaries are a party or by which the
Company or any of its Subsidiaries or any of their properties or assets are or
may be bound or affected, except where any of the foregoing would not result in
a material adverse effect upon the Company's or any Subsidiaries business or
operations; (C) to the best of our knowledge, violate any existing applicable
law, rule or regulation or judgment, order or decree known to us of any
governmental agency or court, domestic or foreign, having jurisdiction over the
Company or any of its Subsidiaries or any of their properties or businesses; or
(D) to the best of our knowledge, have any effect on any permit, certification,
registration, approval, consent, license or franchise necessary for the Company
or any of its Subsidiaries to own or lease and operate their properties and to
conduct their business or the ability of the Company or any of its Subsidiaries
to make use thereof;
(iv) To the best of our knowledge, no authorization, approval,
consent, order, registration, license or permit of any court or governmental
agency or body (other than under the Act, the Regulations and applicable state
securities or Blue Sky laws) is required for the valid authorization, issuance,
sale and delivery of the Stock, the Additional Stock, or the Representative's
Warrants, and the consummation by the Company of the transactions contemplated
by the Underwriting Agreement, the Consulting Agreement or the Representative's
Warrants;
(v) The Registration Statement was declared effective under
the Act on __________ ___, 1997; to the best of our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued, and
no proceedings for that purpose have been instituted or are pending, threatened
or contemplated under the Act or applicable state securities laws;
(vi) The Registration Statement and the Prospectus, as of the
Effective Date (except for the financial statements and other financial data
included therein or omitted therefrom, as to which we express no opinion),
comply as to form in all material respects with the requirements of the Act and
Regulations and the conditions for use of a registration statement on Form SB-2
have been satisfied by the Company;
(vii) The description in the Registration Statement and the
Prospectus of statutes, regulations, contracts and other documents have been
reviewed by us, and, based upon such review, are accurate in all material
respects and present fairly the information required to be disclosed, and to the
best of our knowledge, there are no material statutes or regulations, or, to the
best of our knowledge, material contracts or documents, of a character required
to be
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described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement, which are not so described or filed as
required.
To the best of our knowledge, none of the material provisions
of the contracts or instruments described above violates any existing applicable
law, rule or regulation or judgment, order or decree known to us of any United
States governmental agency or court having jurisdiction over the Company or any
of its assets or businesses;
(viii) The outstanding Common Stock has been duly authorized
and validly issued and is fully paid and nonassessable. To the best of our
knowledge, none of the outstanding Common Stock has been issued in violation of
the preemptive rights of any stockholder of the Company. None of the holders of
the outstanding Common Stock is subject to personal liability solely by reason
of being such a holder. The authorized Common Stock conforms to the description
thereof contained in the Registration Statement and Prospectus. To the best of
our knowledge, except as set forth in the Prospectus, no holders of any of the
Company's securities has any rights, "demand," "piggyback" or otherwise, to have
such securities registered under the Act;
(ix) The issuance and sale of the Stock, the Additional Stock,
the Representative's Warrants and the Representative's Warrant Shares have been
duly authorized and when issued will be validly issued, fully paid and
non-assessable, and the holders thereof will not be subject to personal
liability solely by reason of being such holders. Neither the Stock nor the
Additional Stock are subject to preemptive rights of any stockholders of the
Company. The certificates representing the Stock are in proper legal form;
(x) The issuance and sale of the Representative's Warrants and
Representative's Warrant Shares have been duly authorized and, when paid for,
issued and delivered pursuant to the terms of the Representative's Warrants,
will constitute the valid and binding obligations of the Company, enforceable in
accordance with their terms, to issue and sell the Representative's Warrants and
the Representative's Warrant Shares. All corporate action required to be taken
for the authorization, issuance and sale of the Stock has been duly, validly and
sufficiently taken. The Representative's Warrants conform to the description
thereof contained in the Registration Statement and Prospectus;
(xi) The Underwriters have acquired good title to the Stock,
free and clear of all liens, encumbrances, equities, security interests and
claims, provided that the Underwriters are bona fide purchasers as defined in
Section 8-302 of the Uniform Commercial Code;
(xii) Assuming that the Underwriters exercise the
over-allotment option to purchase the Additional Stock and make payments
therefor in accordance with the terms of the Underwriting Agreement, upon
delivery of the Additional Stock to the Underwriters thereunder, the
Underwriters will acquire good title to the Additional Stock, free and clear of
any liens, encumbrances, equities, security interests and claims, provided that
the Underwriters are bona fide purchasers as defined in Section 8-302 of the
Uniform Commercial Code;
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(xiii) To the best of our knowledge, there are no claims,
actions, suits, proceedings, arbitrations, investigations or inquiries before
any governmental agency, court or tribunal, foreign or domestic, or before any
private arbitration tribunal, pending or threatened against the Company or any
of its Subsidiaries or involving their properties or businesses, other than as
described in the Prospectus, such description being accurate, and other than
litigation incident to the kind of business conducted by the Company or any of
its Subsidiaries which, individually and in the aggregate, is not material, and,
except as otherwise disclosed in the Prospectus and the Registration Statement,
the Company and its Subsidiaries have complied with all federal and state laws,
statutes and regulations concerning its business;
(xiv) All sales of the Company's securities have been made in
compliance with or under an exemption from the registration requirements of the
Act, and no purchaser of such securities in any such sale has a right of action
against the Company for failure to comply with the registration or filing
requirements of any state; and
(xv) We have participated in reviews and discussions in
connection with the preparation of the Registration Statement and the
Prospectus. Although we are not passing upon and do not assume responsibility
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement, no facts came to our attention which lead us to believe
that (A) the Registration Statement (except as to the financial statements and
other financial data contained therein, as to which we express no opinion), on
the Effective Date, contained any untrue statement of 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, or that (B) the
Prospectus (except as to the financial statements and other financial data
contained therein, as to which we express no opinion) contains any untrue
statement or a material fact or omits to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(f) At the Closing Date, you shall have received the opinion of
Irina Igitova, Esq., special counsel to the Company with respect to the laws of
the Russian Federation, dated as of such Closing Date, addressed to the
Underwriters and in form and substance satisfactory to counsel to the
Underwriters, to the effect that:
(i) Corbina Telecommunications ("Corbina"), CompTel Ltd.
