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Exhibit 4.11
VERIO INC.
$175,000,000
10-3/8 % SENIOR NOTES DUE 2005
PURCHASE AGREEMENT
New York, New York
March 19, 1998
SALOMON BROTHERS INC
LAZARD FRERES & CO. LLC
CHASE SECURITIES INC.
BANCBOSTON SECURITIES INC.
c/o Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Verio Inc., a Delaware corporation (the "Company"), proposes to sell,
severally and not jointly, to Salomon Brothers Inc, Lazard Freres & Co. LLC,
Chase Securities Inc. and BancBoston Securities Inc.(together, the "Initial
Purchasers") $175,000,000 principal amount of its 10-3/8 % Senior Notes Due 2005
(the "Securities") as set forth on Schedule I hereto, to be issued under an
indenture (the "Indenture") dated as of March 25, 1998 between the Company and
First Trust National Association, as trustee (the "Trustee").
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. The Initial Purchasers have
advised the Company that the Initial Purchasers will offer and sell the
Securities purchased by them hereunder in accordance with Section 4 of this
agreement (this "Agreement" or the "Purchase Agreement") as soon as they deem
advisable.
In connection with the sale of the Securities, the Company has prepared
a preliminary offering memorandum, dated March 4, 1998 (including any and all
exhibits thereto and any information incorporated by reference therein, the
"Preliminary Memorandum"), and a final offering memorandum, dated March 19, 1998
(the "Final Memorandum"). Each of the Preliminary Memorandum and the Final
Memorandum sets forth certain information concerning the Company and the
Securities. The Company hereby confirms that it has authorized the use of the
Preliminary Memorandum
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and the Final Memorandum, and any amendment or supplement thereto, in connection
with the offer and sale of the Securities by the Initial Purchasers. Unless
stated to the contrary, all references herein to the Final Memorandum are to the
Final Memorandum at the Execution Time (as defined below) and are not meant to
include any amendment or supplement subsequent to the Execution Time.
The holders of the Securities will be entitled to the benefits of the
Registration Agreement dated as of March 25, 1998, between the Company and the
Initial Purchasers (the "Registration Agreement").
This Agreement, the Indenture, the Securities and the Registration
Agreement are referred to herein as the "Transaction Documents".
Capitalized terms used herein without definitions have the respective
meanings assigned to them in the Final Memorandum.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each Initial Purchaser as set forth
below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof, did not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Final Memorandum, at the
date hereof, does not, and at the Closing Date (as defined below) will not
(and any amendment or supplement thereto, at the date thereof and at the
Closing Date, will not), contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, -------- however, that the Company makes no
representation or warranty as to the information contained in or -------
omitted from the Preliminary Memorandum or the Final Memorandum, or any
amendment or supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the
Initial Purchasers specifically for inclusion therein.
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(b) The Company has been advised by the National Association of
Securities Dealers, Inc. PORTAL Market that the Securities have been
designated PORTAL eligible securities in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc. (the
"NASD").
(c) None of the Company nor any of its Affiliates (as defined in Rule
501(b) under the Securities Act) has, directly or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act) which could be
integrated with the sale of the Securities in a manner that would require
the registration of the Securities under the Securities Act.
(d) None of the Company nor any of its Affiliates (as defined in Rule
501(b) under the Securities Act) or any person (other than the Initial
Purchasers, as to whom the Company makes no representation) acting at the
request of the Company has engaged, in connection with the offering of the
Securities, (A) in any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act, (B) in any
directed selling efforts within the meaning of Rule 902 under the
Securities Act in the United States in connection with the Securities being
offered and sold pursuant to Regulation S under the Securities Act, (C) in
any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act or (D) in any action which would require the
registration of the offering and sale of the Securities pursuant to this
Agreement or which would violate applicable state securities or "blue sky"
laws.
(e) Assuming that the representations and warranties of the Initial
Purchasers contained in Section 4 are true, correct and complete, and
assuming compliance by the Initial Purchasers with their covenants in
Section 4, and assuming that the representations and warranties deemed to
be made by non-U.S. persons and "qualified institutional buyers" ("QIBs")
(as defined in Rule 144A under the Securities Act) purchasing Securities
are true and correct as of the Closing Date, it is not necessary in
connection with the offer, sale and delivery of the Securities to the
Initial Purchasers in the manner contemplated by, or in connection with the
initial resale of such Securities by the Initial Purchasers in accordance
with, this Agreement to register the Securities under the Securities Act or
to
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qualify any indenture in respect of the Securities under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
(f) The subsidiaries of the Company listed on Schedule II hereto (also
referred to herein as the "Subsidiaries") are the only subsidiaries of the
Company that constitute "significant subsidiaries" within the meaning of
Rule 1-02(w) of Regulation S-X under the Securities Act. Each of the
Company and the Subsidiaries has been duly organized or incorporated, as
the case may be, and is validly existing and in good standing under the
laws of its jurisdiction of organization or incorporation, with all
requisite power and authority under such laws (a) to own, lease and operate
their respective properties and to conduct their respective businesses as
now conducted and as described in the Final Memorandum and (b) to enter
into, deliver, incur and perform their respective obligations under the
Transaction Documents, except, in the case of the foregoing subclause (a)
for authorizations, approvals, orders, leases, certificates and permits,
the failure of which to possess could not reasonably be expected to have a
Material Adverse Effect (as defined below); and are all duly qualified to
do business as foreign partnerships or corporations in good standing in all
other jurisdictions where the ownership or leasing of their respective
properties or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified could not
reasonably be expected to have a material adverse effect (i) on the
business, condition (financial or otherwise), results of operations,
business affairs or business prospects of the Company and the Subsidiaries
taken as a whole or (ii) on the ability of the Company to perform any of
its obligations under the Transaction Documents or to consummate any of the
transactions contemplated hereby or thereby (a "Material Adverse Effect").
The Company has no ISP affiliates (other than the Subsidiaries) that would
individually constitute a "significant subsidiary" of the Company within
the meaning of Rule 1-02(w) of Regulation S-X under the Securities Act, if
any such ISP affiliate were a subsidiary of the Company.
(g) The Securities, the Exchange Notes and the Private Exchange Notes
have been duly authorized by the Company, and the Company has all requisite
corporate power and authority to execute, issue and deliver the Securities,
the Exchange Notes and the Private Exchange Notes
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and to incur and perform its obligations provided for therein.
(h) The Securities, when executed, authenticated and issued in
accordance with the terms of the Indenture (assuming the due authorization,
execution and delivery of the Indenture by the Trustee) and when delivered
against payment of the purchase price therefor as provided in this
Agreement, will constitute valid and binding obligations of the Company,
entitled to the benefits of the Indenture and enforceable against the
Company in accordance with the terms thereof; and the Exchange Notes and
the Private Exchange Notes, if any, when executed, authenticated, issued
and delivered by the Company in exchange for the Securities in accordance
with the terms of the Registration Agreement, will constitute valid and
binding obligations of the Company, entitled to the benefits of the
Indenture and enforceable against the Company in accordance with the terms
thereof; subject, in the case of each of the foregoing, to (a) applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, (b) general principles
of equity (regardless of whether enforcement is sought in a proceeding in
equity or at law) and (c) the discretion of the court before which any
proceeding therefor may be brought (clauses (a), (b) and (c) being referred
to herein as the "Enforceability Limitations") and except that the waiver
of stay or extension laws contained in Section 5.15 of the Indenture may be
unenforceable.
