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EXHIBIT 4.1
VERIO INC.
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT (this "Agreement"), dated as of July 20, 1999,
by and between Verio Inc., a Delaware corporation (the "Company"), and Norwest
Bank Minnesota, N.A. (the "Deposit Agent"), as deposit agent for the benefit of
the registered holders (the "Holders") of the 6.75% Series A Convertible
Preferred Stock (the "Preferred Stock").
This Agreement is made to induce all present and future Holders
to purchase the Preferred Stock by providing a non-interest bearing trust
deposit account (the "Deposit Account") to pay in cash certain quarterly return
amounts that Holders shall be entitled to receive as hereinafter provided in an
amount equal to $0.8438 per share of Preferred Stock (the "Quarterly Return
Amount") of the Company or, in lieu thereof, to provide funds for the purchase
on behalf of the Holders from the Company of common stock, par value $0.001 per
share, of the Company (the "Common Stock"), on each Deposit Payment Date (as
defined below) as provided herein.
NOW, THEREFORE, the parties hereto agrees as follows:
1. Establishment of Deposit Account.
(a) The Deposit Account shall be established in connection with
the offering of 6,000,000 shares of Preferred Stock (the "Offering"), and
1,200,000 additional shares of Preferred Stock (the "Over-Allotment Shares")
subject to acquisition in connection therewith, and shall be held subject to the
terms and conditions of this Agreement.
(b) Simultaneously with each closing in respect of the Offering,
Xxxxxxx Xxxxx Xxxxxx Inc., Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation,
Credit Suisse First Boston Corporation, Deutsche Bank Securities Inc. and First
Union Capital Markets Corp. (together, the "Initial Purchasers") shall deliver
to the Deposit Agent against the Deposit Agent's written acknowledgment and
receipt thereof, in the form attached hereto as Exhibit A on behalf of the
purchasers of the Preferred Stock, an amount in cash equal to (i) approximately
6.731% of the purchase price of the Preferred Stock (equal to $24,275,155.89 of
the $360,000,000.00 total purchase price) payable by the underwriters pursuant
to the Purchase Agreement (the "Purchase Agreement") dated July 20, 1999,
between the Company and the Initial Purchasers in respect of the Offering (the
"Initial Deposit") plus (ii) a ratable amount (the "Additional Deposit") to be
deposited in respect of any Additional Shares (as defined in the Purchase
Agreement) purchased by the Initial Purchasers, sufficient to pay, together with
the earnings thereon, any Quarterly Return Amount from the Deposit Account
required to be
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made hereunder prior to the Deposit Expiration Date (as defined below). The
Initial Deposit (and the Additional Deposit, if any), together with any
earnings, interest and other proceeds of investments thereon is referred to as
the "Deposit Fund". The Deposit Agent will deposit the Initial Deposit (and the
Additional Deposit, if any) into the Deposit Account and hold it pursuant to the
terms of this Agreement. Subject to early termination of the Deposit Account or
prior conversion of shares of the Preferred Stock as hereinafter provided, the
Deposit Fund will be the property of the Holders, and not of the Company. The
Company shall have a security interest in the Deposit Account to secure payment
of the purchase price for its Common Stock in the event the Company makes the
election on each Deposit Payment Date as set forth in Section 2(b) below. The
Deposit Fund shall be invested as provided on Exhibit B to be attached at the
closing of the Offering (and which may be amended by delivery by the Company of
a revised Exhibit B in the event of the issuance of the Additional Shares),
which investment will provide sufficient funds, without any further investment,
to equal the aggregate Quarterly Return Amounts due on the outstanding Preferred
Stock, as such Quarterly Return Amounts become due, on each Deposit Payment
Date. The Deposit Agent shall have no responsibility for determining whether
funds held in the Deposit Account have been invested in such a manner so as to
comply with the requirements of this Section 1(b).
2. Distribution, Reduction and Termination of Deposit Account;
Duties of Deposit Agent.
