EXHIBIT 10.20
Execution Copy
TIME WARNER TELECOM HOLDINGS INC.
$200,000,000 of 9.25% SENIOR NOTES DUE
2014
and
$240,000,000 of SECOND PRIORITY SENIOR SECURED
FLOATING RATE NOTES DUE 2011
PURCHASE AGREEMENT
February 10, 2004.
February 10, 2004
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
Bear, Stearns & Co. Inc.
Wachovia Capital Markets, LLC
c/o Lehman Brothers Inc.
745 Seventh
Avenue
New York,
New York 10019
Dear Sirs and Mesdames:
Time Warner Telecom Holdings Inc., a
Delaware corporation (the “Company” ), proposes
to issue and sell to the several purchasers named in Schedule I
hereto (the “Initial Purchasers” ) (i)
$200,000,000 principal amount of its Senior Notes due 2014 (the
“Unsecured Securities” ) to be issued pursuant
to the provisions of an Indenture dated as of the Closing Date (as
defined in Section 4 hereof) (the “Unsecured
Indenture” ) among the Company, Time Warner Telecom Inc.,
the parent of the Company ( “TWT Inc.” ),
certain subsidiaries of the Company and TWT Inc. listed in Schedule
II hereto (collectively, the “Subsidiary
Guarantors” and together with TWT Inc., the
“Guarantors” ) and a trustee to be named by the
Company (the “Trustee” ), and (ii) $240,000,000
principal amount of its Second Priority Senior Secured Floating
Rate Notes due 2011 (the “Secured Securities”,
together with the Unsecured Securities, the
“Securities” ) to be issued pursuant to an
Indenture dated as of the Closing Date (the “Secured
Indenture” and together with the Unsecured Indenture, the
“Indentures” ) among the Company, the Guarantors
and the Trustee. The obligations of the Company under the Unsecured
Securities and the Unsecured Indenture will be unconditionally
guaranteed on a senior unsecured basis by the Guarantors pursuant
to the terms of the Unsecured Indenture (the “Unsecured
Guarantees” ). The obligations of the Company under the
Secured Securities and the Secured Indenture will be
unconditionally guaranteed on a second priority senior secured
basis by the Guarantors pursuant to the terms of the Secured
Indenture (the “Secured Guarantees” and together
with the Unsecured Guarantees, the “Guarantees”
).
The Securities will be offered
without being registered under the Securities Act of 1933, as
amended (the “Securities Act” ), to qualified
institutional buyers in compliance with the exemption from
registration provided by Rule 144A under the Securities Act and in
offshore transactions in reliance on Regulation S under the
Securities Act ( “Regulation S” ).
The Initial Purchasers and their
direct and indirect transferees will be entitled to the benefits of
a Registration Rights Agreement dated the Closing Date among the
Company, the Guarantors and the Initial Purchasers (the
“Registration Rights Agreement” ).
In connection with the sale of the
Securities, the Company and the Guarantors have prepared a
preliminary offering memorandum (the “Preliminary
Memorandum” ) and will prepare a final offering
memorandum (the “Final Memorandum” and, with the
Preliminary Memorandum, each a “Memorandum” )
including or incorporating by reference descriptions of
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the terms of the Securities, the terms of the
offerings and a description of the Company and the Guarantors. As
used herein, the term “Memorandum” shall include in
each case the documents incorporated by reference therein. The
terms “supplement”, “amendment” and
“amend” as used herein with respect to a
Memorandum shall include all documents deemed to be incorporated by
reference in the Preliminary Memorandum or Final Memorandum that
are filed subsequent to the date of such Memorandum with the
Securities and Exchange Commission (the
“Commission” ) pursuant to the Securities
Exchange Act of 1934, as amended (the “Exchange
Act” ).