(i) This Agreement has been, and, as of the Closing Date, the
Indenture, and the Registration Agreement will have been, duly authorized,
executed and delivered by the Company, and upon such execution by the
Company (assuming the due authorization, execution and delivery by parties
thereto other than the Company), as of the Closing Date, the Indenture and
the Registration Agreement will constitute the valid and binding
obligations of the Company, enforceable against the Company in accordance
with the terms hereof or thereof, subject only to the Enforceability
Limitations and except that the waiver of stay or extension laws contained
in Section 5.15 of the Indenture may be unenforceable.
(j) No consent, waiver, authorization, approval, license, qualification
or order of, or filing or registration with, any court or governmental or
regulatory agency or body, domestic or foreign, is required for the issue
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and sale of the Securities or the Exchange Notes or the Private Exchange
Notes, if any, the performance by the Company of its obligations under the
Transaction Documents, or for the consummation of any of the transactions
contemplated hereby or thereby, including, without limitation, the issuance
and sale of the Securities hereunder, except such as may be required (A) in
connection with the registration under the Securities Act of the Exchange
Notes or the Private Exchange Notes, if any, pursuant to the Registration
Agreement (including any filing with the NASD), (B) in order to qualify the
Indenture under the Trust Indenture Act or (C) by state securities or "blue
sky" laws in connection with the offer and sale of the Securities or the
registration thereof or of the Exchange Notes or the Private Exchange Notes
pursuant to the Registration Agreement.
(k) The issuance, sale and delivery of the Securities, the Exchange
Notes and the Private Exchange Notes, if any, the execution, delivery and
performance by the Company of this Agreement, the Indenture and the
Registration Agreement and the consummation by the Company of the
transactions contemplated hereby, thereby and in the Final Memorandum and
the compliance by the Company with the terms of the foregoing do not, and,
at the Closing Date, will not conflict with or constitute or result in a
breach or violation by the Company or any of the Subsidiaries of (A) any of
the terms or provisions of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) by any of
the Company or the Subsidiaries or give rise to any right to accelerate the
maturity or require the prepayment of any indebtedness under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or the Subsidiaries under any contract,
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, authorization, permit, certificate or other agreement
or document to which any of the Company or the Subsidiaries is a party or
by which any of them may be bound, or to which any of them or any of their
respective assets or businesses is subject (collectively, "Contracts") (and
the Company has no knowledge of any conflict, breach or violation of such
terms or provisions or of any such default, in any such case, which has
occurred or will so result), (B) the articles or by-laws (each, an
"Organizational Document") of each of the Company and the Subsidiaries or
(C) any law, statute, rule or regulation, or any judgment, decree or order,
in any
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such case, of any domestic or foreign court or governmental or regulatory
agency or other body having jurisdiction over the Company or any of the
Subsidiaries or any of their respective properties or assets. Schedule III
hereto lists each Contract with respect to which any conflict, breach or
violation of the terms or provisions thereof or any default with respect
thereto could have a Material Adverse Effect (each such Contract being
referred to herein as a "Material Contract").
(l) The Securities, the Exchange Notes, the Private Exchange Notes, the
Indenture and the Registration Agreement will each conform in all material
respects to the descriptions thereof in the Final Memorandum.
(m) The audited consolidated financial statements included in the Final
Memorandum, including the notes thereto, respectively present fairly the
financial position of each of the Company and its consolidated
subsidiaries, On-Ramp Technologies, Inc., Global Enterprise
Services-Network division, Compute Intensive Inc., NorthWestNet Inc.,
Aimnet Corporation, Xxxxx Internet Services, Inc., ATMnet Corporation and
Global Internet Network Services, Inc. at the dates indicated, and the
statement of operations, stockholders' deficit/equity and cash flows of
each of such persons and, where applicable such persons' consolidated
subsidiaries for the periods have been prepared in conformity with United
States generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The selected financial
data and the summary financial information included in the Final Memorandum
present fairly the information shown therein and have been compiled on a
basis consistent with that of the financial statements of the Company and
its consolidated subsidaries included in the Final Memorandum. KPMG Peat
Marwick LLP, which has examined such financial statements as set forth in
its report included in the Final Memorandum, is an independent public
accounting firm with respect to each of such persons and, where applicable
such persons Subsidiaries within the meaning of Regulation S-X under the
Securities Act. Except as disclosed in the Final Memorandum, the pro forma
financial information relating to the Company and its Subsidiaries and the
related notes thereto included in the Final Memorandum present fairly the
information shown therein, have been prepared in all material respects in
accordance with the Commission's rules and guidelines with respect to pro
forma financial adjustments and have been properly computed
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on the bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate to
give effect to the transactions and circumstances referred to therein.
(n) Since the respective dates as of which information is given in the
Final Memorandum, except as otherwise specifically stated therein, there
has been no (A) material adverse change in the business, condition
(financial or otherwise), results of operations, business affairs or
business prospects of the Company and the Subsidiaries taken as a whole,
whether or not arising in the ordinary course of business (a "Material
Adverse Change"), (B) transaction entered into by any of the Company or the
Subsidiaries, other than in the ordinary course of business, that is
material to the Company and the Subsidiaries taken as a whole or (C)
dividend or distribution of any kind declared, paid or made by the Company
on its capital stock.
(o) The Company has the authorized, issued and outstanding
capitalization set forth in the Final Memorandum under the caption
"Description of Capital Stock"; all of the outstanding capital stock of the
Company has been duly authorized and validly issued, is fully paid and
nonassessable and was not issued in violation of any preemptive or similar
rights (whether provided contractually or pursuant to any Organizational
Document). Except as set forth in the Final Memorandum under the caption
"Business-- Verio Group Network," the Company does not own, directly or
indirectly, any material amount of shares, or any other material amount of
equity or long-term debt securities or have any material equity interest in
any firm, partnership, joint venture or other entity. Except as set forth
in the Final Memorandum, no holder of any securities of the Company is
entitled to have such securities (other than the Securities, the Exchange
Notes and the Private Exchange Notes, if any) registered under any
registration statement contemplated by the Registration Agreement. All of
the outstanding capital stock of each of the Subsidiaries has been duly
authorized and validly issued, is fully paid and nonassessable and was not
issued in violation of any preemptive or similar rights (whether provided
contractually or pursuant to any Organizational Document).
(p) None of the Company nor the Subsidiaries is (A) in violation of its
respective Organizational Documents, (B) in default (or, with notice or
lapse of time or
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both, would be in default) in the performance or observance of any
obligation, agreement, covenant or condition contained in any Contract or
(C) in violation of any law, statute, judgment, decree, order, rule or
regulation of any domestic or foreign court with jurisdiction over the
Company or the Subsidiaries or any of their respective assets or
properties, or other governmental or regulatory authority, agency or other
body, other than, in the case of clause (B) or (C), such defaults or
violations which could not, individually or in the aggregate, reasonably be
expected to have or result in a Material Adverse Effect; and any real
property and buildings held under lease by the Company or the Subsidiaries
are held by the Company or such Subsidiary, as the case may be, under
valid, subsisting and enforceable leases with such exceptions which could
not, individually or in the aggregate, reasonably be expected to have or
result in a Material Adverse Effect.
(q) Except as set forth in the Final Memorandum, each of the Company
and the Subsidiaries owns or possesses, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, trademarks, service marks, trade
names, copyrights and know-how (including trade secrets and other
proprietary or confidential information, systems or procedures)
(collectively, "intellectual property") necessary to conduct the business
now or proposed to be operated by it as described in the Final Memorandum,
except where the failure to own, possess or have the ability to acquire any
such intellectual property could not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect; and none of the
Company nor the Subsidiaries has received any notice of infringement of or
conflict with (nor knows of any such infringement of or conflict with)
asserted rights of others with respect to any of such intellectual
property.
