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EXHIBIT 1.1
VIATEL, INC.
Common Stock
($.01 par value)
U.S. Underwriting Agreement
New York, New York
, 1996
Salomon Brothers Inc
CS First Boston Corporation
Lazard Freres & Co. LLC
As U.S. Representatives of the several U.S. Underwriters,
c/o Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Viatel, Inc., a Delaware corporation (the "Company"), proposes
to sell to the underwriters named in Schedule I hereto (the "U.S.
Underwriters"), for whom you (the "U.S. Representatives") are acting as
representatives, 5,200,200 shares of Common Stock, $.01 par value ("Common
Stock"), of the Company, (the "U.S. Underwritten Securities"). The Company
also proposes to grant to the U.S. Underwriters an option to purchase up to
780,030 additional shares of Common Stock (the "U.S. Option Securities"; the
U.S. Option Securities, together with the U.S. Underwritten Securities, being
hereinafter called the "U.S. Securities"). It is understood that the Company
is concurrently entering into an International Underwriting Agreement dated the
date hereof (the "International Underwriting Agreement") providing for the sale
by the Company of an aggregate of 3,466,800 shares of Common Stock (said shares
to be sold by the Company pursuant to the International Underwriting Agreement
being hereinafter called the "International Underwritten Securities"), outside
the United States and Canada through arrangements with certain underwriters
outside the United States and Canada (the "International Underwriters"), for
whom Salomon Brothers International Limited, CS First Boston Limited and Lazard
Capital Markets are acting as representatives (the "International
Representatives"), and providing for the grant to the International
Underwriters of an option to purchase from the Company up to 520,020 additional
shares of Common Stock (the "International Option Securities"; the
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International Option Securities, together with the International Underwritten
Securities, being hereinafter called the "International Securities" and the
U.S. Securities, together with the International Securities, being hereinafter
called the "Securities"). It is further understood and agreed that the U.S.
Underwriters and the International Underwriters have entered into an Agreement
Between U.S. Underwriters and International Underwriters dated the date hereof
(the "Agreement Between U.S. Underwriters and International Underwriters"),
pursuant to which, among other things, the International Underwriters may
purchase from the U.S. Underwriters a portion of the U.S. Securities to be sold
pursuant to the U.S. Underwriting Agreement and the U.S. Underwriters may
purchase from the International Underwriters a portion of the International
Securities to be sold pursuant to the International Underwriting Agreement.
In this Agreement, unless otherwise specified, all reference
to "dollars" or "$" are to the currency of the United States.
1. Representations and Warranties.
(a) The Company represents and warrants to, and agrees with,
each U.S. Underwriter as set forth below in this Section 1. Certain terms used
in this Section 1 are defined in paragraph (ix) hereof.
(i) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (file number
333-09699) on Form S-1, including related preliminary prospectuses,
for the registration under the Securities Act of 1933, as amended (the
"Act"), of the offering and sale of the Securities. The Company may
have filed one or more amendments thereto, including the related
preliminary prospectuses, each of which has previously been furnished
to you. The Company will next file with the Commission either (A)
prior to effectiveness of such registration statement, a further
amendment to such registration statement (including the form of final
prospectuses) or (B) after effectiveness of such registration
statement, final prospectuses in accordance with Rules 430A and
424(b)(1) or (4). In the case of clause (B), the Company has included
in such registration statement, as amended at the Effective Date, all
information (other than Rule 430A
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Information) required by the Act and the rules and regulations
thereunder to be included in the Prospectuses with respect to the
Securities and the offering thereof. As filed, such amendment and
form of final prospectuses, or such final prospectuses, shall contain
all Rule 430A Information, together with all other such required
information, with respect to the Securities and the offering thereof
and, except to the extent the U.S. Representatives shall agree in
writing to a modification, shall be in all substantive respects in
the form furnished to you prior to the Execution Time or, to the
extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that
contained in the latest U.S. Preliminary Prospectus) as the Company
has advised you, prior to the Execution Time, will be included or made
therein. Upon your request, but not without your agreement, the
Company also will file with the Commission a Rule 462(b) Registration
Statement in accordance with Rule 462(b).
It is understood that two forms of prospectus are to be used
in connection with the offering and sale of the Securities: one form
of prospectus relating to the U.S. Securities, which are to be offered
and sold to United States and Canadian Persons (as defined herein)
which for purposes of distribution to Canadian Persons shall have a
Canadian "wrap-around" (the "Canadian Offering Memorandum"), and one
form of prospectus relating to the International Securities, which are
to be offered and sold to persons other than United States and
Canadian Persons. The two forms of prospectus are identical except
for the outside front cover page, the discussion under the headings
"Underwriting" and "Certain United States Tax Considerations for
Non-United States Holders" and the outside back cover page. Such form
of prospectus relating to the U.S. Securities as first filed with the
Commission pursuant to Rule 424(b) or, if no filing pursuant to Rule
424(b) is made, such form of prospectus included in the Registration
Statement at the Effective Date, is hereinafter called the "U.S.
Prospectus"; such form of prospectus relating to the International
Securities as first filed with the Commission pursuant to Rule 424(b)
or, if no filing pursuant to Rule 424(b) is made, such form of
prospectus included in the Registration Statement at the Effective
Date, is hereinafter called the "International Prospectus"; and the
U.S. Prospectus
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and the International Prospectus are hereinafter collectively called
the "Prospectuses". Insofar as they relate to offers or sales of
Securities in Canada, all references herein to the U.S. Preliminary
Prospectus (as defined in paragraph (ix) below) and the U.S.
Prospectus shall include the Canadian Offering Memorandum.
(ii) On the Effective Date, the Registration Statement did or
will, and when the Prospectuses are first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined
herein) and on any date on which shares sold in respect of the U.S.
Underwriters' over-allotment option are purchased, if such date is not
the Closing Date (a "Settlement Date"), the Prospectuses (and any
supplements thereto) will comply in all material respects with the
applicable requirements of the Act and the rules and regulations
thereunder; on the Effective Date, the Registration Statement did not
or will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and, on the
Effective Date, the Prospectuses, if not filed pursuant to Rule
424(b), did not or will not, and on the date of any filing pursuant to
Rule 424(b) and on the Closing Date and any Settlement Date, the
Prospectuses (together with any supplement thereto) will not, include
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or
warranties as to the information contained in or omitted from the
Registration Statement or the Prospectuses (or any supplement
thereto) in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of any U.S. Underwriter
through the U.S. Representatives specifically for inclusion in the
Registration Statement or the U.S. Prospectus (or any supplement
thereto).
(iii) The Company and its subsidiaries listed in Schedule II
attached hereto (individually, a "Subsidiary" and collectively, the
"Subsidiaries") have in effect all the telecommunications regulatory
licenses, permits, authorizations, consents and
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approvals ("Telecommunications Licenses") required to be obtained from
the Federal Communications Commission ("FCC") for the Company and its
Subsidiaries to conduct their respective businesses as presently
conducted and, to the extent required, have filed applications,
received comfort letters, or obtained Telecommunications Licenses from
the applicable regulatory authorities outside the United States,
except for Telecommunications Licenses that the failure to obtain
would not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole. The Company and its Subsidiaries are
not required to obtain any Telecommunications Licenses or to file any
tariffs for telecommunications services in the States of New York,
Nebraska or Delaware, those states where it is currently qualified to
transact business, because the Company and its Subsidiaries do not
market intrastate services and do not provide intrastate
telecommunications services in those states. To the best of the
Company's knowledge, the Telecommunications Licenses obtained by the
Company or its Subsidiaries have been duly and validly issued and are
in full force and effect and no proceedings to revoke or restrict such
Telecommunications Licenses are pending or threatened, except that the
Section 214 UK Facilities Authorization (as such term is defined in
the Prospectuses) is still subject to third party petitions for
reconsideration up to and until October 21, 1996, and the Section 214
Global Authorization (as such term is defined in the Prospectuses)
and the Section 214 UK Authorization are subject to FCC
reconsideration on its own motion up to and until October 22, 1996 and
October 30, 1996, respectively. In addition, the Company and its
Subsidiaries have in effect with the FCC all international switched,
international private line and/or United States domestic interexchange
service tariffs necessary to conduct their respective businesses in
the manner presently conducted, except to the extent that the failure
to file such tariffs would not have a material adverse effect on the
Company and its Subsidiaries, taken as a whole.