Pursuant to the Security Agreement
to be dated as of the Closing Date (the “Security
Agreement” and together with any mortgages, deeds of
trust, pledge agreements, collateral assignments, security
agreements, fiduciary transfers, debentures or other instruments or
agreements evidencing or creating any security interests in favor
of the Collateral Agent (as defined below) for the benefit of the
holders of the Secured Securities (the “Second Lien
Creditors” ) in all or any portion of the Collateral, in
each case, as amended, amended and restated, extended, renewed,
supplemented or otherwise modified from time to time, in accordance
with the terms thereof, the “Security Documents”
) among the Company, the Guarantors, the Trustee (in such capacity,
the “Collateral Agent” ) and the other parties
thereto, the Secured Securities are to be secured by a valid and
enforceable perfected second-priority security interest (subject to
certain permitted liens and exceptions) in the property so
described in the Security Agreement (the
“Collateral” ). On the Closing Date, the Trustee
under the Secured Indenture will enter into an Intercreditor
Agreement with a collateral agent under the Company’s new
credit facility with respect to the collateral securing such new
credit facility (the “Intercreditor Agreement”
).
1. Representations and
Warranties. Each of the Company and the Guarantors, jointly and
severally, represents and warrants to, and agrees with, you
that:
(a) (i) Each document, if any, filed
or to be filed pursuant to the Exchange Act and incorporated by
reference in either Memorandum complied or will comply when so
filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder and
(ii) the Preliminary Memorandum does not contain and the Final
Memorandum, in the form used by the Initial Purchasers to confirm
sales and on the Closing Date, will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph
do not apply to statements or omissions in either Memorandum based
upon information relating to any Initial Purchaser furnished to the
Company in writing by such Initial Purchaser through you expressly
for use therein.
(b) Each of the Company and TWT Inc.
has been duly incorporated, is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its
property and to conduct its business as described in each
Memorandum and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the
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failure to be so qualified or be in
good standing would not have a material adverse effect on TWT Inc.
and its subsidiaries, taken as a whole. For the purpose of this
Agreement, the term “subsidiary” refers to all direct
and indirect subsidiaries.
(c) Each subsidiary of TWT Inc.
(other than the Company) has been duly incorporated or, in the case
of partnerships or limited liability companies, duly organized, is
validly existing as a corporation, a partnership or a limited
liability company, as the case may be, in good standing under the
laws of the jurisdiction of its incorporation or organization, has
the corporate power or power as a partnership or limited liability
company, as applicable and authority to own its property and to
conduct its business as described in each Memorandum and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership
or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on TWT Inc. and its
subsidiaries, taken as a whole; all of the issued shares of capital
stock of each subsidiary of TWT Inc. that is a corporation have
been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly or indirectly by TWT Inc. and
the Company, free and clear of any security, interest, mortgage,
pledge, lien, encumbrance or claim (collectively,
“Liens” ), except for security interests granted
pursuant to the Security Documents and the Liens expressly
permitted under the Indentures (“Permitted
Liens”), and all of the partnership interests and
membership interests in each subsidiary of TWT Inc. that is a
partnership or a limited liability company, as the case may be, are
owned directly or indirectly by TWT Inc. and the Company, free and
clear of all Liens, except for Permitted Liens.
(d) This Agreement has been duly
authorized, executed and delivered by the Company and the
Guarantors.
(e) The Secured Securities and the
Unsecured Securities have been duly authorized by the Company and,
when executed and authenticated in accordance with the provisions
of the Secured Indenture and the Unsecured Indenture (as the case
may be) and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, will be valid and
binding obligations of the Company, enforceable in accordance with
their terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors’ rights generally and
general principles of equity, and will be entitled to the benefits
of the Secured Indenture and the Unsecured Indenture (as the case
may be) and the Registration Rights Agreement.
(f) The Secured Guarantees and the
Unsecured Guarantees have been duly authorized by each of the
Guarantors and, when executed and delivered by each Guarantor, will
be valid and binding obligations of such Guarantor, enforceable in
accordance with their terms, subject to applicable bankruptcy,
insolvency or similar laws affecting creditors’ rights
generally and general principles of equity, and will be entitled to
the benefits of the Secured Indenture and the Unsecured Indenture
(as the case may be) and the Registration Rights
Agreement.
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(g) Each of the Secured Indenture
and the Unsecured Indenture has been duly authorized and, when
executed and delivered by the Company and each Guarantor, will be a
valid and binding agreement of the Company and each Guarantor,
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors’
rights generally and general principles of equity.
