Exhibit 4.1
ONEPOINT COMMUNICATIONS CORP.
AND THE SUBSIDIARY GUARANTORS
LISTED ON EXHIBIT A HERETO
175,000 Units Consisting of
$175,000,000 of 14 1/2% Senior Notes
due 2008
and
Warrants to Purchase 111,125 Shares of Common Stock
Purchase Agreement
May 15, 1998
BEAR, XXXXXXX & CO. INC.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
ONEPOINT COMMUNICATIONS CORP.
175,000 Units Consisting of
$175,000,000 of 14 1/2% Senior Notes due 2008
and
Warrants to Purchase 111,125 Shares of Common Stock
PURCHASE AGREEMENT
May 15, 1998
Bear, Xxxxxxx & Co. Inc.
NationsBanc Xxxxxxxxxx Securities LLC
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies & Gentlemen:
OnePoint Communications Corp., a Delaware corporation (the "Company"),
proposes to issue and sell to Bear, Xxxxxxx & Co. Inc. and NationsBanc
Xxxxxxxxxx Securities LLC (together, the "Initial Purchasers") an aggregate of
175,000 units (the "Units") consisting in the aggregate of $175,000,000 of 14
1/2% Senior Notes due 2008 (the "Series A Notes") and Warrants (the "Warrants")
to purchase 111,125 shares of common stock, par value $0.01 per share (the
"Common Stock"), of the Company (the "Warrant Shares"), subject to the terms and
conditions set forth herein. Each Unit will consist of (a) $1,000 principal
amount of the Series A Notes and (b) one Warrant, to purchase .635 shares of
Common Stock. The Series A Notes will be issued pursuant to an indenture (the
"Indenture"), to be dated the Closing Date (as defined below), between the
Company, the Subsidiary Guarantors (as defined below) and Xxxxxx Trust and
Savings Bank, as trustee (the "Trustee"). The Company's payment obligations
under the Notes will be jointly and severally guaranteed (the "Subsidiary
Guarantees") by the entities listed on Exhibit A hereto (the "Subsidiary
Guarantors"). The Warrants will be issued pursuant to a warrant agreement (the
"Warrant Agreement") to be dated the Closing Date, between the Company and
Xxxxxx Trust and Savings Bank, as warrant agent (the "Warrant Agent"). The
Series A Notes and the Warrants comprising each Unit will not be separable until
the earlier of (i) the date that is six months following the initial sale of the
Units, (ii) the commencement of the Exchange Offer (as defined below), (iii) the
date on which the Shelf Registration Statement (as defined below) is declared
effective, (iv) a Change of Control (as defined below) or (v) such date as Bear
Xxxxxxx & Co. Inc. may, in its sole discretion, deem appropriate (such date, the
"Separation Date"). The Units, the Series A Notes and the Warrants are more
fully described in the Offering Memorandum referred to below.
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1. Issuance of Securities. The Company proposes to, upon the terms and
subject to the conditions set forth herein, issue and sell to the Initial
Purchasers the Units. The Series A Notes forming a part of the Units and the
Series B Notes (as defined below) issuable in exchange therefore are hereinafter
collectively referred to as the "Notes." The Units, the Notes and the Warrants
are collectively referred to herein as the "Securities." Capitalized terms used
but not otherwise defined herein shall have the meanings given to such terms in
the Indenture.
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act of 1933,
as amended (the "Securities Act"), the Units, the Notes, the Warrants and the
Warrant Shares (and all securities issued in exchange or in substitution
therefor) shall bear the legends required by the Indenture.
2. Offering. The Units will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration requirements under the
Securities Act. The Company has prepared a preliminary offering memorandum,
dated April 29, 1998 (the "Preliminary Offering Memorandum"), and a final
offering memorandum, dated May 15, 1998 (the "Offering Memorandum"), relating to
the Company and the Units.
The Initial Purchasers have advised the Company that the Initial
Purchasers will make offers to resell (the "Exempt Resales") the Units on the
terms set forth in the Offering Memorandum, as amended or supplemented, solely
to persons whom any of the Initial Purchasers reasonably believe to be
"qualified institutional buyers," as defined in Rule 144A under the Securities
Act ("QIBs"). Such QIBs are also be referred to herein as the "Eligible
Purchasers." The Initial Purchasers will offer the Units to such Eligible
Purchasers initially at a purchase price equal to 100% of the amount thereof.
Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the registration rights agreement relating
thereto (the "Registration Rights Agreement"), and holders (including subsequent
transferees) of the Warrants and Warrant Shares will have the registration
rights set forth in the registration rights agreement relating thereto (the
"Warrant Registration Rights Agreement"), to be dated the Closing Date for so
long as such Notes, Warrants or any Warrant Shares constitute "Transfer
Restricted Securities" (as defined in such agreements). Pursuant to the
Registration Rights Agreement, the Company will agree to file with the
Securities and Exchange Commission (the "Commission"), under the circumstances
set forth therein, (i) a registration statement under the Securities Act (the
"Exchange Offer Registration Statement") with respect to an offer to exchange
(the "Exchange Offer") the Series A Notes for a new issue of debt securities of
the Company (the "Series B Notes") and (ii) under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the Securities Act (the "Shelf
Registration Statement") relating to the resale by certain holders of the Series
A Notes, and to use its best efforts to cause such Registration Statements to be
declared effective and consummate the Exchange Offer. This Agreement, the
Securities, the Indenture, the Warrant Agreement, the Registration Rights
Agreement and the Warrant Registration Rights Agreement are hereinafter
sometimes referred to collectively as the "Operative Documents."
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3. Purchase, Sale and Delivery.
(a) On the basis of the representations, warranties and covenants
contained in this Agreement, and subject to its terms and conditions, the
Company agrees to issue and sell to each Initial Purchaser, and each Initial
Purchaser agrees severally and not jointly to purchase from the Company, that
number of Units set forth opposite such Initial Purchasers name on Schedule I
hereto. The purchase price for the Units shall be $970.00 per Unit.
(b) Delivery of, and payment of the purchase price for, the Units
shall be made at the offices of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx Xxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxx 00000, or such other location as may be mutually
acceptable. Such delivery and payment shall be made at 10 a.m., New York City
time, on May 21, 1998 or at such other time as shall be agreed upon by the
Initial Purchasers and the Company. The time and date of such delivery and
payment are herein called the "Closing Date."
(c) Units sold to QIBs will be represented by one or more permanent
global Units in definitive, fully registered form without interest coupons (each
a "Global Unit") registered in the name of Cede & Co., as nominee of DTC, having
an aggregate amount corresponding to the aggregate amount of the Units sold to
QIBs. Each Global Unit will be comprised of one or more global certificates for
the Notes (the "Global Notes") and one or more global certificates for the
Warrants (the "Global Warrants" and, together with the Global Notes and Global
Units, the "Global Securities"). The Global Securities shall be delivered by the
Company to the Initial Purchasers (or as the Initial Purchasers direct), against
payment by the Initial Purchasers of the purchase price therefor, by wire
transfer of immediately available funds to an account specified by the Company
or as the Company may direct in writing; provided that the Company shall give at
least two business days' prior written notice to the Initial Purchasers of the
information required to effect such wire transfers. The Global Units, Global
Notes and Global Warrants shall be made available to the Initial Purchasers for
inspection not later than 10:00 a.m., New York City time, on the business day
immediately preceding the Closing Date.
4. Agreements of the Company and the Subsidiary Guarantors. The Company
and the Subsidiary Guarantors, jointly and severally, covenant and agree with
each of the Initial Purchasers as follows:
(a) Prior to the completion of the distribution of the Securities by
the Initial Purchasers to the Eligible Purchasers, to advise the Initial
Purchasers promptly and, if requested by the Initial Purchasers, confirm such
advice in writing, (i) of the issuance by any state securities commission of any
stop order suspending the qualification or exemption from qualification of any
Securities for offering or sale in any jurisdiction, or the initiation of any
proceeding for such purpose by any state securities commission or other
regulatory authority and (ii) of the happening of any event that makes any
statement of a material fact made in the Preliminary Offering Memorandum or the
Offering Memorandum untrue or that requires the making of any additions to or
changes in the Preliminary Offering Memorandum or the Offering Memorandum in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading. The Company and the Subsidiary Guarantors
shall use
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their reasonable best efforts to prevent the issuance of any stop order or order
suspending the qualification or exemption of any Securities under any state
securities or Blue Sky laws and, if at any time any state securities commission
or other regulatory authority shall issue an order suspending the qualification
or exemption of any Securities under any state securities or Blue Sky laws, the
Company and the Subsidiary Guarantors shall use their reasonable best efforts to
obtain the withdrawal or lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons identified by
the Initial Purchasers to the Company, without charge, as many copies of the
Offering Memorandum, and any amendments or supplements thereto, as the Initial
Purchasers may reasonably request. The Company and the Subsidiary Guarantors
consent to the use, in accordance with the securities or Blue Sky laws of the
jurisdictions in which the Securities are offered, by the Initial Purchasers and
by dealers to whom the Securities may be sold (i) prior to the date of the
Offering Memorandum, of the Preliminary Offering Memorandum and (ii) of the
Offering Memorandum (and any amendments and supplements thereto), in each case
in connection with the offering and sale of the Securities.