(a) Unless on or prior to the Notice Date (as defined in Section
2(g)), the Company shall have delivered to the Deposit Agent a Direction Notice
(as defined in Section 2(g)) in respect of a Deposit Payment Date or the Deposit
Expiration Date, the Deposit Agent shall deliver from the Deposit Account to
each Holder of Record (as defined in Section 3), cash in an amount equal to the
Quarterly Return Amount on November 1, 1999, February 1, 2000, May 1, 2000 and
August 1, 2000 (each such date being a "Deposit Payment Date"), continuing until
the earlier of (i) August 1, 2000 (the "Deposit Expiration Date") and (ii) such
earlier time as the Deposit Account is terminated in accordance with Section
2(e) below. The amount payable to each Holder of Record shall be prorated
accordingly in the event of early termination of the Deposit Account, and the
Deposit Agent shall distribute the remaining balance of the Deposit Account to
the Company. The sole source of funds for each Quarterly Return Amount delivered
to Holders of Record by the Deposit Agent in accordance herewith shall be the
Deposit Account, and the Deposit Agent shall have no liability in respect of any
deficiency thereof (subject to Section 6(d)).
(b) If the Company shall have delivered a Direction Notice to the
Deposit Agent on or prior to the Notice Date relating to a Deposit Payment Date
or to the Deposit Expiration Date and upon compliance by the Company with
applicable law, the Deposit Agent shall, as instructed by the Company in such
Direction Notice, purchase from the Company, on behalf of the Holders of Record
and with funds from the Deposit Account, that number of
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whole shares of Common Stock as is determined by the Company (as set forth in
the Direction Notice) by dividing all or such portion of the Quarterly Return
Amount as set forth in the Direction Notice (the "Share Consideration") by the
Market Value Amount (as defined in Section 2(g)) as of the Notice Date. The
Deposit Agent shall pay the Share Consideration from the Deposit Account to the
Company in consideration for such purchase of shares, and the Deposit Agent, or
the Company upon the written request of the Deposit Agent, shall transfer such
shares of Common Stock on such Deposit Payment Date or on the Deposit Expiration
Date to Holders of Record appearing on the list provided to the Deposit Agent in
accordance with Section 3, each such Holder of Record to receive the number of
such shares of Common Stock as is directed by the Company in writing. The
Deposit Agent shall transfer to Holders of Record on the next Deposit Payment
Date or on the Deposit Expiration Date any portion of such Quarterly Return
Amount as is not utilized to purchase Common Stock from the Company. The Deposit
Agent's obligation hereunder to cause shares of Common Stock to be purchased by
the Deposit Account from the Company shall be secured by, and limited to, the
funds in the Deposit Account, and the Deposit Agent shall have no liability to
the Company, the Holders or any other person to the extent that there are not
sufficient funds in the Deposit Account to make any purchase, payment or
transfer required under this Agreement.
(c) In the event of any conversion of the Preferred Stock into
shares of Common Stock prior to the Deposit Expiration Date, the Company will
promptly after such conversion be paid any funds remaining in the Deposit
Account allocable to those shares of Preferred Stock so converted. As a result,
Holders of Preferred Stock will not receive any partial payment from the Deposit
Account if they convert their shares of Preferred Stock prior to the record date
for such full Quarterly Return Amount.
(d) On the Deposit Expiration Date, any cash remaining in the
Deposit Account on such date shall be applied to pay the fees and expenses of
the Deposit Agent to the extent the Company has failed to meet its obligations
to pay amounts owed to the Deposit Agent hereunder. Nothing in this Section 2(d)
shall be construed to limit the obligations of the Company under Section 4.
(e) Notwithstanding any other provision herein to the contrary,
if (A) the Company obtains any required amendments to the covenants under its
various debt obligations that would permit the Company to pay cash dividends on
the Preferred Stock prior to the Deposit Expiration Date, and (B) at the time
the Company obtains such amendments or at any time thereafter (so long as the
amendments remain effective), the trading price, on any date, for the Preferred
Stock equals or exceeds the liquidation preference in respect thereof, then, in
such event, the Company may thereafter, upon notice to the Holders, elect to
exchange the Deposit Account for an obligation to accrue dividends on the
Preferred Stock from the Deposit Payment Date immediately preceding the date of
such election by instructing the Deposit Agent in writing to distribute the
remaining balance of the Deposit Account to the Company
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in accordance with this clause (e). If the Company elects to so terminate the
Deposit Account, the Preferred Stock will begin to accrue dividends from the
last Deposit Payment Date preceding such election.