(iv) The Company and its Subsidiaries are not in violation of
any rule or regulation or any judgment, injunction, order or decree of
the FCC or of the telecommunications regulatory authority of the
States of New York, Nebraska or Delaware or of any foreign
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jurisdiction in which the Company or its Subsidiaries conduct business
having jurisdiction over the Company or the Subsidiaries,
respectively, or over their respective properties except for
violations which would not have a material adverse effect on the
Company and its Subsidiaries, taken as a whole.
(v) Except as described in the Prospectuses, within and
between the member states of the European Union (as defined in the
Prospectuses) where the Company operates, the Company is not offering
services that are prohibited as Voice Telephony (as defined in the
Prospectuses). The Company and its Subsidiaries are not in violation
of any of the terms and conditions of any of the Telecommunications
Licenses and are not in violation of any of the applicable statutes,
ordinances, rules, regulations or laws of any of the respective
countries in which the Company or its Subsidiaries conduct their
respective businesses, except to the extent that such violation would
not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole, and except as described in the
Prospectuses.
(vi) The Company is not offering services within Switzerland
or Japan or between either of these countries and any other country,
that are prohibited by Switzerland or Japan.
(vii) The Company is using its leased line between the United
States and the United Kingdom only for calls that (1) originate in one
of those countries and terminate in the other, (2) originate or
terminate in countries which the FCC deems to be "equivalent" or (3)
originate in third countries and are routed between such countries and
the United Kingdom end of the leased line over the international
public switched telephone network as International Message
Telecommunications Services ("IMTS").
(viii) There is no outstanding adverse judgment, injunction,
decree or order that has been issued by the Public Utilities
Commission ("PUC") of the States of New York, Nebraska or Delaware
against the Company or any of its Subsidiaries or any action,
proceeding or investigation pending before or threatened by the PUC of
the States of New York, Nebraska or Delaware against the Company or
any of its Subsidiaries which would have
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a material adverse effect on the Company and its Subsidiaries, taken
as a whole.
(ix) The terms which follow, when used in this Agreement,
shall have the meanings indicated. The term "the Effective Date"
shall mean each date that the Registration Statement, any
post-effective amendment or amendments thereto and any Rule 462(b)
Registration Statement became or become effective. "Execution Time"
shall mean the date and time that this Agreement is executed and
delivered by the parties hereto. The "U.S. Preliminary Prospectus"
and the "International Preliminary Prospectus", respectively, shall
mean any preliminary prospectus with respect to the offering of the
U.S. Securities and the International Securities, as the case may be,
referred to in paragraph (i) above and any preliminary prospectus with
respect to the offering of the U.S. Securities and the International
Securities, as the case may be, included in the Registration Statement
at the Effective Date that omits Rule 430A Information; and the U.S.
Preliminary Prospectus and the International Preliminary Prospectus
are hereinafter collectively called the "Preliminary Prospectuses".
"Registration Statement" shall mean the registration statement
referred to in paragraph (i) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment thereto or any Rule
462(b) Registration Statement becomes effective prior to the Closing
Date (as hereinafter defined), shall also mean such registration
statement as so amended or such Rule 462(b) Registration Statement, as
the case may be. Such term shall include any Rule 430A Information
deemed to be included therein at the Effective Date as provided by
Rule 430A. "Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act. "Rule 430A Information" means information with respect
to the Securities and the offering thereof permitted to be omitted
from the Registration Statement when it becomes effective pursuant to
Rule 430A. "Rule 462(b) Registration Statement" shall mean a
registration statement and any amendments thereto filed pursuant to
Rule 462(b) relating to the offering covered by the initial
registration statement (file number 333-09699). "United States or
Canadian Person" shall mean any person who is a national or resident
of the
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United States or Canada, any corporation, partnership, or other entity
created or organized in or under the laws of the United States or
Canada or of any political subdivision thereof, or any estate or trust
the income of which is subject to United States or Canadian Federal
income taxation, regardless of its source (other than any non-United
States or non-Canadian branch of any United States or Canadian
Person), and shall include any United States or Canadian branch of a
person other than a United States or Canadian Person. "U.S." or
"United States" shall mean the United States of America (including the
states thereof and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.
2. Purchase and Sale. (a) Subject to the terms and
conditions and in reliance upon the representations and warranties herein set
forth, the Company agrees to sell to each U.S. Underwriter, and each U.S.
Underwriter agrees, severally and not jointly, to purchase from the Company, at
a purchase price of $ per share, the amount of the U.S. Underwritten
Securities set forth opposite such U.S. Underwriter's name in Schedule I
hereto, plus any additional number of Securities which such U.S. Underwriter
may be obligated to purchase pursuant to Section 9 of this Agreement. It is
understood that the Company is not obligated to sell, and the U.S. Underwriters
are not obligated to purchase, any U.S. Underwritten Securities, unless all the
International Underwritten Securities are contemporaneously purchased by the
International Underwriters.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company hereby grants
an option to the several U.S. Underwriters to purchase, severally and not
jointly, up to 780,030 shares of the U.S. Option Securities at the same
purchase price per share as the U.S. Underwriters shall pay for the U.S.
Underwritten Securities. Said option may be exercised only to cover
over-allotments in the sale of the U.S. Underwritten Securities by the U.S.
Underwriters. Said option may be exercised in whole or in part at any time
(but not more than once) on or before the 30th day after the date of the U.S.
Prospectus upon written notice by the U.S. Representatives to the Company
setting forth the number of shares of the U.S. Option Securities as to which
the several U.S. Underwriters are exercising the option and, subject to
Section 3 hereof, the Settlement Date. The Settlement Date
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may be the same as the Closing Date but not earlier than the Closing Date nor
later than ten business days after the date of such notice. Delivery of
certificates for the shares of U.S. Option Securities by the Company and
payment therefor to the Company shall be made as provided in Section 3 hereof.
The number of shares of the U.S. Option Securities to be purchased by each U.S.
Underwriter shall be the same percentage of the total number of shares of the
U.S. Option Securities to be purchased by the several U.S. Underwriters as such
U.S. Underwriter is purchasing of the U.S. Underwritten Securities, subject to
such adjustments as you in your absolute discretion shall make to eliminate any
fractional shares.
3. Delivery and Payment. Delivery of and payment for the U.S.
Underwritten Securities and the U.S. Option Securities (if the option provided
for in Section 2(b) hereof shall have been exercised on or before the second
business day prior to the Closing Date) shall be made at 10:00 a.m., New York
City time, on , 1996, or such later date (not later than
, 1996) as the U.S. Representatives and the International Representatives shall
designate, which date and time may be postponed by agreement among the U.S.
Representatives, the International Representatives and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for
the U.S. Securities being herein called the "Closing Date"). Delivery of the
U.S. Securities shall be made to the U.S. Representatives for the respective
accounts of the several U.S. Underwriters against payment by the several U.S.