(c) Not to amend or supplement the Preliminary Offering Memorandum or
the Offering Memorandum prior to the Closing Date unless the Initial Purchasers
shall previously have been advised thereof and shall not have objected thereto
within a reasonable time after being furnished a copy of the proposed amendment
or supplement. The Company and the Subsidiary Guarantors shall promptly prepare,
upon the Initial Purchasers' request, any amendment or supplement to the
Preliminary Offering Memorandum or the Offering Memorandum that may be necessary
or advisable in connection with Exempt Resales.
(d) If, after the date hereof and prior to consummation of any Exempt
Resale, any event shall occur as a result of which, in the judgment of the
Company and the Subsidiary Guarantors or in the reasonable opinion of either
counsel to the Company and the Subsidiary Guarantors or counsel to the Initial
Purchasers, it becomes necessary or advisable to amend or supplement the
Preliminary Offering Memorandum or Offering Memorandum in order to make the
statements therein, in the light of the circumstances under which such
statements were made, not misleading, or if it is necessary or advisable to
amend or supplement the Preliminary Offering Memorandum or Offering Memorandum
to comply with applicable law, (i) to notify the Initial Purchasers of such
occurrence and (ii) forthwith to prepare an appropriate amendment or supplement
to such document and furnish to the Initial Purchasers a reasonable number of
copies thereof.
(e) To cooperate with the Initial Purchasers and counsel to the
Initial Purchasers in connection with the qualification or registration of the
Units under the securities or Blue Sky laws of such jurisdictions as the Initial
Purchasers may reasonably request and to continue such qualification in effect
so long as required for the Exempt Resales; provided, however that neither the
Company nor any Subsidiary Guarantor shall be required in connection therewith
to register or qualify as a foreign corporation where it is not now so qualified
or to take any action that would subject it to service of process in suits or
taxation, in each case, other than
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as to matters and transactions relating to or arising out of the offering or
sale of the Units in any jurisdiction where it is not now so subject.
(f) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement becomes effective or is terminated, to pay all
costs, expenses, fees and taxes incident to the performance of the obligations
of the Company and the Subsidiary Guarantors hereunder, including in connection
with (i) the preparation, printing, filing and distribution of the Preliminary
Offering Memorandum and the Offering Memorandum (including, without limitation,
financial statements) and all amendments and supplements thereto required
pursuant hereto, (ii) the issuance, transfer and delivery by the Company of the
Securities to the Initial Purchasers, (iii) the qualification or registration of
the Securities for offer and sale under the securities or Blue Sky laws of the
several states (including, without limitation, the cost of preparing, printing
and mailing a preliminary and final Blue Sky Memorandum and the reasonable fees
and disbursements of counsel to the Initial Purchasers relating thereto), (iv)
furnishing such copies of the Preliminary Offering Memorandum and the Offering
Memorandum, and all amendments and supplements thereto, as may be requested by
the Initial Purchasers for use in connection with Exempt Resales, (v) the
preparation of certificates for the Securities, (vi) the fees, disbursements and
expenses of the Company's counsel and accountants, (vii) all expenses and
listing fees in connection with the application for quotation of the Securities
in the National Association of Securities Dealers, Inc. ("NASD") Automated
Quotation System - PORTAL ("PORTAL"), (viii) all fees and expenses (including
fees and expenses of counsel) of the Company in connection with the approval of
the Securities by DTC for "book-entry" transfer, (ix) rating the Securities by
rating agencies, (x) the reasonable fees and expenses of the Trustee and its
counsel in connection with the Indenture and the Notes, (xi) the reasonable fees
and expenses of the Warrant Agent and its counsel in connection with the Warrant
Agreement and the Warrants, (xii) the performance by the Company and the
Subsidiary Guarantors of their other obligations under this Agreement and the
other Operative Documents, rating the Securities by rating agencies and (xiii)
"roadshow" travel and other documented and reasonable expenses incurred in
connection with the marketing and sale of the Securities.
(g) To use the proceeds from the sale of the Units substantially in
the manner described in the Offering Memorandum under the caption "Use of
Proceeds."
(h) Not to voluntarily claim, and to resist actively any attempts to
claim, the benefit of any usury laws against the holders of any Securities.
(i) To do and perform all things required to be done and performed
under this Agreement by it prior to or after the Closing Date and to satisfy all
conditions precedent to the Initial Purchasers' obligations to purchase the
Units.
(j) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Securities Act) that
would be integrated with the sale of the Units in a manner that would require
the registration under the Securities Act of the sale to the Initial Purchasers
or the Eligible Purchasers of the Units, the Notes or the Warrants or to take
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any other action that would result in the Exempt Resales not being exempt from
registration under the Securities Act.
(k) For so long as any of the Securities remain outstanding and
during any period in which the Company and the Subsidiary Guarantors are not
subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), to make available upon request to any beneficial
owner of Securities in connection with any sale thereof and any prospective
purchaser of such Securities from such beneficial owner, the information
required by Rule 144A(d)(4) under the Securities Act.
(l) To cause the Exchange Offer to be made in the appropriate form to
permit registered Series B Notes to be offered in exchange for the Series A
Notes and to comply with all applicable federal and state securities laws in
connection with the Exchange Offer.
(m) To comply with all of their agreements set forth in the
Registration Rights Agreement, the Warrant Registration Rights Agreement and all
agreements set forth in the representation letters of the Company to DTC
relating to the approval of the Securities by DTC for "book-entry" transfer.
(n) To use commercially reasonable best efforts to cause the
securities to be designated as eligible for PORTAL and to obtain approval of the
Securities by DTC for "book-entry" transfer.
(o) For so long as any of the Securities remain outstanding, to
deliver without charge to each of the Initial Purchasers, promptly upon request,
copies of (i) all reports or other publicly available information that the
Company shall mail or otherwise make available to its security holders generally
and (ii) all reports, financial statements and proxy or information statements
filed by the Company with the Commission or any national securities exchange and
other information made publicly available by the Company, including without
limitation, press releases.
(p) Prior to the Closing Date, to furnish to each of the Initial
Purchasers, as soon as they have been prepared in the ordinary course by the
Company, copies of all available consolidated financial statements or any
unaudited interim financial statements of the Company for any period subsequent
to the periods covered by the financial statements appearing in the Offering
Memorandum.
(q) Not to take, directly or indirectly, any action designed to, or
that might reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company or any of the
Subsidiary Guarantors to facilitate the sale or resale of the Securities.
(r) Not to distribute the Preliminary Offering Memorandum, the
Offering Memorandum or any other offering material in connection with the
offering and sale of the Securities, except as permitted by the Securities Act.
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(s) To reserve and continue to reserve as long as any Warrants remain
outstanding, a sufficient number of shares of Common Stock for issuance upon
exercise of the Warrants.
(t) To place $80,400,000 of net proceeds of the Offering of the Units
in an Escrow Account (as defined in the Offering Memorandum) to be held by the
Collateral Agent under the Pledge Agreement (as defined in the Offering
Memorandum).
(u) To cause each certificate for a Note to bear the legend contained
in the Indenture for the time period and upon the other terms stated in the
Indenture.
(v) To file with the Commission, not later than 15 days after the
Closing Date, five copies of a notice on Form D under the Securities Act (one of
which will be manually signed by a person duly authorized by the Company); to
otherwise comply with the requirements of Rule 503 under the Securities Act; and
to furnish promptly to the Initial Purchasers evidence of each such required
timely filing (including a copy thereof).
(w) During the period of 180 days following the date of the Offering
Memorandum, not to, without the prior written consent of Bear, Xxxxxxx & Co.
Inc. (which consent may be withheld at the sole discretion of Bear, Xxxxxxx, Co.
Inc.), directly or indirectly, sell, offer, contract or grant any option to
sell, pledge, transfer or establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or
transfer, or announce the offering of, or file any registration statement under
the Securities Act in respect of, any debt securities of the Company
substantially similar to the Notes or securities exchangeable for or convertible
into debt securities of the Company substantially similar to the Notes (other
than as contemplated by this Agreement and pursuant to the Registration Rights
Agreement and the Warrant Registration Rights Agreement).
