Exhibit 1.1
Execution Copy
RHYTHMS NETCONNECTIONS INC.
(a Delaware corporation)
$325,000,000
12 3/4% Senior Notes due 2009
PURCHASE AGREEMENT
Dated: April 16, 1999
TABLE OF CONTENTS
SECTION 1. Representations and Warranties 2
(a) Representations and Warranties by the Company 2
(i) Similar Offerings 2
(ii) Offering Memorandum 2
(iii) Independent Accountants 3
(iv) Financial Statements 3
(v) No Material Adverse Change in Business 3
(vi) Good Standing of the Company 3
(vii) Good Standing of Designated Subsidiaries 4
(viii) Capitalization 4
(ix) Authorization of Agreement 4
(x) Authorization of the Indenture 4
(xi) Authorization of the Registration Rights Agreement 4
(xii) Authorization of the Pledge and Escrow Agreement 5
(xiii) Authorization of the Securities 5
(xiv) Description of the Securities and the Agreements 6
(xv) Absence of Defaults and Conflicts 6
(xvi) Absence of Labor Dispute 6
(xvii) Absence of Proceedings 7
(xviii) Possession of Intellectual Property 7
(xix) Absence of Further Requirements 7
(xx) Possession of Licenses and Permits 8
(xxi) Title to Property 9
(xxii) Tax Returns 10
(xxiii) Environmental Laws 10
(xxiv) Investment Company Act 10
(xxv) Rule 144A Eligibility 10
(xxvi) No General Solicitation 11
(xxvii) No Registration Required 11
(xxviii) No Directed Selling Efforts 11
(xxix) Insurance 11
(xxx) Internal Accounting Controls 11
(xxxi) Stabilization and Manipulation 12
(xxxii) Related Party Transactions 12
(xxxiii) Solvency 12
(b) Officer's Certificates 12
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SECTION 2. Sale and Delivery to Initial Purchasers; Closing 12
(a) Securities 12
(b) Payment 12
(c) Qualified Institutional Buyer 13
(d) Denominations; Registration 13
SECTION 3. Covenants of the Company 13
(a) Offering Memorandum 13
(b) Pledged Securities 13
(c) Notice and Effect of Material Events 14
(d) Amendment to Offering Memorandum and Supplements 14
(e) Qualification of Securities for Offer and Sale 14
(f) DTC 14
(g) Use of Proceeds 15
(h) Restriction on Sale of Securities 15
(i) Press Releases 15
SECTION 4. Payment of Expenses 15
(a) Expenses 15
(b) Termination of Agreement 15
SECTION 5. Conditions of Initial Purchasers' Obligations 16
(a) Opinions of Counsel for Company 16
(b) Opinion of Counsel for Initial Purchasers 16
(c) Officers' Certificate 16
(d) Accountant's Comfort Letter 16
(e) Bring-down Comfort Letter 17
(f) Accountants Opinion 17
(g) PORTAL 17
(h) Registration Rights Agreements and Pledge and Escrow Agreement 17
(i) Additional Documents 17
(j) Termination of Agreement 18
SECTION 6. Subsequent Offers and Resales of the Securities 18
(a) Offer and Sale Procedures 18
(i) Offers and Sales only to Regulation S Purchasers or Qualified
Institutional Buyers 18
(ii) No General Solicitation 18
(iii) Purchases by Non-Bank Fiduciaries 18
(iv) Subsequent Purchaser Notification 18
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(v) Restrictions on Transfer 19
(vi) Delivery of Offering Memorandum 19
(vii) Hedging Transactions 19
(b) Covenants of the Company 19
(i) Due Diligence 19
(ii) Integration 20
(iii) Rule 144A Information 20
(iv) Restriction on Repurchases 20
(c) Resale Pursuant to Rule 903 of Regulation S or Rule 144A 20
SECTION 7. Indemnification 21
(a) Indemnification of Initial Purchasers 21
(b) Indemnification of Company, Directors and Officers 22
(c) Actions against Parties; Notification 22
(d) Settlement without Consent if Failure to Reimburse 23
SECTION 8. Contribution 23
SECTION 9. Representations, Warranties and Agreements to Survive Delivery 24
SECTION 10. Termination of Agreement 24
(a) Termination; General 25
(b) Liabilities 25
SECTION 11. Default by One or More of the Initial Purchasers 25
SECTION 12. Notices 25
SECTION 13. Parties 26
SECTION 14. Governing Law and Time 26
SECTION 15. Effect of Headings 26
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$325,000,000
RHYTHMS NETCONNECTIONS INC.
(a Delaware corporation)
12 3/4% Senior Notes due 2009
PURCHASE AGREEMENT
April 16, 1999
XXXXXXX XXXXX & CO.
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxx Securities Inc.
as Representatives of the several Initial Purchasers
c/x Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Rhythms NetConnections Inc., a Delaware corporation (the "Company"),
confirms its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated ("Xxxxxxx Xxxxx") and each of the other Initial Purchasers
named in Schedule A hereto (collectively, the "Initial Purchasers", which term
shall also include any initial purchaser substituted as hereinafter provided in
Section 11 hereof), for whom Xxxxxxx Xxxxx, Xxxxxxx Xxxxx Xxxxxx Inc. and Chase
Securities Inc. are acting as representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Company and the
purchase by the Initial Purchasers, acting severally and not jointly, of the
respective principal amount set forth in said Schedule A of an aggregate of
$325,000,000 of 12 3/4% Senior Notes due 2009 (the "Securities"). The Securities
are to be issued pursuant to an indenture to be dated on or about April 23, 1999
(the "Indenture") between the Company and State Street Bank and Trust Company of
California, N.A., as trustee (the "Trustee"). Securities issued in book-entry
form will be issued to Cede & Co. as nominee of The Depository Trust Company
("DTC") pursuant to one or more letter agreements, to be dated as of the Closing
Time (as defined in Section 2(b)) (collectively, the "DTC Agreement"), among the
Company, the Trustee and DTC.
The Company understands that the Initial Purchasers propose to make an
offering of the Securities on the terms and in the manner set forth herein and
agrees that the Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers ("Subsequent
Purchasers") at any time after the date of this Agreement. The
Securities are to be offered and sold through the Initial Purchasers without
being registered under the Securities Act of 1933, as amended (the "1933 Act"),
in reliance upon exemptions therefrom. Pursuant to the terms of the Securities
and the Indenture, investors that acquire Securities may only resell or
otherwise transfer such Securities if such Securities are hereafter registered
under the 1933 Act or if an exemption from the registration requirements of the
1933 Act is available (including the exemption afforded by Rule 144A ("Rule
144A") or Regulation S ("Regulation S") of the rules and regulations promulgated
under the 1933 Act by the Securities and Exchange Commission (the
"Commission")).
