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$100,000,000
GLOBAL TELESYSTEMS GROUP, INC.
% SENIOR NOTES DUE 2005
UNDERWRITING AGREEMENT
February [ ], 1998
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.,
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇
& ▇▇▇▇▇ INCORPORATED
UBS SECURITIES LLC
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Ladies and Gentlemen:
Global Telesystems Group, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell $100,000,000 of its % Senior Notes due 2005 (the
"SECURITIES") to the several underwriters named in Schedule I hereto (the
"UNDERWRITERS"). The Securities are to be issued pursuant to the provisions of
an Indenture to be dated as of February [ ], 1998 (the "Indenture") between the
Company and The Bank of New York, as Trustee (in such capacity, the "TRUSTEE").
SECTION 1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "1933 ACT"), a registration statement on Form S-1, including
a prospectus, relating to the Securities. The registration statement, as amended
at
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the time it became effective, including the information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430A under the 1933 Act, is hereinafter referred to as the "REGISTRATION
STATEMENT"; and the prospectus in the form first used to confirm sales of
Securities is hereinafter referred to as the "PROSPECTUS". If the Company has
filed or is required pursuant to the terms hereof to file a registration
statement pursuant to Rule 462(b) under the 1933 Act registering additional %
Senior Notes due 2005 (a "RULE 462(B) REGISTRATION STATEMENT"), then, unless
otherwise specified, any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462(b) Registration Statement. Promptly
after execution and delivery of this Agreement, the Company will prepare and
file a prospectus in accordance with the provisions of Rule 430A ("RULE 430A")
of the 1933 Act and paragraph (b) of Rule 424 ("RULE 424(B)") of the 1993 Act.
The information included in any such prospectus that was omitted from such
Registration Statement at the time it became effective but that is deemed to be
part of such Registration Statement at the time it became effective pursuant to
paragraph (b) of Rule 430A is referred to as "RULE 430A INFORMATION."
SECTION 2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell, and each Underwriter
agrees, severally and not jointly, to purchase from the Company the principal
amount of Securities set forth opposite the name of such Underwriter in Schedule
I hereto at ____% of the principal amount thereof (the "PURCHASE PRICE").
Contemporaneously with the offering of the Securities, the Company will
be offering 11,100,000 shares of common stock, par value $.10 per share, with
8,800,000 shares being offered in the United States and Canada (the "U. S.
OFFERING") and 2,200,000 shares being offered in a concurrent offering outside
the United States and Canada (the "INTERNATIONAL OFFERING" and together with the
U.S. Offering, the "STOCK OFFERINGS"). Consummation of each of the Stock
Offerings and the offering of the Securities is conditioned upon the
consummation of the other.
SECTION 3. Terms of Public Offering. The Company is advised by you that
the Underwriters propose (i) to make a public offering of their respective
portions of the Securities as soon after the execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Securities upon the terms set forth in the PROSPECTUS.
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A portion of the net proceeds from the sale of the Notes (the "INITIAL
ESCROW AMOUNT"), representing funds that, together with the proceeds from the
investment thereof, will be sufficient to pay the first four scheduled interest
payments on the Securities (the "ESCROW FUNDS"), are to be placed in an escrow
account and held by the Escrow Agent (as defined below) for the benefit of the
Trustee and the holders of the Securities pursuant to an escrow agreement, to be
dated the Closing Date (the "ESCROW AGREEMENT") among the Company, The Bank of
New York, as escrow agent (in such capacity, "ESCROW AGENT"), and the Trustee.
SECTION 4. Delivery and Payment. The Securities shall be represented by
definitive certificates and shall be issued in such authorized denominations and
registered in such names as ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
shall request no later than two business days prior to the Closing Date (as
defined below). The Company shall deliver the Securities, with any transfer
taxes thereon duly paid by the Company, to ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation through the facilities of The Depository Trust Company
("DTC"), for the respective accounts of the several Underwriters, against
payment to the Company of the Purchase Price therefore by wire transfer of
Federal or other funds immediately available in New York City. The certificates
representing the Securities shall be made available for inspection by the
Underwriters not later than 10:00 A.M., New York City time, on the business day
prior to the Closing Date. The time and date of delivery and payment for the
Securities shall be 9:00 A.M., New York City time, on February [ ], 1998 or such
other time on the same or such other date as ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation and the Company shall agree in writing. The time and date
of such delivery and payment are hereinafter referred to as the "CLOSING DATE".
