Exhibit 1
NEXTLINK COMMUNICATIONS, INC.
10 3/4% SENIOR NOTES DUE 2008
PURCHASE AGREEMENT
New York, New York
November 4, 1998
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
NEXTLINK Communications, Inc., a corporation organized under the laws of
the State of Delaware (the "Company"), proposes to issue and sell to the parties
named in Schedule I hereto (the "Initial Purchasers") an aggregate of
$500,000,000 principal amount of its 10 3/4% Senior Notes due 2008 (the
"Securities"). The Securities are to be issued under an indenture (the
"Indenture") dated as of November 12, 1998 between the Company and The United
States Trust Company of New York, as trustee. If you are the only Initial
Purchasers, all references herein to the Representatives shall be deemed to be
to the Initial Purchasers.
The sale of the Securities to the Initial Purchasers will be made without
registration of the Securities under the Securities Act of 1933, as amended (the
"Act"), in reliance upon exemptions from the registration requirements of the
Act. You have advised the Company that the Initial Purchasers will offer and
sell the Securities purchased by them hereunder in accordance with Section 3
hereof as soon as you deem advisable.
In connection with the sale of the Securities, the Company will prepare an
offering memorandum, dated the date hereof (the "Execution Date"), including any
and all exhibits thereto and any and all documents incorporated by reference
therein (the "Offering Memorandum") subject to the approval of the Initial
Purchasers, which approval will not be unreasonably withheld or delayed.
References herein to the Offering Memorandum or to any amendment or supplement
thereto shall also mean information incorporated by reference therein.
References herein to the Offering Memorandum as of the date hereof refer to
information contained in the documents to be incorporated by reference therein.
The Offering Memorandum will set forth certain information concerning the
Company and the Securities. The Company hereby confirms that it has authorized
the use of the Offering Memorandum, and any amendment or supplement thereto, in
connection with the offer and sale of the Securities by the Initial Purchasers.
Unless stated to the contrary, all references herein to the Offering Memorandum
are to the Offering Memorandum at the Execution Time (as defined below) and are
not meant to include any amendment or supplement subsequent to the Execution
Time.
The Initial Purchasers and their direct and indirect transferees of the
Securities will be entitled to the benefits of the Exchange and Registration
Rights Agreement, substantially in the form
attached hereto as EXHIBIT A (the "REGISTRATION RIGHTS AGREEMENT"), pursuant to
which the Company has agreed, among other things, to file a registration
statement (the "REGISTRATION STATEMENT") with the Securities and Exchange
Commission (the "COMMISSION") registering the Securities or the Exchange
Securities (as defined in the Registration Rights Agreement) under the Act.
1. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to each of the Initial Purchasers
as set forth below in this Section 1:
(i) Contents of Offering Memorandum. The Offering Memorandum, 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 a 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 Offering 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 through ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. specifically for
inclusion therein. The documents incorporated by reference in the Offering
Memorandum, when they were filed with the Commission, conformed in all
material respects to the requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Offering Memorandum or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Initial Purchaser through ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. expressly for use
therein;
(ii) Independent Accountants. The accountants who certified the
financial statements included in the Offering Memorandum or incorporated by
reference therein are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of Regulation S-X
under the Act;
(iii) Financial Statements. The financial statements, together
with the related notes, included or incorporated by reference in the
Offering Memorandum present fairly the
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financial position of the Company and its consolidated subsidiaries at the
dates indicated and the statement of operations, shareholders' equity and
cash flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved. The selected financial data and the
summary financial information included in the Offering Memorandum present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Offering Memorandum;
(iv) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Offering Memorandum, except
as otherwise stated therein, (1) there has been no material adverse change
in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise (a "Material Adverse Effect"), whether or not
arising in the ordinary course of business, (2) there have been no
transactions entered into by the Company or any of its subsidiaries, other
than those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one enterprise
and (3) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock other than
scheduled or regular dividends, if any, on outstanding preferred stock of
the Company as previously disclosed to the Initial Purchasers;
(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation under the laws of the
State of Delaware and has power and authority to own, lease and operate its
properties and to conduct its business as described in the Offering
Memorandum and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of 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;
(vi) Good Standing of Designated Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) and NEXTLINK Pennsylvania, L.P. and NEXTLINK Ohio, Inc.
(each a "Designated Subsidiary" and, collectively, the "Designated
Subsidiaries") has been duly organized and is validly existing and in good
standing, where applicable, as a corporation, limited liability company or
limited partnership, as the case may be, under the laws of the jurisdiction
of its formation, has power and authority to own, lease and operate its
properties and to conduct its business as described in the Offering
Memorandum and is duly qualified as a foreign corporation, limited
liability company or limited partnership, as the case may be, 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
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to qualify or to be in good standing would not result in a Material Adverse
Effect; except as otherwise disclosed in the Offering Memorandum, all of
the issued and outstanding capital stock or other equity interest of each
Designated Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and 99% thereof is owned by the Company, directly
or through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the outstanding shares
of capital stock or other equity interest of the Designated Subsidiaries
was issued in violation of any preemptive or similar rights arising by
operation of law, or under the constituting or operative document or
agreement of any Designated Subsidiary or under any agreement to which the
Company or any Designated Subsidiary is a party;
(vii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Offering Memorandum as
of the dates indicated therein. The shares of issued and outstanding
capital stock of the Company have been duly authorized and validly issued
and are fully paid and non-assessable; and none of the outstanding shares
of capital stock of the Company was issued in violation of the preemptive
or other similar rights of any securityholder of the Company, as
applicable;
(viii) Authorization of Purchase Agreement and Registration Rights
Agreement. This Agreement has been duly authorized, executed and delivered
by the Company; the Registration Rights Agreement has been duly authorized
by the Company and, when executed and delivered by the Company as of the
Closing Date, will constitute a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(ix) Authorization and Description of the Securities and the
Indenture. The Securities, when issued, will be in the form contemplated
by the Indenture. The Securities and the Exchange Securities (as defined
in the Registration Rights Agreement) have each been duly and validly
authorized by the Company and, when executed by the Company, authenticated
by the Trustee in accordance with the provisions of the Indenture and, in
the case of the Securities, when delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, and, in the case
of the Exchange Securities, when the Indenture has been duly qualified
under the Trust Indenture Act and the Exchange Securities have been
exchanged for the Securities pursuant to the Registration Rights Agreement,
will constitute valid and legally binding obligations of the Company,
entitled to the benefits of the Indenture, and enforceable against the
Company in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; the Indenture has been duly authorized and when executed
and delivered by the Company and the Trustee, will constitute a valid and
legally binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency,
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reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Securities and the Indenture will conform in all material respects to the
descriptions thereof in the Offering Memorandum and will be in
substantially the form previously delivered to the Initial Purchasers;
(x) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its constituting or operative
document or agreement or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party, or by which any of them may be bound, or to
which any of the property or assets of the Company or any of its
subsidiaries is subject (collectively, "Agreements and Instruments") except
for such defaults that would not result in a Material Adverse Effect; the
execution, delivery and performance of this Agreement, the Indenture, the
Securities, the Registration Rights Agreement and any other agreement or
instrument entered into or issued or to be entered into or issued by the
Company in connection with the transactions contemplated hereby, thereby or
in the Offering Memorandum and the consummation of the transactions
contemplated herein, therein and in the Offering Memorandum (including the
issuance and sale of the Securities by the Company hereunder), the
compliance by the Company with its obligations hereunder and under the
Indenture, the Securities and the Registration Rights Agreement have been
duly authorized by all necessary action and do not and will not, whether
with or without the giving of notice or passage of time or both, conflict
with or constitute a breach of, or default or a Repayment Event (as defined
below) under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, the Agreements and Instruments except for such
conflicts, breaches or defaults or liens, charges or encumbrances that,
singly or in the aggregate, would not result in a Material Adverse Effect,
nor will such action result in any violation of the provisions of the
constituting or operative document or agreement of the Company or any of
its subsidiaries or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their assets or properties.
