Exhibit 1.1
Draft February 7, 2000
FLAG Telecom Holdings Limited
o Common Shares(a)
($0.0006 par value)
U.S. Underwriting Agreement
New York, New York
February __, 2000
Xxxxxxx Xxxxx Xxxxxx Inc.
BT Alex.Xxxxx Incorporated
Xxxxxxx, Sachs & Co.
Xxxxxx Xxxxxxx & Co. Incorporated
Warburg Dillon Read LLC
As U.S. Representatives of the several
U.S. Underwriters,
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
FLAG Telecom Holdings Limited, a company organized under the laws of
Bermuda (the "Company"), proposes to sell to the several U.S. Underwriters, for
whom the U.S. Representatives are acting as representatives, o Common Shares,
$0.0006 par value ("Common Stock") of the Company, and the Selling Shareholders
propose to sell to the several U.S. Underwriters o shares of Common Stock (said
shares to be issued and sold by the Company and shares to be sold by the Selling
Shareholders collectively being hereinafter called the "U.S. Underwritten
Securities"). The Company and the Selling Shareholders also propose to grant to
the U.S. Underwriters an option to purchase up to o additional shares of Common
Stock to cover over-allotments (the "U.S. Option Securities" and together with
the U.S. Underwritten Securities, the "U.S. Securities"). It is understood that
the Company and the Selling Shareholders are concurrently entering into the
International Underwriting Agreement providing for the sale by the Company and
the Selling Shareholders of an aggregate of o shares of Common Stock (said
shares to be sold by the Company and the Selling Shareholders pursuant to the
International Underwriting Agreement being hereinafter called the "International
Underwritten Securities") and providing for the grant to the International
Underwriters of an option to purchase from the Company and the Selling
Shareholders up to o additional shares of Common Stock (the "International
Option Securities"). It is further understood and agreed that the International
Underwriters and the U.S. Underwriters have entered into an Agreement Between
U.S. Underwriters and International Underwriters dated the date hereof (the
"Agreement Between
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(a) Plus an option to purchase from the Company and the Selling Shareholders up
to o additional U.S. Securities to cover over-allotments.
U.S. Underwriters and International Underwriters"), pursuant to which, among
other things, the International Underwriters may purchase from the U.S.
Underwriters a portion of the U.S. Securities to be sold pursuant to this U.S.
Underwriting Agreement and the U.S. Underwriters may purchase from the
International Underwriters a portion of the International Securities to be sold
pursuant to the International Underwriting Agreement. The use of the neuter in
this U.S. Underwriting Agreement shall include the feminine and masculine
wherever appropriate. Certain terms used in this U.S. Underwriting Agreement are
defined in Section 20 hereof.
1. Representations and Warranties.
(i) The Company represents and warrants to, and agrees with, each
U.S. Underwriter as set forth below in this Section 1.
(a) The Company has prepared and filed with the Commission a
registration statement (file number 333-94819) on Form F-1, including
related preliminary prospectuses, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or
more amendments thereto, including the related preliminary prospectuses,
each of which has previously been furnished to you. The Company will next
file with the Commission either (1) prior to the Effective Date of such
registration statement, a further amendment to such registration statement
(including the form of final prospectuses) or (2) after the Effective Date
of such registration statement, final prospectuses in accordance with
Rules 430A and 424(b). In the case of clause (2), the Company has included
in such registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and the
rules thereunder to be included in such registration statement and the
Prospectuses. As filed, such amendment and form of final prospectuses, or
such final prospectuses, shall contain all Rule 430A Information, together
with all other such required information, and, except to the extent the
U.S. Representatives shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other changes
(beyond that contained in the latest Preliminary Prospectuses) as the
Company has advised you, prior to the Execution Time, will be included or
made therein.
It is understood that two forms of prospectuses are to be used in
connection with the offering and sale of the Securities: one form of
prospectus relating to the U.S. Securities, which are to be offered and
sold to United States and Canadian Persons (as defined herein) which for
purposes of distribution to Canadian Persons shall have a Canadian
"wrap-around" (the "Canadian Offering Memorandum"), and one form of
prospectus relating to the International Securities, which are to be
offered and sold to persons other than United States and Canadian Persons.
The two forms of prospectus are identical except for the outside front
cover page, the inside front cover page, the discussion under the headings
"Underwriting", "Tax Considerations--Taxation of FLAG Telecom--United
Kingdom Tax Considerations" and "--Taxation of Shareholders--United
Kingdom Income Tax Considerations" and the outside back cover page.
Insofar as they relate to offers or sales of Securities in Canada, all
references herein to the U.S.
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Preliminary Prospectus and the U.S. Prospectus shall include the Canadian
Offering Memorandum;
(b) On the Effective Date, the Registration Statement did or will,
and when the Prospectuses are first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined in this U.S. Underwriting
Agreement) and on any date on which Option Securities are purchased, if
such date is not the Closing Date (a "settlement date"), each Prospectus
(and any supplements thereto) will, comply in all material respects with
the applicable requirements of the Act and the rules thereunder; on the
Effective Date and at the Execution Time, the Registration Statement did
not or will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and, on the Effective
Date, each Prospectus, if not filed pursuant to Rule 424(b), will not, and
on the date of any filing pursuant to Rule 424(b) and on the Closing Date
and any settlement date, each Prospectus (together with any supplement
thereto) will not, include any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representations
or warranties as to the information contained in or omitted from the
Registration Statement, or the Prospectuses (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the
Prospectuses (or any supplement thereto);
(c) Each of the Company and its Subsidiaries has been duly
incorporated and is validly existing as a corporation or company in good
standing under the laws of the jurisdiction in which it is chartered or
organized with the requisite corporate power and authority to own or
lease, as the case may be, and to operate its properties and conduct its
business as described in the Prospectuses;
(d) The subsidiaries listed on Annex A attached hereto are the only
significant subsidiaries of the Company as defined by Rule 1-02 of
Regulation S-X (together with FLAG Atlantic Holdings Limited and FLAG
Atlantic Limited, the "Subsidiaries");
(e) All the outstanding shares of capital stock of each Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectuses, all
outstanding shares of capital stock of the Subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries free and
clear of any perfected security interest or any other security interests,
claims, liens or encumbrances;
(f) The Company's authorized equity capitalization is as set forth
in the Prospectuses; the capital stock of the Company conforms in all
material respects to the description thereof contained in the
Prospectuses; the outstanding shares of Common Stock (including the
Securities being sold under the Underwriting Agreements by the Selling
Shareholders) have been duly and validly authorized and issued and are
fully paid and nonassessable; the Securities being sold under the
Underwriting Agreements by the
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Company have been duly and validly authorized, and, when issued and
delivered to and paid for by the U.S. Underwriters pursuant to this U.S.
Underwriting Agreement and by the International Underwriters pursuant to
the International Underwriting Agreement, will be fully paid and
nonassessable; the Securities being sold under the Underwriting Agreements
by the Company and the Selling Shareholders are listed, and admitted and
authorized for trading, subject only to official notice of issuance, on
the Official List of the London Stock Exchange and authorized for
quotation on The Nasdaq National Market, Inc.; the certificates for the
Securities conform in all material respects to the requirements of Bermuda
law; the holders of outstanding shares of capital stock of the Company are
not entitled to preemptive or other rights to subscribe for the
Securities; and, except as set forth in the Prospectuses, no options,
warrants or other rights to purchase, agreements or other obligations to
issue, or rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership interests in the
Company are outstanding;
(g) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Prospectuses, or
to be filed as an exhibit thereto, which is not described or filed as
required; and the statements in the Prospectuses under the headings
"Business--Regulation", "Principal and Selling Shareholders", "Certain
Transactions", "Description of Capital Stock" and "Tax Considerations"
fairly summarize the matters therein described;
(h) Each of this Agreement and the International Underwriting
Agreement has been duly authorized, executed and delivered by the Company;
(i) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectuses, will not be (i) an "investment company" as
defined in the Investment Company Act of 1940, as amended or (ii) a
"passive foreign investment company" within the meaning of the Code;
(j) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act and the Exchange Act and with the Bermuda Monetary Authority and
such as may be required under the rules of the National Association of
Securities Dealers, Inc. and the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated herein and in the Prospectuses;
(k) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof by the Company will conflict with, result
in a breach or violation of, or the imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
Subsidiaries pursuant to, (i) the charter or by-laws of the Company or any
of its Subsidiaries, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its Subsidiaries is a party or bound or to
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which its or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any of
its Subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
the Company or any of its Subsidiaries or any of its or their properties;
(l) Except as disclosed in the Prospectus or as waived in writing
prior to the date hereof, no holders of securities of the Company have
rights to the registration of such securities under the Registration
Statement;
(m) The consolidated historical financial statements and schedules
of the Company and its consolidated subsidiaries included in the
Prospectuses and the Registration Statement present fairly in all material
respects the financial condition, results of operations and cash flows of
the Company as of the dates and for the periods indicated, comply as to
form with the applicable accounting requirements of the Act and have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except as
otherwise noted therein). The summary financial data set forth under the
caption "Summary Consolidated Financial Data" and the selected financial
data set forth under the caption "Selected Consolidated Financial Data" in
the Prospectuses and Registration Statement fairly present, on the basis
stated in the Prospectuses and the Registration Statement, the information
included therein;
(n) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its Subsidiaries or its or their property is pending or,
to the best knowledge of the Company, threatened that (i) would have a
material adverse effect on the performance by the Company of this
Agreement or the consummation of any of the transactions contemplated
hereby or (ii) would have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of
the Company and its Subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth
in or contemplated in the Prospectuses (exclusive of any supplement
thereto) (a "Material Adverse Effect");
(o) Each of the Company and its Subsidiaries owns or leases all such
properties as are necessary to the conduct of its operations as presently
conducted;
(p) Neither the Company nor any Subsidiary is in violation or
default of (i) any provision of its charter or bylaws, (ii) the terms of
any indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company
or such subsidiary or any of its properties, as applicable, other than
such violations or defaults that would not have a Material Adverse Effect;
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(q) Xxxxxx Xxxxxxxx & Co., who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and schedules included in the Prospectuses, are independent public
accountants with respect to the Company within the meaning of the Act and