(r) Each of the Company and the Subsidiaries has obtained all material
consents, approvals, orders, certificates, licenses, permits, franchises
and other authorizations (collectively, the "Licenses") of and from, and
has made all declarations and filings with, all governmental and regulatory
authorities, all self-regulatory organizations and all courts and other
tribunals necessary to own, lease, license and use its properties and
assets and to conduct its businesses in the manner described in the Final
Memorandum. None of the Company or the Subsidiaries has received any notice
of proceedings relating to the revocation or modification of, or denial of
any application
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for, any License which, if the subject of any unfavorable decision, ruling
or finding, could, singly or in the aggregate, reasonably be expected to
have or result in a Material Adverse Effect; and no event has occurred
which allows, or after notice or lapse of time, or both, would allow,
revocation or termination thereof or result in any other material
impairment of the rights of the holder of any such License, except where
such revocation or termination could not, singly or in the aggregate,
reasonably be expected to have or result in a Material Adverse Effect; and
the Licenses referred to above place no restrictions on the Company or any
of the Subsidiaries that are not described in the Final Memorandum, except
where such restrictions could not, singly or in the aggregate, reasonably
be expected to have or result in a Material Adverse Effect.
(s) There is no legal action, suit, proceeding, inquiry or
investigation before or by any court or governmental body or agency,
domestic or foreign, now pending or, to the best knowledge of the Company,
threatened against the Company or any of the Subsidiaries or any of their
respective properties which would be required to be disclosed in a
registration statement filed under the Securities Act.
(t) Each of the Company and the Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns, and has paid
all taxes shown as due thereon; and no tax deficiency has been asserted
against any of the Company or the Subsidiaries.
(u) Except as described in the Final Memorandum, including the
financial statements and notes thereto included therein, each of the
Company and the Subsidiaries has good and marketable title to all real and
personal property described in the Final Memorandum as being owned by it
and good and marketable title to a leasehold estate in the real and
personal property described in the Final Memorandum as being leased by it,
free and clear of all liens, charges, encumbrances or restrictions, except
to the extent the failure to have such title or the existence of such
liens, charges, encumbrances or restrictions could not, individually or in
the aggregate, reasonably be expected to have or result in a Material
Adverse Effect.
(v) None of the Company or any of the Subsidiaries is an "investment
company" or a company "controlled by" an
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"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended, and the rules and regulations thereunder.
(w) None of the Company nor any of the Subsidiaries nor any of their
respective directors, officers or controlling persons has taken, directly
or indirectly, any action designed, or which might reasonably be expected,
to cause or result, under the Securities Act or otherwise, in, or which has
constituted, stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities, the
Exchange Notes or the Private Exchange Notes.
(x) No strike, labor problem, dispute, slowdown, work stoppage or
disturbance with the employees of the Company or any of the Subsidiaries
exists or, to the best knowledge of the Company, is threatened which could,
individually or in the aggregate, reasonably be expected to have or result
in a Material Adverse Effect.
(y) The Company has insurance in such amounts and covering such risks
and liabilities as are in accordance with normal industry practice.
(z) The statistical and market-related data included in the Final
Memorandum are based on or derived from independent sources which the
Company believes to be reliable and accurate in all material respects or
represent the Company's good faith estimates that are made on the basis of
data derived from such sources.
(aa) The Company is, and immediately after the Closing Date will be,
Solvent. As used herein, the term "Solvent" means, with respect to the
Company on a particular date, that on such date (A) the fair market value
of the assets of the Company exceeds its respective liabilities (including
without limitation, stated liabilities and identified contingent
liabilities), (B) the present fair salable value of the assets of the
Company will exceed its respective probable liabilities on its debts
(including without limitation, stated liabilities and identified contingent
liabilities), (C) the fair market value of the Company's total assets
exceeds its total liabilities, including identified contingent liabilities,
by an amount at least equal to the total par value of its common stock both
immediately prior to and after the Offering, (D) the Company is and will be
able to pay its debts (including
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without limitation, stated liabilities and identified contingent
liabilities) as such debts mature and (E) the Company will not have
unreasonably small capital with which to conduct its present and
anticipated business.
(bb) Except as described in the Final Memorandum or as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect (A) to the Company's knowledge, each of the Company and the
Subsidiaries is in compliance with and not subject to any known liability
under applicable Environmental Laws (as defined below), (B) to the
Company's knowledge, each of the Company and the Subsidiaries (i) has made
all filings and provided all notices required under any applicable
Environmental Law, and (ii) has, and is in compliance with, all Permits
required under any applicable Environmental Laws, and (iii) each of them is
in full force and effect, (C) to the Company's knowledge, there is no
civil, criminal or administrative action, or, investigation, notice or
demand letter or request for information pending or threatened against the
Company or any of the Subsidiaries under any Environmental Law, and (D) to
the Company's knowledge, no lien, charge, encumbrance or restriction has
been recorded under any Environmental Law with respect to any assets,
facility or property owned, operated, leased or controlled by the Company
or any Subsidiary.
For purposes of this Agreement, "Environmental Laws" means the common
law and all applicable federal, state and local laws or regulations
relating to the protection of the environment, including, without
limitation, laws relating to emissions, discharges, releases or threatened
releases of "hazardous substances," as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended.
(cc) Except as described in the Final Memorandum, none of the Company
nor any of the Subsidiaries has incurred any liability for any prohibited
transaction or funding deficiency or any complete or partial withdrawal
liability with respect to any pension, profit sharing or other plan which
is subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), to which the Company or the Subsidiaries makes or ever
has made a contribution and in which any employee of the Company or any
such Subsidiary is or has ever been a participant, which, individually in
the aggregate, could reasonably be expected to have or result in a Material
Adverse Effect.
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With respect to such plans, each of the Company and the Subsidiaries is in
compliance in all respects with all applicable provisions of ERISA, except
where the failure to so comply could not, individually or in the aggregate,
reasonably be expected to have or a result in a Material Adverse Effect.
(dd) Each of the Company and the Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(ee) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(ff) Any certificate signed by any officer of the Company and delivered
to the Initial Purchasers or to Xxxxxx Xxxxxx & Xxxxxxx, counsel for the
Initial Purchasers ("Counsel for the Initial Purchasers") pursuant to the
terms of this Agreement shall be deemed a representation and warranty by
the Company to the Initial Purchasers as to the matters covered thereby.
2. Purchase and Sale of the Securities. Subject to the terms and
conditions and in reliance upon the representations and warranties herein set
forth, the Company agrees to sell to each Initial Purchaser, and each Initial
Purchaser agrees, severally and not jointly, to purchase from the Company, at a
purchase price of 97.25% of the principal amount thereof, plus accrued interest,
if any, from March 25, 1998 to the Closing Date, the principal amount of
Securities set forth opposite such Initial Purchaser's name in Schedule I
hereto.
3. Delivery and Payment. Delivery of and payment for the Securities
shall be made at 9:00 AM, New York City time, on March 25, 1998 or such later
date as the Initial Purchasers shall designate, which date and time may be
postponed by agreement among the Initial Purchasers and the Company or as
provided in Section 9 hereof (such date and time of delivery
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and payment for the Securities being herein called the "Closing Date"). Delivery
of the Securities shall be made to the Initial Purchasers for the respective
accounts of the Initial Purchasers against payment by the Initial Purchasers of
the purchase price thereof to or upon the order of the Company by wire transfer
of same day funds or such other manner of payment as may be agreed by the
Company and the Initial Purchasers. Delivery of the Securities shall be made at
such location as the Initial Purchasers shall reasonably designate at least one
business day in advance of the Closing Date and payment for the Securities shall
be made at the offices of Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxxxx Xxxxxx, Xxx
Xxxxxxxxx, XX 00000, or such other location as may be mutually agreed upon by
the Company and the Initial Purchasers. Certificates for the Securities shall be
registered in such names and in such denominations as the Initial Purchasers may
request not less than two full business days in advance of the Closing Date.
