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EXHIBIT 10.29
EXECUTION COPY
DTI HOLDINGS, INC.
(a Missouri corporation)
506,000 Units Consisting of
12 1/2% Senior Discount Notes due 2008
and Warrants to Purchase Common Stock
PURCHASE AGREEMENT
Dated: February 13, 1998
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TABLE OF CONTENTS
SECTION 1. Representations and Warranties 2
(a) Representations and Warranties by the Company 2
(i) Similar Offerings 3
(ii) Offering Memorandum 3
(iii) Independent Accountants 3
(iv) Financial Statements 3
(v) No Material Adverse Change in Business 3
(vi) Good Standing 4
(vii) Subsidiaries 4
(viii) Capitalization 4
(ix) Authorization of Agreement 4
(x) Authorization of the Indenture 4
(xi) Authorization of the Notes 5
(xii) Authorization of the Warrant Agreement 5
(xiii) Authorization of the Warrants 5
(xiv) Authorization of the Warrant Shares 5
(xv) Authorization of the Registration Rights Agreement 6
(xvi) Authorization of the Warrant Registration Rights
Agreement 6
(xvii) Description of the Registration Rights Agreement,
Warrant Registration Rights Agreement, the Securities,
the Notes, the Warrants, the Common Stock, the
Warrant Agreement and the Indenture 6
(xviii) Absence of Defaults and Conflicts 6
(xix) Absence of Labor Dispute 7
(xx) Absence of Proceedings 7
(xxi) Possession of Intellectual Property 8
(xxii) Absence of Further Requirements 8
(xxiii) Possession of Licenses and Permits 8
(xxiv) Title to Property 9
(xxv) Tax Returns 9
(xxvi) Environmental Laws 10
(xxvii) Investment Company Act 10
(xxviii)Internal Controls 10
(xxix) Rule 144A Eligibility 10
(xxx) No General Solicitation 11
(xxxi) No Registration Required 11
(xxxii) No Directed Selling Efforts 11
(xxxiii)Solvency 11
(b) Officer's Certificates 11
SECTION 2. Sale and Delivery to Initial Purchasers; Closing 11
(a) Securities 11
Exh-H-3
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(b) Payment 12
(c) Qualified Institutional Buyer 12
(d) Denominations; Registration 12
SECTION 3. Covenants of the Company 12
(a) Offering Memorandum 12
(b) Notice and Effect of Material Events 12
(c) Amendment to Offering Memorandum and Supplements 13
(d) Qualification of Securities for Offer and Sale 13
(e) DTC 13
(f) Use of Proceeds 13
(g) Restriction on Sale of Securities 13
(h) PORTAL 14
SECTION 4. Payment of Expenses 14
(a) Expenses 14
(b) Termination of Agreement 14
SECTION 5. Conditions of Initial Purchasers' Obligations 14
(a) Opinion of Counsel for the Company 14
(b) Opinion of FCC Counsel for the Company 14
(c) Opinion of State Regulatory Counsel for the Company
for the State of Missouri 15
(d) Opinion of State Regulatory Counsel for the Company
for the State of Arkansas 15
(e) Opinion of Special Counsel for the Company for
Litigation Matters 15
(f) Opinion of Counsel for Initial Purchasers 15
(g) Officers' Certificate 15
(h) Accountant's Comfort Letter 16
(i) Bring-down Comfort Letter 16
(j) PORTAL 16
(k) Additional Documents 16
(l) Termination of Agreement 16
(m) Stock Split 16
SECTION 6. Subsequent Offers and Resales of the Securities 16
(a) Offer and Sale Procedures 16
(i) Offers and Sales Only to Qualified Institutional
Buyers 16
(ii) No General Solicitation 17
(iii)Purchases by Non-Bank Fiduciaries 17
(iv) Subsequent Purchaser Notification 17
(v) Restrictions on Transfer 17
(b) Covenants of the Company 18
(i) Due Diligence 18
(ii) Integration 18
Exh-H-4
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(iv) Rule 144A Information 18
(v) Restriction on Repurchases 18
(c) Resale Pursuant to Rule 903 of Regulation S,
Rule 144A or Other Exemption 19
(d) Offers and Sales in the United Kingdom 19
SECTION 7. Indemnification 20
(a) Indemnification of Initial Purchasers 20
(b) Indemnification of Company and Directors 21
(c) Actions Against Parties; Notification 21
(d) Settlement Without Consent if Failure to Reimburse 22
SECTION 8. Contribution 22
SECTION 9. Representations, Warranties and Agreements to Survive
Delivery 23
SECTION 10. Termination of Agreement 23
(a) Termination; General 23
(b) Liabilities 24
SECTION 11. Notices 24
SECTION 12. Parties 24
SECTION 13. GOVERNING LAW AND TIME 24
SECTION 14. Effect of Headings 24
Schedule A - List of Initial Purchasers
Schedule B - Pricing Terms
Schedule C - Schedule of Foreign Jurisdictions
Exhibit A - Form of Registration Rights Agreement
Exhibit B - Form of Warrant Agreement
Exhibit C - Form of Warrant Registration Rights Agreement
Exhibit D - Form of Opinion of Bryan Cave LLP
Exhibit E - Form of Opinion of Lukas McGowan, Nace & Gutierrez, Chartered
Exhibit F - Form of Opinion of Hendren & Andrae, LLC
Exhibit G - Form of Opinion of Wright, Lindsey & Jennings, LLP
Exhibit H - Form of Opinion of Evans & Dixon
Exh-H-5
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DTI HOLDINGS, INC.
(a Missouri corporation)
506,000 Units Consisting of $506,000,000
Aggregate Principal Amount at Maturity
12 1/2% Senior Discount Notes due 2008 and
2,530,000 Warrants to Purchase an Aggregate of
3,926,560 Shares of Common Stock
PURCHASE AGREEMENT
February 13, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
TD SECURITIES (USA) INC.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
DTI Holdings, Inc., a Missouri corporation (the "Company"), confirms its
agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and TD Securities (USA) Inc. (the "Initial Purchasers"), with
respect to the issue and sale by the Company and the purchase by the Initial
Purchasers of the respective number of the Company's Units (the "Units" or the
"Securities"), each Unit consisting of $1,000 aggregate principal amount at
maturity of the Company's Senior Discount Notes due 2008 (the "Notes") and five
warrants (the "Warrants"), each Warrant entitling the holder thereof to
purchase 1.552 shares of common stock, par value $0.01 per share (after giving
effect to a 1000 to 1 stock split (the "Stock Split") to be completed prior to
the Closing Time referred to in Section 2(b) hereof, the "Common Stock"), of
the Company. The Notes and Warrants are more fully described in Schedule B
hereto. The Notes are to be issued pursuant to an indenture dated as of
February 23, 1998 (the "Indenture"), between the Company and The Bank of New
York, trustee (the "Trustee"); and the Warrants are to be issued pursuant to a
warrant agreement dated as of February 23, 1998 (the "Warrant Agreement"),
between the Company and The Bank of New York, warrant agent (the "Warrant
Agent"). Securities issued in book-entry form will be issued to Cede & Co. as
nominee of The Depository Trust Company ("DTC") pursuant to a letter agreement,
to be dated as of the
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Closing Time (as defined in Section 2(b)) (the "DTC Agreement"), among the
Company, the Trustee and DTC.
The holders of Notes will be entitled to the benefits of a Registration
Rights Agreement in substantially the form attached hereto as Exhibit A, with
such changes as shall be agreed to by the parties hereto (the "Registration
Rights Agreement"), pursuant to which the Company will file a registration
statement (the "Registration Statement") with the Securities and Exchange
Commission (the "Commission") registering the Notes or the Exchange Notes
referred to in the Registration Rights Agreement under the Securities Act of
1933, as amended (the "1933 Act").
The holders of Warrants will be entitled to the benefits of a Warrant
Registration Rights Agreement in substantially the form attached hereto as
Exhibit C, with such changes as shall be agreed to by the parties hereto (the
"Warrant Registration Rights Agreement") which provides for the registration of
the Warrants under the 1933 Act under certain circumstances set forth therein.
The Company understands that the Initial Purchasers propose to make an
offering of the Securities on the terms and in the manner set forth herein and
agree that the Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers ("Subsequent
Purchasers") at any time on or after the date of this Agreement. The
Securities are to be offered and sold through the Initial Purchasers without
being registered under the 1933 Act, in reliance upon exemptions therefrom.
Pursuant to the terms of the Securities and the Indenture, investors that
acquire Securities may only resell or otherwise transfer such Securities if
such Securities are hereafter registered under the 1933 Act or if an exemption
from the registration requirements of the 1933 Act is available, including the
exemptions afforded by Rule 144A ("Rule 144A") and Regulation S ("Regulation
S") of the rules and regulations promulgated under the 1933 Act by the
Commission.
The Company has prepared and delivered to the Initial Purchasers copies of
a preliminary offering memorandum dated February 2, 1998 (the "Preliminary
Offering Memorandum") and has prepared and will deliver to the Initial
Purchasers, on the date hereof or the next succeeding day, copies of a final
offering memorandum dated February 13, 1998 (the "Final Offering Memorandum"),
each for use by the Initial Purchasers in connection with its solicitation of
purchases of, or offering of, the Securities. "Offering Memorandum" means,
with respect to any date or time referred to in this Agreement, the most recent
offering memorandum (whether the Preliminary Offering Memorandum or the Final
Offering Memorandum, or any amendment or supplement to either such document),
including exhibits thereto and any documents incorporated therein by reference,
which has been prepared and delivered by the Company to the Initial Purchasers
in connection with its solicitation of purchases of, or offering of, the
Securities.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to the Initial Purchasers as of the date hereof and as of the
Closing Time, and agrees with the Initial Purchasers, as follows:
(i) Similar Offerings. The Company and its affiliates, as such term
is defined in Rule 501(b) under the 1933 Act ("Affiliates"), have not,
directly or indirectly, solicited any
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offer to buy, sold or offered to sell or otherwise negotiated in respect
of, and will not, directly or indirectly, solicit any offer to buy or
offer to sell or otherwise negotiate in respect of, in the United States
or to any United States citizen or resident, any securities which are or
would be integrated with the sale of the Securities, or with the Notes or
the Warrants taken separately, in a manner that would require the
Securities, the Notes or the Warrants to be registered under the 1933
Act.
