3,000,000 TRUST CONVERTIBLE PREFERRED SECURITIES
VIATEL FINANCING TRUST I
7 3/4% TRUST CONVERTIBLE PREFERRED SECURITIES
(LIQUIDATION AMOUNT $50 PER CONVERTIBLE PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH IN THE GUARANTEE AGREEMENT BY,
AND CONVERTIBLE INTO THE COMMON STOCK OF,
VIATEL, INC.
PLACEMENT AGREEMENT
APRIL 6, 2000
PLACEMENT AGREEMENT
April 6, 2000
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Xxxxx Xxxxxx Inc.
Banc of America Securities LLC
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 10036-8293
Dear Sirs and Mesdames:
Viatel Financing Trust I, a special purpose statutory business
trust formed under the laws of the State of Delaware (the "TRUST"), proposes to
issue and sell to the several placement agents named in Schedule I hereto (the
"PLACEMENT AGENTS") 3,000,000 of its 7 3/4% Trust Convertible Preferred
Securities, liquidation amount $50 per convertible preferred security (the "FIRM
SECURITIES"). The Trust also proposes to issue and sell to the several Placement
Agents not more than an additional 600,000 of its 7 3/4% Trust Convertible
Preferred Securities, liquidation preference $50 per convertible preferred
security (the "ADDITIONAL SECURITIES"), if and to the extent that the Placement
Agents shall have determined to exercise the right to purchase such additional
securities granted to the several Placement Agents in Section 2 hereof. The Firm
Securities and the Additional Securities are hereinafter collectively referred
to as the "CONVERTIBLE PREFERRED SECURITIES."
The Convertible Preferred Securities will be guaranteed (the
"GUARANTEE") by Viatel, Inc. a Delaware corporation ("VIATEL" or the "COMPANY"),
to the extent provided in the Preferred Securities Guarantee Agreement to be
dated as of April 12, 2000 (the "PREFERRED SECURITIES GUARANTEE AGREEMENT")
between the Company and The Bank of New York, as preferred guarantee trustee
(the "GUARANTEE TRUSTEE"), and will be convertible into the common stock, par
value $0.01 per share, of Viatel ("VIATEL COMMON STOCK" or the "COMMON STOCK").
The Trust will use the proceeds from the sale of the Convertible Preferred
Securities and the sale of the Trust Common Securities (as defined below) to
purchase from the Company $154,639,175 aggregate principal amount of its 7 3/4%
Convertible Junior Subordinated Debentures due 2015 (up to $185,567,010
aggregate principal amount, if and to the extent that the Placement Agents shall
have determined to exercise the right to purchase Additional Securities granted
to the Placement Agents in Section 2 hereof) (the "CONVERTIBLE DEBENTURES")
pursuant to a Debenture Purchase Agreement to be dated as of April 12, 2000 (the
"DEBENTURE PURCHASE AGREEMENT") between the Trust and the Company. The
Convertible Debentures will be issued under an Indenture to be dated as of April
12, 2000 (the "INDENTURE") between the Company and The Bank of New York, as
trustee (the "INDENTURE TRUSTEE"). The Company will also be the holder
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of one hundred percent of the common securities representing undivided
beneficial interests in the assets of the Trust (the "TRUST COMMON SECURITIES"),
which the Company will purchase from the Trust pursuant to a Common Securities
Purchase Agreement to be dated as of April 12, 2000 (the "COMMON SECURITIES
PURCHASE AGREEMENT" and, together with the Debenture Purchase Agreement, the
"PURCHASE AGREEMENTS") between the Company and the Trust. The Trust Common
Securities will be guaranteed by the Company to the extent provided in the
Common Securities Guarantee Agreement to be dated as of April 12, 2000 (the
"COMMON SECURITIES GUARANTEE AGREEMENT" and, together with Preferred Securities
Guarantee Agreement, the "GUARANTEE AGREEMENTS") to be entered into by the
Company.
The Trust has been formed under Delaware law pursuant to a
Declaration of Trust, dated as of March 31, 2000, as amended by an Amended and
Restated Declaration of Trust to be dated as of April 12, 2000 (as so amended
and restated, the "DECLARATION"), executed by the Company, as sponsor, and by
the trustees of the Trust (the "VFT TRUSTEE"), all of whom have been appointed
by the Company as holder of one hundred percent of the Trust Common Securities.
A majority of the VFT Trustees (the "REGULAR TRUSTEES") are persons who are
employees or officers of the Company. One VFT Trustee, The Bank of New York, is
unaffiliated with the Company and shall act as institutional trustee (the
"INSTITUTIONAL TRUSTEE") and as indenture trustee under the Declaration for the
purposes of the Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE
ACT"). The Bank of New York (Delaware) will act as Delaware trustee (the
"DELAWARE TRUSTEE") under the Declaration.
The Company and the Trust will be obligated to file with the
Securities and Exchange Commission (the "COMMISSION"), and to use their
reasonable best efforts to cause the Commission to declare effective, a shelf
registration statement covering certain resales of the Convertible Preferred
Securities, Convertible Debentures, the Guarantee and Viatel Common Stock
pursuant to the Registration Rights Agreement to be dated as of April 6, 2000
(the "REGISTRATION RIGHTS AGREEMENT") among the Trust, the Company and the
Placement Agents and to be substantially in the form attached hereto as EXHIBIT
A.
The Declaration, the Convertible Preferred Securities, the
Trust Common Securities, the Indenture, the Convertible Debentures, the Purchase
Agreements, the Guarantee Agreements, the Registration Rights Agreement and this
Agreement are hereinafter called, collectively, the "OPERATIVE INSTRUMENTS."
The Convertible Preferred Securities will be offered without
being registered under the Securities Act of 1933, as amended (the "SECURITIES
ACT"), to "qualified institutional buyers" (as defined in Rule 144A under the
Securities Act) in compliance with the exemption from registration provided by
Rule 144A under the Securities Act.
In connection with the sale of the Convertible Preferred
Securities, the Company has prepared a preliminary Offering Memorandum issued on
March 31, 2000 (the "PRELIMINARY MEMORANDUM") and a final Offering Memorandum
dated April 6, 2000 (the "FINAL
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MEMORANDUM" and, together with the Preliminary Memorandum, the "MEMORANDUM")
setting forth or including a description of the terms of the Convertible
Preferred Securities, the Convertible Debentures, the Guarantee and the Viatel
Common Stock, the terms of the offering, a description of the Trust and a
description of the Company and its business.
1. REPRESENTATIONS AND WARRANTIES. The Trust and the Company
jointly and severally represent and warrant to, and agree with, each of the
Placement Agents that as of the date hereof:
(a) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with full corporate power and corporate authority to own
its properties and to conduct its business as described in the Final
Memorandum and is duly qualified to transact business as a foreign
corporation 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 (as defined below) on the Company and its Subsidiaries
(as defined below), taken as a whole.
(b) Each subsidiary of the Company is listed on EXHIBIT B
hereto (each a "SUBSIDIARY" and, collectively, the "SUBSIDIARIES") and,
if applicable to such country, each of the Subsidiaries operating in
such country has been duly incorporated or otherwise organized, is
validly existing in good standing under the laws of the jurisdiction of
its incorporation or organization, with full corporate power and
corporate authority to own its properties and to conduct its business
as described in the Final Memorandum 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 (defined below) on the Company and the Subsidiaries,
taken as a whole.