("CompTel") and Investelektrosvyaz ("Investelectro") (the "Russian
Subsidiaries") have been duly organized and are validly existing as closed joint
stock companies in good standing under the laws of the Russian Federation, and
have full corporate power and authority to own their properties and conduct
their businesses as described in the Registration Statement and Prospectus;
(ii) The Russian Subsidiaries have obtained, or are in the
process of obtaining, all licenses, permits and other governmental
authorizations necessary to conduct their businesses as described in the
Prospectus, and such licenses, permits and other governmental
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24
authorizations obtained are in full force and effect, and the Russian
Subsidiaries are in all material respects complying therewith;
(iii) The Company owns 75% of the issued and outstanding
capital stock of each of Corbina and CompTel, and CompTel owns 51% of
Investelectro; all of the Russian Subsidiaries' outstanding securities have been
duly authorized, are validly issued, fully paid and non-assessable and have not
been issued in violation of the preemptive rights of any security holder;
(iv) Such counsel knows of no pending or threatened legal or
governmental proceedings to which either or the Russian Subsidiaries are a party
which could materially adversely affect the business, property, financial
conduct or operations of either of the Russian Subsidiaries;
(v) Such counsel is familiar with all contracts or other
agreements entered into by the Russian Subsidiaries with other Russian
companies, entities, banking institutions or individuals referred to in the
Registration Statement and Prospectus (collectively, the "Russian Agreements"),
and all such Russian Agreements are valid, binding and enforceable under Russian
law, and to the knowledge of such counsel, neither of the Russian Subsidiaries
is in default under any of the Russian Agreements;
(vi) Neither of the Russian Subsidiaries is in violation of or
in default under its Charter Documents or Bylaws, or to the knowledge of such
counsel, in the performance or observance of any material obligation, agreement,
covenant or condition contained in any bond, debenture, note or other evidence
of indebtedness or in any contract, indenture, mortgage, loan agreement or
instrument to which either Russian Subsidiary is are a party or by which it or
any of its properties may be bound, or in violation of any material order, rule,
regulation, writ, injunction or decree of any government or governmental
instrumentality or court; and
(vii) Pursuant to the laws of the Russian Federation, the
minority stockholders of Corbina, CompTel and Investelectro will not be able to
prevent the Company from carrying out the businesses of such Russian
Subsidiaries or the Company, such as consummating material transactions or
declaring dividends in cash or stock.
(g) On or prior to the Closing Date, counsel for the Underwriters
shall have been furnished such documents, certificates and opinions as they may
reasonably require for the purpose of enabling them to review the matters
referred to in subparagraphs (e) and (f) of this Paragraph 9, or in order to
evidence the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained.
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25
(h) Prior to the Closing Date:
(i) There shall have been no material adverse change in the
condition or prospects or the business activities, financial or otherwise, of
the Company from the latest dates as of which such condition is set forth in the
Registration Statement and Prospectus;
(ii) There shall have been no transaction, outside the
ordinary course of business, entered into by the Company from the latest date as
of which the financial condition of the Company is set forth in the Registration
Statement and Prospectus which is material to the Company, which is either (x)
required to be disclosed in the Prospectus or Registration Statement and is not
so disclosed, or (y) likely to have material adverse effect on the Company's
business or financial condition;
(iii) The Company shall not be in default under any material
provision of any instrument relating to any outstanding indebtedness, except as
described in the Prospectus;
(iv) No material amount of the assets of the Company shall
have been pledged, mortgaged or otherwise encumbered, except as set forth in the
Registration Statement and Prospectus;
(v) No action, suit or proceeding, at law or in equity, shall
have been pending or to its knowledge threatened against the Company or
affecting any of its properties or businesses before or by any court or federal
or state commission, board or other administrative agency wherein an unfavorable
decision, ruling or finding would materially and adversely affect the business,
operations, prospects or financial condition or income of the Company, taken as
a whole, except as set forth in the Registration Statement and Prospectus; and
(vi) No stop order shall have been issued under the Act and no
proceedings therefor shall have been initiated or, to the Company's knowledge,
threatened by the Commission.
(vii) Each of the representations and warranties of the
Company contained in this Agreement and in each certificate and document
contemplated under this Agreement to be delivered to you was, when originally
made and is at the time such certificate is dated, true and correct.
(i) Concurrently with the execution and delivery of this Agreement
and at the Closing Date, you shall have received a certificate of the Company
signed by the Chief Executive Officer of the Company and the principal financial
officer of the Company, dated as of the Closing Date, to the effect that the
conditions set forth in subparagraph (h) above have been satisfied and that, as
of the Closing Date, the representations and warranties of the Company set forth
in Paragraph 2 herein and the statements in the Registration Statement and
Prospectus were and are true and correct. Any certificate signed by any of
officer of the
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Company and delivered to you or for counsel for the Underwriters shall be deemed
a representation and warranty by the Company to the Underwriters as to the
statements made therein.
(j) At the time this Agreement is executed, and at the Closing Date,
you shall have received "cold comfort" letters, addressed to the Underwriters
and in form and substance satisfactory in all respects to you and counsel for
the Underwriters, from Ernst & Young LLP and Ernst & Young (CIS) Limited, dated
as of the date of this Agreement and as of the Closing Date.
(k) All proceedings taken in connection with the authorization,
issuance or sale of the Stock, Additional Stock, the Representative's Warrants
and the Representative's Warrant Shares as herein contemplated shall be
satisfactory in form and substance to you and to counsel to the Underwriters,
and the Underwriters shall have received from such counsel an opinion, dated as
the Closing Date with respect to such of these proceedings as you may reasonably
require.
(l) The Company shall have furnished to you such certificates,
additional to those specifically mentioned herein, as you may have reasonably
requested in a timely manner as to the accuracy and completeness, at the Closing
Date, of any statement in the Registration Statement or the Prospectus, as to
the accuracy, at the Closing Date, of the representations and warranties of the
Company herein and in each certificate and document contemplated under this
Agreement to be delivered to you, as to the performance by the Company of its
obligations hereunder and under each such certificate and document or as to the
fulfillment of the conditions concurrent and precedent to your obligations
hereunder.
(m) The obligation of the Underwriters to purchase Additional Stock
hereunder is subject to the accuracy of the representations and warranties of
the Company contained herein on and as of the Option Closing Date and to the
satisfaction on and as of the Option Closing Date of the conditions set forth
herein.
(n) On the Closing Date there shall have been duly tendered to you
for your account the appropriate number of shares of Common Stock constituting
the Stock.
(o) The Company's Common Stock shall be listed on the OTC Electronic
Bulletin Board not later than the Effective Date, at which time at least two (2)
broker-dealers shall be approved pursuant to Rule 15c2-11 of the Exchange Act to
make a market in the Common Stock.
(p) At the Closing Date, you shall have received the opinion of Hall
Dickler Kent Friedman & Wood, LLP, counsel for the Selling Stockholder, dated as
of such Closing Date, addressed to the Underwriters and in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
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(i) This Agreement has been validly executed and delivered by or on
behalf of the Selling Stockholder and constitutes a valid and binding
agreement of the Selling Stockholder;
(ii) The Power of Attorney and Custodian Agreement have been validly
executed and delivered by the Selling Stockholder and constitute valid and
binding agreements of the Selling Stockholder; and
(iii) Valid title to the Selling Stockholder's Stock sold by the
Selling Stockholder shall be delivered on the Closing Date, free and clear
of any liens, claims, encumbrances and perfected security interests
whatsoever.