Underwriters through the U.S. Representatives of the purchase price thereof to
or upon the order of the Company by wire transfer of New York Clearing House
same day funds. Delivery of the U.S. Underwritten Securities and the U.S.
Option Securities shall be made at such location as the U.S. Representatives
shall reasonably designate at least one business day in advance of the Closing
Date and payment for such U.S. Securities shall be made at the office of
Cravath, Swaine & Xxxxx or at such location as may be agreed to by the U.S.
Representatives and the Company. Certificates for the U.S. Securities shall be
registered in such names and in such denominations as the U.S. Representatives
may request not less than two full business days in advance of the Closing
Date.
The Company agrees to have the U.S. Securities available for
inspection, checking and packaging by the U.S.
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Representatives in New York, New York, not later than 1:00 p.m. on the business
day prior to the Closing Date.
If the option provided for in Section 2(b) hereof is exercised
after the second business day prior to the Closing Date, the Company will
deliver (at the expense of the Company) to the U.S. Representatives, at Seven
World Trade Center, New York, New York or at such location as may be agreed to
by the U.S. Representatives and the Company, on the date specified by the U.S.
Representatives (which shall be within three business days after exercise of
said option), certificates for the U.S. Option Securities in such names and
denominations as the U.S. Representatives shall have requested against payment
of the purchase price thereof to or upon the order of the Company by wire
transfer of New York Clearing House same day funds. If settlement for the U.S.
Option Securities occurs after the Closing Date, the Company will deliver to
the U.S. Representatives on the Settlement Date for the U.S. Option Securities,
and the obligation of the U.S. Underwriters to purchase the U.S. Option
Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
It is understood and agreed that the Closing Date shall occur
simultaneously with the "Closing Date" under the International Underwriting
Agreement, and that the Settlement Date, if any, shall occur simultaneously
with the "Settlement Date" under the International Underwriting Agreement.
4. Offering by U.S. Underwriters. It is understood that the
several U.S. Underwriters propose to offer the U.S. Securities for sale to the
public as set forth in the U.S. Prospectus.
5. Agreements.
(a) The Company agrees with the several U.S. Underwriters
that:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereof to become effective. Prior to the termination
of the offering of the Securities, the Company will not file any
amendment to the Registration Statement, supplement to the
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Prospectuses or any Rule 462(b) Registration Statement without your
prior consent. Subject to the foregoing sentence, if the Registration
Statement has become or becomes effective pursuant to Rule 430A, or
filing of the Prospectuses is otherwise required under Rule 424(b),
the Company will cause the Prospectuses, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed
and will provide evidence satisfactory to the U.S. Representatives of
such timely filing. Upon your request, the Company will cause the
Rule 462(b) Registration Statement, completed in compliance with the
Act and the applicable rules and regulations thereunder, to be filed
with the Commission pursuant to Rule 462(b) and will provide evidence
satisfactory to the U.S. Representatives of such filing. The Company
will promptly advise the U.S. Representatives (A) when the
Registration Statement, if not effective at the Execution Time, and
any amendment thereto, shall have become effective, (B) when the
Prospectuses, any supplement thereto or any Rule 462(b) Registration
Statement, shall have been filed (if required) with the Commission
pursuant to Rule 424(b), (C) when, prior to termination of the
offering of the Securities, any amendment to the Registration
Statement shall have been filed or become effective, (D) of any
request by the Commission for any amendment to the Registration
Statement, or any Rule 462(b) Registration Statement, or supplement to
the Prospectuses or for any additional information, (E) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (F) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(ii) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which either of the Prospectuses as then supplemented
would include any untrue statement of a material fact or omit to state
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any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
or if it shall be necessary to amend the Registration Statement or
supplement either of the Prospectuses to comply with the Act or the
rules and regulations thereunder, the Company promptly will (i)
prepare and file with the Commission, subject to the second sentence
of paragraph (a) of this Section 5, an amendment or supplement which
will correct such statement or omission or effect such compliance and
(ii) supply any supplemented Prospectuses to you in such quantities as
you may reasonably request.
(iii) As soon as practicable, the Company will make generally
available to its security holders and to the U.S. Representatives an
earnings statement or statements of the Company and its Subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(iv) The Company will furnish to the U.S. Representatives
and counsel for the U.S. Underwriters, without charge, signed copies
of the Registration Statement (including exhibits thereto) and to each
other U.S. Underwriter a copy of the Registration Statement (without
exhibits thereto) and, so long as delivery of a prospectus by a U.S.
Underwriter or dealer may be required by the Act or otherwise
required, as many copies of each of the U.S. Preliminary Prospectus
and the U.S. Prospectus and any supplement thereto as the U.S.
Representatives may reasonably request. The Company will furnish or
cause to be furnished to the U.S. Representatives copies of all
reports on Form SR required by Rule 463 under the Act. The Company
will pay the expenses of printing or other production of all documents
relating to the offering.
(v) The Company will endeavor, in good faith, in
cooperation with the U.S. Representatives to arrange for the
qualification of the Securities for sale under the laws of such
jurisdictions as the U.S. Representatives may designate, will maintain
such qualifications in effect so long as required for the distribution
of the Securities; provided, however, that the Company shall not be
required to qualify as a foreign corporation or file a general consent
to service of process in any such jurisdiction; and will
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pay the fee of the National Association of Securities Dealers, Inc.,
in connection with its review of the offering.
(vi) The Company will not, for a period of 180 days
following the Execution Time, without the prior written consent of
Salomon Brothers Inc, offer, sell or contract to sell, or otherwise
dispose of, directly or indirectly, or announce the offering of, any
other shares of Common Stock or any securities convertible into, or
exchangeable for, shares of Common Stock; provided, however, that the
Company may issue and sell Common Stock pursuant to any employee stock
option plan of the Company in effect at the Execution Time.
(vii) The Company confirms as of the date hereof that it is
in compliance with all provisions of Section 517.075, Florida
Statutes, relating to issuers doing business with the Government of
Cuba or with any person or affiliate located in Cuba, and the Company
further agrees that if it commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba
after the date the Registration Statement becomes or has become
effective with the Commission or with the Florida Department of
Banking and Finance (the "Department"), whichever date is later, or if
the information reported in the Prospectuses, if any, concerning the
Company's business with Cuba or with any person or affiliate located
in Cuba changes in any material way, the Company will provide the
Department notice of such business or change, as appropriate, in a
form acceptable to the Department.
(b) Each U.S. Underwriter agrees with the Company that
(i) it is not purchasing any of the U.S. Securities for the account of anyone
other than a United States or Canadian Person, (ii) it has not offered or sold,
and will not offer or sell, directly or indirectly, any of the U.S. Securities
or distribute any U.S. Prospectus to any person outside of the United States or
Canada, or to anyone other than a United States or Canadian Person, and (iii)
any dealer to whom it may sell any of the U.S. Securities will represent that
it is not purchasing for the account of anyone other than a United States or
Canadian Person and agree that it will not offer or resell, directly or
indirectly, any of the U.S. Securities outside of the United States or Canada,
or
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to anyone other than a United States or Canadian Person or to any other dealer
who does not so represent and agree; provided, however, that the foregoing
shall not restrict (A) purchases and sales between the U.S. Underwriters on the
one hand and the International Underwriters on the other hand pursuant to the
Agreement Between U.S. Underwriters and International Underwriters, (B)
stabilization transactions contemplated under the Agreement Between U.S.
Underwriters and International Underwriters, conducted through Salomon Brothers
Inc (or through the U.S. Representatives and the International Representatives)
as part of the distribution of the Securities, and (C) sales to or through (or
distributions of U.S. Prospectuses or U.S. Preliminary Prospectuses to) United
States or Canadian Persons who are investment advisors, or who otherwise
exercise investment discretion, and who are purchasing for the account of
anyone other than a United States or Canadian Person.