As used herein, a "Repayment Event" means any event or condition which
gives the holder of any material note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right to
require repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its subsidiaries;
(xi) Possession of Licenses and Permits. Except as set forth in or
contemplated by the Offering Memorandum with respect to systems under
development and the offering of dial tone service, each of the Company and
its Designated Subsidiaries has all material certificates, consents,
exemptions, orders, permits, licenses, authorizations, franchises or other
material approvals (each, an "Authorization") of and from, and has made all
material declarations and filings with, all Federal, state, local and other
governmental authorities, all
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self-regulatory organizations and all courts and other tribunals, necessary
or appropriate for the Company and its Designated Subsidiaries to own,
lease, license, use and construct its properties and assets and to conduct
its business in the manner described in the Offering Memorandum, except to
the extent that the failure to obtain any such Authorizations or make any
such declaration or filing would not, singly or in the aggregate, result in
a Material Adverse Effect. Except as set forth in or contemplated by the
Offering Memorandum, all such Authorizations are in full force and effect
with respect to the Company and its Designated Subsidiaries; to the best
knowledge of the Company, no event has occurred that permits, or after
notice or lapse of time could permit, the revocation, termination or
modification of any such Authorization; the Company and its Designated
Subsidiaries are in compliance in all material respects with the terms and
conditions of all such Authorizations and with the rules and regulations of
the regulatory authorities and governing bodies having jurisdiction with
respect thereto; and, except as set forth in the Offering Memorandum, the
Company has no knowledge that any person is contesting or intends to
contest the granting of any material Authorization; and neither the
execution and delivery of this Agreement, the Indenture or the Securities,
nor the consummation of the transactions contemplated hereby and thereby
nor compliance with the terms, conditions and provisions hereof and thereof
by the Company or any of its Designated Subsidiaries will cause any
suspension, revocation, impairment, forfeiture, nonrenewal or termination
of any Authorization;
(xii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of any
existing labor disturbance by the employees of any of its or any of its
subsidiaries' principal suppliers, manufacturers, customers or contractors,
which, in either case, would reasonably be expected to result in a Material
Adverse Effect;
(xiii) Absence of Proceedings. Except as disclosed in the
Offering Memorandum, there is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body,
domestic or foreign, now pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its subsidiaries
which could reasonably be expected to result in a Material Adverse Effect,
or which might reasonably be expected to materially and adversely affect
the properties or assets of the Company or any of its subsidiaries or the
consummation of this Agreement or the performance by the Company of its
obligations hereunder. The aggregate of all pending legal or governmental
proceedings to which the Company or any subsidiary thereof is a party or of
which any of their respective property or assets is the subject which are
not described in the Offering Memorandum, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect;
(xiv) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or
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unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual
property (collectively, "Intellectual Property") necessary to carry on the
business now operated by them, and except as otherwise described in the
Offering Memorandum neither the Company nor any of its subsidiaries has
received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect;
(xv) Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by them and good title to
all other properties owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the Offering
Memorandum or (b) do not, singly or in the aggregate, materially affect the
value of such property and do not interfere with the use made and proposed
to be made of such property by the Company or any of its subsidiaries; and
all of the leases and subleases material to the business of the Company and
its subsidiaries, considered as one enterprise, and under which the Company
or any of its subsidiaries holds properties described in the Offering
Memorandum, are in full force and effect, and neither the Company nor any
of its subsidiaries has any notice of any material claim of any sort that
has been asserted by anyone adverse to the rights of the Company or any of
its subsidiaries under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or any subsidiary
thereof to the continued possession of the leased or subleased premises
under any such lease or sublease;
(xvi) Tax Returns. The Company and its subsidiaries have filed
all federal, state, foreign and, to the extent material, local tax returns
that are required to be filed or have duly requested extensions thereof and
have paid all taxes required to be paid by any of them and any related
assessments, fines or penalties, except for any such tax, assessment, fine
or penalty that is being contested in good faith and by appropriate
proceedings; and adequate charges, accruals and reserves have been provided
for in the financial statements referred to in Section 1(a)(iii) above in
respect of all federal, state, local and foreign taxes for all periods as
to which the tax liability of the Company or any of its subsidiaries has
not been finally determined or remains open to examination by applicable
taxing authorities;
(xvii) Environmental Laws. Except as described in the Offering
Memorandum and except such matters as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company nor
any of its subsidiaries is in violation of any federal, state, local or
foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of
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human health, the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to the release
or threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company
and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance
with their requirements, (C) there are no pending or, to the Company's
knowledge, threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its subsidiaries and (D) there are no events
or circumstances that would reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous Materials or
Environmental Laws;
(xviii) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Offering
Memorandum will not be, an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (the "1940 Act");
(xix) Certain Disclosures in Offering Memorandum. The statements
set forth in the Offering Memorandum under the caption "Description of
Notes", insofar as they purport to constitute a summary of the terms of the
Securities, and under the caption "Plan of Distribution", and under the
caption "Business--Regulatory Overview" in the Company's Annual Report on
Form 10-KSB, filed on March 25, 1998, which is incorporated therein by
reference, insofar as they purport to describe the provisions of the laws
and documents referred to therein, are accurate and complete in all
material respects; and the statements set forth in the Offering Memorandum
under the caption "Certain United States Federal Income Tax Consequences",
insofar as such statements purport to summarize certain United States
federal income and estate tax consequences of the ownership and
dispensation of the Securities by certain U.S. Holders and non-U.S. Holders
(as such terms are defined in the Offering Memorandum) of the Securities,
provide a fair summary of such consequences under current law;
(xx) Cuba. Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida Statutes;
(xxi) No Manipulation or Stabilization. Neither the Company nor,
to its knowledge, any of its officers, directors or affiliates has taken
and will take, directly or
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indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities;
(xxii) Other Listed Securities. No securities of the Company or
any subsidiary that are of the same class (within the meaning of Rule 144A
under the Act) as the Securities are listed on a national securities
exchange registered under Section 6 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or quoted in a U.S. automated inter-dealer
quotation system;
(xxiii) No General Solicitation or Directed Selling Efforts.
