EX-1.1
Purchase Agreement
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ADVANCED RADIO TELECOM CORP.
(a Delaware corporation)
2,750,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: October ___, 1996
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Draft of October 28, 1996
ADVANCED RADIO TELECOM CORP.
(a Delaware corporation)
2,750,000 Shares of Common Stock
(Par Value $.001 Per Share)
PURCHASE AGREEMENT
October ___, 1996
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
DEUTSCHE XXXXXX XXXXXXXX, INC.
as Representatives of the several 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:
Advanced Radio Telecom Corp. (f/k/a Advanced Radio Technologies
Corporation), 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 and Deutsche Xxxxxx Xxxxxxxx, Inc. are acting as representatives (in such
capacity, the "Representatives"), with respect to the issuance and sale by the
Company and the purchase by the Underwriters, acting severally and not jointly,
of the respective numbers of shares of common stock, par value $.001 per share,
of the Company ("Common Stock") set forth in said Schedule A, 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 412,500 additional shares of Common Stock to cover over-allotments, if
any. The aforesaid 2,750,000 shares of Common Stock (the "Initial Securities")
to be purchased by the Underwriters and all or any part of the 412,500 shares of
Common Stock subject to the option described in Section 2(b) hereof (the "Option
Securities") are hereinafter called, collectively, the "Securities."
The Company understands that the Underwriters propose to make a public offering
of the Securities (the "Offering") as soon as the Representatives deem advisable
after this Agreement has been executed
and delivered. Prior to consummation of the Offering, (i) ART Merger
Corporation, a subsidiary of the Company, will merge with and into Advanced
Radio Telecom Corp. ("Telecom"), with the result that Telecom will become a
wholly owned subsidiary of the Company, (ii) the Company will amend its
certificate of incorporation to change its name to "Advanced Radio Telecom
Corp." and (iii) Telecom will amend its certificate of incorporation to change
its name to ART Licensing Corp. ("ART Licensing") (collectively, the "Merger").
Concurrent with the Offering, the Company will enter into a certain Senior
Secured Credit Agreement and certain ancillary documents attached thereto as
exhibits (collectively, the "CIBC Agreements"), pursuant to which certain
investors identified by CIBC Wood Gundy Securities Corp. will agree to purchase
up to $50.0 million of the Company's senior secured notes in the event that the
Company elects to issue such notes at any time during the 90-day period
following the consummation of the Offering (the CIBC Financing," and, together
with the Offering and the Merger, the "Transactions"). Unless the context
otherwise requires, the "Company" shall refer to the Company after giving effect
to the Merger. References to "subsidiaries" of the Company shall be deemed to
include ART Licensing. This Agreement and the CIBC Agreements are hereinafter
collectively referred to as the "OperativeDocuments."
The Company and the Underwriters agree that up to 275,000 shares of the
Securities to be purchased by the Underwriters (the "Reserved Securities") shall
be reserved for sale by the Underwriters to certain eligible employees and
persons having business relationships with the Company, as part of the
distribution of the Securities by the Underwriters, subject to the terms of this
Agreement, the applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. (the "NASD") and all other applicable
laws, rules and regulations. To the extent that such Reserved Securities are not
orally confirmed for purchase by such eligible employees and persons having
business relationships with the Company by the end of the first business day
after the date of this Agreement, such Reserved Securities may be offered to the
public as part of the public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-04388) 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 such prospectus or in 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 (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) 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, 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 October 16, 1996 together with the
Term Sheet, and all references in this Agreement to the date of the Prospectus
shall mean the date of the 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").
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) 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 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 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, and the Prospectus, any preliminary
prospectus and any supplement thereto or prospectus wrapper prepared in
connection therewith, at their respective times of issuance and at the
Closing Time, complied and will comply in all material respects with any
applicable laws or regulations of foreign jurisdictions in which the
Prospectus and such preliminary prospectus, as amended or supplemented, if
applicable, are distributed in connection with the offer and sale of
Reserved Securities. Neither the Prospectus nor any amendments or
supplements thereto (including any prospectus wrapper), at the time the
Prospectus or any such amendment or supplement was issued and at the
Closing Time (and, if any 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
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 Prospectus.