(c) The agreements of the U.S. Underwriters set forth in
paragraph (b) of this Section 5 shall terminate upon the earlier of the
following events:
(i) a mutual agreement of the U.S. Representatives and
the International Representatives to terminate the selling
restrictions set forth in paragraph (b) of this Section 5 and in
Section 5(b) of the International Underwriting Agreement; or
(ii) the expiration of a period of 30 days after the
Closing Date, unless (A) the International Representatives shall have
given notice to the Company and the U.S. Representatives that the
distribution of the International Securities by the International
Underwriters has not yet been completed, or (B) the U.S.
Representatives shall have given notice to the Company and the
International Underwriters that the distribution of the U.S.
Securities by the U.S. Underwriters has not yet been completed. If
such notice by the U.S. Representatives or the International
Representatives is given, the agreements set forth in such paragraph
(b) shall survive until the earlier of (1) the event referred to in
clause (i) of this subsection (c) or (2) the expiration of an
additional period of 30 days from the date of any such notice.
6. Conditions to the Obligations of the U.S. Underwriters.
The obligations of the U.S. Underwriters to purchase the U.S. Underwritten
Securities and the U.S.
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Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as
of the Execution Time, the Closing Date and any Settlement Date pursuant to
Section 3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional
conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the U.S. Representatives and the
International Representatives agree in writing to a later time, the
Registration Statement will become effective not later than (i) 5:30 p.m., New
York City time, on the date of determination of the public offering price, if
such determination occurred at or prior to 3:00 p.m., New York City, time on
such date or (ii) 12:00 noon on the business day following the day on which the
public offering price was determined, if such determination occurred after 3:00
p.m., New York City time, on such date; if filing of either of the
Prospectuses, or any supplement thereto, is required pursuant to Rule 424(b),
the Prospectuses, and any such supplement, will be filed in the manner and
within the time period required by Rule 424(b); and no stop order suspending
the effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(b) The Company shall have furnished to the U.S.
Representatives the opinion of Xxxxxxx X. Xxxxxxx, Esq., U.S. General Counsel,
for the Company, dated the Closing Date, to the effect that:
(i) each of the Company and the Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with full
corporate power and corporate authority to own its properties and to
conduct its business as described in the Prospectuses, and is duly
qualified to transact business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or
conducts material business, except to the extent that the failure to
be so qualified or to be in good standing would not have a
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material adverse effect on the Company and its Subsidiaries, taken as
a whole, or such other opinion as is satisfactory to counsel for the
U.S. Underwriters;
(ii) all the outstanding shares of capital stock of each
Subsidiary have been duly authorized and are validly issued, fully
paid and nonassessable, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company, either directly or through
wholly owned subsidiaries, free and clear of any perfected security
interest and, to the knowledge of such counsel, after due inquiry
(without investigation of the laws of any jurisdiction other than New
York), any other security interests, claims, liens or encumbrances, or
such other opinion as is satisfactory to counsel for the U.S.
Underwriters;
(iii) the Company's authorized equity capitalization is as set
forth in the Prospectuses under the caption "Description of Capital
Stock"; the capital stock of the Company conforms to the description
thereof contained in the Prospectuses; the outstanding shares of
Common Stock have been duly authorized and are validly issued, fully
paid and nonassessable; the Securities have been duly authorized, and,
when issued and delivered to and paid for by the U.S. Underwriters
pursuant to this Agreement and by the International Underwriters
pursuant to the International Underwriting Agreement, will be validly
issued, fully paid and nonassessable; the certificates for the
Securities are in valid and sufficient form; and the holders of
outstanding shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Securities;
(iv) to the best knowledge of such counsel, there are no
pending or threatened actions, suits or proceedings before any court
or governmental agency, authority or body or any arbitrator involving
the Company or any of its Subsidiaries of a character required to be
disclosed in the Registration Statement or the Prospectuses which are
not adequately described therein, and there is no franchise, contract
or other document of a character required to be described in the
Registration Statement or the Prospectuses, or to be filed as an
exhibit to the Registration Statement, which is not described or filed
as required; and the statements in the Prospectuses under the caption
"Business--Legal Proceedings" present the information
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called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein;
(v) this Agreement and the International Underwriting
Agreement have been duly authorized, executed and delivered by the
Company;
(vi) no consent, approval, authorization or order of any
court or governmental agency or body is required by the Company or any
of the Subsidiaries for the consummation of the transactions
contemplated herein or in the International Underwriting Agreement;
provided, that such counsel need not express an opinion with respect
to state securities or Blue Sky laws or statutes, rules and
regulations relating to the FCC and matters regulated by the FCC or
statutes, rules and regulations relating to foreign telecommunications
regulatory authorities and matters regulated by such authorities;
(vii) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions contemplated herein or
in the International Underwriting Agreement nor the fulfillment of the
terms hereof or thereof will conflict with, result in a breach or
violation of, or constitute a default under any provision of
applicable law or the certificate of incorporation or by-laws of the
Company or, to the best of such counsel's knowledge, the terms of any
indenture or other agreement or instrument to which the Company or any
of its Subsidiaries is a party or bound that is material to the
Company and its Subsidiaries, taken as a whole, or, to the best of
such counsel's knowledge, any judgment, injunction, order or decree of
any court, regulatory body, administrative agency, governmental body
or arbitrator having jurisdiction over the Company or any of its
Subsidiaries; and
(viii) no holders of securities of the Company have rights to
the registration of such securities under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters involving
the application of laws of any jurisdiction other than the State of New York,
the United States or the General Corporation Law of the State of Delaware, to
the extent such counsel deems proper and as
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specified in such opinion, upon the opinion of other counsel of good standing
whom such counsel believes to be reliable and who are satisfactory to counsel
for the U.S. Underwriters and (B) as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the Company and public
officials. References to the Prospectuses in this paragraph (b) include any
supplements thereto at the Closing Date.
In addition, such counsel shall state that nothing has come to his attention
that leads him to believe that the Registration Statement at the time the
Registration Statement became effective (other than the financial statements
and supporting notes and schedules and other financial and statistical data
contained therein, as to which such counsel need not comment) contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectuses (other than the financial
statements and supporting notes and schedules and other financial and
statistical data contained therein, as to which such counsel need not comment)
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(c) The Company shall have furnished to the U.S.