The Company agrees to have the Securities available for inspection,
checking and packaging by the Initial Purchasers in New York, New York, not
later than 10:00 AM on the business day prior to the Closing Date.
4. Offering of Securities. Each Initial Purchaser, severally and not
jointly, represents and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes to be QIBs and that,
in connection with each such sale, it has taken or will take reasonable
steps to ensure that the purchaser of such Securities is aware that such
sale is being made in reliance on Rule 144A, or (ii) in accordance with the
restrictions set forth in Exhibit A hereto.
(b) Neither it nor any person acting on its behalf has made or will
make offers or sales of the Securities in the United States by means of any
form of general solicitation or general advertising within the meaning of
Regulation D in the United States.
5. Agreements of the Company. The Company agrees with each Initial
Purchaser that:
(a) The Company will furnish to each Initial Purchaser and to Counsel
for the Initial Purchasers, without charge, during the period referred to
in paragraph (c) below,
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as many copies of the Preliminary Memorandum and the Final Memorandum and
any amendments and supplements thereto as each Initial Purchaser and
Counsel for the Initial Purchasers may reasonably request.
(b) The Company will not at any time make any amendment or supplement
to the Preliminary Memorandum or the Final Memorandum without the prior
written consent of the Initial Purchasers.
(c) The Company will immediately notify each Initial Purchaser and
confirm such notice in writing of (x) any filing made by the Company
relating to the offering of the Securities with any securities exchange or
any other regulatory body in the United States or any other jurisdiction
and (y) prior to the completion of the placement of the Securities by the
Initial Purchasers as evidenced by a notice in writing from the Initial
Purchasers to the Company, any material changes in or affecting the
earnings, business affairs or business prospects of the Company and its
Subsidiaries that (i) make any statement in the Final Memorandum false or
misleading in any material respect or (ii) are not disclosed in the Final
Memorandum. In such event or if at any time prior to completion of the
distribution of the Securities by the Initial Purchasers to purchasers who
are not its affiliates (as determined by the Initial Purchasers) any other
event shall occur or condition shall exist as a result of which it is
necessary, in the opinion of the Initial Purchasers or Counsel for the
Initial Purchasers, to amend or supplement the Final Memorandum in order
that the Final Memorandum, as then amended or supplemented, will not
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 existing at the time it is delivered to a purchaser, not
misleading or if in the opinion of the Initial Purchasers or Counsel for
the Initial Purchasers, such amendment or supplement is necessary to comply
with applicable law, the Company will, subject to paragraph (b) of this
Section 5, promptly prepare, at its own expense, such amendment or
supplement as may be necessary to correct such untrue statement or omission
or to effect such compliance (in form and substance agreed upon by the
Initial Purchasers and Counsel for the Initial Purchasers), so that as so
amended or supplemented, the statements in the Final Memorandum will not
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
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of the circumstances existing at the time it is delivered to a purchaser,
not misleading or so that such Final Memorandum as so amended or
supplemented will comply with applicable law, as the case may be, and
furnish to the Initial Purchasers such number of copies of such amendment
or supplement as the Initial Purchasers may reasonably request. The Company
agrees to notify the Initial Purchasers in writing to suspend use of the
Final Memorandum as promptly as practicable after the occurrence of an
event specified in this paragraph (c), and the Initial Purchasers hereby
agree upon receipt of such notice from the Company to suspend use of the
Final Memorandum until the Company has amended or supplemented the Final
Memorandum to correct such misstatement or omission or to effect such
compliance.
(d) Neither the Company nor any of its Affiliates (as defined in Rule
501(b) under the Securities Act) will solicit any offer to buy or offer or
sell the Securities, the Exchange Notes or the Private Exchange Notes, if
any, by means of any form of general solicitation or general advertising
(as such terms are used in Regulation D under the Securities Act), or by
means of any directed selling efforts (as defined in Rule 902 under the
Securities Act) in the United States in connection with the Securities
being offered and sold pursuant to Regulation S or in any manner involving
a public offering within the meaning of Section 4(2) of the Securities Act
prior to the effectiveness of a registration statement with respect to the
Securities, the Exchange Notes or the Private Exchange Notes, as
applicable.
(e) Neither the Company nor any of its Affiliates (as defined in Rule
501(b) under the Securities Act) will offer, sell or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in the
Securities Act) which could be integrated with the sale of the Securities
in a manner that would require the registration of the Securities under the
Securities Act.
(f) The Company (A) will, so long as the Securities are outstanding,
furnish to the Trustee on a timely basis, pursuant to the Indenture,
whether or not the Company has a class of securities registered under the
Exchange Act, (i) within 135 days of the end of each fiscal year, audited
year-end consolidated financial statements of the Company (including a
balance sheet, income statement and statement of changes of cash flow)
prepared in accordance
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with GAAP and substantially in the form required under Regulation S-X under
the Securities Act and the information described in Item 303 of Regulation
S-K under the Securities Act with respect to such period and (ii) within 60
days of the end of each fiscal quarter, unaudited quarterly consolidated
financial statements of the Company (including a balance sheet, income
statement and statement of changes of cash flow) prepared in accordance
with GAAP and substantially in the form required by Regulation S-X under
the Securities Act and the information described in Item 303 of Regulation
S-K under the Securities Act with respect to such period, and (B) will
furnish to the Initial Purchasers copies of all such reports and
information, together with such other documents, reports and information as
shall be furnished by the Company to the holders of the Securities or to
the Trustee. In the event the Company is not subject to Section 13 or 15(d)
of the Exchange Act, the Company will furnish to holders of Securities and
prospective purchasers of Securities designated by such holders, upon
request of such holders or such prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Act to
permit compliance with Rule 144A in connection with resales of the
Securities.
(g) The Company will use its reasonable best efforts in cooperation
with the Initial Purchasers to (i) permit the Securities to be eligible for
clearance and settlement through DTC and (ii) permit the Securities to be
designated as PORTAL securities in accordance with the rules and
regulations of the NASD.
(h) Prior to the Closing Date, the Company will furnish to each Initial
Purchaser, if and as soon as they have been prepared, a copy of any
unaudited interim consolidated financial statements of the Company for any
period subsequent to the period covered by the most recent financial
statements of the Company appearing in the Final Memorandum which have been
prepared in the ordinary course of business.
(i) The Company will arrange for the registration and qualification of
the Securities for offering and sale under the applicable securities or
"blue sky" laws of such states and other jurisdictions as the Initial
Purchasers may designate in connection with the resale of the Securities as
contemplated by this Agreement and the Final Memorandum and will continue
such qualifications in effect for
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as long as may be necessary to complete the distribution of the Securities;
provided that in no event shall the Company be obligated to (i) qualify as
a foreign corporation or as a dealer in securities in any jurisdiction
where it would not otherwise be required to so qualify but for this Section
5(i), (ii) file any general consent to service of process in any
jurisdiction where it is not at the Closing Time then so subject or (iii)
subject itself to taxation in any such jurisdiction if it is not so
subject. The Company will file such statements and reports as may be
required by the laws of each jurisdiction in which the Securities have been
qualified as above provided. The Company shall promptly advise the Initial
Purchasers of the receipt by the Company of any notification with respect
to the suspension of the qualification or exemption from qualification of
the Securities for offering or sale in any jurisdiction or the institution,
threatening or contemplation of any proceeding for such purpose.
(j) The Company will use the proceeds received from the Offering in the
manner specified in the Final Memorandum under the heading "Use of
Proceeds."
