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EXHIBIT 1.1
7,000,000 Shares
GST TELECOMMUNICATIONS, INC.
Common Shares
UNDERWRITING AGREEMENT
November [___], 1997
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November [__], 1997
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
Credit Suisse First Boston Corporation
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
Bear, Xxxxxxx International Limited
Credit Suisse First Boston (Europe) Limited
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Ladies and Gentlemen:
GST Telecommunications, Inc., a federally chartered Canadian corporation
(the "Company"), proposes to issue and sell to the several Underwriters named in
Schedule I hereto (the "Underwriters") an aggregate of 7,000,000 Common Shares,
without par value, of the Company (the "Firm Shares").
It is understood that, subject to the conditions hereinafter stated,
5,600,000 Firm Shares (the "U.S. Firm Shares") will be sold to the several U.S.
Underwriters named in Schedule I hereto (the "U.S. Underwriters") in connection
with the offering and sale of such U.S. Firm Shares in the United States and
Canada to United States and Canadian Persons (as such terms are defined in the
Agreement between U.S. and International Underwriters of even date herewith),
and 1,400,000 Firm Shares (the "International Shares") will be sold to the
several International Underwriters named in Schedule II hereto (the
"International Underwriters") in connection with the offering and sale of such
International Shares outside the United States and Canada to persons other than
United States and Canadian Persons. Xxxxxx Xxxxxxx & Co. Incorporated, Bear,
Xxxxxxx & Co. Inc. and Credit Suisse First Boston Corporation shall act as
representatives (the "U.S. Representatives") of the several U.S. Underwriters
and Xxxxxx Xxxxxxx & Co. International Limited, Bear, Xxxxxxx International
Limited and Credit Suisse First Boston (Europe) Limited shall act as
representatives (the "International Representatives") of the several
International Underwriters. The U.S. Underwriters and the International
Underwriters are hereinafter collectively referred to as the "Underwriters."
The Company also proposes to issue and sell to the several U.S.
Underwriters not more than an additional 1,050,000 Common Shares, without par
value, (the "Additional
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Shares"), if and to the extent that the U.S. Representatives shall have
determined to exercise, on behalf of the U.S. Underwriters, the right to
purchase such common shares granted to the U.S. Underwriters in Article II
hereof. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "Shares." The Common Shares, without par value, of the
Company to be outstanding after giving effect to the sales contemplated hereby
are hereinafter referred to as the "Common Shares."
Pursuant to an underwriting agreement, dated the date hereof, among the
Company and Xxxxxx Xxxxxxx & Co. Incorporated, Bear, Xxxxxxx & Co. Inc. and
Credit Suisse First Boston, the Company will issue and sell an aggregate of
$200.0 million principal amount of its [__]% Senior Subordinated Accrual Notes
due 2007 (the "Senior Subordinated Accrual Notes") (the "Debt Offering").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement relating to the Shares. The registration
statement contains two prospectuses to be used in connection with the offering
and sale of the Shares: the U.S. prospectus, to be used in connection with the
offering and sale of Shares in the United States and Canada to United States and
Canadian Persons,and the international prospectus, to be used in connection with
the offering and sale of Shares outside the United States and Canada to persons
other than United States and Canadian Persons. The international prospectus is
identical to the U.S. prospectus except for the outside front cover. The
registration statement, as amended at the time it becomes effective, including
the exhibits thereto, the documents incorporated by reference therein and the
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act of 1933 (the
"Securities Act") is hereinafter referred to as the "Original Registration
Statement"; any registration statement filed pursuant to Rule 462(b) under the
Securities Act is hereinafter referred to as the "Rule 462(b) Registration
Statement"; the Original Registration Statement and any Rule 462(b) Registration
Statement are hereinafter referred to collectively as the "Registration
Statement"; and the U.S. prospectus and the international prospectus in the
respective forms first used to confirm sales of Shares are hereinafter
collectively referred to as the "Prospectus". As used herein, the term
"Specified Subsidiaries" means the following subsidiaries of the Company: GST
USA, Inc., a Delaware corporation, GST Telecom Inc., a Delaware corporation, GST
Pacific Lightwave, Inc. a Washington corporation, GST Telecom Hawaii, Inc., a
Hawaii corporation, GST Tucson Lightwave, Inc., an Arizona corporation, GST
Telecom New Mexico, Inc., a New Mexico corporation, GST Telecom California,
Inc., a Delaware corporation, NACT Telecommunications, Inc., a Delaware
corporation, Wasatch International Network Services, Inc., a Utah corporation,
GST Net, Inc., a Delaware corporation, International Telemanagement Group, Inc.,
an Ohio corporation, TotalNet Communications, Inc., a Texas corporation, GST
Call America, Inc., a California corporation, Tri-Star Residential
Communications Corp., a Washington corporation, GST Equipco, Inc., a Washington
corporation, GST Internet, Inc., a Delaware corporation,
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GST Equipment Funding, Inc., a Delaware corporation and GST Action Telecom,
Inc., a Delaware corporation.