Neither the Company nor any of its Affiliates (as defined in Rule 501(b) of
Regulation D under the Act ("Regulation D")), nor any person (excluding the
Initial Purchasers as to the actions of which the Company makes no
representation or warranty) acting on its or their behalf has offered or
sold the Securities by means of any general solicitation or general
advertising within the meaning of Rule 502(c) under the Act or, with
respect to Securities sold outside the United States to non-U.S. persons
(as defined in Rule 902 under the Act), by means of any directed selling
efforts within the meaning of Rule 902 under the Act and the Company, any
Affiliate of the Company and any person acting on its or their behalf has
complied with and will implement the "offering restriction" within the
meaning of such Rule 902;
(xxiv) Eligibility of Securities. The Securities satisfy the
eligibility requirements of Rule 144A(d)(3) under the Act;
(xxv) Compliance with Exchange Act. The Company is subject to
and in full compliance with the reporting requirements of Section 13 or
Section 15(d) of the Exchange Act;
(xxvi) Other Agents. The Company has not paid or agreed to pay to
any person any compensation for soliciting another to purchase any
securities of the Company (except as contemplated by this Agreement); and
(xxvii) Additional Issuer Information. The information provided by
the Company pursuant to Section 4(f) hereof will not, at the date thereof,
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.
(b) Any certificate signed by any officer of the Company or any of its
subsidiaries delivered to the Initial Purchasers or to counsel for the Initial
Purchasers shall be deemed a representation and warranty by the Company to each
Initial Purchaser as to the matters covered thereby.
2. SALE AND DELIVERY TO INITIAL PURCHASERS.
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(a) Securities. Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company agrees to sell
to each Initial Purchaser, severally and not jointly, and each Initial Purchaser
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 97.75% of the principal amount thereof, plus accrued interest, if any,
from November 12, 1998 to the Closing Date, the principal amount of Securities
set forth opposite such Initial Purchaser's name in Schedule I hereto.
(b) Closing and Payment. (i) The Securities to be purchased by each
Initial Purchaser hereunder, in definitive form, and in such authorized
denominations and registered in such names as ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. may
request upon at least forty-eight hours' prior notice to the Company shall
be delivered by or on behalf of the Company to the Initial Purchasers,
through the facilities of the Depository Trust Company ("DTC") (unless the
Initial Purchasers shall otherwise instruct) for the account of such
Initial Purchaser, against payment by or on behalf of such Initial
Purchaser of the purchase price therefor by wire transfer or certified or
official bank check or checks, payable to the order of the Company in
immediately available (same day) funds. The Company will cause the
certificates representing the Securities to be made available for checking
and packaging at least twenty-four hours prior to the Closing Time (as
defined below) with respect thereto at the offices of DTC or its designated
custodian (the "Designated Office"). The time and date of such delivery
and payment shall be 10:00 a.m. on November 12, 1998 (the "Closing Date"),
or such other time and date as ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. and the Company
may agree upon in writing, such time and date for delivery of the
Securities is herein "Closing Time".
(ii) The documents to be delivered at the Closing Time by or on behalf
of the parties hereto pursuant to Section 6 hereof, including the cross
receipt for the Securities and any additional documents requested by the
Initial Purchasers pursuant to Section 6(j) hereof, will be delivered at
the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ (the "Closing Location"), and the Securities will be delivered at the
Designated Office, all at the Closing Time. A meeting will be held at the
Closing Location at 2:00 p.m. on the New York Business Day next preceding
the Closing Time, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review
by the parties hereto. For the purposes of this Section 2, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close;
provided, however, that November 11, 1998 shall be deemed to be a New York
Business Day.
3. OFFERING OF SECURITIES. Upon the authorization by you of the release
of the Securities, the Initial Purchasers propose to offer the Securities for
sale upon the terms and conditions set forth in this Agreement and the Offering
Memorandum and each Initial Purchaser hereby represents and warrants to, and
agrees with the Company that:
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(a) It will offer and sell the Securities only to: (i) persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A under the Act in transactions meeting the requirements of
Rule 144A, or (ii) upon the terms and conditions set forth in Annex I to this
Agreement;
(b) It is a QIB; and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the methods
described in Rule 502(c) under the Act.