(k) The Company will not, and will not permit any of its Affiliates (as
defined in Rule 501(b) under the Securities Act to, resell any Securities
that have been acquired by any of them.
6. Conditions to the Obligations of the Initial Purchasers. The
obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein at the date and time that this Agreement is executed
and delivered by the parties hereto (the "Execution Time"), and the Closing
Date, to the accuracy of the statements of the Company made in any certificates
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) (i) At the Closing Date, the Initial Purchasers shall have received
the opinion of Xxxxxxxx & Xxxxxxxx LLP, counsel to the Company, dated as of
the Closing Date, in the form set forth below and otherwise reasonably
satisfactory to the Initial Purchasers and Counsel for the Initial
Purchasers, to the effect that:
(1) The Company has been duly incorporated and is validly existing
under the laws of the State of
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Delaware, with corporate power and authority to own, lease and operate
its assets and properties and conduct its business as described in the
Final Memorandum and to enter into and perform its obligations under
this Agreement and each of the other Transaction Documents; to the best
knowledge of such counsel the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect;
(2) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Final Memorandum under the caption
"Description of Capital Stock";
(3) Each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Final Memorandum and to the best knowledge
of such counsel is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing individually or in the
aggregate would not result in a Material Adverse Effect; all of the
issued and outstanding capital stock of each of the Subsidiaries has
been duly authorized and validly issued, is fully paid and
non-assessable and, to such counsel's knowledge and information, except
as set forth in the Final Memorandum under the caption "Business--
Verio Group Network," is owned by the Company directly, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity;
(4) The Company has the requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement, the
Securities, the Exchange Notes, the Private Exchange Notes, the
Indenture and the Registration Agreement; and each of
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this Agreement, the Securities, the Exchange Notes, the Private
Exchange Notes, the Indenture and the Registration Agreement has been
duly authorized by the Company;
(5) No consent, waiver, approval, authorization, license,
qualification or order of or filing or registration with any court or
governmental or regulatory agency or body is required for the execution
and delivery by the Company of this Agreement, the Indenture and the
Registration Agreement or for the issue and sale of the Securities, the
Exchange Notes or the Private Exchange Notes, if any, or the
performance by the Company of its obligations under the Transaction
Documents, or for the consummation of any of the transactions
contemplated hereby or thereby, except such as may be required (A) in
connection with the registration under the Securities Act of the
Exchange Notes or the Private Exchange Notes, if any, under the
Registration Agreement, (B) in order to qualify the Indenture under the
Trust Indenture Act and (C) by state securities or "blue sky" laws in
connection with the purchase and distribution of the Securities by the
Initial Purchasers (as to which such counsel need express no opinion);
(6) The issuance, sale and delivery of the Securities, the Exchange
Notes and the Private Exchange Notes, if any, the execution, delivery
and performance by the Company of this Agreement, the Indenture and the
Registration Agreement (in each case assuming due authorization and
execution by each party other than the Company), and the consummation
by the Company of the transactions contemplated hereby and thereby and
the compliance by the Company with the terms of the foregoing do not,
and, at the Closing Date, will not, conflict with or constitute or
result in a breach or violation by the Company or any of the
Subsidiaries of (A) any provision of the Certificate of Incorporation
or By-laws of the Company, (B) any of the terms or provisions of, or
constitute a default (or an event which, with notice or lapse of time
or both, would constitute a default) by the Company, or give rise to
any right to accelerate the maturity or require the prepayment of any
indebtedness under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company
or any Subsidiary under any Material
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Contract identified in Schedule III hereto or (C) any law, statute,
rule, or regulation or any order, decree or judgment known to such
counsel to be applicable to the Company or any Subsidiary, of any court
or governmental or regulatory agency or body or arbitrator known to
such counsel to have jurisdiction over the Company or any of the
Subsidiaries or any of their respective properties or assets;
(7) The Purchase Agreement has been duly authorized, executed and
delivered by the Company;
(8) The statements in the Offering Memorandum under the headings
"Summary - The Offering," "Description of Capital Stock," "Description
of the 1997 Notes," "Description of the Notes," "Exchange Offer;
Registration Rights" and "Certain Transactions," insofar as such
statements purport to summarize certain provisions of the Securities,
the Exchange Notes, the Indenture, the Registration Agreement, the
Company's authorized and outstanding capital stock and the Company's
13-1/2% Senior Notes due 2004, provide a fair summary of such
provisions of such agreements and instruments;
(9) The statements in the Offering Memorandum under the caption
"Certain Federal Income Tax Considerations" fairly and accurately
summarize the material United States federal tax consequences of owning
the Securities;
(10) Each of the Indenture and the Registration Agreement has been
duly authorized, executed and delivered by the Company and (assuming
due authorization and execution by each party thereto other than the
Company) constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by (a) with respect to the Indenture
and the Registration Agreement, the Enforceability Limitations,
including the waiver contained in Section 5.15 of the Indenture, and
(b) with respect to the Registration Agreement, as to rights of
indemnification and contribution, principles of public policy or
federal or state securities laws relating thereto;
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(11) Each of the Securities, when executed and authenticated in
accordance with the provisions of the Indenture and delivered and paid
for in accordance with the terms of this Agreement, and the Exchange
Notes and the Private Exchange Notes, if any, when executed,
authenticated and delivered in exchange for the Securities in
accordance with the terms of the Registration Agreement, will be
entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with its terms
except as the enforceability thereof may be limited by the
Enforceability Limitations;
(12) To the knowledge of such counsel, other than as described in
the Final Memorandum, no legal, regulatory or governmental proceedings
are pending to which the Company is a party or to which the property or
assets of the Company are subject which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect or which, individually or in the aggregate, could have a
material adverse effect on the power or ability of the Company to
perform its obligations under the Transaction Documents or to
consummate the transactions contemplated thereby or by the Offering
Memorandum and to the knowledge of such counsel, no such material
proceedings have been threatened against the Company or with respect to
any of its respective assets or properties;
(13) Assuming (a) the accuracy of, and compliance with, the
representations, warranties and covenants of the Company in subsections
1(c) and 1(d) of the Purchase Agreement, (b) the accuracy of, and
compliance with, the representations, warranties and covenants of the
Initial Purchasers in Section 4 of the Purchase Agreement, (c) the
compliance by the Initial Purchasers with the offering and transfer
procedures and restrictions described in the Final Memorandum and (d)
receipt by the purchasers to whom the Initial Purchasers initially
resell the Securities of a copy of the Final Memorandum prior to such
sale, it is not necessary in connection with the offer, sale and
delivery of the Securities or in connection with the initial resale of
such Securities in the manner contemplated by the Purchase Agreement
and the Offering Memorandum to register the Securities
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under the Securities Act or to qualify the Indenture under the Trust
Indenture Act, it being understood that no opinion is expressed as to
any subsequent resale of any Securities;
(14) When the Securities are issued and delivered pursuant to this
Agreement, such Securities will not be of the same class (within the
meaning of Rule 144A) as securities of the Company which are listed on
a national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer quotation
system; and
(15) Neither the consummation of the transactions contemplated
hereby nor the sale, issuance, execution or delivery of the Securities
will violate Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System.
In addition, such counsel shall state that such counsel has
participated in conferences with representatives of the Initial Purchasers,
officers and other representatives of the Company and representatives of
the independent certified accountants of the Company, at which conferences
the contents of the Preliminary Memorandum and Final Memorandum and the
business and affairs of the Company and the Subsidiaries were discussed,
and although such counsel has not independently verified and does not pass
upon or assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Final Memorandum (except and
only to the extent set forth in subclauses (8) and (9) above), on the basis
of the foregoing (relying as to materiality to the extent such counsel
deemed appropriate upon the representations and opinions of officers and
other representatives of the Company), no facts have come to the attention
of such counsel which lead such counsel to believe that the Final
Memorandum at the date thereof or as of the Closing Date, contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading (it
being understood that such counsel need not express any comment with
respect to the financial statements, including the notes thereto and
supporting schedules, or any other financial or statistical data set forth
or referred to in the Final Memorandum).
