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EXHIBIT 1.1
4,000,000 SHARES
LEAP WIRELESS INTERNATIONAL, INC.
COMMON STOCK, PAR VALUE $.0001 PER SHARE
UNDERWRITING AGREEMENT
FEBRUARY ___, 2000
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February 16, 2000
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Leap Wireless International, Inc., a Delaware corporation (the
"COMPANY"), proposes to issue and sell to the several Underwriters (as defined
below) 4,000,000 shares of its Common Stock, $.0001 par value per share (the
"FIRM SHARES").
It is understood that, subject to the conditions hereinafter
stated, 3,200,000 Firm Shares (the "U.S. FIRM SHARES") will be sold to the
several U.S. Underwriters named in Schedule I hereto (the "U.S. UNDERWRITERS")
in connection with the offering and sale of such U.S. Firm Shares in the United
States and Canada to United States and Canadian Persons (as such terms are
defined in the Agreement Between U.S. and International Underwriters of even
date herewith), and 800,000 Firm Shares (the "INTERNATIONAL SHARES") will be
sold to the several International Underwriters named in Schedule II hereto (the
"INTERNATIONAL UNDERWRITERS") in connection with the offering and sale of such
International Shares outside the United States and Canada to persons other than
United States and Canadian Persons. Xxxxxx Xxxxxxx & Co. Incorporated and
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, Credit Suisse First Boston
Corporation and ABN AMRO Incorporated shall act as representatives (the "U.S.
REPRESENTATIVES") of the several U.S. Underwriters, and Xxxxxx Xxxxxxx & Co.
International Limited, Xxxxxxxxx, Lufkin & Xxxxxxxx International, Credit Suisse
First Boston (Europe) Limited and ABN AMRO Incorporated shall act as
representatives (the "INTERNATIONAL REPRESENTATIVES") of the several
International Underwriters. The U.S. Underwriters and the International
Underwriters are hereinafter collectively referred to as the "UNDERWRITERS."
The Company also proposes to issue and sell to the several U.S.
Underwriters not more than an additional 600,000 shares of its Common Stock,
$.0001 par value per share (the "ADDITIONAL SHARES") if and to the extent that
the U.S. Representatives shall have determined to exercise, on behalf of the
U.S. Underwriters, the right to purchase such shares of common stock granted to
the U.S. Underwriters in Section 2 hereof. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "SHARES." The shares of
Common Stock, $.0001 par value per share of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the "COMMON STOCK."
The Company has filed with the Securities and Exchange Commission
(the "COMMISSION") a registration statement on Form S-3 (File No. 333-93073),
including a prospectus, relating to the Shares. The registration statement
contains two prospectuses to be used in connection with the offering and sale of
the Shares: the U.S. prospectus, to be used in
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connection with the offering and sale of Shares in the United States and Canada
to United States and Canadian Persons, and the international prospectus, to be
used in connection with the offering and sale of Shares outside the United
States and Canada to persons other than United States and Canadian Persons. The
international prospectus is identical to the U.S. prospectus except for the
outside front cover page. The registration statement as amended at the time it
becomes effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT;" the U.S. prospectus and the
international prospectus in the respective forms first used to confirm sales of
Shares are hereinafter collectively referred to as the "PROSPECTUS." If the
Company has filed an abbreviated registration statement to register additional
shares of Common Stock pursuant to Rule 462(b) under the Securities Act (the
"RULE 462 REGISTRATION STATEMENT"), then any reference herein to the term
"REGISTRATION STATEMENT" shall be deemed to include such Rule 462 Registration
Statement (including, in the case of all references to the Registration
Statement and the Prospectus, documents incorporated therein by reference).
1. Representations and Warranties. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or, to
the Company's knowledge, threatened by the Commission.
(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any 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, in light of the circumstances under which they were
made, not misleading, (ii) each document, if any, filed or to be filed
pursuant to the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, (iii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iv) the Prospectus does
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus and
is duly qualified to transact business and is in good
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standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(d) Except for QUALCOMM Telecommunications Limited (Cayman
Islands), Metrosvyaz Limited, QUALCOMM Telecommunications Limited (Isle
of Man), Orrengrove Investments Limited, Transworld Telecommunications,
Inc. and Transworld Communications (Bermuda) Ltd., each subsidiary of
the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole; all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and, except as described in
the Prospectus, are owned directly by the Company or indirectly through
one of its subsidiaries, and are, except as described in the Prospectus,
free and clear of all liens, encumbrances, equities or claims.
