[ ] SHARES
DESTIA COMMUNICATIONS, INC.
COMMON STOCK
(PAR VALUE .01 PER SHARE)
UNDERWRITING AGREEMENT
[ ], 1999
[ ], 1999
Xxxxxx Xxxxxxx & Co. Incorporated
Credit Suisse First Boston Corporation
Xxxxxx Brothers Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
Credit Suisse First Boston (Europe) Limited
Xxxxxx Brothers International (Europe)
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
DESTIA COMMUNICATIONS, INC. a Delaware corporation (the "COMPANY"), proposes
to issue and sell to the several Underwriters, (as defined below) 6,500,000
shares of its Common stock, $.01 par value per share (the "FIRM SHARES").
It is understood that, subject to the conditions hereinafter stated,
[ ] Firm Shares (the "U.S. FIRM SHARES") will be sold to the
several U.S. Underwriters named in Schedule I hereto (the "U.S.
UNDERWRITERS") in connection with the offering and sale of such U.S. Firm
Shares in the United States and Canada to United States and Canadian Persons
(as such terms are defined in the Agreement Between U.S. and International
Underwriters of even date herewith), and [ ] Firm Shares (the
"INTERNATIONAL SHARES") will be sold to the several International
Underwriters named in Schedule II hereto (the "INTERNATIONAL UNDERWRITERS")
in connection with the offering and sale of such International Shares outside
the United States and Canada to persons other than United States and Canadian
Persons. Xxxxxx Xxxxxxx & Co. Incorporated and Credit Suisse First Boston
Corporation and Xxxxxx Brothers Inc. shall act as representatives (the "U.S.
REPRESENTATIVES") of the several U.S. Underwriters, and Xxxxxx Xxxxxxx & Co.
International Limited and Credit Suisse First Boston (Europe) Limited and
Xxxxxx Brothers International (Europe) shall act as representatives (the
"INTERNATIONAL REPRESENTATIVES") of the several International Underwriters.
The U.S. Underwriters and the International Underwriters are hereinafter
collectively referred to as the Underwriters.
The Company also proposes to issue and sell to the several U.S. Underwriters
not more than an additional 975,000 shares of its Common stock, $.01 par value
per share (the "ADDITIONAL SHARES"), if and to the extent that the U.S.
Representatives shall have determined to exercise, on behalf of the U.S.
Underwriters, the right to purchase such shares of common stock granted to the
U.S. Underwriters in Section 2 hereof. The Firm Shares and the Additional Shares
are hereinafter collectively referred to as the "SHARES". The shares of Common
Stock, $.01 par value per share, of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the
"COMMON STOCK".
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement relating to the Shares. The registration
statement contains two prospectuses to be used in connection with the offering
and sale of the Shares: the U.S. prospectus, to be used in connection with the
offering and sale of Shares in the United States and Canada to United States and
Canadian Persons, and the international prospectus, to be used in connection
with the offering and sale of Shares outside the United States and Canada to
persons other than United States and Canadian Persons. The international
prospectus is identical to the U.S. prospectus except for the outside front
cover page. The registration statement as amended at the time it becomes
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the U.S. prospectus and the
international prospectus in the respective forms first used to confirm sales of
Shares are hereinafter collectively referred to as the "PROSPECTUS". If the
Company has filed an abbreviated registration statement to register additional
shares of Common Stock pursuant to Rule 462(b) under the Securities Act (the
"RULE 462(B) REGISTRATION STATEMENT"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement.
Xxxxxx Xxxxxxx & Co. Incorporated ("XXXXXX XXXXXXX") has agreed to reserve
up to 325,000 Shares to be purchased by it under this Agreement for sale to the
Company's directors, officers, employees and business associates and other
parties related to the Company (collectively, "PARTICIPANTS"), as set forth in
the Prospectus under the heading "Underwriters" (the "DIRECTED SHARE PROGRAM").
The Shares to be sold by Xxxxxx Xxxxxxx pursuant to the Directed Share Program
are referred to hereinafter as the "DIRECTED SHARES". Any Directed Shares not
orally confirmed for purchase by any Participant by the end of the business day
on which this Agreement is executed will be offered to the public by the
Underwriters as set forth in the Prospectus.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, each of the Underwriters that:
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(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and
no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, (ii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all material
respects with the Securities Act and the applicable rules and regulations of
the Commission thereunder, and (iii) the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly subsisting under
the laws of the State of Delaware, has the corporate power and authority to
own its property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(d) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority
to own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole. All of the issued shares of capital stock
of each subsidiary of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and are owned directly by
the Company, free and clear of all liens, encumbrances, equities and
claims except that the Company owns 81.25% of the common stock of America
First Ltd. ("America First") and America First has issued no preferred
stock.
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(e) This Agreement has been duly authorized, executed and delivered by
the Company.
(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock outstanding prior to the issuance of the
Shares have been duly authorized and are validly issued, fully paid and
non-assessable.
(h) The Shares have been duly authorized and, when issued and delivered
in accordance with the terms of this Agreement, will be validly issued,
fully paid and non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement will not contravene
any provision of applicable law or the certificate of incorporation or
by-laws of the Company or any agreement or other instrument binding upon the
Company or any of its subsidiaries or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or
any of its subsidiaries, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under this Agreement,
except such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement). Furthermore, (1) the
Company and its subsidiaries have not incurred any material liability or
obligation, direct or contingent, nor entered into any material transaction
not in the ordinary course of business; (2) the Company has not purchased
any of its outstanding capital stock, nor declared, paid or otherwise made
any dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends; and (3) there has not been any material
change in the capital stock, short-term debt or long-term debt of the
Company and its subsidiaries, except in each case as described in or
contemplated by the Prospectus in respect of the business of the Company
described therein.
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(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration Statement or
the Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(l) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(m) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(n) The Company and its subsidiaries (i) are in compliance with all
applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
LAWS"), (ii) have received all permits, licenses or other approvals required
of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any
such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(o) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company
to require the Company to include securities with the Shares registered
pursuant to the Registration Statement except for such rights as have been
waived in a valid and binding written document.
(p) The Company and its subsidiaries have good title to all properties
and assets owned by them and have good leasehold interest in each property
and asset leased by them, in each case free and clear of all pledges, liens,
encumbrances, security interests, charges, mortgages and defects, except (i)
such as are described or referred to in the Prospectus and the financial
statements and notes thereto contained therein, (ii) such as do not
materially affect the value of such property or asset, (iii) such as do
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not interfere with the use made and proposed to be made of such
properties or assets by the Company or its subsidiaries, as the case may
be or (iv) such as do not have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(q) The Company and its subsidiaries have filed all foreign and U.S.
federal and state income and franchise tax returns required to be filed and
have paid all taxes shown thereon as due, and there is no material tax
deficiency which has been asserted against the Company or any of its
subsidiaries; all material tax liabilities of the Company and its
subsidiaries are adequately provided for on the books of the Company or its
subsidiaries, as the case may be.