9. Indemnification and Contribution.
(a) Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless the Underwriters and each person, if any, who
controls the Underwriters ("controlling person") within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act, against any and all
losses, liabilities, claims, damages, actions and expenses or liability, joint
or several, whatsoever (including but not limited to any and all expense
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever), joint or
several, to which it or such controlling persons may become subject under the
Act, the Exchange Act or under any other statute or at common law or otherwise
or under the laws of foreign countries, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any Preliminary Prospectus or the Prospectus (as from
time to time amended and supplemented); in any post-effective amendment or
amendments or any new registration statement and prospectus in which is included
the Representative's Warrant Shares upon exercise of the Representative's
Warrants; or in any application or other document or written communication (in
this Paragraph 9 collectively called "application") executed by the Company or
based upon written information furnished by the Company filed in any
jurisdiction in order to qualify the Stock, Additional Stock, Representative's
Warrants and Representative's Warrant Shares under the securities laws thereof
or filed with the Commission or any securities exchange; or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading (in the case of the
Prospectus, in the light of the circumstances under which they were made),
unless such statement or omission was made in reliance upon or in conformity
with written information furnished to the Company with respect to the
Underwriters by or on behalf of the Underwriters expressly for use in any
Preliminary Prospectus, the Registration Statement or Prospectus, or any
amendment or supplement thereof, or in application, as the case may be.
Notwithstanding the foregoing, the Company shall have no liability under this
Paragraph 10(a) if any such untrue statement or omission made in a Preliminary
Prospectus, is cured in the Prospectus and the Underwriters failed to deliver to
the person or persons alleging the liability upon which indemnification is being
sought, at or prior to the written confirmation of such sale, a copy of the
Prospectus. This indemnity will be in addition to any liability which the
Company may otherwise have.
-27-
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(b) The Underwriters agree to indemnify and hold harmless the
Company and each of the officers and directors of the Company who have signed
the Registration Statement and each other person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
the Underwriters in Paragraph 9(a), but only with respect to any untrue
statement or alleged untrue statement of any material fact contained in or any
omission or alleged omission to state a material fact required to be stated in
any Preliminary Prospectus, the Registration Statement or Prospectus or any
amendment or supplement thereof or necessary to make the statements therein not
misleading or in any application made solely in reliance upon, and in conformity
with, written information furnished to the Company by you specifically expressly
for use in the preparation of such Preliminary Prospectus, the Registration
Statement or Prospectus directly relating to the transactions effected by the
Underwriters in connection with this Offering. This indemnity agreement will be
in addition to any liability which the Underwriters may otherwise have.
Notwithstanding the foregoing, the Underwriters shall have no liability under
this Paragraph 9(b) if any such untrue statement or omission made in a
Preliminary Prospectus is cured in the Prospectus, and the Prospectus is
delivered to the person or persons alleging the liability upon which
indemnification is being sought.
(c) If any action is brought against any indemnified party (the
"Indemnitee") in respect of which indemnity may be sought against another party
pursuant to the foregoing (the "Indemnitor"), the Indemnitor shall assume the
defense of the action, including the employment and fees of counsel (reasonably
satisfactory to the Indemnitee) and payment of expenses. Any Indemnitee shall
have the right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such Indemnitee unless
the employment of such counsel shall have been authorized in writing by the
Indemnitor in connection with the defense of such action. If the Indemnitor
shall have employed counsel to have charge of the defense or shall previously
have assumed the defense of any such action or claim, the Indemnitor shall not
thereafter be liable to any Indemnitee in investigating, preparing or defending
any such action or claim. Each Indemnitee shall promptly notify the Indemnitor
of the commencement of any litigation or proceedings against the Indemnitee in
connection with the issue and sale of the Common Stock, Warrants, Warrants
Shares, Additional Securities, Underwriters' Securities or in connection with
the Registration Statement or Prospectus.
(d) In order to provide for just and equitable contribution under
the Act in any case in which: (i) the Underwriters make a claim for
indemnification pursuant to Paragraph 10 hereof, but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction
and the time to appeal has expired or the last right of appeal has been denied)
that such indemnification may not be enforced in such case notwithstanding the
fact that this Paragraph 9 provides for indemnification of such case; or (ii)
contribution under the Act may be required on the part of the Underwriters in
circumstances for which indemnification is provided under this Paragraph 9,
then, and in each such case, the Company and the Underwriters shall contribute
to the aggregate losses, claims, damages or liabilities to which they may be
subject (after any contribution from others) in such proportion so that the
Underwriters are responsible for the portion represented by dividing the total
compensation received by the
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Underwriters herein by the total purchase price of all Securities sold in the
public offering and the Company is responsible for the remaining portion;
provided, that in any such case, no person guilty of a 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 foregoing contribution agreement shall in no way affect the
contribution liabilities of any persons having liability under Section 11 of the
Act other than the Company and the Underwriters. As used in this Paragraph 9,
the term "Underwriters" includes any officer, director, or other person who
controls the Underwriters within the meaning of Section 15 of the Act, and the
word "Company" includes any of officer, director or person who controls the
Company within the meaning of Section 15 of the Act. If the full amount of the
contribution specified in this paragraph is not permitted by law, then the
Underwriters and each person who controls the Underwriters shall be entitled to
contribution from the Company to the full extent permitted by law. No
contribution shall be requested with regard to the settlement of any matter from
any party who did not consent to the settlement.
(e) Within fifteen (15) days after receipt by any party to this
Agreement (or its representative) of notice of the commencement of any action,
suit or proceeding, such party will, if a claim for contribution in respect
thereof is made against another party (the "contributing party"), notify the
contributing party of the commencement thereof, but the omission so to notify
the contributing party will not relieve it from any liability it may have to any
other party other than for contribution hereunder.
In case any such action, suit or proceeding is brought against any
party, and such party notifies a contributing party or his or its representative
of the commencement thereof within the aforesaid fifteen (15) days, the
contributing party will be entitled to participate therein with the notifying
party and any other contributing party similarly notified. Any such contributing
party shall not be liable to any party seeking contribution on account of any
settlement of any claim, action or proceeding effected by such party seeking
contribution without the written consent of such contributing party. The
indemnification provisions contained in this Paragraph 9 are in addition to any
other rights or remedies which either party hereto may have with respect to the
other or hereunder.