Representatives the opinion of Xxxxxx Xxxx & Xxxxxx LLP, special counsel for
the Company, dated the Closing Date, to the effect that:
(i) each of the Company and YYC Communications, Inc. (the
"U.S. Subsidiary") has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware with full corporate power and corporate authority to own its
properties and to conduct its business as described in the
Prospectuses, and is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business, except to
the extent that the failure to be so qualified or to be in good
standing would not have a material adverse effect on the Company and
its Subsidiaries, taken as a whole;
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(ii) the Company's authorized equity capitalization is as set
forth in the Prospectuses under the caption "Description of Capital
Stock"; the capital stock of the Company conforms to the description
thereof contained under the captions "Description of Capital
Stock--Common Stock" and "Description of Capital Stock--Preferred
Stock" in the Prospectuses and the capital stock of the Company
conforms in all material respects to the description thereof contained
under the caption "Description of Capital Stock--General" in the
Prospectuses; the Securities have been duly authorized, and, when
issued and delivered to and paid for by the U.S. Underwriters pursuant
to this Agreement and by the International Underwriters pursuant to
the International Underwriting Agreement, will be validly issued,
fully paid and nonassessable; and the certificates for the Securities
are in valid and sufficient form;
(iii) the Registration Statement has become effective under
the Act; any required filing of the Prospectuses, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the best knowledge
of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened and the Registration
Statement and each of the Prospectuses (other than the financial
statements and supporting notes and schedules and other financial and
statistical data contained therein as to which such counsel need not
comment) comply as to form in all material respects with the
applicable requirements of the Act and the rules thereunder;
(iv) this Agreement and the International Underwriting
Agreement have been duly authorized, executed and delivered by the
Company;
(v) to the best of such counsel's knowledge, no consent,
approval, authorization or order of any court or governmental agency
or body is required by the Company or any of the Subsidiaries for the
consummation of the transactions contemplated herein or in the
International Underwriting Agreement; provided, that such counsel need
not express an opinion with respect to state securities or Blue Sky
laws or statutes, rules
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and regulations relating to the FCC and matters regulated by the FCC;
and
(vi) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions contemplated herein or
in the International Underwriting Agreement nor the fulfillment of the
terms hereof or thereof will conflict with, result in a breach or
violation of, or constitute a default under any provision of
applicable law or the certificate of incorporation or by-laws of the
Company or, to the best of such counsel's knowledge, the terms of any
indenture or other agreement or instrument to which the Company or any
of its Subsidiaries is a party or bound that is material to the
Company and its Subsidiaries, taken as a whole, or, to the best of
such counsel's knowledge, any judgment, injunction, order or decree of
any court, regulatory body, administrative agency, governmental body
or arbitrator having jurisdiction over the Company or any of its
Subsidiaries.
In rendering such opinion, such counsel may rely (A) as to matters involving
the application of laws of any jurisdiction other than the State of New York,
the United States or the General Corporation Law of the State of Delaware, to
the extent such counsel deems proper and as specified in such opinion, upon the
opinion of other counsel of good standing whom such counsel believes to be
reliable and who are satisfactory to counsel for the U.S. Underwriters and (B)
as to matters of fact, to the extent such counsel deems proper, on certificates
of responsible officers of the Company and public officials. References to the
Prospectuses in this paragraph (c) include any supplements thereto at the
Closing Date.
In addition, such counsel shall state that nothing has come to
their attention that leads them to believe that the Registration Statement at
the time the Registration Statement became effective (other than the financial
statements and supporting notes and schedules and other financial and
statistical data contained therein, as to which such counsel need not comment)
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectuses (other than the
financial statements and supporting notes and schedules and other financial and
statistical data contained therein, as to which such counsel
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21
need not comment) contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. In
rendering such opinion, such counsel may state that their opinion and belief is
based upon their participation in the preparation of the Registration Statement
and Prospectuses and review and discussion of the contents thereof, but is
without independent check or verification.
(d) The Company shall have furnished to the U.S.
Representatives the opinion of Xxxxxxxx & Xxxxxxxx LLP, special communications
counsel for the Company, dated the Closing Date, to the effect that:
(i) the Section 214 Private Line Authorization, the Section
214 Switched Authorization, the Section 214 Global Authorization and
the Section 214 UK Facilities Authorization (as such terms are defined
in the Prospectuses) are the only Telecommunications Licenses required
from the FCC for the Company and its Subsidiaries to conduct their
business as presently conducted, except for FCC Telecommunications
Licenses that the failure to obtain would not have a material adverse
effect on the Company and its Subsidiaries, taken as a whole. The FCC
Telecommunications Licenses currently held by the Company and its
Subsidiaries have been duly and validly issued and are in full force
and effect, and to the best knowledge of such counsel no proceedings to
revoke or restrict such FCC Telecommunications Licenses are pending or
threatened, except that the Section 214 Global Authorization and the
Section 214 UK Facilities Authorization and are still subject to FCC
reconsideration on its own motion up to and until October 22, 1996 and
October 30, 1996, respectively. To the best of such counsel's
knowledge after due inquiry and based upon a certificate of an officer
of the Company, a copy of which is attached to such opinion as an
exhibit (stating that the Company is using its leased line between the
United States and the United Kingdom only for calls that (1) originate
in one of those countries and terminate in the other, (2) originate or
terminate in countries which the FCC deems to be "equivalent" or (3)
originate in third
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countries and are routed between such countries and the United Kingdom
end of the leased line over the international public switched telephone
network as IMTS), the Company and its Subsidiaries are not in violation
of any of the terms and conditions of any of their FCC
Telecommunications Licenses, are not in violation of the Communications
Act and are not in violation of any FCC rules or regulations, except to
the extent that such violation would not have a material adverse effect
on the Company and its Subsidiaries, taken as a whole, and except as
described in the Prospectuses under the captions "Risk Factors --
Substantial Government Regulation" and "Business -- Government
Regulation -- Overview." Insofar as this opinion pertains to the
application or interpretation of any non-U.S. law, such counsel has
performed no due diligence in this regard other than discussing with
management of the Company the Company's operations and compliance with
applicable FCC requirements and reviewing any portions of the opinions
of local counsel of Argentina, Belgium, Brazil, Colombia, France,
Germany, Italy, Japan, Korea, the Netherlands, Spain, Switzerland, and
the United Kingdom specifically regarding the provision of
international call-back service in certain jurisdictions in which the
Company operates, without any further inquiry or any independent review
of any laws of any such jurisdictions. The Company and its Subsidiaries
have in effect with the FCC all international switched, international
private line and/or United States domestic interexchange service
tariffs necessary to conduct their respective businesses in the manner
presently conducted, except to the extent that the failure to file such
tariffs would not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole;
(ii) to the extent they constitute a summary of the legal
matters, documents or proceedings referred to therein, the statements
in the Prospectuses under the captions "Risk Factors--Substantial
Government Regulation," "Risk Factors--Competition," "Business--Market
Opportunity," "Business--Services," "Business--The Viatel Network,"
"Business--Competition" and "Business--Government Regulation," fairly
present the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters referred to
therein;
(iii) the Company and its Subsidiaries are not required to
obtain any state Telecommunications Licenses or to file any tariffs
required for the provision of telecommunications services in the
States of New York, Nebraska or Delaware to conduct their respective
businesses as presently conducted;
(iv) there is no outstanding adverse judgment, injunction,
decree or order that has been issued by the FCC against the Company or
any of its Subsidiaries or, to the best of such counsel's knowledge
after due inquiry, any action, proceeding or investigation pending
before the FCC or pending or threatened by the FCC against the Company
or any of its Subsidiaries which, if the subject of an unfavorable
decision,
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ruling or finding, would have a material adverse effect on the Company
and its Subsidiaries, taken as a whole, except that the Section 214
Global Authorization and the Section 214 UK Facilities Authorization
are still subject to FCC reconsideration on its own motion up to and
until October 22, 1996 and October 30, 1996, respectively;
(v) based on discussions with management, an inquiry
concerning and review of relevant publicly available documents and a
certificate of an officer of the Company, a copy of which is attached
to such opinion as an exhibit, there is no outstanding adverse
judgment, injunction, decree or order that has been issued by the PUC
of the States of New York, Nebraska or Delaware against the Company or
any of its Subsidiaries or, to the best of such counsel's knowledge
after due inquiry, any action, proceeding or investigation pending
before or threatened by the PUC of the States of New York, Nebraska or
Delaware against the Company or any of its Subsidiaries which, if the
subject of an unfavorable decision, ruling or finding, would have a
material adverse effect on the Company and its Subsidiaries, taken as
a whole;
(vi) no license, permit, consent, approval, order or
authorization of, or filing with, the FCC or with the PUC of the
States of New York, Nebraska or Delaware on the part of the Company or
its Subsidiaries is required in connection with the issuance of the
Securities; and
(vii) neither the issue and sale of the Securities nor the
performance by the Company of its obligations under this Agreement or
the International Underwriting Agreement will result in a violation of
the Communications Act, or any applicable rules or the regulations
promulgated under the Communications Act binding on the Company or its
Subsidiaries or, to the best of such counsel's knowledge after due
inquiry, any order, writ, judgment, injunction, decree or award of the
FCC binding on the Company or its Subsidiaries.