5. Representations and Warranties of the Company and the Subsidiary
Guarantors. The Company and the Subsidiary Guarantors acknowledge that each of
the Initial Purchasers and, for purposes of the opinions to be delivered to the
Initial Purchasers pursuant to Section 9 hereof, counsel to the Company and the
Subsidiary Guarantors and counsel to the Initial Purchasers, will rely upon the
accuracy and truth of the following representations and hereby consent to such
reliance. In addition to the representations and warranties listed in this
Section 5, each certificate signed by any officer of the Company or any of the
Subsidiary Guarantors and delivered to the Initial Purchasers or counsel for the
Initial Purchasers pursuant to this Agreement shall be deemed to be a
representation and warranty by the Company or such Subsidiary Guarantor, as the
case may be, to the Initial Purchasers as to the matters covered thereby. The
Company represents and warrants to each of the Initial Purchasers that:
(a) The Preliminary Offering Memorandum and the Offering Memorandum
have been prepared for use in connection with the Exempt Resales. The
Preliminary Offering Memorandum and the Offering Memorandum do not, and any
supplement or amendment to them will not, as of their respective dates, contain
any untrue statement of a material fact or omit to
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state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties contained in this paragraph shall
not apply to statements in or omissions from the Preliminary Offering Memorandum
and the Offering Memorandum (or any supplement or amendment thereto) made in
reliance upon and in conformity with information relating to the Initial
Purchasers furnished to the Company in writing by the Initial Purchasers
expressly for use therein. No stop order preventing the use of the Preliminary
Offering Memorandum or the Offering Memorandum, or any amendment or supplement
thereto, or any order asserting that any of the transactions contemplated by
this Agreement are subject to the registration requirements of the Securities
Act, has been issued.
(b) When the Securities are issued and delivered pursuant to this
Agreement, none of the Securities will be of the same class (within the meaning
of Rule 144A under the Securities Act) as securities of the Company that are
listed on a national securities exchange registered under Section 6 of the
Exchange Act or that are quoted in a United States automated inter-dealer
quotation system.
(c) Each of the Company and each Subsidiary Guarantor has been duly
incorporated or formed and is validly existing as a corporation or limited
liability company, as the case may be, in good standing under the laws of the
jurisdiction of its incorporation or formation and has the power and authority
to own, lease and operate its properties and to conduct its business as
described in the Offering Memorandum. Each of the Company and each Subsidiary
Guarantor is duly qualified as a foreign corporation or limited liability
company, 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 for such
jurisdictions where the failure to so qualify or to be in good standing would
not, individually or in the aggregate, result in a material adverse change, or
any development that could reasonably be expected to result in a material
adverse change, in the condition, financial or otherwise, or in the earnings,
business, operations or prospects, whether or not arising from transactions in
the ordinary course of business, of the Company and the Subsidiary Guarantors,
considered as one entity (any such change is called a "Material Adverse
Change").
(d) All of the outstanding shares of capital stock of the Company
have been duly authorized, validly issued, and are fully paid and nonassessable
and were not issued in violation of any preemptive or similar rights. At
December 31, 1997, after giving effect to the issuance and sale of the Units
pursuant hereto and the application of the net proceeds from the sale of the
Units, the Company had the pro forma consolidated capitalization as set forth in
the Offering Memorandum under the caption "Capitalization."
(e) The Company is the sole member of each Subsidiary Guarantor, with
the exception of VIC-RMTS-DC, LLC, and the Company's interest in each Subsidiary
Guarantor is free and clear of any security interest, claim, lien, limitation on
voting rights or encumbrance. The Company has no subsidiaries other than the
Subsidiary Guarantors. As used in this Agreement, "subsidiary" or "subsidiaries"
means, with respect to any Person, (i) any corporation,
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association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
subsidiaries or such Person (or any combination thereof).
(f) All of the outstanding shares of capital stock of the Company
were issued in reliance on the exemption from registration pursuant to Section
4(2) of the Securities Act and in compliance with the requirements thereof and
any other statute, judgment, decree, order, rule or regulation of any court,
regulatory body or administrative agency or other governmental body, domestic or
foreign, having jurisdiction over the Company or such issuance.
(g) Except as disclosed in the Offering Memorandum and other than the
rights of the Company or any Subsidiary Guarantor in any Subsidiary Guarantor,
there are not currently, and will not be as a result of the Offering, any
outstanding subscriptions, acquisition rights, warrants, calls, commitments of
sale or options to acquire any capital stock or other equity interest of the
Company or any of the Subsidiary Guarantors, or instruments convertible into or
exchangeable for, any capital stock or other equity interest of the Company or
any of the Subsidiary Guarantors.
(h) The Company and the Subsidiary Guarantors have all requisite
power and authority to execute, deliver and perform their obligations under this
Agreement and the other Operative Documents and to consummate the transactions
contemplated hereby and thereby, including, without limitation, the power and
authority to issue, sell and deliver the Securities and to issue and deliver the
Subsidiary Guarantees as provided herein and therein and the power to effect the
Use of Proceeds as described in the Offering Memorandum.
(i) This Agreement has been duly and validly authorized, executed and
delivered by the Company and each Subsidiary Guarantor and is the legally valid
and binding agreement of the Company and each Subsidiary Guarantor, enforceable
against the Company and each Subsidiary Guarantor in accordance with its terms,
except insofar as indemnification and contribution provisions may be limited by
applicable law or equitable principles and subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of equity.
(j) The Indenture has been duly and validly authorized by the Company
and each Subsidiary Guarantor (assuming due authorization, execution, delivery
and performance by the Trustee), and when duly executed and delivered by the
Company and each Subsidiary Guarantor, will be the legally valid and binding
obligation of the Company and each Subsidiary Guarantor, enforceable against the
Company and each Subsidiary Guarantor in accordance with its terms, subject to
(A) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally, (B) general principles
of
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equity (whether considered in a proceeding in equity or at law) or (C)
applicable public policy considerations. The Offering Memorandum contains a fair
summary of the principal terms of the Indenture.
(k) The Units have been duly and validly authorized by the Company
for issuance and sale to the Initial Purchasers pursuant to the terms of this
Agreement.
(l) The Series A Notes have been duly and validly authorized by the
Company for issuance and sale to the Initial Purchasers by the Company pursuant
to this Agreement and, when issued and authenticated in accordance with the
terms of the Indenture and delivered against payment therefor in accordance with
the terms hereof and thereof, will be the legally valid and binding obligations
of the Company, enforceable against the Company in accordance with their terms
and entitled to the benefits of the Indenture, subject to (A) applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors generally, (B) general principles of equity
(whether considered in a proceeding in equity or at law) or (C) applicable
public policy considerations. The Offering Memorandum contains a fair summary of
the terms of the Series A Notes.
(m) The Series B Notes have been duly and validly authorized for
issuance by the Company and, when issued and authenticated in accordance with
the terms of the Exchange Offer and the Indenture, will be the legally valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms and entitled to the benefits of the Indenture,
subject to (A) applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally, (B)
general principles of equity (whether considered in a proceeding in equity or at
law) or (C) applicable public policy considerations. The Offering Memorandum
contains a fair summary of the terms of the Series B Notes.
(n) The Subsidiary Guarantees have been duly and validly authorized
for issuance by each of the Subsidiary Guarantors and, when executed and
delivered in accordance with the terms of the Indenture and when the Notes have
been issued and authenticated in accordance with the terms of the Indenture and
delivered against payment therefor in accordance with the terms hereof and
thereof, will be the legal, valid and binding obligations of each of the
Subsidiary Guarantors, enforceable against each of them in accordance with their
terms and entitled to the benefits of the Indenture, subject to (A) applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors generally, (B) general principles of equity
(whether considered in a proceeding in equity or at law) or (C) applicable
public policy considerations. The Offering Memorandum contains a fair summary of
the terms of the Subsidiary Guarantees.
(o) The Registration Rights Agreement has been duly and validly
authorized by the Company and each Subsidiary Guarantor and, when duly executed
and delivered by the Company and each Subsidiary Guarantor, will be the legally
valid and binding obligation of the Company and each Subsidiary Guarantor,
enforceable against the Company and each Subsidiary Guarantor in accordance with
its terms, subject to (A) applicable bankruptcy, insolvency,
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fraudulent conveyance, reorganization or similar laws affecting the rights of
creditors generally, (B) general principles of equity (whether considered in a
proceeding in equity or at law) or (C) applicable public policy considerations.
The Offering Memorandum contains a fair summary of the principal terms of the
Registration Rights Agreement.
(p) The Warrant Agreement has been duly and validly authorized by the
Company, and, when duly executed and delivered by the Company, will be the
legally valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to (A) applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally, (B) general principles of equity (whether
considered in a proceeding in equity or at law) or (C) applicable public policy
considerations. The Offering Memorandum contains a fair summary of the principal
terms of the Warrant Agreement.
(q) The Warrants have been duly and validly authorized for issuance
and sale to the Initial Purchasers by the Company pursuant to this Agreement
and, when issued and countersigned in accordance with the terms of the Warrant
Agreement and delivered against payment therefor in accordance with the terms
hereof and thereof, will be the legally valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms and
entitled to the benefits of the Warrant Agreement, subject to (A) applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors generally, (B) general principles of equity
(whether considered in a proceeding in equity or at law) or (C) applicable
public policy considerations. The Offering Memorandum contains a fair summary of
the principal terms of the Warrants.
(r) The Warrants will be exercisable for Warrant Shares in accordance
with the terms of the Warrant Agreement. The Warrant Shares have been duly
authorized for issuance by the Company and, when issued and paid for upon
exercise of the Warrants in accordance with the terms thereof, will be validly
issued, fully paid and nonassessable, free of any preemptive or similar rights.