10. Representations Warranties Agreements to Survive Delivery.
The respective indemnity and contribution agreements by the Underwriters
and the Company contained in Paragraph 9 hereof, and the covenants,
representations and warranties of the Company and the Underwriters set forth in
this Agreement, shall remain operative and in full force and effect regardless
of (i) any investigation made by the Underwriters or on its behalf or by or on
behalf of any person who controls the Underwriters, or by the Company or any
controlling person of the Company or any director or any of officer of the
Company, (ii) acceptance of any of the Securities and payment therefor, or (iii)
any termination of this Agreement, and shall survive the delivery of the
Securities and any successor of the
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Underwriters or the Company, or of any person who controls you or the Company or
any other indemnified party, as the case may be, shall be entitled to the
benefit of such respective indemnity and contribution agreements. The respective
indemnity and contribution agreements by the Underwriters and the Company
contained in this Paragraph 10 shall be in addition to any liability which the
Underwriters and the Company may otherwise have.
11. Effective Date of This Agreement and Termination Thereof.
(a) This Agreement shall become effective at 10:00 A.M., New York
time, on the first full business day following the day on which you and the
Company receive notification that the Registration Statement became effective.
(b) This Agreement may be terminated by the Representative by
notifying the Company at any time on or before the Closing Date, if any domestic
or international event or act or occurrence has materially disrupted, or in your
opinion will in the immediate future materially disrupt, securities markets; or
if trading on the New York Stock Exchange, the American Stock Exchange, or in
the over-the-counter market shall have been suspended, or minimum or maximum
prices for trading shall have been fixed, or maximum ranges for prices for
securities shall have been required on the over-the-counter market by the NASD
or NASDAQ or by order of the Commission or any other governmental authority
having jurisdiction; or if a moratorium in foreign exchange trading by major
international banks or persons has been declared; or if the Company shall have
sustained a loss material or substantial to the Company taken as a whole by
fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity
or malicious act which, whether or not such loss shall have been insured, will,
in your opinion, make it inadvisable to proceed with the delivery of the
Securities; or if there shall have been a material adverse change in the
conditions of the securities market in general, as in your reasonable judgment
would make it inadvisable to proceed with the offering, sale and delivery of the
Securities; or if there shall have been a material adverse change in the
financial or securities markets, particularly in the over-the-counter market, in
the United States having occurred since the date of this Agreement.
(c) If you elect to prevent this Agreement from becoming effective
or to terminate this Agreement as provided in this Paragraph 11, the Company
shall be notified promptly by you by telephone or facsimile, confirmed by
letter.
(d) If this Agreement shall not become effective by reason of an
election of the Representative pursuant to this Paragraph 11 or if this
Agreement shall not be carried out within the time specified herein by reason of
any failure on the part of the Company to perform any undertaking, or to satisfy
any condition of this Agreement by it to be performed or satisfied, the sole
liability of the Company to the Underwriters, in addition to the obligations
assumed by the Company pursuant to Paragraph 7 herein, will be to reimburse the
Underwriters for the following: (i) Blue Sky counsel fees and expenses to the
extent set forth in Paragraph 7(a)(iv); (ii) Blue Sky filing fees; and (iii)
such reasonable out-of-pocket expenses of the Underwriters (including the fees
and disbursements of their counsel), to the extent set forth in Paragraph 7(c),
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in connection with this Agreement and the proposed offering of the Stock, but in
no event to exceed the sum of $100,000 less such amounts already paid.
Notwithstanding any contrary provision contained in this Agreement,
any election hereunder or any termination of this Agreement, and whether or not
this Agreement is otherwise carried out, the provisions of Paragraphs 7 and 9
hereof shall not be in any way affected by such election or termination or
failure to carry out the terms of this Agreement or any part hereof.
12. Notices.
All communications hereunder, except as herein otherwise specifically
provided, shall be in writing and, if sent to the Underwriters, shall be mailed,
delivered or telegraphed and confirmed to the Representative at J.W. Barclay &
Co., Inc., One Battery Park Plaza, New York, New York 10004 Attention: John
Cioffoletti, with a copy thereof to Lawrence G. Nusbaum, Esq., Gusrae Kaplan &
Bruno, 120 Wall Street, New York, New York 10005, and, if sent to the Company,
shall be mailed, delivered or telegraphed and confirmed to the Company at 780
Third Avenue, New York, New York 10017, Attention: Ronald G. Nathan, President,
with a copy thereof to Hall Dickler Kent Friedman & Wood, LLP, 909 Third Avenue,
New York, New York 10022, Attention: Steven D. Dreyer, Esq.
13. Parties.
This Agreement shall inure solely to the benefit of and shall be binding
upon, the Underwriters, the Company and the controlling persons, directors and
officers referred to in Paragraph 9 hereof, and their respective successors,
legal representatives and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
14. Construction.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York and shall supersede any
agreement or understanding, oral or in writing, express or implied, between the
Company and you relating to the sale of any of the Securities.
15. Jurisdiction and Venue.
The Company agrees that the courts of the State of New York shall have
jurisdiction over any litigation arising from this Agreement, and venue shall be
proper in the Southern District of New York.
16. Counterparts.
This agreement may be executed in counterparts.
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If the foregoing correctly sets forth the understanding between you, the
Selling Stockholders and the Company, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement between us.
Very truly yours,
RUSSIAN WIRELESS TELEPHONE COMPANY, INC.
By:______________________________________
Ronald G. Nathan, President
The Selling Stockholder:
THE CAM NEELEY FOUNDATION
By:______________________________________
Accepted as of the date first
above written:
J.W. BARCLAY & CO., INC.
By:_____________________________________
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SCHEDULE A
Common Stock to be Sold By the Selling Stockholder
Name Number of Shares
The Cam Neeley Foundation 30,000
------
Total: 30,000
======
34
SCHEDULE B
Number of Shares
of common Stock
to be Purchased
---------------
Underwriter
- -----------
J.W. Barclay & Co., Inc.
----------
Total: $1,650,000
==========
35
RUSSIAN WIRELESS TELEPHONE COMPANY, INC.
INSTRUCTIONS
FOR COMPLETING THE CUSTODY AGREEMENT AND POWER OF ATTORNEY
THE ATTACHED AGREEMENT MUST BE COMPLETED AND SIGNED BY EACH
STOCKHOLDER WHO WISHES TO SELL SHARES IN THE PROPOSED OFFERING. ALL
SIGNATURES MUST BE GUARANTEED BY A BANK OR TRUST COMPANY OR MEMBER
OF THE NEW YORK OR AMERICAN STOCK EXCHANGE (SEE INSTRUCTION "D").
A. You have been sent four copies of the Custody Agreement and Power of
Attorney (the "Custody Agreement"). Please complete and return three copies of
the Custody Agreement to the address listed in paragraph F below together with
your endorsed stock certificate(s). One completed copy of the Custody Agreement
will be retained by the Custodian, one will be sent to the Attorney-In-Fact and
one will be returned to you.
