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Exhibit 1.3
AETHER SYSTEMS, INC.
(a Delaware corporation)
___% Convertible Subordinated Notes due 2005
PURCHASE AGREEMENT
Dated: March ____, 2000
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TABLE OF CONTENTS
Page
SECTION 1. Representations and Warranties............................................................. 3
(a) Representations and Warranties by the Company....................................................... 3
(i) Compliance with Registration Requirements................................................ 3
(ii) Independent Accountants.................................................................. 4
(iii) Financial Statements..................................................................... 4
(iv) No Material Adverse Change in Business................................................... 5
(v) Good Standing of the Company............................................................. 6
(vi) Good Standing and Ownership of Subsidiaries.............................................. 6
(vii) Capitalization........................................................................... 6
(viii) Authorization of Agreement............................................................... 7
(ix) Authorization of the Indenture........................................................... 7
(x) Authorization of the Securities.......................................................... 7
(xi) Description of the Securities and the Indenture.......................................... 7
(xii) Authorization and Description of Common Stock............................................ 7
(xiii) Absence of Defaults and Conflicts........................................................ 8
(xiv) Absence of Labor Dispute................................................................. 8
(xv) Absence of Proceedings................................................................... 8
(xvi) Accuracy of Exhibits..................................................................... 9
(xvii) Possession of Intellectual Property...................................................... 9
(xviii) Absence of Further Requirements.......................................................... 9
(xix) Possession of Licenses and Permits....................................................... 9
(xx) Title to Property........................................................................ 10
(xxi) Compliance with Cuba Act................................................................. 10
(xxii) Investment Company Act................................................................... 10
(xxiii) Environmental Laws....................................................................... 10
(xxiv) Registration Rights...................................................................... 11
(xxv) Dividends and Distributions.............................................................. 11
(xxvi) Taxes.................................................................................... 11
(xxvii) Insurance................................................................................ 11
(xxviii) ERISA.................................................................................... 11
(xxix) Year 2000 Compliance..................................................................... 12
(a1) Representations and Warranties by the Company with respect to OmniSky............................... 12
(i) Good Standing and Ownership of OmniSky................................................... 12
(ii) No Material Adverse Change in Business................................................... 12
(iii) Certain Representations and Warranties as to the OmniSky
Series B Preferred Stock Purchase Agreement.............................................. 13
(b) Officer's Certificates.............................................................................. 13
SECTION 2. Sale and Delivery to Underwriters; Closing................................................. 13
(a) Initial Securities.................................................................................. 13
(b) Option Securities................................................................................... 13
(c) Payment............................................................................................. 14
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(d) Denominations; Registration......................................................................... 14
SECTION 3. Covenants of the Company................................................................... 14
(a) Compliance with Securities Regulations and Commission Requests...................................... 14
(b) Filing of Amendments................................................................................ 15
(c) Delivery of Registration Statements................................................................. 15
(d) Delivery of Prospectuses............................................................................ 15
(e) Continued Compliance with Securities Laws........................................................... 15
(f) Blue Sky Qualifications............................................................................. 16
(g) Rule 158............................................................................................ 16
(h) Use of Proceeds..................................................................................... 16
(j) Listing............................................................................................. 16
(i) Restriction on Sale of Securities................................................................... 16
(k) Restriction on Sale of Common Stock................................................................. 17
(l) Reporting Requirements.............................................................................. 17
(m) Compliance with Rule 463............................................................................ 17
SECTION 4. Payment of Expenses........................................................................ 17
(a) Expenses............................................................................................ 17
(b) Termination of Agreement............................................................................ 18
SECTION 5. Conditions of Underwriters' Obligations.................................................... 18
(a) Effectiveness of Registration Statement............................................................. 18
(b) Opinion of Counsel for Company...................................................................... 18
(c) Opinion of Counsel for Underwriters................................................................. 18
(d) Officers' Certificate............................................................................... 19
(e) Accountants' Comfort Letters........................................................................ 19
(f) Bring-down Comfort Letters.......................................................................... 19
(g) Approval of Listing................................................................................. 19
(h) No Objection........................................................................................ 19
(i) Lock-up Agreements.................................................................................. 20
(j) Conditions to Purchase of Option Securities......................................................... 20
(i) Officers' Certificate.................................................................... 20
(ii) Opinion of Counsel for Company........................................................... 20
(iii) Opinion of Counsel for Underwriters...................................................... 20
(iv) Bring-down Comfort Letters............................................................... 20
(k) Additional Documents................................................................................ 20
(l) Termination of Agreement............................................................................ 20
SECTION 6. Indemnification............................................................................ 21
(a) Indemnification of U.S. Underwriters................................................................ 21
(b) Indemnification of Company, Directors and Officers.................................................. 22
(c) Actions against Parties; Notification............................................................... 22
(d) Settlement without Consent if Failure to Reimburse.................................................. 22
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SECTION 7. Contribution............................................................................... 23
SECTION 8. Representations, Warranties and Agreements to Survive Delivery............................. 24
SECTION 9. Termination of Agreement................................................................... 24
(a) Termination; General................................................................................ 24
(b) Liabilities......................................................................................... 24
SECTION 10. Default by One or More of the Underwriters................................................. 25
SECTION 11. Notices.................................................................................... 25
SECTION 12. Parties.................................................................................... 25
SECTION 13. GOVERNING LAW AND TIME..................................................................... 26
SECTION 14. Effect of Headings......................................................................... 26
SCHEDULES
Schedule A - List of Underwriters ................................................................ Sch A-1
Schedule B - $___,000,000 __% Convertible Subordinated Notes due 2005 ........................... Sch B-1
Schedule C - 90-Day Lock-up List ................................................................. Sch C-1
Schedule D - 10/21/00 Lock-up List ............................................................... Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel ..................................................... 1
Exhibit B - Form of 90-Day Lock-up Letter ............................................................ 1
Exhibit C - Form of 10/21/00 Lock-up Letter .......................................................... 1
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AETHER SYSTEMS, INC.
(a Delaware corporation)
$___,000,000
___% Convertible Subordinated Notes due 2005
PURCHASE AGREEMENT
March ___, 2000
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Bear Xxxxxxx & Co. Inc.
Friedman, Billings, Xxxxxx & Co., Inc.
as Representatives of the several U.S. Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Aether Systems, Inc., a Delaware corporation (the "Company"), confirms
its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Xxxxxxx Xxxxx, FleetBoston Xxxxxxxxx Xxxxxxxx Inc., Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation, U.S. Bancorp Xxxxx Xxxxxxx Inc., Bear,
Xxxxxxx & Co. Inc. and Friedman, Billings, Xxxxxx & Co., Inc. are acting as
representatives (in such capacity, the "Representatives"), with respect to the
issue and sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective principal amounts set forth in
Schedule A hereto of $___,000,000 aggregate principal amount of the Company's
___% Convertible Subordinated Notes due 2005 (the ("Notes"), and with respect to
the grant by the Company to the Underwriters, acting severally and not jointly,
of the option described in Section 2(b) hereof to purchase all or any part of an
additional $___,000,000 principal amount of Notes to cover over-allotments, if
any. The aforesaid $___,000,000 principal amount of Notes (the "Initial
Securities") to be purchased by the Underwriters and all or any part of the
$___,000,000 principal amount of Notes subject to the option described in
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Section 2(b) hereof (the "Option Securities") are hereinafter called,
collectively, the "Securities". The Securities are to be issued pursuant to an
indenture dated as of March __, 2000 (the "Indenture") between the Company and
First Union National Bank, as trustee (the "Trustee").
The Securities are convertible into shares of common stock, par value
.01 per share, of the Company (the "Common Stock") in accordance with the terms
of the Securities and the Indenture, at the initial conversion price specified
in Schedule B hereto.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered and the Indenture has been
qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act").
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "U.S. Common Purchase Agreement"),
providing for (i) the offering by the Company and the shareholders of the
Company named therein (the "Selling Shareholders"), acting severally and not
jointly, of an aggregate of 2,550,000 shares of Common Stock (the "Initial U.S.
Common Securities") through arrangements with the underwriters named therein
(the "Common Underwriters") for which the Representatives are acting as
representatives, and (ii) the grant by the Company and the Selling Shareholders
to the Underwriters, acting severally and not jointly, of an option to purchase
all or any part of the Underwriters' pro rata portion of up to 382,500
additional shares of Common Stock solely to cover over-allotments, if any (the
"U.S. Common Option Securities"). The Initial U.S. Common Securities and the
U.S. Common Option Securities are hereinafter called the "U.S. Common
Securities".
It is also understood that the Company is concurrently entering into an
agreement dated the date hereof (the "International Common Purchase Agreement"
and, together with the U.S. Common Purchase Agreement, the "Common Purchase
Agreements") providing for (i) the offering by the Company and the Selling
Shareholders, acting severally and not jointly, of an aggregate of 450,000
shares of Common Stock (the "Initial International Common Securities") through
arrangements with certain underwriters outside the United States and Canada (the
"International Managers") for which Xxxxxxx Xxxxx International is acting as
lead manager (the "Lead Manager"), and (ii) the grant by the Company and the
Selling Shareholders to the International Managers, acting severally and not
jointly, of an option to purchase all or any part of the International Managers'
pro rata portion of up to 67,500 additional shares of Common Stock solely to
cover over-allotments, if any (the "International Common Option Securities").
The Initial International Common Securities and the International Common Option
Securities are hereinafter called the "International Common Securities". The
U.S. Common Securities and the International Common Securities are hereinafter
called the "Common Securities." The offering of the Common Securities by the
Common Underwriters and the International Managers is referred to herein as the
"Concurrent Common Offering."
Neither the offer and sale of the Securities contemplated hereby nor
the offer and sale of Common Securities contemplated by the Common Purchase
Agreements is conditioned upon consummation of the other.
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The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-30852) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b).
The information included in any such prospectus or in any such Term
Sheet, as the case may be, that was omitted from such registration statement at
the time it became effective but that is deemed to be part of such registration
statement at the time it became effective (i) pursuant to paragraph (b) of Rule
430A is referred to as "Rule 430A Information" or (ii) pursuant to paragraph (d)
of Rule 434 is referred to as "Rule 434 Information." Each prospectus used
before such registration statement became effective, and any prospectus that
omitted, as applicable, the Rule 430A Information or the Rule 434 Information,
that was used after such effectiveness and prior to the execution and delivery
of this Agreement, is herein called a "preliminary prospectus." Such
registration statement, including the exhibits thereto and schedules thereto at
the time it became effective and including the Rule 430A Information and the
Rule 434 Information, as applicable, but excluding the prospectuses relating to
the Concurrent Common Offering, is herein called the "Registration Statement."
Any registration statement filed pursuant to Rule 462(b) of the 1933 Act
Regulations is herein referred to as the "Rule 462(b) Registration Statement,"
and after such filing the term "Registration Statement" shall include the Rule
462(b) Registration Statement. The final prospectus, in the form first furnished
to the Underwriters for use in connection with the offering of the Securities is
herein called the "Prospectus." If Rule 434 is relied on, the term "Prospectus"
shall refer to the preliminary prospectus dated March 1, 2000, together with the
applicable Term Sheet and all references in this Agreement to the date of the
Prospectus shall mean the date of the applicable Term Sheet. For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("XXXXX").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents and
warrants to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of
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the Company, are contemplated by the Commission, and any request on the
part of the Commission for additional information has been complied
with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
the 1939 Act and the rules and regulations of the Commission under the
1939 Act (the "1939 Act Regulations"), did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. Neither the Prospectus nor any amendments or
supplements thereto (including any prospectus wrapper), at the time the
Prospectus or any amendments or supplements were issued and at the
Closing Time (and, if any U.S. Option Securities are purchased, at the
Date of Delivery), included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434
is used, the Company will comply with the requirements of Rule 434 and
the Prospectus shall not be "materially different", as such term is
used in Rule 434, from the prospectus included in the Registration
Statement at the time it became effective. The representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or the Prospectus made in
reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through Xxxxxxx Xxxxx expressly
for use in the Registration Statement or the Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent permitted
by Regulation S-T.
(ii) Independent Accountants. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements.
(A) The financial statements included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the
Company and its consolidated Subsidiaries (as defined below) at the
dates indicated and the results of operations, stockholders' equity and
cash flows of the Company and the consolidated Subsidiaries for the
periods specified; said financial
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statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved. The supporting schedules included in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data
and the summary financial information included in the Prospectus
present fairly the information shown therein and have been compiled on
a basis consistent with that of the audited financial statements
included in the Registration Statement.
(B) The financial statements of Mobeo, Inc. ("Mobeo")
and Riverbed Technologies, Inc. ("Riverbed") included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the respective financial condition
of Mobeo and Riverbed at the dates indicated and the respective results
of operations, changes in stockholders' equity and cash flows of Mobeo
and Riverbed for the periods specified; said financial statements have
been prepared in conformity with GAAP applied on a consistent basis
throughout the periods involved. The selected financial data and the
summary financial information of Mobeo and Riverbed included in the
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements of Mobeo and Riverbed included in the Registration
Statement.
(C) The pro forma financial statements and the
related notes thereto included in the Registration Statement and the
Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein.
(D) The Company and each of the Subsidiaries maintain
a system of internal accounting controls sufficient to provide
reasonable assurance that (w) transactions are executed in accordance
with management's general or specific authorization; (x) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with GAAP, as applicable, and to maintain asset
accountability; (y) access to assets is permitted only in accordance
with management's general or specific authorization; and (z) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, 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 the Subsidiaries considered as one
enterprise, 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 or any of the Subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and the Subsidiaries considered as one
enterprise, and (C) there has been no dividend or
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distribution of any kind declared, paid or made by the Company on any
class of its equity interests or capital stock, as applicable.
(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and to enter into and perform
its obligations under this Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing
in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(vi) Good Standing and Ownership of Subsidiaries. Each
subsidiary of the Company (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation or limited liability company in good standing under the
laws of the jurisdiction of its incorporation or formation, has
corporate or limited liability company 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 or limited liability company to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Registration Statement, all of the
issued and outstanding capital stock or other equity interests 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 or other equity interests of any
Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Subsidiary. The only Subsidiaries are the
Subsidiaries listed on Exhibit 21 to the Registration Statement.
(vii) Capitalization. (a) The authorized, issued and
outstanding capital stock of the Company is set forth in the Prospectus
in the column entitled "Acquisitions" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to
this Agreement, the U.S. Common Purchase Agreement and the
International Common Purchase Agreement, pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectus or
pursuant to the exercise of convertible securities or options referred
to in the Prospectus). The shares of issued and outstanding capital
stock of the Company, including the Common Securities to be purchased
by the Underwriters from the Selling Shareholders pursuant to the
Concurrent Common Offering, 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, including the Common Securities
to be purchased by the Underwriters from the Selling Shareholders
pursuant to the Concurrent Common Offering, was issued in violation of
the preemptive or other similar rights of any securityholder of the
Company.
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(b) The shares of Common Stock and options
exercisable for Common Stock issued pursuant to the Agreement and Plan
of Merger, dated February 9, 2000, by and among the Company, RT
Acquisition, Inc. and Riverbed, were issued pursuant to valid
exemptions from the registration requirements of the 1933 Act and the
1933 Act Regulations, and were otherwise issued in compliance with all
applicable securities laws.
(viii) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
(ix) Authorization of the Indenture. The Indenture has been
duly authorized by the Company and duly qualified under the 1939 Act
and, when duly executed and delivered by the Company and 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).
(x) Authorization of the Securities. The Securities have been
duly authorized and, at the Closing Time, will have been duly executed
by the Company and, when authenticated, issued and delivered in the
manner provided for in the Indenture and delivered against payment of
the purchase price therefor as provided in this Agreement, 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 will be in the form contemplated by, and entitled to the benefits
of, the Indenture.
(xi) Description of the Securities and the Indenture. The
Securities and the Indenture will conform in all material respects to
the respective statements relating thereto contained in the Prospectus
and will be in substantially the respective forms filed as exhibits to
the Registration Statement.
(xii) Authorization and Description of Common Stock. The
Common Stock conforms to all statements relating thereto contained in
the Prospectus and such description conforms to the rights set forth in
the instruments defining the same. Upon issuance and delivery of the
Securities in accordance with this Agreement and the Indenture, the
Securities will be convertible at the option of the holder thereof for
shares of Common Stock in accordance with the terms of the Securities
and the Indenture; the shares of Common Stock issuable upon conversion
of the Securities have been duly authorized and reserved for issuance
upon such conversion by all necessary corporate action and such shares,
when issued upon such conversion, will be validly issued and will be
fully paid and non-assessable; no holder of such shares will be subject
to personal
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liability by reason of being such a holder; and the issuance of such
shares upon such conversion will not be subject to the preemptive or
other similar rights of any securityholder of the Company.
(xiii) Absence of Defaults and Conflicts. Neither the Company
nor any of the Subsidiaries is in violation of its charter or by-laws
or similar documents or 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 the Company or
any of the Subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or any
Subsidiary is subject (collectively, "Agreements and Instruments")
except for such defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement,
the Indenture and the Securities and the consummation of the
transactions contemplated in this Agreement and in the Registration
Statement (including the issuance and sale of the Securities and the
use of the proceeds from the sale of the Securities as described in the
Prospectus under the caption "Use of Proceeds" and the issuance of the
shares of Common Stock issuable upon conversion of the Securities) and
compliance by the Company with its obligations under this Agreement,
the Indenture and the Securities have been duly authorized by all
necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or by-laws or
similar documents of the Company or any Subsidiary or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their
assets, properties or operations. 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
any Subsidiary.
(xiv) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any 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
or any Subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(xv) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any Subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be
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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 this Agreement and the International Purchase 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 any Subsidiary is a party or of
which any of their respective property or assets is the subject which
are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.
(xvi) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits thereto which
have not been so described and filed as required.
(xvii) Possession of Intellectual Property. Except to the
extent described in the Registration Statement, the Company and the
Subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable 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 any of the Subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of the
Subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xviii) 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 for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance or
sale of the Securities under this Agreement, the issuance of shares of
Common Stock upon conversion of Securities or the consummation of the
transactions contemplated by this Agreement or for the due execution,
delivery or performance of the Indenture by the Company, except such as
have been already obtained or as may be required under the 1933 Act or
the 1933 Act Regulations or state securities laws and except for
qualification of the Indenture under the 1939 Act.
(xix) Possession of Licenses and Permits. The Company and the
Subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them; the
Company and the Subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are
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valid and in full force and effect, except where the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to
be in full force and effect would not have a Material Adverse Effect;
and neither the Company nor any of the Subsidiaries 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.
(xx) Title to Property. The Company and the Subsidiaries have
good and marketable title to all real property owned by the Company and
the Subsidiaries and good title to all other properties owned by them,
in each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Prospectus or (b) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by
the Company or any of the Subsidiaries; and all of the leases and
subleases material to the business of the Company and the Subsidiaries,
considered as one enterprise, and under which the Company or any of the
Subsidiaries holds properties described in the Prospectus, are in full
force and effect, and neither the Company nor any 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 any Subsidiary under any
of the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or such Subsidiary to the continued
possession of the leased or subleased premises under any such lease or
sublease.
(xxi) Compliance with Cuba Act. The Company has complied with,
and is and will be in compliance with, the provisions of that certain
Florida act relating to disclosure of doing business with Cuba,
codified as Section 517.075 of the Florida statutes, and the rules and
regulations thereunder (collectively, the "Cuba Act") or is exempt
therefrom.
(xxii) 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
Prospectus 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").
(xxiii) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of the Subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and the Subsidiaries
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have all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or
proceedings relating to any Environmental Law against the Company or
any of the Subsidiaries 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 any of the Subsidiaries relating to Hazardous Materials or
any Environmental Laws.
(xxiv) Registration Rights. Except as described in the
Registration Statement under the heading "Transactions Between Aether
and its Officers, Directors or Significant Stockholders" or
"Description of Capital Stock," there are no persons with registration
rights or other similar rights to have any securities registered
pursuant to the Registration Statement or otherwise registered by the
Company under the 1933 Act.
(xxv) Dividends and Distributions. No Subsidiary is currently
prohibited, directly or indirectly, from paying any dividends to the
Company, making any other distribution on such Subsidiary's capital
stock, repaying to the Company any loans or advances to such Subsidiary
from the Company, or transferring any of such Subsidiary's property or
assets to the Company or any other Subsidiary.
(xxvi) Taxes. The Company and each of the Subsidiaries have
filed all foreign, federal, state and local tax returns that are
required to be filed or has requested extensions thereof (except in any
case in which the failure so to file would not result in a Material
Adverse Effect) and have paid all taxes required to be paid by them and
any other assessment, fine or penalty levied against them, to the
extent that any of the foregoing is due and payable, except for any
such assessment, fine or penalty that is currently being contested in
good faith.
(xxvii) Insurance. The Company and each of the Subsidiaries
are insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged; neither the Company nor
any such Subsidiary has been refused any insurance coverage sought or
applied for; and neither the Company nor any such Subsidiary has any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.
(xxviii) ERISA. The Company and each of the Subsidiaries are
each in compliance in all material respects with all presently
applicable provisions of ERISA; no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company or any Subsidiary would have any
liability; neither the Company nor any Subsidiary has incurred and nor
expects to incur liability under (A) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (B) Sections
412 or 4971 of the United States Internal Revenue
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Code (the "Code"); and each "pension plan" for which the Company or any
Subsidiary would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification.
(xxix) Year 2000 Compliance. The Company has reviewed its
operations and those of the Subsidiaries to evaluate the extent to
which the business or operations of the Company or any of the
Subsidiaries have been affected by any Year 2000 Problem (as defined
below); (i) as a result of such review, the Company does not believe
that (A) there have been any issues related to the Company's or any
Subsidiary's failure to address any Year 2000 Problem that are of a
character required to be described or referred to in the Prospectuses
which have not been accurately described in the Prospectuses, and (B)
except to the extent disclosed in the Prospectuses, the Year 2000
Problem has had a Material Adverse Effect; and (ii) the Company has
inquired whether the suppliers, vendors, customers or other material
third parties used or served by the Company and the Subsidiaries have
addressed any Year 2000 Problem in a timely manner, except to the
extent that a failure to address any Year 2000 Problem by any supplier,
vendor, customer or material third party would not have a Material
Adverse Effect. "Year 2000 Problem" means any actual occurrence where,
or significant risk that, the Company's computer hardware or software
applications and those of the Subsidiaries (or of any suppliers,
vendors or other material third parties) have not functioned or will
not function, in each case for dates or time periods occurring after
December 31, 1999, at least as effectively as in the case of dates or
time periods occurring prior to January 1, 2000.
(a1) Representations and Warranties by the Company with respect to
OmniSky. The Company represents and warrants to each Underwriter as of the date
hereof (except as to the representation and warranty set forth in the first
sentence of Section (a1)(iii), which representation and warranty is made as of
January 18, 2000), and the Company represents and warrants as of the Closing
Time referred to in Section 2(c) hereof and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof (except as to the representation and warranty
set forth in the first sentence of Section (a1)(iii), which representation and
warranty is made as of January 18, 2000), as follows:
(i) Good Standing and Ownership of OmniSky. Airweb Corporation
d/b/a OmniSky ("OmniSky") has been duly organized and is validly
existing as a corporation in good standing under the laws of Delaware.
Except as otherwise disclosed in the Registration Statement, Aether
OpenSky Investments LLC, a Delaware limited liability company and
wholly-owned subsidiary of the Company ("OpenSky Investments"), owns
10,000,000 shares of Series A Preferred Stock of OmniSky and 1,439,809
shares of Series B Preferred Stock of OmniSky, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity
other than rights of first refusal and co-sale set forth in the related
purchase agreements. To the knowledge of the Company, such 10,000,000
shares of Series A Preferred Stock and 1,439,809 shares of Series B
Preferred Stock constitute 33% of the equity interests of OmniSky on a
fully diluted basis.
(ii) No Material Adverse Change in Business. To the knowledge
of the Company, since the respective dates as of which information is
given in the Registration
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Statement and the Prospectuses, except as otherwise stated therein,
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of OmniSky, whether or not arising in the ordinary course of
business.
(iii) Certain Representations and Warranties as to the OmniSky
Series B Preferred Stock Purchase Agreement. Except as set forth in the
schedule of exceptions attached thereto, all of the representations and
warranties (the "January OmniSky Representations") set forth in the
Series B Preferred Stock Purchase Agreement, dated as of January 18,
2000, between OmniSky and OmniSky Investments, were true and correct
with respect to OmniSky as of January 18, 2000. To the knowledge of the
Company, all of the January OmniSky Representations are true and
correct with respect to OmniSky.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company or any of the Subsidiaries delivered to the Representatives
or to counsel for the Underwriters shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial 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 each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price set forth in Schedule B, the aggregate principal
amount of Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional principal amount of Initial Securities which
such Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional $___,000,000 principal amount
of Securities at the same price set forth in Schedule B, for the Initial
Securities, plus accrued interest, if any, from the Closing Date to the Date of
Delivery (as defined below). The option hereby granted will expire 30 days after
the date hereof and may be exercised in whole or in part from time to time only
for the purpose of covering over-allotments which may be made in connection with
the offering and distribution of the Initial Securities upon notice by the
Representatives to the Company setting forth the number of Option Securities as
to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Securities. Any such time and
date of delivery for the Option Securities (a "Date of Delivery") shall be
determined by the Representatives, but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, as hereinafter defined. If the option is exercised as to all or
any portion of the Option Securities, each of the Underwriters, acting severally
and not jointly, will purchase that proportion of the total number of Option
Securities then being purchased which the number of Initial Securities set forth
in Schedule A opposite the name of such Underwriter bears to the total number of
Initial Securities.
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(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Xxxxx &
Xxxxxxx L.L.P., 000 00xx Xxxxxx, X.X., Xxxxxxxxxx, XX 00000, or at such other
place as shall be agreed upon by the Representatives and the Company, at 9:00
A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of payment and delivery
being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
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 Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Xxxxxxx Xxxxx, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. The Notes representing the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
one full business day before the Closing Time or the relevant Date of Delivery,
as the case may be. The Notes for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company.
The Company covenants with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Representatives immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order
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suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
will furnish the Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or counsel
for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the Securities
Exchange Act of 1934 (the "1934 Act"), such number of copies of the Prospectus
(as amended or supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations and the 1939 Act and the 1939 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required by
the 1933 Act to be delivered in connection with sales of the Securities, any
event shall occur or condition shall exist as a result of which it is necessary,
in the opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend
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or supplement the Prospectus in order that the Prospectus will not include any
untrue statements of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriters such number
of copies of such amendment or supplement as the Underwriters may reasonably
request.
(f) Blue Sky Qualifications . The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities and the shares of
Common Stock issuable upon conversion of the Securities for offering and sale
under the applicable securities laws of such states and other jurisdictions as
the Representatives may designate and to maintain such qualifications in effect
for a period of not less than one year from the later of the effective date of
the Registration Statement and any Rule 462(b) Registration Statement; 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. In each jurisdiction in which the Securities have
been so qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement. The Company
will also supply the Underwriters with such information as is necessary for the
determination of the legality of the Securities for investment under the laws of
such jurisdictions as the Underwriters may request.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect and
maintain the listing of the shares of Common Stock issuable upon conversion of
the Securities on the Nasdaq National Market and will file with the Nasdaq
National Market all documents and notices required by the Nasdaq National Market
of companies that have securities that are traded in the over-the-counter market
and quotations for which are reported by the Nasdaq National Market.
(j) Restriction on Sale of Securities. During a period of 90 days from
the date of the Prospectus, the Company will not, without the prior written
consent of Xxxxxxx Xxxxx, directly or indirectly, issue, sell, offer or contract
to sell, grant any option for the sale of, or otherwise transfer or dispose of,
any debt securities of the Company.
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(k) Restriction on Sale of Common Stock. During a period of 90 days
from the date of the Prospectus, the Company will not, without the prior written
consent of Xxxxxxx Xxxxx (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any share of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Securities to be sold under the U.S. Purchase Agreement or the International
Purchase Agreement or the Securities to be sold under this Agreement, (B) any
shares of Common Stock issued by the Company upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof and
referred to in the Prospectuses or any Convertible Note, (C) any shares of
Common Stock issued or options to purchase Common Stock granted pursuant to
existing employee benefit plans of the Company referred to in the Prospectuses,
(D) any shares of Common Stock issued pursuant to any non-employee director
stock plan or dividend reinvestment plan, or (E) any shares of Common Stock
issued in connection with a stock split involving the Common Stock approved by
the board of directors and stockholders of the Company pursuant to applicable
law.
(l) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(m) Compliance with Rule 463. The Company will comply with Rule 463 of
the 1933 Act Regulations.
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 filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters, the Indenture and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities or the issuance or delivery of the Common
Stock issuable upon conversion thereof, (iii) the preparation, issuance and
delivery of the Notes representing the Securities to the Underwriters and the
certificates for Common Stock issuable upon conversion thereof, (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Securities and the Common Stock under securities laws
in accordance with the provisions of Section 3(f) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, any Term Sheets and of
the Prospectus and any amendments or supplements thereto, (vii) the preparation,
printing and
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delivery to the Underwriters of copies of the Blue Sky Survey and any supplement
thereto, (viii) 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, (ix) the fees and expenses of any transfer agent or registrar
for the Securities, (x) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by
the NASD of the terms of the sale of the Securities and (xi) the fees and
expenses incurred in connection with the listing of the Common Stock issuable
upon conversion of the Securities on the Nasdaq National Market.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any Subsidiary 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) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxx, Xxxxxx & Xxxxxxxxx, counsel for the Company, in form and
substance reasonably satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters to
the effect set forth in Exhibit A hereto and to such further effect as counsel
to the Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Xxxxx & Xxxxxxx L.L.P., counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters
with respect to the matters set forth in clauses (i), (ii), (vi) through (ix),
inclusive, (x) (solely as to preemptive or other similar rights arising by
operation of law or under the charter or by-laws of the Company), (xi) through
(xiv), inclusive, (xvi), (xviii) (solely as to the information in the Prospectus
under "Description of Capital Stock --Common Stock") and the penultimate
paragraph of Exhibit A hereto. In giving such opinion such counsel may rely, as
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to all matters governed by the laws of jurisdictions other than the law of the
State of New York and the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representatives. 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 the Subsidiaries
and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, 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, and the Representatives shall have
received a certificate of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) and Section
1(a1) (except to the extent such representations and warranties are made as of
January 18, 2000) hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iii) the Company has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or are contemplated by the
Commission.
(e) Accountants' Comfort Letters. At the time of the execution of this
Agreement, the U.S. Representatives shall have received from KPMG LLP and
PricewaterhouseCoopers LLP letters dated such date, in form and substance
satisfactory to the Representatives, together with signed or reproduced copies
of such letters for each of the other Underwriters containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information (including, in the case of KPMG LLP, pro forma financial
information) contained in the Registration Statement and the Prospectuses.
(f) Bring-down Comfort Letters. At Closing Time, the Representatives
shall have received from KPMG LLP and PricewaterhouseCoopers LLP letters, dated
as of Closing Time, to the effect that they reaffirm the statements made in the
letters furnished pursuant to subsection (e) of this Section, except that the
specified date referred to shall be a date not more than three business days
prior to Closing Time.
(g) Approval of Listing. At Closing Time, the Common Stock issuable
upon conversion of the Securities shall have been approved for listing on the
Nasdaq National Market, subject only to official notice of issuance.
(h) No Objection. The NASD shall have confirmed that it has not raised
any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
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(i) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received (i) an agreement substantially in the form
of Exhibit B hereto signed by each of the persons listed on Schedule C hereto
and (ii) an agreement substantially in the form of Exhibit C hereto signed by
each of the persons listed on Schedule D hereto.
(j) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company or any Subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
Xxxxxx, Xxxxxx & Xxxxxxxxx, counsel for the Company, in form and
substance reasonably satisfactory to counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(b) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable
opinion of Xxxxx & Xxxxxxx L.L.P., counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(c) hereof.
(iv) Bring-down Comfort Letters. Letters from each of KPMG LLP
and PricewaterhouseCoopers LLP, in form and substance satisfactory to
the Representatives and dated such Date of Delivery, substantially in
the same form and substance as the letters furnished to the
Representatives pursuant to Section 5(e) hereof, except that the
"specified date" in the letter furnished pursuant to this paragraph
shall be a date not more than five days prior to such Date of Delivery.
(k) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters 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
Representatives and counsel for the Underwriters.
(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, or, in the case of any
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condition to the purchase of Option Securities, on a Date of Delivery which is
after the Closing Time, the obligations of the several Underwriters to purchase
the relevant Option Securities, may be terminated by the Representatives by
notice to the Company at any time at or prior to Closing Time or such Date of
Delivery, as the case may be, 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, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.
SECTION 6. Indemnification.
(a) Indemnification of U.S. Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter 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 the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (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 the 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 6(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 fees and disbursements of counsel chosen by Xxxxxxx
Xxxxx), reasonably incurred 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 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 any Underwriter through Xxxxxxx
Xxxxx expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
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(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, 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 Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through Xxxxxxx Xxxxx expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(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 6(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. 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 6 or Section
7 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 6(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
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party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6 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 Underwriters 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 Underwriters 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
Underwriters 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 underwriting discount received by the Underwriters, in each case
as set forth on the cover of the U.S. Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet, bear to the aggregate initial public
offering price of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the U.S.
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 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 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of
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any damages which such Underwriter has otherwise been required to pay by reason
of any 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 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter 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 such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, 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. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the principal amount of Initial Securities set forth opposite
their respective names in Schedule B hereto and not joint.
SECTION 8. 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 any of the Subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to 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 Prospectus, 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 the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the Nasdaq
National Market, or if trading generally on the American Stock Exchange or the
New York Stock Exchange or in the Nasdaq National Market 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 either 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
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Section 4 hereof, and provided further that Sections 1, 6, 7 and 8 shall survive
such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at Closing Time or a Date of Delivery to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
aggregate principal amount of the Securities to be purchased on such date, each
of the non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Securities to be purchased on such date, this Agreement
or, with respect to any Date of Delivery which occurs after the Closing Time,
the obligation of the Underwriters to purchase and of the Company to sell the
Option Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
U.S. Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company shall have the
right to postpone Closing Time or the relevant Date of Delivery, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for a Underwriter under this Section 10.
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 Underwriters shall be
directed to the Representatives at Xxxxx Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000, attention of Xxxx Xxxxxxxx; notices to the Company
shall be directed to it at 00000 Xxxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxx 00000,
attention of Xxxxx X. Xxxx; and notices to the Selling Shareholders shall be
directed to at 00000 Xxxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxx 00000, attention of
Xxxxx X. Xxxxxxx.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be binding
upon the Underwriters and 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
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than the Underwriters and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
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 Underwriters and 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 any
Underwriter 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.
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.
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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 Underwriters and the Company in accordance with its terms.
Very truly yours,
AETHER SYSTEMS, INC.
By_________________________________
Title:
32
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
FLEETBOSTON XXXXXXXXX XXXXXXXX INC.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
U.S. BANCORP XXXXX XXXXXXX INC.
BEAR, XXXXXXX & CO. INC.
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By____________________________________________
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
33
SCHEDULE A
Name of Underwriter Number of
---------------------- Initial
Securities
----------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Bear, Xxxxxxx & Co. Inc.
Friedman, Billings, Xxxxxx & Co., Inc.
