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Verio, LLC
640,000 Shares of Common Stock
Purchase Agreement
New York, New York
March 17, 2000
Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Verio, LLC (the "Company") organized under the laws of Delaware,
proposes to sell to Xxxxxxx Xxxxx Barney Inc., acting as agent for and on behalf
of Salomon Brothers Holding Company Inc. (the "Purchaser" and collectively with
Xxxxxxx Xxxxx Xxxxxx Inc. the "SSB Parties"), 640,000 shares (the "Purchased
Securities") of common stock of Verio Inc. ("Verio") (the "Common Stock"). In
addition, the Company may deliver to the Purchaser additional shares of Common
Stock (the "Additional Securities") in settlement of certain of its obligations
under the Equity Swap Agreement dated as of March 17, 2000, between the Company
and the Purchaser (the "Master Confirmation"). In addition, in connection
therewith, the Company shall pledge certain other shares of Common Stock (the
"Pledged Securities") to the Purchaser (or one of its affiliates) pursuant to a
pledge agreement dated as of the date hereof (the "Pledge Agreement"). The
Company is a wholly owned subsidiary of Verio. The Purchased Securities, the
Pledged Securities and the Additional Securities are hereinafter referred to as
the "Securities". Any reference herein to any Resale Registration Statement, a
Preliminary Prospectus, or any Resale Prospectus (each as defined herein) shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the Exchange Act
on or before the Effective Date of such Resale Registration Statement or the
issue date of such Preliminary Prospectus or Resale Prospectus, as the case may
be; and any reference herein to the terms "amend", "amendment" or "supplement"
with respect to any Resale Registration Statement, Preliminary Prospectus or
Resale Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the applicable Effective Date or issue
date, deemed to be incorporated therein by reference. Certain terms used herein
are defined in Section 17 hereof.
1. Representations and Warranties of Verio and the Company. Each of
Verio and the Company represents and warrants, on a several basis only, to, and
agrees with the SSB Parties as set forth below in this Section 1.
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(a) Verio (or its predecessors) has prepared and filed with the
Commission (those reports incorporated by reference into the Resale
Registration Statement (together with the Resale Registration Statement,
the "Exchange Act Reports"). Each such Exchange Act Report, when filed
with the Commission, complied in all material respects with the applicable
requirements of the Exchange Act and the rules and regulations thereunder
and did 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, in the light of the circumstances
under which they were made, not misleading. Since the date of the most
recent financial statements included in the Exchange Act Reports, there
has been no material adverse change on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and
its subsidiaries considered as one enterprise, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Exchange Act Reports.
(b) Verio has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction in which
it is chartered or organized, with full corporate power and authority to
conduct its business as described in the Exchange Act Reports, and is duly
qualified to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction which requires such qualification,
except where the failure to so qualify does not have a material adverse
effect on Verio or its business. The Company has been duly organized and
is validly existing as a limited liability company under the laws of the
jurisdiction in which it is organized, with full power and authority to
conduct its business as described in the Exchange Act Reports, and is duly
qualified to do business under the laws of each jurisdiction which
requires such qualification, except where the failure to so qualify does
not have a material adverse effect on the Company or its business.
(c) The authorized equity capitalization of Verio is as set forth in
the Exchange Act Reports; the capital stock of Verio conforms in all
material respects to the description thereof contained in the Exchange Act
Reports; the outstanding shares of Common Stock have been duly and validly
authorized and issued and are fully paid and nonassessable; the
certificates for the Securities are (or, in the case of the Additional
Securities, will be) in valid and sufficient form; and the holders of
outstanding shares of capital stock of Verio are not entitled to
preemptive or other rights to subscribe for the Securities; and, except as
set forth in the Exchange Act Reports, 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 Verio are outstanding.
(d) 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 Verio, or any of its affiliates or subsidiaries or
property of a character required to be disclosed in the Exchange Act
Reports which is not adequately disclosed therein, and there is no
franchise, contract or other document of a character required to be
described therein, or to be filed as an exhibit thereto, which is not
described or filed as required.
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(e) The Exchange Act Reports (other than the financial statements
and other financial information contained therein) comply as to form in
all material respects with the applicable requirements of the Act and the
Exchange Act and the respective rules and regulations thereunder; and at
the date of the filing thereof with the Commission, no such Exchange Act
Report 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, in the light of the circumstances under which they
were made, not misleading.
(f) The execution and delivery of this Agreement has been duly
authorized by all necessary corporate or other action by Verio and the
Company, as the case may be, and this Agreement has been duly executed and
delivered by each of Verio and the Company and constitutes the valid,
binding and enforceable agreement of each of the Company and Verio subject
to applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and to general principles of equity.
(g) The execution and delivery of the Master Confirmation and the
Pledge Agreement have been duly authorized by all necessary action of the
Company, each of the Master Confirmation and the Pledge Agreement has been
duly executed and delivered by the Company and constitutes the valid,
binding and enforceable agreement of the Company, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and to general principles of equity.
(h) Neither the Company nor Verio is and, after giving effect to the
sale of the Purchased Securities and the application of the proceeds
thereof, neither will be an "investment company" as defined in the U.S.
Investment Company Act of 1940, as amended.
(i) 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, in the Master Confirmation and in the
Pledge Agreement.
(j) None of the issue and sale of the Purchased Securities, the
issue of any Additional Securities, the consummation of any other of the
transactions contemplated herein, in the Master Confirmation or in the
Pledge Agreement or the fulfillment of the terms hereof or thereof will
conflict with, result in a breach or violation of or imposition of any
lien, charge or encumbrance upon any property or assets of Verio or its
subsidiaries pursuant to, (A) the charter or by-laws of Verio or any of
its subsidiaries; (B) 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 Verio or
its subsidiaries is a party or by which it is bound or to which its or
their property is subject; or (C) any statute, law, rule, regulation,
judgment, order or decree applicable to Verio or its subsidiaries of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over Verio or its
subsidiaries or any of its or their properties; provided, however, that in
no event will
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the aggregate number of shares of common stock issuable as Purchased
Securities and Additional Securities be greater than 2,000,000 shares.
(k) Any certificate signed by any officer of Verio and delivered to
the SSB Parties or counsel for the SSB Parties shall be deemed a
representation and warranty by Verio as to matters covered thereby.
2. Representations and Warranties of the Purchaser.
The Purchaser represents and warrants to, and agrees with, each of
the Company and the as set forth below in this Section 2.
(a) The Purchaser (i) has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks
of an investment in the Securities and is able to bear the economic risk
of investment in the Securities; (ii) is purchasing the Purchased
Securities for its own account (or the account of an affiliate) with no
present intention of distributing any of the Securities or any arrangement
or understanding with any other persons regarding the distribution of the
Securities, it being understood that the foregoing representation does not
limit the right of the Purchaser to resell the Securities pursuant to an
effective Resale Registration Statement or as otherwise contemplated in
the Master Confirmation and Pledge Agreement; and (iii) has completed or
caused to be completed and delivered to the Company and the Resale
Registration Statement Questionnaire and the Stock Certificate
Questionnaire attached hereto as Appendices I and II, respectively, for
use in preparation of any Resale Registration Statement, and the answers
thereto are true and correct as of the date hereof and will be true and
correct as of the applicable Effective Date.
(b) The Purchaser shall, in connection with any transfer of
Securities, provide to the transfer agent for the Common Stock prompt
notice of any Securities sold pursuant to any Resale Registration
Statement or otherwise.
3. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to the Purchaser, and the Purchaser agrees to purchase from the
Company the Purchased Securities at a purchase price per share equal to $52.50
per share.
