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EXHIBIT 1.2
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GLOBAL TELESYSTEMS GROUP, INC.
(a Delaware corporation)
4,183,200 Shares of Common Stock
INTERNATIONAL PURCHASE AGREEMENT
Dated: [ ], 1998
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TABLE OF CONTENTS
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INTERNATIONAL PURCHASE AGREEMENT........................................................................1
SECTION 1. Representations and Warranties..........................................................4
(a) Representations and Warranties by the Company..................................4
(i) Compliance with Registration Requirements...........................4
(ii) Independent Accountants.............................................5
(iii) Financial Statements................................................5
(iv) No Material Adverse Change in Business..............................6
(v) Good Standing of the Company........................................6
(vi) Good Standing of Subsidiaries.......................................7
(vii) Capitalization......................................................7
(viii) Authorization of Agreement..........................................8
(ix) Authorization and Description of Securities.........................8
(x) Absence of Defaults and Conflicts...................................8
(xi) Absence of Labor Dispute............................................9
(xii) Absence of Proceedings..............................................9
(xiii) Accuracy of Exhibits...............................................10
(xiv) Possession of Intellectual Property................................10
(xv) Absence of Further Requirements....................................11
(xvi) Possession of Licenses and Permits.................................11
(xvii) Title to Property..................................................11
(xviii) Compliance with Cuba Act...........................................12
(xix) Investment Company Act.............................................12
(xx) Environmental Laws.................................................12
(xxi) Registration Rights................................................13
(b) Representations and Warranties by the Selling Shareholders....................13
(i) Accurate Disclosure................................................13
(ii) Authorization of Agreements........................................13
(iii) Valid and Marketable Title.........................................14
(iv) Due Execution of Power of Attorney and Custody
Agreement..........................................................15
(v) Absence of Manipulation............................................15
(vi) Absence of Further Requirements....................................15
(vii) Restriction on Sale of Securities..................................16
(viii) Certificates Suitable for Transfer.................................16
(c) Officer's Certificates........................................................16
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SECTION 2. Sale and Delivery to International Managers; Closing...................................17
(a) Initial International Securities..............................................17
(b) International Option Securities...............................................17
(c) Payment.......................................................................18
(d) Denominations; Registration...................................................19
SECTION 3. Covenants of the Company...............................................................19
(a) Compliance with Securities Regulations and Commission Requests................19
(b) Filing of Amendments..........................................................20
(c) Delivery of Registration Statements...........................................20
(d) Delivery of Prospectuses......................................................20
(e) Continued Compliance with Securities Laws.....................................21
(f) Rule 158......................................................................21
(g) Use of Proceeds...............................................................21
(h) Listing.......................................................................22
(i) Restriction on Sale of Securities.............................................22
(j) Reporting Requirements........................................................22
SECTION 4. Payment of Expenses....................................................................22
(a) Expenses......................................................................23
(b) Expenses of the Selling Shareholders..........................................23
(c) Termination of Agreement......................................................23
(d) Allocation of Expenses........................................................24
SECTION 5. Conditions of International Managers' Obligations......................................24
(a) Effectiveness of Registration Statement.......................................24
(b) Opinion of Counsel for Company................................................24
(c) Opinion of Counsel for the Selling Shareholders...............................25
(d) Opinion of Counsel for International Managers.................................25
(e) Officers' Certificate.........................................................25
(f) Certificate of Selling Shareholders...........................................26
(g) Accountant's Comfort Letter...................................................26
(h) Bring-down Comfort Letter.....................................................26
(i) Listing.......................................................................26
(j) No Objection..................................................................27
(k) Lock-up Agreements............................................................27
(l) Purchase of Initial U.S. Securities...........................................27
(m) Conditions to Purchase of International Option Securities.....................27
(i) Officers' Certificate..............................................27
(ii) Certificate of the Selling Shareholders............................27
(iii) Opinion of Counsel for Company.....................................28
(iv) Opinion of Counsel for the Selling Shareholders....................28
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(v) Opinion of Counsel for International Managers......................28
(vi) Bring-down Comfort Letter..........................................28
(n) Additional Documents..........................................................28
(o) Termination of Agreement......................................................29
SECTION 6. Indemnification........................................................................29
(a) Indemnification of International Managers.....................................29
(b) Indemnification of Company, Directors and Officers and Selling
Shareholders..................................................................31
(c) Actions Against Parties; Notification.........................................31
(d) Settlement Without Consent if Failure to Reimburse............................32
(e) Other Agreements with Respect to Indemnification..............................33
SECTION 7. Contribution...........................................................................33
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.........................35
SECTION 9. Termination of Agreement...............................................................35
(a) Termination; General..........................................................35
(b) Liabilities...................................................................36
SECTION 10. Default by One or More of the International Managers...................................36
SECTION 11. Default by One or More of the Selling Shareholders or the Company......................37
SECTION 12. Notices................................................................................38
SECTION 13. Parties................................................................................38
SECTION 14. GOVERNING LAW AND TIME.................................................................38
SECTION 15. Effect of Headings.....................................................................38
SCHEDULES
Schedule A - List of International Managers..............................................Sch A-1
Schedule B - List of Company and Selling Shareholders....................................Sch B-1
Schedule C - Pricing Information.........................................................Sch C-1
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EXHIBITS
Exhibit A-1 - Form of Opinion of Shearman & Sterling.................................A-1-1
Exhibit A-2 - Form of Opinion of ▇▇▇▇▇ ▇▇▇▇▇▇........................................A-2-1
Exhibit A-3 - Form of Opinion of Coudert Brothers....................................A-3-1
Exhibit A-4 - Form of Opinion of Shevchenko Didkovskiy & Partners....................A-4-1
Exhibit A-5 - Form of Opinion of Somodeco............................................A-5-1
Exhibit A-6 - Form of Opinion of Loeff ▇▇▇▇▇▇ ▇▇▇▇▇▇▇................................A-6-1
Exhibit A-7 - Form of Opinion of Counsel for the Selling Shareholders................A-7-1
Exhibit B - Form of Lock-up Letter...................................................B-1
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GLOBAL TELESYSTEMS GROUP, INC.
(a Delaware corporation)
4,183,200 Shares of Common Stock
(Par Value $.10 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
[ ], 1998
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ International
▇▇▇▇▇▇▇ Sachs International
CIBC Wood Gundy Oppenheimer
Baring Brothers Limited (as agent for ING Bank N.V.)