(e) To the Company's knowledge, each of Pegaso
Telecommunicaciones S.A de C.V., Pegaso Humanos Recursos S.A. de C.V.,
Pegaso PCS S.A. de C.V. and Pegaso Communiccaciones y Sistemas S.A. de
C.V. (collectively, the "PEGASO ENTITIES") has been duly incorporated,
is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; all of the issued shares of capital
stock of the Pegaso Entities owned directly or indirectly by the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and those shares of capital stock of the Pegaso entities
owned directly or indirectly by the Company are, except as described in
the Prospectus, free and clear of all liens, encumbrances, equities or
claims. As of the date of this Agreement, the Company owns 28.6% of the
outstanding capital stock of Pegaso Telecommunicaciones S.A de C.V. To
the Company's knowledge, Pegaso Telecommunicaciones S.A de C.V. owns
100% of the outstanding capital stock of each of Pegaso Humanos Recursos
S.A. de C.V., Pegaso PCS S.A. de C.V. and Pegaso Communiccaciones y
Sistemas S.A. de C.V. For purposes of the representations and warranties
contained in this Section 1 other than paragraph (d), the Pegaso
Entities shall be deemed subsidiaries; provided that such
representations and warranties shall be limited to the Company's actual
knowledge with respect to the Pegaso Entities.
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(f) This Agreement has been duly authorized, executed and
delivered by the Company, and the Company has all requisite corporate
power and authority to (i) execute, deliver and perform its obligations
under this Agreement, and (ii) issue the Shares, in the manner and for
the purpose contemplated by this Agreement.
(g) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(h) The shares of Common Stock outstanding prior to the issuance
of the Shares have been duly authorized and are validly issued, fully
paid and non-assessable.
(i) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights.
(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not contravene (i) any provision of applicable law, (ii) the certificate
of incorporation or by-laws of the Company, (iii) any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or (iv)
any judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary. No consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be
required by the securities or Blue Sky laws of the various states or the
Conduct Rules of NASD Regulation, Inc. in connection with the offer and
sale of the Shares.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(l) There are no legal or governmental proceedings pending or, to
the Company's knowledge, threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company
or any of its subsidiaries is subject that are required to be described
in the Registration Statement or the Prospectus and are not so described
or any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement that are not
described or filed as required.
(m) Each preliminary 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 Securities Act, complied when so
filed in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder.
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(n) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(o) The Company and its subsidiaries (i) are in compliance with
any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(p) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(q) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement. The rights under Section 4.3 of the Superceding Warrant to
Purchase 4,500,000 Shares of Common Stock of the Company, dated as of
August 9, 1999, in favor of Xxxxxxxx Xxxxxxxxxxxx ("Qualcomm"), to
require the Company to include such securities with the Shares
registered pursuant to the Registration Statement have been waived.
(r) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) the Company
and its subsidiaries have not incurred any liability or obligation,
direct or contingent, nor entered into any transaction, in each instance
not in the ordinary course of business, which is material to the Company
and its consolidated subsidiaries, taken as a whole; (ii) the Company
has not purchased any of its outstanding capital stock, nor declared,
paid or otherwise made any dividend or distribution of any kind on its
capital stock; and (iii) there has not been any change in the capital
stock, short-term debt or long-term debt of the Company and its
consolidated subsidiaries, which is material to the Company and its
consolidated subsidiaries, taken as a whole; except in each case as
described in the Prospectus.
(s) The Company and its subsidiaries have good and marketable
title to all real property and good and marketable title to all personal
property owned by them that is
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material to the business of the Company and its consolidated
subsidiaries, taken as a whole, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Prospectus or such as do not have a material adverse effect singly or in
the aggregate on the Company and its consolidated subsidiaries, taken as
a whole, or do not materially interfere with the use made and proposed
to be made of such property by the Company and its subsidiaries; and any
real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid and enforceable leases with
such exceptions as do not materially interfere with the use made and
proposed to be made of such property and buildings by the Company and
its subsidiaries, in each case except as described in the Prospectus.
(t) The Company and its subsidiaries own or possess all material
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names currently employed by them in
connection with the business now operated by them. Neither the Company
nor any of its subsidiaries has received any notice of infringement of
or conflict with asserted rights of others with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(u) No material labor dispute with the employees of the Company
or any of its subsidiaries exists, or, to the knowledge of the Company,
is imminent, except for efforts in Chile by unions to organize the
employees of Smartcom S.A.; and the Company is not aware of any
existing, threatened or imminent labor disturbance by the employees of
any of its principal suppliers, manufacturers or contractors that could
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(v) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which
they are engaged; neither the Company nor any of its subsidiaries has
been refused any insurance coverage sought or applied for, except for a
requested increase in the directors' and officers' liability insurance
coverage which was refused with respect to litigation relating to the
Company's Russian subsidiaries and ventures; and neither the Company nor
any of its subsidiaries has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(w) The Company and its subsidiaries possess all licenses,
certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, except where the failure to so possess
would not singly or in the aggregate have a material adverse effect on
the Company and its consolidated subsidiaries, taken as a whole. Neither
the Company nor any such subsidiary has received any notice of
proceedings relating to the revocation or modification of any such
license, certificate, authorization or permit which, singly or in
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the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the Company and its
consolidated subsidiaries, taken as a whole, except as described in the
Prospectus.