The documents to be delivered on the Closing Date on behalf of the
parties hereto pursuant to Section 8 of this Agreement shall be delivered at the
offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and
the Securities shall be delivered at the office of DTC or its designated
custodian (the "DESIGNATED OFFICE"), all on the Closing Date.
SECTION 5. Agreements of the Company. The Company agrees with you:
(a) Subject to Section 5(b), to comply with the requirements of Rule
430A and notify ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation immediately,
and confirm the notice in writing, (i) when any post-effective amendment
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to the Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of
any proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) To give ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation notice
of its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)) or any amendment, supplement or
revision to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ Securities Corporation with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and not
to file or use any such document to which ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation or counsel for the Underwriters shall reasonably object
within three Business Days after being furnished such documents.
(c) That the Company has furnished or will deliver to the Underwriters
and counsel for the Underwriters, without charge, signed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein) and
signed copies of all consents and certificates of experts, and will also deliver
to the Underwriters, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without exhibits)
for each of the Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation S-T.
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(d) That the Company has delivered to each Underwriter, without charge,
as many copies of each preliminary prospectus as such Underwriter reasonably
requested, and the Company hereby consents to the use of such copies for
purposes permitted by the 1933 Act. The Company will furnish to each
Underwriter, without charge, during the period when the Prospectus is required
to be delivered under the 1933 Act or the Securities Exchange of 1934 (the "1934
ACT"), such number of copies of the Prospectus (as amended or supplemented) as
such Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(e) To comply with the 1933 Act so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement and the
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the reasonable
opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement any Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the reasonable opinion
of any such counsel, at any such time to amend the Registration Statement or
amend or supplement any Prospectus in order to comply with the requirements of
the 1933 Act, the Company will promptly prepare and file with the Commission,
subject to Section 5(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(f) To timely file such reports pursuant to the 1934 Act as are
necessary in order to make generally available to its securityholders an
earnings statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(g) To use the net proceeds received by it from the sale of the
Securities in the manner specified in the Prospectus under "Use of Proceeds."
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(h) So long as the Securities are outstanding, to furnish to you as
soon as available copies of all reports or other communications furnished to its
security holders or furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed
and such other publicly available information concerning the Company and its
subsidiaries as you may reasonably request.
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company's counsel and
the Company's accountants in connection with the registration and delivery of
the Securities under the 1933 Act and all other fees and expenses in connection
with the preparation, printing, filing and distribution of the Registration
Statement (including financial statements and exhibits), any preliminary
prospectus, the Prospectus and all amendments and supplements to any of the
foregoing, including the mailing and delivering of copies thereof to the
Underwriters and dealers in the quantities specified herein, (ii) all costs and
expenses related to the transfer and delivery of the Securities to the
Underwriters, including any transfer or other taxes payable thereon, (iii) all
costs of printing or producing this Agreement and any other agreements or
documents in connection with the offering, purchase, sale or delivery of the
Securities, (iv) the filing fees and disbursements of counsel for the
Underwriters in connection with the review and clearance of the offering of the
Securities by the National Association of Securities Dealers, Inc., (v) the cost
of printing certificates representing the Securities, (vi) the costs and charges
of any transfer agent, registrar and/or depositary (including DTC), (vii) any
fees charged by rating agencies for the rating of the Securities, (viii) the
fees and expenses of the Trustee and the Trustee's counsel in connection with
the Indenture, the Escrow Agreement and the Securities and (ix) all other costs
and expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section.
(j) During the period beginning on the date hereof and continuing to
and including the Closing Date, not to offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities of the Company or any
warrants, rights or options to purchase or otherwise acquire debt securities of
the Company substantially similar to the Securities (other than (i) the
Securities and (ii) commercial paper issued in the ordinary course of business),
without the prior written consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation.
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(k) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company prior to
the Closing Date and to satisfy all conditions precedent to the delivery of the
Securities.
(l) If the Registration Statement at the time of the effectiveness of
this Agreement does not cover all of the Securities, to file a Rule 462(b)
Registration Statement with the Commission registering the Securities not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time, on the
date of this Agreement and to pay to the Commission the filing fee for such Rule
462(b) Registration Statement at the time of the filing thereof or to give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the 1933 Act.