The Company has prepared and delivered to each Initial Purchaser copies of
a preliminary offering memorandum dated April 15, 1999 (the "Preliminary
Offering Memorandum") and has prepared and will deliver to each Initial
Purchaser, on the date hereof or the next succeeding day, copies of a final
offering memorandum dated April 16, 1999 (the "Final Offering Memorandum"), each
for use by such Initial Purchaser in connection with its solicitation of
purchases of, or offering of, the Securities. "Offering Memorandum" means, with
respect to any date or time referred to in this Agreement, the most recent
offering memorandum (whether the Preliminary Offering Memorandum or the Final
Offering Memorandum, or any amendment or supplement to either such document),
which has been prepared and delivered by the Company to the Initial Purchasers
in connection with their solicitation of purchases of, or offering of, the
Securities.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Initial Purchaser as of the date hereof, and will represent
as of the Closing Time referred to in Section 2(b) hereof by means of the
certificate described in Section 5(c) hereof, and agrees with each Initial
Purchaser as follows:
(i) Similar Offerings. The Company has not, directly or indirectly,
solicited any offer to buy or offered to sell, and will not, directly or
indirectly, solicit any offer to buy or offer to sell, in the United
States or to any United States citizen or resident, any security which is
or would be integrated with the sale of the Securities in a manner that
would require the Securities to be registered under the 1933 Act.
(ii) Offering Memorandum. The Offering Memorandum does not, and at
the Closing Time 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 under which they were made, not
misleading; provided that this representation, warranty and agreement
shall not apply to such statements in or omissions from the Offering
Memorandum made in reliance upon and in conformity with information
furnished to the Company in writing by any Initial Purchaser through the
Representatives expressly for use in the Offering Memorandum. It is
understood that the statements set forth in the Offering Memorandum on
page i with respect to stabilization, under the heading "Plan of
Distribution" and the identity of counsel to the Initial Purchasers under
the heading "Legal Matters" constitute the only information furnished
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in writing by or on behalf of the Initial Purchasers expressly for use in
the Offering Memorandum.
(iii) Independent Accountants. The accountants who certified the
financial statements included in the Offering Memorandum are independent
certified public accountants with respect to the Company and its
subsidiaries within the meaning of Regulation S-X under the 1933 Act.
(iv) Financial Statements. The financial statements, together with
the related schedules and notes, included in the Offering Memorandum
present fairly the consolidated financial position of the Company and its
subsidiaries at the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements have
been prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved.
The selected financial data included in the Offering Memorandum present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Offering Memorandum. The pro forma and pro forma as adjusted columns of
the selected financial data included in the Offering Memorandum and the
related notes thereto present fairly the information shown therein, have
been prepared in accordance with the Commission's rules and guidelines
with respect to pro forma financial information and have been properly
compiled 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.
(v) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Offering Memorandum, except
as otherwise stated therein, (A) there has been no material adverse change
in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise (a "Material Adverse Effect"), whether or not
arising in the ordinary course of business, (B) there have been no
transactions entered into by the Company or any of its subsidiaries, other
than those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one enterprise,
and (C) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Offering Memorandum and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of
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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.
(vii) Good Standing of Designated Subsidiaries. Each of ACI Corp.
and ACI Corp. -- Virginia (collectively, the "Designated Subsidiaries")
has been duly organized and is validly existing as a corporation (or, in
the case of ACI Corp. -- Virginia, a Virginia public benefit 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 Offering Memorandum and 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; except as
otherwise disclosed in the Offering Memorandum, all of the issued and
outstanding capital stock of each Designated Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
directly owned by the Company (or, in the case of ACI Corp. -- Virginia,
by ACI Corp.), free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock of any Designated Subsidiary was issued in violation of any
preemptive or similar rights arising by operation of law, or under the
charter or by-laws of such Designated Subsidiary or under any agreement to
which the Company or such Designated Subsidiary is a party. The Company
has no subsidiaries other than the Designated Subsidiaries.
(viii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Offering Memorandum in
the column entitled "Pro Forma" under the caption "Capitalization" (except
for subsequent issuances, if any, pursuant to this Agreement, pursuant to
employee benefit or stock option plans referred to in the Offering
Memorandum or pursuant to the exercise of convertible securities or
options referred to in the Offering Memorandum).
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization of the Indenture. The Indenture has been duly
authorized by the Company and, at the Closing Time, will have been duly
executed and delivered by the Company and will constitute the valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other
similar laws relating to or affecting enforcement of creditors' rights
generally, or by general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(xi) Authorization of the Registration Rights Agreement. The
Registration Rights Agreement has been duly authorized by the Company and,
at the Closing Time, will have been duly executed and delivered by the
Company and will constitute the valid
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and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other
similar laws relating to or affecting enforcement of creditors' rights
generally, or by general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(xii) Authorization of the Pledge and Escrow Agreement. The Pledge
and Escrow Agreement has been duly authorized by the Company and, at the
Closing Time, will have been duly executed and delivered by the Company
and will constitute the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws relating to
or affecting enforcement of creditors' rights generally, or by general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law). Upon the Company's purchase of the
Pledged Securities (as defined in the Offering Memorandum), the Company
will be the sole beneficial owner of the Pledged Securities and no lien
will exist upon the Pledged Securities or the Collateral Investments
Account (as defined herein) (and no right or option to acquire the same
will exist in favor any other person or entity), except for the pledge and
security interest in favor of the Trustee, for the benefit of the holders
of the Notes and the Company's 13 1/2% Senior Discount Notes due 2008 (the
"Discount Notes"), to be created or provided in the Pledge and Escrow
Agreement, which pledge and security interest constitutes a first priority
perfected pledge and security interest in and to all of the Pledged
Securities and the Collateral Investments Account. Pursuant to the Pledge
and Escrow Agreement, the Company will pledge and escrow approximately
$113.6 million of the net proceeds of the Offering as security for all
obligations of the Company under the Notes and the Indenture. The Pledged
Securities will be deposited in the Collateral Investments Account under
the Trustee's exclusive dominion and control pending application of such
funds by the Company for the payment pursuant to the terms of the Pledge
and Escrow Agreement.