The Company has reserved sufficient shares of Common Stock for issuance upon the
exercise of the Warrants.
(s) The Warrant Registration Rights Agreement has been duly and
validly authorized by the Company and, when duly executed and delivered by the
Company, will be the legally valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to (A)
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally, (B) general principles
of equity (whether considered in a proceeding in equity or at law) or (C)
applicable public policy considerations. The Offering Memorandum contains a fair
summary of the principal terms of the Warrant Registration Rights Agreement.
(t) Neither the Company nor any of the Subsidiary Guarantors is, or,
after giving effect to the offering of the Securities, will be (A) in violation
of its organizational or governing documents, (B) in default in the performance
of any bond, debenture, note, indenture, mortgage, deed of trust or other
material agreement or instrument to which it is a party or by
11
which it is bound or to which any of its properties is subject, or (C) in
violation of any local, state or Federal law, statute, ordinance, rule,
regulation, requirement, judgment or court decree (including, without
limitation, the Communications Act and the rules and regulations of the FCC and
environmental laws, statutes, ordinances, rules, regulations, judgments or court
decrees) applicable to it or any of its subsidiaries or any of its or their
assets or properties (whether owned or leased) other than, in the case of
clauses (B) and (C), any default or violation, other than the status of the
Company's CLEC application in the District of Columbia as disclosed in the
Offering Memorandum, or any default or violation that could not reasonably be
expected to (x) individually or in the aggregate, result in a material adverse
effect on the properties, business, results of operations, condition (financial
or otherwise), affairs or prospects of the Company and its subsidiaries, taken
as a whole, (y) interfere with or adversely affect the issuance or marketability
of the Units pursuant hereto or (z) in any manner draw into question the
validity of this Agreement or any other Operative Document or the transactions
described in the Offering Memorandum under the caption "Use of Proceeds" (any of
the events set forth in clauses (x), (y) or (z), a "Material Adverse Effect").
There exists no condition that, with notice, the passage of time or otherwise,
would constitute a default under any such document or instrument, except as
disclosed in the Offering Memorandum, except for any such condition which would
not reasonably be expected to result in a Material Adverse Effect.
(u) None of (A) the execution, delivery or performance by the Company
or any of the Subsidiary Guarantors of this Agreement and the other Operative
Documents, (B) the issuance and sale of the Securities and (C) consummation by
the Company of the transactions contemplated hereby violate, conflict with or
constitute a breach of any of the terms or provisions of, or a default under (or
an event that with notice or the lapse of time, or both, would constitute a
default), or require consent which has not been obtained under, or result in the
imposition of a lien or encumbrance other than a "Permitted Lien," as defined in
the Indenture on any properties of the Company or any of its subsidiaries, or an
acceleration of any indebtedness of the Company or any of its subsidiaries
pursuant to, (i) the charter or bylaws or other organizational documents of the
Company or any of its subsidiaries, (ii) any bond, debenture, note, indenture,
mortgage, deed of trust or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or its subsidiaries
or their properties is or may be bound, (iii) any statute, rule or regulation
applicable to the Company or any of its subsidiaries or any of their assets or
properties or (iv) any judgment, order or decree of any court or governmental
agency or authority having jurisdiction over the Company or any of its
subsidiaries or any of their assets or properties, except in the case of clauses
(ii), (iii) and (iv) for such violations, conflicts, breaches, defaults,
consents, impositions of liens or accelerations that (x) would not singly, or in
the aggregate, have a Material Adverse Effect or (y) which are disclosed in the
Offering Memorandum. Other than as described in the Offering Memorandum, no
consent, approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, (A) any court or governmental
agency, body or administrative agency (including, without limitation, the FCC)
or (B) any other person is required for (1) the execution, delivery and
performance by the Company or any of the Subsidiary Guarantors of this Agreement
and the other Operative Documents, (2) the issuance and sale of the Securities
and the transactions contemplated hereby and thereby, except (x) such as have
been obtained and made (or, in the case of the Registration
12
Rights Agreement, will be obtained and made) under the Securities Act, the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act") and state
securities or Blue Sky laws and regulations or such as may be required by the
NASD or (y) where the failure to obtain any such consent, approval,
authorization or order of, or filing registration, qualification, license or
permit would not reasonably be expected to result in a Material Adverse Effect.
(v) There are no legal or governmental actions, suits or proceedings
pending or, to the knowledge of the Company or any Subsidiary Guarantor, overtly
threatened that are not disclosed in the Offering Memorandum (i) against or
affecting the Company or any of its subsidiaries, (ii) which has as the subject
thereof any officer or director (in any such capacity) of, or property owned or
leased by, the Company or any of its subsidiaries or (iii) relating to
environmental or discrimination matters, where in any such case (A) there is a
reasonable possibility that such action, suit or proceeding might be determined
adversely to the Company or such subsidiary and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to result
in a Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement. No material labor dispute with the
employees of the Company or any of its subsidiaries exists or, to the best of
the Company's knowledge, is threatened or imminent.
(w) To the best of the Company's knowledge, no action has been taken
and no statute, rule, regulation or order has been enacted, adopted or issued by
any governmental agency that prevents the issuance of the Securities or prevents
or suspends the use of the Offering Memorandum; no injunction, restraining order
or order of any nature by a federal or state court of competent jurisdiction has
been issued that prevents the issuance of the Securities, prevents or suspends
the sale of the Securities in any jurisdiction referred to in Section 4(e)
hereof or that could adversely affect the consummation of the transactions
contemplated by this Agreement, the Operative Documents or the Offering
Memorandum; and every request of any securities authority or agency of any
jurisdiction to the Company for additional information has been complied with in
all material respects.
(x) Except as would not, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Change, (i) to the best of the
Company's knowledge, neither the Company nor any of its subsidiaries is in
violation of any federal, state, local or foreign law or regulation relating to
pollution or protection of human health or 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 emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum and petroleum products (collectively, "Materials of Environmental
Concern"), or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Materials of
Environmental Concern (collectively, "Environmental Laws"), which violation
includes, but is not limited to, noncompliance with any permits or other
governmental authorizations required for the operation of the business of the
Company or its subsidiaries under applicable Environmental Laws, or
noncompliance with the terms and conditions thereof, nor has the Company or any
of its subsidiaries received any written communication, whether from a
governmental authority,
13
citizens group, employee or otherwise, that alleges that the Company or any of
its subsidiaries is in violation of any Environmental Law; (ii) there is no
claim, action or cause of action filed with a court or governmental authority,
no investigation with respect to which the Company or any of its subsidiaries
has received written notice, and no written notice by any person or entity
alleging potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, attorneys' fees or penalties arising out of, based on or
resulting from the presence, or release into the environment, of any Material of
Environmental Concern at any location owned, leased or operated by the Company
or any of its subsidiaries, now or in the past (collectively, "Environmental
Claims"), pending or, to the best of the Company's knowledge, threatened against
the Company or any of its subsidiaries or any person or entity whose liability
for any Environmental Claim the Company or any of its subsidiaries has retained
or assumed either contractually or by operation of law; and (iii) to the best of
the Company's knowledge, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
the release, emission, discharge, presence or disposal of any Material of
Environmental Concern, that reasonably could result in a violation of any
Environmental Law or form the basis of a potential Environmental Claim against
the Company or any of its subsidiaries or against any person or entity whose
liability for any Environmental Claim the Company or any of its subsidiaries has
retained or assumed either contractually or by operation of law.
(y) The Company and each of its subsidiaries has (i) good and
marketable title to all of the properties and assets described in the Offering
Memorandum or the financial statements included in the Offering Memorandum as
owned by it, free and clear of all liens, charges, encumbrances and
restrictions, except such as are described in the Offering Memorandum (including
the liens imposed by the Company's Security Agreement with The Northern Trust
Company) or as would not have a Material Adverse Effect, (ii) peaceful and
undisturbed possession to the extent described in the Offering Memorandum under
all material leases to which it is a party as lessee, (iii) all licenses,
certificates, permits, authorizations, approvals, franchises and other rights
from, and has made all declarations and filings with, all federal, state and
local authorities (including, without limitation, the FCC), all self-regulatory
authorities and all courts and other tribunals (each an "Authorization")
necessary to engage in the business conducted by the Company and its
subsidiaries in the manner described in the Offering Memorandum, except as
described in the Offering Memorandum, and no such Authorization contains a
materially burdensome restriction that is not disclosed in the Offering
Memorandum and (iv) no reason to believe that any governmental body or agency is
considering limiting, suspending or revoking any such Authorization. Except
where the failure to be in full force and effect would not have a Material
Adverse Effect, all such Authorizations are valid and in full force and effect
and the Company and each of its subsidiaries is 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 having jurisdiction with
respect thereto. All material leases to which the Company and each of its
subsidiaries is a party are valid and binding and no default by the Company or
any of its subsidiaries has occurred and is continuing thereunder and, to the
best knowledge of the Company, no material defaults by the landlord are existing
under any such lease that could reasonably be expected to result in a Material
Adverse Effect.