I.
The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) The Original Registration Statement has become effective and, if
the Company has elected to rely upon Rule 462(b) under the Securities Act,
the Rule 462(b) Registration Statement shall have become effective not
later than the earlier of (i) 10:00 p.m. Eastern time on the date hereof
and (ii) the time confirmations are sent or given, as specified by Rule
462(b) under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or, to the Company's
knowledge, threatened by the Commission.
(b) (i) Each part of the Registration Statement, when such part
became effective, did not contain and each such part, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii)
the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and warranties
set forth in this paragraph (b) do not apply to statements or omissions in
the Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own or lease its
property and to conduct its business as described in the Prospectus and is
duly qualified or licensed to transact business and is in good standing as
a foreign corporation in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification or licensing, except to the extent that the failure to be so
qualified or licensed or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(d) Each of the Specified Subsidiaries has been duly incorporated,
is validly existing as a corporation in good standing under the laws of
the jurisdiction of its
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incorporation, has the corporate power and authority to own or lease its
property and to conduct its business as described in the Prospectus and is
duly qualified or licensed to transact business and is in good standing as
a foreign corporation in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification or licensing, except to the extent that the failure to be so
qualified or licensed or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole. The
only direct subsidiaries of the Company are GST USA, GST Call America,
Inc., TotalNet Communications, Inc. and GST Action Telecom, Inc. and the
Company owns all of the outstanding capital stock of such subsidiaries,
free and clear of any claims, liens, pledges or other encumbrances. The
total assets and revenues of the Company's direct and indirect
subsidiaries other than the Specified Subsidiaries, in the aggregate,
comprised less than 5% of the Company's total consolidated assets and
revenues, respectively, at and for the year ended September 30, 1996 and
at and for the quarter ended June 30, 1997.
(e) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(f) The Common Shares outstanding prior to the issuance of the
Shares have been duly authorized and are validly issued, fully paid and
nonassessable.
(g) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and nonassessable, and the issuance of such Shares will
not be subject to any preemptive or similar rights.
(h) This Agreement has been duly authorized, executed and delivered
by the Company.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
(including the issuance, sale and delivery of the Shares) will not
contravene any provision of applicable law or the articles of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company that is material to the Company and
its subsidiaries, taken as a whole, or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the
Company or any subsidiary, and no consent, approval, authorization or
order of or qualification with any governmental body or agency is required
for the performance by the Company of its obligations under this
Agreement, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise,
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or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date
of this Agreement).
(k) There are no legal or governmental proceedings pending or, to
the best of the Company's knowledge, threatened to which the Company or
any of the Specified Subsidiaries is a party or to which any of the
properties of the Company or any of the Specified Subsidiaries is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(l) The Company and the Specified Subsidiaries have all necessary
permits, licenses, authorizations, consents and approvals and have made
all necessary filings required under any federal, state, local or foreign
supranational, national or regional law, regulation or rule, and have
obtained all necessary authorizations, consents and approvals from other
persons, to own, lease, license and use their respective properties and
assets and to conduct its businesses in the manner described in the
Prospectus, in each case except to the extent that the failure to obtain
such permits, licenses, authorizations, consents or approvals or to make
such filings would not, singly or in the aggregate, have a material
adverse effect on the properties, assets, prospects, condition, financial
or otherwise, business or operations of the Company and its subsidiaries,
taken as a whole; except as accurately described in all material respects
in the Prospectus, the Company and the Specified Subsidiaries have not
received any notice of proceedings which remain unresolved relating to
revocation or modification of any such permits, licenses, authorizations,
consents or approvals, nor is the Company or any of the Specified
Subsidiaries in violation of, or in default under, any such license,
authorization, consent or approval or any federal, state, local or foreign
supranational, national or regional law, regulation or rule or any decree,
order or judgment applicable to the Company or any of the Specified
Subsidiaries the effect of which could have a material adverse effect on
the properties, assets, prospects, condition, financial or otherwise,
business or operations of the Company and its subsidiaries, taken as a
whole.