(x) Except as described in the Prospectus, the Company and its
subsidiaries (i) are in compliance in all material respects with any and
all applicable foreign, federal, state and local laws and regulations
relating to wireless communications services ("TELECOM LAWS"), (ii) have
received all material permits, licenses, concessions or other approvals
("TELECOM LICENSES") required of them under applicable Telecom Laws to
conduct their respective businesses, all of which were validly issued
and are in full force and effect, with no material restrictions or
qualifications except as described in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement) and (iii) are in compliance in all material respects with all
terms and conditions of any such Telecom License and (iv) are eligible
to acquire and hold C-Block and F-Block licenses (as such terms are set
forth and further defined in 47 C.F.R. Part 24, Subparts H and I) as a
very small business under 47 C.F.R. Section 24.709, and, except as
described in the Prospectus, have received all approvals, consents,
orders or authorizations from the Federal Communications Commission
("FCC") necessary to establish such eligibility.
(y) Each of the Company and its subsidiaries has filed with the
FCC or applicable foreign regulatory authority all necessary and
material reports, documents, instruments, information and applications
required to be filed pursuant to applicable Telecom Laws.
(z) Except as described in the Prospectus, the Company has no
reason to believe, and does not believe, that the Telecom Licenses will
not be renewed for a full term when they are due for renewal.
(aa) Except as described in the Prospectus, the Company and each
of its subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(bb) The Company and its subsidiaries have filed all federal,
foreign, state and local tax returns which have been required to be
filed and have paid all taxes required to be paid and any other
assessment, fine or penalty levied against them, to the extent that any
of the foregoing is due and payable, except, in all cases, for any such
tax, assessment, fine or penalty that is being contested in good faith
(and except in any case in which the failure to so file or pay would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole).
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(cc) The Company reviewed its operations and that of its
consolidated subsidiaries to evaluate the extent to which the business
or operations of the Company or any of its consolidated subsidiaries
would be affected by the "Year 2000 Problem" (that is, any significant
risk that the computer hardware or software applications used by the
Company and its consolidated subsidiaries will not, in the case of dates
or time periods occurring after December 31, 1999, function at least as
effectively as in the case of dates or time periods occurring prior to
January 1, 2000); as a result of such review, the Company has no reason
to believe, and does not believe, that the Year 2000 Problem will have a
material adverse effect on the Company and its consolidated
subsidiaries, taken as a whole. As of the date of this Agreement, the
Company has not experienced any problems or incurred any costs related
to the Year 2000 Problem that are of a character required to be
described or referred to in the Registration Statement or the Prospectus
which have not been accurately described in the Registration Statement
or Prospectus.
(dd) (1) Except as would not singly or in the aggregate have a
material adverse effect on the Company and its consolidated
subsidiaries, taken as a whole, the Company and its subsidiaries have
complied and are in compliance with all federal, state, local and
foreign statutes, executive orders, proclamations, regulations, rules,
directives, decrees, ordinances and similar provisions having the force
or effect of law and all judicial and administrative orders, rulings,
determinations and common law concerning the importation of merchandise,
the export or reexport of products, services and technology, and the
terms and conduct of international transactions applicable to the
Company and its subsidiaries in connection with the conduct of the
Company's or any subsidiary's business (including as the same relates to
record keeping requirements) ("INTERNATIONAL TRADE LAWS AND
REGULATIONS"); (2) except as would not singly or in the aggregate have a
material adverse effect on the Company and its consolidated
subsidiaries, taken as a whole, neither the Company nor any of its
subsidiaries has made or provided any false statement or omission to any
agency of any federal, state or local government, purchasers of
products, or foreign government or foreign agency, in connection with
the exportation of merchandise (including with respect to export
licenses, exceptions and other export authorizations and any filings
required for or related to exportation of any item), the importation of
merchandise or other approvals required by a foreign government or
agency or any other requirement relating to any International Trade Laws
and Regulations; and (3) to the Company's knowledge, neither the Company
nor any of its subsidiaries has made any payment, offer, gift, promise
to give, or authorized or otherwise participated in, assisted or
facilitated any payment or gift related to the Company's or any
subsidiary's business that is prohibited by the United States Foreign
Corrupt Practices Act.
(ee) The Company has provided the Underwriters and counsel for
the Underwriters true and correct copies of (i) the Credit Agreement,
dated as of September 29, 1999, among Cricket Communications, Inc.,
Cricket Wireless Communications, Inc., the Lenders party thereto, and
Lucent Technologies, Inc., as Administrative Agent, (ii) the Memorandum
of Agreement, dated September 20, 1999, by and between Ericsson Wireless
Communications Inc., the Company and Cricket Wireless Communications,
Inc. or all definitive agreements entered into pursuant to such
Memorandum of Agreement on or before the date hereof, (iii) the Credit
Agreement, dated September 23, 1998, by and
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between the Company and Xxxxxxxx Xxxxxxxxxxxx ("QUALCOMM"), (iv) the
Second Amended and Restated Deferred Payment Agreement, dated October
12, 1999, by and among Chilesat Telefonia Personal S.A., as Purchaser,
Qualcomm and the Other Vendors Named Therein, Inversiones Leap Wireless
Chile S.A., as Guarantor, Qualcomm, as Administrative Agent, and
Qualcomm, as Collateral Agent and (v) the Letter of Intent, dated April
15, 1999, between Qualcomm and the Company setting forth terms and
conditions pursuant to which Qualcomm will provide financing to Smartcom
S.A. or all definitive agreements entered into pursuant to such Letter
of Intent on or before the date hereof, including in the case of (i),
(ii), (iii), (iv) and (v) above any amendment thereto or restatements
thereof, and all exhibits thereto, as in effect on the date hereof
(collectively, the "VENDOR FINANCING AGREEMENTS").