(m) Pursuant to the Escrow Agreement, to deposit the Initial Escrow
Amount into an escrow account in the United States, representing the Escrow
Funds, and will take all actions necessary to pledge, assign and set over to the
Trustee, for the benefit of the holders of the Securities, and irrevocably grant
to the Trustee for the benefit of the holders of the Securities a first priority
perfected security interest in, all of its right, title and interest in such
escrow account, all funds held therein and all other Escrow Collateral (as such
term is defined in the Escrow Agreement, the "ESCROW COLLATERAL") held by the
Trustee or on its behalf, in order to secure the obligations and indebtedness of
the Company under the Indenture, the Escrow Agreement and the Securities.
(n) To furnish to the Trustee on each anniversary of the Issue Date
(upon receipt of written notice from Escrow Agent) until the date upon which the
balance of Escrow Funds shall have been reduced to zero, an Opinion of Counsel,
dated as of such date, either (i) stating that (A) in the opinion of such
counsel, action has been taken with respect to the recording, registering,
filing, re-recording, re-registering and refiling of all supplemental
indentures, financing statements, continuation statements or other instruments
of further assurance as is necessary to maintain the lien of the Escrow
Agreement and reciting the details of such action or referring to prior Opinions
of Counsel in which such details are given and (B) based on relevant laws as in
effect on the date of such Opinion of Counsel, all financing statements and
continuation statements have been executed and filed that are necessary as of
such date and during the succeeding 12 months fully to preserve and protect, to
the extent such protection and preservation are possible by filing, the rights
of the holders of Securities and the Trustee hereunder and under the Escrow
Agreement with respect to the
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security interests in the Escrow Collateral or (ii) stating that, in the
opinion of such counsel, no such action is necessary to maintain such lien and
assignment.
(o) During the period when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act, to file all documents required to be filed
with the Commission pursuant to the 1934 Act and rules and regulations of the
Commission thereunder within the time periods referred to therein.
(p) To comply with Rule 463 of the 1933 Act.
SECTION 6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that, as of the date hereof and as
of the Closing Date, and agrees with each Underwriter as follows:
(a) The Registration Statement has become effective under the 1933 Act
and no stop order suspending the effectiveness of the Registration Statement has
been issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are contemplated
by the Commission, and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement and any
post-effective amendments thereto became effective and on the Closing
Date, the Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading. Neither the Prospectus nor any amendments or supplements
thereto (including any prospectus wrapper), at the time the Prospectus
or any amendments or supplements thereto were issued and on the Closing
Date, included or will include an untrue statement of a material fact
or omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. The representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or the Prospectus made in
reliance upon and in conformity with information furnished to the
Company in writing by or on behalf of any Underwriter expressly for use
in the Registration Statement or the Prospectus.
Each preliminary prospectus and the Prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment
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thereto, or filed pursuant to Rule 424 under the 1933 Act, complied
when so filed in all material respects with the requirements of the
1933 Act and each preliminary prospectus and the Prospectus delivered
to the Underwriters for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with
the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(b) The accountants who certified the financial statements and
supporting schedules included in the Registration Statement are independent
public accountants as required by the 1933 Act.
(c) The financial statements included in the Registration Statement and
the Prospectus, together with the related schedules and notes, present fairly
the financial position of the entities to which they relate as of the dates
indicated and their respective results of operations, stockholders' equity and
cash flows for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The supporting
schedules included in the Registration Statement present fairly in accordance
with GAAP the information required to be stated therein. The selected financial
data and the summary financial information included in the Prospectus present
fairly the information shown therein and, in the case of the consolidated
financial data therein, have been compiled on a basis consistent with that of
the audited financial statements included in the Registration Statement, and in
the case of the combined financial data therein, have been compiled from
financial statements prepared on a basis consistent with that of the audited
financial statements included in the Registration Statement.
(d) Since the respective dates as of which information is given in the
Registration Statement (at the time it became effective), except as otherwise
stated therein (at the time it became effective), (i) there has been no material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business (a "MATERIAL ADVERSE EFFECT"), (ii) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise, and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock.
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(e) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware and has
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into and
perform its obligations under this Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except where
the failure so to qualify or to be in good standing would not, singly or in the
aggregate, result in a Material Adverse Effect.
(f) Each "significant subsidiary" of the Company (as such term is
defined in Rule 1-02 of Regulation S-X) and each entity in which the Company has
a direct or indirect majority equity interest or voting power (each a
"SUBSIDIARY" and, collectively, the "SUBSIDIARIES") has been duly organized (to
the extent applicable) and is validly existing as a corporation, general
partnership, limited partnership, limited liability company, closed joint stock
company or similar entity in good standing (to the extent applicable) under the
laws of the jurisdiction of its organization, has organizational power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not, singly or in the aggregate, result in a
Material Adverse Effect; except as otherwise disclosed in the Registration
Statement, all of the issued and outstanding capital stock or other ownership
interests of each such Subsidiary has been duly authorized and validly issued,
is fully paid and non-assessable (to the extent applicable) and is owned by the
Company, directly or through Subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock or other ownership interests of any
Subsidiary was issued in violation of the preemptive or similar rights of any
securityholder of such Subsidiary. The only subsidiaries of the Company are (i)
the subsidiaries listed on Exhibit 21 to the Registration Statement and (ii)
certain other subsidiaries which, considered in the aggregate as a single
Subsidiary, do not constitute a "significant subsidiary" as defined in Rule 1-02
of Regulation S-X.
(g) The authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectus in the column entitled "Actual" under the
caption "Capitalization" (except for subsequent issuances, if any, in connection
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with the Stock Offerings, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the exercise of
convertible securities or options referred to in the Prospectus). The shares of
issued and outstanding capital stock of the Company have been duly authorized
and validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock of the Company was issued in violation of
the preemptive or other similar rights of any securityholder of the Company.
(h) This Agreement has been duly authorized, executed and delivered by
the Company.
(i) The Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended (the "TRUST INDENTURE ACT"), and has been duly authorized,
by the Company and, when executed and delivered by the Company and the Trustee,
will be a valid and binding agreement of the Company, enforceable in accordance
with its terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.
(j) The Escrow Agreement has been duly authorized by the Company and,
on the Closing Date, will have be duly executed and delivered by the Company.
When the Escrow Agreement has been executed and delivered, it will be a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability.
(k) At the time of deposit with the Escrow Agent of the Initial Escrow
Amount no lien will exist upon the Escrow Collateral and no right or option to
acquire the same exists in favor of any other person or entity, except for the
pledge and security interest in favor of the Trustee, for the benefit of the
holders of the Securities, to be created or provided for in the Escrow
Agreement, which pledge and security interest shall constitute a first priority
perfected pledge and security interest in and to all of the Escrow Collateral.
(l) The Securities have been duly authorized and, on the Closing Date,
will have been validly executed and delivered by the Company. When the
Securities have been executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, the Securities will be entitled to
the benefits
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of the Indenture and will be valid and binding obligations of the
Company, enforceable in accordance with their terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(m) Neither the Company nor any of its Ventures (as defined below) is
in violation of its charter or by-laws (or equivalent organizational document)
or in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its Ventures is a party or by which it or any of
them may be bound, or to which any of the property or assets of the Company or
any Venture is subject (collectively, "AGREEMENTS AND INSTRUMENTS") except for
such defaults that would not, singly or in the aggregate, result in a Material
Adverse Effect; and the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated in this Agreement and in
the Registration Statement (including the issuance and sale of the Securities
and the use of the proceeds from the sale of the Securities as described in the
Prospectus under the caption "Use of Proceeds") and compliance by the Company
with its obligations under this Agreement have been duly authorized by all
necessary corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any Venture pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens, charges
or encumbrances that would not result in a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter or by-laws
(or equivalent organizational document) of the Company or any Venture or any
applicable law, statute, rule, regulation, judgment, order, writ or decree of
any government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Venture or any of their assets, properties
or operations. As used herein, (i) "VENTURES" means all entities in which the
Company has a direct or indirect greater than 25% equity interest or voting
power and (ii) a "REPAYMENT EVENT" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company or any
Venture.
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(n) No labor dispute with the employees of the Company or any Venture
exists or, to the knowledge of the Company, is threatened, and the Company is
not aware of any existing or threatened labor disturbance by the employees of
any of its or any Venture's principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to, singly or in
the aggregate, result in a Material Adverse Effect.
(o) There is no action, suit, proceeding, inquiry or investigation
before or brought by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened, against
or affecting the Company or any Venture, which is required to be disclosed in
the Registration Statement (other than as disclosed therein), or which, singly
or in the aggregate, might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets of the Company or any Venture or the
consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any Venture is
a party or of which any of their respective property or assets is the subject
which are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, singly or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.
(p) There are no contracts or documents which are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits thereto which have not been so described and filed as required.
(q) The Company and the Ventures own or possess, or can acquire on
reasonable terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "INTELLECTUAL PROPERTY") necessary to carry on the business now
operated by them, except to the extent the failure to so own, possess or be able
to acquire would not result in a Material Adverse Effect, and neither the
Company nor any Venture has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any Venture therein, and which infringement or conflict (if the
subject of any unfavorable
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decision, ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.
(r) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the performance by the Company
of its obligations hereunder, in connection with the offering, issuance or sale
of the Securities under this Agreement and the Indenture or the consummation of
the transactions contemplated by this Agreement, the Escrow Agreement and the
Indenture, except such as have been already obtained or as may be required under
the 1933 Act and foreign or state securities or blue sky laws.
(s) Except as otherwise disclosed in the Registration Statement, the
Company and the Ventures possess such material permits, licenses, approvals,
consents and other authorizations (collectively, "GOVERNMENTAL LICENSES") issued
by the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them; the Company and
the Ventures are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not, singly
or in the aggregate, result in a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not have a Material Adverse
Effect; and neither the Company nor any Venture has received any notice of
proceedings relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.
(t) The Company and the Ventures have good and marketable title to all
real property owned by the Company and the Ventures and good title to all other
properties owned by them, in each case, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or encumbrances of any
kind except such as (i) are described in the Prospectus or (ii) do not, singly
or in the aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company or any Venture; and all of the leases and subleases material to the
business of the Company and the Ventures, considered as one enterprise, and
under which the Company or any Venture holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor any
Venture has any notice of any material claim of any sort that has been asserted
by anyone adverse to the rights of the Company or any Venture under any of the
leases or
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subleases mentioned above, or affecting or questioning the rights of the
Company or such Venture to the continued possession of the leased or subleased
premises under any such lease or sublease.
(u) The Company has complied with, and is and will be in compliance
with, the provisions of that certain Florida act relating to disclosure of doing
business with Cuba, codified as Section 517.075 of the Florida statutes, and the
rules and regulations thereunder or is exempt therefrom.
(v) Neither the Company nor any of its Subsidiaries is, nor upon the
issuance and sale of the Securities as herein contemplated and the application
of the net proceeds therefrom as described in the Prospectus will be, an
"investment company" or an entity "controlled" by an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (the
"1940 ACT").
(w) Except as described in the Registration Statement and except as
would not, singly or in the aggregate, result in a Material Adverse Effect, (A)
neither the Company nor any Venture is in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including, without limitation, laws and regulations
relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "HAZARDOUS MATERIALS") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "ENVIRONMENTAL LAWS"), (B) the
Company and the Ventures have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any Ventures and (D) there are no
events or circumstances that might reasonably be expected to form the basis of
an order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the Company
or any Ventures relating to Hazardous Materials or any Environmental Laws.
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(x) Except as disclosed in the Prospectus, there are no persons with
registration rights or other similar rights to have any securities registered
pursuant to the Registration Statement or otherwise registered by the Company
under the 1933 Act.
(y) Any certificate signed by any officer of the Company or any
Ventures delivered to the Underwriters or to counsel for the Underwriters shall
be deemed a representation and warranty by the Company herein to each
Underwriter as to the matters covered thereby.
(z) Neither the Company nor any of its Subsidiaries or Ventures nor any
agent thereof acting on the behalf of them has taken, and none of them will
take, any action that might cause this Agreement or the issuance or sale of the
Securities to violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R.
Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part
224) of the Board of Governors of the Federal Reserve System.
SECTION 7. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Underwriter, its directors, its officers and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act as follows:
(i) from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any
reasonable legal or other reasonable expenses incurred in connection
with investigating or defending any matter, including any action, that
could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or any
amendment thereto), the Prospectus (or any amendment or supplement
thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to
any Underwriter furnished in writing to the Company by such Underwriter
through you expressly for use therein;
(ii) against any and all loss, liability, claim, damage and
reasonable expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened,
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or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to clause (B) of Section 7(c) below) any such settlement
is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter who
failed to deliver a Prospectus (as then amended or supplemented, provided by the
Company to the several Underwriters in the requisite quantity and on a timely
basis to permit proper delivery on or prior to the Closing Date) to the person
asserting any losses, claims, damages and liabilities and judgments caused by
any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, if such material misstatement or omission
or alleged material misstatement or omission was cured in such Prospectus and
such Prospectus was required by law to be delivered at or prior to the written
confirmation of sale to such person.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, to the
same extent as the foregoing indemnity from the Company to such Underwriter but
only with reference to information relating to such Underwriter furnished in
writing to the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
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against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all reasonable fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 7(a) and 7(b), the Underwriter shall not be
required to assume the defense of such action pursuant to this Section 7(c), but
may employ separate counsel and participate in the defense thereof, but the fees
and expenses of such counsel, except as provided below, shall be at the expense
of such Underwriter). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, in the case
of parties indemnified pursuant to Section 7(a), and by the Company, in the case
of parties indemnified pursuant to Section 7(b). The indemnifying party shall
indemnify and hold harmless the indemnified party from and against any and all
losses, claims, damages, liabilities and judgments by reason of any settlement
of any action (A) effected with its written consent or (B) effected without its
written consent if (i) such settlement is entered into more than forty-five
business days after the indemnifying party shall have received a request from
the indemnified party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the indemnifying
party), (ii) such indemnifying party shall have received notice of the terms of
such settlement at least 45 days prior to such settlement being entered into and
(iii) prior to the date of such settlement, the indemnifying party shall have
failed
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to comply with such reimbursement request. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from
all liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 7 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Securities or (ii) if the allocation provided by clause 7(d)(i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause 7(d)(i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions but before deducting expenses) received
by the Company, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Securities, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Company on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
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rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7(d) are several in proportion to the respective
principal amount of Securities purchased by each of the Underwriters hereunder
and not joint.
(e) The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
SECTION 8. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Securities under this Agreement
are subject to the accuracy of the representations and warranties of the Company
contained in Section 6 hereof and in certificates of any officer of the Company,
any Subsidiary or any Venture delivered pursuant to the provisions hereof, to
the performance by the Company of its covenants and other obligations hereunder,
and to the satisfaction of each of the following further conditions:
(a) The Registration Statement has become effective and on the Closing
Date no stop order suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus containing the Rule
430A Information shall have been filed with the Commission in accordance with
Rule
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424(b) (or a post-effective amendment providing such information shall have
been filed and declared effective in accordance with the requirements of Rule
430A).
(b) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same force
and effect as if made on and as of the Closing Date.
(c) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York City
time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(d) On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have been given
of any potential or intended downgrading, suspension or withdrawal of, or of any
review (or of any potential or intended review) for a possible change that does
not indicate the direction of the possible change in, any rating of the Company
or any securities of the Company (including, without limitation, the placing of
any of the foregoing ratings on credit watch with negative or developing
implications or under review with an uncertain direction) by any "nationally
recognized statistical rating organization" as such term is defined for purposes
of Rule 436(g)(2) under the 1933 Act, (ii) there shall not have occurred any
change, nor shall any notice have been given of any potential or intended
change, in the outlook for any rating of the Company or any securities of the
Company by any such rating organization and (iii) no such rating organization
shall have given notice that it has assigned (or is considering assigning) a
lower rating to the Securities than that on which the Securities were marketed.
(e) On the Closing Date, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Underwriters shall have
received a certificate of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company, dated as of
the Closing Date, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 6 hereof are true and
correct with the same force and effect
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as though expressly made at and as of the Closing Date, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Date, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission.
(f) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there shall not have been any change or any development involving
a prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 8(e)(i),
8(e)(ii) or 8(e)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Securities on the terms and in
the manner contemplated in the Prospectus.
(g) You shall have received on the Closing Date an opinion, dated the
Closing Date, of each of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Company, ▇▇▇▇▇
▇▇▇▇▇▇, Senior Vice President and General Counsel of the Company and Coudert
Brothers [and others], special counsels for the Company, each in form and
substance satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letters for each of the other Underwriters to the
effect set forth in the Exhibits A-1 through A-__ hereto.
The opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ described in Exhibit A-1 hereto
shall be rendered to you at the request of the Company and shall so state
therein.
(h) You shall have received on the Closing Date an opinion, dated the
Closing Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Underwriters, as to
such matters as are reasonably requested by the Underwriters.
(i) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to you, from ▇▇▇▇▇ & Young LLP, independent
public accountants, containing the information and statements of the type
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ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(j) The Underwriters shall have received a certificate delivered by the
Chief Financial Officer of the Company certifying that the indebtedness
represented by the Securities is being incurred for proper purposes and in good
faith and the Company will be on the Closing Date (after giving effect to the
application of the proceeds from the issuance of the Securities) solvent, and
will have on the Closing Date (after giving effect to the application of the
proceeds from the issuance of the Securities) sufficient capital for carrying on
its business and will be on the Closing Date (after giving effect to the
application of the proceeds from the issuance of the Securities) able to pay its
debts as they mature.