the applicable published rules and regulations thereunder;
(r) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery
of this Agreement or the issuance by the Company or sale by the Company of
the Securities;
(s) The Company has filed all foreign, Federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a
Material Adverse Effect) and has paid all taxes required to be paid by it
and any other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except for any such tax
assessment, fine or penalty that is currently being contested in good
faith or as would not have a Material Adverse Effect;
(t) No strike, work stoppage or slow-down by employees of the
Company or any of its Subsidiaries exists or, to the knowledge of the
Company, is threatened, and the Company is not aware of any existing or
threatened strikes, work stoppages or slow-downs by the employees of any
of its or its Subsidiaries' principal suppliers, contractors or customers,
that would have a Material Adverse Effect;
(u) The Company and each of its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which
they are engaged; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its Subsidiaries or their respective
businesses, assets, employees, officers and directors are in full force
and effect; the Company and its Subsidiaries are in compliance with the
terms of such policies and instruments in all material respects; and there
are no claims by the Company or any of its Subsidiaries under any such
policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; neither the
Company nor any such Subsidiary has been refused any insurance coverage
sought or applied for; and 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;
(v) No Subsidiary of the Company is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any
other distribution on such Subsidiary's capital stock, from repaying to
the Company any loans or advances to such Subsidiary from the Company or
from transferring any of such Subsidiary's property or assets to the
Company or any other Subsidiary of the Company, except as described in or
contemplated by the Prospectuses;
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(w) The Company and its Subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, except for those the failure to obtain which
would not have a Material Adverse Effect, and neither the Company nor any
such Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect;
(x) The Company and each of 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;
(y) None of the Company or any of its Subsidiaries or, to the
knowledge of the Company, any director, officer, agent, employee or other
person acting on behalf of the Company or any of its Subsidiaries, has (i)
used any corporate funds of the Company or any of its Subsidiaries for any
unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity, or (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or
employee from corporate funds of the Company or any of its Subsidiaries;
(z) The Company has not taken, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities;
(aa) No violation of, or liabilities or obligations pursuant to, any
applicable laws, statutes, ordinances, codes, orders, judgments, licenses,
permits, authorizations, rules, regulations or governmental requirements,
including without limitation common law, relating to protection of human
health and safety, hazardous or toxic substances or wastes, pollutants or
contaminants ("Hazardous Substances"), or the environment ("Environmental
Laws"), and no conditions relating to Hazardous Substances, human health
and safety or the environment, exist that could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect;
(bb) No pending or threatened claims or proceedings pursuant to
Environmental Law, or relating to Hazardous Substances, human health or
safety or the environment, exist that could reasonably be expected to (i)
have, individually or in the aggregate, a Material Adverse Effect, or (ii)
result in monetary sanctions by a governmental authority of $100,000 or
more;
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(cc) Neither the Company nor any person that would be treated as a
single employer with the Company under Section 414(b), (c), (m) or (o) of
the Code has incurred any liability under Title IV or Section 302 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") or
Section 412 of the Code or maintains or contributes to or is or has been
required to maintain or contribute to, any employee benefit plan subject
to Title IV of ERISA or Section 412 of the Code;
(dd) The Company and its Subsidiaries have implemented a
comprehensive, detailed program to analyze and address the risk that their
computer hardware and software may be unable to recognize and properly
execute date-sensitive functions involving certain dates prior to and any
dates after December 31, 1999 (the "Year 2000 Problem") and has determined
that their computer hardware and software are and will be able to process
all date information prior to and after December 31, 1999 without any
errors, aborts, delays or other interruptions in operations associated
with the Year 2000 Problem; and the Company has not, as of the Execution
Time, experienced any material disruption to its business or operations
(including as a result of the failure of suppliers, vendors, customers or
financial service organizations used or serviced by the Company to remedy
the Year 2000 Problem) associated with the Year 2000 Problem; and
(ee) Neither the Company nor any of its Subsidiaries nor any of its
or their properties or assets has any immunity from the jurisdiction of
any court or from any legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution or otherwise)
under the laws of their respective jurisdictions of incorporation.
Any certificate signed by any officer of the Company and delivered
to the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each U.S. Underwriter.
(ii) Each Selling Shareholder, severally with respect to itself
only, represents and warrants to, and agrees with, each U.S. Underwriter that:
(a) Such Selling Shareholder is the record owner of the securities
to be sold by the Selling Shareholder hereunder free and clear of all
liens, encumbrances, equities and claims and has duly indorsed such
securities in blank or has duly executed a stock power in blank with
respect to such securities, as the case may be, and, assuming that the
U.S. Underwriters purchase such securities without notice of any adverse
claim (within the meaning of Section 8-105 of the New York Uniform
Commercial Code (the "UCC")), upon sale and delivery of, and payment for,
such securities, so indorsed or with such stock power, as provided herein,
the U.S. Underwriters will own the securities, free and clear of all
liens, encumbrances, equities and claims whatsoever.
(b) Such Selling Shareholder has not taken, directly or indirectly,
any action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the U.S. Securities;
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(c) Certificates in negotiable form, indorsed in blank with the
signature of such Selling Shareholder or accompanied by a duly executed
stock power in blank having the signature of such Selling Shareholder, for
such Selling Shareholder's U.S. Securities have been placed in custody,
for delivery pursuant to the terms of this U.S. Underwriting Agreement,
under a Custody Agreement and Power of Attorney duly authorized (if
applicable) executed and delivered by such Selling Shareholder, in the
form heretofore furnished to you (the "Custody Agreement") with American
Stock Transfer & Trust Company, as Custodian (the "Custodian"); the U.S.
Securities represented by the certificates so held in custody for each
Selling Shareholder are subject to the terms and conditions of this U.S.
Underwriting Agreement and the Custody Agreement; the arrangements for
custody and delivery of such certificates, made by such Selling
Shareholder under this U.S. Underwriting Agreement and under the Custody
Agreement, are not subject to termination by any acts of such Selling
Shareholder, or by operation of law, whether by the death or incapacity of
such Selling Shareholder (if such Selling Shareholder is a natural person)
or the occurrence of any other event; and if any such death or incapacity
or any other such event shall occur before the delivery of such U.S.
Securities under this U.S. Underwriting Agreement, certificates for the
U.S. Securities will be delivered by the Custodian in accordance with the
terms and conditions of this U.S. Underwriting Agreement and the Custody
Agreement as if such event had not occurred, regardless of whether or not
the Custodian shall have received notice of such event;
(d) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required for the consummation by
such Selling Shareholder of the transactions contemplated in this U.S.
Underwriting Agreement, except such as may have been obtained under the
Act and the Exchange Act and such as may be required under the rules of
the National Association of Securities Dealers, Inc. and the blue sky laws
of any jurisdiction and the securities laws of any jurisdiction outside
the United States in connection with the purchase and distribution of the
U.S. Securities by the U.S. Underwriters in the manner contemplated herein
and in the Prospectuses and such other approvals as have been obtained;
(e) Neither the sale of the U.S. Securities being sold by such
Selling Shareholder nor the consummation of any other of the transactions
in this U.S. Underwriting Agreement contemplated by such Selling
Shareholder or the fulfillment of the terms hereof by such Selling
Shareholder will conflict with, result in a breach or violation of, or
constitute a default under any law applicable to, or the charter or
by-laws of, such Selling Shareholder or the terms of any indenture or
other agreement or instrument to which such Selling Shareholder or any of
its subsidiaries is a party or bound, or any judgment, order or decree
applicable to such Selling Shareholder or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over such Selling Shareholder or any of its
subsidiaries;
(f) Such Selling Shareholder has no reason to believe that the
representations and warranties of the Company contained in this Section 1
are not true and correct, is familiar with the Registration Statement and
has no knowledge of any material fact, condition or information not
disclosed in the Prospectuses or any supplement thereto
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which has adversely affected or may reasonably be expected to adversely
affect the business of the Company or any of its subsidiaries; and the
sale of the U.S. Securities by such Selling Shareholder pursuant hereto is
not prompted by any information concerning the Company or any of its
subsidiaries that has adversely affected the Company or any of its
subsidiaries or that may reasonably be expected to adversely affect the
Company or any of its subsidiaries which is not set forth in the
Prospectuses or any supplement thereto;
(g) In respect of any statements in or omissions from the
Registration Statement or the Prospectuses or any supplements thereto made
in reliance upon and in conformity with information furnished in writing
to the Company by any Selling Shareholder specifically for use therein,
such Selling Shareholder hereby represents and warrants to each U.S.
Underwriter that, on the Effective Date and at the Execution Time, the
Registration Statement did not or will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, each Prospectus, if not filed
pursuant to Rule 424(b), will not, and on the date of any filing pursuant
to Rule 424(b) and on the Closing Date and any settlement date, each
Prospectus (together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Any certificate signed by any Selling Shareholder or any officer of
any Selling Shareholder and delivered to the Representatives or counsel for the
Underwriters in connection with the offering of the Securities shall be deemed a
representation and warranty by such Selling Shareholder, as to matters covered
thereby, to each U.S. Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations, warranties and agreements in this U.S.
Underwriting Agreement set forth, the Company and the Selling Shareholders
(collectively, the "Sellers" and individually, a "Seller") agree, severally and
not jointly, to sell to each U.S. Underwriter, and each U.S. Underwriter agrees,
severally and not jointly, to purchase from the Company and the Selling
Shareholders, at a purchase price of $o per share, the amount of the U.S.
Underwritten Securities set forth opposite such U.S. Underwriter's name in
Schedule I to this U.S. Underwriting Agreement. The amount of U.S. Underwritten
Securities to be purchased by each U.S. Underwriter from each Seller shall be as
nearly as practicable in the same proportion to the total amount of U.S.
Underwritten Securities to be purchased by such U.S. Underwriter as the total
amount of U.S. Underwritten Securities to be sold by each Seller bears to the
total amount of U.S. Underwritten Securities to be sold pursuant hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations, warranties and agreements set forth in this U.S. Underwriting
Agreement, the Company and the Selling Shareholders hereby grant an option to
the several U.S. Underwriters to purchase, severally and not jointly, up to o
U.S. Option Securities at the same purchase price per share as the U.S.