4. COVENANTS. The Company covenants and agrees with each Initial
Purchaser:
(a) Preparation of Offering Memorandum; Notices. To prepare the Offering
Memorandum in a form approved by the Initial Purchasers; to make no amendment or
any supplement to the Offering Memorandum which shall be disapproved by the
Initial Purchasers promptly after reasonable notice thereof; and to furnish the
Initial Purchasers with copies thereof;
(b) Copies of and Amendments to Offering Memorandum and Supplements. To
furnish the Initial Purchasers with copies in such quantities as the Initial
Purchasers may from time to time reasonably request of the Offering Memorandum
and each amendment or supplement thereto signed by an authorized officer of the
Company with the independent accountants' report(s) in the Offering Memorandum,
and any amendment or supplement containing amendments to the financial
statements covered by such report(s), signed by the accountants, and if, at any
time prior to the expiration of nine months after the Execution Date, any event
shall have occurred as a result of which the Offering Memorandum as then amended
or supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Offering
Memorandum is delivered, not misleading, or, if for any other reason it shall be
necessary or desirable during such same period to amend or supplement the
Offering Memorandum, to notify the Initial Purchasers and upon the request of
the Initial Purchasers to prepare and furnish without charge to each Initial
Purchaser and to any dealer in securities as many copies as the Initial
Purchasers may from time to time reasonably request of an amended Offering
Memorandum or a supplement to the Offering Memorandum which will correct such
statement or omission or effect such compliance;
(c) Lock-up. During the period beginning from the Execution Date and
continuing to and including the date 90 days after the Closing Date, not to
offer, sell, contract to sell or otherwise dispose of, directly or indirectly,
or announce an offering of, except as provided hereunder any debt securities of
the Company in an offering to the public (or in a private offering where holders
of the debt securities are granted rights to have such debt securities
registered under the Act, or to exchange such debt securities for other debt
securities that are so registered) without the prior written consent of ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney Inc.;
11
(d) Investment Company. Not to be or become, at any time prior to the
expiration of three years after the Closing Date, an open-end investment
company, unit investment trust, closed-end investment company or face-amount
certificate company that is or is required to be registered under Section 8 of
the 1940 Act;
(e) PORTAL. To use its reasonable best efforts to cause the Securities to
be eligible for the PORTAL trading system of the National Association of
Securities Dealers, Inc.;
(f) Information to holders of Securities. (i) At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, for the
benefit of holders from time to time of Securities, to furnish at its
expense, upon request, to holders of Securities and prospective purchasers
of securities information (the "Additional Issuer Information") satisfying
the requirements of subsection (d)(4)(i) of Rule 144A under the Act;
(ii) To furnish to the holders of the Securities as soon as
practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders' equity and cash flows
of the Company and its consolidated subsidiaries certified by independent
public accountants) and, as soon as practicable after the end of each of
the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the Execution Date), consolidated summary financial
information of the Company and its subsidiaries for such quarter in
reasonable detail;
(g) Initial Purchasers. During a period of five years from the Execution
Date, to furnish to the Initial Purchasers copies of all reports or other
communications (financial or other) furnished to stockholders of the Company,
and to deliver to the Initial Purchasers (i) as soon they are available, copies
of any reports and financial statements furnished to or filed with the
Commission or any securities exchange on which the Securities or any class of
securities or any class of securities of the Company is listed; and (ii) such
additional information concerning the business and financial condition of the
Company as the Initial Purchasers may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the accounts of
the Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
(h) Resales by Company and Affiliates. Until such time as the Exchange
Offer is completed and all Securities have been exchanged for Exchange
Securities, during the period of two years after the Closing Date, the Company
will not, and will not permit any of its "affiliates" (as defined in Rule 144
under the Act) to, resell any of the Securities which constitute "restricted
securities" under Rule 144 that have been reacquired by any of them;
(i) Exchange Registration. The Company shall file and use its best
efforts to cause to be declared or become effective under the Act, on or prior
to 120 days after the Closing Date, a registration statement on Form S-4
providing for the registration of the Exchange Securities and the exchange of
the Securities for the Exchange Securities, all in a manner which will permit
persons
12
who acquire the Exchange Securities to resell the Exchange Securities pursuant
to Section 4(1) of the Act;
(j) Use of Proceeds. To use the net proceeds received by it from the sale
of the Securities pursuant to this Agreement in the manner specified in the
Offering Memorandum under the caption "Use of Proceeds";
(k) Manner of Sale. Neither the Company nor any of its Affiliates nor any
person acting on its or their behalf will offer or sell the Securities by means
of any general solicitation or general advertising within the meaning of Rule
502(c) under the Act or, with respect to Securities sold outside the United
States to non-U.S. persons (as defined in Rule 902 under the Act), by means of
any directed selling efforts within the meaning of Rule 902 under the Act and
the Company, any Affiliate of the Company and any person acting on its or their
behalf will comply with and will implement the "offering restriction" within the
meaning of such Rule 902; and
(l) DTC. The Company will cooperate with the Representatives and use its
best efforts to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.
5. EXPENSES. The Company covenants and agrees with the Initial
Purchasers that the Company will pay or cause to be paid all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 10 hereof, including all costs and expenses
incident to (i) the fees, disbursements and expenses of the Company's counsel
and accountants and all other expenses in connection with the preparation, word
processing, printing or other production of the Offering Memorandum and
amendments and supplements thereto; (ii) the cost of word processing, printing
or reproducing this Agreement, the Agreement Among Underwriters, the Selling
Agreement, the Indenture, the Registration Rights Agreement, the Securities,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Securities;
(iii) all arrangements relating to the delivery to the Initial Purchasers and
dealers of copies of the foregoing documents; (iv) the costs and charges of any
transfer agent or registrar and of DTC; (v) reasonable expenses in connection
with any meetings with prospective investors in the Securities, (vi) fees and
expenses of the Trustee including fees and expenses of counsel for the Trustee,
(vii) all expenses and listing fees incurred in connection with the application
for quotation of the Securities on the PORTAL market and (viii) any fees charged
by investment rating agencies for the rating of the Securities. It is
understood, however, that, except as provided in this Section, and Sections 7, 8
and 11 hereof, the Initial Purchasers will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Securities by them, and any advertising expenses connected with any
offers they may make.
If this Agreement is terminated by the Initial Purchasers in accordance
with the provisions of Section 6 or Section 10 hereof, the Company shall
reimburse the Initial Purchasers for all of their
13
out of pocket expenses, including the reasonable fees and disbursements of
counsel for the Initial Purchasers.