============
$___,000,000
Total
Sch A-1
34
SCHEDULE B
$___,000,000 ______% Convertible Subordinated Notes due 2005
1. The initial public offering price of the Securities shall be __% of
the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Underwriters for the Initial
Securities shall be __% of the principal amount thereof.
3. The interest rate on the Securities shall be __% per annum.
4. The Securities shall be convertible into shares of common stock, par
value .$01 per share, of the Company at an initial conversion price of $____ per
share (equivalent to a conversion rate of ____ shares per $1,000 principal
amount of Securities).
Sch B-1
35
SCHEDULE C
90-DAY LOCK-UP LIST
J. Xxxxxx Xxxxx, Xx.
Xxxxx X. Xxxxxx, Xx.
Xxxx X. Ein
Xxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Xx. Xxxxxxxx Xxxxx
Xxxxxx X. Xxxxxx
Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
Xxxxxx X. Xxxxxxx
Columbia Capital
Sch C - 1
36
SCHEDULE D
10/21/00 LOCK-UP LIST
Xxxxxx X. Xxxxx
E. Xxxxx Xxxxxxx III
Xxxxx X. Xxxxx
Xxxxx X. Xxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxx
Xxxx X. Xxxxxxx
3Com Corporation
NexGen Technologies, L.L.C.
Pyramid Ventures, Inc.
Reuters MarketClip Holdings Sarl
Telcom-ATI Investors, L.L.C.
Xxxxxxxx Funds
Remaining Selling Shareholders
Sch D - 1
37
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State
of Delaware.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under the Purchase Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company will, at the Closing Time and giving effect to the
issuance of the Initial Securities under the Purchase
Agreement, be as set forth in the Prospectus in the column
entitled "Acquisitions and Convertible Notes Offering" under
the caption "Capitalization" (except for subsequent issuances,
if any, pursuant to the Purchase Agreement or pursuant to
reservations, agreements or employee benefit plans referred to
in the Prospectus or pursuant to the exercise of convertible
securities or options referred to in the Prospectus); the
shares of issued and outstanding capital stock of the Company
have been duly authorized and validly issued and are fully
paid and non-assessable; and none of the outstanding shares of
capital stock of the Company was issued in violation of the
preemptive or other similar rights of any securityholder of
the Company.
(v) Each Subsidiary has been duly organized and is validly
existing as a corporation or limited liability company in good
standing under the laws of the jurisdiction of its
incorporation or formation, has corporate or limited liability
company 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 or
limited liability company to transact business and is in good
standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure
so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding
capital stock or other equity interests of each Subsidiary 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, directly or through Subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; none of the outstanding shares of capital
stock or other equity interests of
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any Subsidiary was issued in violation of the preemptive or
similar rights of any securityholder of such Subsidiary.
(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 (assuming the due authorization, execution
and delivery thereof by the Trustee) constitutes 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).
(viii) The Securities are in the form contemplated by the Indenture,
have been duly authorized by the Company and, assuming that
the Securities have been duly authenticated by the Trustee in
the manner described in its certificate delivered to you today
(which fact such counsel need not determine by an inspection
of the Securities), the Securities have been duly executed,
issued and delivered by the Company and 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 will be entitled to the
benefits of the Indenture.
(ix) Upon issuance and delivery of the Securities in accordance
with the Purchase Agreement and the Indenture, the Securities
shall be convertible at the option of the holder thereof for
shares of Common Stock in accordance with the terms of the
Securities and the Indenture; the shares of Common Stock
issuable upon conversion of the Securities have been duly
authorized and reserved for issuance upon such conversion by
all necessary corporate action; such shares, when issued upon
such conversion, will be validly issued and will be fully paid
and non-assessable and no holder of such Common Stock is or
will be subject to personal liability by reason of being such
a holder.
(x) The issuance of the shares of Common Stock upon conversion of
the Securities is not subject to the preemptive or other
similar rights of any securityholder of the Company.
(xi) The Indenture has been duly qualified under the 0000 Xxx.
(xii) The Securities and the Indenture conform as to legal matters
in all material respects to the descriptions thereof contained
in the Prospectus.
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(xiii) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the
1933 Act; any required filing of the Prospectus pursuant to
Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); and, to the best of our
knowledge, no stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are
pending or threatened by the Commission.
(xiv) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule
434 Information, as applicable, the Prospectus and each
amendment or supplement to the Registration Statement and the
Prospectus as of their respective effective or issue dates
(other than the financial statements and supporting schedules
included therein or omitted therefrom, and the Trustee's
Statement of Eligibility on Form T-1 (the "Form T-1"), as to
which we express no opinion) complied as to form in all
material respects with the requirements of the 1933 Act and
the 1933 Act Regulations.
(xv) If Rule 434 has been relied upon, the Prospectus was not
"materially different," as such term is used in Rule 434, from
the prospectus included in the Registration Statement at the
time it became effective.
(xvi) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable
statutory requirements, with any applicable requirements of
the charter and by-laws of the Company and the requirements of
the Nasdaq National Market.
(xvii) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any Subsidiary is a
party, or to which the property of the Company or any
Subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which is
required to be disclosed in the Prospectus other than those
described or referred to therein and the descriptions thereof
or references thereto are correct in all material respects, 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.
(xviii) The information in the Prospectus under "Description of
Notes", "Description of Capital Stock" and "Business --
Intellectual Property Rights", "Business -- Government
Regulation", "Business -- Legal Proceedings" and "U.S. Federal
Income Tax Considerations to U.S. Holders," and in the
Registration Statement under Item 14, to the extent that it
constitutes matters of law, summaries of legal matters, the
Company's charter and bylaws or legal proceedings, or legal
conclusions, has been reviewed by us and is correct in all
material respects.
(xix) To the best of our knowledge, there are no statutes or
regulations that are required to be described in the
Prospectus that are not described as required.
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(xx) All descriptions in the Prospectus of contracts and other
documents to which the Company or the Subsidiaries are a party
are accurate in all material respects; to the best of our
knowledge, there are no franchises, contracts, indentures,
mortgages, loan agreements, notes, leases or other instruments
required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by
reference as exhibits thereto, and the descriptions thereof or
references thereto are correct in all material respects.