Underwriters shall pay for the U.S. Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the U.S. Underwritten
Securities by the U.S. Underwriters. Said option may be exercised in whole or in
part at any time (but not more
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than once) on or before the 30th day after the date of the U.S. Prospectus upon
written or telegraphic notice by the U.S. Representatives to the Company and the
Selling Shareholders setting forth the number of shares of the U.S. Option
Securities as to which the several U.S. Underwriters are exercising the option
and the settlement date. The maximum number of U.S. Option Securities to be sold
by the Company is o and the maximum aggregate number of U.S. Option Securities
to be sold by the Selling Shareholders is o. In the event that the U.S.
Underwriters exercise less than their full over-allotment option, the number of
U.S. Option Securities to be sold by the Company and each Selling Shareholder
shall be, as nearly as practicable, in the same proportion to each other as are
the maximum number of U.S. Option Securities to be sold by the Company and the
number of U.S. Option Securities listed opposite their names on Schedule II. The
number of U.S. Option Securities to be purchased by each U.S. Underwriter shall
be the same percentage of the total number of shares of the U.S. Option
Securities to be purchased by the several U.S. Underwriters as such U.S.
Underwriter is purchasing of the U.S. Underwritten Securities, subject to such
adjustments as you in your absolute discretion shall make to eliminate any
fractional shares.
3. Delivery and Payment. Delivery of and payment for the U.S.
Underwritten Securities and the U.S. Option Securities (if the option provided
for in Section 2(b) hereof shall have been exercised on or before the third
Business Day prior to the Closing Date) shall be made at 10:00 AM, New York City
time, on February o, 2000 or at such time on such later date not more than three
Business Days after the foregoing date as the U.S. Representatives and the
International Representatives shall designate, which date and time may be
postponed by agreement among the U.S. Representatives, the International
Representatives, the Selling Shareholders and the Company or as provided in
Section 9 hereof (such date and time of delivery and payment for the U.S.
Securities being called in this U.S. Underwriting Agreement the "Closing Date").
Delivery of the U.S. Securities shall be made to the U.S. Representatives for
the respective accounts of the several U.S. Underwriters against payment by the
several U.S. Underwriters through the U.S. Representatives of the respective
aggregate purchase prices of the U.S. Securities being sold by the Company and
each of the Selling Shareholders to or upon the order of the Company and the
Selling Shareholders by wire transfer payable in same-day funds to the accounts
specified by the Company and the Selling Shareholders. Delivery of the U.S.
Underwritten Securities and the U.S. Option Securities shall be made through the
facilities of DTC unless the U.S. Representatives shall otherwise instruct.
The Company will pay all applicable state transfer taxes, if any,
involved in the transfer to the several U.S. Underwriters of the U.S. Securities
to be purchased by them from each Selling Shareholder and the respective U.S.
Underwriters will pay any additional stock transfer taxes involved in further
transfers.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Company and the Selling
Shareholders will deliver the U.S. Option Securities (at the expense of the
Company) to the U.S. Representatives, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, xx the date specified by the U.S. Representatives (which shall be no
earlier than three Business Days after exercise of said option) certificates for
the U.S. Option Securities in such names and denominations as the U.S.
Representatives shall have requested for the respective accounts of the several
U.S. Underwriters, against payment by the several U.S. Underwriters through the
U.S. Representatives of the purchase price thereof to
11
or upon the order of the Company and the Selling Shareholders by wire transfer
payable in same-day funds to the accounts specified to the Representatives in
writing by the Company and the Selling Shareholders. If settlement for the U.S.
Option Securities occurs after the Closing Date, the Company and such Selling
Shareholders will deliver to the U.S. Representatives on the settlement date for
the U.S. Option Securities, and the obligation of the U.S. Underwriters to
purchase the U.S. Option Securities shall be conditioned upon receipt of,
supplemental opinions, certificates and letters confirming as of such date the
opinions, certificates and letters delivered on the Closing Date pursuant to
Section 6 hereof.
It is understood and agreed that the Closing Date shall occur
simultaneously with the "Closing Date" under the International Underwriting
Agreement, and that the settlement date, if any, shall occur simultaneously with
the "settlement date" under the International Underwriting Agreement.
4. Offering by Underwriters. It is understood that the several U.S.
Underwriters propose to offer the U.S. Securities for sale to the public as set
forth in the U.S. Prospectus.
5. Agreements.
(i) The Company agrees with the several U.S. Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the
Registration Statement or supplement to the Prospectuses or any Rule
462(b) Registration Statement unless the Company has furnished you a copy
for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the
foregoing sentence, if the Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Prospectuses is
otherwise required under Rule 424(b), the Company will cause the
Prospectuses, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence reasonably
satisfactory to the U.S. Representatives of such timely filing. The
Company will promptly advise the U.S. Representatives (1) when the
Registration Statement, if not effective at the Execution Time, shall have
become effective, (2) when the Prospectuses, and any supplement thereto,
shall have been filed (if required) with the Commission pursuant to Rule
424(b) or when any Rule 462(b) Registration Statement shall have been
filed with the Commission, (3) when, prior to termination of the offering
of the Securities, any amendment to the Registration Statement shall have
been filed or become effective, (4) of any request by the Commission or
its staff for any amendment of the Registration Statement, or any Rule
462(b) Registration Statement, or for any supplement to the Prospectuses
or for any additional information, (5) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that
purpose and (6) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities for
12
sale in any jurisdiction or the institution or threatening of any
proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which either of the Prospectuses as then supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to
amend the Registration Statement or supplement either of the Prospectuses
to comply with the Act or the rules thereunder, the Company promptly will
(1) notify the U.S. Representatives of any such event; (2) prepare and
file with the Commission, subject to the second sentence of paragraph
(i)(a) of this Section 5, an amendment or supplement which will correct
such statement or omission or effect such compliance; and (3) supply any
supplemented Prospectuses to you in such quantities as you may reasonably
request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the U.S. Representatives an
earnings statement or statements of the Company and its Subsidiaries which
will satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(d) The Company will furnish to each U.S. Representative and counsel
for the U.S. Underwriters a signed copy of the Registration Statement
(including exhibits thereto) and to each other U.S. Underwriter a copy of
the Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by a U.S. Underwriter or dealer may be required
by the Act, as many copies of each U.S. Preliminary Prospectus and the
U.S. Prospectus and any supplement thereto as the U.S. Representatives may
reasonably request.
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the U.S.
Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the U.S. Securities;
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 that would subject it to service of process in suits, other
than those arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of
Xxxxxxx Xxxxx Xxxxxx Inc., (i) directly or indirectly offer, sell,
contract to sell, pledge or otherwise dispose of, or enter into any
transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition) by the Company or any Affiliate of the Company or
any person in privity with the Company or any Affiliate of the Company)
of, any shares of capital stock of the Company or any securities
convertible into or exchangeable or exercisable for shares of capital
stock of the Company; (ii) file (or participate in the filing
13
of) a registration statement with the Commission in respect of, or
establish, modify or liquidate any put equivalent position or call
equivalent position within the meaning of the Exchange Act, with respect
to, any shares of capital stock of the Company or any securities
convertible into, or exercisable, or exchangeable for, shares of capital
stock of the Company, or (iii) publicly announce an intention to effect
any transaction described in clause (i) or clause (ii) above, for a period
of 180 days after the date of the Underwriting Agreements, provided,
however, that (1) the Company may issue and sell Common Stock pursuant to
any employee stock option plan, stock ownership plan or dividend
reinvestment plan of the Company in effect at the Execution Time ("Company
Incentive Plans") and the Company may issue Common Stock issuable upon the
conversion of securities or the exercise of warrants outstanding at the
Execution Time, (2) the Company may file a registration statement on Form
S-8 registering Common Stock to be issued in connection with any Company
Incentive Plans and (3) the Company may, during the 180-day period
described above, file a shelf registration statement on Form F-4 to permit
resales of Common Stock issued after the expiration of such period by the
Company in connection with, and as currency for, an acquisition.
(g) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(h) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the printing or reproduction and filing with the
Commission of the Registration Statement (including financial statements
and exhibits thereto), each Preliminary Prospectus, each Prospectus, and
each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Registration
Statement, each Preliminary Prospectus, each Prospectus, and all
amendments or supplements to any of them, as may, in each case, be
reasonably requested for use in connection with the offering and sale of
the Securities; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (iv) the printing (or reproduction) and delivery of this U.S.
Underwriting Agreement and the International Underwriting Agreement, any
blue sky memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the
Securities; (v) the registration of the Securities under the Exchange Act,
the listing of the Securities on the London Stock Exchange and the
quotation of the Securities on The Nasdaq National Market, Inc.; (vi) any
registration or qualification of the Securities for offer and sale under
the securities or blue sky laws of the several states (including filing
fees and the reasonable fees and expenses of counsel for the Underwriters
relating to such registration and qualification not to exceed $5,000);
(vii) any filings required to be made with the National Association of
Securities Dealers, Inc. (including filing fees and the reasonable fees
and expenses of counsel for the Underwriters relating to such filings);
(viii) the transportation and other expenses incurred by or on behalf of
Company representatives in connection with presentations to prospective
purchasers of the Securities; (ix) the fees and expenses of the Company's
14
accountants and the fees and expenses of counsel (including local and
special counsel) for the Company; and (x) all other costs and expenses
incident to the performance by the Company of their obligations under the
Underwriting Agreements. Each Selling Shareholder will pay costs and
expenses of its own counsel and any miscellaneous costs and expenses
incidental to the performance of its obligations under the Underwriting
Agreements not covered above.
(ii) Each U.S. Underwriter agrees that (i) it is not purchasing any
of the U.S. Securities for the account of anyone other than a United States or
Canadian Person, (ii) it has not offered or sold, and will not offer or sell,
directly or indirectly, any of the U.S. Securities or distribute any U.S.