(h) Each of the Registration Rights
Agreement and the Security Documents has been duly authorized and,
when executed and delivered by the Company and each Guarantor, will
be a valid and binding agreement of the Company and each Guarantor,
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors’
rights generally and general principles of equity and except as
rights to indemnification and contribution under the Registration
Rights Agreement may be limited under applicable law.
(i) (i) The Security Documents, upon
their execution and delivery by the Company and each of the
Guarantors, will create a valid and enforceable security interest
in the Collateral in favor of the Collateral Agent for the benefit
of the Second Lien Creditors and (ii) all material agreements which
are part of the Collateral and to which the Company or any
Guarantor is a party or by which it is bound are valid, binding and
enforceable against the Company or such Guarantor and, to the
Company’s or such Guarantor’s knowledge, are valid and
binding and enforceable against the other party or parties thereto,
have not been amended, amended and restated, supplemented or
otherwise modified, and are in full force and effect, except, in
each case, as the enforceability thereof may be limited by
applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights generally and by equitable principles of
general applicability.
(j) The Company and the Guarantors
own the Collateral, free and clear of any Liens, other than
Permitted Liens.
(k) Upon their execution and
delivery by the Company and each Guarantor, the Security Documents
will create a valid security interest in the Collateral in favor of
the Collateral Agent for the benefit of the Second Lien Creditors.
Upon the filing of UCC-1 financing statements in the offices of the
Secretary of State of the State of Delaware against the Company and
each Guarantor covering the Collateral owned by each, all filings
necessary to perfect a security interest in the Collateral (to the
extent a security interest in the Collateral is capable of being
perfected by filing) under the Uniform Commercial Code will have
been duly made. Security interests in certain of the Collateral can
only be perfected by “control” (as such term is defined
in the Uniform Commercial Code) and the Collateral Agent’s
security interest in such Collateral will only be perfected if the
Collateral Agent has control of such Collateral. Security interests
in certain of the Collateral may be perfected either by filing or
by control. While the Collateral Agent’s security interest in
such Collateral may be perfected by filing or by control, a
superior priority may be afforded to a security interest in such
Collateral perfected by control. The Company and the Guarantors
have taken, or with respect to those Subsidiary Guarantors for
which regulatory approval is required in connection with their
obligations under the transactions contemplated by this Agreement
(in each case
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pursuant to the terms of the Secured
Indenture) will as soon as practicable take upon receiving such
regulatory approvals, all necessary action under the Uniform
Commercial Code to provide control over all Collateral which must
be perfected by control or which enjoys a superior priority if
perfected by control as opposed to perfection by filing, subject in
each case to certain control rights of holders of Liens given
superior priority to the Liens of the Second Lien Creditors by the
terms of the Indenture and the Intercreditor Agreement. The Company
and each Guarantor, subject to the limitations expressed in this
paragraph (k), have taken all necessary steps under the Uniform
Commercial Code to provide the Collateral Agent with a perfected
second priority lien in and to the Collateral (subject to no Liens
other than Permitted Liens).
(l) (i) The execution and delivery
by the Company and each Guarantor of, and the performance by the
Company and each Guarantor of its obligations under, this
Agreement, the Secured Indenture, the Unsecured Indenture, the
Registration Rights Agreement, the Secured Securities and the
Unsecured Securities (in the case of the Company), the Unsecured
Guarantees and the Secured Guarantees (in the case of the
Guarantors) and the Security Documents, (ii) the grant by the
Company and the Guarantors of the Liens granted by them pursuant to
the Security Documents, (iii) the perfection and maintenance of the
Liens created under the Security Documents (including the second
priority nature thereof) and (iv) the exercise by the Collateral
Agent of the remedies in respect of the Collateral pursuant to the
Security Documents, will not contravene any provision of applicable
law or the certificate of incorporation or by-laws of TWT Inc. or
any of its subsidiaries or any agreement or other instrument
binding upon TWT Inc. or any of its subsidiaries that is material
to TWT Inc. and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over TWT Inc. or any of its subsidiaries, and
no consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the
performance by the Company or each Guarantor of its obligations
under this Agreement, the Secured Indenture, the Unsecured
Indenture, the Registration Rights Agreement, the Secured
Securities and the Unsecured Securities (in the case of the
Company), the Secured Guarantees and the Unsecured Guarantees (in
the case of the Guarantors) or the Security Documents, except (1)
such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the
Securities, (2) by Federal and state securities laws with respect
to the Company’s and each Guarantor’s obligations under
the Registration Rights Agreement, (3) as set forth in the
Memorandum, (4) such other consents and approvals as shall have
been obtained on or prior to the date of this Agreement and (5)
regulatory approvals required in connection with the perfection of
security interests granted by certain Subsidiary
Guarantors.