(ff) Each of the Vendor Financing Agreements (i) has been duly
authorized, executed and delivered by, (ii) constitutes the valid and
binding obligation of and (iii) is enforceable in accordance with its
terms against, the Company and its subsidiaries, to the extent each is a
party thereto and, to the best of the Company's knowledge, the lenders
party thereto, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating
to or affecting enforcement of creditors' rights and rules or laws
concerning equitable remedies. The execution, delivery and performance
of the Vendor Financing Agreements by the Company and any of its
subsidiaries that is a party thereto, the compliance by the Company and
such subsidiaries with all of the provisions thereof and the
consummation of the transactions contemplated thereby do not (1) require
any consent, approval, authorization or other order for, or
qualification with, any court or governmental body or agency (except
such as have already been obtained), except where such failure to obtain
any consent, approval, authorization or other order or qualification
would not singly or in the aggregate have a material adverse effect on
the Company and its subsidiaries, taken as a whole, (2) conflict with or
constitute a breach of any of the terms or provisions of, or a default
under (or an event which with notice or lapse of time, or both, would
constitute a breach of or a default under), (x) the certificate of
incorporation or by-laws of the Company or any of its subsidiaries or
(y) any indenture, loan agreement, mortgage, lease or other agreement or
instrument, to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries are bound, except,
with respect to clause (y), for any such conflict, breach or default
which, singly or in the aggregate, would not have a material adverse
effect on the Company and its consolidated subsidiaries, taken as a
whole, (3) as of the date hereof violate or conflict with any applicable
law or any rule, regulation, judgment, order or decree of any court or
any governmental body or agency having jurisdiction over the Company,
any of its subsidiaries except for any such violation or conflict which
would not singly or in the aggregate have a material adverse effect on
the Company and its consolidated subsidiaries, taken as a whole.
(gg) The consolidated financial statements of the Company
together with related notes set forth in the Prospectus fairly present
the financial condition of the Company and its subsidiaries, as of the
dates indicated, and the results of operations and changes in financial
position for the periods therein specified in conformity with generally
accepted accounting principles consistently applied throughout the
periods
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involved (except as otherwise stated therein); the summary and selected
financial data in the Prospectus present fairly in all material respects
the financial information shown therein and have been prepared and
compiled on a basis consistent with audited financial statements
included therein, except as otherwise stated therein; and the pro forma
financial information and the related notes thereto included in the
Prospectus have been prepared using reasonable assumptions and have been
prepared in accordance with the applicable requirements of the
Securities Act and include all adjustments necessary to present fairly
in all material respects the pro forma financial information included in
the Prospectus at the respective dates and for the respective periods
indicated. PricewaterhouseCoopers LLP, which has reported upon the
audited financial statements included in the Prospectus, is an
independent public accounting firm as required by the Securities Act and
the rules and regulations thereunder.
(hh) No relationship, direct or indirect, exists between or among
the Company or any of its subsidiaries on the one hand, and the
directors, officers, stockholders, customers, suppliers or contractors
of the Company and its subsidiaries, on the other hand, which is
required to be described in the Prospectus which is not so described.
(ii) The Asset Purchase Agreement, dated December 24, 1998, by
and among Chase Telecommunications Holdings, Inc., Xxxxxxx Xxxxx,
Xxxxxxx XxXxxxxx and the Company is in full force and effect, and, to
the best of the Company's knowledge, there are no facts or circumstances
existing that would prevent or delay the consummation of the
transactions contemplated by such agreement, subject to obtaining the
approval of the FCC.
2. Agreements to Sell and Purchase. The Company hereby agrees to
sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Firm Shares set forth in Schedules I and II
hereto opposite its names at U.S.$______ a share ("PURCHASE PRICE").
On the basis of the representations and warranties contained in
this Agreement, and subject to the terms and conditions set forth herein, the
Company agrees to sell to the U.S. Underwriters the Additional Shares, and the
U.S. Underwriters shall have a one-time right to purchase, severally and not
jointly, up to 600,000 Additional Shares at the Purchase Price. If you, the U.S.
Representatives, on behalf of the U.S. Underwriters, elect to exercise such
option, the U.S. Representatives shall so notify the Company in writing not
later than 30 days after the date of this Agreement, which notice shall specify
the number of Additional Shares to be purchased by the U.S. Underwriters and the
date on which such shares are to be purchased. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Additional Shares may be
purchased as provided in Section 4 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each U.S. Underwriter agrees, severally
and not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as the U.S. Representatives may
determine) that bears the same proportion to the total number of Additional
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Shares to be purchased as the number of U.S. Firm Shares set forth in Schedule I
hereto opposite the name of such U.S. Underwriter bears to the total number of
U.S. Firm Shares.