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In rendering such opinions, such counsel (A) need not express any
opinion with regard to the application of laws of any jurisdiction other
than the Federal law of the United States, the General Corporation Law of
the State of Delaware and the laws of the State of New York and (B) may
rely, as to matters of fact, to the extent they deem proper on
representations or certificates of responsible officers of the Company and
certificates of public officials.
References to the Final Memorandum in this subsection (a)(i) include
any supplements thereto at or prior to the Closing Date.
(ii) At the Closing Date, the Initial Purchasers shall have received
the opinion of Xxxxx Xxxxx Xxxxxxxx, Esq., General Counsel to the Company,
dated as of the Closing Date, in the form set forth below and otherwise
reasonably satisfactory to the Initial Purchasers and Counsel for the
Initial Purchasers, to the effect that:
(1) To the knowledge of such counsel, other than as described in
the Final Memorandum, no legal, regulatory or governmental proceedings
are pending to which any of the Subsidiaries is a party or to which the
property or assets of the Subsidiaries are subject which, individually
or in the aggregate, could reasonably be expected to have a Material
Adverse Effect or which, individually or in the aggregate, could have a
material adverse effect on the power or ability of the Company to
perform its obligations under the Transaction Documents or to
consummate the transactions contemplated thereby or by the Final
Memorandum and to the knowledge of such counsel, no such material
proceedings have been threatened against the Subsidiaries or with
respect to any of their respective assets or properties; and
(2) None of the Company or the Subsidiaries is in violation of its
respective Organizational Documents; to the knowledge of such counsel,
no default by the Company or any of the Subsidiaries exists in the due
performance or observance of any material obligation, agreement,
covenant or condition contained in any Material Contract which could
reasonably be expected to have a Material Adverse Effect; and to the
knowledge of such counsel, none of the Company nor the Subsidiaries is
in breach or violation of any
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law, statute, rule or regulation, or any judgment, decree or order of
any governmental or regulatory agency or other body having jurisdiction
over the Company or any of the Subsidiaries or any of their respective
properties or assets such that any such breach or violation could
reasonably be expected to have a Material Adverse Effect.
In addition, such counsel shall state that such counsel has
participated in conferences with representatives of the Initial Purchasers,
officers and other representatives of the Company and representatives of
the independent certified accountants of the Company, at which conferences
the contents of the Preliminary Memorandum and Final Memorandum and the
business and affairs of the Company and the Subsidiaries were discussed,
and although such counsel has not independently verified and does not pass
upon or assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Final Memorandum, on the basis
of the foregoing (relying as to materiality to the extent such counsel
deemed appropriate upon the representations and opinions of officers and
other representatives of the Company), no facts have come to the attention
of such counsel which lead such counsel to believe that the Final
Memorandum at the date thereof or as of the Closing Date, contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading (it
being understood that such counsel need not express any comment with
respect to the financial statements, including the notes thereto and
supporting schedules, or any other financial or statistical data set forth
or referred to in the Final Memorandum).
In rendering such opinions, such counsel (A) need not express any
opinion with regard to the application of laws of any jurisdiction other
than the Federal law of the United States, the General Corporation Law of
the State of Delaware and the laws of the State of Colorado and (B) may
rely, as to matters of fact, to the extent she deems proper on
representations or certificates of responsible officers of the Company and
certificates of public officials.
References to the Final Memorandum in this subsection (a)(ii) include
any supplements thereto at or prior to the Closing Date.
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(b) The Initial Purchasers shall have received the opinion, dated as of
the Closing Date, of Xxxxxx Xxxxxx & Xxxxxxx, Counsel for the Initial
Purchasers, with respect to certain matters set forth in clauses (8) (with
respect to "Description of the Notes" and "Exchange Offer; Registration
Rights,") (10) (assuming the due authorization, execution and delivery of
each of the Indenture and Registration Agreement by each party thereto),
(11) and (13) of subsection (a)(i) of this Section 6.
In rendering such opinions, such counsel (A) need not express any
opinion with regard to the application of laws of any jurisdiction other
than the Federal laws of the United States, the General Corporation Law of
the State of Delaware and the laws of the State of New York and (B) may
rely, as to matters of fact, to the extent they deem proper on
representations or certificates of responsible officers of the Company and
certificates of public officials.
In addition, such counsel shall state that such counsel has
participated in conferences with representative of the Initial Purchasers,
officers and other representatives of the Company and representatives of
the independent accountants for the Company at which conferences the
contents of the Preliminary Memorandum and Final Memorandum and related
matters were discussed, and although such counsel has not verified and does
not pass upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Final
Memorandum, on the basis of the foregoing (relying as to materiality to the
extent such counsel deemed appropriate upon the representations and
opinions of officers and other representatives of the Company), no facts
have come to the attention of such counsel which lead such counsel to
believe that the Final Memorandum, at the date thereof or as of the Closing
Date, contained or contains an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no comment
with respect to the financial statements, including the notes thereto, or
any other financial or statistical data set forth or referred to in the
Final Memorandum).
(c) The following conditions contained in clauses (i) and (ii) of this
subsection (c) shall have been satisfied
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at and as of the Closing Date, and the Company shall have furnished to the
Initial Purchasers a certificate of the Company, signed by the Chairman of
the Board or the President and the principal financial or accounting
officer of the Company, dated the Closing Date, to the effect that the
signers of such certificate have carefully examined the Final Memorandum,
any amendment or supplement to the Final Memorandum and this Agreement and
that:
(i) the representations and warranties of the Company 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 the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied hereunder in
all material respects at or prior to the Closing Date; and
(ii) since the date of the most recent financial statements
included in the Final Memorandum (exclusive of any amendment or
supplement thereto), there has been no Material Adverse Change, whether
or not in the ordinary course of business. As used in this
subparagraph, the term "Final Memorandum" means the Final Memorandum in
the form first used to confirm sales of the Securities.
(d) At the Execution Time and at the Closing Date, KPMG Peat Marwick
LLP shall have furnished to the Initial Purchasers a letter or letters,
dated respectively as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the Initial Purchasers, confirming that
they are independent accountants within the meaning of the Securities Act
and the Exchange Act and the applicable published rules and regulations
thereunder and Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants (the "AICPA") and containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to Initial Purchasers with respect to financial
statements and certain financial information contained in the Final
Memorandum, in form and substance satisfactory to Counsel for the Initial
Purchasers.
KPMG Peat Marwick LLP shall have also furnished to the Initial
Purchasers a letter stating that the Company's system of internal
accounting controls taken as a whole is sufficient to meet the broad
objectives of internal accounting
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control insofar as those objective pertain to the prevention or detection
of errors or irregularities in amounts that would be material in relation
to the financial statements of the Company and its subsidiaries.
All references in this Section 6(d) to the Final Memorandum shall be
deemed to include any amendment or supplement thereto at the date of the
letter.
(e) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum, there shall not have
been (i) any change or decrease specified in the letter or letters referred
to in paragraph (d) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting the business or
properties of the Company and its subsidiaries the effect of which, in any
case referred to in clause (i) or (ii) above, is, in the judgment of the
Initial Purchasers, so material and adverse as to make it impractical or
inadvisable to market the Securities as contemplated by the Final
Memorandum.