Prospectus to any person outside the United States or Canada, or to anyone other
than a United States or Canadian Person, and (iii) any dealer to whom it may
sell any of the U.S. Securities will represent that it is not purchasing for the
account of anyone other than a United States or Canadian Person and agree that
it will not offer or resell, directly or indirectly, any of the U.S. Securities
outside the United States or Canada, or to anyone other than a United States or
Canadian Person or to any other dealer who does not so represent and agree;
provided, however, that the foregoing shall not restrict (A) purchases and sales
between the International Underwriters on the one hand and the U.S. Underwriters
on the other hand pursuant to the Agreement Between U.S. Underwriters and
International Underwriters, (B) stabilization transactions contemplated under
the Agreement Between U.S. Underwriters and International Underwriters,
conducted through Xxxxxxx Xxxxx Barney Inc. (or through the U.S. Representatives
and International Representatives) as part of the distribution of the
Securities, and (C) sales to or through (or distributions of U.S. Prospectuses
or U.S. Preliminary Prospectuses to) United States or Canadian Persons who are
investment advisors, or who otherwise exercise investment discretion, and who
are purchasing for the account of anyone other than a United States or Canadian
Person.
(iii) The agreements of the U.S. Underwriters set forth in paragraph
(ii) of this Section 5 shall terminate upon the earlier of the following events:
(a) a mutual agreement of the U.S. Representatives and the
International Representatives to terminate the selling restrictions set
forth in paragraph (ii) of this Section 5 and in Section 5(ii) of the
International Underwriting Agreement; and
(b) the expiration of a period of 30 days after the Closing Date,
unless (A) the U.S. Representatives shall have given notice to the Company
and the International Representatives that the distribution of the U.S.
Securities by the U.S. Underwriters has not yet been completed, or (B) the
International Representatives shall have given notice to the Company and
the U.S. Representative that the distribution of the International
Securities by the International Underwriters has not yet been completed.
If such notice by the U.S. Representatives or the International
Representatives is given, the agreements set forth in such paragraph (ii)
shall survive until the earlier of (1) the event referred to in clause (a)
of this subsection (iii) and (2) the expiration of an additional period of
30 days from the date of any such notice.
15
(iv) Each Selling Shareholder agrees, severally with respect to
itself only, with the several Underwriters that:
(a) Such Selling Shareholder will not, without the prior written
consent of Xxxxxxx Xxxxx Xxxxxx Inc., (1) directly or indirectly offer,
sell, contract to sell, pledge or otherwise dispose of, or enter into any
transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition by such Selling Shareholder or any affiliate of, or
person in privity with, such Selling Shareholder) of, any shares of
capital stock of the Company or any securities convertible into or
exchangeable or exercisable for shares of capital stock of the Company;
(2) file (or participate in the filing of) a registration statement with
the Commission in respect of, or establish, modify or liquidate any put or
call equivalent position (within the meaning of the Exchange Act) with
respect to, any shares of capital stock of the Company or any securities
convertible into or exchangeable or exercisable for shares of capital
stock of the Company, or (3) publicly announce an intention to effect any
transaction described in clause (1) or clause (2) above, for a period of
180 days after the date of the Underwriting Agreement, in each case other
than (A) shares of Common Stock disposed of as bona fide gifts approved by
Xxxxxxx Xxxxx Barney Inc. (such approval not to be unreasonably withheld),
(B) pledges of Common Stock in connection with the purchase of such Common
Stock upon the exercise of stock options granted by the Company under its
Long-Term Incentive Plan and exercised following the pledgor's voluntary
termination of employment with the Company or departure from the Board of
Directors of the Company in circumstances where such options remain
exercisable, provided, that the lender or lenders to whom such Common
Stock is pledged agree in writing with the Underwriters to be bound by the
terms of this subsection (a); (C) dispositions of Common Stock pursuant to
any merger, tender offer or other change of control transaction involving
the Company on terms available to the shareholders of the Company
generally; and (D) transfers of shares of Common Stock to any entity which
is a direct or indirect wholly-owned subsidiary of such Selling
Shareholder or to any entity of which such Selling Shareholder is a direct
or indirect wholly-owned subsidiary (or to any direct or indirect
wholly-owned subsidiary of such entity), provided that in either case the
entity to which the shares of Common Stock are transferred agrees in
writing with the Underwriters to be bound by the terms of this subsection
(a).
(b) Such Selling Shareholder will not take any action designed to or
which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(c) Such Selling Shareholder will advise you promptly, and if
requested by you, will confirm such advice in writing, so long as delivery
of a Prospectuses relating to the Securities by an underwriter or dealer
may be required under the Act, of (i) any material change in the Company's
condition (financial or otherwise), prospects, earnings, business or
properties, (ii) any change in information in the Registration Statement
or the Prospectuses relating to such Selling Shareholder or (iii) any new
material information relating to the Company or relating to any matter
stated in the Prospectuses of which, in each case, such Selling
Shareholder acquires actual knowledge; provided, that nothing in
16
this subsection (c) shall impose a duty on such Selling Shareholder to
seek out or otherwise request such information from the Company.
6. Conditions to the Obligations of the U.S. Underwriters. The
obligations of the U.S. Underwriters to purchase the U.S. Underwritten
Securities and the U.S. Option Securities, as the case may be, shall be subject
to the accuracy of the representations and warranties on the part of the Company
and the Selling Shareholders contained in this U.S. Underwriting Agreement as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company and the Selling
Shareholders made in any certificates pursuant to the provisions hereof, to the
performance by the Company and the Selling Shareholders of their respective
obligations under this U.S. Underwriting Agreement and to the following
additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the U.S. Representatives and the International
Representatives agree in writing to a later time, the Registration Statement
will become effective not later than (i) 6:00 PM New York City time on the date
of determination of the public offering price, if such determination occurred at
or prior to 2:00 PM New York City time on such date or (ii) 9:30 AM on the
Business Day following the day on which the public offering price was
determined, if such determination occurred after 2:00 PM New York City time on
such date; if filing of either of the Prospectuses, or any supplement thereto,
is required pursuant to Rule 424(b), the Prospectuses, and any such supplement,
will be filed in the manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have requested and caused Xxxxxx, Xxxxx &
Xxxxxxx LLP, counsel for the Company, to have furnished to the Representatives
their opinion, dated the Closing Date and addressed to the Representatives, to
the effect that:
(i) the Securities being sold under the Underwriting Agreements by
the Company and the Selling Shareholders are listed, and admitted and
authorized for trading, subject only to official notice of issuance, on
the Official List of the London Stock Exchange and authorized for
quotation on The Nasdaq National Market, Inc.;
(ii) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its Subsidiaries or its or their property of a character
required to be disclosed in the Registration Statement which is not
adequately disclosed in the Prospectuses, and there is no franchise,
contract or other document of a character required to be described in the
Registration Statement or Prospectuses, or to be filed as an exhibit
thereto, which is not described or filed as required; the descriptions
contained in the Prospectuses under the heading "Tax Considerations--
Taxation of Shareholders--United States Federal Income Tax Considerations"
constitute fair summaries of the material provisions of those statutes and
regulations discussed therein applicable to the offering of the Securities
and the statements in the Prospectuses under the headings "Tax
Considerations--Taxation of FLAG Telecom--United States Federal
17
Income Tax Considerations" and "Business--Regulation" and "Certain
Transactions" fairly summarize in all material respects the matters
therein described;
(iii) the Registration Statement has become effective under the Act;
any required filing of the Prospectuses, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been instituted or threatened
and the Registration Statement and each of the Prospectuses (other than
the financial statements and notes thereto and other financial information
contained therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the applicable
requirements of the Act and the rules thereunder; and such counsel has no
reason to believe that on the Effective Date or the date the Registration
Statement was last deemed amended the Registration Statement contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectuses as of the date thereof and on the
Closing Date included or include any untrue statement of a material fact
or omitted 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 (in each case, other than the financial
statements and other financial information contained therein, as to which
such counsel need express no opinion);
(iv) the Underwriting Agreements have been duly executed and
delivered by the Company;
(v) the Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectuses, will not be, (i) an "investment company" as
defined in the Investment Company Act of 1940, as amended or (ii) a
"passive foreign investment company" as defined in the Code;
(vi) no consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection with
the transactions contemplated in the Underwriting Agreements, except such
as have been obtained and made under the Act and the Exchange Act and such
as may be required under the rules of the National Association of
Securities Dealers, Inc. or the blue sky laws of any jurisdiction and the
securities laws of any jurisdiction outside the United States in
connection with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated in the Underwriting Agreements and
in the Prospectuses and such other approvals (specified in such opinion)
as have been obtained;
(vii) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions contemplated in the
Underwriting Agreements nor the fulfillment of the terms of the
Underwriting Agreements will conflict with, result in a breach or
violation of or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or its Subsidiaries pursuant to, (i) the
charter or by-laws of the Company or its Subsidiaries, (ii) the terms of
any indenture, contract, lease,
18
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or its Subsidiaries is a party or bound or to which its or their
property is subject and which is known to such counsel or which has been
described in or filed as an exhibit to the Registration Statement, or
(iii) any statute, law, rule or regulation, or any judgment, order or
decree known to such counsel, applicable to the Company or its
Subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
the Company or its Subsidiaries or any of its or their properties;
(viii) except as set forth in the Prospectuses, such counsel knows
of no outstanding options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital stock
of or ownership interests in the Company;
(ix) except as set forth in the Prospectuses, to the knowledge of
such counsel, no person or entity has any right, not effectively satisfied
or waived, to require the Company to file a registration statement under
the Act with respect to any securities of the Company owned or to be owned
by such person or to require the Company to register such securities
pursuant to the Registration Statement or pursuant to any other
registration statement filed by the Company under the Act, other than in
connection with any registration statement on Form S-8 under the Act; and
(x) the submission of the Company to the non-exclusive jurisdiction
of the New York Courts and the appointment of CT Corporation Systems as
its designee, appointee and authorized agent for the purpose described in
Section 15 hereof are legal, valid and binding under the laws of the State
of New York; and service of process in the manner set forth in Section 15
hereof is effective under the laws of the State of New York to confer
valid personal jurisdiction over the Company.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of New York or the
Federal laws of the United States, to the extent they deem proper and specified
in such opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the Underwriters
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials. Reference to the
Prospectuses in this paragraph (b) include any supplements thereto at the
Closing Date.