(m) There has not occurred any
material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise,
or in the earnings, business or operations of TWT Inc. and its
subsidiaries, taken as a whole, from that set forth in the
Memorandum.
(n) There are no legal or
governmental proceedings pending or, to the knowledge of the
Company, threatened to which TWT Inc. or any of its subsidiaries is
a party or to which any of the properties of TWT Inc. or any of its
subsidiaries is subject
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other than proceedings accurately
described in all material respects in each Memorandum and
proceedings that would not have (i) a material adverse effect on
TWT Inc. and its subsidiaries, taken as a whole, or on the power or
ability of the Company or the Guarantors to perform their
obligations under this Agreement, the Secured Indenture, the
Unsecured Indenture, the Registration Rights Agreement, the Secured
Securities and the Unsecured Securities (in the case of the
Company), the Secured Guarantees and the Unsecured Guarantees (in
the case of the Guarantors) or the Security Documents or to
consummate the transactions contemplated by the Memorandum or (ii)
a material adverse effect on the value of the
Collateral.
(o) TWT Inc. and its subsidiaries
(i) are in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (
“Environmental Laws” ), (ii) have received all
permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material
adverse effect on TWT Inc. and its subsidiaries, taken as a
whole.
(p) There are no costs or
liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental
Laws or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a material
adverse effect on TWT Inc. and its subsidiaries, taken as a
whole.
(q) Neither the Company nor any
Guarantor is, and after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as
described in the Memorandum neither the Company nor any Guarantor
will be required to register as, an “investment
company” as such term is defined in the Investment Company
Act of 1940, as amended.
(r) Neither the Company, any
Guarantor nor any affiliate (as defined in Rule 501(b) of
Regulation D under the Securities Act, an “Affiliate”)
of the Company or any Guarantor has directly, or through any agent,
(i) sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the
Securities in a manner that would require the registration under
the Securities Act of the Securities or (ii) engaged in any form of
general solicitation or general advertising in connection with the
offering of the Securities (as those terms are used in Regulation D
under the Securities Act), or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act;
provided, however, that, in each case, no such
representation or warranty is made by the Company or any Guarantor
with respect to any actions taken by the Initial
Purchasers.
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(s) None of the Company, any
Guarantor, their Affiliates or any person acting on its or their
behalf has engaged or will engage in any directed selling efforts
(within the meaning of Regulation S) with respect to the Securities
and the Company, each Guarantor and their Affiliates and any person
acting on its or their behalf have complied and will comply with
the offering restrictions requirement of Regulation S, except no
representation, warranty or agreement is made by the Company or any
Guarantor in this paragraph with respect to the Initial
Purchasers.
(t) Assuming that the
representations and warranties of the Initial Purchasers in Section
7 are true, correct and complete and assuming compliance by the
Initial Purchasers with their covenants in Section 7, it is not
necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers in the manner contemplated by
this Agreement to register the Securities or the Guarantees under
the Securities Act or to qualify the Indentures under the Trust
Indenture Act of 1939, as amended.
(u) The Securities and the
Guarantees satisfy the requirements set forth in Rule 144A(d)(3)
under the Securities Act.
(v) The Securities and the
Guarantees conform in all material respects to the description
thereof contained in the Memorandum under the heading
“Description of Notes.”