The Company hereby agrees that, without the prior written consent
of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 90 days after the date of the Prospectus, (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 to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such 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 Shares to be sold hereunder, (b) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of any security outstanding on the date hereof of which the
Underwriters have been advised in writing or which is described in the
Prospectus, (c) the issuance by the Company of shares of Common Stock in
connection with, and as consideration for, acquisitions of wireless licenses,
provided that the persons to whom such shares are issued enter into a "lock-up"
agreement, substantially in the form of Exhibit A hereto or (d) the grant by the
Company of options to purchase Common Stock or the issuance of Common Stock
pursuant to the Company's equity and incentive plans as in effect on the date
hereof, copies of which are incorporated by reference as exhibits to the
Registration Statement.
3. Terms of Public Offering. The Company is advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Shares are to be offered to the public initially at
U.S.$_____________ a share (the "PUBLIC OFFERING PRICE") and to certain dealers
selected by you at a price that represents a concession not in excess of
U.S.$______ a share under the Public Offering Price, and that any Underwriter
may allow, and such dealers may reallow, a concession, not in excess of
U.S.$_____ a share, to any Underwriter or to certain other dealers.
4. Payment and Delivery. Payment for the Firm Shares shall be
made to the Company in Federal or other funds immediately available in New York
City against delivery of such Firm Shares for the respective accounts of the
several Underwriters at 10:00 a.m., New York City time, on February ___, 2000,
or at such other time on the same or such other date, not later than March ___,
2000, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 2 or at such other time on the same or on such other
date, in any event not later than April __, 2000, as shall be designated in
writing by the U.S. Representatives. The time and date of such payment are
hereinafter referred to as the "OPTION CLOSING DATE."
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Certificates for the Firm Shares and Additional Shares shall be
in definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The obligations
of the Company to sell the Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the condition that the Registration Statement shall
have become effective not later than February ___, 2000 (New York City time) on
the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded any of the Company's debt securities by any "nationally
recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole,
from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement) that, in your judgment, is so material and adverse
that it makes it, in your judgment, impracticable to market the
Shares on the terms and in the manner contemplated in the
Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in Section 5(a)(i) above and to
the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date
and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date. The officer signing and
delivering such certificate may rely upon the best of his or her
knowledge as to proceedings threatened.
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(c) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx & Xxxxxxx, outside counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Company has been duly incorporated, and is validly
existing and in good standing under the laws of the State of
Delaware, with corporate power and authority to own its property
and to conduct its business as described in the Prospectus. Based
solely on certificates from public officials, such counsel shall
confirm that the Company is qualified to do business in the
states listed on Schedule ___ hereto;
(ii) each domestic subsidiary of the Company has been duly
incorporated, and is validly existing and in good standing under
the laws of the jurisdiction of its incorporation, with the
corporate power and authority to own its property and to conduct
its business as described in the Prospectus. Based solely on
certificates from public officials, such counsel shall confirm
that such domestic subsidiaries are qualified to do business in
the states listed on Schedule ___ hereto;
(iii) the authorized capital stock of the Company conforms
as to legal matters to the description thereof under the captions
"Description of Leap Capital Stock" and "Capitalization"
contained in the Prospectus;
(iv) the Shares of Common Stock outstanding prior to the
issuance of the Shares have been duly authorized and are validly
issued, fully paid and non-assessable;
(v) the shares to be issued and sold by the Company
pursuant to the Underwriting Agreement have been duly authorized
and when issued to and paid for by the Underwriters in accordance
with the terms of this Agreement, will be validly issued, fully
paid and non-assessable, and, to the best of such counsel's
knowledge, free of preemptive rights;
(vi) all of the issued shares of capital stock of each
domestic subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable;
(vii) this Agreement has been duly authorized, executed
and delivered by the Company;
(viii) the Company has all requisite corporate power and
authority to (i) execute, deliver and perform its obligations
under this Agreement, and (ii) issue the Shares, in the manner
and for the purpose contemplated by this Agreement;
(ix) the execution and delivery by the Company of, and the
compliance by the Company with the provisions of, this Agreement
will not result in a violation by the Company of its certificate
of incorporation or by-laws, or the Delaware General Corporation
Law or any federal or California statute, rule or
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regulation known to us to be applicable to the Company (other
than federal or state securities laws or the Communications Act
of 1934, as amended (the "COMMUNICATIONS ACT") or the rules,
regulations, decisions and written policies of the FCC (the "FCC
RULES"), which are specifically addressed elsewhere herein), or,
to the best of such counsel's knowledge, any agreement listed in
the Exhibit Index to the Registration Statement at the time the
Registration Statement becomes effective or any judgment, order
or decree of any governmental body, or agency specifically
directed to the Company or any domestic subsidiary and identified
to such counsel by an officer of the Company as material to the