(ii) Offering Memorandum. The Offering Memorandum does not, and at
the Closing Time will not, include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading; provided that this representation, warranty and
agreement shall not apply to statements in or omissions from the Offering
Memorandum made in reliance upon and in conformity with information
furnished to the Company in writing by the Initial Purchasers expressly
for use in the Offering Memorandum.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Offering
Memorandum are independent certified public accountants with respect to
the Company within the meaning of Regulation S-X under the 1933 Act.
(iv) Financial Statements. The financial statements, together with
the related schedules and notes, included in the Offering Memorandum
present fairly in all material respects the financial position of the
Company at the dates indicated and the statements of operations,
stockholders' deficit and cash flows of the Company for the periods
specified; said financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Offering Memorandum present fairly in
all material respects in accordance with GAAP the information required to
be stated therein. The selected financial data and the summary financial
information included in the Offering Memorandum present fairly in all
material respects the information shown therein and have been compiled on
a basis consistent with that of the audited and unaudited financial
statements included in the Offering Memorandum.
(v) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Offering Memorandum, except
as otherwise stated therein, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiary,
taken as a whole, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Company, other than those in the
ordinary course of business, which are material with respect to the
Company, and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(vi) Good Standing. The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Missouri and has
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corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Offering Memorandum and
to enter into and perform its obligations under this Agreement, the
Registration Rights Agreement, the Warrant Agreement, the Warrant
Registration Rights Agreement, the Indenture and the Securities,
including the Notes and the Warrants; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing in
each of the jurisdictions set forth on Schedule C hereto, which include
all of the jurisdictions in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect.
(vii) Subsidiaries. Digital Teleport, Inc. (the "Subsidiary") has
been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Missouri, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum in each of the
jurisdictions set forth on Schedule C hereto, which include all of the
jurisdictions in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect; except as otherwise disclosed in
the Offering Memorandum, all of the issued and outstanding capital stock
of each such Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and is owned by the Company, directly or
through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock of such Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such Subsidiary.
The Subsidiary is the only subsidiary of the Company.
(viii) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth under the caption "Capitalization" in
the Offering Memorandum; provided that such capital stock shall be adjusted
to give effect to the Stock Split prior to the Closing Time. The shares of
issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; none
of the outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any securityholder
of the Company.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization of the Indenture. The Indenture has been duly
authorized by the Company and, at the Closing Time, will have been duly
executed and delivered by the Company and, when executed by the Trustee,
will constitute a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject
to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
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(xi) Authorization of the Notes. The Notes have been duly authorized
by the Company and, at the Closing Time, will have been duly executed by
the Company and, when authenticated and issued in the manner provided for
in the Indenture and delivered against payment of the purchase price
therefor as provided in this Agreement, (A) will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law),
and (B) will be in the form contemplated by, and entitled to the benefits
of, the Indenture and the Registration Rights Agreement.
(xii) Authorization of the Warrant Agreement. The Warrant Agreement
has been duly authorized by the Company and, at the Closing Time, will
have been duly executed and delivered by the Company and, when duly
executed and delivered by the Warrant Agent, will constitute a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforceability thereof may be limited
by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other
similar laws relating to or affecting enforcement of creditors' rights
generally or by general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(xiii) Authorization of the Warrants. The Warrants have been duly
authorized by the Company and, at the Closing Time, will have been duly
executed by the Company and, when executed and issued in the manner
provided for in the Warrant Agreement and delivered against payment of the
purchase price therefor as provided in this Agreement, (A) will constitute
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law), and (B) will be in the form contemplated by, and entitled to
the benefits of, the Warrant Agreement.
(xiv) Authorization of the Warrant Shares. The shares of Common
Stock issuable upon exercise of the Warrants (the "Warrant Shares") have
been duly authorized and reserved by the Company and, when issued and
delivered upon exercise of the Warrants in accordance with the terms of
the Warrants and the Warrant Agreement, will be validly issued, fully paid
and non-assessable and will not be subject to any preemptive or similar
rights.
(xv) Authorization of the Registration Rights Agreement. The
Registration Rights Agreement has been duly authorized by the Company and,
at the Closing Time, will have been duly executed and delivered by the
Company and, when executed by the Initial Purchasers, will
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constitute a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except as (x) the
enforceability thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws relating to
or affecting enforcement of creditor's rights generally, (y) the
enforceability thereof may be limited by general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law) and (z) any rights to indemnity and contribution may be
limited by federal and state securities laws and public policy
considerations.
(xvi) Authorization of the Warrant Registration Rights Agreement.
The Warrant Registration Rights Agreement has been duly authorized by the
Company and, at the Closing Time, will have been duly executed and
delivered by the Company and, when executed by the Initial Purchasers,
will constitute a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except as (x) the
enforceability thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws relating to
or affecting enforcement of creditor's rights generally, (y) the
enforceability thereof may be limited by general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law) and (z) any rights to indemnity and contribution may be
limited by federal and state securities laws and public policy
considerations.
(xvii) Description of the Registration Rights Agreement, Warrant
Registration Rights Agreement, the Securities, the Notes, the Warrants,
the Common Stock, the Warrant Agreement and the Indenture. The
Registration Rights Agreement, Warrant Registration Rights Agreement, the
Securities, the Notes, the Warrants, the Common Stock, the Warrant
Agreement and the Indenture will conform in all material respects to the
respective statements relating thereto contained in the Offering
Memorandum and will be in substantially the respective forms previously
delivered to the Initial Purchasers.
(xviii) Absence of Defaults and Conflicts. Neither the Company nor
the Subsidiary is (1) in violation of its Articles of Incorporation or
by-laws (or other similar organizational documents), (2) in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which it is a party or by which or any of them may be bound, or to which
any of its property or assets is subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a Material
Adverse Effect or (3) in violation of any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company, the Subsidiary or any of their assets or properties, except
as disclosed in the Offering Memorandum or except for such violations that
would not result in a Material Adverse Effect; and the execution, delivery
and performance of this Agreement, the Indenture, the Securities, the
Warrant Agreement and the Registration Rights Agreement, the Warrant
Registration Rights Agreement and any other agreement or instrument
entered into or issued or to be entered into or issued by the Company or
the Subsidiary in connection with the transactions contemplated hereby or
thereby or in the
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Offering Memorandum and the consummation of the transactions contemplated
herein and in the Offering Memorandum (including the issuance and sale of
the Securities and the use of the proceeds from the sale of the
Securities as described in the Offering Memorandum under the caption "Use
of Proceeds") and compliance by the Company with its obligations
hereunder and thereunder do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute
a breach of, or default or a Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or the Subsidiary pursuant to,
the Agreements and Instruments except for such conflicts, breaches or
defaults or liens, charges or encumbrances that, singly or in the
aggregate, would not result in a Material Adverse Effect, nor will such
action result in any violation of the provisions of the charter or
statute, as applicable, or by-laws (or other similar organizational
documents) of the Company or the Subsidiary or any applicable law,
statute, rule, regulation (including, without limitation, the
Communications Act of 1934, as amended, and the rules and regulations of
the Federal Communications Commission (the "FCC") thereunder), judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or the
Subsidiary or any of their assets or properties, including, without
limitation, the FCC except where such violation would not result in a
Material Adverse Effect. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or the Subsidiary.
(xix) Absence of Labor Dispute. No labor dispute with the
employees of the Company or the Subsidiary exists or, to the knowledge of
the Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers, customers or contractors, which, in either
case, may reasonably be expected to result in a Material Adverse Effect.
(xx) Absence of Proceedings. Except as disclosed in the Offering
Memorandum, there is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body,
domestic or foreign, now pending or, to the knowledge of the Company,
threatened, against or affecting the Company or the Subsidiary, or to
which the Company is a party, which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be
expected to result in a Material Adverse Effect or to adversely affect
the consummation of this Agreement, the Indenture, the Warrant Agreement,
the Securities, the Registration Rights Agreement or the Warrant
Registration Rights Agreement, or the performance by the Company of its
obligations hereunder or thereunder. The aggregate of all pending legal
or governmental proceedings to which the Company or the Subsidiary is a
party or of which any of their respective properties or assets is the
subject which are not described in the Offering Memorandum, including
ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(xxi) Possession of Intellectual Property. The Company and the
Subsidiary own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses,
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inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor the Subsidiary has received any notice and is not otherwise aware of
any infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or circumstances
which would render any Intellectual Property invalid or inadequate to
protect the interest of the Company or the Subsidiary therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.
(xxii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required (x) for the lawful operation of the business of
the Company and its Subsidiary as described in the Offering Memorandum
under the caption "Business" in the manner and to the full extent now
operated or proposed to be operated as described in the Offering
Memorandum, except for such filings, authorizations, approvals, consents,
licenses, orders, registrations, qualifications or decrees that would
not, singly or in the aggregate, result in a Material Adverse Effect, (y)
assuming the Initial Purchasers comply with the procedures set forth in
Section 6(a), for the performance by the Company of its obligations
hereunder, in connection with the offering, issuance or sale of the
Securities hereunder or the consummation of the transactions contemplated
by this Agreement, the Registration Rights Agreement, the Warrant
Registration Rights Agreement or the Offering Memorandum or (z) to permit
the Company to (1) effect payments of principal of and premium and
interest on the Notes and, if issued, the Exchange Notes referred to in
the Registration Rights Agreement, (2) perform its other obligations
under the Indenture or (3) perform its obligations under the Warrant
Agreement and the Warrant Registration Rights Agreement. No event has
occurred which permits (nor has an event occurred which with notice or
lapse of time or both would permit) the revocation or termination of any
authorization, approval, consent, license, order, registration,
qualification or decree described under clause (x) of this paragraph or
which might result in any other material impairment of the rights of the
Company therein or thereunder.
(xxiii) Possession of Licenses and Permits. The Company and the
Subsidiary possess such material permits, licenses, approvals,
concessions, consents and other authorizations (including, without
limitation, all permits required for the operation of the business of the
Company and the Subsidiary by the FCC and each state and local authority
that regulates the activities of the Company) (collectively,
"Governmental Licenses") issued by the appropriate federal, state, local
or foreign regulatory agencies or bodies, other governmental authorities
or self regulatory organizations necessary to conduct the business now
operated by it; the Company and the Subsidiary are in compliance with the
terms and conditions of all such Governmental Licenses, except as
disclosed in the Offering Memorandum and except where the failure so to
comply would not, singly or in the aggregate, result in a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in
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full force and effect would not result in a Material Adverse Effect; and
neither the Company nor the Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a Material
Adverse Effect. To the knowledge of the Company, except as described in
the Offering Memorandum, there exists no reason or cause that could
justify the variation, suspension, cancellation or termination of any
such Governmental Licenses held by the Company or the Subsidiary with
respect to the construction or operation of its respective businesses,
which variation, suspension, cancellation or termination could reasonably
be expected to result in a Material Adverse Effect.
(xxiv) Title to Property. The Company and the Subsidiary have good
and marketable title to all real property owned by the Company and the
Subsidiary and good title to all other properties owned by it, in each
case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Offering Memorandum or (b) do not, singly or
in the aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by
the Company or the Subsidiary; and all of the leases and subleases
material to the business of the Company or the Subsidiary, and under
which the Company or the Subsidiary holds properties described in the
Offering Memorandum, are in full force and effect, and neither the
Company nor the Subsidiary has any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the
Company or the Subsidiary under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company or the
Subsidiary to the continued possession of the leased or subleased
premises under any such lease or sublease.
(xxv) Tax Returns. The Company and the Subsidiary have filed all
federal, state, local and foreign tax returns that are required to be
filed or have duly requested extensions thereof, except for any personal
property tax returns in the State of Missouri, and have paid all taxes
required to be paid by it and any related assessments, fines or
penalties, except for any such tax, assessment, fine or penalty that is
being contested in good faith and by appropriate proceedings; and
adequate charges, accruals and reserves have been provided for in the
financial statements referred to in Section 1(a)(iv) above in respect of
all federal, state, local and foreign taxes for all periods as to which
the tax liabilities of the Company and the Subsidiary have not been
finally determined or remains open to examination by applicable taxing
authorities.
(xxvi) Environmental Laws. Except as described in the Offering
Memorandum and except for such matters as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor the Subsidiary is not in violation of any domestic or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law or
any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations
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relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and the Subsidiary have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are in compliance with their requirements, (C)
there are no pending or, to the knowledge of the Company, threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against
the Company or the Subsidiary and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or affecting
the Company or the Subsidiary relating to Hazardous Materials or
Environmental Laws.
(xxvii) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Offering
Memorandum will not be, an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (the "1940 Act").
(xxviii) Internal Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurances
that (A) transactions are executed in accordance with management's
general or specific authorization; (B) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with GAAP and to maintain accountability for assets; (C) access to assets
is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(xxix) Rule 144A Eligibility. Solely with respect to matters
relating to the eligibility of the Securities for resale pursuant to Rule
144A which are under the Company's control, the Securities are eligible
for resale pursuant to Rule 144A and will not be, at the Closing Time, of
the same class as securities listed on a national securities exchange
registered under Section 6 of the 1934 Act, or quoted in a U.S. automated
interdealer quotation system.
(xxx) No General Solicitation. None of the Company, its
Affiliates or any person acting on its or any of their behalf has engaged
or will engage, in connection with the offering of the Securities, in any
form of general solicitation or general advertising within the meaning of
Rule 502(c) under the 1933 Act.
(xxxi) No Registration Required. Assuming the representations
and warranties set forth in Section 2 are true and the Initial Purchasers
comply with the procedures set forth in Section 6 hereof, it is not
necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers and to each Subsequent Purchaser in
the manner contemplated by this Agreement and the Offering Memorandum to
register the Securities
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under the 1933 Act or to qualify the Indenture under the Trust Indenture
Act of 1939, as amended (the "1939 Act").
(xxxii) No Directed Selling Efforts. With respect to those Securities
being sold by the Initial Purchasers in reliance on Regulation S, (A) none
of the Company or its Affiliates or any person acting on their behalf
(excluding the Initial Purchasers) has engaged or will engage in any
directed selling efforts within the meaning of Regulation S and (B) each of
the Company, its Affiliates and any person acting on its or their behalf
(excluding the Initial Purchasers) has complied and will comply with the
offering restrictions requirement of Regulation S.
(xxxiii) Solvency. The Company is, and immediately after the Closing
Time will be, Solvent. As used herein, "Solvent" means, on a particular
date, that on such date (A) the fair market value of the assets of the
Company is greater than the total amount of liabilities (including
contingent liabilities) of the Company, (B) the present fair salable
value of the assets of the Company is greater than the amount that will
be required to pay the probable liabilities of the Company on its debts
as they become absolute and matured, (C) the Company is able to realize
upon its assets and pay its debts and other liabilities, including
contingent obligations, as they mature and (D) the Company does not have
an unreasonably small capital. The Company is not contemplating either
the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidating of all or a substantial portion of its
property, and the Company does not have any knowledge of any person
contemplating the filing of any such petition against it.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company delivered to the Initial Purchasers or to counsel for the Initial
Purchasers shall be deemed a representation and warranty by the Company to the
Initial Purchasers as to the matters covered thereby.
SECTION 2. Sale and Delivery to Initial Purchasers; Closing.
(a) Securities. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to the Initial Purchasers and the Initial Purchasers agree to
purchase from the Company, at the price set forth in Schedule B, the aggregate
amount of Securities set forth in Schedule A opposite the name of such Initial
Purchaser.
(b) Payment. Payment of the purchase price for, and delivery of
certificates representing the Securities shall be made at the offices of
Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022, or at such
other place as shall be agreed upon by the Initial Purchasers and the Company,
at 9:00 A.M. Eastern Time on the third business day after the date hereof, or
such other time not later than ten business days after such date as shall be
agreed upon by the Initial Purchasers and the Company (such time and date of
payment and delivery being herein called the "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery
to the Initial Purchasers for their account of certificates representing the
Securities to be purchased by them. The Securities, which may be in
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temporary form, will be made available for examination and packaging by the
Initial Purchasers in The City of New York not later than 5:00 P.M. on the last
business day prior to the Closing Time.
(c) Qualified Institutional Buyer. The Initial Purchasers represent and
warrant to, and agree with, the Company that each of the Initial Purchasers is
a "qualified institutional buyer" within the meaning of Rule 144A under the
1933 Act (a "Qualified Institutional Buyer") and an "accredited investor"
within the meaning of Rule 501(a) under the 1933 Act (an "Accredited
Investor").
(d) Denominations; Registration. Certificates for the Securities shall be
in such denominations and registered in such names as the Initial Purchasers
may request in writing at least one full business day before the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with the
Initial Purchasers as follows:
(a) Offering Memorandum. The Company, as promptly as possible, will
furnish to the Initial Purchasers, without charge, such number of copies of the
Preliminary Offering Memorandum, the Final Offering Memorandum and any
amendments and supplements thereto and documents incorporated by reference
therein as the Initial Purchasers may reasonably request.
(b) Notice and Effect of Material Events. The Company will immediately
notify the Initial Purchasers, and confirm such notice in writing, of (x) any
filing made by the Company of information relating to the offering of the
Securities with any securities exchange or any other regulatory body in the
United States or any other jurisdiction, and (y) prior to the completion of the
placement of the Securities by the Initial Purchasers as evidenced by a notice
in writing from the Initial Purchasers to the Company, any material changes in
or affecting the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company which (i) make any statement in
the Offering Memorandum false or misleading or (ii) are not disclosed in the
Offering Memorandum. In such event or if during such time any event shall
occur as a result of which it is necessary, in the reasonable opinion of any of
the Company, its counsel, the Initial Purchasers or counsel for the Initial
Purchasers, to amend or supplement the Final Offering Memorandum in order that
the Final Offering Memorandum not include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in light of the circumstances then existing, the Company
will forthwith amend or supplement the Final Offering Memorandum by preparing
and furnishing to the Initial Purchasers an amendment or amendments of, or a
supplement or supplements to, the Final Offering Memorandum (in form and
substance satisfactory in the reasonable opinion of counsel for the Initial
Purchasers) so that, as so amended or supplemented, the Final Offering
Memorandum will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances existing at the time it is delivered to a Subsequent
Purchaser, not misleading.