(ii) 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 the Offering were identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(iii) No action has been taken and no local, state or Federal law,
statute, ordinance, rules, regulation, requirement, judgment or court
decree has been enacted, adopted or issued by any governmental agency that
prevents the issuance of the Securities or prevents or suspends the use of
the Prospectus; no judgment, restraining order or order of any nature by a
Federal or state court of competent jurisdiction has been issued that
prevents the issuance of the Securities or prevents or suspends the sale
of the Securities in any jurisdiction referred to in Section 3(f) hereof;
and every request of any securities authority or agency of any
jurisdiction for additional information has been complied with in all
material respects.
(iv) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the 1933 Act or by the 1933 Act Regulations
which have not been described or filed as required. The contracts so
described in the Prospectus are accurate and complete in all material
respects, and all such contracts described as being in full force and
effect on the date hereof are in full force and effect on the date hereof.
Neither the Company nor any of its subsidiaries or, to the best of the
Company's knowledge, any other party is in breach of or default under any
such contract.
(v) Each of the Company and ART Licensing has been duly formed as a
corporation and is validly existing in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus. Each of the Company and ART
Licensing is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have,
either individually or in the aggregate, a material adverse effect on the
assets, properties, business, management, earnings, net worth, results of
operations, condition (financial or otherwise) or business prospects of
the Company and its subsidiaries, taken as a whole. No proceeding has been
instituted in any such jurisdiction, revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or
qualification.
(vi) ART Licensing is the only subsidiary of the Company. The
Company owns all of the outstanding capital stock of ART Licensing; all
such capital stock has been duly authorized and validly issued and is
fully paid and nonassessable, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature, other than the
pledge of all outstanding shares of capital stock of ART Licensing in
connection with the CommcoCCC Financing (as such term is defined in the
Prospectus); and none of such capital stock was
issued in violation of any preemptive or similar rights. Except as
disclosed in the Prospectus, there are no outstanding subscriptions,
rights, warrants, calls, commitments of sale or options to acquire, or
instruments convertible into or exchangeable for, any such shares of
capital stock or other equity interest of ART Licensing.
(vii) The Company and its subsidiaries do not have any ownership
interest in any joint venture, other than the Company's 50% ownership
interest in the XXX Xxxx Joint Venture, a Delaware partnership owned by
the Company and Extended Communications, Inc. ("XXX Xxxx").
(viii) Prior to consummation of the Transactions, the Company and
Telecom have authorized and outstanding capital stock as set forth in
Exhibit A hereto. All such issued and outstanding shares of capital stock
of the Company and Telecom have been duly authorized and validly issued,
are fully paid and non-assessable and were not issued in violation of any
preemptive or similar rights. The shares of capital stock of Telecom owned
by the Company prior to completion of the Merger are free and clear of any
security interest, claim, lien, encumbrance or adverse interest of any
nature. Upon consummation of the Transactions, the Company will have
authorized and outstanding capital stock as set forth in Exhibit B hereto.
All such issued and outstanding shares of capital stock of the Company
will have been duly authorized and validly issued, will be fully paid and
non-assessable and will not have been issued in violation of any
preemptive or similar rights. Except as disclosed in the Prospectus, there
are, and there will be, no outstanding subscriptions, rights, warrants,
calls, commitments of sale or options to acquire, or instruments
convertible into or exchangeable for, any capital stock of the Company or
Telecom. The description of the Company's stock option, stock bonus and
other stock plans or arrangements, and the options or other rights granted
and exercised thereunder, set forth in the Prospectus accurately and
fairly presents in all material respects the information required to be
shown with respect to such plans, arrangements, options and rights.
(ix) The Company has all requisite corporate power and authority to
enter into this Agreement and to perform the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a legally valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
(x) No approval, authorization, order, consent, registration,
filing, qualification, license or permit of or with any court, regulatory,
administrative or other governmental body is required for the execution
and delivery of this Agreement by the Company or the consummation of the
transactions contemplated by this Agreement, except such as have been
obtained and are in full force and effect under the 1933 Act and such as
may be required under applicable Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters and the
clearance of the Offering with the NASD.