14
(z) The Company and its subsidiaries own, possess or have the right to
employ sufficient patents, patent rights, licenses (including all FCC, state,
local or other jurisdictional regulatory licenses), inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, software, systems or procedures),
trademarks, service marks and trade names, inventions, computer programs,
technical data and information (collectively, the "Intellectual Property
Rights") reasonably necessary to conduct their businesses as now conducted,
other than the status of the Company's CLEC application in the District of
Columbia as described in the Offering Memorandum; and the expected expiration of
any of such Intellectual Property Rights would not result in a Material Adverse
Change. The Intellectual Property Rights presently employed by the Company and
its subsidiaries in connection with the businesses now operated by them or which
are proposed to be operated by them are owned free and clear of and without
violating any right, claimed right, charge, encumbrance, pledge, security
interest, restriction or lien of any kind of any other person except such as are
described in the Offering Memorandum (including the liens imposed by the
Company's Security Agreement with the Northern Trust Company) and neither the
Company nor any of its subsidiaries has received any notice of infringement of
or conflict with asserted rights of others with respect to any of the foregoing
except as would not reasonably be expected to have a Material Adverse Effect.
The use of the Intellectual Property in connection with the business and
operations of the Company and its subsidiaries does not infringe on the rights
of any person, except as could not reasonably be expected to have a Material
Adverse Effect.
(aa) None of the Company or any of its subsidiaries, or, or to the
best knowledge of the Company, any of their respective officers, directors,
partners, employees, agents or affiliates or any other person acting on behalf
of the Company or any of its subsidiaries has, directly or indirectly, given or
agreed to give any money, gift or similar benefit (other than legal price
concessions to customers in the ordinary course of business) to any customer,
supplier, employee or agent of a customer or supplier, official or employee of
any governmental agency (domestic or foreign), instrumentality of any government
(domestic or foreign) or any political party or candidate for office (domestic
or foreign) or other person who was, is or may be in a position to help or
hinder the business of the Company or any of its subsidiaries (or assist the
Company or any of its subsidiaries in connection with any actual or proposed
transaction) which (i) might subject the Company, or any other individual or
entity to any damage or penalty in any civil, criminal or governmental
litigation or proceeding (domestic or foreign), (ii) if not given in the past,
might have had a Material Adverse Effect or (iii) if not continued in the
future, might have a Material Adverse Effect.
(bb) All material tax returns required to be filed by the Company and
its subsidiaries in all jurisdictions have been so filed. All taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due or claimed to be due from such entities or that are due and payable have
been paid, other than those which would not, singularly or in the aggregate,
reasonably be expected to have a Material Adverse Effect and those being
contested in good faith and for which adequate reserves have been provided or
those currently payable without penalty or interest. To the knowledge of the
Company, there are no material proposed additional tax assessments against the
Company or any of its subsidiaries or the assets or property of the Company or
any of its subsidiaries. The Company has made adequate charges,
15
accruals and reserves in the applicable financial statements included in the
Offering Memorandum in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of the Company or
any of its consolidated subsidiaries has not been finally determined.
(cc) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company Act").
(dd) Except as disclosed in the Offering Memorandum, there are no
holders of securities of the Company or any of its subsidiaries who, by reason
of the execution by the Company or any of the Subsidiary Guarantors of this
Agreement or any other Operative Document to which they are a party or the
consummation by the Company or any of the Subsidiary Guarantors of the
transactions contemplated hereby or thereby, have the right to request or demand
that the Company or any of the Subsidiary Guarantors register under the
Securities Act or analogous foreign laws and regulations securities held by
them, other than such that have been duly waived.
(ee) The Company and each of the Subsidiary Guarantors maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that: (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity in all material
respects with generally accepted accounting principles and to maintain
accountability for assets; and (iii) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(ff) Each of the Company and the Subsidiary Guarantors are insured by
insurers of recognized financial responsibility with policies in such amounts
and with such deductibles and covering such risks as are customary for similarly
situated businesses including, but not limited to, policies covering real and
personal property owned or leased by the Company and its subsidiaries against
theft, damage, destruction and acts of vandalism. The Company has no reason to
believe that it or any Subsidiary Guarantor will not be able (i) to renew its
existing insurance coverage as and when such policies expire or (ii) to obtain
comparable coverage from similar institutions as may be necessary or appropriate
to conduct its business as now conducted and at a cost that would not result in
a Material Adverse Change. Neither the Company nor any Subsidiary Guarantor has
been denied any insurance coverage which it has sought or for which it has
applied.
(gg) Neither the Company nor any Subsidiary Guarantor has (i) taken,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
any security of the Company or any Subsidiary Guarantor to facilitate the sale
or resale of the Units, the Notes or the Warrants or (ii) since the date of the
Preliminary Offering Memorandum (A) sold, bid for, purchased or paid any person
any compensation for soliciting purchases of, the Securities or (B) paid or
agreed to pay to any
16
person any compensation for soliciting another to purchase any other securities
of the Company or any Subsidiary Guarantor.
(hh) No registration under the Securities Act of the Securities is
required for the sale of the Units to the Initial Purchasers as contemplated
hereby or for the Exempt Resales assuming (i) that the purchasers who buy the
Units in the Exempt Resales are Eligible Purchasers and (ii) the accuracy of the
Initial Purchasers' representations contained herein. No form of general
solicitation or general advertising was used by the Company, any of the
Subsidiary Guarantors or any of their respective representatives (other than the
Initial Purchasers, their employees, agents or any other persons acting on their
behalf, as to which the Company and the Subsidiary Guarantors make no
representation or warranty) in connection with the offer and sale of any of the
Securities in connection with Exempt Resales, including, but not limited to,
articles, notices or other communications published in any newspaper, magazine,
or similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising. No securities of the same respective classes as the Securities have
been issued and sold by the Company or any Subsidiary Guarantors within the six-
month period immediately prior to the date hereof.
(ii) The Company and the Subsidiary Guarantors and any "employee
benefit plan" (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the Company, its
subsidiaries or their "ERISA Affiliates" (as defined below) are in compliance in
all material respects with ERISA. "ERISA Affiliate" means, with respect to the
Company or a Subsidiary Guarantor, any member of any group of organizations
described in Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of
1986, as amended, and the regulations and published interpretations thereunder
(the "Code") of which the Company or such Subsidiary Guarantor is a member. No
"reportable event" (as defined under ERISA) has occurred or is reasonably
expected to occur with respect to any "employee benefit plan" established or
maintained by the Company, the Subsidiary Guarantors or any of their ERISA
Affiliates. No "employee benefit plan" established or maintained by the Company,
the Subsidiary Guarantors or any of their ERISA Affiliates, if such "employee
benefit plan" were terminated, would have any "amount of unfunded benefit
liabilities" (as defined under ERISA). Neither the Company, the Subsidiary
Guarantors nor any of their ERISA Affiliates has incurred or reasonably expects
to incur any liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any "employee benefit plan" or (ii) Sections 412, 4971,
4975 or 4980B of the Code. Each "employee benefit plan" established or
maintained by the Company, the Subsidiary Guarantors or any of their ERISA
Affiliates that is intended to be qualified under Section 401(a) of the Code is
so qualified and nothing has occurred, whether by action or failure to act,
which would cause the loss of such qualification.
(jj) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, and each amendment or supplement thereto read in
conjunction with the Preliminary Offering Memorandum or the Final Offering
Memorandum, as applicable, as of its date, contains the information specified
in, and meets the requirements of, Rule 144A(d)(4) under the Securities Act.
17
(kk) Except as otherwise disclosed in the Offering Memorandum,
subsequent to the respective dates as of which information is given in the
Offering Memorandum: (i) there has been no Material Adverse Change; (ii) the
Company and its subsidiaries, considered as one entity, have not incurred any
material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business nor entered into any material transaction or
agreement not in the ordinary course of business; (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company or other subsidiaries, any of its
subsidiaries on any class of capital stock or repurchase or redemption by the
Company or any of its subsidiaries of any class of capital stock; (iv) there has
been no capital expenditure or commitment by the Company or any of its
subsidiaries exceeding $100,000, either individually or in the aggregate except
in the ordinary course of business as generally contemplated by the Offering
Memorandum; (v) there has been no change in accounting methods or practices
(including any change in depreciation or amortization policies or rates) by the
Company or any of its subsidiaries; (vi) there has been no revaluation by the
Company or any of its subsidiaries of any of their assets; (vii) there has been
no increase in the salary or other compensation payable or to become payable by
the Company or any of its subsidiaries to any of their officers, directors,
employees or advisors, nor any declaration, payment or commitment or obligation
of any kind for the payment by the Company or any of its subsidiaries of a bonus
or other additional salary or compensation to any such person; (viii) there has
been no amendment or termination of any material contract, agreement or license
to which the Company or any subsidiary is a party or by which it is bound; (ix)
there has been no waiver or release of any material right or claim of the
Company or any subsidiary, including any write-off or other compromise of any
material account receivable of the Company or any subsidiary; and (x) there has
been no change in pricing or royalties set or charged by the Company or any
subsidiary to their respective customers or licensees or in pricing or royalties
set or charged by persons who have licensed Intellectual Property Rights to the
Company or any of its subsidiaries.