(c) The Trust has been duly created and is validly existing in
good standing as a business trust under the Business Trust Act of the
State of Delaware (the "DELAWARE ACT"), is classified for United States
federal income tax purposes as a grantor trust and not as an
association taxable as a corporation, has the business trust power and
authority to conduct its business as presently conducted and as
described in the Final Memorandum, and is not required to be authorized
or qualified to do business in any other jurisdiction; the Company and
the Trust will treat the Convertible Debentures as indebtedness of the
Company for United States federal income tax purposes; and the Trust is
and will be treated as a consolidated subsidiary of the Company
pursuant to generally accepted accounting principles.
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(d) All of the issued shares of capital stock or other equity
interests, as the case may be, of each Subsidiary of the Company have
been duly authorized and are validly issued, fully paid and
non-assessable and are owned, either directly or indirectly, by the
Company, free and clear of all liens, encumbrances, equities or claims,
other than those indicated in the Final Memorandum.
(e) This Agreement has been duly authorized, executed and
delivered by each of the Trust and the Company.
(f) The Indenture has been duly authorized by the Company and,
when duly executed and delivered by the Company, will constitute valid
and binding obligation of the Company enforceable against the Company
in accordance with its terms, except as the enforceability thereof may
be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and subject to general equitable principles (whether
considered in a proceeding in equity or at law) (the "ENFORCEABILITY
EXCEPTIONS"), except that (x) rights to indemnification and
contribution may be limited by public policy and (y) provisions of the
Indenture, if any, requiring any waiver of stay or extension laws,
diligent performance or other acts on the part of the Indenture Trustee
may be unenforceable under principles of public policy.
(g) The Convertible Debentures have been duly authorized by
the Company and, when duly executed, authenticated, issued and
delivered in the manner provided for in the Indenture and sold and paid
for as provided in the Debenture Purchase Agreement, will be valid and
binding obligations of the Company entitled to the benefits of the
Indenture, enforceable against the Company in accordance with their
terms, subject to the Enforceability Exceptions and except that rights
to indemnification and contribution may be limited by public policy.
(h) The Preferred Securities Guarantee Agreement has been duly
authorized by the Company and, when duly executed and delivered by the
Company, will constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject
to the Enforceability Exceptions and except that rights to
indemnification and contribution may be limited by public policy.
(i) The Registration Rights Agreement has been duly authorized
by each of the Trust and the Company and, when duly executed and
delivered by each of the Trust and the Company, will constitute a valid
and binding obligation of each of the Trust and the Company,
enforceable against each of the Trust and the Company in accordance
with its terms, subject to the Enforceability Exceptions and except
that rights to indemnification and contribution may be limited by
public policy.
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(j) The Declaration has been duly authorized by the Company
and, when duly executed and delivered by the Company, will constitute a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to the Enforceability
Exceptions and except that rights to indemnification and contribution
may be limited by public policy.
(k) The Convertible Preferred Securities have been duly
authorized by the Declaration and, when issued and authenticated in
accordance with the Declaration and delivered to and paid for by the
Placement Agents in accordance with the terms of this Agreement, will
be validly issued, fully paid and non-assessable undivided beneficial
interests in the assets of Trust the and will be entitled to the
benefits of the Declaration; the issuance of the Convertible Preferred
Securities is not subject to any preemptive or similar rights; and
holders of the Convertible Preferred Securities will be entitled to the
same limitation of liability extended to stockholders of private
corporations for profit under Delaware law.
(l) The Trust Common Securities have been duly authorized by
the Declaration and, when issued and executed in accordance with the
provisions of the Declaration and delivered to the Company against
payment of the consideration therefor set forth in the Common
Securities Purchase Agreement, will be validly issued, fully paid and
non-assessable undivided beneficial interests in the assets of the
Trust; the issuance of the Trust Common Securities is not subject to
any preemptive or similar rights; and at the Closing Date, all of the
issued and outstanding Trust Common Securities will be owed by the
Company, directly or through wholly owned subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(m) The Purchase Agreements have been duly authorized by the
Company and the Trust and, at the Closing Date, the Purchase Agreements
will have been duly executed and delivered.
(n) The Final Memorandum does not, and on the Closing Date
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 in or omissions from the Final
Memorandum (or any supplement or amendment thereto) based upon
information relating to any Placement Agent furnished to the Company in
writing by such Placement Agent expressly for use therein.
(o) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Operative
Instruments to which the Company is a party, the execution and delivery
by the Trust of, and the performance by the Trust of its obligations
under, the Operative Instruments to which the Trust is a party, the
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performance by the Trust of its obligations under the Declaration, and
the issuance, sale and delivery of the Convertible Preferred Securities
in accordance with their terms, Trust Common Securities, Convertible
Debentures and the shares of Common Stock issuable upon conversion of
the Convertible Debentures and the Convertible Preferred Securities (A)
will not contravene (i) any provision of applicable law, (ii) the
Declaration or the certificate of incorporation or by-laws of the
Company, (iii) any material agreement or other instrument binding upon
the Company or any of its Subsidiaries, (iv) any material agreement or
other instrument binding upon the Trust, or (v) any judgment, order or
decree of any governmental body, agency or court having jurisdiction
over (x) the Company or any Subsidiary or (y) the Trust, except with
respect to clauses (A)(i) and (A)(iii) to the extent that any
contravention would not have a Material Adverse Effect on the Company
and its Subsidiaries, taken as a whole, and except with respect to
clauses (A)(i) and (A)(iv) to the extent that any such contravention
would not have a Material Adverse Effect on the Trust, (B) do not and
will not result in the imposition of any lien, charge or encumbrance
upon any assets of (i) the Company or any of its Subsidiaries or (ii)
the Trust, pursuant to the terms of any agreement or instrument to
which the Company or any of its Subsidiaries or the Trust is a party or
by which any of them or any of their respective properties is bound,
except for any liens, charges or encumbrances which would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings or business affairs of, with respect to clause (B)(i), the
Company and its Subsidiaries taken as a whole or, with respect to
clause (B)(ii), the Trust, and (C) no consent, approval, authorization,
exemption or order of, or qualification or filing with, any
governmental body or agency is required for the performance by the
Company or the Trust of their respective obligations under the
Operative Instruments (other than such consent, approval,
authorization, exemption, order or other action which has been
obtained), except (x) 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 Convertible Preferred Shares, (y) such as may be required by
federal and state securities laws with respect to the Company's
obligations under the Registration Rights Agreement and (z) for any
consents, approvals, authorizations, orders or qualifications, the
failure to obtain which would not have a Material Adverse Effect on the
ability of the Company or the Trust to perform their respective
obligations under the Operative Instruments.
(p) Any Company document incorporated by reference in the
Final Memorandum, or filed with the Securities and Exchange Commission
after the date hereof, or from which information is so incorporated by
reference when filed or becoming effective, as the case may be, shall
comply in all material respects with the requirements of the Securities
Act and the Securities Exchange Act of 1934 (the "EXCHANGE ACT"), as
applicable, and the rules and regulations promulgated thereunder.