(r) Except as disclosed in the prospectus, the Company and its
subsidiaries own or possess all material patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names currently
employed by them in connection with the business now operated by them, and
neither the Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to
any of the foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected to
result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole.
(s) No material labor dispute with the employees of the Company or any
of its subsidiaries exists, except as described in or contemplated by the
Prospectus, or, to the knowledge of the Company, is imminent; and the
Company is not aware of any existing, threatened or imminent labor
disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that would reasonably be expected to result in
any material adverse change in the condition, financial or otherwise, or in
the earnings, business or operations of the Company and its subsidiaries,
taken as a whole.
(t) Except as set forth in the Prospectus, the Company and its
subsidiaries have all necessary permits, licenses, authorizations, consents
and approvals and have made all necessary filings required under any
federal, state, local or foreign supranational, national or regional law,
regulation or rule, and have obtained all necessary authorizations, consents
and approvals from other persons, material to the present conduct of their
respective businesses, in each case except to the extent that the failure to
obtain such permits, licenses, authorizations, consents or approvals or to
make such filings would not, singly or in the aggregate, have a material
adverse effect on the properties, assets, prospects, condition, financial or
otherwise, business or operations of the Company and its subsidiaries, taken
as a whole; except as set forth in
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the Prospectus, the Company and its subsidiaries have not received any
notice of proceedings which remain unresolved relating to revocation or
modification of any such permits, licenses, authorizations, consents or
approvals, nor is the Company or any of its subsidiaries in violation of,
or in default under, any such license, authorization, consent or approval
or any federal, state, local or foreign supranational, national or
regional law, regulation or rule or any decree, order or judgment
applicable to the Company or its subsidiaries the effect of which could
have a material adverse effect on the properties, assets, prospects,
condition, financial or otherwise, business or operations of the Company
and its subsidiaries, taken as a whole.
(u) The Company and its subsidiaries are insured against such losses
and risks and in such amounts as management of the Company reasonably
believes are prudent for the operation of their business; and neither the
Company nor any of its subsidiaries has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not materially
and adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the company and its subsidiaries, taken as a
whole, except as described in or contemplated by the Prospectus.
(v) The Company and its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or
specific authorizations; (2) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (3)
access to assets is permitted only in accordance with management's general
or specific authorization; and (4) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(w) The financial statements included in the Prospectus present fairly
the consolidated financial position of the Company as of the dates indicated
and the results of operations and cash flows of the Company for the periods
specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved. The selected financial data included in the
Prospectus present fairly the information shown therein and have been
compiled from data contained in the audited financial statements of the
Company, except as indicated in the Prospectus.
(x) The Company has reviewed its operations and that of its
subsidiaries to evaluate the extent to which the business or operation of
the Company or any of its
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subsidiaries will be affected by the Year 2000 Problem (that is, any
significant risk that computer hardware or software applications used by
the Company and its subsidiaries will not, in the case of dates or time
periods occurring after December 31, 1999, function at least as
effectively as in the case of dates or time periods occurring prior to
January 1, 2000); as a result of such review, the Company has no reason
to believe, and does not believe, the (A) there are any issues related to
the Company's preparedness to address the Year 2000 Problem that are of a
character required to be described or referred to in the Registration
Statement or Prospectus and (B) the Year 2000 Problem will have a
material adverse effect on the condition, financial or otherwise, or on
the earnings, business or operations of the Company and its subsidiaries,
taken as a whole, or result in any material loss or interference with the
business or operations of the Company and its subsidiaries taken as a
whole. Based on its inquiries to date, the Company believes that the
suppliers, vendors, customers or other material third parties used or
served by the Company and its subsidiaries are addressing or will address
the Year 2000 Problem in a timely manner.
Furthermore, the Company represents and warrants to Xxxxxx Xxxxxxx that (i)
the Registration Statement, the Prospectus and any preliminary prospectus
comply, and any further amendments or supplements thereto will comply, with any
applicable laws or regulations of foreign jurisdiction in which the Prospectus
or any preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the Directed Share Program, and that (ii) no
authorization, approval, consent, license, order, registration or qualification
of or with any government, governmental instrumentality or court, other than
such as have been obtained, is necessary under the securities laws and
regulations of foreign jurisdictions in which the Directed Shares are offered
outside the United States.
The Company has not offered, or caused the Underwriters to offer, Shares to
any person pursuant to the Directed Share Program with the specific intent to
unlawfully influence (i) a customer or supplier of the Company to alter the
customer's or supplier's level or type of business with the Company, or (ii) a
trade journalist or publication to write or publish favorable information about
the Company or its products.
2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees to sell to
the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Firm Shares set forth in Schedules I and II
here to opposite its names at U.S.$ a share (the "PURCHASE PRICE").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the U.S. Underwriters the Additional Shares, and the U.S. Underwriters shall
have a one-time right to purchase, severally
8
and not jointly, up to 975,000 Additional Shares at the Purchase Price. If
the U.S. Representatives, on behalf of the U.S. Underwriters, elect to
exercise such option, the U.S. Representatives shall so notify the Company in
writing not later than 30 days after the date of this Agreement, which notice
shall specify the number of Additional Shares to be purchased by the U.S.
Underwriters and the date on which such shares are to be purchased. Such date
may be the same as the Closing Date (as defined below) but not earlier than
the Closing Date nor later than ten business days after the date of such
notice. Additional Shares may be purchased as provided in Section 4 hereof
solely for the purpose of covering overallotments made in connection with the
offering of the Firm Shares. If any Additional Shares are to be purchased,
each U.S. Underwriter agrees, severally and not jointly, to purchase the
number of Additional Shares (subject to such adjustments to eliminate
fractional shares as the U.S. Representatives may determine) that bears the
same proportion to the total number of Additional Shares to be purchased as
the number of U.S. Firm Shares set forth in Schedule I hereto opposite the
name of such U.S. Underwriter bears to the total number of U.S. Firm Shares.
The Company hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 180 days after the date of the Prospectus, (i)
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Shares to be sold hereunder (B)
the issuance by the Company of shares of Common Stock upon the exercise of an
option or warrant or the conversion of a security outstanding on the date
hereof of which the Underwriters have been advised in writing or (C)
transactions by any person other than the Company relating to shares of
Common Stock or other securities acquired in open market transactions after
the completion of the offering of the Shares.
3. TERMS OF PUBLIC OFFERING. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Shares are to be offered to the public initially at
U.S.$[ ] a share (the "PUBLIC OFFERING PRICE") and to certain dealers
selected by you at a price that represents a concession not in excess of
U.S.$[ ] a share under the Public Offering Price, and that any Underwriter
may allow, and such dealers may reallow, a concession, not in excess of
U.S.$[ ] a share, to any Underwriter or to certain other dealers.