(xi) The Securities to be sold by the Company have been duly
authorized and, when issued, delivered and paid for in the manner set
forth in this Agreement, will be duly authorized, validly issued, fully
paid and nonassessable, and will conform to the description thereof
contained in the Prospectus. No preemptive rights or other rights to
subscribe for or purchase exist with respect to the issuance and sale of
the Securities by the Company pursuant
to this Agreement. No stockholder of the Company has any right which has
not been waived to require the Company to register the sale of any shares
owned by such stockholder under the 1933 Act in the Offering contemplated
by this Agreement. No further approval or authority of the stockholders or
the board of directors of the Company (the "Board of Directors") will be
required for the issuance and sale of the Securities to be sold by the
Company as contemplated herein.
(xii) Each of (A) the Cooperation Agreement between Landover
Holdings Corp. ("LHC"), Xxxxxxxx X. Xxxxxxxxx and the Company, (B) the
Voting Trust Agreement among Xxxxxx X. Xxxxxxxxxxxx, Xxxxxx X. Xxxxxx and
Xxxx X. Xxxxxxxx, as trustees, LHC, Xxxxxxxx Xxxxxxxxx, the Xxxxxxx Xxxxx
Xxxxxxxxx Trust and the Company and (C) the Confidentiality Agreement
among Xxxxxxxx X. Xxxxxxxxx, the Company and Telecom (collectively, the
"Voting Trust Agreements") has been duly authorized and validly executed
by each of the parties thereto and is the legally valid and binding
agreement of each such party, enforceable against each such party in
accordance with its terms.
(xiii) The CommcoCCC Agreement (as such term is defined in the
Prospectus) has been duly authorized and validly executed by each of the
parties thereto and is the legally valid and binding agreement of each
such party, enforceable against each such party in accordance with its
terms.
(xiv) Each of the CIBC Agreements has been duly authorized, executed
and delivered by each of the parties thereto and is the legally valid and
binding agreement of each such party, enforceable against each such party
in accordance with its terms.
(xv) None of the execution, delivery and performance of this
Agreement by the Company, the compliance by the Company with all of the
provisions hereof, the issuance and sale of the Securities, the
consummation by the Company and its subsidiaries of the Transactions and
the transactions contemplated hereby and thereby (A) require any consent,
approval, authorization or other order of or filing, registration,
qualification, license or permit of or with, any court, regulatory body,
administrative agency or other governmental body (including, without
limitation, the Federal Communications Commission (the "FCC")), other than
those that have been obtained and are in full force and effect, or (B)
violate, conflict with, or constitute a breach of any of the terms or
provisions of, or a default under (or an event that with notice or the
lapse of time, or both, would constitute a default), or require consent
under, or result in the imposition of a lien or encumbrance on any
properties of the Company or any of its subsidiaries pursuant to (1) the
charter or bylaws of the Company or any of its subsidiaries, (2) any bond,
debenture, note, mortgage, deed of trust or other agreement, indenture or
other instrument to which or by which any of them is a party or by which
any of them or any of their respective property is bound, (3) any local,
state or Federal law, statute, ordinance, rule, regulation or requirement
(including, without limitation, the Communications Act of 1934, as amended
by the Telecommunications Act of 1996 (as so amended, the "Communications
Act"), the rules and regulations of the FCC and the environmental laws,
statutes, ordinances, rules or regulations) applicable to the Company, any
of its subsidiaries or any of their respective assets or properties or (4)
any judgment, order or decree of any court or governmental agency or
authority having jurisdiction over the Company, any of its subsidiaries or
any of their assets or properties, that, in the case of clauses (2), (3)
or (4), (x) would
reasonably be expected, either individually or in the aggregate, to result
in a material adverse effect on the assets, properties, business,
management, earnings, net worth, results of operations, condition
(financial or otherwise) or business prospects of the Company and its
subsidiaries, taken as a whole, (y) would materially interfere with or
materially adversely affect the issuance of the Securities or the
consummation of the Transactions or (z) would in any manner draw into
question the validity of any of the Operative Documents (any of the events
set forth in clauses (x), (y) or (z), a "Material Adverse Effect").