6. CONDITIONS TO THE OBLIGATIONS OF THE INITIAL PURCHASERS. The
obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein at the date and time that this Agreement is executed
and delivered by the parties hereto (the "Execution Time") and the Closing Time,
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) Opinion of Counsel for Company. At the Closing Time, the Initial
Purchasers shall have received the favorable opinions, dated as of the Closing
Date, of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel for the Company, and of R. ▇▇▇▇▇
▇▇▇▇▇▇, Esq., Vice President, General Counsel and Secretary of the Company, in
form and substance satisfactory to counsel for the Initial Purchasers, to the
effect set forth in Exhibits A-1 and A-2 hereto, respectively, and to such
further effect as counsel to the Initial Purchasers may reasonably request;
(b) Opinion of Counsel for Initial Purchasers. At the Closing Time, the
Initial Purchasers shall have received the favorable opinion, dated as of the
Closing Date, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Initial Purchasers, with
respect to the incorporation of the Company, the Indenture, the validity of the
Securities being delivered at the Closing Time, the Offering Memorandum and such
other related matters as the Initial Purchasers may reasonably request. In
giving such opinion such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of New York and the
federal law of the United States, upon the opinions of counsel satisfactory to
the Initial Purchasers. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials;
(c) Officers' Certificate. At such Closing Time, there shall not have
been, since the Execution Date or since the date of the most recent financial
statements included in the Offering Memorandum (exclusive of any supplement
thereto), any material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising from
transactions in the ordinary course of business except as set forth in the
Offering Memorandum (exclusive of any supplement thereto), and the Initial
Purchasers shall have received certificates of the Chairman of the Board, the
President or a Vice President of the Company and of the chief financial or chief
accounting officer of the Company, satisfactory to the Initial Purchasers, to
the effect that, at and as of such Closing Time, (i) they have carefully
examined the Offering Memorandum and any supplements thereto and this Agreement,
(ii) there has been no such material adverse change, (iii) the representations
and warranties of the Company in Section 1 hereof are true and correct in all
material respects on and as of the Closing Time with the same force and effect
as though expressly made at and as of such
14
Closing Time, and (iv) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
such Closing Time;
(d) Accountant's Comfort Letter. At the Closing Time, the Initial
Purchasers shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter or letters
dated as of the Closing Date, in form and substance satisfactory to the Initial
Purchasers, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to the Initial Purchasers with
respect to the financial statements and certain financial information contained
in the Offering Memorandum;
(e) No Material Adverse Change in Business. Since the respective dates as
of which information is given in the Offering Memorandum, except as otherwise
stated therein, (1) there has been no Material Adverse Effect, whether or not
arising in the ordinary course of business, (2) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise (3) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock and (4) there has been no change or decrease specified in the
letters referred to in Section 6(d) above, the effect of which, in any case
referred to in clauses (1) through (4) above, is, in the sole judgment of the
Initial Purchasers, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Offering Memorandum (exclusive of any amendment thereof or
supplement thereto);
(f) Maintenance of Rating. At the Closing Date, the Securities shall be
rated at least B by Standard & Poor's Corporation and B3 by ▇▇▇▇▇'▇ Investors
Service Inc. and, on or after the Execution Date, there shall not have occurred
a downgrading in the rating assigned to the Company's debt securities or
preferred stock by any "nationally recognized statistical rating organization",
as that term is defined by the Commission for purposes of Rule 436(g)(2) under
the Act, and no such organization shall have publicly announced that it has
under surveillance or review its rating of any of the Company's debt securities
or preferred stock;
(g) Offering Memorandum. The Offering Memorandum shall be in form and
substance reasonably satisfactory to the Initial Purchasers. The Company shall
have complied with the provisions of Section 4(a) hereof with respect to the
furnishing of Offering Memoranda as soon as practicable but in no event later
than 10:00 a.m. on November 8, 1998;
(h) Adequate Disclosure of Litigation. There is no litigation or
governmental or other action, suit, claim, proceeding or investigation before
any court or any public, regulatory or governmental agency or body, pending or,
to the best of the Company's knowledge, threatened against the Company or any of
its subsidiaries or any of their respective officers (in their capacity as
officers of the Company or such subsidiaries) or any of the properties, assets,
business or rights of the Company or such subsidiaries which is of a character
required to be disclosed in the Offering Memorandum which is not disclosed
therein;
15
(i) Additional Documents. At the Closing Time: (i) the Company shall have
furnished to the Initial Purchasers such further information, certificates and
documents as the Initial Purchasers may reasonably request; (ii) counsel for the
Initial Purchasers shall have been furnished with such documents and opinions as
they may require for the purpose of enabling them to pass upon the issuance and
sale of the Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and (iii) all proceedings taken by the
Company in connection with the issuance and sale of the Securities as herein
contemplated shall be satisfactory in form and substance to the Initial
Purchasers and counsel for the Initial Purchasers; and
(j) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Initial Purchasers by notice to the Company
at any time at or prior to the Closing Time, and such termination shall be
without liability of any party to any other party except as provided in
Section 5 and except that Sections 1, 7 and 8 shall survive any such termination
and remain in full force and effect.
7. INDEMNIFICATION.
(a) Indemnification of Initial Purchasers. The Company agrees to
indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any and all losses, liabilities (joint or
several), claims, damages and expenses whatsoever, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Offering Memorandum (or any amendment or supplement
thereto), or arise out of or are based upon the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that 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 therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Initial Purchaser through the Initial Purchasers specifically for inclusion
therein. This indemnity agreement will be in addition to any liability which
the Company may otherwise have.
(b) Indemnification of Company, Directors and Officers. Each Initial
Purchaser severally agrees to indemnify and hold harmless the Company, each of
its directors (including any person who, with his or her consent, is named in
the Registration Statement as about to become a director of the Company) and
each person, if any, who controls the Company within the meaning of
16
Section 15 of the Act or Section 20 of the Exchange Act against any and all
losses, liabilities (joint or several), claims, damages and expenses described
in the indemnity contained in subsection (a) of this Section, as incurred, but
only with respect to written information furnished to the Company by such
Initial Purchaser through ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. specifically for inclusion
in the documents referred to in the foregoing indemnity. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page regarding delivery of the Securities, the stabilization legend in block
capital letters on the reverse of the cover page and, under the heading "Plan of
Distribution", the paragraph related to stabilization in the Offering Memorandum
constitute the only information furnished in writing by or on behalf of the
several Initial Purchasers for inclusion in such Offering Memorandum.
(c) Actions against Parties; Notification. Each indemnified party shall
give written notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party (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. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 7 or Section 8 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation,
17
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
8. CONTRIBUTION. If the indemnification provided for in Section 7 hereof
is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) incurred by such indemnified party, as
incurred, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Initial Purchasers on
the other hand from the offering of the Securities pursuant to this Agreement
(provided that in no case shall any Initial Purchaser (except as may be provided
in any agreement among Initial Purchasers relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting discount
or commission applicable to the Securities purchased by such Initial Purchaser
hereunder) or (ii) if the allocation provided by clause (i) is unavailable for
any reason, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and of the Initial Purchasers on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Initial Purchasers on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by
the Initial Purchasers, in each case as set forth in the Offering Memorandum.
The relative fault of the Company on the one hand and the Initial
Purchasers on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8.
Notwithstanding the provisions of this Section 8, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to
investors were offered to investors exceeds the amount of any damages which such
Initial Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
18
Notwithstanding the provisions of this Section 8, no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls an
Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act shall have the same rights to contribution as such Initial
Purchaser, and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Company. The Initial Purchasers' respective
obligations to contribute pursuant to this Section 8 are several in proportion
to the number of Securities set forth opposite their respective names in
Schedule I hereto and not joint.
9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement, or in
certificates of officers of the Company submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Initial Purchaser or controlling person, or by or on behalf
of the Company, and shall survive delivery of the Securities to the Initial
Purchasers.
10. TERMINATION OF AGREEMENT.
(a) Termination; General. This Agreement shall be subject to termination
in the absolute discretion of the Initial Purchasers, by notice given to the
Company prior to delivery of and payment for the Securities, if at any time
prior to such time (i) trading in the Company's Common Stock shall have been
suspended by the Commission or The Nasdaq Stock Market, Inc. ("Nasdaq") or
trading in securities generally on the New York Stock Exchange or the Nasdaq
shall have been suspended or limited or minimum prices shall have been
established on such Exchange or Nasdaq, (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 sole judgment
of the Initial Purchasers, impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Offering
Memorandum (exclusive of any supplement thereto).
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 5 hereof, and provided further that Sections
1, 7 and 8 shall survive such termination and remain in full force and effect.
11. DEFAULT BY ONE OR MORE OF THE INITIAL PURCHASERS. If any one or more
of the Initial Purchasers shall fail to purchase and pay for any of the
Securities agreed to be purchased by such Initial Purchaser or Initial
Purchasers hereunder and such failure to purchase shall constitute a default in
the performance of its or their obligations under this Agreement, the remaining
Initial Purchasers
19
shall be obligated severally to take up and pay for (in the respective
proportions which the amount of Securities set forth opposite their names in
Schedule I hereto bears to the aggregate amount of Securities set forth opposite
the names of all the remaining Initial Purchasers) the Securities which the
defaulting Initial Purchaser or Initial Purchasers agreed but failed to
purchase; PROVIDED, HOWEVER, that in the event that the aggregate amount of
Securities which the defaulting Initial Purchaser or Initial Purchasers agreed
but failed to purchase shall exceed 10% of the aggregate amount of Securities
set forth in Schedule I hereto, the remaining Initial Purchasers shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Securities, and if such nondefaulting Initial Purchasers do not purchase all
of the Securities, this Agreement will terminate without liability to any
nondefaulting Initial Purchaser or the Company. In the event of a default by
any Initial Purchaser as set forth in this Section 11, the Closing Time shall be
postponed for such period, not exceeding five Business Days, as the Initial
Purchasers shall determine in order that the required changes in the Offering
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 and any nondefaulting Initial Purchaser
for damages occasioned by its default hereunder.
12. RELIANCE; NOTICES. In all dealings hereunder, the Initial Purchasers
shall act on behalf of each of the Initial Purchasers, and the parties hereto
shall be entitled to act and rely upon any statement, request, notice or
agreement on behalf of any Initial Purchaser made or given by the Initial
Purchasers jointly or by ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. on their behalf.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Initial Purchasers shall be delivered or sent by mail,
telex or facsimile transmission to the Initial Purchasers in care of ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney Inc. General Counsel (fax no. (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel; and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth in
the Offering Memorandum, Attention: General Counsel; PROVIDED, HOWEVER, that any
notice to an Initial Purchaser pursuant to Section 7(c) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Initial
Purchaser at its address set forth in its Initial Purchasers' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by the Initial Purchasers upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. PARTIES. This Agreement shall inure to the benefit of and be binding
upon the Initial Purchasers, the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Initial
Purchasers, the Company and the controlling persons and officers and directors
referred to in Sections 7 and 8 and their respective heirs, executors,
administrators, successors and assigns any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained.
This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the Initial Purchasers, the Company and said
controlling persons and officers and directors and their respective heirs,
executors, administrators, successors and assigns,
20
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any Initial Purchaser shall be deemed to be a successor by
reason merely of such purchase.
14. TIME OF THE ESSENCE. Time shall be of the essence of this Agreement.
As used herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
15. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE CONFLICTS OF LAWS PROVISIONS THEREOF. SPECIFIED TIMES OF DAY REFER TO NEW
YORK CITY TIME.
16. EFFECT OF HEADINGS. The Section and sub-section headings herein are
for convenience only and shall not affect the construction hereof.
17. COUNTERPARTS. This Agreement may be executed by any one of more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same instrument.
21
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, and upon the
acceptance hereof by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., on behalf of each of the Initial
Purchasers, this letter and such acceptance hereof shall constitute a binding
agreement between each of the Initial Purchasers and the Company. It is
understood that your acceptance of this letter on behalf of each of the Initial
Purchasers is pursuant to the authority set forth in a form of Agreement among
Initial Purchasers, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly Yours,
NEXTLINK Communications, Inc.
By /s/ R. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
----------------------------------
Name: R. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
Title: Vice President, General Counsel
and Secretary
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
SCHEDULE I
AGGREGATE
PRINCIPAL AMOUNT OF
SECURITIES TO BE
INITIAL PURCHASER PURCHASED
----------------- -------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. $500,000,000
------------
Total $500,000,000
============
ANNEX I
(1) The Securities have not been and will not be registered under the Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S under
the Act or pursuant to an exemption from the registration requirements of the
Act. The Initial Purchasers represent that they have offered and sold the
Securities, and will offer and sell the Securities (i) as part of their
distribution at any time and (ii) otherwise until 40 days after the later of the
commencement of the offering and the Closing Date, only in accordance with Rule
903 of Regulation S or Rule 144A under the Act. Accordingly, the Initial
Purchasers agree that neither they nor any persons acting on their behalf has
engaged or will engage in any directed selling efforts with respect to the
Securities, and they have complied and will comply with the offering
restrictions requirement of Regulation S. The Initial Purchasers agree that, at
or prior to confirmation of sale of Securities (other than a sale pursuant to
Rule 144A), they will have sent to each distributor, dealer or person receiving
a selling concession, fee or other remuneration that purchases Securities from
it during the restricted period a confirmation or notice to substantially the
following effect:
"THE SECURITIES COVERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED AND
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS (I) AS PART OF THEIR DISTRIBUTION AT ANY TIME OR (II) OTHERWISE
UNTIL 40 DAYS AFTER THE LATER OF THE COMMENCEMENT OF THE OFFERING AND THE
CLOSING DATE, EXCEPT IN EITHER CASE IN ACCORDANCE WITH REGULATION S (OR
RULE 144A IF AVAILABLE) UNDER THE SECURITIES ACT. TERMS USED ABOVE HAVE
THE MEANING GIVEN TO THEM BY REGULATION S."
Terms used in this paragraph have the meanings given to them by Regulation S.
The Initial Purchasers further agree that they have not entered and will
not enter into any contractual arrangement with respect to the distribution or
delivery of the Securities, except with their affiliates or with the prior
written consent of the Company.
(2) The Initial Purchasers further agree, on behalf of themselves and
their affiliates, that (a) they have not offered or sold and, prior to the date
six months after the date of issue of the Securities, will not offer or sell any
Securities to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purpose of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995, (b) they have complied, and will comply,
with all applicable provisions of the Financial Services ▇▇▇ ▇▇▇▇ of Great
Britain with respect to anything done by them in relation to the Securities in,
from or otherwise involving the United Kingdom and (c) they have only issued or
passed on and will only issue or pass on in the United Kingdom any document
received by them in connection with the issuance of the Securities to a person
who is of a kind described in Article 11(3) of the Financial Services ▇▇▇ ▇▇▇▇
(Investment Advertisements)
(Exemptions) Order 1996 of Great Britain or is a person to whom the document may
otherwise lawfully be issued or passed on.
Exhibit A-1
FORM OF OPINION OF ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
TO BE DELIVERED PURSUANT TO SECTION 6(a)
(i) The Company has been duly incorporated and is validly existing as
a corporation under the laws of the State of Delaware.
(ii) The Company has power and authority to own, lease and operate its
properties and to conduct its business as described in the Offering Memorandum
and to enter into and perform its obligations under the Purchase Agreement.
(iii) 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.
(iv) The authorized, issued and outstanding capital stock of the Company
is as set forth in the Offering Memorandum as of the dates indicated therein;
the shares of issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; and none of
the outstanding shares of capital stock of the Company was issued in violation
of the preemptive or other similar rights of any securityholder of the Company.
(v) Each Designated Subsidiary has been duly formed and is validly
existing as a corporation, limited liability company or limited partnership in
good standing, as applicable, under the laws of the jurisdiction of its
formation, and has power and authority to own, lease and operate its properties
and to conduct its business as described in the Offering Memorandum; all of the
issued and outstanding shares, membership interests or partnership interests of
each Designated Subsidiary have been duly authorized and validly issued, are
fully paid and non-assessable and, except as otherwise set forth in the Offering
Memorandum in respect of the minority interests described therein, are owned by
the Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(vi) The Purchase Agreement and the Registration Rights Agreement have
been duly authorized, executed and delivered by the Company, and the
Registration Rights Agreement constitutes a valid and legally binding agreement
of the Company enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles, PROVIDED that such counsel
need express no opinion as to the enforceability of provisions with respect to
indemnity for liabilities arising under the Securities Act of 1933, as amended.
(vii) The Indenture has been duly authorized, executed and delivered;
and, assuming due execution by the Trustee, the Indenture constitutes a valid
and legally binding obligation of the Company enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
A-1-1
(viii) The Securities have been duly authorized and executed by the
Company and authenticated, issued and delivered in accordance with the Indenture
and constitute valid and legally binding obligations of the Company entitled to
the benefits provided by the Indenture, subject, as to enforcement, to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles. In rendering the opinion set forth in this
paragraph (viii), as to authentication we have relied solely on a certificate of
the Trustee as to the authentication of the Securities by a duly authorized
representative of the Trustee and have assumed that the Securities so
authenticated have been delivered to you and paid for by you in accordance with
the Purchase Agreement. The Securities and the Indenture conform in all
material respects to the descriptions thereof in the Offering Memorandum;
(ix) The Exchange Securities have been duly and validly authorized by
the Company and, when executed by the Company, authenticated by the Trustee in
accordance with the provisions of the Indenture and when the Indenture has been
duly qualified under the Trust Indenture Act and the Exchange Securities have
been exchanged for the Securities pursuant to the Registration Rights Agreement,
will constitute valid and legally binding obligations of the Company, entitled
to the benefits of the Indenture, and enforceable against the Company in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(x) The information in the Offering Memorandum under the caption
"Description of the Notes", to the extent that it constitutes a summary of the
terms of the Securities, and under the caption "Plan of Distribution", and the
information under the caption "Business--Regulatory Overview" included in the
Company's Annual Report on Form 10-KSB, filed on March 25, 1998, which is
incorporated therein by reference, to the extent that it constitutes matters of
law, summaries of legal matters, or legal conclusions, has been reviewed by us
and is correct in all material respects.
(xi) The statements set forth in the Offering Memorandum under the
caption "Certain United States Federal Income Tax Consequences", insofar as such
statements purport to summarize certain United States federal income and estate
tax consequences of the ownership and dispensation of the Securities by certain
U.S. Holders and non-U.S. Holders of the Securities, provide a fair summary of
such consequences under current law.
(xii) All descriptions in the Offering Memorandum of contracts and other
documents to which the Company or any of its subsidiaries are a party are
accurate in all material respects; to the best of our knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments that would be required to be described in the Offering
Memorandum that are not described or referred to in the Offering Memorandum
other than those described or referred to therein and the descriptions thereof
or references thereto are correct in all material respects.
(xiii) The documents incorporated by reference in the Offering Memorandum
(other than the financial statements and related schedules therein, as to which
such counsel need express no opinion), as of the date of the Offering
Memorandum, complied as to form in all material respects
A-1-2
with the requirements of the Exchange Act and the rules and regulations of the
Commission thereunder.