(w) The Security Documents and the
Collateral conform in all material respects to the applicable
description thereof contained in the Memorandum under the heading
“Description of Notes— Security and Ranking of 2011
Note Liens— Collateral and Security”
(x) Subsequent to the respective
dates as of which information is given in the Memorandum, (i) TWT
Inc. and its subsidiaries have not incurred any material liability
or obligation, direct or contingent, nor entered into any material
transaction not in the ordinary course of business; (ii) TWT Inc.
and its subsidiaries have not purchased any of its outstanding
capital stock, nor has TWT Inc. or the Company declared, paid or
otherwise made any dividend or distribution of any kind on its
capital stock other than ordinary and customary dividends; and
(iii) there has not been any material change in the capital stock,
short-term debt or long-term debt of TWT Inc. and its subsidiaries,
taken as a whole, except in each case as set forth or described in
the Memorandum.
(y) TWT Inc. and its subsidiaries
have good and marketable title in fee simple to all real property
and good marketable title to all personal property owned by them,
in each case free and clear of all liens, encumbrances and defects
except for Permitted Liens or such as are described in the
Memorandum or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be
made of such property by TWT Inc. and its subsidiaries or such as
do not, singly or in the aggregate, have or could not result in a
material adverse effect on TWT Inc. and its subsidiaries, taken as
a whole; and any real property and buildings held under lease by
TWT Inc. and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as do not
interfere with the use made and proposed to be made of
such
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property and buildings by TWT Inc.
and its subsidiaries or such as do not, singly or in the aggregate,
have or could not result in a material adverse effect on TWT Inc.
and its subsidiaries, taken as a whole, in each case except as
described in the Memorandum.
(z) Except as set forth in the
Memorandum, TWT Inc. and its subsidiaries own or possess, or can
acquire on reasonable terms, all patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and
trade names, currently employed by them in connection with the
business now operated by them, except where the failure to own or
possess or to have the right to acquire any of the foregoing,
singly or in the aggregate, does not have a material adverse effect
on TWT Inc. and its subsidiaries, taken as a whole, and neither TWT
Inc. 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 which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
have a material adverse effect on TWT Inc. and its subsidiaries,
taken as a whole.
(aa) No labor dispute with the
employees of TWT Inc. or any of its subsidiaries exists, except as
described in the Memorandum, or, to the knowledge of the Company,
is imminent, except for disputes that do not or would not have a
material adverse effect on TWT Inc. and its subsidiaries taken as a
whole; and the Company is not aware of any existing, threatened or
imminent labor disturbance by the employees of any of its principal
suppliers or contractors that could have a material adverse effect
on TWT Inc. and its subsidiaries, taken as a whole.
(bb) TWT Inc. and its subsidiaries
are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent
and customary in the businesses in which they are engaged; and
neither TWT Inc. nor any of its subsidiaries has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a material adverse effect on
TWT Inc. and its subsidiaries, taken as a whole, except as
described in the Memorandum.
(cc) TWT Inc. and its subsidiaries
possess all permits, licenses, rights of way, approvals, consents
and other authorizations issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies (including the
Federal Communications Commission (the “FCC” ),
the public utilities commission, or any equivalent body, of each
state in which TWT Inc. and its subsidiaries do business and any
other relevant state or local governmental department, commission,
board, bureau, agency, court or other authority thereof (the
“Local Authorities” )) required for the conduct
of the telecommunications business now operated by TWT Inc. and its
subsidiaries (collectively, the “Governmental
Licenses” ), except where the failure to possess any such
Governmental Licenses would not, singly or in the aggregate, have a
material adverse effect on TWT Inc. and its subsidiaries, taken as
a whole; TWT Inc. and its subsidiaries are in compliance with the
terms and conditions of all such Governmental Licenses, except
where the failure so to comply would not, singly or in the
aggregate,
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have a material adverse effect on
TWT Inc. and its subsidiaries, taken as a whole; all of the
Governmental Licenses are valid and in full force and effect,
except where the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and
effect would not, singly or in the aggregate, have a material
adverse effect on TWT Inc. and its subsidiaries, taken as a whole;
there is no outstanding adverse judgment, decree or order that has
been issued by the FCC or any of the Local Authorities against TWT
Inc. or any of its subsidiaries and which, singly or in the
aggregate, would have a material adverse effect on TWT Inc. and its
subsidiaries, taken as a whole; and neither TWT Inc. nor any of its
subsidiaries has received any notice of or is aware of proceedings
relating to the revocation or modification of any such Governmental
Licenses or, except as set forth in the Memorandum, that would
otherwise affect the operations of TWT Inc. or its subsidiaries and
which, singly or in the aggregate, would have a material adverse
effect on TWT Inc. and its subsidiaries, taken as a
whole.