B. The Custody Agreement includes a questionnaire on pages 10 through 15,
which will be used to prepare any amendments to a Registration Statement on Form
SB-2 (No. 333-24177) which was filed by Russian Wireless Telephone Company, Inc.
(the "Company") with the Securities and Exchange Commission on March 28, 1997.
You must answer each question fully and carefully.
C. You must indicate the number of shares you wish to sell by completing
page 18 of the Custody Agreement.
D. YOU MUST SIGN EACH COPY OF THE CUSTODY AGREEMENT ON PAGE 17, AND YOU
ALSO MUST SIGN EACH STOCK CERTIFICATE (OR THE ACCOMPANYING STOCK POWER)
DEPOSITED HEREUNDER. YOUR SIGNATURE MUST APPEAR ON THE CUSTODY AGREEMENT AND THE
STOCK CERTIFICATE OR THE ACCOMPANYING STOCK POWER GUARANTEED BY ANY BANK OR
TRUST COMPANY OR ANY BROKER WHO IS A MEMBER OF THE NEW YORK OR AMERICAN STOCK
EXCHANGE. PLEASE SIGN THE STOCK CERTIFICATE (OR THE ACCOMPANYING STOCK POWER)
AND EACH COPY OF THE CUSTODY AGREEMENT EXACTLY AS YOUR NAME APPEARS ON YOUR
STOCK CERTIFICATE.
E. IF STOCK CERTIFICATES TO BE DEPOSITED ARE ISSUED IN THE NAME OF
TRUSTEES, EXECUTORS, ADMINISTRATORS, GUARDIANS, PARTNERS, ATTORNEYS-IN-FACT,
NOMINEES, OR OTHERS ACTING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY, THE
CUSTOMARY EVIDENCE OF AUTHORITY OF THE PERSON OR PERSONS MAKING THE DEPOSIT MUST
ACCOMPANY THE STOCK CERTIFICATES, TOGETHER WITH TRUE AND COMPLETE COPIES OF ANY
TRUST INSTRUMENT. EACH NOMINEE SHOULD ATTACH A CERTIFIED COPY OF HIS APPOINTMENT
AS NOMINEE OR A CERTIFIED AUTHORIZATION OF SUCH NOMINEE STATUS.
F. Endorsed stock certificates or stock certificates with stock powers
attached along with fully executed copies of the
36
completed Custody Agreement, and any other documents you are executing in
connection with this transaction, should be promptly forwarded to:
Hall Dickler Kent Friedman & Wood, LLP
909 Third Avenue
New York, New York 10022
Attention: Steven D. Dreyer, Esq.
G. If any certificate which you submit represents a greater number than
the Shares to be sold by you, the Custodian will cause to be delivered to you a
certificate for the excess number of shares within 10 days after the closing of
the sale by the Underwriters.
H. PLEASE CONTACT MR. RONALD G. NATHAN, PRESIDENT OF THE COMPANY, IF ANY
INFORMATION OR REPRESENTATION INCLUDED IN THE ENCLOSED CUSTODY AGREEMENT SHOULD
CHANGE PRIOR TO THE SALE OF YOUR SHARES.
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37
CUSTODY AGREEMENT AND POWER OF ATTORNEY
for
Sale of Shares of Common Stock, $.01 Par Value
RUSSIAN WIRELESS TELEPHONE COMPANY
Hall Dickler Kent Friedman & Wood, LLP
909 Third Avenue
New York, New York 10022
Attention: Steven D. Dreyer, Esq.
("Attorney-In-Fact" and "Custodian")
Dear Sirs:
The undersigned stockholder (the "Selling Stockholder") of Russian
Wireless Telephone Company, Inc., a Delaware corporation (the "Company"), and
the Company desire to sell certain shares of the Common Stock of the Company,
$.01 par value (the "Common Stock"), to J.W. Barclay & Co. Inc. as the
representative of the underwriters (the "Representative") for distribution under
a Registration Statement on Form SB-2 (File No. 333-24177) (the "Registration
Statement") to the public at a price and on terms to be determined as
hereinafter set forth. The Company proposes to issue and sell an aggregate of
1,620,000 shares of its authorized and unissued Common Stock and has granted the
Underwriters an option to purchase up to an additional 247,500 shares of its
authorized and unissued Common Stock on the terms and conditions of the
Underwriting Agreement, as defined below. The Selling Stockholder proposes to
sell an aggregate of 30,000 shares of Common Stock. The aggregate number of
shares or any portion thereof to be sold are referred to hereinafter as the
"Purchased Shares"; the aggregate number of shares or any portion thereof
included in the option granted the Underwriters are referred to hereinafter as
the "Option Shares"; and the Purchased Shares and the Option Shares together
sometimes are referred to hereinafter as the "Shares". It is understood that
such sale to the Underwriters shall be entered into only if, as and when the
Attorney-In-Fact (as hereinafter defined), acting for the Selling Stockholder in
his discretion determines that such sale is in the best interests of the Selling
Stockholder.
A. Power of Attorney
The undersigned hereby irrevocably constitutes and appoints Steven D.
Dreyer his true and lawful agent and attorney ("Attorney-In-Fact") with respect
to all matters arising in connection with the public offering and sale of the
Shares to be sold by the undersigned to the Underwriters, including, but not
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38
limited to, the power and authority on behalf of the undersigned to
do any and all of the following things:
1. To make, execute and deliver an underwriting agreement (the
"Underwriting Agreement") substantially in the form of the draft thereof
which the undersigned has received and which was filed as Exhibit 1.1 to
the Registration Statement, but with such insertions, changes, additions
or deletions as the Attorney-In-Fact shall determine to be not materially
adverse to the undersigned, and not inconsistent with the draft thereof,
such approval to be conclusively evidenced by his execution and delivery
thereof, and to carry out and comply in his sole discretion with all the
provisions of the Underwriting Agreement, including the making of all
representations and agreements provided in the Underwriting Agreement to
be made by, and to exercise all authority thereunder vested in, the
undersigned.
2. To sell, assign and transfer to the Underwriters pursuant to
Section 4 of the Underwriting Agreement the aggregate number, but not less
than the aggregate number, of Purchased Shares listed in Schedule A hereto
and deposited hereunder for sale by the undersigned.
3. To negotiate, determine and agree upon (a) the price at which the
Shares (including the Shares to be sold by the undersigned) will be sold
by the Selling Stockholders to the Underwriters pursuant to the
Underwriting Agreement, and (b) the price at which the Shares (including
the Shares to be sold by the undersigned) initially will be offered to the
public by the Underwriters, such price to be not less than $7.00 per share
and to include an Underwriters' discount and commission of not more than
9%. The difference between the price paid by the Underwriters to the
Company and the price at which the Shares are offered and sold to the
public represents a portion of the Underwriters' compensation for its
services.