Renaissance Advisory Limited
as Lead Managers of the several International Managers
c/o Merrill ▇▇▇▇▇ International
Ropemaker Place
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Ladies and Gentlemen:
GLOBAL TELESYSTEMS GROUP, INC., a Delaware corporation (the
"Company"), and the other persons listed in Schedule B hereto (the "Selling
Shareholders") confirm their agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ International
("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other International Managers named in Schedule
A hereto (collectively, the "International Managers", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom ▇▇▇▇▇▇▇ Lynch, Donaldson, Lufkin & ▇▇▇▇▇▇▇▇ International,
▇▇▇▇▇▇▇ Sachs International, CIBC Wood Gundy Oppenheimer, Baring Brothers
Limited (as agent for ING Bank N.V.) and Renaissance Advisory Limited are acting
as representatives (in such capacity, the "Lead Managers"), with respect to the
issue and sale by the Company and the sale by the Selling Shareholders, acting
severally and not jointly, and the purchase by the International Managers,
acting severally and not jointly, of the respective numbers of shares of Common
Stock, par value $.10 per share, of the Company ("Common Stock") set forth in
said Schedule A, and with respect to the grant by the Company to the
International Managers, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of 627,480
additional shares of Common Stock to cover over-allotments, if any. The
aforesaid 4,183,200 shares of Common Stock (the "Initial International
Securities") to be purchased by the International
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Managers and all or any part of the 627,480 shares of Common Stock subject to
the option described in Section 2(b) hereof (the "International Option
Securities") are hereinafter called, collectively, the "International
Securities."
It is understood that the Company and the Selling Shareholders are
concurrently entering into an agreement dated the date hereof (the "U.S.
Purchase Agreement") providing for the offering by the Company and the Selling
Shareholders of an aggregate of 4,183,200 shares of Common Stock (the "Initial
U.S. Securities") through arrangements with certain underwriters in the United
States and Canada (the "U.S. Underwriters") for which ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities
Corporation, Bear, ▇▇▇▇▇▇▇ & Co., Inc., BT Alex. ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇
Brothers Inc., Prudential Securities Incorporated and ▇▇▇▇▇▇▇ and ▇.
▇▇▇▇▇▇▇▇▇▇▇▇, Inc. are acting as the U.S. representatives (collectively, the
"U.S. Representatives") and the grant by the Company to the U.S. Underwriters,
acting severally and not jointly, of an option to purchase all or any part of
the U.S. Underwriters' pro rata portion of up to 941,220 additional shares of
Common Stock solely to cover over-allotments, if any (the "U.S. Option
Securities" and, together with the International Option Securities, the "Option
Securities"). The Initial U.S. Securities and the U.S. Option Securities are
hereinafter called the "U.S. Securities." It is understood that the Company and
the Selling Shareholders are not obligated to sell, and the International
Managers are not obligated to purchase, any Initial International Securities
unless all of the Initial U.S. Securities are contemporaneously purchased by the
U.S. Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters," the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities," the International Securities and the U.S. Securities are
hereinafter collectively called the "Securities," and this Agreement and the
U.S. Purchase Agreement are hereinafter collectively called the "Purchase
Agreements."
The Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated (in such
capacity, the "Global Coordinator").
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The Company and the Selling Shareholders understand that the
International Managers propose to make a public offering of the International
Securities as soon as the Lead Managers deem advisable after this Agreement has
been executed and delivered.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-1 (No. 333-52733) covering
the registration of the Securities under the Securities Act of 1933, as amended
(the "1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two
forms of prospectus are to be used in connection with the offering and sale of
the Securities: one relating to the International Securities (the "Form of
International Prospectus") and one relating to the U.S. Securities (the "Form of
U.S. Prospectus"). The Form of International Prospectus is identical to the Form
of U.S. Prospectus, except for the front cover and back cover pages and the
information under the caption "Underwriting." The information included in any
such prospectus or in any such Term Sheet, as the case may be, 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
(a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each Form of International Prospectus and Form of U.S.
Prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto and
schedules thereto, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
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shall include the Rule 462(b) Registration Statement. The final Form of
International Prospectus and the final Form of U.S. Prospectus in the forms
first furnished to the Underwriters for use in connection with the offering of
the Securities are herein called the "International Prospectus" and the "U.S.
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is
relied on, the terms "International Prospectus" and "U.S. Prospectus" shall
refer to the preliminary International Prospectus dated June 12, 1998 and
preliminary U.S. Prospectus dated June 12, 1998, respectively, each together
with the applicable Term Sheet and all references in this Agreement to the date
of such Prospectuses shall mean the date of the applicable Term Sheet. For
purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the International Prospectus, the U.S. Prospectus or any
Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each International Manager as of the date hereof, as
of the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b), hereof and agrees with each
International Manager, as follows:
(i) Compliance with Registration Requirements. 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 at the Closing Time
(and, if any International Option Securities are purchased, at the Date of
Delivery), 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 the 1933 Act Regulations and did not and
will not contain an untrue statement of a material fact or omit to state a
material
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fact required to be stated therein or necessary to make the statements
therein not misleading. Neither of the Prospectuses nor any amendments or
supplements thereto, at the time the Prospectuses or any amendments or
supplements thereto were issued and at the Closing Time (and, if any
International Option Securities are purchased, at the Date of Delivery),
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. If Rule 434 is used, the Company will comply with the
requirements of Rule 434 and the Prospectuses shall not be "materially
different," as such term is used in Rule 434, from the prospectuses
included in the Registration Statement at the time it became effective. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
International Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by or on behalf of any
International Manager through the Lead Managers expressly for use in the
Registration Statement or the International Prospectus.
Each preliminary prospectus and the prospectuses filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and each preliminary prospectus and the
Prospectuses 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.
(ii) Independent Accountants. 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
and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements included in the
Registration Statement and the Prospectuses, 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
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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 Prospectuses 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.
(iv) No Material Adverse Change in Business. 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), (A) 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 (as defined
below) considered as one enterprise, whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (B) 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 (C) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
(v) Good Standing of the Company. 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 Prospectuses 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
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or to be in good standing would not, singly or in the aggregate, result in
a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each "significant subsidiary" of
the Company (as such term is defined in Rule 1-02 of Regulation S-X) and
all entities 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 Prospectuses 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, except that the
Company's Capital Stock in Commstock International B.V. and in GTS Hungary
has been pledged to Ericsson Finans A.B. and Creditanstalt Bank as
collateral for certain borrowings; 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 (a) the subsidiaries
listed on Exhibit 21 to the Registration Statement and (b) 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.