(c) The Company shall have requested and caused Xxxxxxx, Xxxxxxxx &
Xxxxx, Bermuda counsel for the Company, to have furnished to the Representatives
their opinion, dated the Closing Date and addressed to the Representatives, to
the effect that:
(i) each of the Company and its Subsidiaries organized under the
laws of Bermuda has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Bermuda, with full
corporate power and authority to own or lease, as the case may be, and to
operate its properties and conduct its business as described in the
Prospectuses;
19
(ii) all the outstanding shares of capital stock of each Subsidiary
organized under the laws of Bermuda have been duly and validly authorized
and issued and are fully paid and nonassessable, and, except as otherwise
set forth in the Prospectuses, all outstanding shares of capital stock of
the Subsidiaries are owned by the Company either directly or through
wholly owned subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel, after due inquiry, any
other security interest, claim, lien or encumbrance;
(iii) the Company's authorized equity capitalization is as set forth
in the Prospectuses; the capital stock of the Company conforms in all
material respects to the description thereof contained in the
Prospectuses; the outstanding shares of Common Stock (including the
Securities being sold under the Underwriting Agreements by the Selling
Shareholders) have been duly and validly authorized and issued and are
fully paid and nonassessable; the Securities being sold under the
Underwriting Agreements by the Company have been duly and validly
authorized, and, when issued and delivered to and paid for by the U.S.
Underwriters pursuant to this U.S. Underwriting Agreement and by the
International Underwriters pursuant to the International Underwriting
Agreement, will be fully paid and nonassessable; the certificates for the
Securities are in valid and sufficient form; the holders of outstanding
shares of capital stock of the Company are not entitled to preemptive or
other rights to subscribe for the Securities; and, except as set forth in
the Prospectuses, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital stock
of or ownership interests in the Company are outstanding;
(iv) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property of a character
required to be disclosed in the Registration Statement which is not
adequately disclosed in the Prospectuses, and there is no franchise,
contract or other document of a character required to be described in the
Registration Statement or Prospectuses, or to be filed as an exhibit
thereto, which is not described or filed as required; the descriptions
contained in the Prospectuses under the heading "Tax Considerations--
Taxation of FLAG Telecom--Bermuda Tax Considerations" and "--Taxation of
Shareholders--Bermuda Tax Considerations" constitute fair summaries of
those statutes and regulations discussed therein applicable to the
offering of the Securities; and the statements in the Prospectuses under
the headings "Service of Process and Enforcement of Liabilities" and
"Description of Capital Stock" fairly summarize the matters therein
described;
(v) each of the Underwriting Agreements has been duly authorized
and, insofar as Bermuda law is concerned, has been executed and delivered
by the Company;
(vi) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions contemplated in the
Underwriting Agreements nor the fulfillment of the terms of the
Underwriting Agreements will conflict with, result in a breach or
violation of or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or its Subsidiaries pursuant to, (i) the
charter or by-
20
laws of the Company or its Subsidiaries or (ii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or its
Subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
the Company or its Subsidiaries or any of its or their properties; and
(vii) the choice of law provision set forth in Section 14 hereof is
legal, valid and binding under the laws of Bermuda and such counsel knows
of no reason why the courts of Bermuda would not give effect to the choice
of New York law as the proper law of this U.S. Underwriting Agreement; the
Company has the legal capacity to xxx and be sued in its own name under
the laws of Bermuda; the Company has the power to submit, and has
irrevocably submitted, to the non-exclusive jurisdiction of the New York
Courts; the irrevocable submission of the Company to the non-exclusive
jurisdiction of the New York Courts and the waivers by the Company of any
immunity and any objection to the venue of the proceeding in a New York
Court herein are legal, valid and binding under the laws of Bermuda and
such counsel knows of no reason why the courts of Bermuda would not give
effect to the submission and waivers; service of process in the manner set
forth in Section 15 hereof, will be effective to confer valid personal
jurisdiction over the Company under the laws of Bermuda; and the courts in
Bermuda will recognize as valid and final, and will enforce, any final and
conclusive judgment against the Company obtained in a New York Court
arising out of or in relation to the obligations of the Company under this
U.S. Underwriting Agreement.
In rendering such opinion, such counsel may rely as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the Company
and public officials.
(d) The Company shall have requested and caused Xxxxxx Xxxxx,
General Counsel for the Company, to have furnished to the Representatives his
opinion, dated the Closing Date and addressed to the Representatives, relating
to certain regulatory matters, in form and substance satisfactory to the
Representatives.
(e) Each of the Selling Shareholders shall have requested and caused
the counsel identified opposite its name on Schedule III hereto to have
furnished to the Representatives their opinion dated the Closing Date and
addressed to the Representatives, to the effect that:
(i) the Underwriting Agreements and the Custody Agreement and
Power-of-Attorney have been duly authorized, executed and delivered by
such Selling Shareholder, the Custody Agreement is valid and binding on
such Selling Shareholder and such Selling Shareholder has full legal right
and authority to sell, transfer and deliver in the manner provided in the
Underwriting Agreements and the Custody Agreement the Securities being
sold by such Selling Shareholder under the Underwriting Agreements;
(ii) Assuming that the Securities to be sold by such Selling
Shareholder under the Underwriting Agreements have been delivered to the
Underwriters registered in the name of such Underwriters or indorsed to
such Underwriters or in blank by an effective indorsement and such
Underwriters acquire their interest in such Securities without
21
notice of any adverse claim (within the meaning of Section 8-105 of the
UCC), such Underwriters will own such Securities free of adverse claims;
(iii) no consent, approval, authorization or order of any court or
governmental agency or body of the United States of America, the State of
New York or the jurisdiction in which such Selling Shareholder is
organized is required for the consummation by such Selling Shareholder of
the transactions contemplated in the Underwriting Agreements, except such
as may have been obtained under the Act or the Exchange Act and such as
may be required under the rules of the National Association of Securities
Dealers, Inc. or the blue sky laws of any jurisdiction and the securities
laws of any jurisdiction outside the United States in connection with the
purchase and distribution of the Securities by the Underwriters and such
other approvals (specified in such opinion) as have been obtained; and
(iv) neither the sale of the Securities being sold by such Selling
Shareholder nor the consummation of any other of the transactions
specifically contemplated in the Underwriting Agreements by such Selling
Shareholder or the fulfillment of the terms hereof by such Selling
Shareholder will conflict with, result in a breach or violation of, or
constitute a default under any law of the United States of America, of the
State of New York or of the jurisdiction in which such Selling Shareholder
is organized or the charter or By-laws of the Selling Shareholder or the
terms of any indenture or other agreement or instrument known to such
counsel and to which such Selling Shareholder or any of its subsidiaries
is a party or bound, or any judgment, order or decree known to such
counsel to be applicable to such Selling Shareholder or any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over such Selling
Shareholder or any of its subsidiaries.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the jurisdiction in which
such Selling Shareholder is organized or the State of New York or the Federal
laws of the United States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they believe to
be reliable and who are satisfactory to counsel for the U.S. Underwriters and
the International Underwriters, and (B) as to matters of fact, to the extent
they deem proper, on certificates of responsible officers of such Selling
Shareholder and public officials.
(f) The Representatives shall have received from Cleary, Gottlieb,
Xxxxx & Xxxxxxxx, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Registration Statement, the
Prospectuses (together with any supplement thereto) and other related matters as
the Representatives may reasonably require, and the Company and each Selling
Shareholder shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
(g) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board and the
principal financial or accounting officer of the Company, dated the Closing
Date, to the effect that the signers of such certificate
22
have carefully examined the Registration Statement, the Prospectuses, any
supplements to the Prospectuses and the Underwriting Agreements and that:
(i) the representations and warranties of the Company in the
Underwriting Agreements are true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the Closing
Date and the Company has complied in all material respects with all the
agreements and satisfied in all material respects all the conditions on
its part to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectuses (exclusive of any supplement thereto), there
has been no Material Adverse Effect.
(h) Each Selling Shareholder shall have furnished to the
Representatives a certificate, signed by (i) the Chairman of the Board, the
President or any Senior/Executive Vice President and (ii) the principal
financial or accounting officer of such Selling Shareholder (or, in each case,
such other responsible officers as may be acceptable to the Representatives),
dated the Closing Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Prospectuses, any supplement
to either of the Prospectuses and this U.S. Underwriting Agreement and the
International Underwriting Agreement and that the representations and warranties
of such Selling Shareholder in this U.S. Underwriting Agreement and the
International Underwriting Agreement are true and correct in all material
respects on and as of the Closing Date to the same effect as if made on the
Closing Date.
(i) The Company shall have requested and caused Xxxxxx Xxxxxxxx &
Co. to have furnished to the Representatives letters, dated respectively as of
the Execution Time and as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants within the meaning of the Act and the applicable rules and
regulations adopted by the Commission thereunder and stating in effect that:
(i) in their opinion the audited financial statements and financial
statement schedules included in the Registration Statement and the
Prospectuses and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the Act and the
related rules and regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its Subsidiaries; carrying
out certain specified procedures (but not an examination in accordance
with generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set forth in
such letter; a reading of the minutes of the meetings of the stockholders
and directors of the Company and the Subsidiaries; and inquiries of
certain officials of the Company who have responsibility for financial and
accounting matters of the Company
23
and its Subsidiaries as to transactions and events subsequent to September
30, 1999, nothing came to their attention which caused them to believe
that:
(1) with respect to the period subsequent to September 30,
1999, there were any changes, at a specified date not more than five
days prior to the date of the letter, in the long-term debt of the
Company and its Subsidiaries or capital stock of the Company or
decreases in the shareholders' equity of the Company as compared
with the amounts shown on the September 30, 1999 consolidated
balance sheet included in the Registration Statement and the
Prospectuses, or for the period from October 1, 1999 to such
specified date there were any decreases, as compared with the
corresponding period in the previous year, in net revenues,
operating income or income before income taxes or in total or per
share amounts of net income of the Company and its Subsidiaries,
except in all instances for changes or decreases set forth in such
letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof unless
said explanation is not deemed necessary by the Representatives; or
(2) the information included in the Registration Statement and
Prospectuses in response to Form 20-F, Item 8 (Selected Financial
Data) and Item 11 (Compensation of Directors and Officers) is not in
conformity with the applicable disclosure requirements of Form 20-F;
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
the Company and its Subsidiaries) set forth in the Registration Statement
and the Prospectuses, including the information set forth under the
captions "Summary Consolidated Financial Data" and "Selected Consolidated
Financial Data" in the Prospectuses, agrees with the accounting records of
the Company and its Subsidiaries, excluding any questions of legal
interpretation; and
(iv) on the basis of a reading of the unaudited pro forma financial
statements included in the Registration Statement and the Prospectuses
(the "pro forma financial statements"); carrying out certain specified
procedures; inquiries of certain officials of the Company and its
Subsidiaries who have responsibility for financial and accounting matters;
and proving the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the pro forma financial
statements, nothing came to their attention which caused them to believe
that the pro forma financial statements do not comply as to form in all
material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of such
statements.