(xiv) To our best knowledge, neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws or other constituting or
operative document or agreement and, to the best of our knowledge, no default by
the Company or any of its subsidiaries exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument that is described or referred to in the Offering
Memorandum.
(xv) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the performance by the Company
of its obligations under the Purchase Agreement, the Registration Rights
Agreement or the Indenture, in connection with the offering, issuance or sale of
the Securities hereunder or thereunder or the consummation of the actions
contemplated by the Purchase Agreement, the Registration Rights Agreement or the
Indenture, except such as may be required under the Act and the Trust Indenture
Act in connection with the Exchange Offer.
(xvi) The issue and sale of the Securities, the execution, delivery and
performance of the Purchase Agreement, the Indenture, the Securities, the
Registration Rights Agreement and any other agreement or instrument entered into
or issued or to be entered into or issued by the Company in connection with the
transactions contemplated hereby, thereby or in the Offering Memorandum, and the
consummation of the transactions contemplated herein, therein and in the
Offering Memorandum (including the issuance and sale of the Securities by the
Company hereunder), the compliance by the Company with its obligations hereunder
and thereunder have been duly authorized by all necessary corporate action on
the part of the Company and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or a Repayment Event under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries, pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease, or any other
agreement or instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any subsidiaries thereof is
subject, except for such conflicts, breaches or defaults or liens, charges or
encumbrances that, singly or in the aggregate, would not result in a Material
Adverse Effect, nor will such action result in any violation of the provisions
of the constituting or operative document or agreement of the Company or any of
its subsidiaries or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their assets or properties.
(xvii) The Company is not, and upon the issuance and sale of the
Securities and the application of the net proceeds therefrom will not be, an
"investment company" or an entity "controlled" by an "investment company," as
such terms are defined in the 1940 Act.
A-1-3
Such counsel shall also state that although such counsel does not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Offering Memorandum, except for those referred to in subsection
(x) of this opinion, such counsel has no reason to believe that, as of its date,
the Offering Memorandum or any further amendment or supplement thereto made by
the Company prior to each Closing Time or any documents incorporated by
reference therein (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading or that, as of such Closing Time, the Offering Memorandum
or any further amendment or supplement thereto made by the Company prior to such
Closing Time or any documents incorporated by reference therein (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) contains an untrue statement of a material fact 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.
In rendering such opinion, such counsel (A) may rely (i) as to matters
involving the application of the laws of the State of Washington, upon the
opinion of R. ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., Vice President, General Counsel and Secretary
of the Company (which opinion shall be dated and furnished to the Initial
Purchasers at the Closing Time, shall be satisfactory in form and substance to
counsel for the Initial Purchasers and shall expressly state that the Initial
Purchasers may rely on such opinion as if it were addressed to them), provided
that ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ shall state in their opinion that they believe
that they and the Initial Purchasers are justified in relying upon such opinion,
and (ii) as to matters of fact (but not as to legal conclusions), to the extent
they deem proper, on certificates of responsible officers of the Company and
public officials and (B) may state that they express no opinion as to the laws
of any jurisdiction outside the United States. Such opinion shall not state that
it is to be governed or qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF R. ▇▇▇▇▇ ▇▇▇▇▇▇, ESQ.
TO BE DELIVERED PURSUANT TO SECTION 6(a)
(i) There is not pending or, to the best of my knowledge, threatened
any action, suit, proceeding, inquiry or investigation, to which the Company or
any subsidiary thereof is a party, or to which the property of the Company or
any subsidiary thereof is subject, before or brought by any court or
governmental agency or body, which could reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of the
transactions contemplated in the Purchase Agreement, the Indenture, the
Registration Rights Agreement or the Securities or the performance by the
Company of its obligations thereunder or the transactions contemplated by the
Offering Memorandum.
(ii) To the best of my knowledge and except as set forth in or
contemplated by the Offering Memorandum with respect to systems under
development, (a) each of the Company and its Designated Subsidiaries has all
Authorizations of and from, and has made all declarations and filings with, all
Federal, state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, which are necessary or
appropriate for the Company and its Designated Subsidiaries to own, lease,
license, use and construct its properties and assets and to conduct its business
in the manner described in the Offering Memorandum, except to the extent that
the failure to obtain any such Authorizations or make any such declaration or
filing would not, singly or in the aggregate, reasonably be expected to result
in a Material Adverse Effect, (b) all such Authorizations are in full force and
effect with respect to the Company and its Designated Subsidiaries, (c) no event
has occurred that permits, or after notice or lapse of time could permit, the
revocation, termination or modification of any such Authorization and (d) the
Company and its Designated Subsidiaries are in compliance in all material
respects with the terms and conditions of all such Authorizations and with the
rules and regulations of the regulatory authorities and governing bodies having
jurisdiction with respect thereto.
(iii) To the best of my knowledge, neither the execution and delivery of
the Purchase Agreement, the Indenture, the Registration Rights Agreement or the
Securities, nor the consummation by the Company of the transactions contemplated
hereby or thereby will cause any suspension, revocation, impairment, forfeiture,
nonrenewal or termination of any Authorization.
(iv) Each Designated Subsidiary formed under the laws of the State of
Washington has been duly formed and is validly existing as a limited liability
company or limited partnership under the laws of the State of Washington, each
such limited liability company has the power and authority under the Washington
limited liability company act and its limited liability company agreement, and
each such limited partnership has the partnership power and authority, to own,
lease and operate its respective properties and to conduct its respective
business as described in the Offering Memorandum, and all of the issued and
outstanding membership interests or partnership interests of each such
Designated Subsidiary have been duly authorized and validly issued.
(v) To the best of my knowledge, none of the Designated Subsidiaries is
in violation of, as applicable, its articles of incorporation, bylaws, limited
liability company agreement or partnership agreement.
A-2-1
In rendering such opinion, such counsel (A) may rely as to matters of fact
(but not as to legal conclusions), to the extent he deems proper, on
certificates of responsible officers of the Company and public officials and (B)
may state that he expresses no opinion as to the laws of any jurisdiction
outside the United States. Such opinion shall not state that it is to be
governed or qualified by, or that it is otherwise subject to, any treatise,
written policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
A-2-2