(vii) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectuses in the column
entitled "Actual" under the caption "Capitalization" (except for subsequent
issuances,
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if any, pursuant to this Agreement, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectuses or pursuant to the
exercise of convertible securities or options referred to in the
Prospectuses). 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.
(viii) Authorization of Agreement. This Agreement and the
International Purchase Agreement have been duly authorized, executed and
delivered by the Company.
(ix) Authorization and Description of Securities. The Securities to
be purchased by the International Managers and the U.S. Underwriters from
the Company have been duly authorized for issuance and sale to the
International Managers pursuant to this Agreement and the U.S. Underwriters
pursuant to the U.S. Purchase Agreement, respectively, and, when issued and
delivered by the Company pursuant to this Agreement and the U.S. Purchase
Agreement, respectively, against payment of the consideration set forth
herein and the U.S. Purchase Agreement, respectively, will be validly
issued, fully paid and non-assessable; the Common Stock conforms in all
material respects to all statements relating thereto contained in the
Prospectuses and such description conforms to the rights set forth in the
instruments defining the same; no holder of the Securities will be subject
to personal liability by reason of being such a holder; and the issuance of
the Securities is not subject to the preemptive or other similar rights of
any securityholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor any
of its Ventures (as defined below) is in violation of its charter or
by-laws (or equivalent constitutive documents) 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
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Material Adverse Effect; and the execution, delivery and performance of
this Agreement and the U.S. Purchase Agreement and the consummation of the
transactions contemplated in this Agreement, the U.S. Purchase 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 Prospectuses under the caption "Use of Proceeds") and
compliance by the Company with its obligations under this Agreement and the
U.S. Purchase 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 constitutive documents)
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, (a) "Ventures" means all entities in which the Company has a
direct or indirect greater than 25% equity interest or voting power and (b)
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.
(xi) Absence of Labor Dispute. 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.
(xii) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or
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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 and the U.S. Purchase Agreement or the performance by the Company
of its obligations hereunder or thereunder; 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.
(xiii) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement or the
Prospectuses or to be filed as exhibits thereto which have not been so
described and filed as required.
(xiv) Possession of Intellectual Property. 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 decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
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(xv) Absence of Further Requirements. 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 U.S. Purchase Agreement or the
consummation of the transactions contemplated by this Agreement and the
U.S. Purchase Agreement, except such as have been already obtained or as
may be required under the 1933 Act or the 1933 Act Regulations and foreign
or state securities or blue sky laws.
(xvi) Possession of Licenses and Permits. 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.
(xvii) Title to Property. 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 (a) are
described in the Prospectuses or (b) 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
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or any Venture holds properties described in the Prospectuses, 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
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.
(xviii) Compliance with Cuba Act. 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
(collectively, the "Cuba Act") or is exempt therefrom.
(xix) Investment Company Act. 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 Prospectuses 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").
(xx) Environmental Laws. 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
18
-13-
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.
(xxi) Registration Rights. Except as disclosed in the Prospectuses,
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.
(b) Representations and Warranties by the Selling Shareholders.
Each Selling Shareholder severally represents and warrants to each International
Manager as of the date hereof and as of the Closing Time, and agrees with each
International Manager, as follows:
(i) Accurate Disclosure. Such Selling Shareholder has reviewed
and is familiar with the Registration Statement and the Prospectuses and
neither the Prospectuses nor any amendment or supplement thereto includes
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein in the light of the
circumstances under which they were made, not misleading; provided, that
the representations and warranties set forth in this paragraph 1(b)(i)
apply only to statements or omissions in the Registration Statement or the
Prospectuses based upon information relating to such Selling Shareholder
furnished to the Company in writing by such Selling Shareholder expressly
for use therein. It is understood and agreed that the only written
information furnished to the Company by each respective Selling Shareholder
specifically for use in the Registration Statement is the information
relating to such Selling Shareholder set forth in the table under the
caption "Principal and Selling Stockholders" in the Prospectuses.
(ii) Authorization of Agreements. Such Selling Shareholder has the
full right, power and authority to enter into this Agreement and, with the
exception of Commingled
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Pension Trust Fund (Multi-Market Special Investment Fund II) of ▇▇▇▇▇▇
Guaranty Trust Company of New York, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Foundation
(Multi-Market Account), Multi-Market Special Investment Trust Fund of
▇▇▇▇▇▇ Guaranty Trust Company of New York, JPM Emerging Markets Special
Opportunities Portfolio, L.P. and JPM Emerging Markets Special
Opportunities Portfolio Offshore, L.P. (collectively, the "▇.▇. ▇▇▇▇▇▇
Entities") and Emerging Markets Growth Fund, Inc., Capital International
Emerging Markets Fund and New Europe East Investment Fund (collectively,
the "Capital Group Entities"), a Power of Attorney and Custody Agreement
(the "Power of Attorney and Custody Agreement"), and such Selling
Shareholder has the full right, power and authority to sell, transfer and
deliver the Securities to be sold by such Selling Shareholder hereunder.
The execution and delivery of this Agreement and, with the exception of the
▇.▇. ▇▇▇▇▇▇ Entities and the Capital Group Entities, the Power of Attorney
and Custody Agreement and the sale and delivery of the Securities to be
sold by such Selling Shareholder and the consummation of the transactions
contemplated herein and compliance by such Selling Shareholder with its
obligations hereunder have been duly authorized by such Selling Shareholder
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 under, or result in the creation or imposition of any tax, lien,
charge or encumbrance upon the Securities to be sold by such Selling
Shareholder or any property or assets of such Selling Shareholder pursuant
to any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, license, lease or other agreement or instrument to which
such Selling Shareholder is a party or by which such Selling Shareholder
may be bound, or to which any of the property or assets of such Selling
Shareholder is subject, nor will such action result in any violation of the
provisions of the charter or by-laws or other organizational instrument of
such Selling Shareholder, if applicable, or any applicable treaty, law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over such Selling Shareholder or any of its properties.
(iii) Valid and Marketable Title. Such Selling Shareholder has and
will at the Closing Time have valid and marketable title to the Securities
to be sold by such Selling Shareholder hereunder, free and clear of any
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-15-
security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind, other than pursuant to this Agreement; and upon
delivery of such Securities and payment of the purchase price therefor as
herein contemplated, assuming each International Manager has no notice of
any adverse claim, each of the International Managers will receive valid
and marketable title to the Securities purchased by it from such Selling
Shareholder, free and clear of any security interest, mortgage, pledge,
lien, charge, claim, equity or encumbrance of any kind.