(dd) TWT Inc. and each of its
subsidiaries 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 with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted
only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any
differences.
2. Agreements to Sell and
Purchase. The Company
hereby agrees to sell to the several Initial Purchasers, and each
Initial Purchaser, upon the basis of the representations and
warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase
from the Company the respective principal amount of (i) Secured
Securities set forth in Schedule I hereto opposite its name at a
purchase price of 97.875% of the principal amount thereof (the
“Secured Securities Purchase Price” ) and (ii)
Unsecured Securities set forth in Schedule I hereto opposite its
name at the purchase price of 97.875% of the principal amount
thereof (the “Unsecured Securities Purchase
Price” , together with the Secured Securities Purchase
Price, the “Purchase Price” ).
The Company and each Guarantor
hereby agree that, without the prior written consent of Lehman
Brothers Inc. on behalf of the Initial Purchasers, it will not,
during the period beginning on the date hereof and continuing to
and including the Closing Date, offer, sell, contract to sell or
otherwise dispose of any debt of the Company or any of the
Guarantors or warrants to purchase debt of the Company or any of
the Guarantors substantially similar to the Securities (other than
the sale of the Securities under this Agreement.)
3. Terms of Offering. You
have advised the Company and the Guarantors that the Initial
Purchasers will make an offering of the Securities purchased by the
Initial Purchasers hereunder on the terms to be set forth in this
Agreement and the Memorandum, as soon as practicable after this
Agreement is entered into as in your judgment is
advisable.
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4. Payment and Delivery.
Payment for the Securities shall be made to the Company in Federal
or other funds immediately available in New York City against
delivery of such Securities for the respective accounts of the
several Initial Purchasers at 10:00 a.m., New York City time, on
February 20, 2004, or at such other date and time, not later than
March 1, 2004, as shall be designated in writing by Lehman Brothers
Inc. The time and date of such payment are hereinafter referred to
as the “Closing Date.”
Certificates for the Securities
shall be in definitive form or global form, as specified by Lehman
Brothers Inc., and registered in such names and in such
denominations as Lehman Brothers Inc. shall request in writing not
later than one full business day prior to the Closing Date. The
certificates evidencing the Securities shall be delivered to you on
the Closing Date for the respective accounts of the several Initial
Purchasers, with any transfer taxes payable in connection with the
transfer of the Securities to the Initial Purchasers duly paid,
against payment of the Purchase Price therefor.
5. Conditions to the Initial
Purchasers’ Obligations. The several obligations of the
Initial Purchasers to purchase and pay for the Securities on the
Closing Date are subject to the following conditions:
(a) Subsequent to the execution and
delivery of this Agreement and prior to the Closing
Date:
(i) there shall not have occurred
any downgrading, nor shall any notice have been given of any
intended or potential downgrading or of any review for a possible
change that does not indicate the direction of the possible change,
in the rating accorded any of TWT Inc.’s or the
Company’s securities by any “nationally recognized
statistical rating organization,” as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred
any change, or any development involving a prospective change, in
the condition, financial or otherwise, or in the earnings, business
or operations of TWT Inc. and its subsidiaries, taken as a whole,
from that set forth in the Memorandum (exclusive of any amendments
or supplements thereto subsequent to the date of this Agreement)
that, in your judgment, is material and adverse and that makes it,
in your judgment, impracticable to market the Secured Securities or
the Unsecured Securities on the terms and in the manner
contemplated in the Memorandum.
(b) The Initial Purchasers shall
have received on the Closing Date (i) a certificate, dated the
Closing Date and signed by an executive officer of the Company, to
the effect set forth in Section 5(a)(i) and to the effect that the
representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and the
Company has complied with all of the agreements and satisfied all
of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date; and (ii) a certificate,
dated the Closing Date and signed by an executive officer of each
Guarantor, to the effect set forth in Section 5(a)(i) and to the
effect that the representations and warranties of such Guarantor
contained in this Agreement are true and correct as of the Closing
Date and such Guarantor has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
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The officer signing and delivering
such certificate may rely upon the best of his or her knowledge as
to proceedings threatened.