(f) Upon the final resolution (including the final resolution of
all appeals or rights to appeal in any court) of any voluntary or involuntary
dissolution, liquidation or winding up of the Company, the Deposit Agent shall,
upon the written direction of the Company, return to the Holders any funds at
the time remaining in the Deposit Account.
(g) For purposes of this Agreement the following terms have the
meanings specified:
"Direction Notice" means a notice from the Company, in the form
attached as Exhibit C, delivered to the Deposit Agent directing the Deposit
Agent to use funds from the Deposit Account to purchase Common Stock from the
Company to distribute to holders of Preferred Stock.
"Market Value" means, as of any date, the average of the daily
closing price for the five consecutive trading days ending on the last trading
day immediately prior to such date. The closing price for each day shall be the
last sales price or, in case no such reported sales take place on such day, the
average of the last reported bid and asked price, in either case on the
principal national securities exchange on which the shares of the Common Stock
are admitted to trading or listed, or if not listed or admitted to trading on
such exchange, the representative closing bid price as reported by the Nasdaq
National Market, or other similar organization if the Nasdaq National Market is
no longer reporting such information, or if not so available, the fair market
price as determined in good faith by the Board of Directors of the Company.
"Market Value Amount" means
(A) if (1) the relevant shares of Common Stock are issued
pursuant to a registration statement, (2) a shelf
registration statement registering the resale of such shares
is effective or (3) such shares are eligible for immediate
resale pursuant to Rule 144(k) under the Securities Act, 97%
of the Market Value of the Common Stock; or
(B) in all other cases, 93% of the Market Value of the Common
Stock.
"Notice Date" means the tenth business day prior to the
applicable Deposit Payment Date or the Deposit Expiration Date, as the case may
be.
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(h) The Deposit Agent shall take all actions and make all filings
and reports in connection with the Deposit Account to the Holders and to the
Internal Revenue Service required by the Internal Revenue Code of 1986 and the
rules and regulations thereunder.
(i) This Agreement shall remain in full force and effect until
all amounts held hereunder by the Deposit Agent have been finally distributed in
accordance herewith.
3. Record Date.
The Quarterly Return Amount or, if a Direction Notice has been
delivered by the Company, Common Stock, shall be returned or delivered to the
Holders of Record of the Preferred Stock, as they appear on the stock register
of the Company or its transfer agent or registrar ten business days prior to
each Deposit Payment Date (such Holders, the "Holders of Record"). A list of the
Holders of Record, including the number of shares of Preferred Stock held by
each such Holder, shall be delivered to the Deposit Agent by the Company or its
transfer agent or registrar at least five business days prior to each Deposit
Payment Date.
4. Expenses.
The Deposit Agent shall be entitled to customary fees and
expenses for performing its duties hereunder, as may be agreed from time to time
by the Company and the Deposit Agent. The Deposit Agent shall be entitled to
prompt reimbursement of all reasonable expenses incurred by it in carrying out
its duties hereunder, including, without limitation, reasonable travel and other
out-of-pocket expenses and reasonable fees and expenses of its legal counsel
arising in connection with the entering into of this Agreement or the
negotiation, interpretation or enforcement of any provision hereof or any
arbitration or other proceeding hereunder. The fees and expenses of the Deposit
Agent in carrying out its duties hereunder shall be paid or reimbursed by the
Company. In the event the Deposit Agent renders any extraordinary services in
connection with the Deposit Account or otherwise under this Agreement at the
request of the Company or the Holders, the Deposit Agent shall be entitled to
reasonable additional compensation from the Company therefor. The terms of this
Section 4 shall survive termination of this Agreement.
5. Notices.
All communications hereunder will be in writing and effective
only on receipt, and will be mailed, delivered or telegraphed and confirmed:
(a) if to the Holders, to their address as set forth in the stock
transfer records of the Company;
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(b) if to the Company, to Verio Inc., 0000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx Xxxxx Xxxxxxxx, Esq., or
to such other person or address as the Company shall designate in writing, with
a copy to Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000-0000, Attention: Xxxxx Xxxxxx, Esq.; and
(c) if to the Deposit Agent, to Norwest Shareowner Services, a
division of Norwest Bank Minnesota, N.A., Sixth and Marquette, Xxxxxxxxxxx,
Xxxxxxxxx 00000-0000, Attention: Xxxxxx Xxxxxxxxx.