4. PAYMENT AND DELIVERY. Payment for the Firm Shares shall be made to the
Company in Federal or other funds immediately available in New York City against
9
delivery of such Firm Shares for the respective accounts of the several
Underwriters at a closing to be held at the office of Shearman & Sterling, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 A.M., New York City time, on
[ ], 1999, or at such other time on the same or such other date, not later
than [ ], 1999, as shall be designated in writing by you. The time
and date of such payment are herein referred to as the "CLOSING DATE".
Payment for any Additional Shares shall be made to the Company in Federal or
other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at a
closing to be held at the offices of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, at 10:00 a.m., New York City time, on the date specified in
the notice described in Section 2 or at such other time on the same or on such
other date, in any event not later than [ ], 1999, as shall be designated
in writing by the U.S. Representatives. The time and date of such payment are
hereinafter referred to as the "OPTION CLOSING DATE".
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Company to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than [ ] (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the date of this Agreement and prior to the Closing
Date, there shall not have occurred any change, or any development involving
a prospective change, in the condition, financial or otherwise, or in the
earnings, business or operations, of the Company and its subsidiaries, taken
as a whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement)
that, in your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
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(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect that the representations and warranties of the
Company contained in this Agreement are true and correct as of the Closing
Date and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or satisfied on
or before the Closing Date.
The officer signing and delivering such certificate may rely upon the
best of his knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an opinion
of Xxxxxxx Xxxx & Xxxxx LLP, independent counsel for the Company, dated the
Closing Date, substantially to the effect set forth in Exhibit B.
(d) The Underwriters shall have received on the Closing Date an opinion
of Shearman & Sterling, counsel for the Underwriters, dated the Closing
Date, in form and substance satisfactory to you.
(e) The Underwriters shall have received on the Closing Date opinions
of (i) Swidler, Berlin, Shereff, Friedman, special U.S. federal and state
regulatory counsel to the Company, (ii) Xxxxxxx & Xxxxxxx, special U.K. and
European Union regulatory counsel to the Company, (iii) Xxxxx & XxXxxxxx,
special Belgian regulatory counsel to the Company, (iv) Doser Amereller
Xxxxx, special German regulatory counsel to the Company, and (v) Xxxxxxx &
Xxxxxxx, special French regulatory counsel to the Company, respectively,
dated the Closing Date, substantially in the form of Xxxxxxxx X-0, X-0,
X-0, X-0, and C-5, respectively.
(f) The Underwriters shall have received on each of the date hereof and
the Closing Date a letter, dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to you, from Xxxxxx Xxxxxxxx
LLP, the Company's independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectus; PROVIDED that the letter delivered on the Closing Date shall
use a "cut-off date" not earlier than the date hereof.
(g) The "lockup" agreements, each substantially in the form of Exhibit
A hereto, between you and certain shareholders, officers and directors of
the Company listed on Exhibit A-1 hereto relating to sales and certain other
dispositions of shares of Common
11
Stock or certain other securities, delivered to you on or before the date
hereof, shall be in full force and effect on the Closing Date.
(h) The Shares shall have been approved for listing on the Nasdaq
National Market, subject only to official notice of issuance.
(i) You shall have received such other documents as you and your
counsel shall reasonably request.
The several obligations of the U.S. Underwriters to purchase Additional
Shares hereunder are subject to the delivery to the U.S. Representatives on the
Option Closing Date of such documents as they may reasonably request with
respect to the good standing of the Company, the due authorization and issuance
of the Additional Shares and other matters related to the issuance of the
Additional Shares.
6. COVENANTS OF THE COMPANY. In further consideration of the agreements of
the Underwriters contained in this Agreement, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, seven signed copies of the
Registration Statement (including exhibits thereto) and for delivery to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to you, without charge, in New York City,
prior to 10:00 a.m. New York City time on the business day next succeeding
the date of this Agreement and during the period mentioned in Section 7(c)
below, as many copies of the Prospectus and any supplements and amendments
thereto or to the Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object without unreasonable delay, and to file with the
Commission within the applicable period specified in Rule 424(b) under the
Securities Act any prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public offering
of the Shares as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur or condition exist as a result
of which it is necessary in your judgement to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable
law, forthwith to prepare, file with the Commission
12
and furnish, at its own expense, to the Underwriters and to the dealers
(whose names and addresses you will furnish to the Company) to which
Shares may have been sold by you on behalf of the Underwriters and to any
other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request; provided that in no event shall the Company be obligated to qualify
to do business in any jurisdiction where it is not now so qualified or to
take any action which would subject it to taxation in any jurisdiction where
it is not now so subject or to service or process in suits, other than those
arising out of the offering or sale of the Shares, in any jurisdiction where
it is not now so subject.
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the twelve-month
period ending June 30, 2000 that satisfies the provisions of Section 11(a)
of the Securities Act and the rules and regulations of the Commission
thereunder.
(f) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under
this Agreement including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Securities Act and all
other fees or expenses in connection with the preparation and filing of
the Registration Statement, any preliminary prospectus, the Prospectus
and amendments and supplements to any of the foregoing, including all
printing costs associated therewith, and the mailing and delivering of
copies thereof to the Underwriters and dealers, in the quantities
hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) the cost of printing or
producing any Blue Sky or Legal Investment memorandum in connection with
the offer and sale of the Shares under state securities laws and all
expenses in connection with the qualification of the Shares for offer and
sale under state securities laws as provided in Section 6(d) hereof,
including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky or Legal Investment memorandum, (iv) all
filing fees and the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification of
the offering of the Shares by the
13
National Association of Securities Dealers, Inc., (v) all fees and
expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Common Stock and all
costs and expenses incident to listing the Shares on the Nasdaq National
Market, (vi) the cost of printing certificates representing the Shares,
(vii) the costs and charges of any transfer agent, registrar or
depositary, (viii) the costs and expenses of the Company relating to
investor presentations on any "road show" undertaken in connection with
the marketing of the offering of the Shares, including, without
limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in connection
with the road show presentations with the prior approval of the Company,
travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and the cost of any aircraft chartered
in connection with the road show, (ix) all other costs and expenses
incident to the performance of the obligations of the Company hereunder
for which provision is not otherwise made in this Section and (x) all
expenses in connection with any offer and sale of the Shares outside of
the United States, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with offers
and sales outside of the United States. It is understood, however, that
except as provided in this Section, Section 7 entitled "Indemnity and
Contribution", and the last paragraph of Section 9 below, the
Underwriters will pay all of their costs and expenses, including fees and
disbursements of their counsel, stock transfer taxes payable on resale of
any of the Shares by them and any advertising expenses connected with any
offers they may make.