(xxi) To the best of our knowledge, neither the Company nor any
Subsidiary is in violation of its charter or by-laws or
similar documents and no default by the Company or any
Subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument that
is described or referred to in the Registration Statement or
the Prospectus or filed or incorporated by reference as an
exhibit to the Registration Statement.
(xxii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other
than under the 1933 Act and the 1933 Act Regulations, which
have been obtained, or as may be required under the securities
or blue sky laws of the various states and except for the
qualification of the Indenture under the 1939 Act, as to which
we express no opinion) is necessary or required in connection
with the due authorization, execution and delivery of the
Purchase Agreement or for the offering, issuance, sale or
delivery of the Securities and the issuance of shares of
Common Stock upon conversion of Securities.
(xxiii) The execution, delivery and performance of the Purchase
Agreement, the Indenture and the Securities and the
consummation of the transactions contemplated in the Purchase
Agreement and in the Registration Statement (including the
issuance and sale of the Securities, and the use of the
proceeds from the sale of the Securities as described in the
Prospectus under the caption "Use Of Proceeds" and the
issuance of the shares of Common Stock issuable upon
conversion of the Securities) and compliance by the Company
with its obligations under the Purchase Agreement, the
Indenture and the Securities do not and will not, (A) whether
with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section 1(a)(xiii) of the
Purchase Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any Subsidiary 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 or any Subsidiary
is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any
Subsidiary is subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have
a Material Adverse Effect), (B) result in any violation of the
provisions of the charter or by-laws or similar documents of
the Company or any Subsidiary, or (C) violate any applicable
law, statute, rule, regulation, judgment, order, writ or
decree, known to us, of any government, government
instrumentality or court,
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domestic or foreign, having jurisdiction over the Company or
any Subsidiary or any of their respective properties, assets
or operations.
(xxiv) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are
defined in the 0000 Xxx.
(xxv) The shares of Common Stock and options exercisable for Common
Stock issued pursuant to the Agreement and Plan of Merger,
dated February 8, 2000, by and among the Company, RT
Acquisition, Inc. and Riverbed, were issued pursuant to valid
exemptions from the registration requirements of the 1933 Act
and the 1933 Act Regulations, and were otherwise issued in
compliance with all applicable securities laws.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial data included therein or omitted
therefrom and the Form T-1, as to which we make no statement), at the time such
Registration Statement or any such amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Prospectus or any amendment or supplement thereto (except for
financial statements and schedules and other financial data included therein or
omitted therefrom, as to which we need make no statement), at the time the
Prospectus was issued, at the time any such amended or supplemented prospectuses
were issued or at the Closing Time, included or includes an untrue statement of
a material fact or omitted or omits to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
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Exhibit B
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS
PURSUANT TO SECTION 5(i)
March __, 2000
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated,
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Bear, Xxxxxxx & Co. Inc.
Friedman, Billings, Xxxxxx & Co., Inc.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Proposed Public Offering by Aether Systems, Inc.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of
Aether Systems, Inc., a Delaware corporation (the "Company"), understands that
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx") and FleetBoston Xxxxxxxxx Xxxxxxxx Inc., Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation, U.S. Bancorp Xxxxx Xxxxxxx Inc., Bear, Xxxxxxx
& Co. Inc. and Friedman, Billings, Xxxxxx & Co., Inc. propose to enter into a
Purchase Agreement (the "Purchase Agreement") with the Company providing for the
public offering of ___% Convertible Subordinated Notes due 2005 (the
"Securities") which are convertible into the Company's common stock, par value
$.01 per share (the "Common Stock"). In recognition of the benefit that such an
offering will confer upon the undersigned as a stockholder and an officer and/or
director of the Company, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the undersigned agrees
with each underwriter to be named in the Purchase Agreement that, during a
period of 90 days from the date of the Purchase Agreement, the undersigned will
not, without the prior written consent of Xxxxxxx Xxxxx, directly or indirectly
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant for the sale of, or otherwise dispose of or transfer any shares of the
Company's Common Stock or any securities convertible into or exchangeable or
exercisable for Common Stock, whether now
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owned or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition, or file any
registration statement under the Securities Act of 1933, as amended, with
respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction is to be settled by delivery of Common Stock or
other securities, in cash or otherwise.
Very truly yours,
Signature:
-----------------------------
Print Name:
-----------------------------
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Exhibit C
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS
PURSUANT TO SECTION 5(i)
March __, 2000
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated,
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Bear, Xxxxxxx & Co. Inc.
Friedman, Billings, Xxxxxx & Co., Inc.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Proposed Public Offering by Aether Systems, Inc.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of
Aether Systems, Inc., a Delaware corporation (the "Company"), understands that
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx") and FleetBoston Xxxxxxxxx Xxxxxxxx Inc., Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation, U.S. Bancorp Xxxxx Xxxxxxx Inc., Bear, Xxxxxxx
& Co. Inc. and Friedman, Billings, Xxxxxx & Co., Inc. propose to enter into a
Purchase Agreement (the "Purchase Agreement") with the Company providing for the
public offering of ___% Convertible Subordinated Notes due 2005 (the
"Securities") which are convertible into the Company's common stock, par value
$.01 per share (the "Common Stock"). In recognition of the benefit that such an
offering will confer upon the undersigned as a stockholder [and an officer
and/or director] of the Company, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the undersigned
agrees with each underwriter to be named in the Purchase Agreement that, during
the period beginning on the date of the Purchase Agreement and ending at 11:59
p.m., Eastern Standard Time, on October 21, 2000, the undersigned will not,
without the prior written consent of Xxxxxxx Xxxxx, directly or indirectly, (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of the Company's
Common Stock or any securities convertible into or
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45
exchangeable or exercisable for Common Stock, whether now owned or hereafter
acquired by the undersigned or with respect to which the undersigned has or
hereafter acquires the power of disposition, or file any registration statement
under the Securities Act of 1933, as amended, with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction is to be settled by delivery of Common Stock or other securities, in
cash or otherwise.
Very truly yours,
Signature:
---------------------------
Print Name:
---------------------------
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