(q) The authorized capital stock of the Company conforms in
all material respects to the descriptions thereof contained in the
Final Memorandum.
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(r) The shares of Viatel Common Stock issuable upon the
conversion of the Convertible Debentures and the Convertible Preferred
Securities have been duly authorized and reserved for issuance upon
such conversion and, when issued upon such conversion, will be validly
issued, fully paid and non-assessable, and the issuance of such shares
upon such conversion is not and will not be subject to any preemptive
or similar rights.
(s) The shares of outstanding Common Stock have been duly
authorized and validly issued, and are fully paid and non-assessable
and are not subject to any preemptive or similar rights.
(t) Assuming the accuracy of the Placement Agents'
representations contained herein and the Placement Agents' compliance
with their agreements hereunder, it is not necessary to register the
Convertible Preferred Securities, the Guarantee, the Convertible
Debentures or the shares of Common Stock issuable upon conversion of
the Convertible Debentures and the Convertible Preferred Securities
(collectively, the "OFFERED SECURITIES") under the Securities Act or to
qualify the Declaration, the Preferred Securities Guarantee Agreement
or the Indenture under the Trust Indenture Act.
(u) 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 (a "MATERIAL ADVERSE EFFECT") of (A) the Trust or (B) the
Company and its Subsidiaries, taken as a whole, from that set forth in
the Final Memorandum, attached as EXHIBIT C; furthermore, (i) other
than the transactions contemplated hereby, the Company and its
Subsidiaries or the Trust have not incurred any material liability or
obligation, direct or contingent, nor entered into any material
transaction not in the ordinary course of business; (ii) 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 (iii)
there has not been any material change in the capital stock, short-term
debt or long-term debt of the Company and its consolidated
Subsidiaries, taken as a whole, except in each case as described in the
Final Memorandum.
(v) There are no legal or governmental proceedings pending or,
to the knowledge of the Trust and the Company, threatened to which the
Trust or the Company or any of its Subsidiaries is or may be a party,
or to which any of the properties of the Trust or the Company or any of
its Subsidiaries is or may be subject other than proceedings accurately
described in all material respects in the Final Memorandum and
proceedings that are not reasonably likely to have a Material Adverse
Effect on Company and its Subsidiaries, taken as a whole, or on the
power or ability of the Trust or the Company to perform its respective
obligations under any of the Operative Instruments or to consummate the
transactions contemplated by the Final Memorandum.
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(w) Each of the Trust and the Company is not, and after giving
effect to the issuance of the Convertible Preferred Securities and the
Convertible Debentures, and the application of the proceeds of the
Convertible Preferred Securities as described in the Final Memorandum
under the caption "Use of Proceeds," will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
(x) Neither the Company nor any affiliate of the Company (as
defined in Rule 501(b) of Regulation D under the Securities Act, an
"AFFILIATE") has directly, or through any agent, (i) sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as defined in the Securities Act) which is or will be
integrated with the sale of any of the Offered Securities in a manner
that would require the registration under the Securities Act of any of
the Offered Securities or (ii) engaged in any form of general
solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) in connection with the offering
of any of the Offered Securities in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.
(y) The Company and its Subsidiaries (i) are in compliance
with any and 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.
(z) There are no costs and liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a Material Adverse Effect on the Company and its Subsidiaries,
taken as a whole.
(aa) The Convertible Preferred Securities and the Convertible
Debentures satisfy the requirements set forth in Rule 144A(d)(3) under
the Securities Act.
(bb) Except as described in the Final Memorandum, the Company
and its Subsidiaries (i) have all necessary consents, authorizations,
approvals, orders, certificates and permits of and from, and have made
all declarations and filings with, all federal, state, local and other
governmental, administrative or regulatory authorities, all
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self-regulatory organizations and all courts and other tribunals, to
own, lease, license and use their properties and assets and to conduct
their business in the manner described in the Final Memorandum, except
to the extent that the failure to obtain such consents, authorizations,
approvals, orders, certificates or permits or make such declarations or
filings would not have a Material Adverse Effect on the Company and its
Subsidiaries, taken as a whole; and (ii) have not received any notice
of proceedings relating to the violation, revocation or modification of
any such license, consent, authorization, approval, order, certificate
or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected
to have a Material Adverse Effect on the Company and its Subsidiaries,
taken as a whole.
(cc) The Company and its Subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them which is material to the
business of the Company and its Subsidiaries, taken as a whole, in each
case free and clear of all liens, encumbrances and defects except (i)
such as are reflected in the Company's financial statements or are
described in the Final Memorandum; (ii) such as do not materially
affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and its
Subsidiaries; or (iii) such as do not have a Material Adverse Effect on
the Company and its Subsidiaries, taken as a whole; and any real
property and buildings held under lease by the Company and its
Subsidiaries are held by them under valid, binding and enforceable
leases with such exceptions as are not material and do not materially
interfere with the use made and proposed to be made of such property
and buildings by the Company and its Subsidiaries, in each case except
as described in or contemplated by the Final Memorandum and subject to
the Enforceability Exceptions.
(dd) The Company and its Subsidiaries own or possess, or can
acquire on reasonable terms, 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, except as set forth in the Final Memorandum,
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 be
reasonably likely to have a Material Adverse Effect on the Company and
its Subsidiaries, taken as a whole.
(ee) No material labor dispute with the employees of the
Company or any of its Subsidiaries exists, except as described in or
contemplated by the Final Memorandum, 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 might reasonably
be expected to have a Material Adverse Effect on the Company and its
Subsidiaries, taken as a whole.
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(ff) (i) The Company and its Subsidiaries are insured against
such losses and risks and in such amounts as the Company reasonably
believes are prudent and customary in the businesses in which they are
engaged; (ii) neither the Company nor any such Subsidiary has been
refused any insurance coverage sought or applied for; and (iii) neither
the Company nor any such Subsidiary 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 have a Material Adverse Effect on the Company and its
Subsidiaries, taken as a whole, except as described in or contemplated
by the Final Memorandum.
(gg) The Company and its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
2. AGREEMENTS TO SELL AND PURCHASE. The Trust hereby agrees to
sell to the several Placement Agents, and each Placement Agent upon the basis of
the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to purchase
the respective number of Firm Securities set forth in Schedule II opposite its
name from the Trust, at a purchase price of $50.00 per Convertible Preferred
Security (the "PURCHASE PRICE").
On the basis of the representations and warranties of the
Trust and the Company contained in this Agreement, and subject to its terms and
conditions, the Trust agrees to sell to the Placement Agents the Additional
Securities, and the Placement Agents shall have a right to purchase, severally
and not jointly, up to 600,000 Additional Securities at the Purchase Price, plus
accrued dividends, if any. If the Placements Agents elect to exercise such
option, the Placements Agents shall so notify the Trust and the Company in
writing not later than 30 days after the date of this Agreement, which notice
shall specify the number of Additional Securities to be purchased by the
Placement Agents and the date on which such Additional Securities are to be
purchased. Such date may be the same as the Closing Date but not earlier than
the Closing Date nor later than ten business days after the date of such notice.