(g) In the event that counsel for the Underwriters determines that any
of the Underwriters, or any successors thereto, has become an Affiliate (as
such term is defined in Rule 405 under the Securities Act) of the Issuer, or
any successor thereto, the Issuer (or its successor) shall use its best
efforts to cause to be filed as soon as practicable after receiving notice
thereof from such counsel a shelf registration statement (the "RESALES
REGISTRATION STATEMENT") under the Securities Act providing for the resale
by the Underwriters (or any of their Affiliates) of all securities of the
Issuer that were originally offered to the public and that they acquire from
time to time in connection with market-making activities and to have such
shelf registration statement declared effective by the Commission. The
Issuer (or its successor) will use its best efforts to keep the Resales
Registration Statement effective and current until such time as each
Underwriter and its Affiliates shall, in its opinion, cease to be an
Affiliate of the Issuer, as evidenced by written notice sent promptly upon
such event to the Issuer.
(h) That, in connection with the Directed Share Program, the Company
will ensure that the Directed Shares will be restricted to the extent
required by the National Association of Securities Dealers, Inc. (the
"NASD") or the NASD rules from sale,
14
transfer, assignment, pledge or hypothecation for a period of three
months following the date of the effectiveness of the Registration
Statement. Xxxxxx Xxxxxxx will notify the Company as to which
Participants will need to be so restricted. The Company will direct the
transfer agent to place stop transfer restrictions upon such securities
for such period of time.
(i) To pay all fees and disbursements of counsel incurred by the
Underwriters in connection with the Directed Share Program and stamp duties,
similar taxes or duties or other taxes, if any, incurred by the Underwriters
in connection with the Directed Share Program.
Furthermore, the Company covenants with Xxxxxx Xxxxxxx that the Company will
comply with all applicable securities and other applicable laws, rules and
regulations in each foreign jurisdiction in which the Directed Shares are
offered in connection with the Directed Share Program.
7. INDEMNITY AND CONTRIBUTION. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (in each case, as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to such Underwriter;
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
15
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 7(a) or 7(b) such person (the "INDEMNIFIED PARTY")
shall promptly notify the person against whom such indemnity may be sought
(the "INDEMNIFYING PARTY") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party and
any others the indemnifying party may designate in such proceeding and shall
pay the fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel
or (ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal expenses of
any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed
as they are incurred. Such firm shall be designated in writing by Xxxxxx
Xxxxxxx & Co. Incorporated, in the case of parties indemnified pursuant to
Section 7(a), and by the Company, in the case of parties indemnified pursuant
to Section 7(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(d) To the extent the indemnification provided for in Section 7(a) or 7(b)
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of
16
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause 7(d)(i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 7(d)(i) above but also the relative fault of
the Company on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other hand in connection with the offering of the
Shares shall be deemed to be in the same respective proportions as the net
proceeds from the offering of the Shares (before deducting expenses) received
by the Company and the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover of
the Prospectus, bear to the aggregate Public Offering Price of the Shares.
The relative fault of the Company on the one hand and the Underwriters on the
other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the respective number
of Shares they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 7 were determined by PRO RATA
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 7(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
17
(f) The indemnity and contribution provisions contained in this Section
7 and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of
and payment for any of the Shares.
8. DIRECTED SHARE PROGRAM INDEMNIFICATION. (a) The Company agrees to
indemnify and hold harmless Xxxxxx Xxxxxxx and each person, if any, who controls
Xxxxxx Xxxxxxx within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act ("XXXXXX XXXXXXX ENTITIES"), from and against any
and all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) (i) caused by any untrue statement or
alleged untrue statement of a material fact contained in any material prepared
by or with the consent of the Company for distribution to Participants in
connection with the Directed Share Program or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) caused by the
failure of any Participant to pay for and accept delivery of Directed Shares
that the Participant agreed to purchase; or (iii) related to, arising out of, or
in connection with the Directed Share Program, other than losses, claims,
damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted from the bad faith or gross negligence of
Xxxxxx Xxxxxxx Entities.
(b) In case any proceeding (including any governmental investigation) shall
be instituted involving any Xxxxxx Xxxxxxx Entity in respect of which indemnity
may be sought pursuant to Section 10(a), the Xxxxxx Xxxxxxx Entity seeing
indemnity, shall promptly notify the Company in writing and the Company, upon
request of the Xxxxxx Xxxxxxx Entity, shall retain counsel reasonably
satisfactory to the Xxxxxx Xxxxxxx Entity to represent the Xxxxxx Xxxxxxx Entity
and any others the Company may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any Xxxxxx Xxxxxxx Entity shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Xxxxxx Xxxxxxx Entity unless (i) the Company shall have agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Company and the Xxxxxx
Xxxxxxx Entity and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. The
Company shall not, in respect of the legal expenses of the Xxxxxx Xxxxxxx
Entities in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Xxxxxx Xxxxxxx Entities. Any such
separate firm for the Xxxxxx Xxxxxxx Entities shall be designated in writing by
Xxxxxx Xxxxxxx. The Company shall not be liable for any settlement of any
proceeding effected without its written consent, but if
18
settled with such consent or if there be a final judgment for the plaintiff,
the Company agrees to indemnify the Xxxxxx Xxxxxxx Entities from and against
any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time a Xxxxxx Xxxxxxx
Entity shall have requested the Company to reimburse it for fees and expenses
of counsel as contemplated by the second and third sentences of this
paragraph, the Company agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by the Company of the aforesaid
request and (ii) the Company shall not have reimbursed the Xxxxxx Xxxxxxx
Entity in accordance with such request prior to the date of such settlement.
The Company shall not, without the prior written consent of Xxxxxx Xxxxxxx,
effect any settlement of any pending or threatened proceeding in respect of
which any Xxxxxx Xxxxxxx Entity is or could have been a party and indemnity
could have been sought hereunder by such Xxxxxx Xxxxxxx Entity, unless such
settlement includes an unconditional release of the Xxxxxx Xxxxxxx Entitites
from all liability on claims that are the subject matter of such proceeding.
(c) To the extent the indemnification provided for in Section 10(a) is
unavailable to a Xxxxxx Xxxxxxx Entity or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then the Company
in lieu of indemnifying the Xxxxxx Xxxxxxx Entity thereunder, shall
contribute to the amount paid or payable by the Xxxxxx Xxxxxxx Entity as a
result of such losses, claims, damages or liabilities (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Xxxxxx Xxxxxxx Entities on the other hand from the
offering of the Directed Shares or (ii) if the allocation provided by clause
10(c)(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
10(c)(i) above but also the relative fault of the Company on the one hand and
of the Xxxxxx Xxxxxxx Entities on the other hand in connection with any
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Xxxxxx
Xxxxxxx Entities on the other hand in connection with the offering of the
Directed Shares shall be deemed to be in the same respective proportions as
the net proceeds from the offering of the Directed Shares (before deducting
expenses) and the total underwriting discounts and commissions received by
the Xxxxxx Xxxxxxx Entities for the Directed Shares, bear to the aggregate
Public Offering Price of the Directed Shares. If the loss, claim, damage or
liability is caused by an untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact, the
relative fault of the Company on the one hand and the Xxxxxx Xxxxxxx Entities
on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement or the omission or alleged
omission relates to information supplied by the Company or by the Xxxxxx
Xxxxxxx Entities and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(d) The Company and the Xxxxxx Xxxxxxx Entities agree that it would not be
just or equitable if contribution pursuant to this Section 10 were determined by
PRO RATA allocation
19
(even if the Xxxxxx Xxxxxxx Entities were treated as one entity for such
purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in Section 10(c). The amount paid or
payable by the Xxxxxx Xxxxxxx Entities as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by the Xxxxxx Xxxxxxx Entities in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 10, no Xxxxxx Xxxxxxx Entity
shall be required to contribute any amount in excess of the amount by which
the total price at which the Directed Shares distributed to the public were
offered to the public exceeds the amount of any damages that such Xxxxxx
Xxxxxxx Entity has otherwise been required to pay. The remedies provided for
in this Section 10 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or
in equity.