(ll) None of the execution, delivery and performance of this
Agreement, the issuance and sale of the Securities, the application of the
proceeds from the issuance and sale of the Securities and the consummation of
the transactions contemplated thereby as set forth in the Offering Memorandum,
will violate Regulations T, U or X promulgated by the Board of Governors of the
Federal Reserve System or analogous foreign laws and regulations.
(mm) Xxxxx & Young LLP and Beers & Xxxxxx PLLC, who have expressed
their opinion with respect to the financial statements (which term as used in
this Agreement includes the related notes thereto) and supporting schedules
included in the Offering Memorandum, are independent public or certified public
accountants within the meaning of Regulation S-X under the Securities Act and
the Exchange Act.
(nn) The financial statements, together with the related notes,
included in the Offering Memorandum present fairly in all material respects the
consolidated financial position of OnePoint Communications, LLC and its
consolidated subsidiaries and, to the best knowledge of the Company, Mid-
Atlantic Telcom Plus, LLC, as of and at the dates indicated and the results of
their operations and cash flows for the periods specified. Such financial
statements of OnePoint Communications, LLC and its consolidated susidiaries, and
to the best knowledge of
18
the Company, of Mid-Atlantic Telcom Plus, LLC, have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the periods involved, except as may be expressly stated in the
related notes thereto. The financial data set forth in the Offering Memorandum
under the captions "Offering Memorandum Summary--Summary Financial Data,"
"Selected Financial Data" and "Capitalization" fairly present the information
set forth therein on a basis consistent with that of the audited financial
statements contained in the Offering Memorandum. The ratios of earnings to
fixed charges set forth in the Offering Memorandum under the captions "Offering
Memorandum Summary - Summary Financial Data" and "Selected Financial Data" have
been calculated in compliance with Item 503(d) of Regulation S-K under the
Securities Act.
(oo) Neither the Company nor any Subsidiary Guarantor intends to, nor
believes that it will, incur debts beyond its ability to pay such debts as they
mature. The present fair saleable value of the assets of each of the Company and
the Subsidiary Guarantors exceeds the amount that will be required to be paid on
or in respect of its existing debts and other liabilities (including contingent
liabilities) as they become absolute and matured. The assets of each of the
Company and the Subsidiary Guarantors do not constitute unreasonably small
capital to carry out its business as conducted or as proposed to be conducted.
Upon the issuance of the Units, the present fair saleable value of the assets of
each of the Company and the Subsidiary Guarantors will exceed the amount that
will be required to be paid on or in respect of existing debts and other
liabilities (including contingent liabilities) of the Company on a consolidated
basis as they become absolute and matured. Upon the issuance of the Units, the
assets of each of the Company and the Subsidiary Guarantors will not constitute
unreasonably small capital to carry out its businesses as now conducted,
including the capital needs of each of the Company and the Subsidiary
Guarantors.
(pp) Except pursuant to this Agreement and the Company's Professional
Services Agreement with the VenCom Group, Inc., there are no contracts,
agreements or understandings between the Company or the Subsidiary Guarantors
and any other person that would give rise to a valid claim against the Company
or any Subsidiary Guarantor or either of the Initial Purchasers for a brokerage
commission, finder's fee or like payment in connection with the issuance,
purchase and sale of the Securities.
(rr) There are no business relationships or related-party
transactions involving the Company or any Subsidiary Guarantor or any other
person that would be required to be described in the Offering Memorandum were it
to be filed as a part of a Registration Statement on Form S-1 under the
Securities Act, which have not been described as would have been so required.
The statements (including the assumptions described therein) included in the
Offering Memorandum under the headings "Business" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations", to the extent
such data constitute forward looking statements as defined in Rule 175(c), were
made by the Company with a reasonable basis and reflect the Company's good faith
estimate of the matters described therein.
19
6. Representations, Warranties and Covenants of the Initial Purchasers.
Each of the Initial Purchasers, severally and not jointly represents, warrants
and covenants to the Company and agrees that:
(a) Such Initial Purchaser is a QIB, with such knowledge and
experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the Units.
(b) Such Initial Purchaser is not acquiring the Units with a view to
any distribution thereof that would violate the Securities Act or the securities
laws of any state of the United States or any other applicable jurisdiction.
(c) No form of general solicitation or general advertising has been
or will be used by either of the Initial Purchasers or any of their
representatives in connection with the offer and sale of any of the Units,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.
(d) Each of the Initial Purchasers agrees that (A) that they will
offer to sell the Units only to, and will solicit offers to buy the Units only
from QIBs who in purchasing such Units will be deemed to have represented and
agreed that they are purchasing the Units for their own accounts or accounts
with respect to which they exercise sole investment discretion and that they or
such accounts are QIBs and (B) that such QIBs will acknowledge and agree that
such Units will not have been registered under the Securities Act and may be
resold, pledged or otherwise transferred only (x)(I) to a person who the seller
reasonably believes is a QIB in a transaction meeting the requirements of Rule
144A, (II) in a transaction meeting the requirements of Rule 144, (III) outside
the United States to a person that is not a U.S. Person (as defined in Rule 902
under the Securities Act) in an offshore transaction meeting the requirements of
Rule 904 under the Securities Act, (IV) to an institutional "Accredited
Investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act) that, prior to such transfer, furnishes to the Trustee and
Warrant Agent a signed letter containing certain representations and agreements
relating to the Units, Notes and Warrants (the form of such letter can be
obtained from the Trustee or Warrant Agent), or (V) in accordance with another
exemption from the registration requirements of the Securities Act (in the case
of II, III, IV or V, based upon an opinion of counsel if the Company or Trustee,
or the "Registrar" or "Transfer Agent" (as such terms are defined in the
Indenture) for the Securities so requests), (y) to the Company or (z) pursuant
to an effective registration statement under the Securities Act and, in each
case, in accordance with any applicable securities laws of any state of the
United States and (C) that the holder and each subsequent holder will be
required to notify any purchaser of the security evidenced thereby of the resale
restrictions set forth in (B) above.
(e) Each of the Initial Purchasers understands that the Company and,
for purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Section 9 hereof,
20
counsel to the Company and counsel to the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and hereby consents
to such reliance.
7. Indemnification.
(a) The Company and the Subsidiary Guarantors, jointly and severally,
agree to indemnify and hold harmless (i) each of the Initial Purchasers, (ii)
each person, if any, who controls either of the Initial Purchasers within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act
and (iii) the respective officers, directors, partners, employees,
representatives and agents of any of the Initial Purchasers or any controlling
person to the fullest extent lawful, from and against any and all losses,
liabilities, claims, damages and expenses whatsoever (including but not limited
to reasonable attorneys' fees and any and all reasonable expenses whatsoever
incurred in investigating, preparing or defending against any investigation or
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum, or in any supplement
thereto or amendment thereof, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Company
will not be liable in any such case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense 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 the Initial Purchasers
expressly for use therein and further provided, that the indemnity agreement
provided in this Section 7(a) with respect to any Preliminary Offering
Memorandum shall not inure to the benefit of any Initial Purchaser (or to the
benefit of any person controlling such Initial Purchaser or any officer,
director, partner, employee, representative or agent of such Initial Purchaser)
on account of any such loss, liability, claim, damage or expenses arising from
the sale of Units by such Initial Purchaser to any person if the untrue
statement of material fact or omission or alleged omission to state therein a
material fact contained in the Preliminary Offering Memorandum was corrected in
the Offering Memorandum and such Initial Purchaser sold Units to that person
without sending or giving at or prior to the written confirmation of such sale,
a copy of the Offering Memorandum (as then amended or supplemented) if the
Company or the Subsidiary Guarantors have previously furnished copies thereof to
the Initial Purchasers. This indemnity agreement will be in addition to any
liability which the Company may otherwise have, including under this Agreement.
(b) Each Initial Purchaser, severally and not jointly, agrees to
indemnify and hold harmless (i) the Company and the Subsidiary Guarantors, (ii)
each person, if any, who controls any of the Company and the Subsidiary
Guarantors within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act, and (iii) the respective officers, directors,
partners, employees, representatives and agents of the Company, the Subsidiary
21
Guarantors or any controlling person to the fullest extent lawful from and
against any and all losses, liabilities, claims, damages and expenses whatsoever
(including but not limited to reasonable attorneys' fees and any and all
reasonable expenses whatsoever incurred in investigating, preparing or defending
against any investigation or litigation, commenced or threatened, or any claim
whatsoever and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum or the Offering
Memorandum, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any 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 either Initial Purchaser expressly for use therein;
provided, however, that in no case shall either Initial Purchaser be liable or
responsible for any amount in excess of the discounts and commissions received
by such Initial Purchaser, as set forth on the cover page of the Offering
Memorandum. This indemnity will be in addition to any liability which either
Initial Purchaser may otherwise have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may otherwise have). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case (and where the Initial Purchasers are the indemnified
parties, Bear, Xxxxxxx & Co. Inc. shall have the right to select such counsel
for the Initial Purchasers), but the fees and expenses of such counsel shall be
at the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying parties
in connection with the defense of such action, (ii) the indemnifying parties
shall not have employed counsel to take charge of the defense of such action
within a reasonable time after notice of commencement of the action, or (iii)
such indemnified party or parties shall have reasonably concluded that there may
be defenses available to it or them which are different from or additional to
those available to one or all of the indemnifying parties (in which case the
indemnifying party or parties shall not
22
have the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such fees and expenses of counsel
shall be borne by the indemnifying parties; provided, however, that the
indemnifying party under subsection (a) or (b) above, shall only be liable for
the legal expenses of one counsel (in addition to any local counsel) for all
indemnified parties in each jurisdiction in which any claim or action is
brought. Anything in this subsection to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement of any claim or action
effected without its prior written consent.