If any Additional Securities are to be purchased, each Placement Agent agrees,
severally and not jointly, to purchase the number of Additional Securities
(subject to such adjustments to eliminate fractional securities the Placement
Agents may determine) that bears the same proportion to the total number of
Additional Securities to be purchased as the number of Firm Securities set forth
in Schedule I hereto opposite the name of such Placement Agent bears to the
total number of Firm Securities.
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In view of the fact that proceeds from the sale of the
Convertible Preferred Securities will be invested by the Trust in the
Convertible Debentures, the Company hereby agrees to pay the Placement Agents as
compensation (the "PLACEMENT AGENTS' COMPENSATION") for the Placement Agents'
arranging for the investment therein of such proceeds, $1.75 per Convertible
Preferred Security purchased by the Placement Agents on the Closing Date and the
Option Closing Date (as defined below), if any ($5,250,000 in the aggregate
assuming no exercise of the Placement Agents' option or $6,300,000 in the
aggregate assuming exercise of such option in full). The Placement Agents'
Compensation shall be payable to the Placement Agents by wire transfer of
immediately available funds on the Closing Date and on the Option Closing Date,
if any.
The Trust and the Company hereby agree, jointly and severally,
that, without the prior written consent of Xxxxxx Xxxxxxx & Co. Incorporated on
behalf of the Placement Agents, they will not, during the period ending 90 days
after the date of this Agreement, (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, or otherwise transfer or
dispose of, directly or indirectly, any equity securities of the Company, the
Trust or any similar trust or any securities convertible into or exercisable or
exchangeable for any equity security of the Company, the Trust or any similar
trust or (ii) enter into any swap or other agreement or arrangement that
transfers to another, in whole or in part, directly or indirectly, any of the
economic consequences of ownership of any equity securities of the Company, the
Trust or any similar trust, whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of equity securities of the Company,
the Trust or any similar trust, other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Convertible Preferred Securities
to be sold hereunder, (B) the issuance by the Company of the Convertible
Debentures pursuant to the Debenture Purchase Agreement, (C) the issuance by the
Trust of the Trust Common Securities pursuant to the Common Securities Purchase
Agreement, (D) the issuance by the Company of shares of Common Stock upon
conversion of the Convertible Preferred Securities sold hereunder and the
related Convertible Debentures, (E) the issuance by the Company of shares of
Common Stock or options to purchase Common Stock pursuant to employee benefit
plans described in the Final Memorandum or (F) transactions by an person other
than the Company or the Trust pertaining to shares of Common Stock or other
securities acquired in open market transactions after the completion of the
offering of Convertible Preferred Securities.
3. TERMS OF OFFERING. The Placement Agents have advised the
Trust and the Company that the Placement Agents will make an offering of the
Convertible Preferred Securities purchased by the Placement Agents hereunder on
the terms set forth in the Final Memorandum, as soon as practicable after this
Agreement is entered into as in the judgment of the Placement Agents is
advisable.
4. PAYMENT AND DELIVERY. Payment for the Firm Securities shall
be made in federal or other funds immediately available in New York City against
delivery of such Firm Securities for the respective accounts of the several
Placement Agents at the closing to be held at
11
the office of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, at
9:00 A.M., local time, on April 12, 2000, or at such other time on the same or
such other date, not later than April 22, 2000, as shall be agreed to by the
Company and Xxxxxx Xxxxxxx & Co. Incorporated. The time and date of such payment
are herein referred to as the "CLOSING DATE."
Payment for any Additional Securities shall be made in federal
or other immediately available funds against delivery of such Additional
Securities for the respective accounts of the Placement Agents at 9:00 A.M., New
York City time, on the date specified in the notice described in Section 2 or on
such other date, in any event not later than May 8, 2000, as shall be designated
in writing by the Placement Agents. The time and date of such payment are
hereinafter referred to as the "OPTION CLOSING DATE."
Certificates for the Firm Securities and Additional Securities
shall be in definitive form or global form, as specified by the Placement
Agents, and registered in such names and in such denominations as the Placement
Agents shall request in writing not later than two full business days prior to
the Closing Date or the Option Closing Date, as the case may be. The
certificates evidencing the Firm Securities and Additional Securities shall be
delivered to the Placement Agents on the Closing Date or the Option Closing
Date, as the case may be, with any transfer taxes payable in connection with the
transfer of the Convertible Preferred Securities to the Placement Agents duly
paid, against payment of the Purchase Price therefor.
5. CONDITIONS TO THE PLACEMENT AGENTS' OBLIGATION. The
obligations of the Placement Agents to purchase and pay for the Convertible
Preferred Securities on the Closing Date is subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date,
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
other than any notice which shall already have been given as
of the date hereof, in the rating accorded to the Company or
any of the Company's securities or in the rating outlook for
the Company by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) 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, its Subsidiaries or the Trust,
taken as a whole, from that set forth in the Final Memorandum
(exclusive of any amendments or supplements thereto subsequent
to the date of this Agreement) that, in the reasonable
judgment of the Placement Agents, is material and adverse
12
and that makes it, in the reasonable judgment of the Placement
Agents, impracticable to market the Convertible Preferred
Securities on the terms and in the manner contemplated in the
Final Memorandum.
(b) The Placement Agents shall have received on the Closing
Date a certificate, dated the Closing Date and signed by an executive
officer of the Company and a Regular Trustee of the Trust, to the
effect set forth in Section 5(a)(i) of this Agreement and to the effect
that the representations and warranties of the Company and the Trust
contained in this Agreement are true and correct as of the Closing Date
and that each of the Company and the Trust has complied with all of the
agreements and satisfied all of the conditions contained herein on its
part to be performed or satisfied hereunder on or before the Closing
Date. The officer of the Company and Regular Trustee signing and
delivering such certificate may rely upon the best of his or her
knowledge as to any proceedings threatened.
(c) The Placement Agents shall have received, (A) 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 the Placement Agents, from KPMG LLP, 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 Final Memorandum and (B) on the date
hereof, letters dated the date hereof, in form and substance
satisfactory to the Placement Agents, from KPMG LLP, independent public
accountants, with respect to agreed-upon procedures to be applied to
information contained in the Final Memorandum with respect to billable
minutes, revenue per billable minute and number of customers; PROVIDED
THAT the letters delivered pursuant to Section 5(c)(A) and Section
5(c)(B) shall use a "cut-off date" not earlier than 2 business days
prior to the date hereof.
(d) The Placement Agents shall have received on the Closing
Date an opinion of Xxxxxx Xxxx & Xxxxxx LLP, outside counsel to the
Company, dated the Closing Date, to the effect set forth in EXHIBIT D.
Such opinion shall be rendered to the Placement Agents at the request
of the Company and the Trust and shall so state therein.
(e) The Placement Agents shall have received on the Closing
Date opinions of foreign local counsel in Germany, Switzerland, Italy,
France, Belgium, Spain, The Netherlands and the United Kingdom, dated
the Closing Date, each to the effect set forth in EXHIBIT E or as to
such other form as agreed to by the Placement Agents. Such opinions
shall be rendered to the Placement Agents at the request of the Company
and the Trust and shall so state therein.