(m) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 or Rule 462 under the Securities Act, complied
when so filed in all material respects with the Securities Act and the
rules and regulations of the Commission thereunder.
(n) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
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(o) The Company and the Specified Subsidiaries are (i) in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure
to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(p) There are no holders of securities (debt or equity) of the
Company or any of its subsidiaries, or holders of rights, options, or
warrants to obtain securities of the Company or any of its subsidiaries,
who have the right, during the 120 day period after the date of this
Agreement to request the Company to register securities held by them under
the Securities Act, other than holders who have waived such right for the
120 day period after the date of the initial public offering of the Shares
and have waived their rights with respect to the inclusion of their
securities in the Registration Statement.
(q) The financial statements contained in the Prospectus comply with
the requirements of Regulation S-X of the Commission.
(r) Schedule A to the Certificate of Responsible Officer dated
[______], 1997 signed by Xxxx Xxxxx and delivered in connection with the
opinion of Xxxxxxx & Berlin delivered pursuant to Article V(g) hereof
lists all of the telecommunications services provided by the Specified
Subsidiaries (other than NACT Telecommunications, Inc. and Wasatch
International Network Services, Inc.), other than services which are not,
singly or in the aggregate, material to the Company and its subsidiaries,
taken as a whole.
II.
The Company hereby agrees to sell to the several Underwriters, and the
Underwriters, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agree, severally
and not jointly, to purchase from the Company the respective numbers of Firm
Shares set forth in Schedules I and II hereto opposite their names at U.S.$[__]
a share (the "purchase price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the U.S. Underwriters the Additional Shares, and the U.S. Underwriters shall
have a one-time right to purchase, severally and not jointly, up to 1,050,000
Additional Shares at the purchase price.
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Additional Shares may be purchased as provided in Article IV hereof solely for
the purpose of covering overallotments made in connection with the offering of
the Firm Shares. If any Additional Shares are to be purchased, each U.S.
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
the U.S. Representative may determine) that bears the same proportion to the
total number of Additional Shares to be purchased as the number of U.S. Firm
Shares set forth in Schedule I hereto opposite the name of such U.S. Underwriter
bears to the total number of U.S. Firm Shares.
The Company hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend or otherwise transfer or dispose of, directly or indirectly, any
Common Shares or any securities convertible into or exercisable or exchangeable
for Common Shares or (ii) enter into any swap or other agreement that transfers,
in whole or in part, any of the economic consequences of ownership of the Common
Shares, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise for a period of 120 days after the date of the Prospectus, other than
(A) the Shares to be sold hereunder, (B) any options granted pursuant to the
Company's benefit plans existing on the date hereof that are referred to in the
Prospectus or (C) any Common Shares sold by the Company upon the exercise of an
option or warrant or the conversion of a security outstanding on the date hereof
of which the Underwriters have been advised in writing or that are referred to
in the Prospectus.
III.
The Company is advised by you that the Underwriters propose to make a
public offering of their respective portions of the Shares as soon after the
Original Registration Statement and this Agreement have become effective as in
your judgment is advisable. The Company is further advised by you that the
Shares are to be offered to the public initially at U.S.$[__] a share (the
"public offering price") and to certain dealers selected by you at a price that
represents a concession not in excess of U.S.$[____] a share under the public
offering price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of U.S.$[____] a share, to any Underwriter
or to certain other dealers.
IV.
Payment for the Firm Shares to be sold by the Company shall be made in
same day funds by wire transfer to the Company's account at [_______] at a
closing to be held at the offices of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, at [____]
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A.M., local time, on [_________], 1997 or at such other time on the same or such
other date, not later than [_________], 1997, as shall be designated in writing
by you. The time and date of such payment are hereinafter referred to as the
Closing Date.
Payment for any Additional Shares shall be made in same day funds by wire
transfer to the Company's account at [_______] at a closing to be held at the
offices of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at
[____] A.M., local time, on such date (which may be the same as the Closing Date
but shall in no event be earlier than the Closing Date nor later than ten
business days after the giving of the notice hereinafter referred to) as shall
be designated in a written notice from the U.S. Representatives to the Company
of their determination, on behalf of the U.S. Underwriters, to purchase a
number, specified in said notice, of Additional Shares, or on such other date,
in any event not later than [______], 1997, as shall be designated in writing by
the U.S. Representatives. The time and date of such payment are hereinafter
referred to as the Option Closing Date. The notice of the determination to
exercise the option to purchase Additional Shares and of the Option Closing Date
may be given at any time within 30 days after the date of this Agreement.