8. Contribution. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 7 is for any reason held to be
unavailable or is insufficient to hold harmless a party indemnified thereunder,
the Company and the Subsidiary Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, shall contribute to the aggregate losses, claims,
damages, liabilities and expenses of the nature contemplated by such
indemnification provision (including any reasonable investigation, legal and
other expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claims asserted, but after deducting
in the case of losses, claims, damages, liabilities and expenses suffered by the
Company and the Subsidiary Guarantors, any contribution received by the Company
and the Subsidiary Guarantors from persons, other than the Initial Purchasers,
who may also be liable for contribution, including persons who control the
Company and the Subsidiary Guarantors within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act) to which the Company, the
Subsidiary Guarantors and one or both of the Initial Purchasers may be subject,
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Subsidiary Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, from the offering of the Units or, if such
allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 7, in such proportion as is appropriate to reflect not only
the relative benefits referred to above but also the relative fault of the
Company and the Subsidiary Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Subsidiary Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, shall be deemed to be in the same proportion as
(x) the total proceeds from the offering of Units (net of discounts but before
deducting expenses) received by the Company and the Subsidiary Guarantors and
(y) the discounts received by the Initial Purchasers in each case as set forth
in the table on the cover page of the Offering Memorandum. The relative fault of
the Company and the Subsidiary Guarantors, on the one hand, and of the Initial
Purchasers, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, the Subsidiary Guarantors or the Initial Purchasers and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company, the Subsidiary Guarantors 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 or by any other method of
allocation which does not take into account the
23
equitable considerations referred to above. Notwithstanding the provisions of
this Section 8, (i) in no case shall either of the Initial Purchasers be
required to contribute any amount in excess of the amount by which the discount
applicable to the Units purchased by such Initial Purchaser pursuant to this
Agreement exceeds the amount of any damages which such Initial Purchaser has
otherwise been required to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8, (A)
each person, if any, who controls either of the Initial Purchasers within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, (B) the respective officers, directors, partners, employees,
representatives and agents of any of the Initial Purchasers or any controlling
person shall have the same rights to contribution as such Initial Purchaser, (C)
each person, if any, who controls the Company and the Subsidiary Guarantors
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act and (D) the respective officers, directors, partners, employees,
representatives and agents of the Company and the Subsidiary Guarantors shall
have the same rights to contribution as the Company and the Subsidiary
Guarantors, subject in each case to clauses (i) and (ii) of this Section 8. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section , notify such party or parties from whom contribution may be
sought, but the failure to so notify such party or parties shall not relieve the
party or parties from whom contribution may be sought from any obligation it or
they may have under this Section 8 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its prior
written consent.
9. Conditions of Initial Purchasers' Obligations. The several obligations
of the Initial Purchasers to purchase and pay for the Units, if any, as provided
herein, shall be subject to the satisfaction of the following conditions:
(a) All of the representations and warranties of the Company and the
Subsidiary Guarantors contained in this Agreement shall be true and correct on
the date hereof and on the Closing Date with the same force and effect as if
made on and as of the date hereof and the Closing Date, respectively. The
Company and the Subsidiary Guarantors shall have performed or complied with all
of the agreements herein contained and required to be performed or complied with
by it at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 10:00 a.m., New York City
time, on the second business day following the date of this Agreement or at such
later date and time as to which the Initial Purchasers may agree, and no stop
order suspending the qualification or exemption from qualification of the Units,
the Notes or the Warrants in any jurisdiction referred to in Section 4(e) shall
have been issued and no proceeding for that purpose shall have been commenced or
shall be pending or threatened.
24
(c) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental agency
which would, as of the Closing Date, prevent the issuance of the Units, the
Notes or the Warrants; no action, suit or proceeding shall have been commenced
and be pending against or affecting or, to the best knowledge of the Company and
the Subsidiary Guarantors, threatened against, the Company or any of its
subsidiaries before any court or arbitrator or any governmental body, agency or
official that (1) could reasonably be expected to result in a Material Adverse
Effect and (2) has not been disclosed in the Offering Memorandum; and no stop
order shall have been issued preventing the use of the Offering Memorandum, or
any amendment or supplement thereto, or which could reasonably be expected to
have a Material Adverse Effect.
(d) Since the dates as of which information is given in the Offering
Memorandum, (i) there shall not have been any material adverse change, or any
development that is reasonably likely to result in a material adverse change, in
the capital stock or the long-term debt, or material increase in the short-term
debt, of the Company or any of its subsidiaries from that set forth in the
Offering Memorandum, (ii) no dividend or distribution of any kind shall have
been declared, paid or made by the Company or any of its subsidiaries on any
class of its capital stock, (iii) neither the Company nor any of its
subsidiaries shall have incurred any liabilities or obligations, direct or
contingent, that are material, individually or in the aggregate, to the Company
and its subsidiaries, taken as a whole, and that are required to be disclosed on
a balance sheet or notes thereto in accordance with generally accepted
accounting principles and are not disclosed on the latest balance sheet or notes
thereto included in the Offering Memorandum. Since the date hereof and since the
dates as of which information is given in the Offering Memorandum, there shall
not have occurred any Material Adverse Effect.
(e) The Initial Purchasers shall have received certificates, dated
the Closing Date, signed on behalf of the Company and each Subsidiary Guarantor
in form and substance reasonably satisfactory to the Initial Purchasers,
confirming, as of the Closing Date, the matters set forth in paragraphs (a),
(b), (c) and (d) of this Section 9.
(f) The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, in form and substance satisfactory to the
Initial Purchasers and counsel to the Initial Purchasers, of Xxxxxxxx & Xxxxx,
counsel for the Company and the Subsidiary Guarantors, to the effect set forth
in Exhibit B hereto.
(g) The Initial Purchasers shall have received an opinion, dated the
Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers, of Xxxxxx & Xxxxxxx, counsel to the Initial Purchasers, covering
such matters as are customarily covered in such opinions.
(h) The Initial Purchasers shall have received an opinion, dated the
Closing Date, in form and substance satisfactory to the Initial Purchasers and
counsel to the Initial Purchasers, of Wiley, Rein & Fielding, regulatory counsel
to the Company and the Subsidiary Guarantors, to the effect set forth in Exhibit
C hereto.
25
(i) The Initial Purchasers shall have received opinions from the law
firms listed on Exhibit D hereto, dated the Closing Date, in the form of draft
opinions previously provided to the Initial Purchasers.
(j) At the time this Agreement is executed and at the Closing Date,
the Initial Purchasers shall have received from Ernst & Young LLP and Beers &
Xxxxxx, PLLC, each independent public accountants, dated as of the date of this
Agreement and as of the Closing Date, customary comfort letters addressed to the
Initial Purchasers and in form and substance satisfactory to the Initial
Purchasers and counsel to the Initial Purchasers with respect to the financial
statements and certain financial information of the Company and the Subsidiary
Guarantors contained in the Offering Memorandum.
(k) Xxxxxx & Xxxxxxx shall have been furnished with such documents,
in addition to those set forth above, as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in this
Section 9 and in order to evidence the accuracy, completeness or satisfaction in
all material respects of any of the representations, warranties or conditions
herein contained.
(l) Prior to the Closing Date, the Company and the Subsidiary
Guarantors shall have furnished to the Initial Purchasers such further
information, certificates and documents as the Initial Purchasers may reasonably
request.
(m) The Company, the Subsidiary Guarantors and the Trustee shall have
entered into the Indenture and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof.
(n) The Company and the Subsidiary Guarantors shall have entered into
the Registration Rights Agreement and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof.
(o) The Company shall have entered into the Warrant Agreement and the
Initial Purchasers shall have received counterparts, conformed as executed,
thereof.
(p) The Company shall have entered into the Warrant Registration
Rights Agreement and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
(q) The Company and the Trustee shall have entered into the Pledge
Agreement and the Initial Purchasers shall have received counterparts conformed
as executed thereof.
All opinions, certificates, letters and other documents required by
this Section 9 to be delivered by the Company and the Subsidiary Guarantors will
be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Initial Purchasers. The Company and
the Subsidiary Guarantors will furnish the Initial Purchasers with
26
such conformed copies of such opinions, certificates, letters and other
documents as it shall reasonably request.