Company. To the best of such counsel's knowledge, no consent,
approval, authorization or order of, or filing with, any federal
or California court or governmental agency or body is required
for the compliance by the Company with the provisions of this
Agreement, except such as have been obtained or as may be
required under state securities laws in connection with the
purchase and distribution of such Shares by the Underwriters;
(x) the statements in the Prospectus under the captions
"Business - Government Regulation," "Description of Capital
Stock," and "Certain United States Federal Tax Consequences to
Non-U.S. Holders" in each case insofar as such statements
constitute summaries of the legal matters, documents or
proceedings referred to therein, are accurate in all material
respects;
(xi) to the best of such counsel's knowledge, there are no
contracts or other documents, or legal or governmental
proceedings to which the Company or any of its subsidiaries is
party, that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described and filed as
required;
(xii) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as such term is defined in the Investment
Company Act of 1940, as amended;
(xiii) each document filed pursuant to the Exchange Act
and incorporated by reference in the Registration Statement and
the Prospectus (except for financial statements, schedules and
other financial and statistical data included or incorporated by
reference in, or omitted from, the Registration Statement or the
Prospectus as to which such counsel need not express any opinion)
complied when so filed as to form in all material respects with
the requirements for such documents under the Exchange Act and
the applicable rules and regulations of the Commission
thereunder. The Registration Statement and Prospectus (except for
financial statements and schedules and other financial and
statistical data included or incorporated by reference in, or
omitted from, the Registration Statement or the Prospectus as to
which such counsel need not express any opinion) comply as to
form in all material respects with the requirements for
registration statements on Form S-3 under the Securities Act and
the applicable rules and regulations of the Commission
thereunder. In passing
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upon the compliance as to form of each such document filed
pursuant to the Exchange Act and the Registration Statement and
the Prospectus, such counsel may assume that the statements made
and incorporated by reference therein are correct and complete.
(xiv) Schedule I attached thereto includes all licenses,
authorizations, and permits required under the Communications Act
or the FCC Rules, which are necessary for the Company and its
domestic subsidiaries to conduct their business as such counsel
has been advised they are now conducted and as proposed to be
conducted immediately following the Closing Date (the "FCC
LICENSES"). Schedule I attached thereto accurately sets forth
each such license, the name of the licensee, the call letters (if
applicable), the class of service, geographic scope and the
expiration date for each of the FCC Licenses, each of which is in
full force and effect.
(xv) except as described in the Prospectus, other than
rulemaking proceedings or similar proceedings generally affecting
the domestic public cellular mobile radio telecommunications
industry, there is no proceeding before the FCC that is pending
or, to the best of such counsel's knowledge, threatened against
the Company, its domestic subsidiaries or any of their officers,
directors or shareholders, including any FCC complaint,
investigation, notice of apparent liability, order of forfeiture,
proceeding pursuant to an exercise of pre-emptive authority under
47 U.S.C. Section 252, or other administrative action or
proceeding, regarding the business of the Company and its
domestic subsidiaries (i) that is likely to result in a
forfeiture or termination, revocation, adverse modification,
non-renewal, short-term renewal, or other material impairment of
any of the FCC Licenses, or (ii) that reasonably could be
expected to materially and adversely affect the operations or
condition, financial or otherwise, of the Company or its domestic
subsidiaries or the ability of the Company to perform its
obligations under this Agreement.
(xvi) no authorization or approval or other action by, and
no notice to or filing with, the FCC is required under the
Communications Act or the FCC Rules: (i) in connection with the
due execution and delivery by the Company of this Agreement; or
(ii) for the exercise by the Underwriters of any of their
respective rights and remedies under this Agreement.
(xvii) the execution and delivery by the Company of this
Agreement and the performance by the Company of its obligations
under this Agreement (i) do not contravene the Communications Act
or any FCC Rule and (ii) do not and will not result in any
suspension, revocation, material impairment or non-renewal of any
FCC License material to the Company's and its domestic
subsidiaries' operations and business.
In addition, such counsel shall state in the opinion that
it has participated in conferences with officers and other
representatives of the Company, representatives of the
independent public accountants for the Company, and
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representatives of the Underwriters, at which the contents of the
Registration Statement and the Prospectus and related matters
were discussed and, although it is not passing upon, and does not
assume any responsibility for, the accuracy, completeness or
fairness of the statements contained or incorporated by reference
in the Registration Statement and the Prospectus and has not made
any independent check or verification thereof, during the course
of such participation, no facts came to its attention that caused
it to believe that the Registration Statement, at the time it
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, as of its date, contained an
untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
it being understood that such counsel expresses no belief with
respect to the financial statements, schedules and other
financial and statistical data included or incorporated by
reference in, or omitted from, the Registration Statement or the
Prospectus.
(d) The Underwriters shall have received on the Closing Date an
opinion of O'Melveny & Xxxxx LLP, counsel for the Underwriters, dated
the Closing Date, covering the matters referred to in Sections 5(c)(vi),
5(c)(vii), 5(c)(x) (but only as to the statements in the Prospectus
under "Description of Leap Capital Stock" and "Underwriters") and
clauses (b), (c), and (d) of Section 5(c)(xiv) above.