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one business day prior to the Closing
Date or the Option Closing Date, as the case may be. The certificates evidencing
the Firm Shares and Additional Shares shall be delivered to you on the Closing
Date or the Option Closing Date, as the case may be, for the respective accounts
of the several Underwriters, with any transfer taxes payable in connection with
the transfer of the Shares to the Underwriters duly paid, against payment of the
purchase price therefor.
V.
The obligations of the Company and the several obligations of the
Underwriters hereunder are subject to the condition that the Registration
Statement shall have become effective not later than 5:30 p.m. (New York City
time) on the date hereof.
The several obligations of the Underwriters hereunder are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date,
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the
direction of the possible change, in the
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rating accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations,
of the Company and its subsidiaries, taken as a whole, from that set
forth in the Registration Statement, that, in your judgment, is
material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, on behalf of the Company, to the effect set forth in clause
(a)(i) above and to the effect that the representations and warranties of
the Company contained in this Agreement are true and correct in all
material respects as of the Closing Date and that the Company has complied
with all of the agreements and satisfied all of the conditions contained
in this Agreement on its part to be performed or satisfied on or before
the Closing Date.
The officer signing and delivering such certificate may rely upon
the best of his knowledge as to proceedings threatened.
(c) No stop order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for such purpose shall be
pending before or, to the knowledge of the Company or the Underwriters,
threatened by the Commission.
(d) You shall have received on the Closing Date an opinion of Xxxxxx
Xxxxxxxx Frome & Xxxxxxxxxx LLP, U.S. counsel for the Company, dated the
Closing Date, in the form attached hereto as Exhibit A.
The opinion of Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP shall be
rendered to you at the request of the Company and shall so state therein.
(e) You shall have received on the Closing Date an opinion of
X'Xxxxx & Company, Canadian counsel for the Company, dated the Closing
Date, in the form attached hereto as Exhibit B.
The opinion of X'Xxxxx & Company shall be rendered to you at the
request of the Company and shall so state therein.
(f) You shall have received on the Closing Date an opinion of
Thorsteinssons, Canadian tax counsel for the Company, dated the Closing
Date, which shall be to the effect that such counsel is of the opinion
that the statements in the Prospectus under the
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caption "Certain Canadian Tax Considerations" are accurate in all material
respects and fairly summarize the matters referred to therein.
(g) You shall have received on the Closing Date an opinion of
Xxxxxxx & Berlin, Chartered, special regulatory counsel for the Company,
in the form attached hereto as Exhibit C.
The opinion of Xxxxxxx & Berlin, Chartered shall be rendered to you
at the request of the Company and shall so state therein.
(h) You shall have received on the Closing Date opinions from local
regulatory counsel in the forms attached hereto as Exhibit D.
(i) You shall have received on the Closing Date an opinion of
Shearman & Sterling, counsel for the Underwriters, dated the Closing Date,
with respect to the Registration Statement and the Prospectus and such
other related matters as you may reasonably request, and such counsel
shall have received such documents and information as they may reasonably
request to enable them to pass upon such matters.
(j) You shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to you, from KPMG Peat
Marwick LLP, independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectus; provided that the letter delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(k) You shall have received "lock-up" agreements substantially in
the form of Exhibit D hereto from certain management stockholders,
officers and directors of the Company listed on Schedule III hereto and
such agreements shall be in full force and effect on the Closing Date.
(l) The Company shall have complied with the provisions of Article
VI(a) hereof with respect to the furnishing of Prospectuses on the
business day next succeeding the date of this Agreement, in such
quantities as you shall have reasonably requested.
(m) You shall have received such other documents and certificates as
are reasonably requested by you or your counsel.
(n) The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the delivery to the U.S.
Representatives on the Option Closing Date of such documents as they may
reasonably request with respect to the good
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standing of the Company, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the
Additional Shares.
VI.