(xvi) Neither the Company nor any of its subsidiaries is or,
immediately after giving effect to the Transactions, will be (A) in
violation of its charter or bylaws, (B) in default in the performance of
any material obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any other
agreement, indenture or instrument material to the conduct of the business
of the Company and its subsidiaries, taken as a whole, to which any of
them is a party, or by which any of their respective properties is bound
or (C) in violation of any local, state or Federal law, statute,
ordinance, rule, regulation, requirement, judgment or court decree
(including, without limitation, the Communications Act and the rules and
regulations of the FCC and environmental laws, statutes, ordinances,
rules, regulations, judgments or court decrees) applicable to any of them
or any of their respective assets or properties (whether owned or leased),
other than, in the case of clauses (B) and (C), any default or violation
that would not reasonably be expected to have a Material Adverse Effect.
There exists no condition that, with notice, the passage of time or
otherwise, would constitute a default under any such document or
instrument that would reasonably be expected to have a Material Adverse
Effect.
(xvii) Other than routine FCC proceedings relating to applications
for and assignments of 38 GHz wireless broadband authorizations and other
than rulemaking procedures of general applicability to the 38 GHz wireless
broadband telecommunications industry, there is (A) no action, suit or
proceeding before or by any court, arbitrator or governmental agency, body
or official, domestic or foreign, now pending or threatened or, to the
Company's knowledge, contemplated to which the Company or any of its
subsidiaries is or may be a party or to which the business or property of
any of them is subject, or (B) no injunction, restraining order or order
of any nature by a Federal or state court or foreign court of competent
jurisdiction to which the Company, any of its subsidiaries or their
business, assets, or property are, or would reasonably be expected to be,
subject.
(xviii) Each of the Company and ART Licensing has good and
marketable title, free and clear of all liens, claims, encumbrances and
restrictions, except for liens described in the Prospectus, liens for
taxes not yet due and payable and other liens not material to the
business, prospects, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole, to all property and assets
described in the Prospectus as currently being owned by each of the
Company and its subsidiaries. The Company or its subsidiaries hold 73
authorizations (the "Company FCC Licenses") to provide 38 GHz wireless
broadband services ("Service"). In particular, the Company or its
subsidiaries hold the authorizations set forth in the table in the
Prospectus under the heading "Business--38 GHz Wireless Broadband Licenses
and Authorizations" (the "License Table") to provide Service in the
markets identified therein as "Owned" and for the amount of bandwidth set
forth in the column entitled "Owned" opposite each such market. The
Company has entered into contracts with third parties that
hold, on a combined basis, 35 authorizations (the "Managed FCC Licenses")
to provide Service. In particular, these third parties hold the
authorizations set forth in the License Table to provide Service in the
markets identified therein as "Managed" and for the amount of bandwidth
set forth in the column entitled "Managed" opposite each such market. The
shareholders of CommcoCCC, Inc. ("CommcoCCC") hold 129 authorizations (the
"CommcoCCC FCC Licenses") to provide Service.. In particular, the
shareholders of CommcoCCC hold the authorizations set forth in the License
Table to provide Service in the markets identified therein as "Under
Definitive Agreement to Acquire" and for the bandwidth set forth in the
column entitled "Under Definitive Agreement to Acquire" opposite each such
market. All of the Company FCC Licenses, the Managed FCC Licenses and the
CommcoCCC FCC Licenses (collectively, the "Licenses") are in full force
and effect. Each of the Company and its subsidiaries is in compliance with
the terms and conditions of all such Licenses and with the rules and
regulations of the regulatory authorities having jurisdictions with
respect thereto. All leases to which the Company or any of its
subsidiaries is a party are valid and binding, and no default has occurred
or is continuing thereunder which would reasonably be expected to result
in a Material Adverse Effect. Each of the Company and its subsidiaries
enjoys peaceful and undisturbed possession under all such Leases to which
it is a party as lessee or as assignee of lessee with such exceptions as
do not materially interfere with the use made by the Company or its
subsidiaries.
(xix) Each of the Company and ART Licensing has such permits,
licenses, franchises, trademarks and authorizations of governmental or
regulatory authorities other than the FCC ("Permits") as are necessary to
own, lease and operate their respective properties and to conduct their
respective business in the manner described in the Prospectus. Each of the
Company and ART Licensing has fulfilled and performed all of its material
obligations with respect to such Permits, and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or result in any other material impairment of the
rights of the holder of any such Permit, except for any such impairments
which would not, individually or in the aggregate, have a Material Adverse
Effect. Except as described in the Prospectus, such Permits contain no
restrictions that are materially burdensome to the Company and its
subsidiaries, taken as a whole.