(f) The Placement Agents shall have received on the Closing
Date an opinion of Xxxxxxxx & Forester, LLP, special U.S.
communications counsel to the Company,
13
together with an opinion of Nebraska counsel, each dated the Closing
Date, substantially to the effect set forth in EXHIBIT F. Such opinions
shall be rendered to the Placement Agents at the request of the Company
and the Trust and shall so state therein.
(g) The Placement Agents shall have received on the Closing
Date an opinion of Xxxxx, Xxxxxx & Xxxxxx, LLP, counsel to the
Institutional Trustee and the Guarantee Trustee, dated the Closing
Date, substantially to the effect set forth in EXHIBIT G.
(h) The Placement Agents shall have received on the Closing
Date an opinion of Xxxxxxxx, Xxxxxx & Finger, counsel to the Delaware
Trustee, dated the Closing Date, substantially to the effect set forth
in EXHIBIT H.
(i) The Placement Agents shall have received on the Closing
Date an opinion of Xxxxxxxx & Xxxxxxxx, counsel to the Placement
Agents, dated the Closing Date, in form and substance satisfactory to
you.
(j) The Registration Rights Agreement shall be executed and in
full force and effect.
(k) On or prior to the close of business on the day after the
date of this Agreement, the Placement Agents shall have received a
lock-up agreement, substantially in the form attached hereto as EXHIBIT
I, from each of the persons listed in EXHIBIT J, and each such
agreement shall be in full force and effect on the Closing Date.
(l) The Placement Agents shall have received such other
documents and certificates as are reasonably requested by you or your
counsel.
The obligation of the Placement Agents to purchase Additional
Securities hereunder is subject to the delivery to the Placement Agents on the
Option Closing Date of such documents as they may reasonably request with
respect to the good standing of the Company and the Trust, the due authorization
and issuance of the Additional Securities and other matters related to the
issuance of the Additional Securities.
6. COVENANTS OF THE COMPANY AND THE TRUST. In further
consideration of the agreements of the Placement Agents contained in this
Agreement, each of the Company and the Trust covenants with each Placement Agent
as follows:
(a) To use its best efforts to furnish to each Placement Agent
in New York City, without charge, prior to 9:00 a.m. New York City time
on April 10, 2000 and during the period mentioned in Section 6(c), as
many copies of the Final Memorandum, any supplements and amendments
thereto and any documents incorporated by reference therein as such
Placement Agent may reasonably request.
14
(b) Before amending or supplementing the Final Memorandum, to
furnish to each Placement Agent a copy of each such proposed amendment
or supplement and not to use any such proposed amendment or supplement
without the consent of Xxxxxx Xxxxxxx & Co. Incorporated, which consent
shall not be unreasonably withheld or delayed.
(c) If, during such period after the date hereof and prior to
the date on which all of the Convertible Preferred Securities shall
have been sold by the Placement Agents, any event shall occur or
condition exist as a result of which it is necessary to amend or
supplement the Final Memorandum in order to make the statements
therein, in the light of the circumstances when the Final Memorandum is
delivered to a purchaser, not misleading, or if, in the opinion of
counsel to the Placement Agents it is necessary to amend or supplement
the Final Memorandum to comply with applicable law, forthwith to
prepare and furnish, at its own expense, to the Placement Agents,
either amendments or supplements to the Final Memorandum so that the
statements in the Final Memorandum as so amended or supplemented will
not, in the light of the circumstances when the Final Memorandum is
delivered to a purchaser, be misleading or so that the Final
Memorandum, as so amended or supplemented, will comply with applicable
law.
(d) To endeavor to qualify the Offered Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions as
the Placement Agents shall reasonably request; PROVIDED THAT in no
event shall the Company be obligated to qualify to do business in any
jurisdiction in which it is not now so qualified or to take any action
which would subject it to taxation in any jurisdiction in which 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 Offered Securities in any
jurisdiction in which it is not now so subject.
(e) To reserve and keep available at all times, free of
preemptive and similar rights, shares of Viatel Common Stock for the
purpose of enabling the Company to satisfy any obligations to issue
shares of Viatel Common Stock upon the conversion of the Convertible
Debentures and the Convertible Preferred Securities.
(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 reasonable expenses incident to the performance of
its obligations under this Agreement, including: (i) the preparation of
each Memorandum and all amendments and supplements thereto, (ii) the
preparation, issuance and delivery of the Offered Securities, (iii) the
fees and disbursements of the Company's and the Trust's counsel and
accountants and the Institutional Trustee, the Guarantee Trustee and
the Indenture Trustee and their respective counsel, (iv) the
qualification of such Offered Securities under securities or Blue Sky
laws in accordance with the provisions of Section 6(d), including
filing fees and the fees and disbursements of one counsel for the
Placement Agents in connection therewith and in connection with the
preparation of any Blue Sky or legal investment memoranda, (v) the
printing and delivery to the Placement Agents in quantities as herein
above stated
15
of copies of each Memorandum and any amendments or supplements thereto,
(vi) any fees charged by rating agencies, (vii) all reasonable document
production charges and expenses of one counsel to the Placement Agents
(but not including their fees for professional services) in connection
with the preparation of this Agreement, (viii) the fees and expenses,
if any, incurred in connection with the admission of such Offered
Securities for trading in the Private Offerings, Resales and Trading
through Automatic Linkages ("PORTAL") Market or any other appropriate
market system, (ix) the costs and expenses of the Company relating to
investor presentations on any "road show" undertaken in connection with
the marketing of the offering, whether by traditional or electronic
means, 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
with the prior approval of the Company, (x) all fees and expenses
incident to listing the shares of Common Stock issuable upon conversion
of the Convertible Preferred Securities and the Convertible Debentures
on the Nasdaq National Market, (xi) the costs and charges of any
transfer agents, registrars and depositaries, and (xii) such other
reasonable costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not
otherwise made in this Section. It is understood, however, that except
as provided in this Section 6, Section 8 and Section 10, the Placement
Agents will pay all of their costs and expenses, including fees and
disbursements of their counsel, transfer taxes payable on resale of any
of the Convertible Preferred Securities by them and any advertising
expenses connected with any offers they may make.
(g) Neither the Company nor the Trust nor any of their
respective Affiliates will sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in
the Securities Act) which would be integrated with the sale of any of
the Offered Securities in a manner which would require the registration
under the Securities Act of any of such Offered Securities.
(h) Neither the Company nor any Subsidiary will solicit any
offer to buy or offer or sell any of the Offered Securities by means of
any form of general solicitation or general advertising (within the
meaning of Rule 502(c) under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act, except as may be contemplated by the Registration
Rights Agreement.
(i) While any of the Offered Securities remain "restricted
securities" within the meaning of Rule 144 under the Securities Act, to
make available, upon request, to any seller of any of such Offered
Securities the information concerning the Company and the Trust
specified in Rule 144A(d)(4) under the Securities Act, unless the
Company is then subject to and in compliance with Section 13 or 15(d)
of the Exchange Act.
16
(j) To use its reasonable best efforts to permit the
Convertible Preferred Securities and, if the Convertible Debentures are
at any time distributed to holders, the Convertible Debentures to be
designated PORTAL securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers,
Inc. relating to trading in the PORTAL Market.
(k) The Company shall not, and shall use its best efforts to
cause its Affiliates not to, purchase and then resell or otherwise
transfer any of the Offered Securities.