In further consideration of the agreements of the Underwriters herein
contained, the Company covenants and agrees as follows:
(a) To furnish to you, without charge, seven signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and, during the period mentioned in paragraph
(c) below, as many copies of the Prospectus and any supplements and
amendments thereto or to the Registration Statement as you may reasonably
request. In the case of the Prospectus, to furnish to you copies of the
Prospectus in New York City and London, prior to 3:00 p.m., on the
business day following the date of this Agreement, in such quantities as
you reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment
or supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of your counsel the Prospectus is
required by law to be delivered in connection with sales by an Underwriter
or dealer, any event shall occur or condition shall exist as a result of
which it is necessary in your judgment to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of your counsel, it is necessary to
amend or supplement the Prospectus to comply with applicable law,
forthwith to prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to the dealers (whose names and addresses
you will furnish to the Company) to which Shares may have been sold by you
on behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the statements
in the Prospectus as so amended or supplemented will not, in the light of
the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request; provided that the Company shall not be required to (A) qualify as
a foreign corporation or as a dealer in
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securities in any jurisdiction where it would not otherwise be required to
qualify but for this paragraph (d), (B) file any general consent to
service of process or (C) subject itself to taxation in any such
jurisdiction if it is not otherwise so subject.
(e) If the Company elects to rely on Rule 462(b) under the
Securities Act, the Company shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) under the
Securities Act no later than the earlier of (i) 10:00 p.m. Eastern time on
the date hereof and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2) under the Securities Act, and shall pay the
applicable fees in accordance with Rule 111 under the Securities Act.
(f) To make generally available to the Company's security holders
and to you as soon as practicable an earnings statement of the Company
covering the twelve-month period ending December 31, 1998 that satisfies
the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(g) To use the net proceeds received by the Company from the sale of
(i) the Shares hereunder and (ii) the Senior Subordinated Accrual Notes
sold in the Debt Offering, in the manner specified in the Prospectus under
the caption "Use of Proceeds."
(h) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under
this Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Securities Act and all
other fees or expenses in connection with the preparation and filing of
the Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies
thereof to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or
other taxes payable thereon, (iii) the cost of printing or producing any
Blue Sky or Legal Investment memorandum in connection with the offer and
sale of the Shares under state securities laws and all expenses in
connection with the qualification of the Shares for offer and sale under
state securities laws as provided in Article VI(d) hereof, including
filing fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with
the Blue Sky or Legal Investment memorandum, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters incurred
in connection with the review and qualification of the offering of the
Shares by the National Association of Securities Dealers, Inc., (v) all
costs and expenses incident to listing the Shares on the AMEX and other
national securities exchanges and foreign stock exchanges, (vi) the cost
of printing certificates
14
13
representing the Shares, (vii) the costs and charges of any transfer
agent, registrar or depositary, (viii) the costs and expenses of the
Company relating to investor presentations on any "road show" undertaken
in connection with the marketing of the offering of the Shares, including,
without limitation, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers
of the Company and any such consultants, and the cost of any aircraft
chartered in connection with the road show, (ix) all expenses in
connection with any offer and sale of the Shares outside of the United
States, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with offers and sales outside
of the United States, and (x) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Article, Article VII and the
third paragraph of Article IX below, the Underwriters will pay all of
their costs and expenses, including fees and disbursements of their
counsel, stock transfer taxes payable on resale of any of the Shares by
them and any advertising expenses connected with any offers they may make.
VII.
The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to such Underwriter,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly
15
14
for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated, in the case of
parties indemnified pursuant to the second preceding paragraph, and by the
Company, in the case of parties indemnified pursuant to the first preceding
paragraph. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
16
15
To the extent the indemnification provided for in the first or second
paragraph of this Article VII is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party or parties on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the indemnifying party or parties on the one hand and of the indemnified party
or parties on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other hand in connection with the
offering of the Shares shall be deemed to be in the same respective proportions
as the net proceeds from the offering of the Shares (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate public offering price of the
Shares. The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters' respective obligations to contribute
pursuant to this Article VII are several in proportion to the respective number
of Shares they have purchased hereunder, and not joint.
The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Article VII were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Article VII, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any
17
16
person who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Article VII are not exclusive and shall not limit any
rights or remedies which may otherwise be available to any indemnified party at
law or in equity.
The indemnity and contribution provisions contained in this Article VII
and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Shares.
VIII.
This Agreement shall be subject to termination by notice given by you to
the Company, if (a) after the execution and delivery of this Agreement and prior
to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange, the Chicago Board of Trade or the Vancouver Stock Exchange, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and (b) in
the case of any of the events specified in clauses (a)(i) through (iv), such
event singly or together with any other such event makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus.
IX.
This Agreement shall become effective upon the later of (x) execution and
delivery hereof by the parties hereto and (y) release of notification of the
effectiveness of the Original Registration Statement by the Commission.