(e) The indemnity and contribution provisions contained in this Section 10
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Xxxxxx Xxxxxxx Entity or the Company, its officers or directors or any
person controlling the Company and (iii) acceptance of and payment for any of
the Directed Shares.
9. TERMINATION. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery
of this Agreement and prior to the Closing Date (i) trading generally shall
have been suspended or materially limited on or by, as the case may be, any
of the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or
any calamity or crisis that, in your judgment, is material and adverse and
(b) in the case of any of the events specified in clauses 8(a)(i) through
8(a)(iv), such event, singly or together with any other such event, makes it,
in your judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
10. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other
20
Underwriters shall be obligated severally in the proportions that the number
of Firm Shares set forth opposite their respective names in Schedule I or
Schedule II bears to the aggregate number of Firm Shares set forth opposite
the names of all such non-defaulting Underwriters, or in such other
proportions as you may specify, to purchase the Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; PROVIDED that in no event shall the number of Shares that any
Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 11 by an amount in excess of one-ninth of such
number of Shares without the written consent of such Underwriter. If, on the
Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Firm Shares to be purchased, and arrangements satisfactory to you and the
Company for the purchase of such Firm Shares are not made within 36 hours
after such default, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter or the Company. In any such case
either you or the Company shall have the right to postpone the Closing Date,
but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in
any other documents or arrangements may be effected. If, on the Option
Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
Additional Shares or (ii) purchase not less than the number of Additional
Shares that such non-defaulting Underwriters would have been obligated to
purchase in the absence of such default. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
11. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
21
13. HEADINGS. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
DESTIA COMMUNICATIONS, INC.
By
--------------------------------------
Name:
Title:
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXX BROTHERS INC.
Acting severally on behalf of themselves
and the several U.S. Underwriters
named in Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
----------------------------------------
Name:
Title:
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
XXXXXX BROTHERS INTERNATIONAL (EUROPE)
Acting severally on behalf of themselves
and the several International Underwriters
named in Schedule II hereto.
By: Xxxxxx Xxxxxxx & Co. International Limited
By:
----------------------------------------
Name:
Title:
22
SCHEDULE I
U.S. UNDERWRITERS
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------- ---------------
Xxxxxx Xxxxxxx & Co. Incorporated................................................................
Credit Suisse First Boston Corporation...........................................................
Xxxxxx Brothers Inc..............................................................................
---------------
Total U.S. Firm Shares...........................................................................
---------------
---------------
SCHEDULE II
INTERNATIONAL UNDERWRITERS
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------- ---------------
Xxxxxx Xxxxxxx & Co. International Limited.......................................................
Credit Suisse First Boston (Europe) Limited......................................................
Xxxxxx Brothers International (Europe)...........................................................
---------------
Total International Firm Shares..................................................................
---------------
---------------
EXHIBIT A
[FORM OF LOCK-UP LETTER]
, 1999
Xxxxxx Xxxxxxx & Co. Incorporated
Credit Suisse First Boston Corporation
Xxxxxx Brothers Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx & Co. International Limited
Credit Suisse First Boston (Europe) Limited
Xxxxxx Brothers International (Europe)
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx
Xxxxxxx") and Xxxxxx Xxxxxxx & Co. International Limited ("MSIL") propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") with Destia
Communications, Inc., a Delaware corporation (the "Company"), providing for the
public offering (the "Public Offering") by the several Underwriters, including
Xxxxxx Xxxxxxx and MSIL (the "Underwriters") of [ ] shares (the
"Shares") of the Common stock, $.01 par value per share of the Company (the
"Common Stock").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of Xxxxxx Xxxxxxx on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 180 days after the date of the final prospectus relating
to the Public Offering (the "Prospectus"), (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of,
A-1
directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or (2)
enter into any swap or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (1) or (2) above is
to be settled by delivery of Common Stock or such other securities, in cash
or otherwise. The foregoing sentence shall not apply to (a) the sale of any
Shares to the Underwriters pursuant to the Underwriting Agreement or (b)
transactions relating to shares of Common Stock or other securities acquired
in open market transactions after the completion of the Public Offering. In
addition, the undersigned agrees that, without the prior written consent of
Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 180 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into
or exercisable or exchangeable for Common Stock.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
--------------------------------------
(Name)
--------------------------------------
(Address)
A-2
EXHIBIT A-1
Xxxxx X. Xxxxxx
Xxxxxx Investment Associates LLC
Xxxxx and Xxxxxxx Xxxxxx Grantor Retained Annuity Trust
Xxxx X. Xxxxx
GS Econ Ltd. Partnership
Xxxx X. Xxxx
Xxxxxx Xxxx
AT Econ Ltd. Partnership
AT Econ Ltd. Partnership No. 2
Xxxxxx Xxxx
SS Econ Ltd. Partnership
SS Econ Ltd. Partnership Xx. 0
Xxxxxxx Xxxx Xxxxxxxxx XX, X.X.