(xx) The development, implementation and operation of the 38 GHz
wireless broadband telecommunications services network as described, and
in the markets described, in the Prospectus will not (A) result in any
violation of the provisions of the charter or bylaws of the Company or any
of its subsidiaries, (B) result in any violation of any applicable law,
administrative regulation or administrative or court decree (including,
without limitation, the Communications Act, the rules and regulations of
the FCC and environmental laws) or (C) conflict with or constitute a
breach or violation of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or its subsidiaries pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries is a party or
by which any of them may be bound, or to which any of their property is
subject, except, in the case of clauses (B) and (C) above, any such
violations, conflicts or breaches that would not individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(xxi) Except as described in the Prospectus, the business and
operations conducted and proposed to be conducted by the Company and its
subsidiaries as described in the Prospectus are not regulated by any
public service or public utility commissions in the States in which the
Company and its subsidiaries conduct or propose to conduct such business
and operations as described in the Prospectus; and neither the Company nor
any of its subsidiaries is or will be required to obtain any Permit from
any public service or public utility commission in any such State to
conduct its business as described in the Prospectus.
(xxii) Each of the Company, ART Licensing and XXX Xxxx has filed all
reports required to be filed with the FCC.
(xxiii) Neither the Company nor ART Licensing has violated any
foreign, Federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants, except where any
such violations would not, individually or in the aggregate, have a
Material Adverse Effect.
(xxiv) All tax returns required to be filed by the Company or any of
its subsidiaries in any jurisdiction have been so filed. All material
taxes, including withholding taxes, penalties and interest, assessments,
fees and other charges due or claimed to be due from such entities or that
are due and payable have been paid, other than those being contested in
good faith and for which adequate reserves have been provided for those
currently payable without penalty or interest. There are no proposed
additional taxes assessments against the Company or any of its
subsidiaries, and neither the Company nor any of its subsidiaries has any
knowledge of any tax deficiency which has been or might be asserted or
threatened against the Company or any of its subsidiaries which would
reasonably be expected to have a Material Adverse Effect.
(xxv) Each of the Company and its subsidiaries maintains reasonably
adequate insurance.
(xxvi) Coopers & Xxxxxxx, L.L.P., who have expressed their opinion
with respect to the financial statements and schedules filed with the
Commission as part of the Registration Statement and included in the
Prospectus and in the Registration Statement, are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(xxvii) The financial statements, together with related schedules
and notes forming part of the Registration Statement and the Prospectus
(and any amendment or supplement thereto), present fairly the individual
and consolidated financial positions, results of operations and changes in
financial position of the Company, its subsidiaries and Telecom on the
basis stated in the Registration Statement and the Prospectus (and any
amendment or supplement thereto) at the respective dates or for the
respective periods to which they apply. Such statements and related
schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied through the periods
involved, except as disclosed therein. The other financial and statistical
information and data set forth in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) is, in all material
respects, accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Company, its
subsidiaries and Telecom, as
applicable. The pro forma financial information and other financial
information included in the Prospectus present fairly the information
shown therein, have been prepared in accordance with the Commission's
rules and regulations with respect to pro forma financial information,
have been properly compiled on the pro forma basis described therein, and,
in the opinion of the Company, the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate to
give effect to the transactions or circumstances referred to therein. No
other financial statements or schedules are required to be included in the
Registration Statement. The selected financial data set forth in the
Prospectus under the captions "Summary Historical and Pro Forma Financial
Data," "Capitalization" and "Selected Historical and Pro Forma Financial
Data" fairly present the information set forth therein on the basis stated
in the Registration Statement.
(xxviii) Each of the Company and its subsidiaries maintains a system
of internal accounting controls sufficient to provide reasonable assurance
that (A) transactions are executed in accordance with management's general
or specific authorizations, (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets,
(C) access to assets is permitted only in accordance with management's
general or specific authorizations and (D) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto.