References to the Prospectuses in this paragraph (i) include any
supplement thereto at the date of the letter.
(j) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the
24
Prospectuses (exclusive of any supplement thereto), there shall not have been
(i) any change or decrease specified in the letter or letters referred to in
paragraph (i) of this Section 6 or (ii) any change, or any development involving
a prospective change, in or affecting the condition (financial or otherwise),
earnings, business or properties of the Company and its Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectuses (exclusive
of any supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the U.S. Representatives,
so material and adverse as to make it impractical or inadvisable to proceed with
the offering or delivery of the U.S. Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the Prospectuses
(exclusive of any supplement thereto).
(k) The closing of the purchase of the International Underwritten
Securities to be issued and sold by the Company and the Selling Shareholders
pursuant to the International Underwriting Agreement shall occur concurrently
with the closing described herein.
(l) Prior to the Closing Date, the Company and the Selling
Shareholders shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may reasonably
request.
(m) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of FLAG Limited's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating that does
not indicate the direction of the possible change.
(n) The Securities shall have been admitted to the Official List of
the London Stock Exchange and quoted on The Nasdaq National Market, Inc., and
satisfactory evidence of such actions shall have been provided to the
Representatives.
(o) At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto from (i)
each officer and director of the Company, (ii) Xxxx Atlantic Network Systems
Company and (iii) Spinconsult SA, in each case addressed to the Representatives.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this U.S.
Underwriting Agreement and the International Underwriting Agreement, or if any
of the opinions and certificates mentioned above or elsewhere in this U.S.
Underwriting Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the U.S. Representatives and counsel for
the Underwriters, this U.S. Underwriting Agreement and all obligations of the
U.S. Underwriters under this U.S. Underwriting Agreement may be canceled at, or
at any time prior to, the Closing Date by the U.S. Representatives. Notice of
such cancellation shall be given to the Company and each Selling Shareholder in
writing or by telephone or facsimile confirmed in writing.
25
The documents required to be delivered by this Section 6 shall be
delivered at the office of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, counsel for the
Underwriters, at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, XX 00000, on the Closing Date.
7. Reimbursement of U.S. Underwriters' Expenses. If the sale of the
U.S. Securities provided for in this U.S. Underwriting Agreement is not
consummated because any condition to the obligations of the U.S. Underwriters
set forth in Section 6 hereof is not satisfied, because of any termination
pursuant to clause (i) of Section 10 hereof or because of any refusal, inability
or failure on the part of the Company or any Selling Shareholders to perform any
agreement in this U.S. Underwriting Agreement or comply with any provision
hereof other than by reason of a default by any of the U.S. Underwriters as
described in Section 9 hereof, the Company will reimburse the U.S. Underwriters
severally through Xxxxxxx Xxxxx Barney Inc. on demand for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities. If the Company is required to make any payments to
the Underwriters under this Section 7 because of any Selling Shareholder's
refusal, inability or failure to satisfy any condition to the obligations of the
Underwriters set forth in Section 6, such Selling Shareholder shall reimburse
the Company on demand for all amounts so paid.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each U.S. Underwriter, the directors, officers,
employees and agents of each U.S. Underwriter and each person who controls any
U.S. Underwriter within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in any U.S. or International Preliminary Prospectus or in either of the
Prospectuses, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any U.S. Underwriter through the U.S. Representatives specifically for inclusion
therein; provided further, that with respect to any untrue statement or omission
of material fact made in any U.S. Preliminary Prospectus, the indemnity
agreement contained in this Section 8(a) shall not inure to the benefit of any
U.S. Underwriter from whom the person asserting any such loss, claim, damage or
liability purchased the securities concerned, to the extent that any such loss,
claim, damage or liability of such U.S. Underwriter occurs under the
circumstance where (w) the Company had previously furnished copies of the U.S.
Prospectus to the U.S. Representatives, (x) delivery of the U.S. Prospectus was
required by the Act to be made to such person, (y) the untrue statement or
omission of a material fact contained in the U.S. Preliminary Prospectus was
corrected in the U.S. Prospectus and (z)
26
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such securities to such person, a copy of the U.S.
Prospectus. This indemnity agreement will be in addition to any liability which
the Company may otherwise have.
(b) Each Selling Shareholder severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, each U.S. Underwriter, the directors, officers,
employees and agents of each U.S. Underwriter and each person who controls the
Company or any U.S. Underwriter within the meaning of either the Act or the
Exchange Act and each other Selling Shareholder, if any, to the same extent as
the foregoing indemnity from the Company to each U.S. Underwriter, but only with
reference to written information furnished to the Company by or on behalf of
such Selling Shareholder specifically for inclusion in the documents referred to
in the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Selling Shareholder may otherwise have.
(c) Each U.S. Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act and each
Selling Shareholder, to the same extent as the foregoing indemnity to each U.S.
Underwriter, but only with reference to written information relating to such
U.S. Underwriter furnished to the Company by or on behalf of such U.S.
Underwriter through the U.S. Representatives specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any U.S. Underwriter may otherwise have.
The Company and each Selling Shareholder acknowledge that the statements set
forth in the last paragraph of the cover page regarding delivery of the U.S.
Securities and, under the heading "Underwriting", (i) the sentences related to
concessions and reallowances and (ii) the paragraphs related to stabilization,
syndicate covering transactions and penalty bids in any U.S. or International
Preliminary Prospectus and the Prospectuses constitute the only information
furnished in writing by or on behalf of the several U.S. Underwriters for
inclusion in any U.S. or International Preliminary Prospectus or the
Prospectuses.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a), (b) or (c) above unless
and to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a), (b) or (c) above. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate
27
counsel (including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the use of
counsel chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
under this U.S. Underwriting Agreement (whether or not the indemnified parties
are actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a), (b)
or (c) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Selling Shareholders and the
U.S. Underwriters agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which the Company, one or more of the Selling Shareholders and one or more of
the U.S. Underwriters may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Company, by the Selling
Shareholders and by the U.S. Underwriters from the offering of the U.S.
Securities; provided, however, that in no case shall any U.S. Underwriter
(except as may be provided in any agreement among underwriters relating to the
offering of the U.S. Securities) be responsible for any amount in excess of the
underwriting discount or commission applicable to the Securities purchased by
such U.S. Underwriter under this U.S. Underwriting Agreement. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the Company, the Selling Shareholders and the U.S. Underwriters shall contribute
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company, of the Selling Shareholders and of
the U.S. Underwriters in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company and by the Selling Shareholders shall be deemed
to be equal to the total net proceeds from the offering (before deducting
expenses) received by each of them, and benefits received by the U.S.
Underwriters shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the U.S. Prospectus.
Relative fault shall be determined by reference to, among other things, whether
any untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the
Company, the Selling Shareholders or the U.S. Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company, the Selling
Shareholders and the U.S. Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations
referred to
28
above. Notwithstanding the provisions of this paragraph (e), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an U.S. Underwriter within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of a U.S.
Underwriter shall have the same rights to contribution as such U.S. Underwriter,
and each person who controls the Company within the meaning of either the Act or
the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (e).
(f) The liability of each Selling Shareholder under such Selling
Shareholder's representations and warranties contained in Section 1 hereof and
under the indemnity and contribution agreements contained in this Section 8
shall be limited to an amount equal to the initial public offering price of the
U.S. Securities sold by such Selling Shareholder to the U.S. Underwriters minus
the aggregate amount of the underwriting discount and commission paid thereon to
the U.S. Underwriters by such Selling Shareholder, minus all previous payments
made by such Selling Shareholder pursuant to this Section 8. The Company and the
Selling Shareholders may agree, as among themselves and without limiting the
rights of the U.S. Underwriters under this U.S. Underwriting Agreement, as to
the respective amounts of such liability for which they each shall be
responsible.
9. Default by a U.S. Underwriter. If any one or more U.S.
Underwriters shall fail to purchase and pay for any of the U.S. Securities
agreed to be purchased by such U.S. Underwriter or U.S. Underwriters under this
U.S. Underwriting Agreement and such failure to purchase shall constitute a
default in the performance of its or their obligations under this U.S.
Underwriting Agreement, the remaining U.S. Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the amount
of U.S. Securities set forth opposite their names in Schedule I hereto bears to
the aggregate amount of U.S. Securities set forth opposite the names of all the
remaining U.S. Underwriters) the U.S. Securities which the defaulting U.S.
Underwriter or U.S. Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate amount of U.S. Securities which
the defaulting U.S. Underwriter or U.S. Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of U.S. Securities set forth
in Schedule I hereto, the remaining U.S. Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the U.S.
Securities, and if such nondefaulting U.S. Underwriters do not purchase all the
U.S. Securities, this U.S. Underwriting Agreement will terminate without
liability to any nondefaulting U.S. Underwriter, the Selling Shareholders or the
Company. In the event of a default by any U.S. Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the U.S. Representatives shall determine in order that
the required changes in the Registration Statement and the Prospectuses or in
any other documents or arrangements may be effected. Nothing contained in this
U.S. Underwriting Agreement shall relieve any defaulting U.S. Underwriter of its
liability, if any, to the Company, the Selling Shareholders and any
nondefaulting U.S. Underwriter for damages occasioned by its default under this
U.S. Underwriting Agreement.