10. Initial Purchasers' Information. The Company, the Subsidiary
Guarantors and the Initial Purchasers severally acknowledge that the statements
with respect to the offering of the Units set forth in the third paragraph, the
fourth and fifth sentences of the fourth paragraph and the fifth paragraph under
the caption "Plan of Distribution" in the Offering Memorandum constitute the
only information furnished in writing by the Initial Purchasers expressly for
use in the Offering Memorandum.
11. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Initial Purchasers, the Company and
the Subsidiary Guarantors contained in this Agreement, including the agreements
contained in Sections 4(f) and 12(d), the indemnity agreements contained in
Section 7 and the contribution agreements contained in Section 8, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Initial Purchasers or any controlling person thereof or by
or on behalf of the Company or any controlling person thereof, and shall survive
delivery of and payment for the Units to and by the Initial Purchasers. The
representations contained in Sections 5 and 6 and the agreements contained in
Sections 4(f), 7, 8 and 12(d) shall survive the termination of this Agreement,
including any termination pursuant to Section 12.
12. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon execution and delivery
of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate this
Agreement at any time prior to the Closing Date by notice to the Company from
the Initial Purchasers, without liability (other than with respect to Sections 7
and 8) on the Initial Purchasers' part to the Company if, on or prior to such
date, (i) the Company or any Subsidiary Guarantor shall have failed, refused or
been unable to perform in any material respect any agreement on its part to be
performed hereunder, (ii) any other condition to the obligations of the Initial
Purchasers hereunder as provided in Section 9 is not fulfilled when and as
required in any material respect, (iii) in the reasonable judgment of the
Initial Purchasers any material adverse change shall have occurred since the
respective dates as of which information is given in the Offering Memorandum in
the condition (financial or otherwise), business, properties, assets,
liabilities, prospects, net worth, results of operations or cash flows of the
Company and the Subsidiary Guarantors taken as a whole, other than as set forth
in the Offering Memorandum, or (iv)(A) any domestic or international event or
act or occurrence has materially disrupted, or in the opinion of the Initial
Purchasers will in the immediate future materially disrupt, the market for the
Company's securities or for securities in general; or (B) trading in securities
generally on the New York or American Stock Exchanges shall have been suspended
or materially limited, or minimum or maximum prices for trading shall have been
established, or maximum ranges for prices for securities shall have been
required, on such exchange, or by such exchange or other regulatory body or
governmental authority having jurisdiction; or (C) a banking moratorium
27
shall have been declared by Federal or state authorities, or a moratorium in
foreign exchange trading by major international banks or persons shall have been
declared; or (D) there is an outbreak or escalation of armed hostilities
involving the United States on or after the date hereof, or if there has been a
declaration by the United States of a national emergency or war, the effect of
which shall be, in the Initial Purchasers' judgment, to make it inadvisable or
impracticable to proceed with the offering or delivery of the Units on the terms
and in the manner contemplated in the Offering Memorandum; or (E) there shall
have been such a material adverse change in general economic, political or
financial conditions or if the effect of international conditions on the
financial markets in the United States shall be such as, in the Initial
Purchasers' judgment, makes it inadvisable or impracticable to proceed with the
delivery of the Units as contemplated hereby.
(c) Any notice of termination pursuant to this Section 12 shall be by
telephone, telex, telephonic facsimile, or telegraph, confirmed in writing by
letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions of Section 12(b)(i)-(iii) hereof, or if the sale of the Units
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth herein is not satisfied or because of any
refusal, inability or failure on the part of the Company or any Subsidiary
Guarantor to perform any agreement herein or comply with any provision hereof,
the Company and the Subsidiary Guarantors will, subject to demand by the Initial
Purchasers, reimburse the Initial Purchasers for all out-of-pocket expenses
(including the reasonable fees and expenses of Initial Purchasers' counsel),
incurred by the Initial Purchasers in connection herewith.
13. Notice. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to the Initial
Purchasers shall be mailed, delivered, or telexed, telegraphed or telecopied and
confirmed in writing to Bear, Xxxxxxx & Co. Inc. and NationsBanc Xxxxxxxxxx
Securities LLC, c/o Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Corporate Finance Department, telecopy number: (212) 272-
3092, with a copy, which shall not constitute notice, to Xxxxxx & Xxxxxxx, Attn:
Xxxxxxxxxxx X. Xxxxxxx, Sears Tower, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000;
telecopy number: (000) 000-0000; and if sent to the Company or the Subsidiary
Guarantors, shall be mailed, delivered or telexed, telegraphed or telecopied and
confirmed in writing to OnePoint Communications Corp., 0000 Xxxxxxxx Xxxx, Xxxxx
X-000, Xxxxxxxxxxx, Xxxxxxxx 00000, Attention: Chief Executive Officer, telecopy
number: (000) 000-0000, with a copy, which shall not constitute notice, to
Xxxxxxxx & Xxxxx, 000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attn: Xxxxxx
Xxxxxxx, telecopy number: (000) 000-0000.
14. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Initial Purchasers, the Company and the Subsidiary
Guarantors and the controlling persons and agents referred to in Sections 6 and
7, and their respective successors and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or claim under or
in respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its capacity
as such, of Units from the Initial Purchasers.
28
15. Construction. This Agreement shall be construed in accordance with
the internal laws of the State of New York without giving any effect to any
provisions thereof relating to conflicts of law. TIME IS OF THE ESSENCE IN THIS
AGREEMENT.
16. Captions. The captions included in this Agreement are included solely
for convenience of reference and are not to be considered a part of this
Agreement.
17. Counterparts. This Agreement may be executed in various counterparts
which together shall constitute one and the same instrument.
[Signature page to follow]
29
If the foregoing correctly sets forth the understanding among the Initial
Purchasers, the Company and the Subsidiary Guarantors, please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
Very truly yours,
ONEPOINT COMMUNICATIONS CORP.
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Name:
Title: Chairman and Chief Executive Officer
ONEPOINT COMMUNICATIONS HOLDINGS, LLC
By: ONEPOINT COMMUNICATIONS CORP.,
its Manager
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Name:
Title: Chairman and Chief Executive Officer
ONEPOINT COMMUNICATIONS - GEORGIA, LLC
By: ONEPOINT COMMUNICATIONS CORP.,
its Manager
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Name:
Title: Chairman and Chief Executive Officer
[SIGNATURE PAGE TO PURCHASE AGREEMENT]
ONEPOINT COMMUNICATIONS - ILLINOIS, LLC
By: ONEPOINT COMMUNICATIONS CORP.,
its Manager
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Name:
Title: Chairman and Chief Executive Officer
ONEPOINT COMMUNICATIONS - COLORADO, LLC
By: ONEPOINT COMMUNICATIONS CORP.,
its Manager
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Name:
Title: Chairman and Chief Executive Officer
VIC-RMTS-DC, LLC
By: ONEPOINT COMMUNICATIONS
HOLDINGS, LLC, its Manager
By: ONEPOINT COMMUNICATIONS
CORP., its Manager
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Name:
Title: Chairman and Chief Executive Officer
[SIGNATURE PAGE TO PURCHASE AGREEMENT]
Accepted and agreed to as of
the date first above written:
BEAR, XXXXXXX & CO. INC.,
on behalf of the Initial Purchasers
By: /s/ X. Xxxxxx Xxxxx
---------------------------------
Name:
Title: Senior Managing Director
[SIGNATURE PAGE TO PURCHASE AGREEMENT]
Schedule I
Number of
Units to
be Purchased
Initial Purchaser ------------
Bear, Xxxxxxx & Co. Inc.......................................... 113,750
NationsBanc Xxxxxxxxxx Securities LLC............................ 61,250
Total: 175,000
Exhibit A
Subsidiary Guarantors
OnePoint Communications Holdings, LLC
OnePoint Communications - Georgia, LLC
OnePoint Communications - Illinois, LLC
OnePoint Communications - Colorado, LLC
VIC-RMTS-DC, LLC
Exhibit B
Form of Opinion of Xxxxxxxx & Xxxxx
Exhibit C
Form of Opinion of Wiley, Rein & Fielding,
regulatory counsel of the Company
Exhibit D
Snell & Xxxxxx - Arizona
Meyer, Xxxxx, Xxxxxxxxxx, Xxxxx, Xxxx & Xxxxxx, P.C. - Illinois
Xxxxxxxx Xxxxxxx LLP - Xxxxxxx
XxXxxx, Xxxx, Xxxxxx & XxxXxx, L.L.P. - Colorado
Holland & Knight LLP - Florida
Xxxx & Xxxxxxxx & Xxxxxxxx, L.L.P. - North Carolina
Block, Xxxxxx and Xxxxx-Xxxxx LLP - Pennsylvania
Piper & Marbury L.L.P - Maryland, Delaware, District of Columbia
Mezzullo & XxXxxxxxxx - Virginia
Exhibit E
Forms of Opinions of
state regulatory counsel of the Company