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(c) Amendment to Offering Memorandum and Supplements. The Company will
not make any amendment or supplement to the Offering Memorandum of which the
Initial Purchasers shall not previously have been advised or to which they
shall reasonably object after being so advised. Neither the consent of the
Initial Purchasers, nor the Initial Purchasers' delivery of any such amendment
or supplement, shall constitute a waiver of any of the conditions set forth in
Section 5 hereof.
(d) Qualification of Securities for Offer and Sale. The Company will use
its best reasonable efforts, in cooperation with the Initial Purchasers, to
qualify the Securities for offering and sale under the applicable securities
laws of such jurisdictions as the Initial Purchasers may designate and will
maintain such qualifications in effect as long as required for the sale of the
Securities; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified or to subject itself to taxation in respect of doing business in
any jurisdiction in which it is not otherwise so subject.
(e) DTC. The Company will cooperate with the Initial Purchasers and use
its best efforts to permit the Securities to be eligible for clearance and
settlement through the facilities of DTC.
(f) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner described in the Offering
Memorandum under "Use of Proceeds."
(g) Restriction on Sale of Securities. During a period of 90 days from
the date of the Offering Memorandum, the Company will not, without the prior
written consent of the Initial Purchasers, directly or indirectly, issue, sell,
offer or agree to sell, grant any option for the sale of, or otherwise dispose
of, any other debt or equity securities of the Company, other than (i) the
Notes, the Exchange Notes referred to in the Registration Rights Agreement and
the Warrants, (ii) capital stock issued to employees, directors, alternate
directors or officers of the Company or any subsidiary (or permitted
transferees of such employees, directors, alternate directors or officers),
pursuant to the terms of the DTI Holdings, Inc. 1997 Long-Term Incentive Award
Plan (or amendments thereto) approved by the Company's Board of Directors or
(iii) shares of Common Stock of the Company issued to holders of the Company's
Series A Preferred Stock pursuant to and in accordance with the Company's
Articles of Incorporation, as amended.
(h) PORTAL. The Company will use its best efforts to permit the
Securities, the Notes and the Warrants to be designated PORTAL securities in
accordance with the rules and regulations adopted by the National Association
of Securities Dealers, Inc. ("NASD") relating to trading in the PORTAL Market.
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SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and any filing of the Offering Memorandum (including
financial statements and any schedules or exhibits and any document
incorporated therein by reference) and of each amendment or supplement thereto,
(ii) the preparation, printing and delivery to the Initial Purchasers of this
Agreement, the Indenture and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates
representing the Securities to the Initial Purchasers, including any charges of
DTC in connection therewith, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the
Securities under securities laws in accordance with the provisions of Section
3(d) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Initial Purchasers in connection therewith and in connection
with the preparation of the Blue Sky Survey and any supplement thereto, (vi)
the fees and expenses of the Trustee, including the fees and disbursements of
counsel for the Trustee in connection with the Indenture and the Securities,
(vii) any fees payable in connection with the rating of the Securities, and
(viii) any fees and expenses payable in connection with the initial and
continued designation of the Securities as PORTAL securities under the PORTAL
Market Rules pursuant to NASD Rule 5322.
(b) Termination of Agreement. If this Agreement is terminated by the
Initial Purchasers in accordance with the provisions of Section 5 or Section
10(a)(i) hereof, the Company shall reimburse the Initial Purchasers for all of
their out-of-pocket expenses, including the reasonable fees and disbursements
of counsel for the Initial Purchasers.
SECTION 5. Conditions of Initial Purchasers' Obligations. The
obligations of the Initial Purchasers hereunder are subject to the accuracy of
the representations and warranties of the Company contained in Section 1 hereof
and in certificates of any officer of the Company or the Subsidiaries delivered
pursuant to the provisions hereof, to the performance by the Company of its
covenants and other obligations hereunder, and to the following further
conditions:
(a) Opinion of Counsel for the Company. At the Closing Time, the Initial
Purchasers shall have received the favorable opinion, dated as of the Closing
Time, of Bryan Cave LLP, counsel for the Company, in form and substance
satisfactory to counsel for the Initial Purchasers, to the effect set forth in
Exhibit D hereto.
(b) Opinion of FCC Counsel for the Company. At the Closing Time, the
Initial Purchasers shall have received the favorable opinion, dated as of the
Closing Time, of Lukas McGowan, Nice & Gutierrez, Chartered, special regulatory
counsel for the Company, in form and substance satisfactory to counsel for the
Initial Purchasers, to the effect set forth in Exhibit E hereto.
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(c) Opinion of State Regulatory Counsel for the Company for the State of
Missouri. At the Closing Time, the Initial Purchasers shall have received the
favorable opinion, dated as of the Closing Time, of Hendren & Andrae, LLC,
special state regulatory counsel for the Company for the State of Missouri, in
form and substance satisfactory to counsel for the Initial Purchasers, to the
effect set forth in Exhibit F hereto.
(d) Opinion of State Regulatory Counsel for the Company for the State of
Arkansas. At the Closing Time, the Initial Purchasers shall have received the
favorable opinion, dated as of the Closing Time, of Wright, Lindsey & Jennings,
LLP, special state regulatory counsel for the Company for the State of
Arkansas, in form and substance satisfactory to counsel for the Initial
Purchasers, to the effect set forth in Exhibit G hereto.
(e) Opinion of Special Counsel for the Company for Litigation Matters. At
the Closing Time, the Initial Purchasers shall have received the favorable
opinion, dated as of the Closing Time, of Evans & Dixon, special litigation
counsel for the Company, in form and substance satisfactory to counsel for the
Initial Purchasers, to the effect set forth in Exhibit H hereto.
(f) Opinion of Counsel for Initial Purchasers. At the Closing Time, the
Initial Purchasers shall have received the favorable opinion, dated as of the
Closing Time, of Shearman & Sterling, counsel for the Initial Purchasers, with
respect to the matters set forth in (i) (solely as to execution and delivery
and solely to the extent execution and delivery is a matter of New York law),
(ii) through (vi), inclusive, (vii) (solely as to the information in the
Offering Memorandum under "Description of the Units," "Description of the
Notes," "Description of the Warrants" and "Book-entry; Delivery and Form") and
the penultimate paragraph of Exhibit D hereto. In giving such opinion, such
counsel may rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York an the federal law of the United States,
upon the opinions of counsel satisfactory to the Initial Purchasers. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and certificates of public officials.
(g) Officers' Certificate. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company considered as one enterprise, whether or not
arising in the ordinary course of business, and the Initial Purchasers shall
have received a certificate of the President or any vice president of the
Company and of the Chief Financial Officer or Chief Accounting Officer of the
Company, dated as of the Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties in
Section 1 hereof are true and correct with the same force and effect as though
expressly made at and as of the Closing Time, and (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time.
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(h) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Initial Purchasers shall have received from Deloitte & Touche
LLP a letter dated such date, in form and substance satisfactory to the Initial
Purchasers containing statements and information of the type ordinarily
included in accountants' "comfort letters" to the Initial Purchasers with
respect to the financial statements and certain financial information contained
in the Offering Memorandum.
(i) Bring-down Comfort Letter. At the Closing Time, the Initial
Purchasers shall have received from Deloitte & Touche LLP a letter, dated as of
the Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (h) of this Section, except that the
specified date referred to shall be a date not more than three business days
prior to the Closing Time.
(j) PORTAL. At the Closing Time, the Securities, the Notes and the
Warrants shall have been designated for trading on PORTAL.
(k) Additional Documents. At the Closing Time, counsel for the Initial
Purchasers shall have been furnished with such documents and opinions as they
may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Initial Purchasers and counsel for the Initial Purchasers.
(l) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Initial Purchasers by notice to the Company
at any time at or prior to the Closing Time, and such termination shall be
without liability of any party to any other party except as provided in Section
4 and except that Sections 1, 7, 8 and 9 shall survive any such termination and
remain in full force and effect.
(m) Stock Spli. The Company will complete the Stock Split prior to the
Closing Time.
SECTION 6. Subsequent Offers and Resales of the Securities.
(a) Offer and Sale Procedures. Each of the Initial Purchasers and the
Company hereby establishes and agrees to observe the following procedures in
connection with the offer and sale of the Securities:
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(i) Offers and Sales Only to Qualified Institutional Buyers. Offers
and sales of the Securities will be made only by the Initial Purchasers or
Affiliates thereof qualified to do so in the jurisdictions in which such
offers or sales are made. Each such offer or sale shall only be made (A)
in compliance with Rule 144A to persons whom the offeror or seller
reasonably believes to be qualified institutional buyers (as defined in
Rule 144A under the Securities Act) or (B) in compliance with Regulation S
to non-U.S. persons outside the United States (which shall include dealers
or other professional fiduciaries in the United States acting on a
discretionary basis for beneficial owners (other than an estate or trust)
that are non-U.S. persons) to whom the offeror or seller reasonably
believes offers and sales of the Securities may be made in reliance upon
Regulation S under the 1933 Act.
(ii) No General Solicitation. No general solicitation or general
advertising (within the meaning of Rule 502(c) under the 1933 Act) will
be used in the United States in connection with the offering or sale of
the Securities.
(iii) Purchases by Non-Bank Fiduciaries. In the case of a non-bank
Subsequent Purchaser of a Security acting as fiduciary for one or more
third parties, in connection with an offer and sale to such purchaser
pursuant to clause (i) above, each third party shall, in the judgment of
the Initial Purchasers, be a Qualified Institutional Buyer or a non-U.S.
Person outside the United States.
(iv) Subsequent Purchaser Notification. The Initial Purchasers will
take reasonable steps to inform, and cause each of its U.S. Affiliates to
take reasonable steps to inform, persons acquiring Securities from the
Initial Purchasers or affiliates, as the case may be, in the United
States that the Securities (A) have not been and will not be registered
under the 1933 Act, (B) are being sold to them without registration under
the 1933 Act in reliance on Rule 144A or in accordance with another
exemption from registration under the 1933 Act, as the case may be, and
(C) may not be offered, sold or otherwise transferred except (1) to the
Company, (2) outside the United States in accordance with Rule 904 of
Regulation S, or (3) inside the United States in accordance with (x) Rule
144A to a person whom the seller reasonably believes is a Qualified
Institutional Buyer that is purchasing such Securities for its own
account or for the account of a Qualified Institutional Buyer to whom
notice is given that the offer, sale or transfer is being made in
reliance on Rule 144A or (y) pursuant to another available exemption from
registration under the 1933 Act.
(v) Restrictions on Transfer. Each of the Securities will bear, to
the extent applicable, the legend contained under "Notice to Investors"
in the Offering Memorandum for the time period and upon the other terms
stated therein, except after the Securities are resold pursuant to a
registration statement effective under the 1933 Act. Following the sale
of the Securities by the Initial Purchasers to Subsequent Purchasers
pursuant to the terms hereof, the Initial Purchasers shall not be liable
or responsible to the Company for any losses, damages or liabilities
suffered or incurred by the Company, including any losses, damages or
liabilities under the 1933 Act, arising from or relating to any resale or
transfer of any Security.
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(b) Covenants of the Company. The Company covenants with the Initial
Purchasers as follows:
(i) Due Diligence. In connection with the original distribution of
the Securities, the Company agrees that, prior to any offer or resale of
the Securities by the Initial Purchasers, the Initial Purchasers and
counsel for the Initial Purchasers shall have the right to make
reasonable inquiries into the business of the Company. The Company so
agrees to provide answers to each prospective Subsequent Purchaser of
Securities who so requests concerning the Company (to the extent that
such information is available or can be acquired and made available to
prospective Subsequent Purchasers without unreasonable effort or expense
and to the extent the provision thereof is not prohibited by applicable
law or under the terms of any Agreements to which the Company is a party)
and the terms and conditions of the offering of the Securities, as
provided in the Offering Memorandum.
(ii) Integration. The Company agrees that it will not and will cause
its Affiliates not to solicit any offer to buy or make any offer or sale
of, or otherwise negotiate in respect of, securities of the Company of
any class if, as a result of the doctrine of "integration" referred to in
Rule 502 under the 1933 Act, such offer or sale would render invalid (for
the purpose of (i) the sale of the Securities by the Company to the
Initial Purchasers, (ii) the resale of the Securities by the Initial
Purchasers to Subsequent Purchasers or (iii) the resale of the Securities
by such Subsequent Purchasers to others) the exemption from the
registration requirements of the 1933 Act provided by Section 4(2)
thereof or by Rule 144A or by Regulation S thereunder or otherwise.
(iii) No Directed Selling Efforts. The Company agrees that, with
respect to those Securities sold in reliance on Regulation S, (A) none of
the Company or its Affiliates or any person acting on their behalf will
engage in any directed selling efforts within the meaning of Regulation S
and (B) each of the Company, its Affiliates and any person acting on its
or their behalf will comply with the offering restrictions requirement of
Regulation S.
(iv) Rule 144A Information. The Company agrees that, in order to
render the Securities eligible for resale pursuant to Rule 144A under the
1933 Act, while any of the Securities remain outstanding, it will make
available, upon request, to any holder of Securities or prospective
purchasers of Securities the information specified in Rule 144A(d)(4),
unless the Company furnishes information to the Commission pursuant to
Section 13 or 15(d) of the 1934 Act (such information, whether made
available to holders or prospective purchasers or furnished to the
Commission, is herein referred to as "Additional Information").
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(v) Restriction on Repurchases. Until the expiration of two years
after the original issuance of the Securities, the Company will not, and
will cause its Affiliates not to, purchase or agree to purchase or
otherwise acquire any Securities which are "restricted securities" (as
such term is defined under Rule 144(a)(3) under the 1933 Act), whether as
beneficial owner or otherwise (except as agent acting as a securities
broker on behalf of and for the account of customers in the ordinary
course of business in unsolicited broker's transactions) unless,
immediately upon any such purchase, the Company or any Affiliate thereof
shall submit such Securities to the Trustee for cancellation.
(c) Resale Pursuant to Rule 903 of Regulation S, Rule 144A or Other
Exemption. The Initial Purchasers understand that the Securities have not been
and will not be registered under the 1933 Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
except pursuant to an exemption from the registration requirements of the 1933
Act. The Initial Purchasers represent and agree that, except as permitted by
Section 6(a), they have offered and sold Securities and will comply with all
applicable laws and regulations in each jurisdiction in which they acquire,
offer, sell or deliver Securities or have in their possession or distribute the
Offering Memorandum or other materials, in all cases at their own expense and
will offer and sell Securities (i) as part of their distribution at any time
and (ii) otherwise until 40 days after the later of the date upon which the
offering of the Securities commences and the Closing Time, only in accordance
with Rule 903 of Regulation S or Rule 144A under the 1933 Act. Accordingly,
neither the Initial Purchasers or their affiliates nor any persons acting on
their behalf have engaged or will engage in any directed selling efforts
(within the meaning of Regulation S) with respect to Securities, and the
Initial Purchasers, their affiliates and any person acting on their behalf have
complied and will comply with the offering restriction requirements of
Regulation S. The Initial Purchasers agree that, at or prior to confirmation
of a sale of Securities (other than a sale of Securities pursuant to Rule 144A
hereof), they will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from
them or through them during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under the
United States Securities Act of 1933 (the "Securities Act") and may
not be offered or sold within the United States or to or for the
account or benefit of U.S. persons (i) as part of their distribution
at any time and (ii) otherwise until forty (40) days after the later
of the date upon which the offering of the Securities commenced and
the date of closing, except in either case in accordance with
Regulation S or another exemption from the registration requirements
of the Securities Act. Terms used above have the meaning given to
them by Regulation S."
Terms used in the above paragraph have the meanings given to them by
Regulation S.
The Initial Purchasers represent and agree that they have not entered and
will not enter into any contractual arrangements with respect to the
distribution of the Securities, except with their affiliates or with the prior
written consent of the Company.
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(d) Offers and Sales in the United Kingdom. The Initial Purchasers hereby
represent, warrant and agree that (i) they have not offered or sold and prior
to the expiration of the period six months after the date of issue of the
Securities will not offer to sell by means of any document any Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) they have complied and will comply with all
applicable provisions of the Financial Services Act 1986 with respect to
anything done by them in relation to the Securities in, from or otherwise
involving the United Kingdom; and (iii) they have only issued or passed on, and
will only issue or pass on within six months of the date hereof, in the United
Kingdom any document received by them in connection with the issue of the
Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995
or is a person to whom such document may otherwise lawfully be issued or passed
on.
(e) Offers and Sales in Japan. The Initial Purchasers understand that the
Securities have not been and will not be registered under the Securities and
Exchange Law of Japan, and represent that they have not offered or sold, and
agree that they will not offer or sell, any Securities, directly or indirectly,
in Japan or to any resident of Japan except (i) pursuant to an exemption from
the registration requirements of the Securities and Exchanges Law of Japan and
(ii) in compliance with any other applicable requirements of Japanese law.
SECTION 7. Indemnification.
(a) Indemnification of Initial Purchasers. The Company agrees to
indemnify and hold harmless the Initial Purchasers and each person, if any, who
controls the Initial Purchasers within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Offering
Memorandum or the Final Offering Memorandum (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
7(d) below) any such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding
20
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by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Initial Purchasers expressly for use in the Offering Memorandum (or any
amendment thereto).
(b) Indemnification of Company and Directors. The Initial Purchasers
severally agree to indemnify and hold harmless the Company, its directors and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Offering Memorandum in reliance upon and in conformity with written information
furnished to the Company by the Initial Purchasers expressly for use in the
Offering Memorandum.
(c) Actions Against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve
such indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section
7(a) above, counsel to the indemnified parties shall be selected by the Initial
Purchasers, and, in the case of parties indemnified pursuant to Section 7(b)
above, counsel to the indemnified parties shall be selected by the Company;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnifying party
shall not have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence;
(ii) the indemnifying party does not promptly retain counsel satisfactory to
the indemnified party; or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs
and expenses of any settlement of such action effected by such indemnified
party without the
21
26
consent of the indemnifying party. An indemnifying party may participate at
its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 7 or Section 8 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 8. Contribution. If the indemnification provided for in Section
7 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Initial Purchasers on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Initial Purchasers on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Initial Purchasers on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total initial purchaser's discount received by the Initial
Purchasers, bear to the aggregate initial offering price of the Securities.
The relative fault of the Company on the one hand and the Initial
Purchasers on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue
22
27
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or by the Initial
Purchasers and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section, the Initial Purchasers
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
the Initial Purchasers has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls the
Initial Purchasers within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Initial
Purchasers, and each director of the Company, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, shall have the same rights to contribution as the
Company.
SECTION 9. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or the Subsidiary
submitted pursuant hereto 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, or by or on behalf of the Company, and shall survive
delivery of the Securities to the Initial Purchasers.
SECTION 10. Termination of Agreement.
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28
(a) Termination; General. The Initial Purchasers may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing
Time (i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the Offering
Memorandum, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and the Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or any
outbreak of hostilities or escalation thereof or other calamity or crisis, the
effect of which is such as to make it, in the judgment of the Initial
Purchasers, impracticable to market the Securities or to enforce contracts for
the sale of the Securities, or (iii) if trading of any securities of the
Company has been suspended or materially limited by the Commission or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market System has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such
system or by order of the Commission, the National Association of Securities
Dealers, Inc. or any other governmental authority, or (iv) if a banking
moratorium has been declared by Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof; and provided further that
Sections 1, 7, 8 and 9 shall survive such termination and remain in full force
and effect.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Initial
Purchasers shall be directed to the Initial Purchasers at North Tower, World
Financial Center, New York, New York 10281, attention of Edmond N. Moriarty
III; notices to the Company shall be directed to the Company at 11111 Dorsett
Road, St. Louis, Missouri 63043, attention of Richard D. Weinstein.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchasers, the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 7 and 8
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Initial Purchasers,
the Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from the Initial Purchasers shall be deemed to be a successor by reason merely
of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
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29
SECTION 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Initial Purchasers and the Company in accordance with its
terms.
Very truly yours,
DTI HOLDINGS, INC.
By: /s/ Richard D. Weinstein
------------------------------
Name: Richard D. Weinstein
Title: President and Chief Executive
Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
TD SECURITIES (USA), INC.
By: Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
/s/ Marcey Becker
--------------------
Authorized Signatory
Marcey Becker
Vice President
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30
SCHEDULE A
Number of
Name of Underwriter Units
- -------------------- ---------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................... 397,716
TD Securities (USA) Inc.............. 108,284
---------
Total................................ 506,000
---------
Sch A-1
31
SCHEDULE B
DTI HOLDINGS, INC.
506,000 Units, each Unit consisting of one $1,000 aggregate principal
amount at maturity of 12 1/2% Senior Discount Notes due 2008 and five Warrants,
entitling the holder thereof to purchase 3,926,560 shares of Common Stock.
1. The initial public offering of the Units shall be $543.92 per Unit,
plus accreted amortization of original issue discount on the Notes, if any,
from February 23, 1998.
2. The purchase price to be paid by the Initial Purchasers for the Units
shall be $508.92 per Unit, plus accreted amortization of original issue discount
on the Notes, if any, from February 23, 1998.
3. The interest rate on the Notes shall be 12 1/2% per annum; interest
will be payable semiannually on March 1 and September 1, commencing September
1, 2003.
4. The Notes will mature on March 1, 2008 and will be issued in
denominations of $1,000 principal amount at maturity or integral multiples
thereof.
5. The redemption price supplied on page 70 of the Offering Memorandum
(and correspondingly in the Indenture) with respect to redemptions of Notes
from the proceeds of Public Equity Offerings shall be 112.5% of the principal
amount thereof.
6. The redemption prices supplied on page 69 of the Offering Memorandum
(and correspondingly in the Indenture) relating to the Notes shall be:
Redemption
Year Price
---- ----------
2003 106.25%
2004 104.17
2005 102.08
2006 and thereafter 100.00
Sch B-1
32
SCHEDULE C
SCHEDULE OF FOREIGN JURISDICTIONS
DTI Holdings, Inc.
None
Digital Teleport, Inc.
Illinois
Sch A-1
33
Exhibit A
FORM OF
REGISTRATION RIGHTS AGREEMENT
[Separately Attached]
Exh-A-1
34
Exhibit B
FORM OF
WARRANT AGREEMENT
[Separately Attached]
Exh-B-1
35
Exhibit C
FORM OF
WARRANT REGISTRATION RIGHTS AGREEMENT
[Separately Attached]
Exh-C-1
36
Exhibit D
FORM OF OPINION OF BRYAN CAVE LLP
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
This opinion is furnished to you pursuant to Section 5(a) of the Purchase
Agreement dated February 13, 1998 ("Purchase Agreement") between DTI Holdings,
Inc., a Missouri corporation (the "Company") and you as the Initial Purchaser
of the respective number of the Company's Units (the "Units" or the
"Securities"), each Unit consisting of $1,000 aggregate principal amount at
maturity of the Company's Senior Discount Notes due 2008 (the "Notes") and five
warrants (each, a "Warrant"), each Warrant entitling the holder thereof to
purchase 1.552 shares of common stock, par value $0.01 per share (after giving
effect to a 1000 to 1 stock split (the "Stock Split") to be completed prior to
the Closing Time referred to in Section 2(b) hereof, the "Common Stock") of the
Company. Defined terms used herein and not otherwise defined herein have the
respective meanings assigned to such terms in the Purchase Agreement.
In connection herewith, we have examined and relied without independent
investigation as to matters of fact upon originals or copies, certified or
otherwise identified to the Company, including, without limitation, [that
certain certificate of even date herewith executed by Richard D. Weinstein,
President of the Company (the "Officer's Certificate"),] and such other
documents, corporate records, opinions and instruments as we have deemed
necessary or appropriate to enable us to render the opinions expressed below.
In rendering this opinion, we have assumed (i) the genuineness of all
signatures appearing on the documents examined, (ii) the legal capacity of all
persons executing such documents, (iii) the authenticity of documents submitted
to us for our examination, whether or not they have been submitted to us as
originals, (iv) the conformity to authentic original documents of all documents
submitted to us as certified, conformed, facsimile or photostatic copies, (v)
the due authorization of the execution, delivery and performance of the
Purchase Agreement, the Indenture, the Warrant Agreement, the Registration
Rights Agreement and the Warrant Registration Rights Agreement (collectively,
the "Transaction Agreements") by parties other than the Company and (vi) the
validity and binding effect of the Transaction Agreements upon the parties
thereto other than the Company.
Based upon the foregoing, and subject to the qualifications and
limitations set forth elsewhere in this letter, we are of the opinion that:
(i) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Missouri.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Offering Memorandum and to enter into and perform its obligations under
the Purchase Agreement.
Exh-D-1
37
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each of the jurisdictions
set forth on Schedule A hereto, which include all of the jurisdictions in
which the Company is required to be so qualified and in good standing,
other than those where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect.
(iv) Digital Teleport, Inc. has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Missouri, has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and
is duly qualified as a foreign corporation to transact business and is in
good standing in each of the jurisdictions listed on Schedule A hereto,
which include all of the jurisdictions in which Digital Teleport, Inc. is
required to be so qualified and in good standing, other than those where
the failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the Offering
Memorandum, all of the issued and outstanding capital stock of Digital
Teleport, Inc. has been duly authorized and validly issued, is fully paid
and non-assessable and, to the best of our knowledge, is owned by the
Company, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity other than as described in the Offering
Memorandum; none of the outstanding shares of capital stock of Digital
Teleport, Inc. was issued in violation of the preemptive or similar
rights of any security holder of such subsidiary.
(v) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Offering Memorandum in the column entitled
"Actual" under the caption "Capitalization" (except for the subsequent
issuances, if any, pursuant to the Purchase Agreement or pursuant to the
reservations, agreements or employee benefit plans referred to in the
Offering Memorandum or pursuant to the exercise of options referred to in
the Offering Memorandum); the shares of issued and outstanding capital
stock of the Company have been duly authorized and validly issued and are
fully paid and non-assessable; and none of the outstanding shares of
capital stock of the Company was issued in violation of the preemptive or
other similar rights of any security holder of the Company.
(vi) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(vii) The Indenture has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding obligation of
the Company, enforceable against the Company in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles, including,
without limitation, concepts of materiality, reasonableness, good faith
and fair dealing, and the possible unavailability of specific
performance, injunctive relief or other equitable
Exh-D-2
38
remedies, regardless of whether enforceability is considered in a
proceeding in equity or at law.
(viii) The Registration Rights Agreement constitutes a valid and
legally binding obligation of the Company, enforceable in accordance with
its terms, subject, as to enforcement, to (i) bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles, including,
without limitation, concepts of materiality, reasonableness, good faith
and fair dealing, and the possible unavailability of specific
performance, injunctive relief or other equitable remedies, regardless of
whether enforceability is considered in a proceeding in equity or at law
and subject, as to enforcement of the rights to indemnity and
contribution thereunder, to limitations under applicable federal and
state securities laws or public policy considerations.
(ix) The Warrant Agreement constitutes a valid and legally binding
obligation of the Company, enforceable against the Company in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles, including,
without limitation, concepts of materiality, reasonableness, good faith
and fair dealing, and the possible unavailability of specific
performance, injunctive relief or other equitable remedies, regardless of
whether enforceability is considered in a proceeding in equity or at law.
(x) The Warrant Registration Rights Agreement constitutes a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization or other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, and the possible
unavailability of specific performance, injunctive relief or other
equitable remedies, regardless of whether enforceability is considered in
a proceeding in equity or at law and subject, as to enforcement of the
rights to indemnity and contribution thereunder, to limitations under
applicable federal and state securities laws or public policy
considerations..
(xi) The Notes are in the form contemplated by the Indenture, have
been duly authorized by the Company and, when executed by the Company and
authenticated by the Trustee in the manner provided in the Indenture and
delivered against payment of the purchase price therefor, will constitute
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, and the
possible unavailability of specific performance, injunctive relief or
other equitable remedies, regardless of whether enforceability is
considered in a proceeding in
Exh-D-3
39
equity or at law, and will be entitled to the benefits of the
Registration Rights Agreement and the Indenture.
(xii) The Warrants are in the form contemplated by the Warrant
Agreement, have been duly authorized by the Company and, when executed by
the Company and authenticated by the Trustee in the manner provided in
the Warrant Agreement and delivered against payment of the purchase price
therefor, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors' rights
and to general equity principles, including, without limitation, concepts
of materiality, reasonableness, good faith and fair dealing, and the
possible unavailability of specific performance, injunctive relief or
other equitable remedies, regardless of whether enforceability is
considered in a proceeding in equity or at law, and will be entitled to
the benefits of the Warrant Registration Rights Agreement and the Warrant
Agreement.