(xxix) Subsequent to the respective dates as of which information is
given in the Prospectus and except as set forth in the Prospectus, (A)
neither the Company nor any of its subsidiaries has incurred any
liabilities or obligations, direct or contingent, which are material,
individually or in the aggregate, to the Company and its subsidiaries,
taken as a whole, nor entered into any transaction not in the ordinary
course of business, (B) neither the Company nor any of its subsidiaries
has sustained any material loss or interference with its businesses or
properties from fire, flood, windstorm, accident or other calamity,
whether or not covered by insurance, (C) there has not been, individually
or in the aggregate, any change or development which would reasonably be
expected to result in a Material Adverse Effect and (D) there has been no
dividend or distribution of any kind declared, paid or made by the Company
or any of its subsidiaries on any class of capital stock.
(xxx) The Company does not intend to, nor does it believe that it
will, incur debts beyond its ability to pay such debts as they mature. The
present fair saleable value of the assets of the Company on a consolidated
basis exceeds the amount that will be required to be paid on or in respect
of the existing debts and other liabilities (including contingent
liabilities) of the Company on a consolidated basis as they become
absolute and matured. The assets of the Company on a consolidated basis do
not constitute unreasonably small capital to carry out the business of the
Company and its subsidiaries, taken as a whole, as conducted or as
proposed to be conducted.
(xxxi) Neither the Company nor any of its subsidiaries is (A) an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or
(B) a "holding company" or a "subsidiary company" or an "affiliate" of a
holding company within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
(xxxii) The Company has not distributed, and will not distribute
prior to the First Closing Date, any offering material in connection with
the offering and sale of the Securities other than any preliminary
prospectus, the Prospectus, the Registration Statement and the other
materials permitted by the 1933 Act. (xxxiii) Neither the Company nor any
of its subsidiaries has (A) taken, directly or indirectly, any action
designed to, or that might reasonably be expected to, cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities or (B) since the date
of the Prospectus (1) sold, bid for, purchased or paid any person any
compensation for soliciting purchases of, the Securities or (2) paid or
agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.
(xxxiv) Except pursuant to this Agreement, there are no contracts,
agreements or understandings between the Company or any of its
subsidiaries and any other person that would give rise to a valid claim
against the Company, any of its subsidiaries or any of the Underwriters
for a brokerage commission, finder's fee or like payment in connection
with the issuance, purchase and sale of the Securities.
(xxxv) Each of the Company and its subsidiaries has complied with
all provisions of Section 517.075, Florida Statutes.
(xxxvi) Except as disclosed in the Prospectus, there are no business
relationships or related party transactions required to be disclosed
therein pursuant to Item 404 of Regulation S-K of the Commission.
(xxxvii) The Merger has been completed substantially in accordance
with the description thereof contained in the Prospectus.
The Company acknowledges that each of the Underwriters and, for purposes of the
opinions to be delivered to the Underwriters pursuant to Section 5 hereof,
counsel to the Company and counsel to the Underwriters, will rely upon the
accuracy and truth of the foregoing representations and hereby consents to such
reliance.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its 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.
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 per share set forth in Schedule B hereto, the number of Initial
Securities set forth in Schedule A hereto opposite the name of such Underwriter,
plus any additional number 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 412,500 shares of Common Stock
at the price per share set forth in Schedule B hereto, less an amount per share
equal to any dividends or distributions declared by the Company and payable on
the Initial Securities but not payable on the Option Securities. 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 (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 hereto opposite the name of such
Underwriter bears to the total number of Initial Securities, subject in each
case to such adjustments as the Representatives in their discretion shall make
to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Xxxxxx
& Xxxxxxx, New York, New York 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 hereof), 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 the
"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 or other accounts 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 a 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. Certificates for 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 certificates 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.
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) hereof, 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 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 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 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) hereof, 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 for
offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) 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.
(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 quotation of the Securities on the Nasdaq Stock Market and
will file with the Nasdaq Stock Market all documents and notices required
by the Nasdaq Stock Market of companies that have securities that are
traded in the over-the-counter market and quotations for which are
reported by the Nasdaq Stock Market.
