CONFORMED COPY
NEXTLINK COMMUNICATIONS, INC.
$335,000,0000
9% SENIOR NOTES DUE 2008
PURCHASE AGREEMENT
New York, New York
February 26, 1998
Salomon Brothers Inc
TD Securities (USA) Inc.
As Representatives of the Initial Purchasers
c/o Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
NEXTLINK Communications, Inc., a corporation organized under the laws of
the State of Washington (the "Company"), proposes to issue and sell to the
parties named in Schedule I hereto (the "Initial Purchasers") $335,000,000
principal amount of its 9% Senior Notes Due March 15, 2008 (the "Securities").
The Securities are to be issued under an indenture (the "Indenture") dated as of
March 3, 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 has prepared a
preliminary offering memorandum, dated February 23, 1998, including any and all
exhibits thereto (the "Preliminary Memorandum"), and a final offering
memorandum, dated the date hereof (the "Execution Date") including any and all
exhibits thereto (the "Final Memorandum"). Each of the Preliminary Memorandum
and the Final Memorandum sets forth certain information concerning the Company
and the Securities. The Company hereby confirms that it has authorized the use
of the Preliminary Memorandum and the Final Memorandum, and any amendment or
supplement thereto, in connection with the offer and sale of the Securities by
the Initial Purchasers. Unless stated to the contrary, all references herein to
the Final Memorandum are to the Final Memorandum at the Execution Time (as
defined below) and are not meant to include any amendment or supplement
subsequent to the Execution Time.
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The Initial Purchasers and their direct and indirect transferees of the
Securities will be entitled to the benefits of the 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 Preliminary Memorandum, at
the date thereof, did 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. The Final Memorandum, at the Execution Date, 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 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 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 through the Representatives
specifically for inclusion therein;
(ii) Independent Accountants. The accountants who certified the
financial statements included in the Final Memorandum 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 in the Final Memorandum present fairly the
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 Final
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 Final Memorandum;
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(iv) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Final 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;
(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 Washington and has power and authority to own, lease and operate
its properties and to conduct its business as described in the Final
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, L.L.C.
(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
Final 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 to
qualify or to be in good standing would not result in a Material Adverse
Effect; except as otherwise disclosed in the Final 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
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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 Final 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. This 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;
(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, 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 Final Memorandum and
will be in substantially the form previously delivered to the Initial
Purchasers;
(x) Absence of Defaults and Conflicts. Neither the Company
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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 Final Memorandum and the consummation of the
transactions contemplated herein, therein and in the Final 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 Final 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 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
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its business in the manner described in the Final 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 Final 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 Final 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 Final
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 Final 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 unpatentable
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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 Final
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 of 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 Final
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 Final 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 Final
Memorandum and except such matters as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
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nor any of its subsidiaries is in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance, code, policy or rule
of common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company
and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or, 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 Final
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 Final Memorandum. The statements set
forth in the Final Memorandum under the caption "Description of Notes",
insofar as they purport to constitute a summary of the terms of the
Securities, and under the captions "Business Regulatory Overview" and
"Plan of Distribution", 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 Final
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 Final 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
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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 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 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.
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2. Sale and Delivery to Initial Purchasers.
(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 99.798% the principal amount thereof, plus accrued interest, if any,
from March 3, 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 Salomon Brothers 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 March 3, 1998 (the "Closing
Date"), or such other time and date as Salomon Brothers 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 Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (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.
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 Final
Memorandum and each Initial Purchaser hereby represents and warrants to,
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and agrees with the Company that:
(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 Final Memorandum; Notices. To prepare the Final
Memorandum in a form approved by the Initial Purchasers; to make no amendment or
any supplement to the Final 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 Final 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 Final Memorandum and
each amendment or supplement thereto signed by an authorized officer of the
Company with the independent accountants' report(s) in the Final 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 Final 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 Final
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 Final
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 Final Memorandum or a supplement
to the Final 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
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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 Salomon
Brothers Inc
(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
10
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 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
Final 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 any Preliminary Memorandum, the Final 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,
11
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 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 Xxxxxxx Xxxx & Xxxxxxxxx, counsel for the Company, of R. Xxxxx Xxxxxx,
Esq., Vice President, General Counsel and Secretary of the Company, and of Xxxxx
Xxxxxx Xxxxxxxx LLP, special Washington counsel to the Company, in form and
substance satisfactory to counsel for the Initial Purchasers, to the effect set
forth in Exhibits A_1, A_2 and A-3 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 Xxxxxxxx & Xxxxxxxx, 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 Final 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 Final 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 Final
12
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
Preliminary Memorandum, the Final 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 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. On the Execution Date at a time prior to
the execution of this Agreement, and at 10:00 a.m. on the effective date of any
amendment or supplement thereto entered into subsequent to the Execution Date,
the Initial Purchasers shall have received from Xxxxxx Xxxxxxxx LLP a letter or
letters dated the respective dates of delivery thereof, 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 Final Memorandum;
(e) Bring-down Comfort Letter. At the Closing Time, the Initial Purchasers
shall have received from Xxxxxx Xxxxxxxx LLP a letter, dated as of the Closing
Date, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (d) of this Section 6, except that the
specified date referred to shall be a date not more than three business days
prior to such Closing Date;
(f) No Material Adverse Change in Business. Since the respective dates as
of which information is given in the Final 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) and 6(e) 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 Final Memorandum (exclusive of any amendment thereof or
supplement thereto);
(g) Maintenance of Rating. 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 securities rating
13
agency, and no such securities rating agency shall have publicly announced that
it has under surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities or preferred stock;
(h) Final Memorandum. The Company shall have complied with the provisions
of Section 4(c) hereof with respect to the furnishing of Final Memoranda on the
New York Business Day next succeeding the Execution Date;
(i) 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 Final Memorandum which is not disclosed therein;
(j) 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
(k) 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
14
material fact contained in the Preliminary Memorandum (or any amendment or
supplement thereto) or the Final 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 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 Salomon Brothers 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 Preliminary Memorandum or the Final
Memorandum constitute the only information furnished in writing by or on behalf
of the several Initial Purchasers for inclusion in such Preliminary Memorandum
or Final 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
15
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, 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.