(f) On or prior to the Closing Date, the Company shall have furnished
to the Initial Purchasers such further information, certificates and
documents as the Initial Purchasers may reasonably request.
(g) The Company and the Trustee shall have entered into the Indenture.
(h) The Company and the Initial Purchasers shall have entered into the
Registration Agreement.
(i) The Company shall have repurchased from WorldCom, Inc. and
cancelled $50,000,000 aggregate principal amount of the Company's 13-1/2%
Senior Notes due 2004.
If any of the conditions specified in this Section 6 shall not have
been fulfilled 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
Initial Purchasers and Counsel for the Initial Purchasers, this Agreement and
all obligations of the Initial Purchasers hereunder may be canceled at, or at
any time prior to, the Closing Date by the Initial Purchasers. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
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The documents required to be delivered by this Section 6 will be
delivered at the office of Counsel for the Initial Purchasers, at 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the Closing Date.
7. Reimbursement of Expenses. (a) Whether or not any sale of the
Securities is consummated, the Company agrees to pay and bear all costs and
expenses incident to the performance of all of its obligations under this
Agreement, including (i) the preparation and printing of the Preliminary
Memorandum, the Final Memorandum and any amendments or supplements thereto and
the cost of furnishing copies thereof to the Initial Purchasers, (ii) the
preparation, issuance, printing and distribution of the Securities, the Exchange
Notes, the Private Exchange Notes, if any, and any survey of state securities or
"blue sky" laws or legal investment memoranda, (iii) the delivery to the Initial
Purchasers of the Securities, the Exchange Notes or the Private Exchange Notes,
(iv) the fees and disbursements of the Company's counsel and accountants, (v)
the qualification of the Securities under the applicable state securities or
"blue sky" laws in accordance with the provisions of Section 5(i) hereof and any
filing for review of the offering with the NASD, if required, including filing
fees and reasonable fees and disbursements of counsel to the Initial Purchasers
in connection therewith and in connection with the preparation of any survey of
state securities or "blue sky" laws or legal investment memoranda, (vi) any fees
charged by rating agencies for rating the Securities, the Exchange Notes and the
Private Exchange Notes, if any, (vii) the fees and expenses of the Trustee,
including the fees and disbursements of counsel for the Trustee, (viii) all
expenses (including travel expenses) of the Company and the Initial Purchasers
in connection with any meetings with prospective investors in the Securities and
(ix) all expenses and listing fees in connection with the application for
designation of the Securities as PORTAL securities and to permit the Securities,
the Exchange Notes and the Private Exchange Notes, as applicable, to be eligible
to clearance through The Depository Trust Company.
(b) If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Initial Purchasers
set forth in Section 6 hereof is not satisfied, because of any termination
pursuant to Section 10 hereof or because of any refusal, inability or failure on
the part of the Company to perform any agreement herein or comply with any
provision hereof other than by reason of a default by any of the Initial
Purchasers in payment for the Securities on the Closing Date, the Company will
reimburse the Initial
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Purchasers severally upon demand for all reasonable out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Securities.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each person who controls any
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Memorandum or the Final Memorandum 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, in the light of the circumstances
under which they were made, not misleading, and agree to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made in the Preliminary
Memorandum or the Final Memorandum, or in any amendment thereof or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by or on behalf of any Initial Purchasers specifically for
inclusion therein. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
The foregoing indemnity with respect to any untrue statement contained
in or any omission from the Preliminary Memorandum shall not inure to the
benefit of any Initial Purchaser (or any affiliate or person who controls such
Initial Purchaser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) from whom the person asserting such loss,
liability, claim, damage or expense purchased any of the Securities that are the
subject thereof if such person was not sent or given a copy of the Final
Memorandum (or any amendment or supplement thereto), if the Company
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shall have previously furnished copies thereof to the Initial Purchasers in
accordance with this Agreement, at or prior to the written confirmation of the
sale of such Securities to such person and the untrue statement contained in or
the omission from the Preliminary Memorandum was corrected in the Final
Memorandum (or any amendment or supplement thereto).
(b) Each Initial Purchaser severally and not jointly agrees to
indemnify and hold harmless the Company, its directors, officers and each person
who controls the Company within the meaning of either the Securities Act or the
Exchange Act to the same extent as the foregoing indemnity from the Company to
each Initial Purchaser, but only with reference to written information relating
to such Initial Purchaser furnished to the Company by or on behalf of such
Initial Purchaser specifically for inclusion in the Preliminary Memorandum or
the Final Memorandum (or in any amendment or supplement thereto). This indemnity
agreement will be in addition to any liability which any Initial Purchaser may
otherwise have. The Company acknowledges that the statements set forth in the
last paragraph of the cover page and in the table, fifth paragraph and tenth
paragraph under the heading "Plan of Distribution" in the Preliminary Memorandum
and the Final Memorandum constitute the only information furnished in writing by
or on behalf of the Initial Purchasers for inclusion in the Preliminary
Memorandum or the Final Memorandum (or in any amendment or supplement thereto).
(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,
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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.
(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, the Company on the one hand and the Initial Purchasers on
the other hand agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively, "Losses") to which the
Company or one or more of the Initial Purchasers, as applicable, may be subject
in such proportion as is appropriate to reflect the relative benefits received
by the Company or the Initial Purchasers from the offering of the Securities;
provided, however, that in no case shall any Initial Purchaser be responsible
for any amount in excess of the purchase discount or commission applicable to
the Securities purchased by such Initial Purchaser hereunder. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the Company and
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the Initial Purchasers shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company or the Initial Purchasers, as applicable, 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 total net proceeds from the offering received by each
of them, respectively, (before deducting expenses), and benefits received by the
Initial Purchasers shall be deemed to be equal to the total purchase discounts
and commissions received by the Initial Purchasers from the Company in
connection with the purchase of the Securities hereunder. Relative fault shall
be determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or the Initial Purchasers. The
Company and the Initial Purchasers 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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8 each
person who controls an Initial Purchaser within the meaning of either the
Securities Act or the Exchange Act and each director, officer, employee and
agent of an Initial Purchaser shall have the same rights to contribution as such
Initial Purchaser, and each person who controls the Company within the meaning
of either the Securities Act or the Exchange Act and each officer and director
of the Company shall have the same rights to contribution as the Company subject
in each case to the applicable terms and conditions of this paragraph (d).
9. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of securities set forth opposite the names of all the
remaining Initial Purchasers) the Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided,
however, that in the event that the aggregate principal amount of Securities
which the defaulting
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Initial Purchaser or Initial Purchasers agreed but failed to purchase shall
exceed 10% of the aggregate principal amount of Securities set forth in Schedule
I hereto, the remaining Initial Purchasers shall have the right to purchase all,
but shall not be under any obligation to purchase any, of the Securities, and if
such non-defaulting Initial Purchasers do not purchase all the Securities, this
Agreement will terminate without liability to any non-defaulting Initial
Purchaser or Company. In the event of a default by any Initial Purchaser as set
forth in this Section 9 the Closing Date shall be postponed for such period, not
exceeding seven days, as the Initial Purchasers shall determine in order that
the required changes in the Final Memorandum or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Initial Purchaser of its liability, if any, to the Company or any
non-defaulting Initial Purchaser for damages occasioned by its default
hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Initial Purchasers, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in any of the Company's securities shall have been suspended by the
Commission or trading in securities generally on the New York Stock Exchange or
the NASDAQ National Market shall have been suspended or limited or minimum
prices shall have been established on either of such exchanges, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the judgment of the Initial Purchasers, impracticable or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Final Memorandum.