(k) The Securities shall have been rated " " by [Standard & Poor's
Ratings Group] and " " by [▇▇▇▇▇'▇ Investors Service, Inc.]
(l) The Underwriters shall have received a counterpart, conformed as
executed, of the Indenture, which shall have been entered into by the Company
and the Trustee.
(m) The Underwriters shall have received a counterpart, conformed as
executed, of the Escrow Agreement, which shall have been entered into by the
Company, the Trustee and the Escrow Agent.
(n) The Company shall not have failed on or prior to the Closing Date
to perform or comply with any of the agreements herein contained and required to
be performed or complied with by the Company on or prior to the Closing Date.
(o) The NASD has confirmed that it has not raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(p) On the Closing Date, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably request for
the purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy of any
of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably
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satisfactory in form and substance to the Underwriters and counsel for the
Underwriters.
(q) Contemporaneously with the purchase by the Underwriters of the
Securities under this Agreement, the consummation of the Stock Offerings shall
have occurred.
SECTION 9. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Company if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Securities on the terms and in the manner contemplated in the Prospectus, (ii)
the suspension or material limitation of trading in securities or other
instruments on the New York Stock Exchange, the American Stock Exchange, the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange, the Chicago
Board of Trade or the Nasdaq National Market or limitation on prices for
securities or other instruments on any such exchange or the Nasdaq National
Market, (iii) the suspension of trading of any securities of the Company on any
exchange or in the over-the-counter market, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your opinion
materially and adversely affects, or will materially and adversely affect, the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States.
If on the Closing Date any one or more of the Underwriters shall fail
or refuse to purchase the Securities which it or they have agreed to purchase
hereunder on such date and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of
Securities to be purchased on such date by all Underwriters, each non-defaulting
Underwriter
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shall be obligated severally, in the proportion which the principal amount of
Securities set forth opposite its name in Schedule I bears to the aggregate
principal amount of Securities which all the non-defaulting Underwriters have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Securities which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
aggregate principal amount of Securities which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 9
by an amount in excess of one-ninth of such principal amount of Securities
without the written consent of such Underwriter. If on the Closing Date any
Underwriter or Underwriters shall fail or refuse to purchase Securities and the
aggregate principal amount of Securities with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of Securities
to be purchased by all Underwriters and arrangements satisfactory to you and
the Company for purchase of such Securities are not made within 48 hours after
such default, this Agreement will terminate without liability on the part of
any non-defaulting Underwriter and the Company. In any such case which does not
result in termination of this Agreement, either you or the Company shall have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of any such Underwriter under this
Agreement.
SECTION 10. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to Global
Telesystems Group, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ -- ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and (ii) if to any Underwriter or to
you, to you c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate Department, or in any
case to such other address as the person to be notified may have requested in
writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and the several Underwriters set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Securities,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the officers or directors of any
Underwriter, any person controlling any Underwriter, the Company, the officers
or directors of the Company or any person controlling the Company,
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(ii) acceptance of the Securities and payment for them hereunder and
(iii) termination of this Agreement.
If for any reason the Securities are not delivered by or on behalf of
the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 9), the Company agrees to reimburse the
several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by them. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has agreed
to pay pursuant to Section 5(k) hereof. The Company also agrees to reimburse the
several Underwriters, their directors and officers and any persons controlling
any of the Underwriters for any and all fees and expenses (including, without
limitation, the fees disbursements of counsel) incurred by them in connection
with enforcing their rights hereunder (including, without limitation, pursuant
to Section 7 hereof).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriters, the Underwriters' directors and officers, any controlling persons
referred to herein, the Company's directors and the Company's officers who sign
the Registration Statement and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Securities from any of the
several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
GLOBAL TELESYSTEMS
GROUP, INC.
By:
------------------------
Title:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO,
▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED
UBS SECURITIES LLC
Acting severally on behalf of
themselves
By: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By:
------------------------
Title:
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SCHEDULE I
Principal amount of Securities
Underwriters to be Purchased
--------------------------------------- ------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated
UBS Securities LLC
------------------------------
------------------------------
Total $100,000,000
29
Exhibit A-1
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 8(g)
EXHIBIT A-1-1
30
EXHIBIT A-2
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 8(g)
EXHIBIT A-2-1