If, on the Closing Date or the Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares that
it or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares
18
17
set forth opposite their respective names in Schedule I or Schedule II bears to
the aggregate number of Firm Shares set forth opposite the names of all such
nondefaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to Article
II be increased pursuant to this Article IX by an amount in excess of one-ninth
of such number of Shares without the written consent of such Underwriter. If, on
the Closing Date or the Option Closing Date, as the case may be, any Underwriter
or Underwriters shall fail or refuse to purchase Shares and the aggregate number
of Shares with respect to which such default occurs is more than one-tenth of
the aggregate number of Shares to be purchased on such date, and arrangements
satisfactory to you and the Company for the purchase of such Shares are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case either you or the Company shall have the right to postpone the Closing
Date or the Option Closing Date, as the case may be, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
This Agreement may be signed in two or more counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
The Company hereby (i) acknowledges that it has irrevocably designated and
appointed Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxx X. Xxxxx, Esq. (together with any successor, the
"Process Agent"), as its authorized agent upon which process may be served in
any suit, action or proceeding arising out of or relating to this Agreement or
the transactions contemplated herein, that may be instituted in any federal or
state court in the State of New York, or brought under federal or state
securities laws, and acknowledges that the Process Agent has accepted such
designation, (ii) agrees that service of process upon the Process Agent and
written notice of such service to the Company (mailed or delivered to its Chief
Executive Officer at its principal office at 0000 X.X. Xxxxxxxx Xxx, Xxxxxxxxx,
Xxxxxxxxxx 98662),
19
18
shall be deemed in every respect effective service of process upon the Company
in any such suit, action or proceeding and (iii) agrees to take any and all
action, including the execution and filing of any and all such documents and
instruments as may be necessary to continue such designation and appointment of
the Process Agent in full force and effect so long as any of the Shares shall be
outstanding. The Company hereby agrees to submit to the nonexclusive
jurisdiction of any federal or state court in the State of New York in any such
suit, action or proceeding arising out of or relating to this Agreement or the
transactions contemplated herein.
To the extent that the Company has or hereafter may acquire any immunity
from jurisdiction of any court or from any legal process (whether through
service of notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property, it hereby
irrevocably waives such immunity in respect of its obligations under this
Agreement to the extent permitted by law.
Any notice required or permitted to be given hereunder shall be given in
writing and shall be deemed effective three days after deposit in the United
States mail (certified or registered, return receipt requested), postage
prepaid, or when received if personally delivered, addressed as follows:
To the Underwriters: To the Company:
Xxxxxx Xxxxxxx & Co. GST Telecommunications, Inc.
Incorporated 0000 X.X. Xxxxxxxx Xxx
0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxxx 00000
Xxx Xxxx, Xxx Xxxx 00000 Attention: Chief Executive Officer
Attention: Xxxxx Xxxxx
with a copy to: with a copy to:
Shearman & Xxxxxxxx Xxxxxx Xxxxxxxx Frome &
000 Xxxxxxxxx Xxxxxx Xxxxxxxxxx XXX
Xxx Xxxx, Xxx Xxxx 00000 000 Xxxx Xxxxxx
Xxxxxxxxx: Xxxxx X. Xxxxxxx, Esq. Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx, Esq.
or to such other address of which written notice is given to the other.
20
19
This Agreement shall be governed by the laws of the State of New York.
Very truly yours,
GST TELECOMMUNICATIONS, INC.
By______________________________
Name:
Title:
Accepted, November [__], 1997
XXXXXX XXXXXXX & CO. INCORPORATED
BEAR, XXXXXXX & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
Acting severally on behalf of themselves
and the several U.S. Underwriters
named in Schedule I hereto.
By Xxxxxx Xxxxxxx & Co. Incorporated
By__________________________
Authorized Signatory
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
BEAR, XXXXXXX INTERNATIONAL LIMITED
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
Acting severally on behalf of themselves
and the several International Underwriters
named in Schedule II hereto.
By Xxxxxx Xxxxxxx & Co. International Limited
By__________________________
Authorized Signatory
21
SCHEDULE I
U.S. Underwriters
Number of
Firm Shares
Underwriter To Be Purchased
----------- ---------------
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
Credit Suisse First Boston Corporation
---------
Total U.S. Firm Shares................................
22
21
SCHEDULE II
International Underwriters
Number of
Firm Shares
Underwriter To Be Purchased
----------- ---------------
Xxxxxx Xxxxxxx & Co. International Limited
Bear, Xxxxxxx International Limited
Credit Suisse First Boston (Europe) Limited
---------
Total International Firm Shares.......................