29
10. Termination. This U.S. Underwriting Agreement shall be subject
to termination in the absolute discretion of the U.S. Representatives, by notice
given to the Company prior to delivery of and payment for the U.S. Securities,
if at any time prior to such time (i) trading in the Company's Common Stock
shall have been suspended by the Commission or the London Stock Exchange or The
Nasdaq National Market, Inc., (ii) trading in securities generally on the New
York Stock Exchange, the London Stock Exchange or The Nasdaq National Market,
Inc. shall have been suspended or limited or minimum prices shall have been
established on either of such Exchanges or Nasdaq National Market, (iii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iv) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States or the United Kingdom of a
national emergency or war, or other calamity or crisis the effect of which on
financial markets is such as to make it, in the sole judgment of the U.S.
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the U.S. Prospectus (exclusive of
any supplement thereto). Without prejudice to the provisions of Section 11, no
U.S. Underwriter, no Selling Shareholder nor the Company shall incur any
liability to any other party to this U.S. Underwriting Agreement solely by
exercise of the termination right provided in this Section 10.
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of each Selling Shareholder and of the U.S.
Underwriters set forth in or made pursuant to this U.S. Underwriting Agreement
will remain in full force and effect, regardless of any investigation made by or
on behalf of any U.S. Underwriter, any Selling Shareholder or the Company or any
of the officers, directors, employees, agents or controlling persons referred to
in Section 8 hereof, and will survive delivery of and payment for the U.S.
Securities. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this U.S. Underwriting Agreement.
12. Notices. All communications under this U.S. Underwriting
Agreement will be in writing and effective only on receipt, and, if sent to the
U.S. Representatives, will be mailed, delivered or telefaxed to the Xxxxxxx
Xxxxx Xxxxxx Inc. General Counsel (fax no.:(000) 000-0000) and confirmed to such
General Counsel at Xxxxxxx Xxxxx Barney Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000, Attention: General Counsel; or, if sent to the Company, will be
mailed, delivered or telefaxed to the attention of Xxxxxx Xxxxx, General Counsel
(fax no. (00) 000-000-0000) and confirmed to it at 0xx Xxxxx, 000 Xxxxx Xxxxxx,
Xxxxxx X0X 0XX, attention of Xxxxxx Xxxxx; or if sent to any Selling
Shareholder, will be mailed, delivered or telefaxed and confirmed to it at the
address set forth in Schedule II hereto.
13. Successors. This U.S. Underwriting Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and the officers, directors, employees, agents and controlling
persons referred to in Section 8 hereof, and no other person (including a
purchaser of the Securities from any Underwriters) will have any right or
obligation under this U.S. Underwriting Agreement.
14. Applicable Law. This U.S. Underwriting Agreement will be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York.
30
15. Jurisdiction. Each of the Company and the Selling Shareholders,
severally with respect to itself only, agrees that any suit, action or
proceeding against the Company brought by any U.S. Underwriter, the directors,
officers, employees and agents of any U.S. Underwriter, or by any person who
controls any U.S. Underwriter, arising out of or based upon this U.S.
Underwriting Agreement or the transactions contemplated hereby may be instituted
in any New York Court, and, severally with respect to itself only, waives any
objection which it may now or hereafter have to the laying of venue of any such
proceeding, and, severally with respect to itself only, irrevocably submits to
the non-exclusive jurisdiction of such courts in any suit, action or proceeding.
Each of the Company and each Selling Shareholder, severally with respect to
itself only, has appointed CT Corporation System, 000 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, X.X.X. as its authorized agent (the "Authorized Agent") upon
whom process may be served in any suit, action or proceeding arising out of or
based upon this U.S. Underwriting Agreement or the transactions contemplated
herein which may be instituted in any New York Court, by any U.S. Underwriter,
the directors, officers, employees and agents of any U.S. Underwriter, or by any
person who controls any U.S. Underwriter, and, severally with respect to itself
only, expressly accepts the non-exclusive jurisdiction of any such court in
respect of any such suit, action or proceeding. Each of the Company and the
Selling Shareholders hereby represents and warrants, severally with respect to
itself only, that the Authorized Agent has accepted such appointment and has
agreed to act as said agent for service of process, and each of the Company and
each such Selling Shareholder, severally with respect to itself only, agrees to
take any and all action, including the filing of any and all documents that may
be necessary to continue such appointment in full force and effect as aforesaid.
Service of process upon the Authorized Agent shall be deemed, in every respect,
effective service of process upon the Company and the Selling Shareholders.
Notwithstanding the foregoing, any action arising out of or based upon this U.S.
Underwriting Agreement may be instituted by any U.S. Underwriter, the directors,
officers, employees and agents of any U.S. Underwriter, or by any person who
controls any U.S. Underwriter, in any court of competent jurisdiction in
Bermuda.
The provisions of this Section 15 shall survive any termination of
this U.S. Underwriting Agreement, in whole or in part.
16. Currency. Each reference in this U.S. Underwriting Agreement to
U.S. Dollars (the "relevant currency") is of the essence. To the fullest extent
permitted by law, the obligations of each of the Company, the Selling
Shareholders and the U.S. Underwriters in respect of any amount due under this
U.S. Underwriting Agreement will, notwithstanding any payment in any other
currency (whether pursuant to a judgment or otherwise), be discharged only to
the extent of the amount in the relevant currency that the party entitled to
receive such payment may, in accordance with its normal procedures, purchase
with the sum paid in such other currency (after any premium and costs of
exchange) on the Business Day immediately following the day on which such party
receives such payment. If the amount in the relevant currency that may be so
purchased for any reason falls short of the amount originally due, the Company,
the Selling Shareholder or the U.S. Underwriter, as the case may be, making such
payment will pay such additional amounts, in the relevant currency, as may be
necessary to compensate for the shortfall. Any obligation of any of the Company,
the Selling Shareholders or the U.S. Underwriters not discharged by such payment
will, to the fullest extent permitted by
31
applicable law, be due as a separate and independent obligation and, until
discharged as provided herein, will continue in full force and effect.
17. Waiver of Immunity. To the extent that any of the Company or the
Selling Shareholders has or hereafter may acquire any immunity (sovereign or
otherwise) from any legal action, suit or proceeding, from jurisdiction of any
court or from set-off or any legal process (whether service or notice,
attachment in aid or otherwise) with respect to itself or any of its property,
each of the Company, the U.S. Underwriters and the Selling Shareholders,
severally with respect to itself only, hereby irrevocably waives and agrees not
to plead or claim such immunity in respect of its obligations under this U.S.
Underwriting Agreement.
18. Counterparts. This U.S. Underwriting Agreement may be signed in
one or more counterparts, each of which shall constitute an original and all of
which together shall constitute one and the same agreement.
19. Entire Agreement; Headings. This U.S. Underwriting Agreement,
together with the International Underwriting Agreement and the Custody
Agreement, set forth the entire understanding and agreement between the parties
as to the matters covered herein. The section headings used in this U.S.
Underwriting Agreement are for convenience only and shall not affect the
construction hereof.
20. Definitions. The terms which follow, when used in this U.S.
Underwriting Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning assigned to such term for
purposes of Rule 144 under the Act.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies
are authorized or obligated by law to close in New York City or London.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" shall mean the Securities and Exchange Commission.
"DTC" means the Depository Trust Company.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
32
"Execution Time" shall mean the date and time that this U.S.
Underwriting Agreement is executed and delivered by the parties hereto.
"International Preliminary Prospectus" shall have the meaning set
forth under "U.S. Preliminary Prospectus."
"International Prospectus" shall mean such form of prospectus
relating to the International Securities as first filed pursuant to Rule
424(b) after the Execution Time or, if no filing pursuant to Rule 424(b)
is made, such form of prospectus included in the Registration Statement at
the Effective Date.
"International Representatives" shall mean the addressees of the
International Underwriting Agreement.
"International Securities" shall mean the International Underwritten
Securities and the International Option Securities.
"International Underwriters" shall mean the several underwriters
named in Schedule I to the International Underwriting Agreement.
"International Underwriting Agreement" shall mean the International
Underwriting Agreement dated the date hereof related to the sale of the
International Securities by the Company and the Selling Shareholders to
the International Underwriters.
"New York Courts" shall mean the U.S. Federal or State courts
located in the State of New York, County of New York.
"Option Securities" shall mean the U.S. Option Securities and the
International Option Securities.
"Preliminary Prospectus" shall have the meaning set forth under
"U.S. Preliminary Prospectus."
"Prospectuses" and "each Prospectus" shall mean the U.S. Prospectus
and the International Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(i)(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in
the event any post-effective amendment thereto or any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date, shall
also mean such registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be. Such term shall include any
Rule 430A Information deemed to be included therein at the Effective Date
as provided by Rule 430A.
"Representatives" shall mean the U.S. Representatives and the
International Representatives.
33
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the
Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred to
in Section 1(a)(i) hereof.
"Securities" shall mean the U.S. Securities and the International
Securities.
"Selling Shareholders" shall mean the persons named on Schedule II
to the U.S. Underwriting Agreement and the International Underwriting
Agreement.
"Underwriter" and "Underwriters" shall mean the U.S. Underwriters
and the International Underwriters.
"Underwriting Agreements" shall mean the U.S. Underwriting Agreement
and the International Underwriting Agreement.
"Underwritten Securities" shall mean the International Underwritten
Securities and the U.S. Underwritten Securities.
"United States or Canadian Person" shall mean any person who is a
national or resident of the United States or Canada, any corporation,
partnership, or other entity created or organized in or under the laws of
the United States or Canada or of any political subdivision thereof, or
any estate or trust the income of which is subject to United States or
Canadian Federal income taxation, regardless of its source (other than any
non-United States or non-Canadian branch of any United States or Canadian
Person), and shall include any United States or Canadian branch of a
person other than a United States or Canadian Person. "U.S." or "United
States" shall mean the United States of America (including the states
thereof and the District of Columbia), its territories, its possessions
and other areas subject to its jurisdiction.