7. OFFERING OF CONVERTIBLE PREFERRED SECURITIES; RESTRICTIONS
ON TRANSFER. (a) Each Placement Agent, severally and not jointly, represents and
warrants that such Placement Agent is a qualified institutional buyer as defined
in Rule 144A under the Securities Act (a "QIB"). Each Placement Agent, severally
and not jointly, agrees with the Company and the Trust that (i) it will not
solicit offers for, or offer or sell, Convertible Preferred Securities by any
form of general solicitation or general advertising (as those terms are used in
Rule 502(c) under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act and (ii) it
will solicit offers for Convertible Preferred Securities only from, and will
offer such Convertible Preferred Securities only to, persons that it reasonably
believes to be other QIBs who, in purchasing such Convertible Preferred
Securities are deemed to have represented and agreed as provided in either
Memorandum under the caption "Transfer Restrictions."
(b) Each Placement Agent, severally and not jointly,
represents, warrants, and agrees with respect to offers and sales outside the
United States that:
(i) it understands that no action has been or will be taken in
any jurisdiction by the Company or the Trust that would permit a public
offering of the Convertible Preferred Securities, or possession or
distribution of either Memorandum or any other offering or publicity
material relating to the Convertible Preferred Securities, in any
country or jurisdiction where action for that purpose is required;
(ii) such Placement Agent will comply with all applicable laws
and regulations in each jurisdiction in which it acquires, offers,
sells or delivers Convertible Preferred Securities or has in its
possession or distributes either Memorandum or any such other material,
in all cases at its own expense;
(iii) such Placement Agent has (A) not offered or sold and,
prior to the date six months after the Closing Date, will not offer or
sell any Convertible Preferred Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal
or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer
to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995; (B) complied and will comply
with all
17
applicable provisions of the Financial Services Act 1986 with respect
to anything done by it in relation to the Convertible Preferred
Securities in, from or otherwise involving the United Kingdom; and (C)
only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Convertible Preferred Securities to a person who is of a kind described
in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996, or is a person to whom such
document may otherwise lawfully be issued or passed on; and
(iv) such Placement Agent understands that the Convertible
Preferred Securities have not been and will not be registered under the
Securities and Exchange Law of Japan, and represents that it has not
offered or sold, and agrees that it will not offer or sell, any
Convertible Preferred Securities directly or indirectly in Japan or for
the account of any resident thereof except pursuant to any exemption
from the registration requirements of the Securities and Exchange Law
of Japan and otherwise in compliance with applicable provisions of
Japanese law.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Placement Agent, and each person, if any, who
controls any Placement Agent within the meaning of either Section 15 of the
Securities Act or Section 20 of 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 each Memorandum (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 necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the foregoing indemnity agreement with respect to any Preliminary
Memorandum shall not inure to the benefit of any Placement Agent from whom the
person asserting any such losses, claims, damages or liabilities purchased
Convertible Preferred Securities, or any person controlling such Placement
Agent, if a copy of the Final Memorandum (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Placement Agent to such person at or prior to
the written confirmation of the sale of the Convertible Preferred Securities to
such person, and if the Final Memorandum (as so amended or supplemented) would
have cured the defect giving rise to such losses, claims, damages or
liabilities, unless such failure is the result of noncompliance by the Company
with Section 6(a) hereof; PROVIDED FURTHER that each of the Company will not be
liable in any such case to the extent, but only to the extent, that any 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 Placement Agent furnished to the Company in writing by such
Placement Agent expressly for use therein.
18
(b) Each Placement Agent agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers 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 Placement Agent, but only with
reference to information relating to such Placement Agent furnished to the
Company in writing by such Placement Agent expressly for use in either
Memorandum or any amendments or supplements thereto.
(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 any provision of Section 8(a) or Section
8(b), such person (the "INDEMNIFIED PARTY") shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
(but the failure to so notify an indemnifying party shall not relieve it from
any liability which it may have under this Section 8, except to the extent that
it has been prejudiced in any material respect by such failure, or from any
liability it may otherwise have) 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 reasonable 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 8(a) and by the Company in the case of
parties indemnified pursuant to Section 8(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 60 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, which consent may not be
19
unreasonably withheld, 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 (whether or not any
indemnified party is an actual or potential party to such proceeding) 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 any
provision of Section 8(a) or Section 8(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 section, in lieu of
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 and the Trust, on the one hand, and
Placement Agents, on the other hand, from the offering of such Convertible
Preferred Securities, or (ii) if the allocation provided by clause 8(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 8(d)(i) above but
also the relative fault of the Company and the Trust and the Placement Agents 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 and the Trust, on
the one hand, and the Placement Agents, on the other hand, in connection with
the offering of the Convertible Preferred Securities shall be deemed to be in
the same respective proportions as the net proceeds from the offering of the
Convertible Preferred Securities (net of discounts and commissions but before
deducting expenses) received by the Company and the Trust and the total
discounts and commissions received by the Placement Agents in respect thereof
bear to the aggregate offering price of $50 per Convertible Preferred Security.
The relative fault of the Company and the Trust, on the one hand, and the
Placement Agents, 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 and the Trust or the Placement Agents and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Placement Agents'
respective obligations to contribute pursuant to this Section 8 are several in
proportion to the respective number of Convertible Preferred Securities they
have purchased hereunder and not joint.
(e) The Company, the Trust and the Placement Agents agree that
it would not be just or equitable if contribution pursuant to this Section 8
were determined by PRO RATA allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in Section
8(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in Section 8(d) above 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 8, the Placement Agents
20
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Convertible Preferred Securities resold by it in
the initial placement of such Convertible Preferred Securities were offered to
investors exceeds the amount of any damages that the Placement Agents have
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 8 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.
(f) The indemnity and contribution provisions contained in
this Section 8 and the representations, warranties and other statements of the
Company and the Trust 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 Placement Agent or any person
controlling any Placement Agent or by or on behalf of the Trust, the VFT
Trustees, the Company, or any of its officers or directors or any person
controlling the Company or the Trust, and (iii) acceptance of and payment for
any of the Convertible Preferred Securities.
9. TERMINATION. This Agreement shall be subject to termination
by notice given by the Placement Agents 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 9(a)(i)
through 9(a)(iv) above, such event, singly or together with any other such
event, makes it, in your judgment, impracticable to market the Convertible
Preferred Securities on the terms and in the manner contemplated in the Final
Memorandum.