With respect to clauses (b), (c) and (d) of Section 5(c)(xiv)
above, O'Melveny & Xxxxx LLP may state that its opinion and belief are
based upon its participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and
documents (other than the documents incorporated by reference) and
review and discussion of the contents thereof (including documents
incorporated by reference), but are without independent check or
verification, except as specified.
(e) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx Xxxxxxxx Majlis & Cia, outside counsel for Inversiones
Leap Wireless Chile S.A. and Smartcom S.A. (formerly Chilesat Telefonica
Personal S.A.), dated the Closing Date, substantially in the form of
Schedule ___ hereto.
(f) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxx, Angoitia, Xxxxxx x Xxxxxxx, outside counsel for the
Pegaso Entities, dated the Closing Date, substantially in the form of
Schedule ___ hereto.
The opinions of Xxxxxx & Xxxxxxx described in Section 5(c) above,
Xxxxxx Xxxxxxxx Majlis & Cia described in Section 5(e) above and
Xxxxxxx, Angoitia, Xxxxxx x Xxxxxxx described in Section 5(f) above
shall be rendered to the Underwriters at the request of the Company and
shall so state therein.
(g) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from PricewaterhouseCoopers LLP,
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independent public accountants, 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 the pro forma financial statements)
contained in the Registration Statement and the Prospectus; provided
that the letter delivered on the Closing Date shall use a "cut-off date"
not earlier than the date hereof.
(h) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you and certain shareholders, officers and
directors of the Company relating to sales and certain other
dispositions of shares of Common Stock or certain other securities,
delivered to you on or before the date hereof, shall be in full force
and effect on the Closing Date.
The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the delivery to the U.S.
Representatives on the Option Closing Date of such documents as they may
reasonably request with respect to the good standing of the Company and its
subsidiaries, the due authorization and issuance of the Additional Shares and
other matters related to the issuance of the Additional Shares.
6. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, three signed copies of the
Registration Statement (including exhibits thereto and documents
incorporated by reference) and for delivery to each other Underwriter a
conformed copy of the Registration Statement (without exhibits thereto
but including documents incorporated by reference) and to furnish to you
in New York City, without charge, prior to 10:00 a.m. New York City time
on the business day next succeeding the date of this Agreement and
during the period mentioned in Section 6(c) below, as many copies of the
Prospectus, any documents incorporated by reference, and any supplements
and amendments thereto or to the Registration Statement as you may
reasonably request. The terms "supplement" and "amendment" or "amend" as
used in this Agreement shall include all documents subsequently filed by
the Company with the Commission pursuant to the Securities Exchange Act
of 1934, as amended, that are deemed to be incorporated by reference in
the Prospectus.
(b) Before amending or supplementing the Registration Statement
or the Prospectus, to furnish to you a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which you reasonably object, and to file with the
Commission within the applicable period specified in Rule 424(b) under
the Securities Act any prospectus required to be filed pursuant to such
Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with
sales by an Underwriter or dealer, any event shall occur or condition
exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when
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the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to
the Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Shares may have been sold by you on
behalf of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in
the Prospectus as so amended or supplemented will not, in the light of
the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security holders
and to you as soon as practicable an earning statement covering the
twelve-month period ending February 28, 2001 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
7. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company shall pay
or cause to be paid all expenses incident to the performance of its obligations
under this Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Securities Act and all other
fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof to the
Underwriters and dealers, in the quantities hereinabove specified, (ii) all
costs and expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iii) the
cost of printing or producing any Blue Sky or Legal Investment memorandum in
connection with the offer and sale of the Shares under state securities laws and
all expenses in connection with the qualification of the Shares for offer and
sale under state securities laws as provided in Section 6(d) hereof, including
filing fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky or Legal Investment memorandum, (iv) all filing fees incurred in
connection with the review and qualification of the offering of the Shares by
the National Association of Securities Dealers, Inc., (v) all costs and expenses
incident to the quotation of the Shares on the Nasdaq National Market, (vi) the
cost of printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, (viii) the costs and
expenses of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and the cost of any aircraft chartered by the
Company in connection with the road show, and (ix) all other costs and expenses
incident to the performance of the obligations of the Company hereunder for
which
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provision is not otherwise made in this Section. It is understood, however, that
except as provided in this Section 7, Section 8 entitled "Indemnity and
Contribution," and the last paragraph of Section 10 below, the Underwriters will
pay all of their costs and expenses, including, without limitation, fees and
disbursements of their counsel, stock transfer taxes payable on resale of any of
the Shares by them and any advertising expenses connected with any offers they
may make.