Any party may change the address (or the person to whose attention such notice
is directed) by notice given to the other parties hereto as aforesaid.
6. Concerning the Deposit Agent.
In order to induce the Deposit Agent to act as deposit agent
hereunder, the Company hereby covenants and agrees with the Deposit Agent as
follows:
(a) The Deposit Agent shall not in any way be bound or affected
by any amendment, modification or cancellation of this Agreement, unless the
same shall have been agreed to in writing by the Deposit Agent.
(b) The Deposit Agent shall be entitled conclusively to rely, and
shall be protected in acting in reliance upon, any Direction Notice or other
notice, letter, statement, list, instruction or direction or any signature
furnished to the Deposit Agent pursuant to this Agreement and shall be entitled
to treat as genuine, and as the document it purports to be, any letter, notice,
statement, list, instruction, direction or other document or instrument and any
signature delivered to the Deposit Agent hereunder and believed by the Deposit
Agent to be genuine and to have been presented by the proper party or parties,
without being required to determine (and the Deposit Agent shall be permitted to
so assume) the authenticity or correctness thereof and of any fact stated
therein, the propriety or validity thereof, or the authority or authorization of
the party or parties making and/or delivering the same.
(c) This Agreement sets forth exclusively the duties and
obligations of the Deposit Agent with respect to any and all matters pertinent
to its acting as deposit agent under this Agreement.
(d) The Deposit Agent undertakes to perform only such duties as
are expressly set forth in this Agreement, and no implied duties or implied
obligations shall be read into this Agreement against the Deposit Agent. Neither
the Deposit Agent nor any of its directors, officers, employees or agents shall
be in any manner liable or responsible to the
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Company or any Holder or any other person or entity for or in respect of any
loss, claim, damage or liability (collectively, "Loss") resulting from, or
arising out of, any action or failure or omission to act hereunder or for any
mistake of fact or error of judgment, including, but not limited to, any Loss
that may occur by reason of the exercise of the Deposit Agent's discretion in
connection with this Agreement or the Deposit Account in any particular matter
or for any other reason, except for any Loss which is the result of gross
negligence or willful misconduct on the part of the Deposit Agent or such
director, officer, employee or agent.
(e) The Company covenants and agrees to indemnify and hold the
Deposit Agent and each of its directors, officers, employees and agents (the
Deposit Agent and any such person or entity seeking indemnification hereunder
being hereinafter referred to as an "Indemnified Party") harmless from and
against, and upon demand reimburse each Indemnified Party for, any and all
losses, claims, damages, liabilities, costs and expenses, actions, suits or
proceedings at law or in equity, and any other expenses, fees or charges of any
character or nature (including reasonable costs of investigation and fees and
disbursements of its legal counsel) (collectively, "Indemnified Losses"), which
may be paid, incurred or suffered by such Indemnified Party or to which such
Indemnified Party may become subject by reason of or in connection with its
acting as deposit agent hereunder or arising out of the Deposit Account
(including, but not limited to, any action taken or omitted by the Deposit Agent
in connection with this Agreement or any action allegedly so taken or omitted)
or by reason of, or as a result of, the Deposit Agent's compliance with the
instructions set forth herein or with any instructions delivered to the Deposit
Agent pursuant hereto, except with respect to Indemnified Losses which shall be
the result of gross negligence or willful misconduct on the part of such
Indemnified Party. The terms of this Section 6(e) shall survive the termination
of this Agreement.
(f) In the event of any controversy or dispute hereunder, or with
respect to any question as to the construction of this Agreement or any action
to be taken by it hereunder, the Deposit Agent may, in its discretion, obtain
the advice of counsel reasonably satisfactory to it and shall incur no liability
for, and shall be fully protected in, acting in accordance with the advice or
opinion of such counsel.
(g) If any part of the Deposit Fund is at any time attached,
garnished or levied upon or under any court order, or in case the payment,
assignment, transfer, conveyance or delivery of any of the Deposit Fund shall be
stayed or enjoined by any court order, or in case any order, writ, judgment or
decree shall be made or entered by any court affecting the Deposit Fund or any
part thereof, then and in any of such events, the Deposit Agent is authorized,
in its sole discretion, to rely upon and comply with any such order, writ,
judgment or decree. The Deposit Agent shall not be liable to any of the parties
hereto, to any Holder or to any other person, firm or corporation by reason of
such compliance even though such order, writ, judgment or decree may be
subsequently reversed, modified, annulled, set aside, vacated,
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found to have been entered without jurisdiction, or found to be in violation of
or beyond the scope of a constitution or a law.