"U.S. Preliminary Prospectus" and the "International Preliminary
Prospectus", respectively, shall mean any preliminary prospectus with
respect to the offering of the U.S. Securities and the International
Securities, as the case may be, referred to in paragraph 1(i)(a) above and
any preliminary prospectus with respect to the offering of the U.S.
Securities and the International Securities, as the case may be, included
in the Registration Statement at the Effective Date that omits Rule 430A
Information; and the U.S. Preliminary Prospectus and the International
Preliminary Prospectus are hereinafter collectively called the
"Preliminary Prospectuses".
"U.S. Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the Execution
Time or, if no filing pursuant to Rule 424(b) is required, shall mean the
form of final prospectus relating to the Securities included in the
Registration Statement at the Effective Date.
34
"U.S. Representatives" shall mean the addressees of the U.S.
Underwriting Agreement.
"U.S. Securities" shall mean the U.S. Underwritten Securities and
the U.S. Option Securities.
"U.S. Underwriters" shall mean the several underwriters named in
Schedule I to the U.S. Underwriting Agreement.
"U.S. Underwriting Agreement" shall mean this agreement relating to
the sale of the U.S. Securities by the Company and the Selling
Shareholders to the U.S. Underwriters.
[remainder of page intentionally left blank]
35
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the several Selling Shareholders and the several U.S. Underwriters.
Very truly yours,
FLAG Telecom Holdings Limited
By:______________________________________
Name:
Title:
Xxxxxxxx Limited
By:______________________________________
Name: Xxxx X.X. Xxxxxxxxxx
Title: Attorney-in-fact
K.I.N. (Thailand) Co., Ltd.
By:______________________________________
Name:
Title:
Marubeni Telecom Development Limited
By:______________________________________
Name:
Title:
The Asian Infrastructure Fund
By:______________________________________
Name:
Title:
36
GE Capital Project Finance VI Ltd.
By:______________________________________
Name:
Title:
AT&T Capital Corporation
By:______________________________________
Name:
Title: Attorney-in-fact
Xxxxx Xxxxx Xxxx Xxxxxx
______________________________________
Xxxxx Xxxx Xxxxxxxx Xxxxx
______________________________________
37
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxxx Xxxxx Barney Inc.
By:________________________
Name:
Title:
Deutsche Bank Alex. Xxxxx
By:________________________
Name:
Title: Attorney-in-fact
Xxxxxxx, Sachs & Co.
By:________________________
Name:
Title: Attorney-in-fact
Xxxxxx Xxxxxxx & Co. Incorporated
By:________________________
Name:
Title: Attorney-in-fact
Warburg Dillon Read LLC
By:________________________
Name:
Title: Attorney-in-fact
For themselves and the other
several U.S. Underwriters named in
Schedule I to the foregoing Agreement.
38
Draft February 7, 2000
SCHEDULE I
Number of Underwritten
Securities to be
Underwriters Purchased
------------ ---------
Xxxxxxx Xxxxx Xxxxxx Inc.....................
BT Alex.Xxxxx Incorporated...................
Xxxxxxx, Sachs & Co..........................
Xxxxxx Xxxxxxx & Co. Incorporated............
Warburg Dillon Read LLC...................... ----------------
Total............................ ================
SCHEDULE II
Maximum Number of
Number of Underwritten Option Securities to be
Selling Shareholders: Securities to be Sold Sold
--------------------- --------------------- ----
Xxxxxxxx Xxxxxxx
Xxxxxx Xxxxxxxx,
Xxxx Xxxxxx
P.O. Box 3186
Road Town
Tortola, BVI
Fax: 000-0-000-0000.........
K.I.N. (Thailand) Co., Ltd.
c/o Telecom Holdings Company
Limited
30th Floor, Telecom Tower
00 Xxxxxxxxxxxxxx Xxxx
Xxxx Xxxxxx
Xxxxxxxx 00000, Xxxxxxxx
Fax: 00-0-000-0000..........
Marubeni Telecom Development
Limited
Xxxxx Xxxxx
00 Xxxxx Xxxxxx
Xxxxxxxx XX 00, Bermuda
Fax: [_____________]........
The Asian Infrastructure Fund
c/o Caledonian Bank & Trust
Limited
Caledonian House
Xxxx Street
Georgetown, Grand Cayman
Cayman Islands
Fax: 000-0000-0000.........
GE Capital Project Finance VI
Ltd.
Clarendon House
Church Street West
Hamilton HMCX, Bermuda
Fax: [________________].....
Maximum Number of
Number of Underwritten Option Securities to be
Selling Shareholders: Securities to be Sold Sold
--------------------- --------------------- ----
AT&T Capital Corporation
c/o The CIT Group, Inc.
Structured Finance Group
Two Xxxxxxxx Xxxxx, Xxxxx
Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Vice President -- Credit
Fax: 000-000-0000
(with a copy to:
Vice President -- Legal
Fax: 000-000-0000) .........
Xxxxx Xxxxx Xxxx Xxxxxx
c/o Dallah Albaraka Group
X.X. Xxx 000, Xxxxxx Xxxxx
Xxxxxxxxx Xxxx
Xxxxxx 00000, Saudi Arabia
Fax: 000-0-000-0000.........
Xxxxx Xxxx Xxxxxxxx Xxxxx -------------- ---------------
c/o Dallah Albaraka Group
P.O. Box 430, Dallah Tower
Xxxxxxxxx Xxxx
Xxxxxx 00000, Xxxxx Xxxxxx
Fax: 000-0-000-0000.........
Total....................... ============== ===============
SCHEDULE III
Name of Selling Shareholder Name of Counsel Delivering Opinion(s)
--------------------------- -------------------------------------
Xxxxxxxx Limited, Xxxxx Xxxxx Xxxx
Xxxxxx and Xxxxx Xxxx Xxxxxxxx Xxxxx.. Xxxxxx, Xxxx & Xxxxxxxx LLP
Xxxxxx Westwood & Riegels
K.I.N. (Thailand) Co., Ltd............ Cravath, Swaine & Xxxxx
[TBD]
Marubeni Telecom Development Limited.. Xxxxx Xxxx & Xxxxxxxx
Xxxxxxx, Xxxxxxxx & Xxxxx
The Asian Infrastructure Fund ........ Debevoise & Xxxxxxxx
[Walkers]
GE Capital Project Finance VI Ltd. ... Weil, Gotshal & Xxxxxx LLP
Xxxxxxx Xxxx & Xxxxxxx
AT&T Capital Corporation ............. Xxxx X. Xxxxxx XX, Vice President -
Legal, The CIT Group, Inc.
[Form of Lock-Up Agreement] EXHIBIT A
[Letterhead of officer, director or major non-selling stockholder of
FLAG Telecom Holdings Limited]
FLAG Telecom Holdings Limited
Public Offering of Common Stock
[date]
Xxxxxxx Xxxxx Xxxxxx Inc.
BT Alex.Xxxxx Incorporated
Xxxxxxx, Sachs & Co.
Xxxxxx Xxxxxxx & Co. Incorporated
Warburg Dillon Read LLC
As U.S. Representatives of the several
U.S. Underwriters,
Salomon Brothers International Limited
Deutsche Bank AG London
Xxxxxxx Xxxxx International
Xxxxxx Xxxxxxx & Co. International Limited
UBSAG, acting through its division Warburg Dillon Read
As International Representatives of the several
International Underwriters
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed U.S. Underwriting Agreement and International Underwriting Agreement
(the "Underwriting Agreements"), among FLAG Telecom Holdings Limited, a Bermuda
corporation (the "Company"), certain Selling Shareholders named therein and each
of you as representatives of a group of U.S. Underwriters and International
Underwriters, respectively, named therein, relating to an underwritten public
offering of Common Stock, $0.0006 par value (the "Common Stock"), of the
Company.
In order to induce you and the other U.S. Underwriters and
International Underwriters to enter into the Underwriting Agreements, the
undersigned will not, without the prior written consent of Xxxxxxx Xxxxx Barney
Inc., (i) directly or indirectly offer, sell, contract to sell, pledge or
otherwise dispose of, or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition by the undersigned or any
affiliate of, or person in privity with, the undersigned) of, any shares of
capital stock of the Company or any securities convertible into or exchangeable
or exercisable for shares of capital stock of the Company; (ii) file (or
participate in the filing of) a registration statement with the U.S. Securities
and Exchange Commission in respect of, or establish, modify or liquidate any put
or call equivalent position (within the meaning of the U.S. Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder)
with respect to, any shares of capital stock of the Company or any securities
convertible into or exchangeable or exercisable for shares of capital stock of
the Company, or (iii) publicly announce an intention to effect any transaction
described in clause (i) or clause (ii) above, for a period of 180 days after the
date of the Underwriting Agreements, in each case other than (A) shares of
Common Stock disposed of as bona fide gifts approved by Xxxxxxx Xxxxx Xxxxxx
Inc., (B) pledges of Common Stock in connection with the purchase of such Common
Stock upon the exercise of stock options granted by the Company under its
Long-Term Incentive Plan and exercised following the pledgor's voluntary
termination of employment with the Company or departure from the Company's Board
of Directors in circumstances where such options remain exercisable; provided,
that the lender or lenders to whom such Common Stock is pledged agree in writing
to be bound by the terms of this letter agreement, (C) dispositions of Common
Stock pursuant to any merger, tender offer or other change of control
transaction involving the Company on terms available to the shareholders of the
Company generally; and (D) transfers of shares of Common Stock to any entity
which is a direct or indirect wholly-owned subsidiary of the undersigned or to
any entity of which the undersigned is a direct or indirect wholly-owned
subsidiary (or to any direct or indirect wholly-owned subsidiary of such
entity), provided that in either case the entity to which the shares of Common
Stock are transferred agrees in writing to be bound by the terms of this letter
agreement.
If for any reason the Underwriting Agreements shall be terminated
prior to the Closing Date (as defined in the Underwriting Agreements), the
agreement set forth above shall likewise be terminated.
Yours very truly,
[Signature of officer, director or major stockholder]
[Name and address of officer, director or major stockholder]
A-2