(iv) Due Execution of Power of Attorney and Custody Agreement. Such
Selling Shareholder, with the exception of the ▇.▇. ▇▇▇▇▇▇ Entities and the
Capital Group Entities, has duly executed and delivered, in the form
heretofore furnished to the Lead Managers, the Power of Attorney and
Custody Agreement with ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇,
or any of them, as attorneys-in-fact (the "Attorneys-in-Fact") and the
Company, as custodian (the "Custodian"); the Custodian is authorized to
deliver the Securities to be sold by such Selling Shareholder hereunder and
to accept payment therefor; and each Attorney-in-Fact is authorized to
execute and deliver this Agreement and the certificate referred to in
Section 5(f) or that may be required pursuant to Section 5(l) on behalf of
such Selling Shareholder, to sell, assign and transfer to the International
Managers the Securities to be sold by such Selling Shareholder hereunder,
to determine the purchase price to be paid by the Underwriters to such
Selling Shareholder, as provided in Section 2(a) hereof, but subject to the
provisions of the Power of Attorney, to authorize the delivery of the
Securities to be sold by such Selling Shareholder hereunder, to accept
payment therefor, and otherwise to act on behalf of such Selling
Shareholder in connection with this Agreement.
(v) Absence of Manipulation. Such Selling Shareholder has not taken,
and will not take, directly or indirectly, any action which is designed to
or which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(vi) Absence of Further Requirements. No filing with, or consent,
approval, authorization, order, registration, qualification or decree of,
any court or governmental authority or agency, domestic or foreign, is
21
-16-
necessary or required for the performance by each Selling Shareholder of
its obligations hereunder or, with the exception of the ▇.▇. ▇▇▇▇▇▇
Entities and the Capital Group Entities, in the Power of Attorney and
Custody Agreement, or in connection with the sale and delivery of the
Securities hereunder or the consummation of the transactions contemplated
by this Agreement, except such as may have previously been made or obtained
or as may be required under the 1933 Act or the 1933 Act Regulations or
state securities laws.
(vii) Restriction on Sale of Securities. During of a period of 90
days from the date of the Prospectuses, such Selling Shareholder will not,
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of the
Underwriters, (a) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or file
any registration statement under the 1933 Act with respect to any of the
foregoing or (b) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly,
the economic consequence of ownership of the Common Stock, whether any such
swap or transaction described in clause (a) or (b) above is to be settled
by delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to the sale of the Securities
hereunder and under the International Purchase Agreement.
(viii) Certificates Suitable for Transfer. Certificates for all of
the Securities to be sold by such Selling Shareholder, with the exception
of the ▇.▇. ▇▇▇▇▇▇ Entities and the Capital Group Entities, pursuant to
this Agreement, in suitable form for transfer by delivery or accompanied by
duly executed instruments of transfer or assignment in blank with
signatures guaranteed, have been placed in custody with the Custodian with
irrevocable conditional instructions to deliver such Securities to the
International Managers pursuant to this Agreement.
(c) Officer's Certificates. Any certificate signed by any officer of
the Company or any Ventures delivered to the Global Coordinator, the Lead
Managers or to counsel for the International Managers shall be deemed a
representation and warranty by the Company herein to each International Manager
as to
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the matters covered thereby; and any certificate signed by or on behalf of
the Selling Shareholders as such and delivered to the Lead Managers or to
counsel for the International Managers pursuant to the terms of this Agreement
shall be deemed a representation and warranty by such Selling Shareholder to the
International Managers as to the matters covered thereby.
SECTION 2. Sale and Delivery to International Managers; Closing.
(a) Initial International Securities. The Company and each Selling
Shareholder, severally and not jointly, agrees to sell to each International
Manager, severally and not jointly, and on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, each International Manager, severally and not jointly, agrees to purchase
from the Company and each Selling Shareholder, at the price per share set forth
in Schedule C, that proportion of the number of Initial International Securities
set forth in Schedule B opposite the name of the Company or such Selling
Shareholder, as the case may be, which the number of Initial International
Securities set forth in Schedule A opposite the name of such International
Manager, plus any additional number of Initial International Securities which
such International Manager may become obligated to purchase pursuant to the
provisions of Section 10 hereof, bears to the total number of Initial
International Securities, subject in each case, to such adjustments among the
International Managers as the Lead Managers in their sole discretion shall make
to eliminate any sales or purchases of fractional shares.
(b) International Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company and each Selling Shareholder, severally
and not jointly, hereby grants an option to the International Managers,
severally and not jointly, to purchase up to an additional 627,480 shares of
Common Stock as set forth in Schedule B, at the price per share set forth in
Schedule C, less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial International Securities but
not payable on the International Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised not more than two
times in whole or in part only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Initial
International Securities upon notice by the Global Coordinator to the Company
and the
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Selling Shareholders setting forth the number of International Option Securities
as to which the several International Managers are then exercising the option
and the time and date of payment and delivery for such International Option
Securities. Any such time and date of delivery for the International Option
Securities (a "Date of Delivery") shall be determined by the Global Coordinator,
but shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time, as hereinafter defined. If
the option is exercised as to all or any portion of the International Option
Securities, each of the International Managers, acting severally and not
jointly, on the basis of the representations and warranties of the Company
contained herein and subject to the terms and conditions herein set forth, will
purchase that proportion of the total number of International Option Securities
then being purchased which the number of Initial International Securities set
forth in Schedule A opposite the name of such International Manager bears to the
total number of Initial International Securities, subject in each case to such
adjustments as the Global Coordinator in its discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for the Initial
Securities shall be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or at such other place as shall be agreed upon
by the Global Coordinator and the Company, at 9:00 A.M. (Eastern time) on the
third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on the date
hereof) business day after the date hereof (unless postponed in accordance with
the provisions of Section 10), or such other time not later than ten business
days after such date as shall be agreed upon by the Global Coordinator and the
Company (such time and date of payment and delivery being herein called "Closing
Time").
In addition, in the event that any or all of the International
Option Securities are purchased by the International Managers, payment of the
purchase price for such International Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Global Coordinator and the Company, on each Date of Delivery as specified in the
notice from the Global Coordinator to the Company.
Payment shall be made to the Company and the Selling Shareholders by
wire transfer of immediately available funds to bank accounts designated by the
Company and the Custodian pursuant
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to each Selling Shareholder's Power of Attorney and Custody Agreement, as the
case may be, with the exception of the ▇.▇. ▇▇▇▇▇▇ Entities and the Capital
Group Entities. It is understood that each International Manager has authorized
the Lead Managers, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial International Securities and the
International Option Securities, if any, which it has agreed to purchase.
▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the International
Managers, may (but shall not be obligated to) make payment of the purchase price
for the Initial International Securities or the International Option Securities,
if any, to be purchased by any International Manager whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such International Manager from its
obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with
each International Manager as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of Rule
430A or Rule 434, as applicable, and will notify the Global Coordinator
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectuses or any amended Prospectuses 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 Prospectuses 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
25
-20-
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) Filing of Amendments. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term Sheet
or any amendment, supplement or revision to either the prospectus included in
the Registration Statement at the time it became effective or to the
Prospectuses, will furnish the Global Coordinator with copies of any such
documents a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file or use any such document to which the Global
Coordinator or counsel for the International Managers shall reasonably object
within three Business Days after being furnished such documents.
(c) Delivery of Registration Statements. The Company has furnished
or will deliver to the Lead Managers and counsel for the International Managers,
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 Lead Managers, without
charge, a conformed copy of the Registration Statement as originally filed and
of each amendment thereto (without exhibits) for each of the International
Managers. The copies of the Registration Statement and each amendment thereto
furnished to the International Managers will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager 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 International Manager,
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without charge, during the period when the International 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 International Prospectus (as amended or
supplemented) as such International Manager may reasonably request. The
International Prospectus and any amendments or supplements thereto furnished to
the International Managers 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) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement, the U.S. Purchase Agreement and the Prospectuses. 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
International Managers or for the Company, to amend the Registration Statement
or amend or supplement any Prospectus in order that the Prospectuses 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 or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectuses comply with such requirements, and the Company will furnish to the
International Managers such number of copies of such amendment or supplement as
the International Managers may reasonably request.
(f) Rule 158. The Company will 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) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in the
Prospectuses under "Use of Proceeds."
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(h) Listing. The Company will use its best efforts to effect the
admission of the Securities being issued and sold by the Company pursuant to
this Agreement on the European Association of Securities Dealers Automated
Quotation ("EASDAQ") system and comply with the requirements of such exchange to
maintain such listing. The Company will use its best efforts to effect and
maintain the quotation of the Securities being issued and sold by the Company
pursuant to this Agreement on the Nasdaq National Market and will file with the
Nasdaq National Market all documents and notices required by the Nasdaq National
Market of companies that have securities that are traded in the over-the-counter
market and quotations for which are reported by the Nasdaq National Market.
(i) Restriction on Sale of Securities. During a period of 90 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of the Global Coordinator, (i) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
file any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the sale of the Securities hereunder and under
the U.S. Purchase Agreement, (B) the issuance of any shares of Common Stock by
the Company upon the exercise of options or warrants or the conversion of
securities outstanding on the date hereof and referred to in the Prospectuses or
(C) the purchase or acquisition of shares of Common Stock pursuant to contracts
entered into prior to the date hereof and referred to in the Prospectuses.
(j) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934 Act,
will 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.
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SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters and the transfer of
the Securities between the U.S. Underwriters and the International Managers,
(iv) the fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheets and of the Prospectuses and any
amendments or supplements thereto, (vi) the preparation, printing and delivery
to the Underwriters of copies of the Blue Sky Survey and any supplement thereto,
(vii) the fees and expenses of any transfer agent or registrar for the
Securities, (viii) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by
the National Association of Securities Dealers, Inc. (the "NASD") of the terms
of the sale of the Securities and (ix) the fees and expenses incurred in
connection with the listing of the Securities being issued and sold by the
Company and the Selling Shareholders, as applicable, pursuant to this Agreement
on EASDAQ and inclusion of the Securities being issued and sold by the Company
and the Selling Shareholders, as applicable, pursuant to this Agreement in the
Nasdaq National Market.
(b) Expenses of the Selling Shareholders. The Selling Shareholders,
jointly and severally, will pay all expenses incident to the performance of
their respective obligations under, and the consummation of the transactions
contemplated by, this Agreement, including (i) any stamp duties, capital duties
and stock transfer taxes, if any, payable upon the sale of the Securities to the
U.S. Underwriters, and their transfer between the U.S. Underwriters pursuant to
an agreement between such U.S. Underwriters, and (ii) the fees and disbursements
of their respective counsel and accountants.
(c) Termination of Agreement. If this Agreement is terminated by
the Lead Managers in accordance with the provisions of Section 5, Section
9(a)(i) or Section 11 hereof, the
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Company and the Selling Shareholders shall reimburse the International Managers
for all of their out-of-pocket expenses reasonably incurred by the International
Managers in connection with this Agreement or the offering of the Securities
contemplated hereunder, including the reasonable fees and disbursements of
counsel and special counsel for the International Managers.
(d) Allocation of Expenses. The provisions of this Section shall
not affect any agreement that the Company and the Selling Shareholders may make
for the sharing of such costs and expenses.
SECTION 5. Conditions of International Managers' Obligations. The
obligations of the several International Managers hereunder are subject to the
accuracy of the representations and warranties of the Company and the Selling
Shareholders contained in Section 1 hereof and in certificates of any officer of
the Company or any subsidiary of the Company or on behalf of any Selling
Shareholder delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement has become effective and at Closing Time 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 International Managers. A prospectus containing the Rule
430A Information shall have been filed with the Commission in accordance
with Rule 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) or, if the Company has elected to rely upon Rule
434, a Term Sheet shall have been filed with the Commission in accordance
with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the
International Managers shall have received the favorable opinion, dated as
of Closing Time, of each of Shearman & Sterling, counsel for the Company,
▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President and General Counsel of the Company,
Coudert Brothers, special counsel for the Company
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and special regulatory counsel for Hermes Europe Railtel B.V., Shevchenko
Didkovskiy & Partners, special Ukrainian counsel to Bancomsvyaz, Somodeco,
counsel and regulatory counsel to GTS Monaco Access ▇.▇.▇., and Loeff
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, special Dutch counsel, each in form and substance
satisfactory to counsel for the International Managers, together with
signed or reproduced copies of such letter for each of the other
International Managers to the effect set forth in Exhibits A-1 through A-5
hereto.
(c) Opinion of Counsel for the Selling Shareholders. At Closing
Time, the International Managers shall have received the favorable opinion,
dated as of the Closing Time, of the respective counsel for each Selling
Shareholder, in form and substance satisfactory to counsel for the
International Managers, together with signed or reproduced copies of such
letter for each of the other International Managers to the effect set forth
in Exhibit A-6 hereto and to such further effect as counsel to the
International Managers may reasonably request.