4. To take any and all steps deemed necessary or desirable by the
Attorney-In-Fact in connection with the registration with the Securities
and Exchange Commission (the "Commission") of the Shares under the
Securities Act of 1933, as amended (the "Securities Act"), and the
registration or qualification of the Shares under the securities or blue
sky laws of any jurisdiction, including the requesting of acceleration of
effectiveness of the Registration Statement, the filing of letters with
the Commission and such other steps as the Attorney-In-Fact may deem
necessary or advisable.
5. To represent to the Commission, if requested by the Commission,
that the undersigned is selling the Shares owned by him for the purposes
of raising funds or diversifying the investment portfolio of the
undersigned.
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39
6. To accept and deliver to the Custodian, on behalf of the
undersigned, any certificates for shares of stock of the Company issued in
the name of the undersigned after the date hereof but prior to the sale of
the Shares to the Underwriters.
7. If necessary, to endorse (in blank or otherwise) on behalf of the
undersigned the certificate or certificates representing the Shares to be
sold by the undersigned, or a stock power or powers attached to such
certificate or certificates, and to transfer and deliver such certificate
or certificates representing such Shares to or upon the order of the
Underwriters.
8. To instruct the Company's transfer agent with respect to all
matters pertaining to the certificates representing the Shares; to cause
the Company's transfer agent to issue and register a certificate or
certificates representing the Shares in accordance with the directions of
the Underwriters; and to permit inspection and packaging of such
certificates by the Underwriters, in each case as provided in the
Underwriting Agreement.
9. To retain Messrs. Hall Dickler Kent Friedman & Wood, LLP, as
legal counsel for the Selling Stockholder.
10. Subject to the terms and conditions of Section 1 hereof,
otherwise to take all actions and do all things, in his discretion,
including the execution and delivery of all documents necessary or proper,
required, contemplated or deemed advisable by the Selling Stockholder and
generally to act for and in the name of the undersigned with respect to
the sale of the Shares to the Underwriters and re-offering of the Shares
by the Underwriters as fully as could the undersigned if then personally
present and acting.
The Attorney-In-Fact hereby is empowered to determine in his sole
discretion the time or times when, and the purposes for and the manner in which,
any power herein conferred upon him by the Selling Stockholder shall be
exercised and to exercise any such power.
This Power of Attorney shall terminate (other than as provided in Section
H hereof) when the Shares to be sold by the Selling Stockholder have been
delivered and paid for as provided in the Underwriting Agreement and any and all
actions required to be taken by the Custodian under this Agreement and the
Underwriting Agreement have been completed.
-5-
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B. Deposit of Shares
For the purposes hereof, the undersigned herewith transmits to the
Custodian, one or more certificates representing not less than the aggregate
number of Shares set forth with respect to the undersigned in Schedule A
attached hereto. Each such certificate so delivered (i) is in negotiable and
proper deliverable form with the signature of the undersigned to the endorsement
thereon guaranteed by a bank or trust company having an office or a
correspondent in New York City or by a member of the New York Stock Exchange or
American Stock Exchange, or (ii) is accompanied by a duly executed stock power
or powers, in blank, bearing the signature of the undersigned so guaranteed. The
Custodian is hereby authorized and directed, subject to the instructions of the
Attorney-In-Fact: (i) to hold the Shares represented by the certificate or
certificates referred to above in custody; (ii) to make such other appropriate
arrangements as may be necessary for the safekeeping of said certificate or
certificates and the delivery thereof for sale to the Underwriters at the date
of delivery; and (iii) to deliver to the undersigned new certificates for the
untransferred balance, if any, of the shares of Common Stock evidenced by the
enclosed certificate or certificates.
If acting as a trustee or in any other fiduciary or representative
capacity, the undersigned has delivered duly certified copies of each trust
agreement, will, letters testamentary or other instrument pursuant to which the
undersigned is authorized to act as a Selling Stockholder. The undersigned
agrees to deliver to the Attorney-In-Fact or the Custodian such additional
documentation as the Company or the Underwriters may request to effectuate any
of the provisions hereof or of the Underwriting Agreement.
C. Sale of Shares
The Custodian hereby is authorized and directed to deliver to the
Underwriters certificates for the Shares to be sold by the undersigned as
provided in the Underwriting Agreement against delivery to the Custodian for the
account of the undersigned of the purchase price payable by the Underwriters in
the form of a certified check of J.W. Barclay & Co., Inc., or by bank cashier's
check in New York Clearing House funds payable to the order of each of the
Selling Stockholders for their respective amounts. The Custodian is authorized,
on behalf of the undersigned, to accept and acknowledge receipt of the payment
of the purchase price for the Shares to be sold by the undersigned.
D. Representations, Warranties and Agreements
The undersigned represents and warrants to, and agrees with the Company
and the Underwriters that (i) the undersigned has reviewed carefully the proof
of the Underwriting Agreement,
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including without limitation, the representations and warranties to be made by
the undersigned as a Selling Stockholder contained in Section 2.B, the
certificate referred to in Section 8(i), and the indemnity and contribution
provisions contained in Section 9; (ii) such representations and warranties are
true and correct as of the date hereof and will be true and correct at the time
of the execution of the Underwriting Agreement and the time of the sale of the
Shares to the Under-writers; and (iii) such covenants and agreements are valid
and binding as of the date hereof and will be valid and binding at the time of
the execution of the Underwriting Agreement and the time of the sale of the
Shares to the Underwriters. This Agreement constitutes a representation that the
undersigned has received the Preliminary Prospectus of the Company and, except
as set forth under "Exceptions" below, the information contained in such
Preliminary Prospectus with respect to the undersigned is true and correct.
The foregoing representations, warranties and agreements, as well as those
contained in the Questionnaire which comprises Section I of this Agreement, and
those contained in the Underwriting Agreement, are and will be made for the
benefit of, and may be relied upon by, the Underwriter, the Attorney-in-Fact,
and the Custodian and their respective representatives, agents and counsel.
EXCEPTIONS:
E. Irrevocability of Instruments
This Agreement, the deposit pursuant hereto of certificates representing
the Shares, and all authority herein conferred, is granted, made and conferred
subject to and in consideration of the interest of the Underwriters and the
Company, for the purpose of completing the transactions contemplated hereunder
and by the Underwriting Agreement; and the Attorney-In-Fact further is vested
hereby with an estate, right, title and interest in and to the Shares for the
purpose of irrevocably empowering and securing to him authority sufficient to
consummate said transactions at the time of purchase. Accordingly, this
Agreement shall be irrevocable prior to August 31, 1997 and shall remain in full
force and effect until that date. Furthermore, for the consideration herein
referred to and in consideration of the said interest in the Shares, the
undersigned agrees that this Agreement is irrevocable and shall not be
terminated by operation of law upon the occurrence of any event whatsoever.