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, and of the Initial Purchasers 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 Initial Purchasers or the Company
or any of the officers, directors or controlling persons referred to in Section
8 hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
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12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Initial Purchasers, will be
mailed, delivered or telegraphed and confirmed to them, care of Salomon Brothers
Inc, at Seven Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at Verio
Inc., 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxx Xxxxx Xxxxxxxx, Esq.; with a copy to Xxxxxxxx & Xxxxxxxx LLP,
000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000, Attention: Xxxxx Xxxxxx, Esq.
13. 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,
except as expressly set forth in Section 5(f) hereof, no other person will have
any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
15. Business Day. For purposes of this Agreement, "business day" means
each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in the City of New York, New York are authorized or
obligated by law, executive order or regulation to close.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
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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 Agreement and your acceptance shall represent a binding agreement between
the Company and the Initial Purchasers.
Very truly yours,
VERIO INC.
By:
-----------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
Salomon Brothers Inc
Lazard Freres & Co. LLC
Chase Securities Inc.
BancBoston Securities Inc.
By: Salomon Brothers Inc
By:
-----------------------------------
Name:
Title:
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SCHEDULE I
Principal Amount
of Notes
Initial Purchasers To Be Purchased
------------------ ---------------
Salomon Brothers Inc. ....................... $ 87,500,000
Lazard Freres and Co. LLC ................... 52,500,000
Chase Securities Inc. ....................... 26,250,000
BancBoston Securities Inc. .................. 8,750,000
------------
Total ..................... $175,000,000
38
SCHEDULE II
Subsidiaries
Percentage
Organized Ownership
Name of Entity Under Laws of of Company
-------------- ------------- ----------
Verio Web Hosting, Inc. Utah 100%
Verio-Northern California, Inc. Colorado 100%
Verio-Northeast, Inc. Colorado 100%
39
SCHEDULE III
Material Contracts
1. Indenture, dated as of June 24, 1997, by and among Verio Inc. and
First Trust National Association (as trustee).
2. Warrant Agreement, dated as of June 24, 1997, by and between First
Trust National Association and Verio Inc.
3. Common Stock Registration Rights Agreement, dated as of June 17,
1997, by and among Verio Inc., Xxxxxx Fiber Properties, Inc., Norwest Equity
Partners V, Providence Equity Partners, Centennial Fund V, L.P., Centennial Fund
IV, L.P. (as investors) and the Initial Purchasers.
4. Registration Rights Agreement, dated as of June 17, 1997, by and
among Verio Inc. and the Initial Purchasers.
5. Lease Agreement, dated as of June 20, 1997, by and between Verio
Inc. and Highland Park Ventures, LLC, with respect to the property in Englewood,
Colorado, including the First Amendment to Lease Agreement, dated as of December
16, 1997.
6. Lease Agreement, dated as of May 24, 1997, by and between Verio Inc.
and IM Joint Venture, with respect to the property in Dallas, Texas, as amended.
7. Form of Indemnification Agreement between Verio Inc. and each of its
officers and directors.
8. Amended and Restated Stockholders Agreement, dated as of May 20,
1997, by and between Verio Inc., the Series A Purchasers, the Series B
Purchasers, the Series C Purchasers and members of the management of Verio Inc.
9. The 1996 Stock Option Plan of Verio Inc.
10. The 1997 California Stock Option Plan of Verio Inc..
11. The 1998 Employee Stock Purchase Plan of Verio Inc..
40
12. The 1998 Stock Incentive Plan of Verio Inc..
13. Form of Executive Protection Agreement between Verio Inc. and each
of its executive officers.
14. Master Service Agreement, dated as of August 23, 1996, by and
between Verio Inc. and MFS Datanet, Inc.
15. Agreement for Terminal Facility Collocation Space, dated August 8,
1996, by and between MFS Telecom, Inc. and Verio Inc.
16. Bilateral Peering Agreement, dated May 19, 1997, between AT&T Corp.
and Verio Inc.
17. Master Lease Agreement, dated November 17, 1997, by and between
Insight Investments Corp. and Verio Inc.
18. Master Lease Agreement, dated October 27, 1997, by and between
Cisco Capital Systems Corporation and Verio Inc.
19. Home Domestic Peering Agreement, dated September 30, 1996, by and
between At Home Corporation and Verio Inc.
20. MCI Domestic (US) Public Interconnection Agreement, dated June 12,
1997, by and between MCI Telecommunications Corporation and Verio Inc., as
amended by Amendment to MCI (US) Domestic Public Interconnection Agreement dated
as of December 23, 1997.
21. Master Services Agreement, dated January 15, 1998, by and between
MCI Telecommunication Corporation and Verio Inc.
22. Cisco Systems, Inc. Domestic Internet Service Provider Agreement,
dated February 27, 1998, by and between Cisco Systems, Inc. and Verio Inc.
23. ISP Peering Agreement, dated October 21, 1997, by and between
PSINet, Inc. and Verio Inc.
24. Cover Agreement, dated September 30, 1996, by and between Sprint
Communications Company L.P. and Verio Inc., as amended by Amendment One to Cover
Agreement dated November 7, 1996 and Amendment Two to Cover Agreement dated
February 25, 1998 (not signed by Sprint yet).
41
25. Lateral Exchange Networks Interconnection Agreement, dated February
3, 1997, by and between Sprint Communications Company L.P. and Verio Inc.
42
EXHIBIT A
Selling Restrictions for Offers and
Sales Outside the United States
(1) (a) The Securities have not been and will not be registered under
the Securities Act and may not be offered or sold within the United States or
to, or for the account or benefit of, U.S. persons except in accordance with
Regulation S under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act. Each Initial Purchaser
represents and agrees that, except as otherwise permitted by Section 4(a)(i) or
(ii) of the Agreement to which this is an exhibit, it has offered and sold the
Securities, and will offer and sell the Securities, (i) as part of their
distribution at any time and (ii) otherwise until 40 days after the later of the
commencement of the offering and the Closing Date, only in accordance with Rule
903 of Regulation S under the Securities Act. Accordingly, each Initial
Purchaser represents and agrees that neither it, nor any of its affiliates nor
any person acting on its or their behalf has engaged or will engage in any
directed selling efforts with respect to the Securities, and that it and they
have complied and will comply with the offering restrictions requirement of
Regulation S. Each Initial Purchaser agrees that, at or prior to the
confirmation of sale of Securities (other than a sale of Securities pursuant to
Section 4(a)(i) or (ii) of the Agreement to which this is an exhibit), it shall
have sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Securities from it during the
restricted period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered or
sold within the United States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or (ii) otherwise
until 40 days after the later of the commencement of the offering and
[specify closing date of the offering], except in either case in accordance
with Regulation S or Rule 144A under the Securities Act. Terms used above
have the meanings given to them by Regulation S."
43
(b) Each Initial Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any distributor
with respect to the distribution of the Securities, except with its affiliates
or with the prior written consent of the Company.
(c) Terms used in this section have the meanings given to them by
Regulation S.
(2) Each Initial Purchaser represents and agrees that (i) it has not
offered or sold and will not offer or sell, in the United Kingdom, by means of
any document, any Securities other than to persons whose ordinary business it is
to buy or sell shares or debentures, whether as principal or as agent (except in
circumstances which do not constitute an offer to the public within the meaning
of the Companies Xxx 0000 of Great Britain), (ii) it has complied and will
comply with all applicable provisions of the Financial Services Xxx 0000 of the
United Kingdom with respect to anything done by it in relation to the Securities
in, from or otherwise involving the United Kingdom, and (iii) it has only issued
or passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the Securities to a person who is
of a kind described in Article 9(3) of the Financial Services Xxx 0000
(Investment Advertisements) (Exemptions) Order 1988 or is a person to whom the
document may otherwise lawfully be issued or passed on.
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