Exhibit 10.44(b)
October 16, 1996
Xx. Xxxxxx X. Xxxxx
Executive Vice President &
Chief Financial Officer
Advanced Radio Telecom Corp.
000 000xx Xxxxxx, XXX.X.
Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000
Gentlemen:
This agreement (the "Agreement") will confirm that Advanced Radio Telecom
Corp. and Advanced Radio Technologies Corporation (collectively, the "Company")
have agreed, for good and valuable consideration, the receipt of which is hereby
acknowledged , to offer to retain Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") as the sole book-running manager on customary
terms of the Company's future public or private offerings of (i) equity
securities (including common stock (whether issued in the Company's proposed
initial public offering of its Common Stock ("the IPO")or otherwise), securities
equivalent to common stock such as alphabet or targeted stock or preference
stock with characteristics similar to common stock, and securities convertible
into common stock) and (ii) debt securities (including investment grade debt
securities, non-investment grade debt securities, preferred stock, convertible
debt and convertible preferred stock), excluding for purposes of (i) and
(ii) above private equity issues, bank financings and vendor financings
initiated and negotiated directly between the Company (including its officers
and directors) and such investors and the purchase by certain investors of up to
$50 million of the Company's senior secured notes pursuant to the CIBC Financing
as described in the Company's registration statement relating to the IPO
(collectively, the "Future Financings").
1. RETENTION. (a) Subject to the provisions set forth below in this
Agreement, the Company hereby agrees to offer to retain Xxxxxxx Xxxxx as the
sole book-running manager of the Company's Future Financings on customary terms.
The Company represents that, (i) on and after the date hereof, it will not enter
into discussions or become obligated under any agreement with any other agent,
initial purchaser or underwriter with respect to a private or public offering of
any equity securities or debt securities, excluding private equity issues, bank
financings and vendor financings initiated and negotiated directly between the
Company (including its officers and directors) and such investors, without first
discussing such transaction with Xxxxxxx Xxxxx and offering Xxxxxxx Xxxxx the
opportunity to act as sole book-running manager in connection therewith, and
(ii) the Company has disclosed to Xxxxxxx Xxxxx all material agreements with any
other agents, underwriters, initial purchasers or advisors.
(a) Xxxxxxx Xxxxx, at its sole option, may accept the Company's
offer to act as sole book-running manager of any of the Company's Future
Financings, such acceptance being subject to, without limitation,
(a) satisfactory completion of Xxxxxxx Xxxxx'x due diligence, (b) market
conditions
Advanced Radio Telecom Corp.
October 16, 1996
Page 2
which, in Xxxxxxx Xxxxx'x sole judgment, are satisfactory at the time of any
such Future Financing, (c) receipt by Xxxxxxx Xxxxx of all internal commitment
committee approvals, (d) no material adverse change in the condition, financial
or otherwise, of the Company, its business affairs or business prospects,
(e) mutually acceptable offering size, structure and pricing and (f) execution
of a customary Xxxxxxx Xxxxx agreement containing customary terms and conditions
for such Future Financing.
2. COMPENSATION. In consideration for services rendered hereunder
by Xxxxxxx Xxxxx, the Company agrees to pay Xxxxxxx Xxxxx as follows:
(a) If Xxxxxxx Xxxxx accepts the Company's offer with respect to
any Future Financing, the Company agrees to pay to Xxxxxxx Xxxxx not less than
55% of all fees and compensation payable to all managers in respect of the
Future Financings (based on customary market terms) if two managers are engaged,
or (ii) not less than 50% of all fees and compensation payable to all managers
in respect of the Future Financings (based on customary market terms) if three
or more managers are engaged. Such fees shall be paid with respect to such
Future Financing if, as and when the closing thereof occurs and shall be paid
directly out of the gross proceeds from the Future Financings by wire transfer
or by delivery to Xxxxxxx Xxxxx of a certified or official bank check or checks
payable to its order in immediately available funds.
(b) Whether or not any portion of this engagement is
consummated, the Company hereby agrees to reimburse Xxxxxxx Xxxxx promptly upon
request (on a monthly basis) and upon presentation of appropriate documentation
thereof in reasonable detail for all reasonable out-of-pocket expenses
(including word processing charges, messenger and duplicating services, research
document expenses, travel expenses, legal fees and expenses and other customary
expenditures) incurred by it in connection with this engagement; PROVIDED,
HOWEVER, that the Company shall have no obligation to reimburse Xxxxxxx Xxxxx
for (i) fees and disbursements of its legal counsel if any Future Financing
closes, or (ii) expenses in connection with any Future Financing (other than
legal fees and disbursements as aforesaid) that are customarily borne by the
representatives of the underwriters or placement agents under customary Xxxxxxx
Xxxxx underwriting or placement agreements.