23
SCHEDULE III
Shareholders Executing Lock Up Agreements
Xxxx Xxxxx
Tomen
Xxxxxxxx X. Xxxxxx
Xxx Xxxxxx
Xxxxxxx Xxxxx
Xxxxxx X. Xxxxxx
W. Xxxxxx Xxxxxxxxxx
Xxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxx, Xx.
Xxxxxxxxx Xxxx
Xxxxxx X. Xxxx, III
A. Xxx Xxxxxxx
24
EXHIBIT A
OPINION OF U.S. COUNSEL FOR THE COMPANY
The opinion of the U.S. counsel for the Company to be delivered
pursuant to Article V(d) of the Underwriting Agreement shall be to the effect
that:
(A) Each Specified Subsidiary has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority
to own or lease its property and to conduct its business as described in
the Prospectus and is duly qualified or licensed to transact business and
is in good standing as a foreign corporation in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification or licensing, except to the extent that the
failure to be so qualified or licensed or be in good standing would not
have a material adverse effect on the properties, assets, prospects,
condition, financial or otherwise, business or operations of the Company
and its subsidiaries, taken as a whole; and to such counsel's knowledge,
after due inquiry (i) the only direct subsidiaries of the Company are GST
USA, Inc., GST Call America, Inc., TotalNet Communications, Inc. and GST
Action Telecom, Inc. and (ii) the Company owns all the outstanding shares
of capital stock of such subsidiaries free and clear of any claims, liens,
pledges, or other encumbrances;
(B) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement (including the issuance, sale and delivery of the Shares by the
Company), will not contravene (i) any provision of applicable law, (ii) to
such counsel's knowledge, any agreement or other instrument binding upon
the Company that is material to the Company and its subsidiaries, taken as
a whole, or (iii) to such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having jurisdiction over
the Company, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under the Underwriting
Agreement;
(C) the Registration Statement has become effective under the
Securities Act; and, to our knowledge, no stop order suspending the
effectiveness of the Registration Statement or suspending or preventing
the use of the Prospectus has been issued and no proceedings for that
purpose have been instituted or are threatened by the Securities and
Exchange Commission;
(D) after due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or any
of the Specified Subsidiaries is a party or to which any of the properties
of any of the Specified Subsidiaries is subject that are required to be
described in the Registration Statement or Prospectus and are not so
described or of any statutes, regulations,
25
A-2
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required;
(E) the Company is not and after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended;
(F) the statements (1) in the Prospectus under the captions
"Management --Employment and Other Agreements," "Certain Transactions,"
"Description of Certain Indebtedness," "Description of Capital Stock,"
"Business -- Legal Proceedings" and "Certain United States Federal Income
Tax Considerations" and (2) in the Registration Statement in Item 15,
insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein; and
(G) such counsel (1) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and schedules
and other financial data included therein as to which such counsel need
not express any opinion) comply as to form in all material respects with
the Securities Act and the rules and regulations of the Commission
thereunder, (2) believes that (except for financial statements and
schedules and other financial data as to which such counsel need not
express any belief) the Registration Statement and the prospectus included
therein at the time the Registration Statement became effective did not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (3) believes that (except for
financial statements and schedules and other financial data as to which
such counsel need not express any belief) the Prospectus does not contain
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.
With respect to paragraph (G) above, counsel may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and review and discussion of the contents thereof, but are without independent
check or verification except as specified.