8. Indemnity and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages
and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages
or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein, provided, however, that the
foregoing indemnity agreement with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter from whom the person
asserting any such losses, claims, damages or liabilities purchased
Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given
by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, at or prior to the written confirmation of
the sale of the Shares to such person, and if the Prospectus (as so
amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities, unless such failure is the
result of noncompliance by the Company with Section 6(a) hereof.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls
the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Underwriter, but only with
reference to information relating to such Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use in
the Registration Statement, any preliminary prospectus, the Prospectus
or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to Section 8(a) or 8(b), such
person (the "INDEMNIFIED PARTY") shall promptly notify the
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person against whom such indemnity may be sought (the "INDEMNIFYING
PARTY") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated, in the case
of parties indemnified pursuant to Section 8(a), and by the Company, in
the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with
such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered
into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior
to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of
any pending or threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section
8(a) or 8(b) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to
therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (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 Shares or (ii) if the allocation provided by clause 8(d)(i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 8(d)(i)
above but also the relative fault
20
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of the Company on the one hand and of the Underwriters on the other hand
in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, 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 Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the
Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus, bear
to the aggregate Public Offering Price of the Shares. 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 the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 8 are several in
proportion to the respective number of Shares they have purchased
hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 8 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 that
does not take account of the equitable considerations referred to in
Section 8(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of
this Section 8, no Underwriter shall be required to contribute any amount
in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The remedies provided for in this
Section 8 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in
equity.
(f) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of
the Company contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter or by or on behalf
of the Company, its officers or directors or any person controlling the
Company and (iii) acceptance of and payment for any of the Shares.
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9. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 9(a)(i) through 9(a)(iv), such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus.
10. Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case
may be, any one or more of the Underwriters shall fail or refuse to purchase
Shares that it has or they have agreed to purchase hereunder on such date, and
the aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I or Schedule
II bears to the aggregate number of Firm Shares set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as you may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 10 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. If, on the
Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
Additional Shares or (ii) purchase not less than the number of Additional Shares
that such non-defaulting Underwriters would have been obligated to purchase in
the absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
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If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
11. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
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13. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
Very truly yours,
LEAP WIRELESS INTERNATIONAL, INC.
By:
--------------------------------
Name:
Title:
S-1
26
Accepted as of the date hereof:
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Acting severally on behalf
of themselves and the
several U.S. Underwriters
named in Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
----------------------------------------
Name:
Title:
Xxxxxx Xxxxxxx & Co. International Limited
Xxxxxxxxx, Lufkin & Xxxxxxxx International
Credit Suisse First Boston (Europe) Limited
ABN AMRO Incorporated
Acting severally on behalf
of themselves and the several
International Underwriters named in
Schedule II hereto.
By: Xxxxxx Xxxxxxx & Co. International Limited
By:
----------------------------------------
Name:
Title:
S-2
27
SCHEDULE I
U.S. UNDERWRITERS
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------- ---------------
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
[NAMES OF OTHER UNDERWRITERS]
---------------
Total U.S. Firm Shares ===============
3,200,000
Schedule I
28
SCHEDULE II
INTERNATIONAL UNDERWRITERS
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------- ---------------
Xxxxxx Xxxxxxx & Co. International Limited
Xxxxxxxxx, Lufkin & Xxxxxxxx International
Credit Suisse First Boston (Europe) Limited
ABN AMRO Incorporated
---------------
Total International Firm Shares ===============
800,000
Schedule II
29
EXHIBIT A
FORM OF LOCK-UP LETTER
December __, 1999
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co.
Incorporated ("XXXXXX XXXXXXX") and possibly Xxxxxx Xxxxxxx & Co. International
Limited ("MSIL") propose to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with Leap Wireless International, Inc., a Delaware
corporation (the "COMPANY"), providing for the public offering (the "PUBLIC
OFFERING") by the several Underwriters, including Xxxxxx Xxxxxxx and possibly
MSIL (the "UNDERWRITERS"), of shares (the "SHARES") of the Common Stock, $.0001
par value per share, of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 90 days after the date of the final prospectus
relating to the Public Offering (the "PROSPECTUS"), (1) 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, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (1) or (2)
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 sale of any
Shares to the Underwriters pursuant to the Underwriting Agreement or (b)
transactions relating to shares of Common Stock or other securities acquired in
open market transactions after the completion of the Public Offering. In
addition, the undersigned agrees that, without the prior written consent of
Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 90 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock. Notwithstanding the foregoing (i)
gifts and transfers by will or intestacy or (ii) transfers to (A) the
undersigned's members, partners, affiliates or immediate family or (B) a trust,
the
Exhibit A
1
30
beneficiaries of which are the undersigned and/or members of the undersigned's
immediate family, shall not be prohibited by this agreement; provided that (x)
the donee or transferee agrees in writing to be bound by the foregoing in the
same manner as it applies to the undersigned and (y) if the donor or transferor
is a reporting person subject to Section 16(a) of the Securities Exchange Act of
1934 (the "EXCHANGE ACT"), any gifts or transfers made in accordance with this
paragraph shall not require such person to, and such person shall not
voluntarily, file a report of such transaction on Form 4 under the Exchange Act.
"IMMEDIATE FAMILY" shall mean spouse, lineal descendants, father, mother,
brother or sister of the transferor and father, mother, brother or sister of the
transferor's spouse.
Whether or not the Public Offering actually occurs depends on a
number of factors, including market conditions. Any Public Offering will only be
made pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
-----------------------------
(Signature)
-----------------------------
(Printed Name)
-----------------------------
-----------------------------
-----------------------------
(Address)
Exhibit A
2