(j) Restriction on Sale of Securities. During a period of 180 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 hereunder, (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 Prospectus provided that the recipient of any such shares of Common
Stock shall enter into a lockup agreement substantially in the form of
Exhibit E-1 hereto, (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 Prospectus provided that the recipient
of any such shares of Common Stock shall enter into a lockup agreement
substantially in the form of Exhibit E-1 hereto or (D) 6,000,000 shares of
Common Stock issued pursuant to the CommcoCCC Agreement.
(k) 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
rules and regulations of the Commission thereunder.
(l) Compliance with NASD Rules. The Company hereby agrees that it
will ensure that the Reserved Securities will be restricted as required by
the NASD or the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of this
Agreement. The Underwriters will notify the Company as to which persons
will need to be so restricted. At the request of the Underwriters, the
Company will direct the transfer agent to place a stop transfer
restriction upon such securities for such period of time. Should the
Company release, or seek to release, from such restrictions any of the
Reserved Securities, the Company agrees to reimburse the Underwriters for
any reasonable expenses (including, without limitation, legal expenses)
they incur in connection with such release.
(m) Compliance with Rule 463. The Company will file with the
Commission such reports on Form SR as may be required pursuant to Rule 463
of the 1933 Act Regulations.
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 and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(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 any Blue Sky memoranda 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 delivery to the
Underwriters of copies of any Blue Sky memoranda and any supplement thereto,
(viii) the fees and expenses of any transfer agent or registrar for the
Securities, 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, (x) the fees and expenses
incurred in connection with the inclusion of the Securities in the Nasdaq Stock
Market, and (xi) all costs and expenses of the Underwriters, including the fees
and disbursements of counsel for the Underwriters, in connection with matters
related to the Reserved Securities which are designated by the Company for sale
to employees and others having a business relationship with the Company.
(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.
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 of the Company 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 the 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 the Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Xxxx & Hessen LLP, counsel for the Company, in form and
substance 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 C hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(c) Opinion of Special Regulatory Counsel. At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Xxxxxx & Xxxxxxx, special regulatory counsel, in form and
substance satisfactory to the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to the
effect set forth in Exhibit D hereto and to such further effect as the
Underwriters may reasonably request.
(d) Opinion of Counsel for Underwriters. At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Xxxxxx & Xxxxxxx, counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other
Underwriters with respect to such matters as the Representatives may
request. In giving such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of
New York, 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 its
subsidiaries and certificates of public officials.
(e) Officers' Certificate. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising 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 the Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct
with the same force and effect as though expressly made at and as of the
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 the 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.
(f) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Representatives shall have received from Coopers &
Xxxxxxx L.L.P. a letter dated such date, in form and substance
satisfactory to the Representatives, together with signed or reproduced
copies of such letter 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 contained in the Registration Statement
and the Prospectus.
(g) Bring-down Comfort Letter At the Closing Time, the
Representatives shall have received from Coopers & Xxxxxxx L.L.P. a
letter, dated as of the Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (f) of this
Section, except that the specified date referred to shall be a date not
more than three business days prior to the Closing Time.
(h) Approval of Listing. At the Closing Time, the Securities shall
have been approved for inclusion in the Nasdaq Stock Market, subject only
to official notice of issuance.
(i) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(j) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received agreements substantially in the forms
of Exhibits E-1 through E-4 hereto signed by the persons listed on
Schedule C hereto, as applicable.
(k) Reliance Letter. Prior to the Closing Time, the Representatives
shall have received from Ropes & Xxxx, counsel to the Company, a letter
dated as of the Closing Time with respect to certain matters relating to
the CIBC Financing in form and substance satisfactory to counsel for the
Underwriters.
(l) Merger. Prior to the date hereof, the Merger shall have been
completed in the manner contemplated by the Prospectus.
(m) Voting Trust Agreements. Prior to the date hereof, each of the
Voting Trust Agreements shall have been entered into by the parties
thereto.
(n) CIBC Financing. Prior to the Closing Time, the Company shall
have entered into the CIBC Financing on terms substantially identical to
those described in the Prospectus, and the Representatives shall have
received a certificate from CIBC to the effect that all conditions
precedent to the Company's ability to immediately draw on the CIBC
Financing have been satisfied or waived.