X-0
EXHIBIT B
FORM OF OPINION OF COUNSEL
FOR THE COMPANY
(i) the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(ii) each subsidiary of the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its property and
to conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(iii) the authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus;
(iv) the shares of Common Stock (including the Shares to be sold by the
Selling Shareholders) outstanding prior to the issuance of the Shares to be sold
by the Company have been duly authorized and are validly issued, fully paid and
non-assessable;
(v) all of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly by the Company, free and clear of all
liens, encumbrances, equities or claims;
(vi) the Shares to be sold by the Company have been duly authorized and,
when issued and delivered in accordance with the terms of the Underwriting
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar rights;
B-1
(vii) this Agreement [and each of the Power of Attorney and Custody
Agreements] have been duly authorized, executed and delivered by the Company;
(viii) the execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement [and the Power of Attorney
and Custody Agreements] will not contravene 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, any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or, to the best of such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations under
this Agreement [or the Power of Attorney or Custody Agreements,] except such as
may be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares;
(ix) the statements (A) in the Prospectus under the captions "[ ],"
"[ ]," "Description of Capital Stock" and "Underwriters" and (B) in the
Registration Statement in Items 14 and 15, in each case insofar as such
statements constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(x) after due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or any of
its subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required;
(xi) the Company is not and, after giving effect to the offering and sale
of the Shares and the application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended;
(xii) the Company and its subsidiaries (A) are in compliance with any and
all applicable Environmental Laws, (B) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (C) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with
B-2
Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries, taken as a
whole;
(xiii) the statements in the Prospectus under the caption "Certain United
States Federal Income Tax Considerations," insofar as such statements constitute
a summary of the United States federal tax laws referred to therein, are
accurate and fairly summarize the United States federal tax laws referred to
therein; and
* (xiv) such counsel (A) is of the opinion that the Registration Statement
and Prospectus (except for financial statements and schedules and other
financial and statistical data included therein as to which such counsel need
not express any opinion) comply as to form in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder, (B) has no reason to believe that (except for financial statements
and schedules and other financial and statistical data as to which such counsel
need not express any belief) the Registration Statement and the prospectus
included therein at the time the Registration Statement became effective
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading and (C) has no reason to believe that (except for financial
statements and schedules and other financial and statistical data as to which
such counsel need not express any belief) the Prospectus when issued contained,
or as of the date such opinion is delivered contains, any untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
* The opinion and belief of Xxxxxxx Xxxx & Xxxxx LLP are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification, except as
specified.
X-0
XXXXXXX X
XXXXXXX X-0: Form of Opinion of U.S. Regulatory Counsel to the Company
EXHIBIT C-2: Form of Opinion of U.K. and European Union Regulatory Counsel to the Company
EXHIBIT C-3: Form of Opinion of Belgian Regulatory Counsel to the Company
EXHIBIT C-4: Form of Opinion of German Regulatory Counsel to the Company
EXHIBIT C-5: Form of Opinion of French Regulatory Counsel to the Company
C-1
EXHIBIT C-1
[U.S. REGULATORY COUNSEL OPINION FORM]
We are of the opinion that:
1. The descriptions in the Prospectus, dated [ ] 1999, (hereinafter
referred to as the "Prospectus") of federal statutes relating to
telecommunications, and the respective rules and regulations promulgated
thereunder, including, without limitation, the Telecommunications Act of 1996
and the Communications Act of 1934 (collectively, the "Federal Communications
Law"), and current telecommunications statutes, rules and regulations of the
states where Destia Communications, Inc. ("Destia") and its subsidiaries listed
on schedule A hereto (the "Subsidiaries") are authorized to provide
interexchange telecommunications services (collectively, the "State
Communications Law"), and the statements in the Prospectus discussing matters
related to the Federal Communications Law and the State Communications Law,
including, without limitation, those under the captions "Risk Factors--
Competition--North America--United States," "Risk Factors--Regulatory
Restrictions," "Risk Factors--Need for Interconnection," "Industry Overview,"
"Business--Competition," "Business-- Regulation--United States," are accurate in
all material respects and fairly summarize all matters described therein.
2. (A) The consummation of the transactions contemplated by the Prospectus
do not violate (1) the Federal Communications Law; (2) any rules and regulations
of the Federal Communications Commission ("FCC") applicable to Destia or any of
its Subsidiaries, (3) State Communications Law applicable to Destia and its
Subsidiaries, and (4) to the best of our knowledge after due inquiry, any
telecommunication related decree from any court, and (B) no authorization or
filing with the FCC or any state regulatory authority (hereinafter, "State
Authority") is necessary for the consummation of the transactions contemplated
by the Prospectus.
3. to our knowledge and after due inquiry of Destia, (A)(i) Destia is a
nondominant carrier authorized by the FCC to provide international and
interstate interexchange telecommunications services, (ii) Destia has been
granted Section 214 authority by the FCC to provide international message
telecommunications services through the resale of international switched voice
to [list countries], through the resale of private line services to [list
countries], and as a facilities-based carrier to [list countries]; (iii) Destia
has been authorized by the FCC to provide interstate interexchange message
telecommunications services, (iv) Destia and the Subsidiaries named on schedule
[ ] hereto are certified and/or registered to resell intrastate interexchange
telecommunications services in, and are not required to be certified to resell
intrastate interexchange telecommunications services in, the respective states
named on Schedule [ ] hereto and (v) in accordance with (i), (ii) and (iii)
above,
C-2
Destia has on file with the FCC tariffs applicable to its international
and interstate exchange message telecommunications services; (B) to our
knowledge and after due inquiry of Destia, Destia has all the certificates,
orders, permits, licenses, authorizations, consents and approvals, including
those specified in subparagraph (A) above, of the FCC and the State Authorities
necessary to own, lease, or use its transmission lines and to conduct its
business in the manner described in the Prospectus; and (C) to our knowledge and
after due inquiry of Destia, Destia has not received any notice from the FCC of
any proceedings relating to the revocation or modification of any of such
certificates, orders, permits, licenses, authorizations, consents or approvals,
or the qualification or rejection of any such filing, the effect of which,
singly or in the aggregate, would have a material adverse effect on the
prospects, condition (financial or otherwise), earnings, business or operations
of Destia.
4. To our knowledge and after due inquiry of Destia, (A) Destia is
conducting its business in accordance with the FCC and state authorizations
mentioned in Paragraph 3 above; and (B) Destia is not in violation of or in
default under the Federal Communications Law, the rules or regulations of the
FCC or State Communications Law, the effect of which, singly or in the
aggregate, would have a material adverse effect on the prospects, conditions,
(financial or otherwise), earnings, business or operations of Destia.
5. To our knowledge and after due inquiry of Destia, except as disclosed in
the Prospectus, (A) no decree or order of the FCC or any State Authority has
been issued against Destia; (B) no litigation, proceeding, inquiry or
investigation has been commenced or threatened, and no notice of violation or
order to show cause has been issued, against Destia, before or by the FCC or any
State Authority and (C) there are no rulemaking or other administrative
proceedings pending before the FCC or any State Authority, (i) which are
generally applicable to telecommunications services or the resale thereof, and
(ii) which, if decided adversely to the interest of Destia, would have a
material adverse effect on Destia.
C-3
EXHIBIT C-2
[UK & EU REGULATORY COUNSEL OPINION FORM]
We are of the opinion that
1. The wholly owned subsidiary of Destia Communications, Inc., American
Telemedia Limited (the "Subsidiary") is the holder of the International
Facilities Licence ("the IFL") and registered under the International Simple
Voice Resale Licence ("the ISVR License") (together known as "the Licenses") in
the UK. The ISVR License relates to the provision of international simple voice
resale services by means of the Applicable Systems as specified in Annex A
thereto. The IFL relates to the provision of international services (other than
international simple voice resale services) by means of the Applicable Systems
as defined therein.
2. The descriptions in the Prospectus dated [ ] 1999 (the
"Prospectus") of current UK statutes relating to telecommunications, and the
respective rules and regulations promulgated thereunder (collectively, the "UK
Communications Law"), including, without limitation, the 1984 Act, and the
statements in the Prospectus discussing matters relating to the UK
Communications Law, including, without limitation, those under the captions
"Risk Factors--Increasing Pricing Pressures-- Price Competition in Europe,",
"Risk Factors--Need for Interconnection--Considerations Affecting
Interconnection in Europe,", "Industry Overview,", "Business--Company
Strategy--Focus on High Margin Retail Business,", "Business--Company
Operations--United Kingdom," and "Business-- Regulation--European Union--United
Kingdom" ("the Sections"), are accurate in all material respects and fairly
summarize all matters described therein. We expressly exclude from our opinion
any statements made in the Sections concerning the permissibility of the
Issuer's or the Subsidiary's services under the local laws of any country other
than the UK.
3. Except as stated below in this paragraph 3, the descriptions in the
Prospectus of current law of the EU relating to telecommunications, in the form
of Directives promulgated by European Commission (the "Commission") or otherwise
(collectively the "EC Directives"), including, without limitations, European
Commission Directive 90/388/EEC of 28 June 1990 (the "Services Directive") and
the European Commission Directive 96/19/EC of 13 March 1996 (the "Full
Competition Directive"), and the statements in the Prospectus discussing matters
related to the EC Directives, including, without limitation, those under the
captions"Risk Factors--Dependence on Third Party Sales Organizations,", "Risk
Factors--Regulatory Restrictions,", "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources--Euro Conversion,", "Industry
C-4
Overview", "Business--Company Operations--Continental Europe,",
"Business--Company Operations--United Kingdom,", "Business--Competition" and
"Business--Regulation--European Union" ("the EU Sections") are accurate in
all material respects and fairly summarise all matters described therein. We
expressly exclude from our opinion any statements made in the EU Sections
concerning the permissibility of Destia's or the Subsidiary's services under
the local laws of any country other than the UK.
4. The execution and delivery of the Underwriting Agreement dated [
] 1999 (hereinafter referred to as the "Underwriting Agreement") and the
consummation of the transactions contemplated hereby do not violate (1) the UK
Communications Law, (2) any telecommunications related rules or regulations of
the Department of Trade and Industry ("DTI") and OFTEL applicable to Destia and
the Subsidiary and (3) to the best of our knowledge any telecommunications
related judgment from any English court. However, the Subsidiary may be required
under the Licenses to notify the change in shareholding in Destia occasioned by
the consummation of the transactions referred to above.
5. (A) to the best of our knowledge, each of Destia and the Subsidiary has
all certificates, orders, permits, licenses, authorisations, consents and
approvals of and from the DTI necessary to own, lease, license and use its
properties and assets and to conduct its business in the manner described in the
Prospectus, it being recognized that the Subsidiary and not Destia holds the
necessary licenses to run any telecommunications systems owned or leased by
Destia in the UK; and (B) to the best of our knowledge and having made a
telephone enquiry of OFTEL (but no further enquiry), neither Destia nor the
Subsidiary has received any notice or proceedings relating to the revocation or
modification of any such DTI granted certificates, orders, permits, licenses,
authorisations, consents or approvals, or the qualification or rejection of any
such filing or registration, the effect of which, singly or in the aggregate,
would have a material adverse effect on the prospects, condition, financial or
otherwise, or in the earnings, business or operations of the Issuer and its
subsidiaries, taken as a whole.
6. To the best of our knowledge and having made a telephone enquiry of
OFTEL (but not further enquiry), (A) no determination or order of OFTEL has been
issued against Destia or the Subsidiary and (B) no litigation, proceeding,
inquiry or investigation has been commenced or threatened, and no interim
determination or provisional order has been issued, against Destia or the
Subsidiary before or by OFTEL.
7. To the best of our knowledge, there are no consultation documents,
complaints or other administrative proceedings pending before OFTEL which are in
the public domain (1) which are generally applicable to telecommunications
services or
C-5
the resale thereof and (2) which, if decided adversely to the interest of
Destia or the Subsidiary, would have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
AMERICAN TELEMEDIA LIMITED ("ATL") AND TELCO GLOBAL COMMUNICATIONS LIMITED
("TELCO") (TOGETHER "THE COMPANIES")
We are of the opinion that:
(A) the Companies have been duly incorporated and are validly existing as
limited liability companies under the laws of England and Wales. You
have informed us that the business of the Companies is the provision
of telephony and related and ancillary services. We confirm that both
ATL and Telco have full power and corporate authority to conduct such
business and to own their properties; and
(B) so far as we are aware, based on the Searches, no receiver,
liquidator or administrator of any of the Companies has been
appointed nor has any winding-up or administration order in respect
of any of the Companies been made; in this connection, it should be
noted that a search at the Register of Companies at Companies House
would not necessarily reveal whether or not a receiver, liquidator or
administrator of the Companies had been appointed or a winding-up or
administration order had been made against, or a winding-up
resolution had been passed by, any of the Companies on or prior to
the date of such search.
C-6
EXHIBIT C-3
[BELGIAN REGULATORY COUNSEL OPINION FORM]
We are of the opinion that:
1. the descriptions in the Prospectus of [matters in connection with]
current statutes relating to telecommunications, and the respective
rules and regulations promulgated thereunder (collectively, the "
Communications Law"), including, without limitation, [relevant
telecommunications law], [and the statements in the Prospectus discussing
matters related to Communications Law, including, without limitation,
those under the captions [" -- " and
" -- -- ,",...] are accurate in all material respects and
fairly summarize all matters described therein;
2. Econophone limited (hereinafter referred to as "Econophone") is the
holder of licence[s] issued by the [relevant government agency], dated
, 199 , issued under Section of [relevant law], relating to
the provision of international telecommunications services in ;
3. (A) the execution and delivery of the Underwriting Agreement by
Destia Communications, Inc. (Hereinafter referred to as "the Company"), and
the consummation of the transactions contemplated thereby do not violate (1)
the Communications Law, (2) any rules or regulations of [government
agency] applicable to the Company, Econophone, and other subsidiaries of the
Company (hereinafter referred to as "the Subsidiaries") and (3) to the best
of our knowledge after due inquiry, any telecommunications related decree
from any court, and (B) no authorization of or filing with [government
agency] is necessary for the execution and delivery of the Underwriting
Agreement by the Company and the consummation of the transactions
contemplated thereby in accordance with the terms thereof;
4. (A) each of the Company, Econophone and the Subsidiaries has all
certificates, orders, permits, licenses, authorizations, consents and
approvals of and from [government agency] necessary to own, lease, license
and use its properties and assets and to conduct its business in the manner
described in the Prospectus; and (B) to the best of our knowledge after due
inquiry, neither the Company, Econophone nor any of the Subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such certificates, orders, permits, licenses,
authorizations, consents or approvals, or the qualification or rejection of
any such filing or registration, the effect of which, singly or in the
aggregate, would have a material adverse effect on the prospects, condition,
financial or otherwise, or in the earnings, business or operations of the
Company, Econophone and the Subsidiaries, taken as a whole;
C-7
5. to the best of our knowledge after due inquiry, (A) each of the
Company, Econophone and the Subsidiaries is conducting its business in
accordance with [government agency] authorizations listed in Paragraph 4
above and (B) neither the Company, Econophone nor any of the Subsidiaries is
in violation of or in default under the Communications Law or the
rules or regulations of [government agency], the effect of which, singly or
in the aggregate, would have a material adverse effect on the prospects,
condition, financial or otherwise, or in the earnings, business or
operations of the Company, Econophone and the Subsidiaries, taken as a
whole; and
6. to the best of our knowledge after due inquiry, (A) no decree or
order of [government agency] has been issued against the Company,
Econophone or any of the Subsidiaries; (B) no litigation, proceeding,
inquiry or investigation has been commenced or threatened, and no notice
of violation or order to show cause has been issued, against the Company,
Econophone or any of the Subsidiaries before or by [government agency]
and (C) there are no rulemakings or other administrative proceedings
pending before [government agency], (i) which are generally applicable to
telecommunications services or the resale thereof and (ii) which, if
decided adversely to the interest of the Company, Econophone or the
Subsidiaries, would have a material adverse effect on the Company,
Econophone and the Subsidiaries, taken as a whole.