(h) Notwithstanding anything to the contrary contained herein, if
the Deposit Agent shall be uncertain as to its duties or rights hereunder, shall
receive any notice, advice, direction, or other document from the Company with
respect to the Deposit Fund which, in its opinion, is in conflict with any of
the provisions of this Agreement, should be advised that a dispute has arisen
with respect to the payment, ownership, or right of possession of the Deposit
Fund or any part thereof (or as to the delivery, non-delivery, or content of any
notice, advice, direction, or other document) or if any obligation of the
Deposit Agent under this Agreement shall, in the opinion of the Deposit Agent,
expose the Deposit Agent to liability due to actual or potential conflicting
claims to the Deposit Account, the Deposit Agent shall be entitled (but not
obligated), without liability to anyone, to refrain from taking any action other
than to hold the Deposit Fund in accordance with this Agreement until such
uncertainty, conflict, dispute or obligation is resolved to the reasonable
satisfaction of the Deposit Agent, including by (and, notwithstanding anything
to the contrary, it shall be reasonable for the Deposit Agent not to act until
it has received) an order, decree or judgment of a court of competent
jurisdiction which has been finally affirmed on appeal or which by lapse of time
or otherwise is no longer subject to appeal, but the Deposit Agent shall be
under no duty to institute or to defend any proceeding, although it may
institute or defend such proceedings.
(i) The Company shall have the right to cause the Deposit Agent
to be relieved of its duties hereunder and to select a substitute deposit agent,
upon the expiration of 30 days following delivery of written notice of
substitution to the Deposit Agent. Upon selection of such substitute deposit
agent, such substitute deposit agent and the Company shall enter into an
agreement substantially identical to this Agreement and, thereafter, the
replaced deposit agent shall be relieved of its duties and obligations to
perform hereunder, except that the replaced deposit agent shall transfer to the
substitute deposit agent upon request therefor the Deposit Funds and copies of
all books, records, plans and other documents in the replaced deposit agent's
possession relating to such funds or this Agreement.
(j) Upon not less than 30 days' written notice to the Company and
the Holders of its intention to resign under this Agreement, the Deposit Agent
may resign. The Company shall promptly select a successor deposit agent. Such
resignation shall take effect upon delivery by the resigning Deposit Agent of
the Deposit Fund to such successor deposit agent; the resigning Deposit Agent
shall thereupon be discharged of all its duties and obligations hereunder. If
the Company has not selected and appointed a successor deposit agent within 30
days of the notice from the Deposit Agent of its resignation, the Deposit Agent
may petition a court of competent jurisdiction to appoint a successor deposit
agent, notify the Company of such selection and deliver the Deposit Fund to such
successor agent as described in this paragraph (j). In addition, the Deposit
Agent shall be discharged of all of its duties and
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obligations hereunder upon its deposit of the Deposit Fund with a court of
competent jurisdiction. The Company and the Holders each hereby irrevocably
consents and submits to the jurisdiction of such court in any such action and
waives all rights to contest the jurisdiction of such court.
(k) The Company hereby authorizes the Deposit Agent, (i) to
institute a xxxx of interpleader in any court of competent jurisdiction to
determine the rights of any person (including the Initial Purchasers, the
Holders, the Company and any other person) to the Deposit Account and the
Company shall pay all reasonable costs, expenses and disbursements of the
Deposit Agent in connection therewith, including reasonable attorney's fees and
(ii) to deposit the Deposit Account with the clerk of that court.
(l) The Deposit Agent's duties, obligations and liabilities
hereunder, except as a result of the Deposit Agent's gross negligence or willful
misconduct, will terminate upon its delivery of all of the Deposit Fund pursuant
to the terms of this Agreement. The provisions of this Section 6(l) shall
survive any such termination.
7. Miscellaneous.
(a) Continuance of Agreement. This Agreement shall be binding
upon the parties hereto and their respective heirs, personal representatives,
successors and assigns.
(b) Counterparts. This Agreement may be executed in any number of
counterparts all of which, taken together shall constitute the same agreement.