(d) Opinion of Counsel for International Managers. At Closing Time,
the International Managers shall have received the favorable opinion, dated
as of Closing Time, of each of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the
International Managers, and ▇▇▇▇▇▇▇▇ Chance, special Russian counsel to the
International Managers, together with signed or reproduced copies of such
letter for each of the other International Managers as to such matters as
are reasonably requested by the Lead Managers.
(e) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, 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 Lead Managers 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 Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct
with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on
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its part to be performed or satisfied at or prior to Closing Time, 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, to the knowledge of such officer, are contemplated by the
Commission.
(f) Certificate of Selling Shareholders. At Closing Time, the
International Managers shall have received certificates signed by each
Selling Shareholder or of an Attorney-in-Fact on behalf of each Selling
Shareholder, dated as of Closing Time, to the effect that (i) the
representations and warranties of each Selling Shareholder contained in
Section 1(b) hereof are true and correct in all respects with the same
force and effect as though expressly made at and as of Closing Time and
(ii) each Selling Shareholder has complied in all material respects with
all agreements and all conditions on its part to be performed under this
Agreement at or prior to Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the International Managers shall have received from Ernst &
Young a letter dated such date, in form and substance satisfactory to the
Lead Managers, together with signed or reproduced copies of such letter for
each of the other International Managers containing statements and
information of the type 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 Prospectuses.
(h) Bring-down Comfort Letter. At Closing Time, the International
Managers shall have received from Ernst & Young a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (e) of this Section, except that
the specified date referred to shall be a date not more than three business
days prior to Closing Time.
(i) Listing. At Closing Time, the Securities being issued and sold
by the Company pursuant to this Agreement shall have been accepted for
listing on EASDAQ, subject only to official notice of issuance. At Closing
Time, the Securities being issued and sold by the Company pursuant to this
Agreement shall have been accepted for inclusion in the Nasdaq National
Market, subject only to official notice of issuance.
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(j) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(k) Lock-up Agreements. At the date of this Agreement, the
International Managers shall have received an agreement substantially in
the form of Exhibit B hereto signed by a sufficient number of holders as is
reasonably acceptable to the Lead Managers of shares of Common Stock,
warrants, options or other rights to purchase or acquire shares of Common
Stock or other securities convertible or exchangeable into Common Stock
(other than the Company's Convertible Bonds due 2000 (the "Convertible
Bonds")).
(l) Purchase of Initial U.S. Securities. Contemporaneously with the
purchase by the International Managers of the Initial International
Securities under this Agreement, the U.S. Underwriters shall have purchased
the Initial U.S. Securities under the U.S. Purchase Agreement.
(m) Conditions to Purchase of International Option Securities. In
the event that the International Managers exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the International
Option Securities, the representations and warranties of the Company and
the Selling Shareholders contained herein and the statements in any
certificates furnished by the Company, any subsidiary of the Company and
the Selling Shareholders hereunder shall be true and correct as of each
Date of Delivery and, at the relevant Date of Delivery, the Lead Managers
shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) Certificate of the Selling Shareholders. A certificate,
dated such Date of Delivery, of an Attorney-in-Fact on behalf of each
Selling Shareholder confirming that the certificate delivered at
Closing Time pursuant to Section 5(f) hereof remains true and correct
as of such Date of Delivery.
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(iii) Opinion of Counsel for Company. The favorable opinion,
dated as of such Date of Delivery, of each of the counsels listed in
Section 5(b), each in form and substance satisfactory to counsel for
the International Managers, relating to the International Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(b) hereof.
(iv) Opinion of Counsel for the Selling Shareholders. The
favorable opinion, dated as of such Date of Delivery, of the
respective counsel for each Selling Shareholder, in form and substance
satisfactory to the counsel for the International Managers, relating
to the Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(c)
hereof.
(v) Opinion of Counsel for International Managers. The
favorable opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the
International Managers and ▇▇▇▇▇▇▇▇ Chance, special counsel to the
International Managers, dated such Date of Delivery, relating to the
International Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(vi) Bring-down Comfort Letter. A letter from Ernst & Young, in
form and substance satisfactory to the Lead Managers and dated such
Date of Delivery, substantially in the same form and substance as the
letter furnished to the International Managers pursuant to Section
5(f) hereof, except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than five days
prior to such Date of Delivery.
(n) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the International Managers 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 by the Company and
with the sale of the Securities by the
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Selling Shareholders as herein contemplated shall be reasonably
satisfactory in form and substance to the Lead Managers and counsel for the
International Managers.
(o) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of
International Option Securities on a Date of Delivery which is after the
Closing Time, the obligations of the several International Managers to
purchase the relevant Option Securities, may be terminated by the Lead
Managers by notice to the Company at any time at or prior to Closing Time
or such Date of Delivery, as the case may be, and such termination shall be
without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of International Managers. The Company and the
Selling Shareholders, jointly and severally, agree to indemnify and hold
harmless each International Manager and each person, if any, who controls any
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, 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 or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectuses (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation,
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or any investigation or proceeding by any governmental agency or body,
commenced or threatened, 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 Section 6(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 ▇▇▇▇▇▇▇ ▇▇▇▇▇), 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 this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of any International Manager through the Lead Managers expressly for
use in the Registration Statement (or any amendment or supplement thereto),
including the Rule 430A Information and the Rule 434 Information, if applicable,
or any preliminary prospectus or the International Prospectus (or any amendment
or supplement thereto); provided, further, that the Company will not be liable
to any International Manager with respect to any preliminary prospectus to the
extent that the Company shall sustain the burden of proving that any such loss,
liability, claim, damage or expense resulted from the fact that such
International Manager, in contravention of a requirement of this Agreement or
applicable law, sold Securities to a person to whom such International Manager
failed to send or give, at or prior to the Closing Date, a copy of the
International Prospectus as then amended or supplemented if (i) the Company has
previously furnished copies thereof (sufficiently in advance of the Closing Date
to allow for distribution by the Closing Date) to the International Managers,
and the loss, liability, claim, damage or expense of such International Manager
resulted from an untrue statement or omission of a material fact contained in or
omitted from the preliminary prospectus which was corrected in the International
Prospectus as, if applicable, amended or supplemented prior to the Closing Date
and such International Prospectus was required by law to be delivered at or
prior to the written confirmation of sale to such
36
-31-
person and (ii) such failure to give or send such International Prospectus by
the Closing Date to the party or parties asserting such loss, liability, claim,
damage or expense would have constituted the sole defense to the claim asserted
by such person; provided, further, that each Selling Shareholder shall be liable
only with reference to information relating to such Selling Shareholder
furnished to the Company in writing by or on behalf of such Selling Shareholder
expressly for use in the Registration Statement, any preliminary prospectus, the
International Prospectus or any amendment or supplement thereto; provided,
further, that each Selling Shareholder's aggregate liability under this Section
6(a) shall be limited to an amount equal to the gross proceeds (after deducting
the underwriting discount, but before deducting expenses) received by such
Selling Shareholder from the sale of the International Securities and the U.S.