In rendering such opinion, such counsel may rely (A) with respect to the
opinion expressed in paragraphs (iii) and
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(vi) above on a certificate of officers of the Company, a copy of which shall
be attached to such opinion as an exhibit, to the effect that the Company's
business as conducted does not and will not until the proper regulatory
approvals are obtained, allow intrastate calls originating and terminating in
the States of New York, Nebraska or Delaware, (B) to the extent such counsel
deems proper and as specified in such opinion, upon the opinion of other
counsel of good standing whom such counsel believes to be reliable and who are
satisfactory to counsel for the U.S. Underwriters and (C) as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials, copies of which shall be attached
to such counsel's opinion as exhibits. References to the Prospectuses in this
paragraph (d) include any supplements thereto at the Closing Date.
Such counsel also shall state that the Section 214 Switched Authorization, the
Section 214 Private Line Authorization and the Section 214 Global Authorization
require the Company and its Subsidiaries to provide any international
call-back service using uncompleted call signaling in a manner that is
consistent with the laws of the countries in which they operate. Such counsel
shall state that although such counsel does not provide legal services to the
Company or its Subsidiaries regarding the application or interpretation of any
non-U.S. law and although such counsel has performed no due diligence in this
regard other than discussing with management of the Company the Company's
operations and compliance with applicable FCC requirements and reviewing any
portions of
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25
the opinions of local counsel of Argentina, Belgium, Brazil, Colombia, France,
Germany, Italy, Japan, Korea, the Netherlands, Spain, Switzerland, and the
United Kingdom specifically regarding the provision of international call-back
service in certain jurisdictions in which the Company operates, such counsel is
not aware of any non-compliance in the provision of international call-back
service by the Company with the laws of any foreign jurisdiction in which the
Company operates that would constitute a violation of the Section 214 Switched
Authorization, the Section 214 Private Line Authorization or the Section 214
Global Authorization and have a material adverse effect on the Company and its
Subsidiaries, taken as a whole. For the purpose of making such statement, such
counsel may rely, to the extent such counsel deems proper and as specified in
such opinion, upon such counsel's review of any portions of the opinions of
local counsel of Argentina, Belgium, Brazil, Colombia, France, Germany, Italy,
Japan, Korea, the Netherlands, Spain, Switzerland, and the United Kingdom
specifically regarding the provision of international call-back service
provided by the Company, without any further inquiry or any independent review
of any laws of any such jurisdictions.
(e) The Company shall have furnished to the U.S. Representatives the
opinions of local counsel of good standing whom the Company believes to be
reliable, and who are satisfactory to counsel for the U.S. Underwriters, in
each of Argentina, Belgium, Brazil, Colombia, France, Germany, Italy, Japan,
Korea, the Netherlands, Spain, Switzerland, and the United Kingdom dated the
Closing Date, or such date prior to the Closing Date as is satisfactory to
counsel for the U.S. Underwriters, in the following form or in such other form
as is acceptable to counsel for the U.S. Underwriters:
(i) if applicable to such country, each of the Subsidiaries
operating in such country (the "Local Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with full
corporate power and corporate authority to own its properties and to
conduct its business as described in the Prospectuses, and is duly
qualified to transact business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or
conducts material business, except to the extent that the failure to
be so qualified or to be in good standing would not have a material
adverse effect on the Company and its Subsidiaries, taken as a whole;
(ii) all the outstanding shares of capital stock of the Local
Subsidiaries have been duly authorized and are validly issued, fully
paid and nonassessable, and all outstanding shares of capital stock of
the Local Subsidiaries are owned by the Company, either directly or
through wholly owned subsidiaries, free and clear of any perfected
security interest and, to the best knowledge of such counsel, any
other security interests, claims, liens or encumbrances.
(iii) if applicable to such country, neither the issue and
sale of the Securities, nor the consummation of any other of the
transactions contemplated herein or
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26
in the International Underwriting Agreement nor the fulfillment of the
terms hereof or thereof will conflict with, result in a breach or
violation of, or constitute a default under any provision of
applicable law or the charter or by-laws of the Local Subsidiaries or,
to the best of such counsel's knowledge, the terms of any indenture or
other agreement or instrument to which any of the Local Subsidiaries
is a party or bound or, to the best of such counsel's knowledge, any
judgment, injunction, order or decree of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Local Subsidiaries;
(iv) the Company and the Local Subsidiaries have all
Telecommunications Licenses necessary for the Company and the Local
Subsidiaries to conduct their respective businesses as presently
conducted in such country except for Telecommunications Licenses that
the failure to obtain would not have a material adverse effect on the
Company or the Local Subsidiaries; to the knowledge of such counsel
such Telecommunications Licenses are in full force and effect and no
proceedings to revoke or restrict such Telecommunications Licenses are
pending or threatened; and to the knowledge of such counsel the
Company and its Subsidiaries are in material compliance with all of
the applicable telecommunications laws and rules and regulations of
such country; and
(v) to the knowledge of such counsel after due inquiry of
Company officers, the Company and the Local Subsidiaries are not in
violation of any telecommunications law, rule or regulation of such
country or of any judgment, injunction, order or decree of the
telecommunications regulatory authority having jurisdiction over the
Company or such Local Subsidiaries, respectively, or over its
properties except for violations which would not have a material
adverse effect on the Company and its Subsidiaries, taken as a whole.
In addition, counsel from European Union member states and from Switzerland
shall state in their opinions that the Company is not offering services that
are prohibited as Voice Telephony (as defined in the Prospectuses). Counsel
from Switzerland shall state that the Company is not offering services in
Switzerland or between Switzerland and any other country that are prohibited by
Switzerland.
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Counsel from Japan shall state that, to the best of such counsel's knowledge
based solely upon discussions with the Company's management and a certificate
from an officer of the Company, the Company's client in Japan is in material
compliance with all applicable telecommunications laws and related rules and
regulations in Japan. Additionally, counsel from the United Kingdom shall also
state that to the extent they constitute a summary of the legal matters,
documents or proceedings referred to therein, the statements in the
Prospectuses under the heading "Business--Government Regulation--Regulatory
Framework--Europe," fairly present the information called for with respect to
such legal matters, documents and proceedings and fairly summarize the matters
referred to therein.
(f) The U.S. Representatives shall have received from
Cravath, Swaine & Xxxxx, counsel for the U.S. Underwriters, such opinion or
opinions, dated the Closing Date, with respect to the issuance and sale of the
Securities, the Registration Statement, the Prospectuses (together with any
supplement thereto) and other related matters as the U.S. Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(g) The Company shall have furnished to the U.S.
Representatives a certificate of the Company, signed by (1) the Chairman of the
Board and Chief Executive Officer or the President and Chief Operating Officer
and (2) the Vice President, Finance, Treasurer and Chief Financial Officer of
the Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectuses, any supplements to the Prospectuses and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
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(iii) since the date of the most recent financial statements
included in the Prospectuses (exclusive of any supplement thereto),
there has been no material adverse change in the condition (financial
or otherwise), earnings, business or properties of the Company and its
Subsidiaries, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the
Prospectuses (exclusive of any supplement thereto).