10. EFFECTIVENESS; DEFAULTING PLACEMENT AGENTS. 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 Placement Agents shall fail or refuse to
purchase Convertible Preferred Securities that it has or they have agreed to
purchase hereunder on such date, and the aggregate number of Convertible
Preferred Securities which such defaulting Placement Agent or Placement Agents
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Convertible Preferred Securities to be purchased on such
date, the other Placement Agents shall be obligated severally in the proportions
that the number of Firm Securities set forth opposite
21
their respective names in Schedule I bears to the aggregate number of Firm
Securities set forth opposite the names of all such non-defaulting Placement
Agents, or in such other proportions as you may specify, to purchase the
Convertible Preferred Securities which such defaulting Placement Agent or
Placement Agents agreed but failed or refused to purchase on such date; PROVIDED
that in no event shall the number of Convertible Preferred Securities that any
Placement Agent has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 10 by an amount in excess of one-ninth of such number
of Convertible Preferred Securities without the written consent of such
Placement Agent. If, on the Closing Date, any Placement Agent or Placement
Agents shall fail or refuse to purchase Firm Securities and the aggregate number
of Firm Securities with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Securities to be purchased, and
arrangements satisfactory to you, the Trust and the Company for the purchase of
such Firm Securities are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Placement Agent, the Trust or the Company. In any such case either you or the
Trust 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 Final
Memorandum or in any other documents or arrangements may be effected. If, on the
Option Closing Date, any Placement Agent or Placement Agents shall fail or
refuse to purchase Additional Securities and the aggregate number of Additional
Securities with respect to which such default occurs is more than one-tenth of
the aggregate number of Additional Securities to be purchased, the
non-defaulting Placement Agents shall have the option to (i) terminate their
obligation hereunder to purchase Additional Securities or (ii) purchase not less
than the number of Additional Securities that such non-defaulting Placement
Agents would have been obligated to purchase in the absence of such default. Any
action taken under this paragraph shall not relieve any defaulting Placement
Agent from liability in respect of any default of such Placement Agent under
this Agreement.
If this Agreement shall be terminated by the Placement Agents,
or any of them, because of any failure or refusal on the part of the Company or
the Trust to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company or the Trust shall be unable to
perform its obligations under this Agreement (other than by reason of a breach
of this Agreement by any of the Placement Agents), the Company and the Trust
will reimburse the Placement Agent or such Placement Agents as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of its counsel)
reasonably incurred by such Placement Agents in connection with this Agreement
or the offering contemplated hereunder.
11. NOTICES. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if delivered personally to the parties hereto as
follows:
22
(a) If to the Placement Agents:
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 10036
Attention: Xxxxx X. Xxxxx
(b) If to the Company or the Trust:
Viatel, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Vice President and General Counsel
with a copy to:
Xxxxxx Xxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxx
12. COUNTERPARTS. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
13. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
14. 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.
[THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
23
Please confirm your agreement to the foregoing by signing in
the space provided below for that purpose and returning to us a copy hereof,
whereupon this Agreement shall constitute a binding agreement between Viatel,
Inc., Viatel Financing Trust I and the Placement Agents.
Very truly yours,
VIATEL, INC.
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Name: Xxxxx X. Xxxx
Title: Chief Financial Officer
VIATEL FINANCING TRUST I
By: VIATEL, INC., as Sponsor
By: /s/ Xxxxx X. Xxxx
-------------------------------
Name: Xxxxx X. Xxxx
Title: Chief Financial Officer
Agreed, April 6, 2000
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXX XXXXX-XXXXXX INC.
BANC OF AMERICA SECURITIES LLC
Acting severally on behalf of themselves
and the several Placement Agents named
in Schedule I hereto
By: XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Principal
SCHEDULE I
PLACEMENT AGENT NUMBER OF CONVERTIBLE PREFERRED
SECURITIES TO BE PURCHASED
Xxxxxx Xxxxxxx & Co. Incorporated 1,950,000
Xxxxxxx Xxxxx Xxxxxx Inc. 675,000
Banc of America Securities LLC 375,000
Total:............................................3,000,000
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
EXHIBIT B
SUBSIDIARIES OF VIATEL, INC.
NAME OF SUBSIDIARY JURISDICTION OF INCORPORATION
OR ORGANIZATION
Viatel Cable Assets, Inc. Delaware
Viatel Financing Trust I Delaware
Viatel Services, Inc. Delaware
VYTL LLC Delaware
Destia Communications Delaware
Xxxxxx.xxx, Inc. Delaware
Off the Mall Advertising Inc. Delaware
Voicenet Corporation New York
Viatel (Bermuda) Cable Assets Limited Bermuda
Viatel Cable Assets Limited United Kingdom
Viatel Global Communications (UK) Limited United Kingdom
Viatel Communications, Ltd. United Kingdom
Destia Communications Holdings, Ltd. United Kingdom
Destia Communications, Ltd. United Kingdom
Wavetech, Ltd. United Kingdom
America 1st United Kingdom
Destia Network Services Ltd. United Kingdom
AmberHold Ltd. United Kingdom
Econophone, Ltd. United Kingdom
Viatel Ltd. Ireland
Destia Communications Limited Ireland
Destia Communications Services Ltd. Ireland
Econophone GmbH Austria
Econophone N.V. Belgium
Call BVBA Belgium
Destia Communications S.A. France
Viatel German Holding GmbH Germany
Viatel Global Communications GmbH Germany
Econophone GmbH Germany
Teleriffic Global Communications GmbH Germany
Econophone (Hellas) S.A. Greece
Viaphon N.V./S.A. Netherlands
Viatel European Holding S.R.L. Spain
Econophone AG Switzerland
Phonecentre GmbH Switzerland
EXHIBIT C
FINAL OFFERING MEMORANDUM,
DATED APRIL 6, 2000
EXHIBIT D
FORM OF OPINION OF
XXXXXX XXXX & XXXXXX LLP
ATTACHMENT A
TO
FORM OF XXXXXX XXXX & XXXXXX LLP OPINION
In the course of the preparation by the Trust and the Company
of the Final Memorandum, we have participated in conferences with officers,
directors and representatives of the Trust and the Company, its independent
auditors, officers, directors and your representatives and representatives of
counsel for the Placement Agents at which conferences the contents of the Final
Memorandum and related matters were discussed. Although we have not
independently verified the accuracy or completeness of, or otherwise verified
the statements made in the Final Memorandum (other than as expressly provided
above), nothing has come to our attention that has led us to believe that the
Final Memorandum, as of its date or the date hereof, contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order the make the statements therein, in the light of the circumstances under
which they were made, not misleading. Notwithstanding the foregoing, we are not
expressing any belief as to the financial statements and supporting notes and
schedules and other financial data contained in the Final Memorandum.
EXHIBIT E
FORM OF FOREIGN LOCAL COUNSEL OPINION
(A) [________] (the "Company") has been duly incorporated, is
validly existing as a company under the laws of [Name of Country], has the
corporate power and authority to own its property and to conduct its business as
described in the Offering Memorandum of Viatel Financing Trust I dated April __,
2000 (the "Final Memorandum") and is duly qualified to transact business 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 would not in our view have a Material Adverse Effect on the
Company and its subsidiaries taken as a whole).
(B) The Company has no subsidiaries.
(C) The Company has all materially necessary certificates,
orders, permits, licenses, authorizations, consents and approvals of and from,
and has made all declarations and filings with all relevant governmental
authorities, all self-regulatory organizations and all relevant courts and
tribunals, to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Final Memorandum, and, to
the best of our knowledge, after due inquiry has not received any notice of
proceedings relating to revocation or modification of any such certificates,
orders, permits, licenses, authorizations, consents or approvals, nor is the
Company in violation of, or in default under, any federal, state, local,
national or regional law, regulation, rule, decree, order or judgment applicable
to the Company, 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, except as described
herein or in the Final Memorandum.
(D) The statements in the Final Memorandum under the caption
"Business -- [_______]" are accurate in all material respects and fairly
summarize all matters referred to therein.
(E) There are no restrictions (legal, contractual or
otherwise) on the ability of the Company to declare and pay any dividend or make
any payment or transfer of property or assets to its stockholders other than
those described in the Final Memorandum and such restrictions as would not have
a material adverse effect on the prospects, condition, financial or otherwise,
or in the earnings, business or operations of the Company and such descriptions,
if any, fairly summarize such restrictions.
* * * * * * * * *
F-1
EXHIBIT F
FORM OF U.S. REGULATORY COUNSEL OPINION
Pursuant to Section 5(f) of the Placement Agreement, Xxxxxxxx &
Xxxxxxxx LLP, regulatory counsel for the Company, shall furnish an opinion to
the effect that:
(A) (1) the execution and delivery of the Placement Agreement
by the Trust and the Company and the consummation of the transactions
contemplated thereby do not violate (i) the federal Communications Act
of 1934, as amended, and the Telecommunications Act of 1996, any rules
or regulations of the Federal Communications Commission ("FCC")
applicable to the Company (collectively, the "Communications Act"),
(ii) any state telecommunications law, rules or regulations ("State
Law") applicable to the Company, and (iii) to the best of such
counsel's knowledge, any decree from any court, and (2) no consent,
approval, authorization or order of or filing with the FCC or any state
authority overseeing telecommunications matters ("State Authority"), is
necessary for the execution and delivery of the Placement Agreement by
the Company and the Trust and except to the extent that the failure to
obtain such consents, approvals, authorizations or orders or to make
filings with, the FCC or any State Authority would not, individually or
in the aggregate, have a material adverse effect on the prospects,
condition (financial or otherwise) or in the earnings, business or
operations of the Trust and the Company and the subsidiaries listed in
Schedule B to the Placement Agreement (the "Subsidiaries") taken as a
whole;
(B) except as indicated in this paragraph B, to the best of
our knowledge, (1) the Company and its Subsidiaries have made all
reports and filings, and paid all fees, required by the FCC and the
State Authorities, and have all certificates, orders, permits,
licenses, authorizations, consents and approvals of and from, and have
made all filings and registrations, with the FCC and the State
Authorities necessary to own, lease, license and use its properties and
assets and to conduct its respective business in the manner described
in the Final Memorandum, except for those filings, fees, and approvals
the failure to obtain or file of which would not have material adverse
effect on the financial condition, or on the earnings, business, or
operations of the Company and its Subsidiaries, taken as a whole; (2)
has not received any notice of proceedings relating to the violation,
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, taken as a whole; and (3)
neither the Company nor its Subsidiaries is in violation of, or in
default under, the Communications Act or State Law, the effect of
which, singly or in the aggregate, would have a material
F-2
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;
(C) to the best of such counsel's knowledge after due inquiry
(i) no adverse judgment, decree or order of the FCC or any State
Authority has been issued against the Company or its Subsidiaries and
(ii) no litigation, proceeding, inquiry or investigation has been
commenced or threatened against the Company or its Subsidiaries before
or by the FCC or any State Authority which, if decided adversely to the
interests of the Company or its Subsidiaries would have a material
adverse effect on the Company and its Subsidiaries, taken as a whole;
and
(D) the statements in the Final Memorandum under the captions
"Risk Factors -- Competition," "Risk Factors -- Substantial Government
Regulation," "Business -- Government Regulation," insofar as such
statements constitute a summary of the legal matters, documents or
proceedings of the FCC and State Authorities with respect to
telecommunications regulation referred to therein, fairly summarize the
matters referred to therein.
* * * * * * * * *
EXHIBIT G
FORM OF OPINION OF
XXXXX, XXXXXX & XXXXXX, LLP
[Attach form provided by Xxxxx, Xxxxxx & Xxxxxx, LLP]
EXHIBIT H
FORM OF OPINION OF
XXXXXXXX, XXXXXX & FINGER
[Attach form provided by Xxxxxxxx, Xxxxxx & Xxxxxx]
H-1
I-1
EXHIBIT I
Form of Lock-Up Agreement
April 6, 2000
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Xxxxx Xxxxxx Inc.
Banc of America Securities LLC
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: VIATEL FINANCING TRUST I
Ladies and Gentlemen:
The undersigned, an officer and/or director of Viatel, Inc., a Delaware
corporation (the "Company"), understands that Xxxxxx Xxxxxxx & Co. Incorporated
("Xxxxxx Xxxxxxx") intends to enter into a Placement Agreement (the "Placement
Agreement") with the Company and Viatel Financing Trust I, a statutory business
trust formed under the laws of the State of Delaware (the "Trust"), providing
for the offering by the several Placement Agents, including Xxxxxx Xxxxxxx (the
"Placement Agents") of convertible preferred securities (the "Preferred
Securities") of the Trust.
To induce the Placement Agents to enter into the Placement Agreement,
and in recognition of the benefit that the offering of the Preferred Securities
will confer upon the undersigned as an officer and/or director of the Company,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned hereby agrees that, without the
prior written consent of Xxxxxx Xxxxxxx on behalf of the Placement Agents, the
undersigned will not, during the period commencing on the date hereof and ending
90 days after the date of the Placement Agreement, (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, or
otherwise transfer or dispose of, directly or indirectly, any equity securities
of the Company, the Trust or any similar trust or any securities convertible
into or exchangeable or exercisable for any equity securities of the Company,
the Trust or any similar trust, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or (ii) enter into any swap or any other agreement or
arrangement that transfers to another, in whole or in part, directly or
indirectly, any of the economic consequences of ownership of any equity
securities of the Company, the Trust or any similar trust, whether any such
transaction described in clause (i) or
I-2
(ii) above is to be settled by delivery of any equity securities of the Company,
the Trust or any similar trust, other securities, in cash or otherwise. The
foregoing sentence shall not apply to (a) the sale of any equity securities to
the Placement Agents pursuant to the Placement Agreement, or (b) transactions
relating to equity securities acquired in open market transactions after the
completion of the offering of the Preferred Securities.
The undersigned recognizes that whether or not the offering of the
Preferred Securities actually occurs depends on a number of factors, including
market conditions. Any such offering will only be made pursuant to a Placement
Agreement, the terms of which are subject to negotiation between the Company,
the Trust and the Placement Agents.
In the event the Closing Date (as defined in the Placement Agreement)
does not occur by April 17, 2000, this lock-up agreement will automatically
expire and be of no further effect.
This agreement shall be governed by and construed in accordance with
the laws of the State of New York.
Very truly yours,
Signature:
Print Name:
EXHIBIT J
Persons to Deliver Lock-Up Agreements
EXECUTIVE OFFICER TITLE
Xxxxxxx X. Xxxxxxx Chairman of the Board and Chief Executive
Officer
Xxxxxx Xxxx Vice Chairman of the Board
Xxxxxxx X. Xxxxxx President and Director
Xxxxx X. Xxxx Chief Financial Officer and Director
Xxxxxxx X. Xxxxxxx Executive Vice President, Corporate
Development and Director
Xxxxxxx X. Xxxxx Chief Technology Officer and Director
Xxxxxxxx X. Xxxxxx Executive Vice President, Wholesale Sales and
Marketing
Draft: April 3, 2000