Securities pursuant to the Purchase Agreements.
(b) Indemnification of Company, Directors and Officers and Selling
Shareholders. Each International Manager severally agrees to indemnify
and hold harmless the Company, its directors, each of its officers who signed
the Registration Statement, each Selling Shareholder 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, and each person, if any, who controls any Selling
Shareholder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment or supplement thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or any preliminary International prospectus
or the International Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such International Manager through the Lead Managers expressly for
use in the Registration Statement (or any amendment or supplement thereto) or
such preliminary prospectus or the International Prospectus (or any amendment or
supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof
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and in any event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. In the case of parties
indemnified pursuant to Section 6(a) above, counsel to the indemnified parties
shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in the case of parties indemnified
pursuant to Section 6(b) above, counsel to the indemnified parties shall be
selected by the Company. An indemnifying party may participate at its own
expense in the defense of any such action; provided, however, that counsel to
the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
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(e) Other Agreements with Respect to Indemnification. The
provisions of this Section shall not affect any agreement among the Company and
the Selling Shareholders with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Shareholders on the one hand and the International
Managers on the other hand from the offering of the Securities pursuant to this
Agreement or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Selling Shareholders on the one hand and of the
International Managers on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling
Shareholders on the one hand and the International Managers on the other hand in
connection with the offering of the International Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the International Securities pursuant to this
Agreement (before deducting expenses) received by the Company and the Selling
Shareholders and the total underwriting discount received by the International
Managers, in each case as set forth on the cover of the International
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the International
Securities as set forth on such cover.
The relative fault of the Company and the Selling Shareholderson the
one hand and the International Managers on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or
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the Selling Shareholders or by the International Managers and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company, the Selling Shareholders and the International Managers
agree that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the International
Managers were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 7. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in
this Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party 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 or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, (i) no Selling
Shareholder shall be required to contribute any amount in excess of the amount
of the total net proceeds received by such Selling Shareholder from the U.S.
Securities purchased from such Selling Shareholder and (ii) no International
Manager shall be required to contribute any amount in excess of the amount by
which the total price at which the International Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such International Manager has otherwise been required to pay
by reason of any 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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company or any the Selling Shareholder within the meaning of
Section 15 of the 1933 Act or Section 20
40
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of the 1934 Act shall have the same rights to contribution as the Company or
such Selling Shareholder, as the case may be. The International Managers'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial International Securities set forth opposite
their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any Venture or the
Selling Shareholders submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any International Manager or controlling person, or by or on behalf of the
Company or the Selling Shareholders, and shall survive delivery of the
Securities to the International Managers.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Lead Managers may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the International 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, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Lead Managers, impracticable to market the Securities or
to enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission, or EASDAQ, Luxembourg Stock Exchange or the Nasdaq National Market,
or if trading generally on the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the NASD or any other governmental authority, or
(iv) if
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a banking moratorium has been declared by either Federal or New York
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the International Managers.
If one or more of the International Managers shall fail at Closing Time or a
Date of Delivery to purchase the Securities which it or they are obligated to
purchase under this Agreement (the "Defaulted Securities"), the Lead Managers
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting International Managers, or any other underwriters,
to purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth; if, however,
the Lead Managers shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of International Securities to be purchased on such
date, each of the non-defaulting International Managers shall be
obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all
non-defaulting International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of International Securities to be purchased on such date, this
Agreement or, with respect to any Date of Delivery which occurs after
the Closing Time, the obligation of the International Managers to
purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without
liability on the part of any non-defaulting International Manager.
No action taken pursuant to this Section shall relieve any
defaulting International Manager from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a
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Date of Delivery which is after the Closing Time, which does not result in a
termination of the obligation of the International Managers to purchase and the
Company to sell the relevant International Option Securities, as the case may
be, either (i) the Lead Managers or (ii) the Company and any Selling Shareholder
shall have the right to postpone Closing Time or the relevant Date of Delivery,
as the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "International Manager"
includes any person substituted for a International Manager under this Section
10.
SECTION 11. Default by One or More of the Selling Shareholders or
the Company. (a) If one or more of the Selling Shareholders selling an aggregate
of at least $15,000,000 of Securities shall fail at Closing Time or at a Date of
Delivery to sell and deliver the number of Securities which such Selling
Shareholder or Selling Shareholders are obligated to sell hereunder, and the
remaining Selling Shareholders do not exercise the right hereby granted to
increase, pro rata or otherwise, the number of Securities to be sold by them
hereunder to the total number to be sold by all Selling Shareholders as set
forth in Schedule B hereto, then the International Managers may, at option of
the Lead Managers, by notice from the Lead Managers to the Company and the
non-defaulting Selling Shareholders, either (a) terminate this Agreement without
any liability on the fault of any non-defaulting party except that the
provisions of Sections 1, 4, 6, 7 and 8 shall remain in full force and effect or
(b) elect to purchase the Securities which the non-defaulting Selling
Shareholders and the Company have agreed to sell hereunder. No action taken
pursuant to this Section 11 shall relieve any Selling Shareholder so defaulting
from liability, if any, in respect of such default.
In the event of a default by any Selling Shareholder as referred to
in this Section 11, each of the Lead Managers, the Company and the
non-defaulting Selling Shareholders shall have the right to postpone Closing
Time or the Date of Delivery for a period not exceeding seven days in order to
effect any required change in the Registration Statement or Prospectuses or in
any other documents or arrangements.
(b) If the Company shall fail at Closing Time or at the Date of
Delivery to sell the number of Securities that it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the part
of any non-defaulting party; provided, however, that the provisions of Sections
1, 4,
43
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6, 7 and 8 shall remain in full force and effect. No action taken pursuant to
this Section 11 shall relieve the Company from liability, if any, in respect of
such default.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers c/o Merrill ▇▇▇▇▇
International at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, attention of [ ]; notices
to the Company shall be directed to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ -
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇; and notices to
the Selling Shareholders shall be directed to [ ], attention of [ ].