(h) At the Execution Time and at the Closing Date, KPMG Peat
Marwick LLP shall have furnished to the U.S. Representatives a letter or
letters, dated respectively as of the Execution Time and as of the Closing
Date, in form and substance satisfactory to the U.S. Representatives,
confirming that they are independent accountants within the meaning of the Act
and the applicable published rules and regulations thereunder and that they
have performed a review of the unaudited financial information for the six
months ended June 30, 1996 in accordance with Statement of Auditing Standards
No. 71 and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedule included in the Registration Statement
and the Prospectuses and reported on by them comply in form in all
material respects with the applicable accounting requirements of the
Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
Subsidiaries; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors and
compensation and audit committees of the Company and the Subsidiaries;
and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company and
the Subsidiaries as to
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transactions and events subsequent to December 31, 1995, nothing came
to their attention which caused them to believe that:
(1) any unaudited financial statements included in
the Registration Statement and the Prospectuses do not comply
in form in all material respects with applicable accounting
requirements of the Act and with the published rules and
regulations of the Commission with respect to registration
statements on Form S-1; and said unaudited financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included in the Registration Statement and the Prospectuses;
or
(2) with respect to the period subsequent to June 30,
1996, there were any changes, at a specified date not more
than five business days prior to the date of the letter, in
the long-term liabilities of the Company and its Subsidiaries
or capital stock of the Company and its Subsidiaries or
decreases in the total stockholders' equity of the Company as
compared with the amounts shown on the June 30, 1996
consolidated balance sheet included in the Registration
Statement and the Prospectuses; or for the period from July 1,
1996 to such specified date there were any decreases, as
compared with the corresponding period in the preceding year,
in telecommunications revenue or increases in net losses or in
total or per share amounts of net losses of the Company and
its Subsidiaries or in total operating expenses, except in all
instances for changes or decreases set forth in such letter,
in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the U.S.
Representatives; or
(3) the information included in the Registration
Statement and the Prospectuses in response to Regulation S-K,
Item 301 (Selected Financial Data), Item 302 (Supplementary
Financial Information) and Item 402 (Executive Compensation)
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30
is not in conformity with the applicable disclosure
requirements of Regulation S-K; and
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its Subsidiaries) set
forth in the Registration Statement and the Prospectuses, including
the information set forth under the captions "Prospectus Summary",
"Risk Factors", "Use of Proceeds", "Capitalization", "Selected
Consolidated Financial and Other Data", "Management's Discussion and
Analysis of Financial Condition and Results of Operations",
"Business", "Management", and "Certain Transactions" in the
Prospectuses, agrees with the accounting records of the Company and
its Subsidiaries, excluding any questions of legal interpretation.
References to the Prospectuses in this paragraph (h) include
any supplement thereto at the date of the letter.
The U.S. Representatives shall have also received from KPMG
Peat Marwick LLP a letter stating that the Company's system of internal
accounting controls taken as a whole is sufficient to meet the broad objectives
of internal accounting control insofar as those objectives pertain to the
prevention or detection of errors or irregularities in amounts that would be
material in relation to the financial statements of the Company and its
Subsidiaries.
(i) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Registration Statement (exclusive
of any amendment thereof) and the Prospectuses (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in the
letter or letters referred to in paragraph (h) of this Section 6 or (ii) any
change, or any development involving a prospective change, in or affecting the
business or properties of the Company and its Subsidiaries the effect of which,
in any case referred to in clause (i) or (ii) above, is, in the judgment of the
U.S. Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the
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Registration Statement (exclusive of any amendment thereof) and the
Prospectuses (exclusive of any supplement thereto).
(j) At the Execution Time, the Company shall have furnished
to the U.S. Representatives a letter substantially in the form of Exhibit A
hereto from each officer and director of the Company and each holder of one
percent (1%) or more of outstanding shares of Common Stock of the Company
addressed to the U.S. Representatives, in which each such person agrees not to
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce an offering of, any shares of Common Stock beneficially
owned by such person or any securities convertible into, or exchangeable for,
shares of Common Stock for a period of 180 days following the Execution Time
without the prior written consent of Salomon Brothers Inc, other than shares of
Common Stock disposed of as bona fide gifts.
(k) Prior to the Closing Date, the Company shall have
furnished to the U.S. Representatives such further information, certificates
and documents as the U.S. Representatives may reasonably request.
(l) The closing of the purchase of the International
Underwritten Securities to be issued and sold by the Company pursuant to the
International Underwriting Agreement shall occur concurrently with the closing
described herein.
(m) The Securities shall be duly authorized for listing,
subject to official notice of issuance, on the Nasdaq National Market
("Nasdaq").
(n) At the Execution Time and at the Closing Date, Xxxxxx
Xxxxxx & Company LLP shall have furnished to the U.S. Representatives a letter
or letters, dated respectively as of the Execution Time and as of the Closing
Date, in form and substance satisfactory to the U.S. Representatives,
confirming that they are independent accountants within the meaning of the Act
and the applicable published rules and regulations thereunder and that they
have performed specified procedures as a result of which they determined that
certain information of an accounting, financial or statistical nature (which is
limited to accounting, financial or statistical information derived from the
general accounting records of the Company and its Subsidiaries) set forth in
the Registration Statement and the Prospectuses under the caption "Selected
Consolidated
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Financial and Other Data" agrees with the accounting records of the Company and
its Subsidiaries, excluding any questions of legal interpretation.
If any of the conditions specified in this Section 6 shall
not have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the U.S. Representatives and counsel for
the U.S. Underwriters, this Agreement and all obligations of the U.S.
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the U.S. Representatives. Notice of such cancellation shall be given to
the Company in writing, by facsimile or by telephone confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Cravath, Swaine & Xxxxx at Worldwide Plaza, 000
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the Closing Date or such other place as
the U.S. Representatives and the Company shall mutually agree.
7. Reimbursement of U.S. Underwriters' Expenses. If the sale
of the Securities provided for herein is not consummated because any condition
to the obligations of the U.S. Underwriters set forth in Section 6 hereof is
not satisfied, because of any termination pursuant to Section 10 hereof or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the U.S. Underwriters, the Company will
reimburse the U.S. Underwriters severally upon demand for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Securities.
8. Indemnification and Contribution. (a) The Company agrees
to indemnify and hold harmless each U.S. Underwriter, the directors, officers,
employees and agents of each U.S. Underwriter and each person who controls any
U.S. Underwriter within the meaning of either the Act or the Securities
Exchange Act of 1934 (the "Exchange Act") against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other Federal or state
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statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in any U.S.
or International Preliminary Prospectus or in either of the Prospectuses, or in
any amendment thereof or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and agrees to reimburse each such indemnified party, as incurred, for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that (i) the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any U.S. Underwriter
through the U.S. Representatives specifically for inclusion therein and (ii)
with respect to any untrue statement or omission of a material fact made in any
U.S. Preliminary Prospectus, the indemnity agreement contained in this Section
8(a) shall not inure to the benefit of any U.S. Underwriter (or any of the
directors, officers, employees and agents of such U.S. Underwriter or any
controlling person of such U.S. Underwriter) from whom the person asserting any
such loss, claim, damage or liability purchased the Securities concerned, to
the extent that any such loss, claim, damage or liability of such U.S.
Underwriter occurs under the circumstances where it shall have been determined
by a court of competent jurisdiction by final and nonappealable judgment that
(w) the Company had previously furnished copies of the U.S. Prospectus to the
U.S. Underwriters, (x) delivery of the U.S. Prospectus was required by the Act
to be made to such person, (y) the untrue statement or omission of a material
fact contained in the U.S. Preliminary Prospectus was corrected in the U.S.