(c) No Amendments. This Agreement may not be modified or amended,
nor may any provision hereof be waived, except by a writing duly executed by the
Deposit Agent, the Company and by a majority of the Holders. For the avoidance
of doubt, delivery of a revised Exhibit B as provided in Section 1(b) shall not
be considered an amendment to this Agreement.
(d) Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of New York without reference to its
principles of conflicts of law.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and the year first above written.
VERIO INC.
By: /s/ Xxxxx Xxxxx Xxxxxxxx
-----------------------------
Name: Xxxxx Xxxxx Xxxxxxxx
Title: Vice President and General
Counsel
NORWEST BANK MINNESOTA, N.A.
By: /s/ Xxxxxx X. Schweqman
-----------------------------
Name: Xxxxxx X. Schweqman
Title: Assistant Vice President
* With the understanding that section 2(h) may require Norwest to employ tax
counsel to ensure compliance. Therefore, additional expense to the company for
reimbursement of associated fees may be necessary.
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EXHIBIT A
FORM OF DEPOSIT AGENT'S CROSS-RECEIPT
THE UNDERSIGNED hereby acknowledges receipt of Dollars ($)
of the [Initial] [Additional] Deposit.
The undersigned, as deposit agent (the "Deposit Agent") pursuant
to that certain Deposit Agreement, dated July 20, 1999 between the Company and
Norwest Bank Minnesota, N.A., as Deposit Agent (the "Deposit Agreement"), has
deposited the [Initial] [Additional] Deposit in the Deposit Account (as such
term is defined in the Deposit Agreement).
NORWEST BANK MINNESOTA, N.A.
By:
-----------------------------
Name:
Title:
Date:
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EXHIBIT B
INVESTMENTS
The funds that the Initial Purchasers of the 6.75% Series A
Convertible Preferred Stock deposit in the Deposit Account will be invested in
U.S. government obligations or U.S. government guaranteed obligations as
provided on the attachment hereto.
In the event that investments made pursuant to this Exhibit B
shall mature or otherwise require reinvestment, the Deposit Agent shall make
overnight (or, if requested in writing by the Company, other) investment of
available funds in U.S. government obligations or U.S. government guaranteed
obligations which shall mature as required to make payments required under the
Deposit Agreement.
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EXHIBIT C
FORM OF DIRECTION NOTICE
VERIO INC.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
[DATE]
NORWEST BANK MINNESOTA, N.A.
Sixth and Marquette
Xxxxxxxxxxx, XX 00000-0000
Re: Direction Notice No. [ ]
Ladies and Gentlemen:
We refer to the Deposit Agreement (the "Deposit Agreement") dated
as of the 20th day of July, 1999 between you, as Deposit Agent, and Verio Inc.,
a Delaware corporation (the "Company"). Unless otherwise specified, capitalized
terms used herein shall have the meaning given in the Deposit Agreement. This
letter constitutes a Direction Notice under the Deposit Agreement.
[The undersigned hereby notifies you that you are directed,
pursuant to Section 2(b) of the Deposit Agreement, to purchase from the Company
on behalf of the Holders, for delivery to each Holder of Record of Preferred
Stock in lieu of the Quarterly Return Amount ($[ ] on the Deposit Payment
Date ([Date]), shares of Common Stock for $ of Quarterly Return Amount. The
calculation of the number of shares of Common Stock to be purchased is attached
hereto as Annex A.]
[The undersigned hereby notifies you of the conversion of shares
of Preferred Stock by certain Holders, and that you are directed, pursuant to
Section 2(c) of the Deposit Agreement, to pay to the Company any funds remaining
in the Deposit Account allocable to the shares of Preferred Stock so converted.
The number of shares of Preferred Stock converted and a calculation of the
related amount to be paid to the Company is attached hereto as Annex A.]
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In connection with the requested disbursement, the undersigned
hereby notifies you that: (i) you may elect to have the Company deliver, for and
on your behalf, the shares of Common Stock acquired by you directly to the
holders of the Preferred Stock and (ii) your obligation to purchase shares of
Common Stock is secured by the funds in the Deposit Account. The Deposit Agent
is entitled to rely on the foregoing in disbursing funds relating to this
Deposit Notice.
VERIO INC.
By:
----------------------------
Name:
Title:
