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EXHIBIT 1.1
VERIO INC.
6,000,000 Shares
6.75% SERIES A CONVERTIBLE PREFERRED STOCK
PURCHASE AGREEMENT
New York, New York
July 14, 1999
XXXXXXX XXXXX XXXXXX INC.
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
CREDIT SUISSE FIRST BOSTON CORPORATION
DEUTSCHE BANK SECURITIES INC.
FIRST UNION CAPITAL MARKETS CORP.
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Verio Inc., a Delaware corporation (the "Company"), proposes to
issue and to sell to Xxxxxxx Xxxxx Xxxxxx Inc., Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation (together with Xxxxxxx Xxxxx Barney Inc., the
"Representatives"), Credit Suisse First Boston Corporation, Deutsche Bank
Securities Inc. and First Union Capital Markets Corp., a division of Wheat First
Securities, Inc. (together, the "Initial Purchasers"), severally and not
jointly, an aggregate of 6,000,000 shares (the "Firm Shares") of its 6.75%
Series A Convertible Preferred Stock, liquidation preference of $50.00 per share
(the "Convertible Preferred Stock"), as set forth on Schedule I hereto (the
"Offering"). The Company also proposes to issue and to sell to the Initial
Purchasers, severally and not jointly, not more than an additional 1,200,000
shares of the Convertible Preferred Stock (the "Additional Shares") upon the
terms and conditions set forth herein. The Firm Shares and the Additional Shares
are herein referred to collectively as the "Shares". The Shares may be converted
into shares of common stock, par value $0.001 per share, of the Company (the
"Common Stock") in accordance with the terms of the Certificate of Designation
(as defined below).
The sale of the Shares to the Initial Purchasers will be made
without registration of the Shares 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 Shares
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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 Shares, the Company has
prepared a preliminary offering memorandum, dated July 1, 1999 (including any
information incorporated by reference therein, the "Preliminary Memorandum"),
and a final offering memorandum, dated July 14, 1999 (including any information
incorporated by reference therein, the "Final Memorandum"). Each of the
Preliminary Memorandum and the Final Memorandum sets forth certain information
concerning the Company, the Shares and the Common Stock. The Company hereby
confirms that it has authorized the use of the Preliminary Memorandum and the
Final Memorandum, and any amendment or supplement thereto, in connection with
the offer and sale of the Shares 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. All references in
this Agreement to financial statements and schedules and other information that
is "contained", "included" or "state", or words of similar import, in the
Preliminary Memorandum or Final Memorandum shall be deemed to mean and include
all such financial statements and schedules and other information which are
incorporated by reference in the Preliminary memorandum or Final Memorandum, as
the case may be.
The Shares are to be issued pursuant to a Certificate of
Designation (the "Certificate of Designation") to the Certificate of
Incorporation of the Company. The holders of the Shares and the shares of Common
Stock issued as dividends (including through the mechanics of the Deposit
Agreement) and upon conversion of the Shares (collectively, the Subject
Securities") will be entitled to the benefits of the Registration Rights
Agreement (the "Registration Rights Agreement") to be dated as of July 20, 1999,
among the Company and the Initial Purchasers. In addition, the holders of the
Shares will be entitled to the benefits of the Deposit Agreement (the "Deposit
Agreement") to be dated as of July 20, 1999, between the Company and the deposit
agent named therein (the "Deposit Agent").
This Agreement, the Registration Rights Agreement, the Deposit
Agreement and the Certificate of Designation 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.
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(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.
(b) The documents incorporated or deemed to be incorporated by
reference in the Preliminary Memorandum and Final Memorandum, at the
time they were or hereafter are filed with the Securities and Exchange
Commission (the "Commission"), complied and will comply in all
material respects with the requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and
regulations thereunder and, when read together with the other
information in the Preliminary Memorandum or Final Memorandum, as the
case may be, at the time issued did not, and as of the Closing Date
(and, if any Additional Shares are purchased, at the Option Closing
Date (as defined below)) 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.
(c) The Company has been advised by The Portal Market that the
Shares have been designated Portal-eligible securities in accordance
with the rules and regulations of the National Association of
Securities Dealers, Inc. (the "NASD").
(d) 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 Shares in a manner
that would require the registration of the Shares under the Securities
Act.
(e) 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 Shares, (A) in any form of general solicitation or
general advertising within the meaning of Rule 502(c) under the
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Securities Act, (B) in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act or (C) in any action
which would require the registration of the offering and sale of the
Shares pursuant to this Agreement or which would violate applicable
state securities or "blue sky" laws.
(f) 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 "qualified institutional buyers"
("QIBs") (as defined in Rule 144A under the Securities Act) purchasing
Shares are true and correct as of the Closing Date, it is not
necessary in connection with the offer, sale and delivery of the
Shares to the Initial Purchasers in the manner contemplated by, or in
connection with the initial resale of such Shares by the Initial
Purchasers in accordance with, this Agreement to register the Shares
under the Securities Act.
(g) 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. The Company and each Subsidiary 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 internet service provider 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
internet service provider affiliate were a subsidiary of the Company.
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(h) The Company's authorized equity capitalization is as set
forth in the Final Memorandum under the caption "Description of
Capital Stock". The capital stock of the Company conforms in all
material respects to the description thereof contained in the Final
Memorandum under the caption "Description of Capital Stock". The
shares of issued and outstanding capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable. Except as set forth in the Final Memorandum, no
options, warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or ownership
interests in the Company are outstanding.
(i) The Shares being sold hereunder by the Company have been duly
and validly authorized, and, when issued and delivered to and
purchased by the Initial Purchasers pursuant to this Agreement, will
be fully paid and non-assessable. The shares of Common Stock issuable
as dividends and upon conversion or redemption of the Shares have been
duly and validly authorized and reserved for issuance and, when issued
and delivered in accordance with the provisions of the Certificate of
Designation, will be fully paid and non-assessable. The Shares being
sold hereunder conform in all material respects to the description
thereof contained in the Final Memorandum. The holders of outstanding
shares of capital stock of the Company are not entitled to preemptive
or other rights to subscribe for the Subject Securities.
(j) This Agreement has been, and, as of the Closing Date, the
Deposit Agreement, the Certificate of Designation and the Registration
Rights 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 Deposit
Agreement and the Registration Rights Agreement will constitute the
valid and binding obligations of the Company, enforceable against the
Company in accordance with the terms hereof or 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").
(k) 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 and sale of the Subject Securities, the
performance by the Company of its obligations under the Transaction
Documents, or for the consummation of any of the transactions
contemplated hereby or
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thereby, including, without limitation, the issuance and sale of the
Shares hereunder, except such as may be required (A) in connection
with the registration under the Securities Act of the Subject
Securities pursuant to the Registration Rights Agreement (including
any filing with the NASD), or (B) by state securities or "blue sky"
laws in connection with the offer and sale of the Shares or the
registration of the Subject Securities pursuant to the Registration
Rights Agreement.
(l) The issuance, sale and delivery of the Shares, the execution,
delivery and performance by the Company of the Transaction Documents
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 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").
(m) The Deposit Agreement, the Certificate of Designation and the
Registration Rights Agreement will each conform in all material
respects to the descriptions thereof in the Final Memorandum.
(n) The audited financial statements included or incorporated by
reference in the Final Memorandum, including the notes thereto,
respectively present fairly the financial position of the Company and
its consolidated subsidiaries, NSNet, Inc.,
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Access One, Inc., STARnet, L.L.C., Computing Engineers Inc., LI Net,
Inc., NTX, Inc., and Best Internet Communications, 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
indicated, 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 consolidated
financial statements of the Company and its subsidiaries included or
incorporated by reference in the Final Memorandum. KPMG 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 person's
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 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.
(o) 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.
(p) Except as set forth in the Final Memorandum under the caption
"Business -- The Verio Organization", 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 Subject Securities) registered under any registration
statement contemplated by the Registration
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Rights Agreement. All of the outstanding capital stock of each of the
Subsidiaries has been duly authorized and validly issued, is fully
paid and non-assessable and was not issued in violation of any
preemptive or similar rights (whether provided contractually or
pursuant to any Organizational Document).
(q) 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 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.
(r) 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.
(s) 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
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application for, any License which, if the subject of any unfavorable
decision, ruling or finding, could, individually 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, individually or in the aggregate, reasonably
be expected to have or result in a Material Adverse Effect.
(t) 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.
(u) 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.
(v) 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.
(w) None of the Company nor any of the Subsidiaries is an
"investment company" or a company "controlled by" an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended, and the rules and regulations thereunder.
(x) 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
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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 Subject Securities.
(y) 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.
(z) The Company has insurance in such amounts and covering such
risks and liabilities as are in accordance with normal industry
practice.
(aa) 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.
(bb) 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 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.
(cc) 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
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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.
(dd) 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.
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.
(ee) 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.
(ff) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance and sale by
the Company of the Subject Securities.
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(gg) The Shares satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(hh) 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 Shares.
(a) 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 $48.375 per share (the "Purchase Price"; strictly for
purposes of this Agreement, the Purchase Price is inclusive of the
Deposit Amount (as defined below)), the number of Firm Shares set
forth opposite such Initial Purchaser's name in Schedule I hereto. In
connection with the purchase of the Shares from the Company, each
Initial Purchaser agrees, severally and not jointly, to deposit into
an account designated in the Deposit Agreement, at the request of the
purchasers of the Shares and on their behalf, an amount equal to
approximately 6.73% of the Purchase Price ($20,193,966.00). Such
amount (the "Deposit Amount") shall be sufficient, together with the
earnings thereon, to pay any quarterly cash payment required to be
made under the Deposit Agreement through the Deposit Expiration Date
(as defined in the Deposit Agreement).
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby
grants an option to the several Initial Purchasers to purchase,
severally and not jointly, up to 1,200,000 Additional Shares at the
Purchase Price and upon delivery of the Deposit Amount relating to
such Additional Shares into the deposit account specified in and
pursuant to the terms of the Deposit Agreement. Said option may be
exercised only to cover over-allotments in the sale of the Firm Shares
by the Initial Purchasers. Said option may be exercised in whole or in
part at any time (but not more than once) on or before the 30th day
after the date of the Final Memorandum upon written or telephonic
notice by the Representatives (on behalf of the Initial Purchasers) to
the Company setting forth the number of Additional Shares as to which
the several Initial Purchasers are exercising the option and the date
of settlement and delivery of the related Deposit Amount. Delivery of
certificates for the Additional Shares by the Company and payment
therefor to the Company and delivery of the related Deposit Amount
shall be made as provided in Section 3 hereof. The percentage of the
Additional Shares to be
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purchased by each Initial Purchaser shall be the same percentage of
the total number of shares of the Additional Shares to be purchased by
the several Initial Purchasers as such Initial Purchaser is purchasing
of the Firm Shares, subject to such adjustments as you in your
absolute discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the Firm
Shares and the Additional Shares (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third business day prior to
the Closing Date) shall be made at 9:00 AM, New York City time, on July 20,
1999, 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 and
payment for the Shares being herein called the "Closing Date"). The Company will
deliver against payment of the Purchase Price (including delivery of the related
Deposit Amount) by the Initial Purchasers the Shares in the form of one or more
permanent global securities in definitive form (the "Global Securities")
deposited with Norwest Shareowner Services ("Norwest") as custodian for The
Depository Trust Company (the "Depositary") and registered in the name of Cede &
Co., as nominee for the Depositary. Interests in any permanent Global Securities
will be held only in book-entry form through the Depositary, except in the
limited circumstances described in the Final Memorandum. Payment for the Shares
shall be made by the Initial Purchasers to or upon the order of the Company on
the Closing Date by wire transfer of same day funds or such other manner of
payment as may be agreed by the Company and the Initial Purchasers, to an
account previously designated to the Initial Purchasers by the Company at one or
more financial institutions acceptable to the Initial Purchasers, at the offices
of Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such
other location as may be mutually agreed upon by the Company and the Initial
Purchasers, against delivery to Norwest as custodian for the Depositary of the
Global Securities representing all of the Shares.
The Company agrees to have the Global Securities available
checking by the Initial Purchasers in New York, New York, not later than 10:00
AM on the business day prior to the Closing Date.
If the option provided for in Section 2(b) hereof is exercised
after the third business day prior to the Closing Date, the Company will deliver
the Additional Shares (at the expense of the Company), in the form of one or
more permanent Global Securities deposited with Norwest as custodian for the
Depositary and registered in the name of Cede & Co. as nominee for the
Depositary, to the Initial Purchasers on the date (the "Option Closing Date")
specified by the Initial Purchasers (which shall be within three business days
after exercise of said option) against payment by the Initial Purchasers of the
purchase price thereof (including delivery of the related Deposit Amount) to or
upon the order of the Company by wire transfer payable in same-day funds to the
account specified by the Company. If settlement for the
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Additional Shares occurs after the Closing Date, the Company will deliver to the
Initial Purchasers on the Option Closing Date, and the obligation of the Initial
Purchasers to purchaser the Additional Shares shall be conditioned upon receipt
of, supplemental opinions, certificates and letters confirming as of such date
the opinions, certificates and letters delivered on the Closing Date pursuant to
Section 6 hereof.
4. Offering of Shares. 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
Shares except 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 Shares is aware that such
sale is being made in reliance on Rule 144A.
(b) Neither it nor any person acting on its behalf has made or
will make offers or sales of the Shares 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.
(c) It has not offered or sold and will not offer or sell, in the
United Kingdom, by means of any document, any Shares 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 Shares 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 Shares to a person who is of a kind
described in Article 11(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.
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, 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.
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(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 Shares 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 Shares 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 placement of the
Shares 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
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.
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(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 Shares by means of any form of general solicitation
or general advertising (as such terms are used in Regulation D under
the Securities Act), 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 Subject
Securities.
(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 Shares in a manner that would require the registration of the
Shares under the Securities Act.
(f) The Company will use its reasonable best efforts in
cooperation with the Initial Purchasers to (i) permit the Shares to be
eligible for clearance and settlement through DTC and (ii) permit the
Shares to be designated as securities eligible for trading in The
Portal Market in accordance with the rules and regulations of the
NASD.
(g) 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.
(h) The Company will arrange for the registration and
qualification of the Shares 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 Shares as contemplated by this Agreement and the Final
Memorandum and will continue such qualifications in effect for as long
as may be necessary to complete the distribution of the Shares;
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(h), (ii) file any general consent to service of
process in any jurisdiction where it is not at the Closing Date 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 Shares 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
Shares for offering or sale in
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any jurisdiction or the institution, threatening or contemplation of
any proceeding for such purpose.
(i) The Company will reserve and keep available at all times,
free of any preemptive rights, shares of Common Stock for the purpose
of enabling the Company to satisfy all obligations to issues shares of
Common Stock as dividends with respect to the Shares or upon
conversion of the Shares.
(j) The Company will file the Certificate of Designation prior to
the Closing Date with the Secretary of State of the State of Delaware,
and the Certificate of Designation shall have become effective on or
prior to the Closing Date in accordance with the General Corporation
Law of the State of Delaware.
(k) The Company will use the proceeds received from the Offering
in the manner specified in the Final Memorandum under the heading "Use
of Proceeds".
(l) 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 Shares that have been acquired by any of them.
(m) The Company will not, without the prior written consent of
Xxxxxxx Xxxxx Barney Inc., for a period of 90 days after the date
hereof, offer, sell or contract to sell, or otherwise dispose of (or
enter into any transaction which is designed to, or might reasonably
be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement
or otherwise) by the Company or any affiliate of the Company or any
person in privity with the Company or any affiliate of the Company)
directly or indirectly, or announce the offering of, any other shares
of Common Stock or any securities convertible into, or exchangeable
for, shares of Common Stock; provided that (i) the Company may issue
and sell Common Stock pursuant to any employee stock option plan,
stock ownership plan or dividend reinvestment plan of the Company in
effect at the date hereof, (ii) the Company may issue Common Stock
issuable upon the conversion of securities or the exercise of warrants
outstanding at the date hereof, (iii) the Company may issue Common
Stock (or securities convertible into, or exchangeable for, shares of
Common Stock) as consideration or partial consideration for the
acquisition of all or substantially all of an Internet Service
Business (as defined in the Indenture, dated as of March 25, 1998, by
and between the Company and First Trust National Association, as
trustee), whether by stock purchase, merger, purchase of all or
substantially all of the assets of such person or otherwise, (iv) the
Company may issue and sell Common Stock (or securities convertible
into, or exchangeable for, shares of Common Stock) in connection with
the formation or furtherance of a strategic alliance and (v) the
Company may issue
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Common Stock (or securities convertible into, or exchangeable for,
shares of Common Stock) as consideration or partial consideration for
the acquisition of all or substantially all of an Internet Service
Business having at least one class of capital stock which is at the
time of such acquisition registered pursuant to Section 12(b) or 12(g)
of the Exchange Act, whether by stock purchase, merger, purchase of
all or substantially all of the assets of such person or otherwise;
provided, further, that in connection with any issuance or issuance
and sale permitted under clauses (iii) or (iv) of the previous
proviso, the Company agrees not to grant any rights exercisable prior
to the date that is 90 days after the date of this Agreement with
respect to the registration under the Act of any shares of Common
Stock (or securities convertible into, or exchangeable for, shares of
Common Stock) issued in connection with such transaction.
6. Conditions to the Obligations of the Initial Purchasers. The
obligations of the Initial Purchasers to purchase the Shares and deliver the
Purchase Price and related Deposit Amount 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 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;
(2) (A) 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"; (B) the shares of issued
and outstanding capital stock of the Company have been duly and
validly authorized and issued and are fully paid and
non-assessable; (C) the Shares being sold hereunder by the
Company have been duly and validly authorized, and, when issued
and delivered to and purchased by the Initial Purchasers pursuant
to this Agreement, will be fully paid and non-assessable; (D) the
shares of Common Stock issuable as dividends and upon conversion
of the Shares have been duly and validly
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authorized and reserved for issuance and, when issued and
delivered in accordance with the provisions of the Certificate of
Designation, will be fully paid and non-assessable; (E) the
holders of outstanding shares of capital stock of the Company are
not entitled to preemptive or other rights to subscribe for the
Subject Securities; (F) the certificates for the Shares are in
valid and sufficient form; and (G) except as set forth in the
Final Memorandum, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for,
shares of capital stock of or ownership interests in the Company
are outstanding;
(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; 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-- The Verio Organization", 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 Deposit Agreement and the Registration Rights
Agreement;
(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 Deposit Agreement or the Registration Rights Agreement or for
the issue and sale of the Shares, 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
Subject Securities under the Registration Rights Agreement, and
(B) by state securities or "blue sky" laws in connection with the
purchase and distribution of the Shares by the Initial Purchasers
(as to which such counsel need express no opinion);
(6) The issuance, sale and delivery of the Shares, the
execution, delivery and performance by the Company of this
Agreement, the Deposit Agreement and the Registration Rights
Agreement (in each case assuming due
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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 Contract
identified in Schedule III hereto (provided that such counsel
need not express an opinion as to any potential violation of any
financial covenant contained in any Material Contract) 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 Final Memorandum under the
headings "Offering Memorandum Summary - The Offering",
"Description of the Convertible Preferred Stock", "Description of
Capital Stock", and "Certain Related Party Transactions," insofar
as such statements purport to summarize certain provisions of the
Certificate of Designation, the Shares, the Common Stock, the
Deposit Agreement, the Registration Rights Agreement, the
Company's authorized and outstanding capital stock and certain
agreements to which the Company is a party, provide a fair
summary of such provisions of such agreements and instruments;
(9) The statements in the Final Memorandum under the caption
"Federal Tax Considerations" fairly and accurately summarize the
material United States federal tax consequences of owning the
Shares;
(10) Each of the Deposit Agreement and the Registration
Rights 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,
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enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by (a) with respect
to the Deposit Agreement and the Registration Rights Agreement,
the Enforceability Limitations, and (b) with respect to the
Registration Rights Agreement, as to rights of indemnification
and contribution, principles of public policy or federal or state
securities laws relating thereto;
(11) 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 Final 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;
(12) 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
Shares 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 Shares or in connection with the initial resale of such
Shares in the manner contemplated by the Purchase Agreement and
the Final Memorandum to register the Shares under the Securities
Act, it being understood that no opinion is expressed as to any
subsequent resale of any Shares; and
(13) When the Shares are issued and delivered pursuant to
this Agreement, such Shares 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.
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
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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).
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
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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;
(2) 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;
(3) To the best knowledge of such counsel, each of the
Subsidiaries 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; and
(4) 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 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
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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.
(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 as are customarily
covered by such opinions.
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
-24-
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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 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 Shares.
(d) At the Execution Time and at the Closing Date, KPMG 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.
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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) At the Execution Time, the Company shall have furnished to
the Representatives a letter agreement substantially in the form of
Exhibit A hereto addressed to the Representatives from each executive
officer of the Company and from Xx. Xxxxxx X. Xxxxxxxx and Xx. Xxxxxx
X. Xxxxxx. With respect to Xx. Xxxxxx, the letter agreement shall
apply only to 50% of the shares of Common Stock owned by him as of the
date hereof.
(f) 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 Shares as contemplated by the Final Memorandum.
(g) 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.
(h) The Company and the Deposit Agent shall have entered into the
Deposit Agreement.
(i) The Company and the Initial Purchasers shall have entered
into the Registration Rights Agreement.
(j) The Certificate of Designation shall have become effective in
accordance with the provisions of the General Corporation Law of the
State of Delaware.
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
Shares 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 Subject Securities and any survey of
state securities or "blue sky" laws or legal investment memoranda, (iii) the
delivery to the Initial Purchasers of the Shares and the delivery to the holders
of the Shares the Common Stock issuable as dividends or upon conversion or
redemption of the Shares, (iv) the fees and disbursements of the Company's
counsel and accountants, (v) the qualification of the Subject Securities under
the applicable state securities or "blue sky" laws in accordance with the
provisions of Section 5(h) 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 and expenses relating to
maintaining the Deposit Account, (vii) the fees and expenses of the Deposit
Agent, including the fees and disbursements of counsel for the Deposit Agent,
(viii) all expenses (including travel expenses) of the Company and the Initial
Purchasers in connection with any meetings with prospective investors in the
Shares and (ix) all expenses and listing fees in connection with the application
for designation of the Shares as Portal-eligible securities and to permit the
Shares to be eligible to clearance through The Depository Trust Company.
(b) If the sale of the Shares 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 Shares on the Closing Date (including the deposit
of the related Deposit Amount), the Company will reimburse the Initial
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
Shares.
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
-27-
28
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 Shares 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 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
Shares 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
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29
and in the table and the second, seventh, eighth, ninth, tenth and eleventh
paragraphs after the table under the heading "Plan of Distribution" in the
Preliminary Memorandum and the Final Memorandum (insofar as such statements
relate to the Initial Purchasers) 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, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
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30
(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 Shares; 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 Shares purchased by such Initial Purchaser
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and 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 it (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 Shares 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 Shares agreed to be
purchased by such Initial Purchaser hereunder and deliver the related Deposit
Amount and such failure to do any of the foregoing 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 number of Shares set forth opposite their names
in
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Schedule I hereto bears to the aggregate number of Shares set forth opposite the
names of all the remaining Initial Purchasers) the Shares which the defaulting
Initial Purchaser or Initial Purchasers agreed but failed to purchase; provided,
however, that in the event that the aggregate number of Shares which the
defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase
shall exceed 10% of the aggregate number of Shares 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 Shares, and if
such non-defaulting Initial Purchasers do not purchase all the Shares, this
Agreement will terminate without liability to any non-defaulting Initial
Purchaser or the 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 Shares, 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 Shares 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 Shares. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
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 Xxxxxxx Xxxxx
Xxxxxx Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx
-00-
00
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 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.
[Signature Page Follows]
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33
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: /s/ Xxxxx Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxx Xxxxxxxx
Title: Vice President, General
Counsel and Secretary
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
First Union Capital Markets Corp.
By: Xxxxxxx Xxxxx Barney Inc.,
as Representative of the
Initial Purchasers
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
By: Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation,
as Representative of the
Initial Purchasers
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
S-1
34
SCHEDULE I
Number of Shares
Initial Purchasers To Be Purchased
------------------ ----------------
Xxxxxxx Xxxxx Barney Inc................................ 2,160,000
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation..... 2,160,000
Credit Suisse First Boston Corporation.................. 720,000
Deutsche Bank Securities Inc............................ 480,000
First Union Capital Markets Corp........................ 480,000
---------
Total 6,000,000
35
SCHEDULE II
Subsidiaries
Percentage
Organized Ownership
Name of Entity Under Laws of of Company
-------------- ------------- ----------
Best Internet Communications,
Inc. (d/b/a Hiway Technologies) California 100
digitalNATION, Inc. Virginia 100
II-1
36
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 named therein.
4. Registration Rights Agreement, dated as of June 17, 1997, by
and among Verio Inc. and the initial purchasers named therein.
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..
12. The 1998 Stock Incentive Plan of Verio Inc.
XXX-0
00
00. Form of Compensation Protection Agreement between Verio Inc.
and each of its 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. Lateral Exchange Networks Interconnection Agreement, dated
February 3, 1997, by and between Sprint Communications Company L.P. and Verio
Inc.
20. Cover Agreement, dated September 30, 1996, by and between
Verio Inc. and Sprint.
21. Amendment One to Cover Agreement, dated November 7, 1996, by
and between Verio Inc. and Sprint.
22. Amendment Two to Cover Agreement, dated March 2, 1998, by and
between Verio Inc. and Sprint.
23. Indenture, dated as of March 25, 1998, by and among Verio
Inc. and First Trust National Association (as trustee).
24. Registration Rights Agreement, dated as of March 25, 1998, by
and among Verio Inc. and the initial purchasers named therein.
25. Capacity and Services Agreement, dated as of March 31, 1998,
by and among Verio Inc. and Qwest Communications Corporation.
XXX-0
00
00. Credit Agreement, dated as of April 6, 1998, by and among
Verio Inc., The Chase Manhattan Bank (as administrative agent) and Fleet
National Bank (as documentation agent).
27. Stock Purchase and Master Strategic Relationship Agreement,
dated as of April 7, 1998, by and among Verio Inc. and Nippon Telegraph and
Telephone Corporation ("NTT"), a Japanese corporation.
28. Investment Agreement, dated as of April 7, 1998, by and among
Verio Inc. and NTT.
29. Outside Service Provider Agreement, dated as of April 7,
1998, by and among Verio Inc. and NTT America, Inc.
30. Master Services Agreement, dated as of June 13, 1997, by and
between Verio Inc. and MCI Telecommunications Corporation ("MCI").
31. MCI Domestic (US) Public Interconnection Agreement dated as
of June 12, 1997, by and between Verio Inc. and MCI, as amended.
32. Verio Inc.'s 1998 Non-Employee Director Stock Incentive Plan.
33. Interconnection Agreement, effective as of April 1, 1998 by
and between Verio Inc. and UUNET Technologies, Inc.
34. Indenture, dated as of November 25, 1998, by and among Verio
Inc. and the U.S. Bank Trust National Association (as trustee).
35. Registration Rights Agreement, dated as of November 25, 1998,
by and among Verio Inc. and the initial purchasers named therein.
III-3
39
EXHIBIT A
[Form of Lock-up Agreement]
Verio Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
July [ ], 1999
Xxxxxxx Xxxxx Barney Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
First Union Capital Markets Corp.
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Agreement not to sell or otherwise
dispose of securities of Verio Inc.
Ladies and Gentlemen:
The undersigned understands that Verio Inc. (the "Company") has
circulated an offering memorandum to potential investors in connection with the
offering (the "Offering") by the Company of its 6.75% Series A Convertible
Preferred Stock. The undersigned further understands that the Company proposes
to enter into a purchase agreement (the "Purchase Agreement") with Xxxxxxx Xxxxx
Xxxxxx Inc. and Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation as
Representatives for the several Initial Purchasers named in the Purchase
Agreement (collectively, the "Initial Purchasers"), in connection with the
Offering.
In recognition of the benefit that such Offering will confer upon
the undersigned, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Company
and the Initial Purchasers to enter
40
into the Purchase Agreement and to proceed with the Offering, the undersigned
hereby agrees, that, should the Offering be consummated, for a period of 90 days
after the date of the Purchase Agreement relating to the Offering, the
undersigned will not, without the prior written consent of Xxxxxxx Xxxxx Xxxxxx
Inc., directly or indirectly, (i) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, or otherwise dispose of or
transfer any shares of capital stock of the Company or any securities
convertible into or exchangeable or exercisable for such capital stock, whether
now owned or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition, (ii) enter into
any swap or any other agreement or any transaction that transfers, in whole or
in part, directly or indirectly, the economic consequence of ownership of any
shares of capital stock of the Company or any securities convertible into or
exchangeable or exercisable for such capital stock, whether any such swap
transaction is to be settled by delivery of such capital stock or other
securities, in cash or otherwise or (iii) file (or participate in the filing of)
a registration statement with the Securities and Exchange Commission in respect
of shares of capital stock of the Company or any securities convertible into or
exercisable or exchangeable for such capital stock or, in any of clauses (i)
through (iii), publicly announce an intention to effect such a transaction.
Sincerely,
-----------------------------------
Name:
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