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42
F. Rights and Obligations of the Selling Stockholder
Until payment in full for the Shares has been made by or for the account
of the Underwriters, as above provided, the undersigned Selling Stockholder
shall remain the owner of his Shares and shall retain all rights of ownership
with respect to the Shares, including the right to vote and to receive any
dividends and payment thereon, except the right to dispose of the Shares, which
is subject to the Attorney-In-Fact's, rights pursuant hereto and subject to the
Underwriting Agreement. However, until such payment in full has been made, or
until the Underwriting Agreement has been terminated, the undersigned agrees not
to give, pledge, hypothecate, grant liens on, transfer, deal with or contract
with respect to, the Shares, or any interest therein, except in accordance with
the Underwriting Agreement, and the Custodian shall not seek, request or demand
any transfer, or transfer any, of the Shares except pursuant to the Underwriting
Agreement.
G. Liability and Indemnification of
the Attorney-In-Fact and Custodian
Subject to the terms and conditions of Section A.1 hereof, the
Attorney-In-Fact and the Custodian are authorized to accept this Agreement and
take any and all actions hereunder as the Attorney-In-Fact, in his sole
discretion, shall determine. The Attorney-In-Fact and Custodian assume no
responsibility or liability to the undersigned or to any other person, other
than to deal with the Shares and any other shares of Common Stock held and
received by the Attorney-In-Fact or deposited with the Custodian pursuant to the
terms of this Agreement in accordance with the provisions hereof. The
undersigned hereby does agree to indemnify and hold harmless the
Attorney-In-Fact and the Custodian with respect to anything done by them in good
faith in connection with any and all matters contemplated by this Agreement or
the Underwriting Agreement.
H. Return of Undelivered Shares
If the Underwriting Agreement is not executed and delivered prior to
November 30, 1997, or if the Underwriting Agreement shall be executed and
delivered and then terminated pursuant to the provisions thereof without
purchase of the Shares, this Custody Agreement (and the Power of Attorney
included herein) shall terminate, and the Attorney-In-Fact, after all
obligations hereunder or under the Underwriting Agreement have been fulfilled,
shall instruct the Custodian to return to the undersigned the Shares held in
custody for the account of the undersigned, together with any applicable stock
powers, unless this Agreement is extended by written notice from the Selling
Stockholder.
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43
I. Questionnaire
In connection with the preparation of the Registration Statement it is
necessary that the Company obtain from you the information called for by the
following questions. The information supplied in response to this Questionnaire
will be used to assure that certain of the information included in the
Registration Statement is correct. Accordingly, great care should be exercised
in the completion of the following questions,
If the answer to any item is negative, or if such item is inapplicable,
please so state in the space provided. If the space provided is insufficient for
a complete answer, additional sheets may be attached to this Agreement.
Question 1. Before answering this question, please read the explanatory
information concerning "beneficial ownership" which follows this question.
Please state as of (I) October 15, 1997, and (II) immediately following
the sale of the Shares by you to the Underwriters:
I II
As of
Oct. 15, 1997 After sale
------------- ----------
A.1. The number of shares
of the Company's Common Stock
beneficially owned, directly or
indirectly, by you:
2. The number of shares
listed in A.1 as to which you
have sole voting power: _____ shares _____ shares
share voting power: _____ shares _____ shares
have sole investment/
disposition power: _____ shares _____ shares
share investment/
disposition power: _____ shares _____ shares
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44
I II
As of
Oct. 15, 1997 After sale
------------- ----------
3. The number of shares
of the Company's Common Stock
owned of record by you: _____ shares _____ shares
4. Whether the shares
listed in A.3 are included in
those listed in A.1: Yes____No____ Yes____No____
B.1. The number of shares
of Company Common Stock that are
owned by a partnership, firm,
corporation, trust, estate or
voting trust of which you are a
partner, director, officer,
principal stockholder, trustee,
executor or participant: _____ shares _____ shares
2. The name (or other
identification) of any such
partnership, firm, corporation,
trust, estate or voting trust:
3. Whether the shares
listed in B.1 are included in
those listed in A.1: Yes____No____ Yes____No____
C.1. The number of shares
of Company Common Stock with
respect to which you have the
right to acquire beneficial
ownership, directly or
indirectly, within 60 days
pursuant to the power to
revoke or the automatic
termination of a trust,
discretionary account or
similar arrangement: _____ shares _____ shares
through the exercise of
any option, warrant or
right _____ shares _____ shares
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45
I II
As of
Oct. 15, 1997 After sale
------------- ----------
2. Whether the shares
listed in C.1 are included
in those listed in A.1: Yes____No____ Yes____No____
Note: Items A, B and C are intended to elicit information as to the nature of
your beneficial ownership of shares (such as record ownership, beneficial
ownership by virtue of your having or sharing voting or investment powers,
beneficial ownership by reason of your right to acquire, etc.). If you do not
believe that the nature of your beneficial ownership is apparent from your
responses to items A, B and C, please further explain below:
D. The number of shares
reported as beneficially owned
by you under Question A.1 that
are subject to any put, call,
straddle or other option, or to
any pledge, hypothecation or
other agreement which may affect
your ownership thereof, and the
nature of the option or
agreement involved:
_____ shares _____ shares
E.1. The number of shares
reported as beneficially owned
by you under Question A.1 as to
which you disclaim beneficial
ownership: _____ shares _____ shares
2. If you disclaim
beneficial ownership of any
shares, please briefly identify
such shares and state the
reasons for such disclaimer:
Beneficial ownership: A beneficial owner of a security includes any person who,
directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise has or shares (1) voting power, including the power to
direct the voting of such security or (2) disposition power, including the power
to dispose of or direct the disposition of such security. In addition, a person
is deemed to have "beneficial ownership" of any securities as to which such
person has the right to acquire beneficial ownership at any time within 60 days,
including, but not limited to, any right to acquire:
(i) through the exercise of any option, warrant or
right;
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46
(ii) through the conversion of any security;
(iii) pursuant to the power to revoke a trust,
discretionary account or similar arrangement; or
(iv) pursuant to the automatic termination of a trust,
discretionary account or similar arrangement.
It is possible that a security may have more than one "beneficial owner,"
such as a trust, with two co-trustees sharing voting power, and the settler or
another third party having investment power, and the settler or another third
party having investment power, in which case each of the three would be the
"beneficial owner" of the securities in the trust. The power to vote or direct
the voting, or to invest or dispose of, or direct the investment or disposition
of, a security may be indirect and arise from legal, economic, contractual or
other rights, and the determination of beneficial ownership depends on who
ultimately possesses or shares the power to direct the voting or the disposition
of the security.