26
EXHIBIT B
OPINION OF CANADIAN COUNSEL FOR THE COMPANY
The opinion of Canadian counsel for the Company to be delivered
pursuant to Article V(e) of the Underwriting Agreement shall be to the effect
that:
(A) the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation and has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus and is
duly qualified or licensed to transact business and is in good standing as
a foreign corporation in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification or licensing, except to the extent that the failure to be so
qualified or licensed or be in good standing would not have a material
adverse effect on the properties, assets, prospects, condition, financial
or otherwise, business or operations of the Company and its subsidiaries,
taken as a whole;
(B) the authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus;
(C) the shares of Common Stock outstanding prior to the issuance of
the Shares to be sold by the Company have been duly authorized and are
validly issued, fully paid and non-assessable;
(D) the Shares to be sold by the Company have been duly authorized
and, when issued and delivered, in accordance with the terms of the
Underwriting Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject to any
preemptive or similar rights;
(E) the Underwriting Agreement has been duly authorized, executed
and delivered by the Company;
(F) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement (including the issuance, sale and delivery of the Shares) will
not contravene (i) any provision of applicable British Columbia or federal
Canadian law, (ii) the certificate of incorporation or by-laws of the
Company, (iii) to such counsel's knowledge, any agreement or other
instrument binding upon the Company that is material to the Company and
its subsidiaries, taken as a whole or (iv) to such counsel's knowledge any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Company and no consent, approval, authorization or
order of, or qualification with, any governmental body or agency in Canada
is required for the performance by the Company of its obligations under
the Underwriting Agreement;
27
B-2
(G) the statements in the Prospectus under the captions "Risk
Factors--Risks of Investment in a Canadian Corporation," "Enforceability
of Civil Liabilities against Foreign Persons" and "Exchange Controls and
Other Limitations Affecting Shareholders" insofar as such statements
constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein; and
(H) after due inquiry, such counsel is not aware of any Canadian
legal or governmental proceeding pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject other than
proceedings fairly summarized in all material respects in the Prospectus
and proceedings which are not likely to have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
28
EXHIBIT C
OPINION OF SPECIAL REGULATORY COUNSEL FOR THE COMPANY
The opinion of special regulatory counsel for the Company to be
delivered pursuant to Article V(g) of the Underwriting Agreement shall be to the
effect that:
(A) The Company and its subsidiaries have all necessary permits,
licenses, authorizations, consents and approvals and have made all
necessary filings required under any federal, state, local or foreign
supranational, national or regional law, regulation or rule, and have
obtained all necessary authorizations, consents and approvals from other
persons, material to the conduct of their respective businesses, in each
case except to the extent that the failure to obtain such permits,
licenses, authorizations, consents or approvals or to make such filings
would not, singly or in the aggregate, have a material adverse effect on
the properties, assets, prospects, condition, financial or otherwise,
business or operations of the Company and its subsidiaries, taken as a
whole; and except as accurately described in all material respects in the
Prospectus, the Company and its subsidiaries have not received any notice
of proceedings which remain unresolved relating to revocation or
modification of any such permits, licenses, authorizations, consents or
approvals, nor is the Company or any of its subsidiaries in violation of,
or in default under, any such license, authorization, consent or approval
or any federal, state, local or foreign supranational, national or
regional law, regulation or rule or any decree, order or judgment
applicable to the Company or its subsidiaries the effect of which could
have a material adverse effect on the properties, assets, prospects,
condition, financial or otherwise, business or operations of the Company
and its subsidiaries, taken as a whole; and
(B) the statements in the Prospectus under the captions "Risk
Factors --Government Regulation" and "Business -- Regulation" insofar as
such statements constitute a summary of the legal matters, licenses,
documents, procedures or proceedings referred to therein, fairly summarize
the matters referred to therein.
29
EXHIBIT D
[INSERT LOCAL REGULATORY OPINIONS]
30
EXHIBIT D
______ __, 1997
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
Credit Suisse First Boston Corporation
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The undersigned understands that you, as representatives of the
several Underwriters, propose to enter into an Underwriting Agreement with GST
Telecommunications, Inc. (the "Company") providing for the public offering (the
"Public Offering") by the several Underwriters, including yourselves, of Common
Shares, without par value (the "Common Shares") of the Company.
In consideration of the Underwriters' agreement to purchase and make
the Public Offering of the Common Shares, and for other good and valuable
consideration receipt of which is hereby acknowledged, the undersigned hereby
agrees that, without the prior written consent of Xxxxxx Xxxxxxx & Co.
Incorporated on behalf of the Underwriters, it will not, during the period
ending 120 days after the date of the Prospectus, (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend or
otherwise transfer or dispose of, directly or indirectly, any Common Shares or
any securities convertible into or exercisable or exchangeable for Common Shares
or (2) enter into any swap or similar agreement that transfers, in whole or in
part, any of the economic consequences of ownership of the Common Shares,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Shares or such other securities, in cash or
otherwise, other than transfers of Common Shares to the Company. In addition,
the undersigned agrees that, without the prior written consent of Xxxxxx Xxxxxxx
& Co. Incorporated on behalf of the Underwriters, it will not, during the period
ending 120 days after the date of the Prospectus, make any demand for or
exercise any right with respect to, the registration of any Common Shares or any
security convertible into or exercisable or exchangeable for Common Shares.
Very truly yours,
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(Name)
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(Print Name)
Accepted as of the date
first set forth above:
Xxxxxx Xxxxxxx & Co. Incorporated
By:
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