(xiii) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to
which the Company is a party or to which the property of the Company is
subject, before or brought by any court or governmental agency or body,
domestic or foreign, which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in the Purchase Agreement or
the performance by the Company of its obligations thereunder or the
transactions contemplated by the Offering Memorandum.
(xiv) The information in the Offering Memorandum under the captions
"Certain Relationships and Transactions with Related Parties,"
"Description of Existing Indebtedness," "Description of Units,"
"Description of the Notes," "Description of the Warrants" are correct in
all material respects and fairly summarize the matter discussed therein;
and the information in the Offering Memorandum under the caption "Income
Tax Considerations -- U.S. Holder," to the extent that it constitutes
matters of law, summaries of legal matters or legal proceedings, or legal
conclusions, are accurate and fairly summarize the matters discussed
therein.
(xv) To the best of our knowledge, the Company is not in violation
of its charter or by-laws.
(xvi) To the best of our knowledge, except as otherwise disclosed in
the Offering Memorandum, no default by the Company exists in the due
performance or observance of any material obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument that is listed on
Schedule B hereto.
Exh-D-4
40
(xvii) Assuming the accuracy of the representations, warranties and
covenants of the Initial Purchaser in Section 6(c) of the Purchase
Agreement, no authorization, approval, consent or order of any court or
governmental authority or agency (other than such as may be required
under the applicable securities or Blue Sky laws of the various
jurisdictions in which the Units will be offered or sold, as to which we
need express no opinion) is required in connection with the due
authorization, execution and delivery of the Purchase Agreement or the
due execution, delivery or performance of the Indenture by the Company or
for the offering, issuance, sale or delivery of the Units to the Initial
Purchasers or the resale by the Initial Purchasers in accordance with the
Purchase Agreement.
(xviii) Assuming the accuracy of the representations, warranties and
covenants of the Initial Purchaser, it is not necessary in connection
with the offer, sale and delivery of the Units to the Initial Purchasers
and to each Subsequent Purchaser in the manner contemplated by the
Purchase Agreement and the Offering Memorandum to register the Units
under the 1933 Act or to qualify the Indenture under the Trust Indenture
Act.
(xix) The execution, delivery and performance of the Purchase
Agreement, the Registration Rights Agreement, the Warrants, the Warrant
Agreement, the Warrant Registration Rights Agreement, the Indenture and
the Warrants and the Notes and the consummation of the transactions
contemplated in the Purchase Agreement and in the Offering Memorandum
(including the use of the proceeds from the sale of the Units as
described in the Offering Memorandum under the caption "Use of Proceeds")
and compliance by the Company with its obligations under the Purchase
Agreement, the Warrant Agreement, the Registration Rights Agreement, the
Warrant Registration Rights Agreement, the Indenture, Warrants and the
Notes will not, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or default under
or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or any other agreement or instrument, known to us, to which
the Company is a party or by which it may be bound, or to which any of
the property or assets of the Company is subject (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not reasonably be expected to have a Material Adverse Effect), nor
will such action result in any violation of the provisions of the charter
or by-laws of the Company, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company's properties, assets or operations.
(xx) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
1940 Act.
During the course of the preparation by the Company of the Offering
Memorandum, we have participated in conferences with your representatives and
counsel and with officers and
Exh-D-5
41
representatives of the Company, at which conferences the contents of the
Offering Memorandum were discussed, reviewed and revised, and, although we are
not passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements made in the Offering Memorandum
(except to the extent set forth in paragraph (xi) above), [on the basis of the
information which was developed in the course thereof,] considered in the light
of our understanding of applicable law and the experience we have gained
through our practice thereunder, we have no reason to believe that Offering
Memorandum, as of the date thereof, contained, or, as of the date hereof,
contains, any untrue statement of a material fact or omitted or, as of the date
hereof, omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made
when such documents were issued, not misleading; we do not express any opinion
or belief as to the financial statements and related notes and the other
financial data contained in the Offering Memorandum.
Whenever the phrase "to our knowledge" or a similar phrase is used herein
in connection with any matter, such phrase means that, with respect to such
matter, (i) we have made inquiry of executive officers of the Company and (ii)
we have inquired of those attorneys in our office who have spent significant
time representing the Company in connection with this transaction as to their
present knowledge of such matter. These attorneys include all of the attorneys
at Bryan Cave LLP who regularly represent the Company. Unless otherwise
specifically indicated, we have not undertaken any independent investigation to
determine the existence or absence of such facts, and no inference as to our
knowledge of the existence of such facts should be drawn from the fact of our
representation of the Company in this or other instances.
We express no opinion as to (a) whether any provisions of the Purchase
Agreement, the Securities, the Registration Rights Agreement and the Indenture
regarding waivers of rights or the effects of oral modifications are
enforceable or (b) the accuracy or completeness of the financial statements and
other financial and statistical data contained in the Offering Memorandum.
On the basis of the information which was developed in the course thereof,
to the best of our Knowledge, we have no reason to believe that there are
franchises, contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments or statutes or regulations that would be required to be
described in the Offering Memorandum that are not described or referred to in
the Offering Memorandum other than those described or referred to therein and
such references are accurate in all material respects.
This opinion is not rendered with respect to any laws other than the
federal laws of the United States and the laws of the State of New York and The
General and Business Corporation Law of the State of Missouri.
Notwithstanding any other provision herein, and without limiting the
generality of the preceding paragraph, no opinion is made herein, express or
implied, regarding the effect of provisions of any federal, Missouri or other
states' laws or regulations relating to utilities or
Exh-D-6
42
telephone companies or any other law or regulation applicable to the
Company as a company establishing and providing telecommunications services.
This opinion is delivered to you solely in connection with the Purchase
Agreement and by your acceptance of this opinion you agree that it may not be
used or relied upon by any person or entity other than the addressee hereof for
any purpose whatsoever, and may not be distributed to or relied upon by any
other person, without prior written consent.
Very truly yours,
BRYAN CAVE LLP
Exh-D-7
43
SCHEDULE A TO EXHIBIT D
Missouri Highway Contracts: Agreement regarding Fiber Optic Cable on Freeways in
Missouri, between Missouri Highway Transportation
Commission and Digital Teleport, Inc., dated July
29, 1994 as amended July 29, 1994, November 7,
1994, and October 9, 1996.
Arkansas Highway Contracts: Fiber Optic Cable Agreement, between Arkansas State
Highway and Transportation Department and Digital
Teleport, Inc., dated May 28, 1997.
Contracts with Major Customers:
ATT Agreement for the Provision of Telecommunications
Services and Facilities, between AT&T Corporation and
Digital Teleport, Inc., dated September 9, 1997.
Sprint IRU Agreement, between United Telephone Company of
Missouri and Digital Teleport, Inc., dated September 20,
1996.
MCI (1) IRU Agreement, between Digital Teleport Inc. and
MCIMetro Access Transmission Services, Inc., dated
October 3, 1995.
(2) Master Capacity Agreement Between MCIMetro
Access Transmission Services, Inc. and Digital
Teleport Inc., dated March 11, 1996.
(3) Master Service Agreement, Between Digital
Teleport Inc., and MCI Telecommunications
Corporation, dated September 6, 1996.
(4) Fiber Optic Communication Services Agreement
between Digital Teleport Inc., and MCIMetro
Access Transmission Services, Inc., dated October 3, 1995.
IXC Carrier (1) Installation Agreement
(Joplin/Anderson), between Digital Teleport Inc. and IXC
Carrier, Inc., dated October 31, 1996.
(2) Installation and IRU Agreement (Kansas
City/Joplin), between Digital Teleport Inc. and
IXC Carrier, Inc., dated October 7, 1996.
(3) Optical Fiber Maintenance Agreement, between
Digital Teleport, Inc. and IXC Carrier, Inc.,
dated October 7, 1996.
KCPL (1) Agreement of Merger, between KCDT L.L.C.
and Digital Teleport, Inc., dated September 23, 1997.
(2) Stock Purchase Agreement, between KLT
Telecom, Inc. and Digital Teleport, Inc., dated
December 31, 1996.
Exh-D-8
44
(3) Shareholders' Agreement, Richard Weinstein
and KLT Telecom, Inc., dated March 12, 1997.
(4) Guaranty Agreement, between Richard
Weinstein and KLT Telecom, Inc., dated December 31, 1996.
Union Electric (1) Agreement for the Provision of
Digital Transport Services, between Union Electric Co. and
Digital Teleport, Inc., dated July 29, 1994, as amended on
February 20, 1996.
(2) Network Services Agreement, between Union
Electric Company, and Digital Teleport, Inc.,
dated October 6, 1994, as amended on February 20,
1996 and November 18, 1996.
Principal Supplier Contracts:
Nortel (1) Network Products Purchase Agreement, between Northern
Telecom, Inc. and Digital Teleport, Inc., dated
October 15, 1997.
(2) Product Attachment, Carrier Networks
Products Agreement between Northern Telecom, Inc.
and Digital Teleport, Inc., dated October 15, 1997.
Ciena (1) Services and IRU Agreement, dated as of
March 12, 1997.
(2) Escrow Agreement, dated as of June 9, 1997.
Fujitsu Purchase Order No. A012794, between Fujitsu Network
Transmission Systems, Inc. and Digital Teleport, Inc.,
dated December 2, 1994.