SECTION 13. Parties. This Agreement shall each inure to the benefit
of and be binding upon the International Managers, the Company and the Selling
Shareholders and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the International Managers, the Company and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the International Managers, the Company and the Selling
Shareholders and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any International Manager shall be deemed to be a successor by reason merely of
such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
44
-39-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the International Managers, the Company and the Selling Shareholders in
accordance with its terms.
Very truly yours,
GLOBAL TELESYSTEMS GROUP, INC.
By
------------------------------
Title:
THE SELLING SHAREHOLDERS NAMED IN
SCHEDULE B HERETO, EXCLUDING THE
▇.▇. ▇▇▇▇▇▇ ENTITIES
By:
------------------------------
As Attorney-in-Fact acting on
behalf of the Selling
Shareholders named in
Schedule B hereto, excluding
the ▇.▇. ▇▇▇▇▇▇ Entities
45
-40-
▇▇▇▇▇▇ GUARANTY TRUST COMPANY ▇.▇. ▇▇▇▇▇▇ INVESTMENT MANAGEMENT
OF NEW YORK, AS TRUSTEE OF THE INC. AS INVESTMENT MANAGER AND
COMMINGLED PENSION TRUST FUND AGENT
(MULTI-MARKET SPECIAL INVESTMENT JPM EMERGING MARKETS SPECIAL
FUND II) OF ▇▇▇▇▇▇ GUARANTY TRUST OPPORTUNITIES PORTFOLIO, L.P.
COMPANY OF NEW YORK
▇▇▇▇▇▇ GUARANTY TRUST COMPANY ▇.▇. ▇▇▇▇▇▇ INVESTMENT MANAGEMENT
OF NEW YORK, AS INVESTMENT INC. AS INVESTMENT MANAGER AND AGENT
MANAGER AND AGENT FOR THE JPM EMERGING MARKETS SPECIAL
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ FOUNDATION OPPORTUNITIES PORTFOLIO OFFSHORE, L.P.
(MULTI-MARKET ACCOUNT)
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, AS TRUSTEE OF THE
MULTI-MARKET SPECIAL INVESTMENT
TRUST FUND OF ▇▇▇▇▇▇ GUARANTY
TRUST COMPANY OF NEW YORK
By: By:
------------------------------- -------------------------------
Name: Name:
Title: Title:
46
-41-
EMERGING MARKETS GROWTH FUND, INC.
By:
-------------------------------
Name:
Title:
CAPITAL INTERNATIONAL EMERGING MARKETS FUND
By:
-------------------------------
Name:
Title:
NEW EUROPE EAST INVESTMENT FUND
By:
-------------------------------
Name:
Title:
47
-42-
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
INTERNATIONAL
▇▇▇▇▇▇▇ SACHS INTERNATIONAL
CIBC WOOD GUNDY OPPENHEIMER
BARING BROTHERS LIMITED (as agent for ING Bank N.V.)
RENAISSANCE ADVISORY LIMITED
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
By:
-------------------------------
Authorized Signatory
For themselves and as Lead Managers of the other International Managers named in
Schedule A hereto.
48
SCHEDULE A
Number of
Initial
International
Name of International Manager Securities
----------------------------- -------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ International............................... $
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ $
International
▇▇▇▇▇▇▇ Sachs International $
CIBC Wood Gundy Oppenheimer $
Baring Brothers Limited (as agent for $
ING Bank N.V.)
Renaissance Advisory Limited $
-------------
Total..................................................... $
=============
Schedule ▇-▇
▇▇
▇▇▇▇▇▇▇▇ ▇
Number of Maximum Number of
Initial International International Option
Securities Securities
to be Sold to be Sold
--------------------- --------------------
Global TeleSystems Group, Inc...........
[SELLING SHAREHOLDERS]..................
--------------------- --------------------
Total................................... $ $
Schedule B-1
50
SCHEDULE C
GLOBAL TELESYSTEMS GROUP, INC.
Shares of Common Stock
(Par Value $.10 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $[ ].
2. The purchase price per share for the International Securities
to be paid by the several International Managers shall be $[ ], being an
amount equal to the initial public offering price set forth above less $[ ]
per share; provided that the purchase price per share for any International
Option Securities purchased upon the exercise of the over-allotment option
described in Section 2(b) shall be reduced by an amount per share equal to
any dividends or distributions declared by the Company and payable on the
Initial International Securities but not payable on the International
Option Securities.
Schedule C-1
51
Exhibit B
, 1998
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
North Tower
World Financial Center
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Re: Agreement not to sell or otherwise
dispose of securities of Global
TeleSystems Group, Inc.
Ladies and Gentlemen:
The undersigned, a stockholder of Global TeleSystems Group, Inc. (the
"Company"), understands that the Company proposes to file two registration
statements on Form S-1 with the Securities and Exchange Commission in connection
with public offerings (the "Offerings") of shares of Common Stock (the "Shares")
and convertible bonds (the "Bonds," together with the Shares, the "Securities")
of the Company. The undersigned further understands that the Company proposes to
enter into one or more purchase agreements (the "Purchase Agreements") with
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") as
representative of the underwriters of the Offerings (the "Underwriters").
In recognition of the benefit that such Offerings will confer upon the
undersigned as a stockholder of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce the Company and the Underwriters to enter into the respective
Purchase Agreements and to proceed with the Offerings, the undersigned hereby
agrees, that until the date that is 90 days after the date of the Purchase
Agreements, the undersigned will not, without the prior written consent of
▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, (i) offer, pledge, sell,
B-1
52
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant for the sale of, or
otherwise dispose of or transfer any Shares or any securities convertible into
or exchangeable or exercisable for any Shares (other than any Shares sold
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), or any securities convertible into or
exchangeable or exercisable for any such Shares, whether now owned or hereafter
acquired by the undersigned or with respect to which the undersigned has or
hereafter acquires the power of disposition (except for publicly-traded Shares
that have been acquired on Nasdaq or Easdaq) or request the filing of any
registration statement under the Securities Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of Shares (other than any Shares sold pursuant to an
effective registration statement under the Securities Act), whether any such
swap transaction is to be settled by delivery of Shares or other securities, in
cash or otherwise.
Sincerely,
Name of Stockholder:
---------------------------
(Print)
Signature:
---------------------------
By:
(if not natural person)
B-2