(xiii) Authorization of the Securities. The Securities have been
duly authorized and, at the Closing Time, will have been duly executed by
the Company and, when authenticated in the manner provided for in the
Indenture and delivered against payment of the purchase price therefor
will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws relating, to or affecting
enforcement of creditors' rights generally, or by general principles of
equity (regardless of whether enforcement is considered in a proceeding,
in equity or at law), and will be in the form contemplated by, and
entitled to the benefits of, the Indenture. All of the outstanding shares
of capital stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable, are not subject to any
preemptive or similar rights and have been issued in compliance
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with or in reliance upon an exemption from all applicable state and
federal securities laws.
(xiv) Description of the Securities and the Agreements. The
Securities, the Indenture, the Registration Rights Agreement and the
Pledge and Escrow Agreement will conform in all material respects to the
respective statements relating thereto contained in the Offering
Memorandum and will be in substantially the respective forms previously
delivered to the Initial Purchasers.
(xv) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or
by which any of them may be bound, or to which any of the property or
assets of the Company or any of its subsidiaries is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect, and the execution, delivery and
performance of this Agreement, the Indenture, the Registration Rights
Agreement, the Pledge and Escrow Agreement and the Securities and any
other agreement or instrument entered into or issued or to be entered into
or issued by the Company in connection with the transactions contemplated
hereby or thereby or in the Offering Memorandum and the consummation of
the transactions contemplated herein and in the Offering Memorandum
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Offering
Memorandum under the caption "Use of Proceeds") and compliance by the
Company with its obligations hereunder have been duly authorized by all
necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, default or a Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, the Agreements and Instruments except for such
conflicts, breaches or defaults or liens, charges or encumbrances that,
singly or in the aggregate, would not result in a Material Adverse Effect,
nor will such action result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries or any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its subsidiaries
or any of their assets or properties. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note,
debenture, other evidence of indebtedness or preferred stock (or any
person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness or preferred stock by the Company or any of its subsidiaries.
(xvi) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any of its subsidiaries exists or, to the knowledge of
the Company, is
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imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any of its subsidiaries'
principal suppliers, manufacturers, customers or contractors, which, in
either case, may reasonably be expected to result in a Material Adverse
Effect.
(xvii) Absence of Proceedings. Except as disclosed in the Offering
Memorandum, there is no action, suit, proceeding, inquiry or investigation
before or by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened,
against or affecting the Company or any subsidiary thereof which might
reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the
properties or assets of the Company or any of its subsidiaries or the
consummation of this Agreement or the performance by the Company of its
obligations hereunder. The aggregate of all pending legal or governmental
proceedings to which the Company or any subsidiary thereof is a party or
of which any of their respective property or assets is the subject which
are not described in the Offering Memorandum, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(xviii) Possession of Intellectual Property. Except as disclosed in
the Offering Memorandum, (A) the Company and its subsidiaries own or
possess, or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service
marks, trade names or other intellectual property (collectively,
"Intellectual Property") necessary to carry on the business now operated
by them, except that the Company and its subsidiaries may fail to so own,
possess or have the ability to acquire on reasonable terms any
Intellectual Property if such failure would not result, singly or in the
aggregate, in a Material Adverse Effect, and (B) neither the Company nor
any of its subsidiaries has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or circumstances
which would render any Intellectual Property invalid or inadequate to
protect the interest of the Company or any of its subsidiaries therein,
and which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.
(xix) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale
of the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except as may be required under the 1933
Act or state securities or "blue sky" laws in connection with the Exchange
Offer (as defined in the Offering Memorandum).
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(xx) Possession of Licenses and Permits. Except as disclosed in the
Offering Memorandum, the Company and its subsidiaries possess such
permits, licenses, approvals, consents and other authorizations issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them
(collectively, "Governmental Licenses"); the Company and its subsidiaries
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in
the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except where the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect. The Company has not
been informed of any fact, event or circumstance that is reasonably likely
to impair the Company's (or its subsidiaries') ability to obtain any
Governmental Licenses necessary or advisable in order to effectuate the
Company's future plans and strategies described in the Offering
Memorandum. Without limiting the generality of this paragraph (xix):
(A) The Company and each of its subsidiaries hold all
telecommunications regulatory licenses, permits, authorizations,
consents and approvals (the "Telecommunications Licenses") required
from the Federal Communications Commission (the "FCC") for the
Company and its subsidiaries to conduct their business on and as of
the date hereof in the manner described in the Offering Memorandum,
except as would not have, individually or in the aggregate, a
Material Adverse Effect; the Telecommunications Licenses have been
duly and validly issued and are in full force and effect, except
where the failure to be in full force and effect would not have,
individually or in the aggregate, a Material Adverse Effect; no
proceedings to revoke or restrict the Telecommunications Licenses
are pending or, to the best of the Company's knowledge, threatened;
neither the Company nor its subsidiaries are in violation of any of
the terms and conditions of any of the Telecommunications Licenses,
are in violation of the Communications Act of 1934, as amended (the
"Communications Act"), or are in violation of any FCC rules and
regulations, except as would not have, individually or in the
aggregate, a Material Adverse Effect; and the Company and its
subsidiaries have in effect with the FCC all international and
domestic service tariffs necessary to conduct their business on and
as of the date hereof in the manner described in the Offering
Memorandum except as would not have, individually or in the
aggregate, a Material Adverse Effect;
(B) The Company and its subsidiaries have obtained all state
and municipal Telecommunications Licenses and filed all tariffs
required for the provision of telecommunications services in any
state to conduct their business on and as of the date hereof in the
manner described in the Offering Memorandum,
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except where the failure to do so would not have, individually or in
the aggregate, a Material Adverse Effect;
(C) There is no outstanding adverse judgment, injunction,
decree or order that has been issued by the FCC or any state utility
commission or similar state agency ("PUC") or municipality against
the Company or its subsidiaries or any action, proceeding or
investigation pending before the FCC or any state PUC or
municipality, or, to the Company's knowledge, threatened by the FCC
or any state PUC or municipality against the Company or its
subsidiaries which, if the subject of any unfavorable decision,
ruling or finding, would have a Material Adverse Effect on the
Company or its subsidiaries;
(D) No license, permit, consent, approval, order or
authorization of, or filing with, the FCC or with any state PUC or
municipal authority on the part of the Company or its subsidiaries
is required in connection with the issuance or sale of the
Securities; and
(E) Neither the issuance and sale of the Securities nor the
performance by the Company or its subsidiaries of their obligations
under this Agreement, the Registration Rights Agreements (as defined
herein), the Indenture or the Pledge and Escrow Agreement (as
defined herein) (collectively, the "Purchase Documents") will result
in a violation in any material respect of: (1) the Communications
Act or the applicable rules or regulations, or any order, writ,
judgment, injunction, decree or award of the FCC binding on the
Company or its subsidiaries; (2) any state telecommunications laws
or any applicable state PUC rules or regulations, or any order,
writ, judgment, injunction, decree or award of any state PUC binding
on the Company or its subsidiaries; or (3) any municipal rules or
regulations applicable to the Company or its subsidiaries.