Prospectus and (z) there was not sent or given to such person, at or prior to
the written confirmation of the sale of such Securities to such person, a copy
of the U.S. Prospectus. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
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(b) Each U.S. Underwriter severally agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company to each U.S. Underwriter, but only
with reference to written information relating to such U.S. Underwriter
furnished to the Company by or on behalf of such U.S. Underwriter through the
U.S. Representatives specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any U.S. Underwriter may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page and under the heading "Underwriting" in any U.S. or International
Preliminary Prospectus and the Prospectuses constitute the only information
furnished in writing by or on behalf of the several U.S. Underwriters for
inclusion in any U.S. or International Preliminary Prospectus or the
Prospectuses, and you, as the U.S. Representatives, confirm that such
statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall
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35
have the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise
or consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the U.S. Underwriters agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the U.S. Underwriters may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company and by
the U.S. Underwriters from the offering of the U.S. Securities; provided,
however, that in no case shall any U.S. Underwriter (except as may be provided
in any agreement among underwriters relating to the offering of the U.S.
Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such U.S.
Underwriter hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any
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36
reason, the Company and the U.S. Underwriters shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and of the U.S. Underwriters in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses), and benefits received by the U.S. Underwriters
shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the U.S.
Prospectus. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Company or the U.S. Underwriters. The Company and the U.S. Underwriters agree
that it would not be just and equitable if contribution were determined by pro
rata allocation or any other method of allocation which does not take account
of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls a
U.S. Underwriter within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of a U.S. Underwriter shall have
the same rights to contribution as such U.S. Underwriter, and each person who
controls the Company within the meaning of either the Act or the Exchange Act,
each officer of the Company who shall have signed the Registration Statement
and each director of the Company shall have the same rights to contribution as
the Company, subject in each case to the applicable terms and conditions of
this paragraph (d).
9. Default by a U.S. Underwriter. If any one or more U.S.
Underwriters shall fail to purchase and pay for any of the U.S. Securities
agreed to be purchased by such U.S. Underwriter or U.S. Underwriters hereunder
and such failure to purchase shall constitute a default in the performance of
its or their obligations under this Agreement, the remaining U.S. Underwriters
shall be obligated severally to take up and pay for (in the respective
proportions which the amount of U.S. Securities set forth opposite their names
in Schedule I hereto bears to the aggregate amount of U.S. Securities set forth
opposite the names of all the remaining U.S. Underwriters) the U.S.
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Securities which the defaulting U.S. Underwriter or U.S. Underwriters agreed
but failed to purchase; provided, however, that in the event that the aggregate
amount of U.S. Securities which the defaulting U.S. Underwriter or U.S.
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of U.S. Securities set forth in Schedule I hereto, the remaining U.S.
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the U.S. Securities, and if such nondefaulting
U.S. Underwriters do not purchase all the U.S. Securities, this Agreement will
terminate without liability to any nondefaulting U.S. Underwriter or the
Company. In the event of a default by any U.S. Underwriter as set forth in
this Section 9, the Closing Date shall be postponed for such period, not
exceeding seven days, as the U.S. Representatives shall determine in order that
the required changes in the Registration Statement and the Prospectuses or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting U.S. Underwriter of its liability, if
any, to the Company and any nondefaulting U.S. Underwriter for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the U.S. Representatives, by notice
given to the Company prior to delivery of and payment for the U.S. Securities,
if prior to such time (i) trading in the Company's Common Stock shall have been
suspended by the Commission or the Nasdaq or trading in securities generally on
the New York Stock Exchange or the Nasdaq shall have been suspended or limited
or minimum prices shall have been established on the New York Stock Exchange or
the Nasdaq, (ii) a banking moratorium shall have been declared either by
Federal or New York State authorities or (iii) there shall have occurred any
outbreak or escalation of hostilities, declaration by the United States of a
national emergency or war or other calamity or crisis the effect of which on
financial markets is such as to make it, in the judgment of the U.S.
Representatives, impracticable or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the U.S. Prospectus (exclusive
of any supplement thereto).
11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the U.S. Underwriters set
forth in or made
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pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any U.S. Underwriter or the Company
or any of the officers, directors or controlling persons referred to in Section
8 hereof, and will survive delivery of and payment for the U.S. Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the U.S. Representatives, will
be mailed, delivered or telecopied and confirmed to them care of Salomon
Brothers Inc, at Seven Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000,
attention: Legal Department; or, if sent to the Company, will be mailed,
delivered or telecopied and confirmed to it at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, attention of Xxxxxxx X. Xxxxxxx, Esq.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your
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acceptance shall represent a binding agreement among the Company and the
several U.S. Underwriters.
Very truly yours,
Viatel, Inc.
By:
-------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc
CS First Boston Corporation
Lazard Freres & Co. LLC
By: Salomon Brothers Inc
By:
----------------------------
Name:
Title:
For themselves and the other
several U.S. Underwriters named
in Schedule I to the foregoing
Agreement.
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SCHEDULE I
to the U.S. Underwriting Agreement
Number of Shares of U.S.
Underwritten Securities
U.S. Underwriters To Be Purchased
----------------- -----------------------
Salomon Brothers Inc . . . . . . . . . . . . . . . . . . .
CS First Boston Corporation . . . . . . . . . . . . . . . .
Lazard Freres & Co. LLC . . . . . . . . . . . . . . . . . .
---------
Total . . . . . . . . . . . . . . . . . . . . . .
=========
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SCHEDULE II
to the U.S. Underwriting Agreement
SUBSIDIARIES
1. Viatel U.K. Limited (U.K.)
2. Viaphone S.R.L. (Italy)
3. Viatel S.R.L. (Italy)
4. VPN, S.A. (France)
5. Viatel S.A. (France)
6. YYC Communications, Inc. (Delaware)
7. Viafon Dat Iberica, S.A. (Spain)
8. Viatel Global Communication Espana S.A. (Spain)
9. Viatel SA/NV (Belgium)
10. Viatel BV (branch) of Viatel Belgium (Belgium)
11. Viatel Gmbh (Germany)
12. In Liquidation Datex S.R.L.
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EXHIBIT A
[Letterhead of executive officer, director or 1% stockholder of Viatel, Inc.]
Viatel, Inc.
Public Offering of Common Stock
, 1996
Salomon Brothers Inc
CS First Boston Corporation
Lazard Freres & Co. LLC
Salomon Brothers International Limited
CS First Boston Limited
Lazard Capital Markets
As U.S. and International Representatives
of the several U.S. and International
Underwriters,
c/o Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
This letter is being delivered to you in connection with the
proposed U.S. and International Underwriting Agreements (the "Underwriting
Agreements"), between Viatel, Inc., a Delaware corporation (the "Company"), and
you as representatives of a group of U.S. and International Underwriters named
in the Underwriting Agreements, relating to an underwritten public offering of
common stock, $.01 par value (the "Common Stock"), of the Company.
In order to induce you and the other U.S. and International
Underwriters to enter into the Underwriting Agreements, the undersigned agrees
not to offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce an offering of, any shares of Common Stock beneficially
owned by the undersigned or any securities convertible into, or exchangeable
for, shares of Common Stock for a period of 180 days following the day on which
the Underwriting Agreements are executed without the prior written consent of
Salomon Brothers Inc, other than shares of Common Stock disposed of as bona
fide gifts.
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If for any reason the Underwriting Agreements shall be
terminated prior to the Closing Date (as defined in the Underwriting
Agreements), the agreement set forth above shall likewise be terminated.
Yours very truly,
[Signature of executive officer,
director or 1% stockholder]
[Name and address of
executive officer, director or 1%
stockholder]