(o) 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(e)
hereof remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of Xxxx &
Hessen LLP, counsel for the Company, together with the favorable opinion
of Xxxxxx & Xxxxxxx, special regulatory counsel, each in form and
substance satisfactory to counsel for the Underwriters or to the
Underwriters, as the case may be, 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 opinions required by Sections 5(b) and
5(c) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable opinion of
Xxxxxx & Xxxxxxx, 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(e) hereof.
(iv) Bring-down Comfort Letter. A letter from Coopers & Xxxxxxx
L.L.P., in form and substance satisfactory to the Representatives and
dated such Date of Delivery, substantially in the same form and substance
as the letter furnished to the Representatives pursuant to Section 5(g)
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.
(p) Additional Documents. At the Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and 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.
(q) 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 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 the 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 hereof and except that Sections 1, 6, 7 and 8 hereof shall
survive any such termination and remain in full force and effect.
6. Indemnification.
(a) Indemnification of 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, arising out of (A) the violation of any
applicable laws or regulations of any jurisdictions where Reserved
Securities have been offered and (B) any untrue statement or alleged
untrue statement of a material fact included in the supplement or
prospectus wrapper material distributed in connection with the reservation
and sale of the Reserved Securities to eligible employees and other
persons having business relationships with the Company or the omission or
alleged omission therefrom of a material fact necessary to make the
statements therein, when considered in conjunction with the Prospectus or
preliminary prospectus, not misleading;
(iii) 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 or in connection with any violation
of the nature referred to in Section 6(a)(ii)(A) hereof; provided that
(subject to Section 6(d) hereof) any such settlement is effected with the
written consent of the Company; and
(iv) 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 or in connection with any violation
of the nature referred to in Section 6(a)(ii)(A) hereof, to the extent
that any such expense is not paid under (i), (ii) or (iii) 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).
(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) hereof,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 6(b) hereof, 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) and Section 6(a)(iii) hereof effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
(e) Indemnification for Reserved Securities. In connection with the offer
and sale of the Reserved Securities, the Company agrees, promptly upon a request
in writing, to indemnify and hold harmless the Underwriters from and against any
and all losses, liabilities, claims, damages and expenses incurred by them as a
result of the failure of eligible employees of the Company and other persons
having business relationships with Company to pay for and accept delivery of
Reserved Securities which, by the end of the first business day following the
date of this Agreement, were subject to a properly confirmed agreement to
purchase.
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, or in connection with
any violation of the nature referred to in Section 6(a)(ii)(A) hereof, 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 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 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 or any violation of the nature referred to in Section 6(a)(ii)(A)
hereof.
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 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 number of Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.
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 its 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.
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 the Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States, 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 Stock Market, or if trading generally on the American
Stock Exchange or the New York Stock Exchange or in the Nasdaq Stock 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 NASD 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 Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 hereof shall survive such termination and remain in full force and
effect.
10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at the 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
number of 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 number
of 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
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 the 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 an Underwriter under this Section 10.
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 Xxxxxx X. Xxxxx; and notices to the
Company shall be directed to it at 000 000xx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxxx,
Xxxxxxxxxx 00000, attention of Chief Financial Officer.
12. Parties. This Agreement shall each 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 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 hereof 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.
13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAWS PROVISIONS THEREOF. SPECIFIED TIMES OF DAY REFER TO NEW
YORK CITY TIME.
14. Effect of Headings. The Article and Section headings herein and the
Table of Contents are for convenience only and shall not affect the construction
hereof.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
ADVANCED RADIO TELECOM CORP.
By ________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
DEUTSCHE XXXXXX XXXXXXXX, 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.
SCHEDULE A
List of Underwriters
Number of
Initial
Name of Underwriter Securities
------------------- ----------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Deutsche Xxxxxx Xxxxxxxx, Inc.
Total 2,750,000
SCHEDULE B
Pricing Information
ADVANCED RADIO TELECOM CORP.
2,750,000 Shares of Common Stock
(Par Value $.001 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $__.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $__, being an amount equal to the initial public
offering price set forth above less $__ per share; provided that the purchase
price per share for any Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option Securities.
SCHEDULE C
List of Persons and Entities subject to Lock-up
1. Existing Security Holders, Directors and Officers (Exhibit E-1):
2. High Sky Entities (Exhibit E-2):
3. March Bridge Note Holders (Exhibit E-3):
4. Commco Entities (Exhibit E-4):