* Unless otherwise defined herein, capitalized terms used herein have the
meanings assigned to such terms in the Underwriting Agreement.
C-8
EXHIBIT C-4
[GERMAN REGULATORY COUNSEL OPINION FORM]
We are of the opinion that:
1. The description in Destia communications, Inc.'s Prospectus dated [ ]
1999 (hereinafter the "Prospectus") of matters in connection with the German
Telecommunications Act of 25 July 1996 (the "German Telecommunications Act")
and the statements in the Prospectus discussing matters related to the
German Telecommunications Act, including, without limitation, those under
the caption"Risk Factors--Competition,", "Industry Overview,",
"Business--The Destia Network-- European Network," and
"Business--Regulation--European Union--Germany,", are accurate in all
material respects regarding the German Telecommunications Act and fairly
summarize all matters described therein;
2. Destia Communications, Inc. ("The Company") has duly filed a notification as
a telecommunications service provider of the Bundesamt fur Post und
Telekommunikation on June 12, 1997;
3. The consummation of the transactions contemplated by the Prospectus do not
violate (1) the German Telecommunications Act, (2) any rules or regulations
promulgated under the German Telecommunications Act applicable to the
Company and its subsidiaries and (3) to the best of our knowledge after due
inquiry, any telecommunications-related decree from any German court, and
(B) no authorization of or filing with the Regulatory Authority for
Telecommunciations and Posts (this defined term refers to both the Federal
office of that name which was established on January 1 1998 and to the
Federal Ministry of Posts and Telecommunications which assumed the functions
of the Regulatory Authority for Telecommunications and Posts until 1 January
1998) is necessary for the consummation of the transactions contemplated by
the Prospectus in accordance with the terms thereof;
4. (A) To the best of our knowledge, each of the Company and its subsidiaries
has all certificates, orders, permits, licenses, authorizations, consents
and approvals of and from the Regulatory Authority of Telecommunications and
Posts necessary under the German Telecommunications Act to offer the
services described in Annex A; and (B) to the best of our knowledge after
due inquiry, neither the Company nor any of its subsidiaries has received
any notice of proceedings relating to the revocation or modification of any
such certificates, orders, permits, licenses, authorizations,
C-9
consents or approvals or the qualifications or rejection of any such
filing or registration, the effect of which, singly or in the aggregate,
would have a material adverse effect on the prospects, condition,
financial or otherwise, or on the earnings, business or operations of the
Company and its subsidiaries, taken as a whole;
5. To the best of our knowledge after due inquiry, (A) each of the Company and
its subsidiaries is conducting its business in accordance with the
notification filed with the Federal Office for Telecommunications and Post
on June 12, 1997 and (B) neither the Company nor any of its subsidiaries is
in violation of or in default under the German Telecommunications Act or the
rules or regulations of the Regulatory Authority for Telecommunciations and
Posts, the effect of which, singly or in the aggregate, would have a
material adverse effect on the prospects, condition, financial or otherwise,
or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole; and
6. To the best of our knowledge after due inquiry, (A) no decree or order of
the Regulatory Authority for Telecommunications and Posts has been issued
against the Company or any of its subsidiaries; (B) no litigation,
proceeding, inquiry or investigation has been commenced or threatened,
and no notice of violation or order to show cause has been issued,
against the Company or any of its subsidiaries before or by the
Regulatory Authority for Telecommunciations and Posts and (C) there are
no rulemakings or other administrative proceedings pending before the
Regulatory Authority for Telecommunications and Posts (i) which are
generally applicable to telecommunications services or the resale thereof
and (ii) which, if decided adversely to the interest of the Company or
its subsidiaries, would have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
C-10
ANNEX A TO LEGAL
OPINION
GERMANY
[ ] 1999
SERVICES PROVIDED BY THE COMPANY AND ITS SUBSIDIARIES IN GERMANY
C-11
EXHIBIT C-5
[FRENCH REGULATORY COUNSEL OPINION FORM]
DESTIA COMMUNICATIONS, INC. (THE "ISSUER"): PROPOSED OFFERING OF SHARES OF
COMMON STOCK
We are of the opinion that;
The statements in the Prospectus dated [ ]1999 (hereinafter the
"Prospectus") concerning French law and regulation relating to
telecommunications (including the CODE DES POSTES ET TELECOMMUNICATIONS, and the
rules and regulations promulgated thereunder), including those under the
captions "Risk Factors--Competition,", "Risk Factors--Increasing Pricing
Pressures--Price Competition in Europe,", "Industry Overview," and
"Business--Regulation--European Union--France", are accurate in all material
respects.
ECONOPHONE FRANCE SARL (THE "COMPANY")
We are of the opinion that:
(A) The Company has been duly incorporated and is validly existing as a
limited liability company (SOCIETE A RESPONSABILITE LIMITEE) under the laws
of France.
(B) The Company's corporate objects, as stated in article 2 of the
STATUTS (a copy of which is annexed hereto) include the following object:
-- the development, marketing, in France and abroad, of telecommunications
services and telecommunications networks, by any technical means, whether
actual or developed in the future.
We are of the opinion that the statements in the Prospectus concerning
French law and regulation relating to telecommunications (including CODE DES
POSTES ET TELECOMMUNICATIONS, and the rules and regulations promulgated
thereunder), including those under the captions "Risk Factors--Competition,",
"Risk Factors--Increasing Pricing Pressures--
C-12
Price Competition in Europe,", "Industry Overview," and
"Business--Regulation--European Union--France", are accurate in all material
respects.
C-13