Exh-D-9
45
Exhibit E
FORM OF OPINION OF
LUCAS MCGOWAN, NACE & GUTIERREZ, CHARTERED
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
We have acted as special communications counsel to the Company in
connection with the transaction set forth in the Agreement. The Company may
have employed separate counsel for other purposes. As special communications
counsel, unless otherwise stated, we address only matters within the
jurisdiction of the Federal Communications Commission ("FCC"). Unless
otherwise stated, the following opinions are based upon and concern only the
effect of the Communications Act of 1934, as amended (which amendments include,
but are not limited to, the Telecommunications Act of 1996), and the rules,
regulations and published policies of the FCC ("Communications Law").
In rendering this opinion we have examined and relied upon without
independent investigation as to matters of fact the following documents:
1. The Purchase Agreement;
2. The Indenture;
3. The Notes Registration Rights Agreement;
4. The Warrant Agreement;
5. The Warrant Registration Rights Agreement;
6. The Units;
7. The Notes;
8. The Warrants; and
9. Offering Memorandum
(Collectively, the "Transaction Agreements.") In addition, we have relied upon
a certificate of the Company that it has no FCC licenses, permits or
authorizations, and that the Company neither owns nor controls any facilities
for the transmission of energy or communications by radio or wire, nor does the
Company currently operate as an interstate common carrier pursuant to 47 U.S.C.
Section 201 et. seq. Collectively, our investigation referred to in this
paragraph is "Our Inquiry."
Exh-E-1
46
In making Our Inquiry, we have assumed, without independent verification,
(i) the genuineness of all signatures (whether original or photostatic) and the
authenticity of all documents submitted to us as originals; (ii) the conformity
to authentic original documents of all documents submitted to us as certified
or photostatic copies; (iii) that the signatures on all documents examined by
us are genuine; (iv) that where any such signature purports to have been made
in a corporate, governmental, fiduciary or other capacity, the person who
affixed such signature to such documents had authority to do so; and (v) the
correctness of public files, records and certificates furnished by,
governmental or regulatory agencies or authorities, except where we have
specific knowledge to the contrary. As to all questions of fact material to
this opinion, we have relied upon the representations and warranties of the
Company contained in the Transaction Agreements referred to above. We have
assumed, without independent verification, the accuracy of the relevant facts
stated therein.
When used in this opinion, the term "Our Knowledge" refers to the actual
current knowledge of the attorneys currently in this firm who have been
actively involved in the Company's representation. Whenever our opinion with
respect to the existence or nonexistence of facts is qualified by the phrase
"To Our Knowledge," or some similar phrase, it is intended to indicate that no
information has come to the attention of those attorneys in the course of our
representation that would give them actual knowledge that our opinion with
respect to the existence or nonexistence of such facts is inaccurate. We have
not, however, undertaken any independent investigation of the Company or its
facilities to determine the existence or nonexistence of such facts, other than
our review of those documents identified above. No inference as to our
knowledge of the existence or nonexistence of facts, other than facts of which
we have obtained actual knowledge as a result of our representation, should be
drawn from the fact of our representation of the Company as special
communications counsel. Our opinion, therefore, does not encompass any matter
which would be apparent, inter alia, only as a result of such investigation.
Whenever our opinion is qualified by the phrase "after Our Inquiry" or some
similar phrase, it is intended to indicate that we undertook Our Inquiry as
described herein, but did not undertake any independent investigation or
evaluation to confirm the accuracy or completeness of the responses of the
Company or FCC to Our Inquiry.
This opinion is governed by, and shall be interpreted in accordance with,
the Legal Opinion Accord of the ABA Section of Business law (1991). As a
consequence, it is subject to a number of qualifications, exceptions,
definitions, limitations on coverage and other limitations, all as more
particularly described in the Accord, and this opinion should be read in
conjunction therewith.
Subject to the qualifications, assumptions and limitations set forth
herein, we are of the opinion that:
(i) To Our Knowledge, after Our Inquiry, the statements in the Offering
Memorandum under the captions "Risk Factors -- Regulatory Risks," "Risk Factors
- -- Competition" and "Business -- Regulatory Matters, General Regulatory
Environment and Federal Regulation," to the extent that they constitute
matters of law, summaries of legal matters or
Exh-E-2
47
proceedings, or legal conclusions in connection with Communications Law, are
accurate and fair summaries of the matters discussed therein.
(ii) The execution, delivery and performance of the Company of its
obligations under the Transaction Agreements will not contravene, violate or
conflict with the Communications Law; and no consent, approval, authorization
or order or qualification with the FCC is required for performance by the
Company of its obligations thereunder.
(iii) To our Knowledge, after Our Inquiry, the Company has made all
material reports and filings, and paid all fees, required by the FCC applicable
to the Company or its existing operations as they are described in the Offering
Memorandum, and has all such licenses, certificates, orders, permits,
authorizations, consents and approvals of and from the FCC as are necessary to
own, lease, license and use its properties and assets and for the operation of
its business as it we understand currently exists.
(iv) To Our Knowledge, after Our Inquiry, no proceeding has been
instituted or is threatened in writing by the FCC against the Company which if
decided adversely with respect to the company would have a materially adverse
affect on the company's operations in the aggregate; and
(v) We have not been retained to devote substantial attention to any
matter or claim which, if true, would constitute a material violation of the
Communications Law by the Company.
This opinion is being provided to you only for your use in connection with
the Agreement and may not be quoted to, copied, delivered to, or relied upon by
anyone other than you in connection with the Agreement, and for no other
purpose, without our prior written consent. This opinion is effective only as
of the date hereof and we undertake no professional responsibility to advise
you as to any subsequent event either in the nature of a change of fact or law,
as to which we may become aware. This opinion should not be assumed to state
general principles of law applicable to transactions of this kind.
Lukas, McGowan, Nace & Gutierrez, Chartered
Exh-E-3
48
Exhibit F
FORM OF OPINION OF HENDREN & ANDRAE, LLC,
SPECIAL MISSOURI REGULATORY COUNSEL TO THE COMPANY,
TO BE DELIVERED PURSUANT TO
SECTION 5(c)
(1) The information in the Offering Memorandum under the captions "Risk
Factors - General Regulatory Framework," "Risk Factors - Competition" and
"Business - Telecommunications Regulations," to the extent that it constitutes
matters of law, summaries of legal matters or proceedings, or legal
conclusions, are accurate and fairly summarize the matters discussed therein.
(2) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, the Purchase Agreement, the Indenture,
the Notes Registration Rights Agreement, the Warrant Agreement, the Warrant
Registration Rights Agreement, the Warrants and the Securities will not
contravene, violate or conflict with any Missouri State telecommunications law,
rules or regulations ("State Law") or applicable to the Company or result in
termination or revocation of any of the Company's Missouri State authority
overseeing telecommunications matters ("State Authority"). Further, the
Company is not in violation of, or in default under, any other Missouri State
telecommunications law.
(3) The Company has made all reports and filings, and paid all fees,
required by the Missouri State authorities, and has all such licenses,
certificates, orders, permits, authorizations, consents and approvals of and
from and has made all filings and registrations with, the Missouri State
authorities as is necessary to own, lease , license and use its properties and
assets and for the lawful operation of its business in the manner and to the
full extent now operated or proposed to be operated as described in the Final
Memorandum. The Company's Missouri State Telecommunications Licenses are in
full force and effect and, to the best of such counsel's knowledge, no
proceeding has been instituted or is threatened, pending or contemplated, which
in any manner affects or draws into question the validity or effectiveness
thereof; such Missouri State Telecommunications Licenses contain no materially
burdensome restrictions not customarily imposed by the Missouri State
authorities on telecommunication companies of the same class and type.
Exh-F-1
49
Exhibit G
FORM OF OPINION OF WRIGHT, LINDSEY & JENNINGS, LLP,
SPECIAL ARKANSAS REGULATORY COUNSEL TO THE COMPANY,
TO BE DELIVERED PURSUANT TO
SECTION 5(d)
(1) The information in the Offering Memorandum under "Risk Factors -
General Regulatory Framework," "Risk Factors -- Competition" and "Business --
Telecommunications Regulations," to the extent that it constitutes matters of
law, summaries of legal matters or proceedings, or legal conclusions, are
accurate and fairly summarize the matters discussed therein.
(2) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, the Purchase Agreement, the Indenture,
the Notes Registration Rights Agreement, the Warrant Agreement, the Warrant
Registration Rights Agreement, the Warrants and the Securities will not
contravene, violate or conflict with any Arkansas State telecommunications law,
rules or regulations ("State Law") or applicable to the Company or result in
termination or revocation of any of the Company's Arkansas State authority
overseeing telecommunications matters ("State Authority"). Further, the
Company is not in violation of, or in default under, any other Arkansas State
telecommunications law.
(3) The Company has made all reports and filings, and paid all fees,
required by the Arkansas State authorities, and has all such licenses,
certificates, orders, permits, authorizations, consents and approvals of and
from and has made all filings and registrations with, the Arkansas State
authorities as is necessary to own, lease , license and use its properties and
assets and for the lawful operation of its business in the manner and to the
full extent now operated or proposed to be operated as described in the Final
Memorandum. The Company's Arkansas State Telecommunications Licenses are in
full force and effect and, to the best of such counsel's knowledge, no
proceeding has been instituted or is threatened, pending or contemplated, which
in any manner affects or draws into question the validity or effectiveness
thereof; such Arkansas State Telecommunications Licenses contain no materially
burdensome restrictions not customarily imposed by the Arkansas State
authorities on telecommunication companies of the same class and type.
50
FORM OF OPINION OF EVANS & DIXON
TO BE DELIVERED PURSUANT TO
SECTION 5(e)
(1) The information set forth in the Offering Memorandum in the first
paragraph under "Business -- Litigation," in each case insofar as such
statements constitute a summary of legal matters, documents or proceedings
referred to therein, fairly summarizes the matters referred to therein in all
material respects.