(c) The Initial Purchasers shall
have received on the Closing Date an opinion of Faegre & Benson
LLP, outside counsel for the Company and the Guarantors, dated the
Closing Date, to the effect that:
(i) Each of the Company and TWT Inc.
has been duly incorporated, and, based solely on a certificate of
good standing from the Secretary of State of the State of Delaware,
is a corporation validly existing and in good standing under the
laws of the State of Delaware, with full corporate power and
authority to conduct its business as described in the
Memorandum;
(ii) to such counsel’s
knowledge, (A) there are not any pending or, to the knowledge of
such counsel, threatened governmental proceedings before any court
or governmental agency or authority or any arbitrator to which TWT
Inc. or any of its subsidiaries is a party or to which any of the
properties of TWT Inc. or any of its subsidiaries is subject of a
character required to be disclosed in the Memorandum which is not
disclosed as required, and (B) there is no contract, indenture,
mortgage, loan agreement, note, lease or other document of a
character required to be described in the Memorandum which is not
described as required;
(iii) the Secured Securities and
Unsecured Securities conform in all material respects to the
description thereof contained in the Memorandum; the Secured
Securities and Unsecured Securities have been duly authorized by
the Company and, when executed and authenticated in accordance with
the provisions of the Secured Indenture and the Unsecured Indenture
(as the case may be) and delivered to and paid for by the Initial
Purchasers in accordance with the terms of the Purchase Agreement,
will constitute legal, valid and binding obligations of the
Company, entitled to the benefits of the Secured Indenture and the
Unsecured Indenture (as the case may be) and the Registration
Rights Agreement, and enforceable against the Company in accordance
with their terms (subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar
laws affecting creditors’ rights generally and general
principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealings,
regardless of whether in a proceeding in equity or at
law);
(iv) the Secured Guarantees and
Unsecured Guarantees conform in all material respects to the
description thereof contained in the Memorandum; the Secured
Guarantees and Unsecured Guarantees have been duly authorized by
the Guarantors and, when executed and authenticated in accordance
with the provisions of the Secured Indenture and the Unsecured
Indenture (as the case may be) and delivered to and paid for by the
Initial Purchasers in accordance with the terms of the Purchase
Agreement, will constitute legal, valid and binding
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obligations of each Guarantor,
entitled to the benefits of the Secured Indenture and the Unsecured
Indenture (as the case may be) and the Registration Rights
Agreement, and enforceable against the Guarantors in accordance
with their terms (subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar
laws affecting creditors’ rights generally and general
principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealings,
regardless of whether in a proceeding in equity or at
law);
(v) Each of the Security Documents
conform in all material respects to the description thereof
contained in the Memorandum, the description of Collateral
contained in the Memorandum conforms in all material respects to
the description of the Collateral contained in the Security
Documents, and each Security Document has been duly authorized by
the Company and the Guarantors and, when executed, will constitute
legal, valid and binding obligations of the Company and each
Guarantor and enforceable against the Company and the Guarantors in
accordance with their terms (subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and
other similar laws affecting creditors’ rights generally and
general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair
dealings, regardless of whether in a proceeding in equity or at
law);
(vi) each of the Secured Indenture,
the Unsecured Indenture, the Registration Rights Agreement and the
Security Documents has been duly authorized, executed and delivered
by, and constitutes a legal, valid and binding obligation of, the
Company and each Guarantor, enforceable in accordance with its
terms (subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar
laws affecting creditors’ rights generally and general
principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealings,
regardless of whether in a proceeding in equity or at law, and
subject to rights to indemnification and contribution under the
Registration Rights Agreement as may be limited under applicable
law);
(vii) the Purchase Agreement has
been duly authorized, executed and delivered by the Company and
each Guarantor;
(viii) the execution and delivery by
the Company and each Guarantor of, and the performance by the
Company and each Guarantor of their obligations under, this
Agreement, the Secured Indenture, the Unsecured Indenture, the
Registration Rights Agreement, the Security Documents, the Secured
Securities and t