The final determination of the existence of beneficial ownership depends
on the facts of each case; you may, in the space provided after Question 1.E.2,
disclaim beneficial ownership of securities held in the name of another,
although indicating the holdings of such other person. Since beneficial
ownership by you of securities registered in the name of another may have
serious consequences, financial or otherwise, to you, you should use great care,
and if necessary consult your attorney, before reporting such shares as
beneficially owned.
Question 2. Describe briefly and state the approximate amount of any
interest, direct or indirect, which you or any of your associates had or have in
any transaction, or series of similar transactions, occurring in whole or in
part since April 1994 or in any proposed transaction, or series of similar
transactions, to which the Company was, or is to be, a party. You may merely
affirm the statements made in the Preliminary Prospectus dated September 16,
1997 under the heading "Certain Relationships and Related Transactions." (You
need not describe transactions in which you or any associate did not have an
aggregate interest exceeding $10,000 or any transaction in which your interest
arose solely from your ownership of securities of the Company provided that you
received no extra or special benefit not shared on a pro rata basis by all other
security holders.) For purposes of the foregoing, your "associates" include:
(1) Any corporation or other organization (other than the Company) of
which you are an officer or partner or of which you beneficially
own, directly or indirectly, 10% or more of any class of equity
securities;
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47
(2) Any trust or estate in which you have a substantial beneficial
interest or as to which you serve as trustee, executor or in a
similar fiduciary capacity; and
(3) Your spouse and any relative of yours or of your spouse if such
relative either lives with you or is a director or officer of the
Company or any of its subsidiaries.
ANSWER:
Question 3. Please describe briefly any material legal proceeding pending
or known to be contemplated in which you or any of your associates (as defined
in the previous question) has an interest adverse to the Company, including the
name of the court or agency in which any proceeding is pending or known to be
contemplated, the date instituted or the date you anticipate it will be
instituted, the principal parties thereto, a description of the factual basis
alleged to underlie the proceeding or contemplated proceeding and the relief
sought or to be sought.
ANSWER:
Question 4. Do you know of any arrangement (other than the proposed
Underwriting Agreement) made or to be made by any person for any of the
following purposes: (a) to limit or restrict the sale of shares of the Company's
Common Stock during the period of distribution; (b) to stabilize the market for
any shares of the Company's Common Stock to be offered; or (c) to withhold
commissions, or otherwise to hold the Underwriters or each dealer responsible
for the distribution of his participation in connection with the proposed
offering?
Yes_________ No_________
If yes, please summarize your knowledge of such arrangement:
Question 5. Please state whether (a) you are, directly or indirectly,
affiliated or associated with any member of the National Association of
Securities Dealers, Inc. or (b) you have been or might be an underwriter, or a
controlling person or member
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48
of any investment banking or brokerage firm which has been or might be an
underwriter, for securities of the Company including the securities now being
registered. If your answer to (a) is in the affirmative, please state the name
of such member and the nature of the relationship. If your answer to (b) is in
the affirmative, please state any underwriting discounts and commissions
received or which might be received by you or such firm upon the sale of
securities by the Company.
ANSWER:
Question 6. Please state each person or specify each class of persons
(other than underwriters or dealers, as such) to whom any shares of Common Stock
of the Company have been sold by you or any associate (as defined in Question 2)
of yours, since April 26, 1994 or are to be sold by you or any such associate of
yours. In answering this question, please make a separate statement with respect
to each sale of Common Stock, giving the number of shares of Common Stock sold,
the price at which such shares were sold and the consideration given for the
shares so sold.
ANSWER:
Question 7. Do you or does any associate (as defined in Question 2) of
yours have any understanding or agreement to sell to anyone shares of Common
Stock other than pursuant to the Underwriting Agreement? If yes, please give
details of any such sale, undertaking or agreement, including the date(s),
number of shares, sale price and party to whom sold or to be sold.
ANSWER:
J. Miscellaneous
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.
Receipt by the Attorney-In-Fact and the Custodian of executed counterparts
of this Agreement, or any certificate representing Shares deposited hereunder,
shall constitute acceptance by each of the Attorney-In-Fact and the Custodian of
the authorizations herein
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49
conferred and evidence the agreement of each of the Attorney-In-Fact and the
Custodian to carry out and to perform this Agreement in accordance with the
provisions hereof.
The validity, enforceability, interpretation and construction of this
Agreement shall be determined in accordance with the laws of the State of New
York and shall inure to the benefit of, and this Agreement shall be binding
upon, the undersigned and the undersigned's heirs, executors, administrators,
successors end assigns, as the case may be.
If any word, phrase, clause, portion or provision of this Agreement shall
be held or deemed to be, or shall in fact be, inoperative or unenforceable as
applied in any particular case or circumstance in any applicable jurisdiction or
jurisdiction because if conflicts with any other provision hereof, or any
constitution, statute or rule of public policy, or for any other reason, such
eventuality shall not render any of the aforesaid inoperative or unenforceable
in any other case or circumstance, or render any one or more or combination of
any words, phrases, clauses, portions, or provisions herein invalid,
inoperative, ultra vires or unenforceable to any extent whatsoever.
The undersigned hereby ratifies and confirms all that the Attorney-In-Fact
shall do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Agreement on this
_____ day of __________, 1997.
Signature:
_________________________________
Signature of Selling __________________________________
Stockholder Guaranteed Please sign exactly as your
by: name appears on your stock
certificate.
Name and address to which
___________________________ notices and funds shall be
*(See Note below) sent (please print or type),
_________________________________
(Name)
_________________________________
(Street)
_________________________________
(City) (State) (Zip Code, if in USA)
*(NOTE: The Stockholder's signature must be guaranteed by a bank or trust
company or by a member of the New York or American Stock Exchange.)
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50
SCHEDULE A
Certificate for Shares of Common Stock of
RUSSIAN WIRELESS TELEPHONE COMPANY, INC.
Deposited Herewith
1. Your exact name and address:
2. Certificates for Shares of Common Stock Deposited
A B C
No. of Shares
No. of Shares of Common Stock
of Common Stock from This
Certificate represented by Certificate
Number Certificate* To Be Sold**
- --------------- --------------- ---------------
- --------------- --------------- ---------------
- --------------- --------------- ---------------
- --------------------
* The number to be inserted in this column is the number
appearing on the stock certificate you are submitting for
sale.
** The number to be inserted in this column is the number of shares from the
certificate that you want to sell. If you deposit a certificate or
certificates representing more shares than you plan to sell, the Custodian
will cause to be delivered to you a new certificate representing the
number of shares to be retained by you within ten days after the closing
of the sale to the Underwriters.