16
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 Final 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.
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
17
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 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 Final 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 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 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 and any nondefaulting Initial
18
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 Salomon Brothers 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 Salomon
Brothers Inc General Counsel (fax no. (000) 000-0000) and confirmed to Salomon
Brothers Inc, Seven Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, 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 Final
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, 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
19
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.
20
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 Salomon Brothers 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. XXXXX XXXXXX, Xx.
-----------------------------------
Name: R. Xxxxx Xxxxxx, Xx.
Title: Vice President
CONFIRMED AND ACCEPTED,
as of the date first above written:
Salomon Brothers Inc
TD Securities (USA) Inc.
By: Salomon Brothers Inc
By /s/ XXXX XXXXXXXXX
----------------------------------
Name: Xxxx Xxxxxxxxx
Title: Associate
For themselves and on behalf of the
other Initial Purchasers named in Schedule I hereto.
21
SCHEDULE I
Aggregate
Principal
Amount of
Securities to
Initial Purchaser be Purchased
Salomon Brothers Inc $ 268,000,000
TD Securities (USA) Inc. $ 67,000,000
Total $ 335,000,000
=============
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 Xxx 0000 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 Xxx 0000
(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 XXXXXX XXXX & XXXXXXXXX
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 Washington.
(ii) The Company has power and authority to own, lease and operate its
properties and to conduct its business as described in the Final 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 Final Memorandum as of the dates indicated therein;
except that the par value of the Class A Common Stock and the class B Common
Stock is $.022658473; 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 Final 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 Final
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.
(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.
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 Final 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 Final 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 captions "Business Regulatory Overview" and "Plan of
Distribution", 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 Final 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 Final 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 Final Memorandum
that are not described or referred to in the Final Memorandum other than those
described or referred to therein and the descriptions thereof or references
thereto are correct in all material respects.
(xiii) 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
2
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 Final
Memorandum.
(xiv) 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.
(xv) 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 Final Memorandum, and the
consummation of the transactions contemplated herein, therein and in the Final
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.
(xvi) 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 0000 Xxx.
(xvii) Although such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the Final
1
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 Final Memorandum or
any further amendment or supplement thereto made by the Company prior to each
Closing Time (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 Final Memorandum or any
further amendment or supplement thereto made by the Company prior to such
Closing Time (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 Xxxxx Xxxxxx Xxxxxxxx LLP, special Washington counsel to 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 Xxxxxxx
Xxxx & Xxxxxxxxx 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).
2
Exhibit A-2
FORM OF OPINION OF R. XXXXX XXXXXX, 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
Final Memorandum.
(ii) To the best of my knowledge and except as set forth in or
contemplated by the Final 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 Final 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.
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 Xxxxx Xxxxxx Xxxxxxxx LLP, special Washington counsel to 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 Mr. Easter
shall state in his opinion that he believes that he 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 he deems proper, on certificates of
1
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).
2
Exhibit A-3
FORM OF OPINION OF XXXXX XXXXXX XXXXXXXX LLP
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 Washington.
(ii) Each of the Indenture, the Purchase Agreement and the Registration
Rights Agreement has been duly authorized, executed and delivered by the Company
under the laws of the State of Washington.
(iii) The Securities have been duly authorized and executed by the
Company.
(iv) 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 thereby or in the Final Memorandum, and the
consummation of the transactions contemplated therein and in the Final
Memorandum (including the issuance and sale of the Securities by the Company
under the Purchase Agreement and the use of the proceeds from the sale of the
Securities as described in the Final Memorandum under the caption "Use of
Proceeds"), the compliance by the Company with its obligations under the
Purchase Agreement 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, contravene or
constitute a breach of the Company's Articles of Incorporation or By_Laws.
(v) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency of the State of Washington 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 thereunder or the consummation of the actions
contemplated by the Purchase Agreement, the Registration Rights Agreement or the
Indenture.
(vi) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Final
Memorandum and to enter into and perform its obligations under the Purchase
Agreement.
(vii) 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 Final 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.
1
(viii) The authorized capital stock of the Company is as set forth in the
Final Memorandum, except that the par value of the Class A Common Stock and the
Class B Common Stock is $0.022658473; 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.
(ix) To our knowledge, neither the Company nor any of its Designated
Subsidiaries is in violation of, as applicable, its articles of incorporation,
bylaws, limited liability company agreement or partnership agreement.
In rendering such opinion, such counsel (A) may rely 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 other than the State of Washington. 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).
2