4. Delivery and Payment. Delivery of and payment for the Purchased
Securities shall be made at 10:00 AM, New York City time, on March 17, 2000 or
at such time on such later date not more than three Business Days after the
foregoing date as the Company and the Purchaser may agree, which date and time
may be postponed by agreement between the Company and the SSB Parties (such date
and time of delivery and payment for the Purchased Securities being herein
called the "Closing Date"). Delivery of the Purchased Securities shall be made
to Xxxxxxx Xxxxx Barney Inc., as agent for and on behalf of the Purchaser,
against payment by the Purchaser of the purchase price therefor by wire transfer
in immediately available funds. Certificates for the Purchased Securities shall
be registered in such names and in such denominations as the Purchaser may
request.
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5. Certain Agreements. Verio agrees with the SSB Parties that:
(a) Verio shall promptly advise the SSB Parties (i) of any request
by the Commission or its staff for any amendment of any Exchange Act
Report of Verio or for any additional information; and (ii) of the
institution or threatening of any enforcement proceeding, including any
stop order, by the Commission against Verio and relating to any Exchange
Act Report or other document filed by Verio with the Commission, including
any registration statement filed under the Act.
(b) Verio 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 Verio to facilitate the sale
or resale of any Securities.
(c) Verio shall notify in writing the SSB Parties as promptly as
practicable at any time that Verio determines that, as a result of a
change in the capital stock of Verio the SSB Parties holds more than 4.9%
of the common stock of Verio.
(d) Verio shall, for so long as any Securities are owned by the SSB
Parties, (i) upon reasonable prior written notice, permit representatives
of the SSB Parties access to the books and records and to the principal
executive and operating officers of Verio during normal business hours at
such times as may be mutually agreed between the SSB Parties and Verio, as
the case may be, at any time during which the SSB Parties may have an
intention to resell any of the Securities; and (ii) furnish to the SSB
Parties such certificates of officers of Verio relating to the business,
operations and affairs of Verio and its respective subsidiaries, any
Resale Registration Statement or Resale Prospectus and any amendments or
supplements thereto, this Agreement, the Master Confirmation and the
performance by Verio its respective obligations hereunder and thereunder
as the SSB Parties may from time to time reasonably request.
(e) For so long as the Master Confirmation shall remain in effect,
(i) not later than 90 days following the end of the fiscal year of Verio
or 45 days following the end of each fiscal quarter of Verio and Verio
shall provide the SSB Parties (A) a copy of the applicable Annual Report
on Form 10-K or Quarterly Report on Form 10-Q of Verio then required to be
filed by Verio with the Commission; (B) a certificate of the Chief
Financial Officer, General Counsel or other authorized officer of Verio to
the effect that such Annual Report on Form 10-K or Quarterly Report on
Form 10-Q complied in all material respects, as of the date of the filing
thereof with the Commission, with the applicable requirements of the
Exchange Act and the rules and regulations thereunder and did 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, in the light of the circumstances under which they were made, not
misleading; and (ii) promptly upon the filing thereof, a copy of each
other report filed with the Commission by Verio.
(f) Verio agrees to pay all reasonable expenses incident to the
performance of its obligations hereunder and under the Master
Confirmation, including (i) the preparation
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and filing of any Resale Registration Statement and all amendments
thereto; (ii) the cost of printing and delivering certificates evidencing
the Securities; (iii) the cost of printing and delivering any Resale
Registration Statement, Preliminary Prospectus and Resale Prospectus in
such quantities as the SSB Parties may reasonably request; (iv) the fees
and expenses of independent accountants for Verio and their respective
counsel; (v) the qualification of the Securities for sale under state
securities or blue sky laws; (vi) the listing of the Securities on the
NASDAQ Stock Exchange; and (vii) all transfer or other taxes (other than
income taxes) payable in connection with the issuance, sale or transfer of
the Securities, and (viii) the reasonable fees and disbursements of
counsel to Holdings and its affiliates incurred in connection with any
sales or resales of the Securities.
6. Conditions to the Obligations of the Purchaser. The obligations
of the Purchaser to purchase the Purchased Securities shall be subject to the
accuracy of the representations and warranties on the part of Verio contained
herein as of the Execution Time and the Closing Date, to the accuracy of the
statements of Verio made in any certificates pursuant to the provisions hereof,
to the performance by Verio and the Company of their obligations hereunder and
to the following additional conditions:
(a) No enforcement proceeding, including any stop order, by the
Commission against Verio and relating to any Exchange Act Report or other
document filed by Verio with the Commission, including any registration
statement filed under the Act, shall have been instituted or threatened.
(b) Verio and the Company shall have requested and caused Xxxxxxxx &
Xxxxxxxx LLP, counsel for Verio and the Company, to furnish to the SSB
Parties an opinion, dated the Closing Date and addressed to the SSB
Parties substantially in the form attached hereto as Exhibit A.
(c) Verio shall have furnished to the SSB Parties a certificate of
each of the Company and Verio signed by its respective Chief Financial
Officer, General Counsel or other authorized officer or manager, dated the
Closing Date, to the effect that the signers of such certificate have
carefully examined this Agreement and that:
(i) the representations and warranties of Verio and the
Company, as the case may be, in this Agreement are true and correct
in all material respects on and as of the Closing Date with the same
effect as if made on the Closing Date, and Verio and the Company, as
the case may be, have complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or
prior to the Closing Date; and
(ii) since the date of the most recent financial statements
included in the Exchange Act Reports, there has been no material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries
considered as one enterprise, whether or not arising from
transactions in the ordinary course of business, except as set forth
in or contemplated in the Exchange Act Reports.
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(d) The Company and the Purchaser shall have entered into the Master
Confirmation and the Pledge Agreement.
(e) Prior to the Closing Date, Verio and the Company shall have
furnished to the SSB Parties such further information, certificates and
documents as the SSB Parties may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the SSB Parties and counsel for the SSB Parties, this Agreement
and all obligations of the SSB Parties hereunder may be canceled at, or at any
time prior to, the Closing Date by Xxxxxxx Xxxxx Xxxxxx Inc., as agent for and
on behalf of the Purchaser. Notice of such cancellation shall be given to the
Company and the in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Xxxxxxx Xxxxx Barney, Inc., 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, XX on the Closing Date.
7. Registration of the Securities. (a) Verio agrees:
(i) as soon as practicable after the Closing Date, but in no
event later than 30 days after the Closing Date, to prepare and file
with the Commission a Resale Registration Statement covering the
resale by the SSB Parties, from time to time of a number of shares
of Common Stock at least equal to the number of Purchased Securities
and the Pledged Securities in any manner of distribution specified
in the Master Confirmation (the "Initial Resale Registration
Statement"), but in any event permitting distribution by
underwritten public offering, direct sales from time to time and
block trades, and use its best efforts to obtain effectiveness of
the Initial Resale Registration Statement as promptly as practicable
following such filing, but in no event later than 90 days after the
Closing Date. If the aggregate number of Purchased Securities and
Pledged Securities plus any Additional Securities exceeds the number
of shares of Common Stock covered by the Initial Resale Registration
Statement, then Verio shall promptly prepare and file with the
Commission such additional Resale Registration Statement or
Statements as shall be necessary to cover the resale by the SSB
Parties of such Additional Securities in the same manner as
contemplated by the Initial Resale Registration Statement, provided
that prior to issuing any such Additional Securities to the SSB
Parties, the applicable Resale Registration Statement shall have
become effective and no stop order suspending such effectiveness
shall be in effect;
(ii) to use its best efforts to maintain each Resale
Registration Statement continuously effective until the later to
occur of (A) the termination of the Master Confirmation; and (B) the
final disposition by the SSB Parties of all Purchased
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Securities and Securities received by it under the Master
Confirmation. Verio shall be deemed not to have used its best
efforts to maintain a Resale Registration Statement effective during
the requisite period if it voluntarily takes any action that would
result in the SSB Parties' inability to effect public sales of the
Securities thereunder, unless (X) such action is required by
applicable law; or (Y) such action is taken by Verio in good faith
and for valid business reasons (not including avoidance of its
respective obligations under this Agreement), including the
acquisition or divestiture of assets, so long as the Company
promptly thereafter prepares and files with the Commission a
post-effective amendment to such Resale Registration Statement or an
amendment or supplement to the related Resale Prospectus and such
other documents so that such Resale Prospectus shall not include an
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;
(iii) to cause (A) any Resale Registration Statement and any
amendment thereto and any Resale Prospectus forming a part thereof
and any amendment or supplement thereto to comply in all material
respects with the Act and the Exchange Act and the respective rules
and regulations thereunder; (B) any Resale Registration Statement
and any amendment thereto not, when it becomes effective, to contain
an 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 (C) any Resale Prospectus
forming a part of any Resale Registration Statement and any
amendment or supplement thereto not to include an 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;
(iv) to advise the SSB Parties in writing (A) when a Resale
Registration Statement or any post-effective amendment thereto shall
have been filed with the Commission and when such Resale
Registration Statement or any post-effective amendment thereto shall
have become effective; (B) of any request by the Commission for any
amendment or supplement to any Resale Registration Statement or
related Resale Prospectus or for additional information; (C) of the
issuance by the Commission of any stop order suspending the
effectiveness of any Resale Registration Statement or the initiation
of any proceedings for that purpose; (D) of the receipt by Verio of
any notification with respect to the suspension of the qualification
of the Securities for sale in any jurisdiction designated by the SSB
Parties in accordance with clause (x) below or the initiation or
threatening of any proceeding for such purpose; and (E) the
happening of any event that requires the making of any changes in
any Resale Registration Statement or related Resale Prospectus so
that, as of such date, the statements therein are not misleading and
do not omit to state a material fact required to be stated therein
or necessary to make the statements therein (in the case of any such
Resale Prospectus, in the light of the circumstances under which
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they were made) not misleading, which notice shall be accompanied by
an instruction to suspend the use of such Resale Prospectus until
the requisite changes shall have been made;
(v) to make generally available to its security holders as
soon as practicable after the Effective Date of each Resale
Registration Statement and after the date of each underwriting or
similar agreement relating to a disposition of any Securities,
including any confirmation relating to a block trade, an earning
statement satisfying the provisions of Section 11(a) of the Act and
Rule 158 thereunder;
(vi) to (A) make reasonably available for inspection by any
underwriter or executing dealer participating in any disposition of
Securities pursuant to any Resale Registration Statement (whether
through an underwritten offering, an "at the market offering", a
block transaction or otherwise) and any attorney, accountant or
other agent retained by such underwriter or executing dealer all
relevant financial and other records, pertinent corporate documents
and properties of Verio and its respective subsidiaries; (B) cause
the officers, directors and employees of Verio and its respective
subsidiaries to supply all relevant information reasonably requested
by any such underwriter, executing dealer, attorney, accountant or
agent in connection with any such Resale Registration Statement as
is customary for due diligence examinations; (C) make such
representations and warranties to such underwriter or executing
dealer in form, substance and scope as are customarily made by
issuers to underwriters in primary underwritten offerings; (D)
request and cause counsel to Verio to furnish to the SSB Parties
opinions and updates thereof (which counsel and opinions (in form,
substance and scope) shall be reasonably satisfactory to the SSB
Parties), addressed to the SSB Parties and any such underwriter or
executing dealer, covering such matters as are customarily covered
in opinions requested in underwritten offerings and such other
matters as may be reasonably requested by the SSB Parties or such
underwriter or executing dealer; (E) request and cause the
independent certified public accountants of Verio (and, if
necessary, of any other independent certified public accountants of
any subsidiary of Verio or of any business acquired by Verio for
which financial statements and financial data are, or are required
to be, including in any Resale Registration Statement) to furnish to
the SSB Parties "cold comfort" letters and updates thereof addressed
to the SSB Parties and any such underwriter or executing dealer, in
customary form and covering matters of the type customarily covered
in "cold comfort" letters in connection with primary underwritten
offerings; and (F) deliver such documents and certificates as may be
reasonably requested by the SSB Parties or any such underwriter or
executing dealer and to evidence compliance with any customary
conditions contained in the underwriting agreement or other
agreement entered into by Verio. The foregoing actions set forth in
clauses (C), (D), (E) and (F) shall be performed, unless waived by
the SSB Parties, upon or at (1) the effectiveness of each Resale
Registration Statement and each post-effective
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amendment thereto; (2) each closing under any underwriting, purchase
or similar agreement as and to the extent required thereunder; and
(3) the confirmation of any block trade or direct resale by the SSB
Parties;
(vii) to cause the transfer agent for the Common Stock to
issue, promptly upon the effectiveness of the Initial Resale
Registration Statement, certificates evidencing the Purchased
Securities bearing no legends evidencing restrictions on the sale of
such Purchased Securities and to cooperate with the SSB Parties in
issuing to persons purchasing from the SSB Parties certificates
evidencing the Securities in such names and denominations as they
may request;
(viii) to use its best efforts to prevent the issuance and to
obtain the withdrawal of any order suspending the effectiveness of
each Resale Registration Statement or Resale Prospectus or
suspending the qualification (or exemption from qualification) of
any of the Securities for sale in any jurisdiction designated by the
SSB Parties in accordance with clause (x) below;
(ix) to furnish to the SSB Parties with respect to the
Securities registered under any Resale Registration Statement such
reasonable number of copies of such Resale Registration Statement
and the related Resale Prospectus, including any supplements and
amendments thereto and any documents incorporated by reference
therein;
(x) to qualify the Securities for sale under the securities or
blue sky laws in such jurisdictions as shall be designated to Verio
in writing by the SSB Parties; provided, however, that Verio shall
be required to qualify to do business or consent to service of
process in any jurisdiction in which it is not now so qualified or
has not so consented;
(xi) to file promptly any necessary listing applications or
amendments or supplements to existing listing applications to cause
any shares of Common Stock covered by any Resale Registration
Statement to be listed or admitted to trading, on or prior to the
effectiveness of such Resale Registration Statement, on any national
stock exchange or automated quotation system on which the Common
Stock is then listed or traded and to cause the same to be so listed
not later than the effective date of such Resale Registration
Statement; and
(xii) not to file any Resale Registration Statement (including
the Initial Resale Registration Statement) or Resale Prospectus or
any amendment or supplement thereto, unless a copy thereof shall
have been first submitted to the Purchaser and the Purchaser shall
not have objected thereto in good faith; provided, however, that if
the Purchaser do not object within five Business Days of receiving
any such material, there shall be deemed to have no objection
thereto; and provided further that the foregoing shall not limit the
obligations Verio under Section 5(d) hereof.
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(b) Notwithstanding any other provisions of this Agreement to the
contrary, if (i) Verio determines, in its good faith judgment, that the
disclosure of an event or development, or the filing of a required filing with
the Commission would have a material adverse impact on Verio or the Company, or
(ii) the disclosure of an event or development, or the filing of a required
filing with the Commission is otherwise related to a material business
transaction that has not yet been publicly disclosed, Verio shall be entitled to
suspend any registration referred to in this Section 7.