(xxi) Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Offering Memorandum or (b) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by
the Company or any of its subsidiaries; and all of the leases and
subleases material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Offering Memorandum, are in
full force and effect, and neither the Company nor any of its subsidiaries
has any notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any of its subsidiaries
under any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or any subsidiary thereof to the
continued possession of the leased or subleased premises under any such
lease or sublease.
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(xxii) Tax Returns. The Company and its subsidiaries have filed all
federal, state, local and foreign tax returns that are required to be
filed or have duly requested extensions thereof and have paid all taxes
required to be paid by any of them and any related assessments, fines or
penalties, except for any such tax, assessment, fine or penalty that is
being contested in good faith and by appropriate proceedings, and adequate
charges, accruals and reserves have been provided for in the financial
statements referred to in Section l(a)(v) above in respect of all federal,
state, local and foreign taxes for all periods as to which the tax
liability of the Company or any of its subsidiaries has not been finally
determined or remains open to examination by applicable taxing
authorities, except for such failures to file, request extensions, make
payments and provide for adequate charges, accruals and reserves as would
not, singly or in the aggregate, result in a Material Adverse Effect.
(xxiii) Environmental Laws. Except as described in the Offering
Memorandum and except such matters as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance, code, policy or rule
of common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company
and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous Materials or
Environmental Laws.
(xxiv) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Offering
Memorandum will not be, an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (the "1940 Act").
(xxv) Rule 144A Eligibility. The Securities are eligible for resale
pursuant to Rule 144A and will not be, at the Closing Time, of the same
class as securities listed on a
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national securities exchange registered under Section 6 of the 1934 Act,
or quoted in a U.S. automated interdealer quotation system.
(xxvi) No General Solicitation. None of the Company, its affiliates,
as such term is defined in Rule 501(b) under the 1933 Act ("Affiliates"),
or any person acting on its or any of their behalf (other than the Initial
Purchasers, as to whom the Company makes no representation) has engaged or
will engage, in connection with the offering of the Securities, in any
form of general solicitation or general advertising within the meaning of
Rule 502(c) under the 1933 Act.
(xxvii) No Registration Required. Subject to compliance by the
Initial Purchasers with the representations and warranties set forth in
Section 2 and the procedures set forth in Section 6 hereof, it is not
necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers and to each Subsequent Purchaser in
the manner contemplated by this Agreement and the Offering Memorandum to
register the Securities under the 1933 Act or to qualify the Indenture
under the Trust Indenture Act of 1939, as amended (the "1939 Act").
(xxviii) No Directed Selling Efforts. With respect to those
Securities sold in reliance on Regulation S, (A) none of the Company, its
Affiliates or any person acting on its or their behalf (other than the
Initial Purchasers, as to whom the Company makes no representation) has
engaged or will engage in any directed selling efforts within the meaning
of Regulation S and (B) each of the Company and its Affiliates and any
person acting on its or their behalf (other than the Initial Purchasers,
as to whom the Company makes no representation) has complied and will
comply with the offering restrictions requirement of Regulation S.
(xxix) Insurance. The Company and each of its subsidiaries maintains
insurance covering its properties, operations, personnel and business.
Such insurance insures against such losses and risks as are adequate in
accordance with customary industry practice to protect the Company, each
of its subsidiaries and their businesses. Neither the Company or any of
its subsidiaries has received notice from any insurer or agent of such
insurer that substantial capital improvement or other expenditures will
have to be made in order to continue such insurance. All such insurance is
outstanding and duly in force on the date hereof.
(xxx) Internal Accounting Controls. The Company maintains a system
of internal accounting controls sufficient to provide reasonable
assurances that (a) transactions are executed in accordance with
management's general or specific authorization; (b) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (c) access to assets is permitted only in
accordance with management's general or specific authorization; and (d)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
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(xxxi) Stabilization and Manipulation. None of the Company or any of
its subsidiaries has (a) taken, directly or indirectly, any action
designed to, or that might reasonably be expected to, cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Notes or (b) since the date of the
Preliminary Offering Memorandum (I) sold, bid for, purchased or paid any
person any compensation for soliciting purchases of, the Notes or (II)
paid or agreed to pay to any person any compensation for soliciting
another to purchase any securities of the Company.
(xxxii) Related Party Transactions. Except as disclosed in the
Offering Memorandum, there are no business relationships or related party
transactions required to be disclosed therein pursuant to Item 404 of
Regulation S-K of the Commission (assuming for purposes of this paragraph
(xxx) that Regulation S-K is applicable to the Offering Memorandum).
(xxxiii) Solvency. The Company is, and immediately after the Closing
Time 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 is greater than the total
amount of liabilities (including contingent liabilities) of the Company,
(B) the present fair salable value of the assets of the Company is greater
than the amount that will be required to pay the probable liabilities of
the Company on its debts as they become absolute and mature, (C) the
Company is able to realize upon its assets and pay its debts and other
liabilities, including contingent obligations, as they mature, and (D) the
Company does not have unreasonably small capital.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Initial Purchasers shall be deemed a representation and warranty
by the Company to each Initial Purchaser as to the matters covered thereby.
SECTION 2. Sale and Delivery to Initial Purchasers; Closing.
(a) Securities. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to each Initial Purchaser, severally and not jointly, and each
Initial Purchaser, severally and not jointly, agrees to purchase from the
Company, at the price set forth in Schedule B, the principal amount of
Securities set forth in Schedule A opposite the name of such Initial Purchaser,
plus any additional principal amount of Securities which such Initial Purchaser
may become obligated to purchase pursuant to the provisions of Section 11
hereof.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the office of Xxxxx &
XxXxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as
shall be agreed upon by the Representatives and the Company, at 10:00 A.M. on
the fifth business day after the date hereof (unless postponed in accordance
with the provisions of Section 11), or such other time not later than ten
business days
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after such date as shall be agreed upon by the Representatives and the Company
(such time and date of payment and delivery being herein called the "Closing
Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company against delivery to
the Representatives for the respective accounts of the Initial Purchasers of
certificates for the Securities to be purchased by them. It is understood that
each Initial Purchaser has authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Securities which it has agreed to purchase. Xxxxxxx Xxxxx, individually and not
as representative of the Initial Purchasers, may (but shall not be obligated to)
make payment of the purchase price for the Securities to be purchased by any
Initial Purchaser whose funds have not been received by the Closing Time, but
such payment shall not relieve such Initial Purchaser from its obligations
hereunder. The certificates representing the Securities shall be registered in
the name of Cede & Co. pursuant to the DTC Agreement and shall be made available
for examination and packaging by the Initial Purchasers in The City of New York
not later than 10:00 A.M. on the last business day prior to the Closing Time.
(c) Qualified Institutional Buyer. Each Initial Purchaser severally and
not jointly represents and warrants to, and agrees with, the Company that, as of
the date hereof and as of the Closing Date, it is a "qualified institutional
buyer" within the meaning, of Rule 144A under the 1933 Act (a "Qualified
Institutional Buyer") and an "accredited investor" within the meaning of Rule
501(a) under the 1933 Act (an "Accredited Investor").
(d) Denominations; Registration. Certificates for the Securities shall be
in such denominations and registered in such names as the Representatives may
request in writing at least one full business day before the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with each
Initial Purchaser as follows:
(a) Offering Memorandum. The Company, as promptly as possible, will
furnish to each Initial Purchaser, without charge, such number of copies of the
Preliminary Offering Memorandum, the Final Offering Memorandum and any
amendments and supplements thereto and documents incorporated by reference
therein as such Initial Purchaser may reasonably request.
(b) Pledged Securities On the Closing Date, the Company will purchase and
pledge to the Trustee, for the benefit of the holders of the Notes and the
Discount Notes (on an equal and ratable basis), Government Securities (as
defined in the Indenture) in such amount as will be sufficient to provide for
payment in full of the first six scheduled interest payments on the Notes. The
Government Securities will be pledged by the Company to the Trustee, for the
benefit of the holders of the Notes and the Discount Notes (on an equal and
ratable basis), pursuant to the Pledge and Escrow Agreement (the "Pledge and
Escrow Agreement"), to be dated the Closing Date, and will be held by the
Trustee in an account (the "Collateral Investments Account") established with
the Trustee pursuant to the Pledge and Escrow Agreement.
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(c) Notice and Effect of Material Events. The Company will immediately
notify each Initial Purchaser, and confirm such notice in writing, of (x) any
filing made by the Company of information 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 which (i) make any statement in the Offering Memorandum
false or misleading or (ii) are not disclosed in the Offering Memorandum. In
such event or if during such time any event shall occur as a result of which it
is necessary, in the reasonable opinion of the Company, its counsel, the Initial
Purchasers or counsel for the Initial Purchasers, to amend or supplement the
Final Offering Memorandum in order that the Final Offering Memorandum not
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances then existing, the Company will forthwith amend or supplement
the Final Offering Memorandum by preparing and furnishing to each Initial
Purchaser an amendment or amendments of, or a supplement or supplements to, the
Final Offering Memorandum (in form and substance satisfactory in the reasonable
opinion of counsel for the Initial Purchasers) so that, as so amended or
supplemented, the Final Offering 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 of the circumstances existing at the time
it is delivered to a Subsequent Purchaser, not misleading.
(d) Amendment to Offering Memorandum and Supplements. The Company will
advise each initial Purchaser promptly of any proposal to amend or supplement
the Offering Memorandum and will not effect such amendment or supplement without
the consent of the Initial Purchasers. Neither the consent of the Initial
Purchasers, nor the Initial Purchasers' delivery of any such amendment or
supplement, shall constitute a waiver of any of the conditions set forth in
Section 5 hereof.
(e) Qualification of Securities for Offer and Sale. The Company will use
its best efforts, in cooperation with the Initial Purchasers, to qualify the
Securities for offering and sale by the Initial Purchasers to any Subsequent
Purchasers under the applicable securities laws of such jurisdictions as the
Representatives may reasonably designate and will maintain such qualifications
in effect as long as required for the sale of the Securities; provided, however,
that the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject.
(f) DTC. The Company will cooperate with the Representatives and use its
best efforts to permit the Securities to be eligible for clearance and
settlement through the facilities of DTC.
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(g) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Offering
Memorandum under "Use of Proceeds".
(h) Restriction on Sale of Securities. During a period of 180 days from
the date of the Offering Memorandum, the Company will not, without the prior
written consent of Xxxxxxx Xxxxx, directly or indirectly, issue, sell, offer or
agree to sell, grant any option for the sale of, or otherwise dispose of, any
other debt securities of the Company or securities of the Company that are
convertible into, or exchangeable for, the Securities or such other debt
securities.
(i) Press Releases. From the date hereof to the Closing Time, without the
prior consent of the Initial Purchasers, the Company will not issue directly or
indirectly any press release or other public communication or hold any press
conference with respect to the Company or the business, financial condition,
assets, results of operations or prospects of the Company, unless in the
judgment of the Company and its counsel, and after notification to the Initial
Purchasers, such press release, communication or conference is required by law.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and any filing of the Offering Memorandum (including
financial statements and any schedules or exhibits and any document incorporated
therein by reference) and of each amendment or supplement thereto, (ii) the
preparation, printing and delivery to the Initial Purchasers of this Agreement
and any Agreement among Initial Purchasers, the Indenture and such other
documents as may be required in connection with the offering, purchase, sale and
delivery of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Initial Purchasers, including any charges
of DTC in connection therewith, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(e) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Initial Purchasers in connection therewith and in connection with the
preparation of the Blue Sky Survey, any supplement thereto and any Legal
Investment Survey, which amounts shall not exceed $2,500, (vi) the fees and
expenses of the Trustee, including the fees and disbursements of counsel for the
Trustee in connection with the Indenture and the Securities, (vii) any fees
payable in connection with the rating of the Securities and (viii) any fees
payable to the review by the National Association of Securities Dealers, Inc.
(the "NASD") in connection with the initial and continued designation of the
Securities as PORTAL securities under the PORTAL Market Rules pursuant to NASD
Rule 5322.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
10(a)(i) hereof, the Company shall reimburse the Initial Purchasers for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Initial Purchasers.
-15-
SECTION 5. Conditions of Initial Purchasers' Obligations. The obligations
of the several Initial Purchasers hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any of its subsidiaries
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Opinions of Counsel for Company. At the Closing Time, the
Representatives shall have received the opinions, dated as of the Closing Time,
together with signed or reproduced copies of such letters for each of the other
Initial Purchasers, (i) of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, counsel for the
Company, to the effect set forth in Exhibit A-1 hereto, (ii) of Xxxx and Xxxx
LLP, counsel for the Company, to the effect set forth in Exhibit A-2 hereto,
(iii) of Xxxxxxxxxx & Xxxxx, counsel for the Company, to the effect set forth in
Exhibit A-3 hereto, (iv) of Leboeuf, Xxxx, Xxxxxx & XxxXxx L.L.P., counsel for
the Company, to the effect set forth on Exhibit A-4 hereto and (v) of Xxxxxxx
Xxxxxxxxxx, General Counsel of the Company, to the effect set forth on Exhibit
A-5 hereto. In giving the opinion described in clause (i) above such counsel may
rely, as to all matters governed by the laws of jurisdictions other than the law
of the State of New York, the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representatives.
(b) Opinion of Counsel for Initial Purchasers. At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Xxxxx & XxXxxxxx, counsel for the Initial Purchasers, together
with signed or reproduced copies of such letter for each of the other Initial
Purchasers, substantially to the effect set forth in Exhibit A-6 hereto. In
giving such opinion such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of New York, the federal
law of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Representatives.
(c) Officers' Certificate. At the Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Offering Memorandum, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, dated as of the Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and warranties in
Section 1 hereof are true and correct with the same force and effect as though
expressly made at and as of the Closing Time, and (iii) the Company has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time.
(d) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from PricewaterhouseCoopers
LLP a letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced
-16-
copies of such letter for each of the other Initial Purchasers containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to Initial Purchasers with respect to the financial statements
and certain financial information contained in the Offering Memorandum.
(e) Bring-down Comfort Letter. At the Closing Time, the Representatives
shall have received from PricewaterhouseCoopers LLP a letter, dated as of the
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (d) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to the
Closing Time.
(f) Accountants Opinion. The Representatives shall have received the
opinion of PricewaterhouseCoopers LLP (or another internationally recognized
firm of independent public accountants or nationally recognized investment
banking firm selected by the Company) that the amount of Pledged Securities,
upon receipt of scheduled interest and principal payments of such securities,
will be sufficient to provide for payment in full of the first six scheduled
interest payments due on the Notes.
(g) PORTAL. At the Closing Time, the Securities shall have been designated
for trading on PORTAL.
(h) Registration Rights Agreements and Pledge and Escrow Agreement. The
Issuer and the Initial Purchasers shall have entered into a registration rights
agreement (the "Registration Rights Agreement"), dated as of the Closing Time,
substantially in form and substance as described in the Offering Memorandum
under the heading "Description of the Notes--Exchange Offer; Registration
Rights." The Issuer and the Trustee shall have entered into the Pledge and
Escrow Agreement, dated as of the Closing Date, substantially in the form and
substance as described in the Offering Memorandum under the heading "Description
of the Notes--Security." The Company shall have prepared financing statements
naming the Company as debtor and the Trustee, on behalf and for the benefit of
the holders of the Notes and the Discount Notes, together with all schedules
thereto, on the appropriate forms and shall have filed such financing statements
with the appropriate filing offices along with payment of all related filing
fees. Confirmation of such filings and payments shall be provided to the Initial
Purchasers and counsel to the Initial Purchasers.
(i) Additional Documents. At the Closing Time, counsel for the Initial
Purchasers shall have been furnished with such other documents and opinions as
they may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Initial Purchasers.
-17-
(j) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by notice to the Company at
any time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 7 and 8 shall survive any such termination and remain in
full force and effect.
SECTION 6. Subsequent Offers and Resales of the Securities.
(a) Offer and Sale Procedures. Each of the Initial Purchasers and the
Company hereby acknowledge and agree to observe the following procedures in
connection with the offer and sale of the Securities:
(i) Offers and Sales only to Regulation S Purchasers or Qualified
Institutional Buyers. Offers and sales of the Securities will be made only
by the Initial Purchasers or Affiliates thereof qualified to do so in the
jurisdictions in which such offers or sales are made. Each such offer or
sale shall only be made (A) to persons whom the offeror or seller
reasonably believes to be qualified institutional buyers (as defined in
Rule 144A under the Securities Act) or (B) to non-U.S. persons outside the
United States to whom the offeror or seller reasonably believes offers and
sales of the Securities may be made in reliance upon Rules 903 and 904 of
Regulation S under the 1933 Act.
(ii) No General Solicitation. The Securities will be offered by
approaching prospective Subsequent Purchasers on an individual basis. No
general solicitation or general advertising (within the meaning of Rule
502(c) under the 1933 Act) will be used in the United States in connection
with the offering of the Securities.
(iii) Purchases by Non-Bank Fiduciaries. In the case of a non-bank
Subsequent Purchaser of a Security acting as a fiduciary for one or more
third parties, in connection with an offer and sale to such purchaser
pursuant to clause (a) above, each third party shall, in the judgment of
the applicable Initial Purchaser, be an Institutional Accredited Investor
or a Qualified Institutional Buyer or a non-U.S. person outside the United
States.
(iv) Subsequent Purchaser Notification. Each Initial Purchaser will
take reasonable steps to inform, and cause each of its U.S. Affiliates to
take reasonable steps to inform, persons acquiring Securities from such
Initial Purchaser or Affiliate, as the case may be, in the United States
that the Securities (A) have not been and will not be registered under the
1933 Act and have not been registered under any state securities laws, (B)
are being sold to them without registration under the 1933 Act in reliance
on Rule 144A or in accordance with another exemption from registration
under the 1933 Act, as the case may be, and (C) may not be offered, sold
or otherwise transferred except (1) to the Company, (2) outside the United
States in accordance with Rule 904 of Regulation S, or (3) inside the
United States in accordance with (x) Rule 144A to a person whom the seller
reasonably believes is a Qualified Institutional Buyer that is
-18-
purchasing such Securities for its own account or for the account of a
Qualified Institutional Buyer to whom notice is given that the offer, sale
or transfer is being made in reliance on Rule 144A or (y) the exemption
from registration under the 1933 Act provided by Rule 144, if available.
(v) Restrictions on Transfer. The transfer restrictions and the
other provisions set forth in Section 3.17 of the Indenture, including the
legends required thereby, shall apply to the Securities except as
otherwise agreed by the Company and the Initial Purchasers. The Company
shall refuse to register any transfer of securities not made in accordance
with Regulation S under the Securities Act, pursuant to registration under
the Securities Act, or pursuant to an available exemption from such
registration. Following the sale of the Securities by the Initial
Purchasers to Subsequent Purchasers pursuant to the terms hereof, the
Initial Purchasers shall not be liable or responsible to the Company for
any losses, damages or liabilities suffered or incurred by the Company,
including any losses, damages or liabilities under the 1933 Act, arising
from or relating to any resale or transfer by any Subsequent Purchaser of
any Security; provided, that nothing contained in this sentence shall
limit the Initial Purchasers' rights and obligations under Section 7
hereof.
(vi) Delivery of Offering Memorandum. Each Initial Purchaser will
deliver to each purchaser of the Securities from such Initial Purchaser,
in connection with its original distribution of the Securities, a copy of
the Offering Memorandum, as amended and supplemented at the date of such
delivery.
(vii) Hedging Transactions. The Initial Purchasers will not engage
in hedging transactions with respect to the Securities prior to the
expiration of the applicable distribution compliance period specified in
Rule 903 of Regulation S under the Securities Act, unless in compliance
with the Securities Act.
(b) Covenants of the Company. The Company covenants with each Initial
Purchaser as follows:
(i) Due Diligence. In connection with the original distribution of
the Securities, the Company agrees that, prior to any offer or resale of
the Securities by the Initial Purchasers, the Initial Purchasers and
counsel for the Initial Purchasers shall have the right to make reasonable
inquiries into the business of the Company and its subsidiaries. The
Company also agrees to provide answers to each prospective Subsequent
Purchaser of Securities who so requests concerning the Company and its
subsidiaries (to the extent that such information is available or can be
acquired and made available to prospective Subsequent Purchasers without
unreasonable effort or expense and to the extent the provision thereof is
not prohibited by applicable law) and the terms and conditions of the
offering of the Securities, as provided in the Offering Memorandum.
-19-
(ii) Integration. The Company agrees that it will not and will cause
its Affiliates not to make any offer or sale of securities of the Company
of any class if, as a result of the doctrine of "integration" referred to
in Rule 502 under the 1933 Act, such offer or sale would render invalid
(for the purpose of (i) the sale of the Securities by the Company to the
Initial Purchasers, (ii) the resale of the Securities by the Initial
Purchasers to Subsequent Purchasers or (iii) the resale of the Securities
by such Subsequent Purchasers to others, in each case in accordance with
the terms and conditions herein set forth) the exemption from the
registration requirements of the 1933 Act provided by Section 4(2) thereof
or by Rule 144A or by Regulation S thereunder or otherwise.
(iii) Rule 144A Information. The Company agrees that, in order to
render the Securities eligible for resale pursuant to Rule 144A under the
1933 Act, while any of the Securities remain outstanding, it will make
available, upon request, to any holder of Securities or prospective
purchasers of Securities the information specified in Rule 144A(d)(4),
unless the Company furnishes information to the Commission pursuant to
Section 13 or 15(d) of the 1934 Act (such information, whether made
available to holders or prospective purchasers or furnished to the
Commission, is herein referred to as "Additional Information").
(iv) Restriction on Repurchases. Until the expiration of three years
after the original issuance of the Securities, the Company will not, and
will cause its Affiliates not to, purchase or agree to purchase or
otherwise acquire any Securities which are "restricted securities" (as
such term is defined under Rule 144(a)(3) under the 1933 Act), whether as
beneficial owner or otherwise (except as agent acting as a securities
broker on behalf of and for the account of customers in the ordinary
course of business in unsolicited broker's transactions) unless,
immediately upon any such purchase, the Company or any Affiliate shall
submit such Securities to the Trustee for cancellation.
(c) Resale Pursuant to Rule 903 of Regulation S or Rule 144A. Each Initial
Purchaser represents and agrees, that, except as permitted by Section 6(a)
above, it has offered and sold Securities and will offer and sell Securities (i)
as part of their distribution at any time and (ii) otherwise until forty days
after the later of the date upon which the offering of the Securities commences
and the Closing Time, only in accordance with Rule 903 of Regulation S or Rule
144A under the 1933 Act. Accordingly, neither the Initial Purchasers, their
affiliates nor any persons acting on their behalf have engaged or will engage in
any directed selling efforts with respect to Securities, and the Initial
Purchasers, their affiliates and any person acting on their behalf have complied
and will comply with the offering restriction requirements of Regulation S. Each
Initial Purchaser agrees that, at or prior to confirmation of a sale of
Securities (other than a sale of Securities pursuant to Rule 144A), it will have
sent to each distributor, dealer or person receiving a selling concession, fee
or other remuneration that purchases Securities from it or through it during the
restricted period a confirmation or notice to substantially the following
effect:
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"The Securities covered hereby have not been registered under the
United States 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 and (ii) otherwise until forty days after the later of
the date upon which the offering of the Securities commenced and the
date of closing, except in either case in accordance with Regulation
S or Rule 144A under the Securities Act. Terms used above have the
meaning given to them by Regulation S."
Terms used in the above paragraph have the meanings given to them by Regulation
S.
Each Initial Purchaser severally represents and agrees that it has not entered
and will not enter into any contractual arrangements with respect to the
distribution of the Securities, except with its affiliates or with the prior
written consent of the Company.
SECTION 7. Indemnification.
(a) Indemnification of Initial Purchasers. The Company agrees to indemnify
and hold harmless each Initial Purchaser and each person, if any, who controls
any Initial Purchaser within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Offering
Memorandum or the Final Offering Memorandum (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
7(d) below) any such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Xxxxxxx Xxxxx), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
-21-
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Initial Purchaser through the Representative expressly for use in the Offering
tMemorandum (or any amendment thereto), which information is described in
Section 1(a)(ii) hereof; and provided further that the Company will not be
liable to an Initial Purchaser with respect to any Preliminary Offering
Memorandum to the extent that the Company shall sustain the burden of proof of
proving that any such loss, liability, claim, damage or expense resulted from
the fact that such Initial Purchaser, in contravention of a requirement of this
Agreement or applicable law, sold Securities to a person to whom such Initial
Purchaser failed to send or give, at or prior to the Closing Date, a copy of the
Final Offering Memorandum as then amended or supplemented if (i) the Company has
previously furnished copies thereof (sufficiently in advance of the Closing Date
to allow for the distribution by the Closing Date) to the Initial Purchasers and
the loss, liability, claim, damage or expense of such Initial Purchaser resulted
from an untrue statement or omission or alleged untrue statement or omission of
a material fact contained in or omitted from the Preliminary Offering Memorandum
which was corrected in the Final Offering Memorandum as, if applicable, amended
or supplemented prior to the Closing Date and (ii) giving or sending such Final
Offering Memorandum by the Closing Date to the party or parties asserting such
loss, liability, claim, damage or expense would have constituted a complete
defense to the claim asserted by such person.
(b) Indemnification of Company, Directors and Officers. Each Initial
Purchaser severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who would be required to sign the Offering
Memorandum if it were a registration statement on Form S-1, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Offering Memorandum in
reliance upon and in conformity with written information furnished to the
Company by such Initial Purchaser through the Representatives expressly for use
in the Offering Memorandum.
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 7(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any
-22-
local counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 7 or Section 8 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 8. Contribution. If the indemnification provided for in Section 7
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Initial Purchasers on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Initial Purchasers on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Initial Purchasers on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Initial
Purchasers, bear to the aggregate initial offering price of the Securities.
The relative fault of the Company on the one hand and the Initial
Purchasers on the other hand shall be determined by reference to, among other
things, whether any such untrue or
-23-
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or by the
Initial Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed pursuant
to this Agreement were offered to the Subsequent Purchasers exceeds the amount
of any damages which such Initial Purchaser has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11 (f) of the 1933 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, if any, who controls an
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as such Initial
Purchaser, and each director of the Company, each officer of the Company who
would be required to sign the Offering Memorandum if it were a registration
statement on Form S-1, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Initial Purchasers'
respective obligations to contribute pursuant to this Section 8 are several in
proportion to the principal amount of Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 9. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Initial Purchaser or controlling person, or by or on behalf
of the Company, and shall survive delivery of the Securities to the Initial
Purchasers.
SECTION 10. Termination of Agreement.
-24-
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Offering
Memorandum, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or limited by the Commission, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 7
and 8 shall survive such termination and remain in full force and effect.
SECTION 11. Default by One or More of the Initial Purchasers. If one or
more of the Initial Purchasers shall fail at the Closing Time to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representatives shall have the right, but not the
obligation, within 24 hours thereafter, to make arrangements, for one or more of
the non-defaulting Initial Purchasers, or any other Initial Purchasers, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then this Agreement shall terminate without liability on the part of any
non-defaulting Initial Purchaser.
No action pursuant to this Section shall relieve any defaulting Initial
Purchaser from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Representatives or the Company shall have the right
to postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Offering Memorandum or in any other documents
or arrangement.
SECTION 12. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard
-25-
form of telecommunication. Notices to the Initial Purchasers shall be directed
to the Representatives at North Tower, World Financial Center, New York, New
York 10281-11201, attention of Xxxxxx Xxxxxx, with a courtesy copy to Xxxxxxx X.
Xxxx, Xxxxx & XxXxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; notices to
the Company shall be directed to it at 0000 Xxxxx Xxxxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, attention of Xxxxx Xxxxxxxx, with a courtesy copy to Xxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 000 Xxxx "X" Xxxxxx, Xxxxx 0000, Xxx
Xxxxx, Xxxxxxxxxx 00000.
SECTION 13. Parties. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchasers and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 7 and 8
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Initial Purchasers and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Initial Purchaser shall be deemed to be a successor by reason merely of such
purchase.
SECTION 14. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
[signature page follows]
-26-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Initial Purchasers and the Company in accordance with its terms.
Very truly yours,
RHYTHMS NETCONNECTIONS, INC.
By: /s/ XXXXX XXXXXXXX
-----------------------
Xxxxx Xxxxxxxx
Chief Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX
INCORPORATED
XXXXXXX XXXXX XXXXXX INC.
XXXXX SECURITIES INC.
By: XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By /s/ XXXXX XXXXXX
---------------------------------------
Authorized Signatory
For themselves and as Representatives of the other Initial Purchasers named in
Schedule A hereto.
-27-
SCHEDULE A
Name of Initial Purchaser Principal Amount
------------------------- ----------------
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx Incorporated.... $162,500,000
Xxxxxxx Xxxxx Xxxxxx Inc.............................. 81,250,000
Chase Securities Inc.................................. 81,250,000
Total................................................. $325,000,000
============
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SCHEDULE B
RHYTHMS NETCONNECTIONS, INC.
12 3/4% Senior Notes due 2009
1. The initial public offering price of the Securities shall be 100.0% of
the principal amount of the Notes.
2. The purchase price to be paid by the Initial Purchasers for the
Securities shall be 97.0% of the principal amount of the Notes.
3. The interest rate on the Notes shall be 12 3/4% per annum commencing
October 15, 1999.
4. The further terms and conditions of the Securities are as set forth in
the Offering Memorandum.
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Exhibit A-1
FORM OF OPINION OF COMPANY'S LEGAL COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(i)
[Form of Xxxxxxx Xxxxxxx opinion follows]
A-1
Exhibit A-2
FORM OF OPINION OF COMPANY'S LEGAL COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(ii)
[form of Xxxx and Xxxx opinion follows]
A-2
Exhibit A-3
FORM OF OPINION OF COMPANY'S LEGAL COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(iii)
[form of Xxxxxxxxxx & Xxxxx opinion follows]
A-3
Exhibit A-4
FORM OF OPINION OF COMPANY'S LEGAL COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(iv)
[Form of XxXxxxx Xxxx opinion follows.]
A-4
Exhibit A-5
FORM OF OPINION OF THE COMPANY'S LEGAL COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(v)
[form of General Counsel opinion follows]
A-5
Exhibit A-6
FORM OF OPINION OF INITIAL PURCHASERS' LEGAL COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
[form of Xxxxx & XxXxxxxx opinion follows]
A-6