(c) The SSB Parties shall notify Verio at least one business day
prior to the earlier of the date on which they intend to commence effecting any
resales of Securities under a Resale Registration Statement or the date of
pricing with respect to the public resale or other disposition of any Shares
under a Resale Registration Statement effected through an underwritten offering
or a block trade and, if Verio does not, within such one-day period, advise the
SSB Parties of the existence of any facts of the type referred to in subsection
(a)(iv)(D) above, then Verio shall be deemed to have jointly and severally
represented to each of the SSB Parties that no such facts then exist and each of
the SSB Parties may rely on such representation in making such resales. The
preceding sentence shall not limit the obligations of Verio and the Company and
the under Section 5(e) or subsections (a)(ii) and (a)(vi) of this Section 7.
(d) If the SSB Parties notify the Company and the Purchaser wishes
to effect an underwritten offering or block trade of the Securities, Xxxxxxx
Xxxxx Xxxxxx Inc. shall be the managing underwriter or the executing dealer, as
the case may be, and shall be entitled to designate other underwriters or
executing dealers to participate therein, which shall be reasonably satisfactory
to Verio and the. The underwriters participating in such sale shall be entitled
to fees mutually agreed upon with the Company.
8. Indemnification and Contribution. (a) Verio and the Company
severally agree to indemnify and hold harmless the SSB Parties, the directors,
officers, employees and agents of the SSB Parties and each person who controls
the SSB Parties within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or to which such entity may respectively
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 any Resale Registration Statement as originally filed or in
any amendment thereof, or in any Preliminary Prospectus or any Resale
Prospectus, 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 neither Verio nor the Company will
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 or the by or
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on behalf of the SSB Parties specifically for inclusion therein. This indemnity
agreement will be in addition to any liability which Verio or the Company may
otherwise have.
(b) Each of the SSB Parties agrees to indemnify and hold harmless
each of the Company and Verio and each of their respective directors, each of
their respective officers, and each person who controls the Company or Verio
within the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing respective indemnities from the Company and Verio to the SSB
Parties, but only with reference to written information relating to the SSB
Parties furnished to either the Company or Verio by or on behalf of the SSB
Parties specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
the SSB Parties may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses;
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action; or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
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(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, each of Verio, the Company, and the SSB
Parties agrees 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 Verio,
the Company, and the SSB Parties may be subject in such proportion as is
appropriate to reflect the relative benefits received by Verio, the Company and
the SSB Parties from the purchase and sale of the Securities; provided, however,
that in no case shall the SSB Parties be responsible for any amount in excess of
the amount by which the aggregate net proceeds retained by the SSB Parties from
the transactions contemplated hereby and by the Master Confirmation exceeds the
amount of any damages that the SSB Parties have otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, Verio, the Company, and the SSB Parties shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of Verio, the Company and the SSB
Parties in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the amount paid by the SSB Parties
to the Company pursuant to this Agreement and the Master Confirmation, and
benefits received by the SSB Parties shall be deemed to be equal to the net
proceeds retained by the SSB Parties from the transactions contemplated by this
Agreement and the Master Confirmation. 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 Verio, the Company or the SSB
Parties on the other, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. Verio, the Company, and the SSB Parties agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls the SSB Parties within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of each of the SSB Parties shall have the same rights to contribution as
the SSB Parties, and each person who controls Verio within the meaning of either
the Act or the Exchange Act, each officer of Verio who shall have signed the
Resale Registration Statement and each director of Verio shall have the same
rights to contribution as the Verio, subject in each case to the applicable
terms and conditions of this paragraph (d).
9. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
Verio and the Company, or their respective officers and of the SSB Parties set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the SSB Parties
or Verio and the Company or any of the officers, directors or controlling
persons referred to in Section 8 hereof, and will survive the execution of this
Agreement and the Master
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Confirmation and the delivery of and payment for the Securities. The provisions
of Section 8 hereof shall survive the termination or cancellation of this
Agreement.
10. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to either of the SSB Parties, will be
mailed, delivered or telefaxed to the General Counsel, Xxxxxxx Xxxxx Barney
Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General
Counsel; or, if sent to Verio or the Company will be mailed, delivered or
telefaxed to Verio, LLC 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000 Facsimile: (000) 000-0000 and confirmed to it by
Telephone: (000) 000-0000, addressed to the attention of the General Counsel.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof and, in
the case of Section 7 hereof, each person who purchases any Securities from the
SSB Parties otherwise than pursuant to an effective Resale Registration
Statement or in accordance with Rule 144 under the Act, if available, and no
other person will have any right or obligation hereunder. Any assignee or
transferee of rights or obligations of the SSB Parties under the Master
Confirmation shall be subject to all of the terms of this Agreement.
12. Amendments. This Agreement may not be amended or modified except
pursuant to an instrument in writing signed by Verio the Company, and the SSB
Parties.
13. Applicable Law. This 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.
14. Counterparts. This 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.
15. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
16. Confidentiality. The SSB Parties agree to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (i) to its and its affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (ii) to the extent requested by any regulatory
authority, (iii) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (iv) to any other party to this
Agreement, (v) in connection with the exercise of any remedies hereunder or
under the Master Confirmation or the Pledge Agreement or any suit, action or
proceeding relating to this Agreement, the Master Confirmation or the Pledge
Agreement or the enforcement of rights hereunder or thereunder, (vi) subject to
an agreement containing provisions substantially the same as those of this
paragraph, to any assignee of or participant in, or any prospective assignee
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of or participant in, any of its rights or obligations under this Agreement,
the Master Confirmation or the Pledge Agreement, (vii) with the consent of the
Company and Verio or (viii) to the extent such Information (A) becomes publicly
available other than as a result of a breach of this paragraph or (B) becomes
available to any SSB Party on a nonconfidential basis from a source other than
the Company or Verio. For the purposes of this Section 16, "Information" means
all information received from the Company or Verio relating to the Company or
Verio or its business, other than any such information that is available to any
SSB Party on a nonconfidential basis prior to disclosure by the Company or
Verio; provided that, in the case of information received from the Company or
Verio after the date hereof, such information is clearly identified at the time
of delivery as confidential. Any person required to maintain the confidentiality
of Information as provided in this Section 16 shall be considered to have
complied with its obligation to do so if such person has exercised the same
degree of care to maintain the confidentiality of such Information as such
person would accord to its own confidential information.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the U.S. Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"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.
"Commission" shall mean the U.S. Securities and Exchange Commission.
"Effective Date" shall mean each date and time any Resale
Registration Statement, any post-effective amendment or amendments thereto
and any Rule 462(b) Registration Statement, as the case may be, became or
become effective.
"Exchange Act" shall mean the U.S. Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Initial Resale Registration Statement" shall have the meaning set
forth in Section 7(a) hereof.
"Preliminary Prospectus" shall mean any preliminary prospectus
included in a Resale Registration Statement at the applicable Effective
Date that omits Rule 430A Information.
"Resale Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) or, if no filing
pursuant to Rule 424(b) is required, shall
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mean the form of final prospectus relating to the Securities included in a
Resale Registration Statement at the applicable Effective Date.
"Resale Registration Statement" shall mean each registration
statement relating to the resale by the SSB Parties of the Securities,
including exhibits and financial statements, as amended at the Effective
Date and, in the event any post-effective amendment thereto or any Rule
462(b) Registration Statement becomes effective, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as
provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the
Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Resale 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 resale of Securities covered by the applicable Resale
Registration Statement.
18. Interpretation; No Guaranties. Notwithstanding anything to the
contrary contained herein, each and every representation, warranty and covenant
herein is being made by Verio and the Company solely on a several basis and
nothing herein shall be interpreted to impute to either Verio or the Company any
obligation or guaranty by either such entity on behalf of the other.
* * *
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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 and the SSB Parties.
Very truly yours,
VERIO, LLC
By: /s/ Xxxxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Manager
VERIO INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Holding Company Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
By: Xxxxxxx Xxxxx Barney Inc.
By: /s/ Xxxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Managing Director
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