(c) No fee paid or payable to Xxxxxxx Xxxxx or any of its
affiliates shall be credited against any other fee paid or payable to Xxxxxxx
Xxxxx or any of its affiliates. Nothing contained in this Agreement shall
require Xxxxxxx Xxxxx or any of its affiliates to lend any amounts, purchase any
securities or make any investment in the Company or any of its affiliates for
its own account, directly or indirectly.
3. OFFERING MATERIALS. (a) The Company represents and warrants to
Xxxxxxx Xxxxx that this Agreement has been duly authorized, executed and
delivered by the Company and, assuming the due execution by Xxxxxxx Xxxxx,
constitutes a legal, valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms.
(a) The Company will furnish or cause to be furnished to Xxxxxxx
Xxxxx financial and other information which Xxxxxxx Xxxxx believes is
appropriate to its assignment as well as with offering documentation with
respect to Future Financings (collectively, together with amendments and
supplements thereto, the "Offering Materials").
(b) Xxxxxxx Xxxxx will perform due diligence; however the
Company recognizes and confirms that Xxxxxxx Xxxxx (i) will use and rely
primarily on the Offering Materials and on information available from generally
recognized public sources in performing the services contemplated by this
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October 16, 1996
Page 3
Agreement without having independently verified the same, (ii) does not assume
responsibility for the accuracy or completeness of the Offering Materials and
such other information, (iii) will not make an appraisal of any assets or
liabilities of the Company and (iv) reserves the right to continue to perform
due diligence during the course of this engagement until this engagement is
consummated.
(c) Each of the parties hereto agrees that any reference to the
other party or any release or communication in connection with this engagement
is subject to the other party's prior written approval. If any party hereto
terminates this engagement prior to the dissemination of any such release,
communication or material, no reference shall be made therein to such party.
(d) Without Xxxxxxx Xxxxx'x prior written consent, no advice
rendered by Xxxxxxx Xxxxx in connection with the services performed by Xxxxxxx
Xxxxx pursuant to this Agreement will be quoted by the Company, its affiliates
or representatives nor will any such advice be referred to in any report,
document, release or other communication, whether written or oral, prepared,
issued or transmitted by such person, except to the extent required by law (in
which case the appropriate party shall so advise the other in writing prior to
such use and shall consult with the other with respect to the form and timing of
disclosure).
(e) The Company represents that the Offering Materials will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they are made, not
misleading. The Company agrees to advise Xxxxxxx Xxxxx immediately of the
occurrence of any event or any other change known to it which results in any
Offering Materials containing any untrue statement of a material fact or
omitting to state any material fact required to be stated therein or necessary
to make the statements contained therein, in light of the circumstances under
which they were made, not misleading, and to promptly deliver to Xxxxxxx Xxxxx
copies of any announcement, annual report, financial report or such other
information concerning the business and financial condition of the Company.
4. INDEMNITY. In consideration of Xxxxxxx Xxxxx'x agreement to act
on behalf of the Company, notwithstanding any limitations set forth herein, the
Company agrees to indemnify and hold harmless Xxxxxxx Xxxxx and its affiliates,
and its and their respective directors, officers, employees, agents and
controlling persons (Xxxxxxx Xxxxx and each such person being an "Indemnified
Party"), from and against any and all losses, claims, damages and liabilities,
joint or several, to which any Indemnified Party may become subject under any
applicable law or otherwise, related to or arising out of (i) any untrue
statement or alleged untrue statement of a material fact contained in any
information (oral or written) or other documents furnished or made available by
the Company to Xxxxxxx Xxxxx or any of its representatives (including, without
limitation, the Offering Materials), or the omission or alleged omission to
state therein a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, or (ii) any
transaction contemplated by this Agreement or the engagement of Xxxxxxx Xxxxx
pursuant to, and the performance by Xxxxxxx Xxxxx of the services contemplated
by this Agreement or any involvement or alleged involvement of Xxxxxxx Xxxxx in
the Future Financings, and will reimburse any Indemnified Party for all expenses
(including reasonable counsel fees and expenses) as they are incurred in
connection with the investigation or, preparation for or defense of any pending
or threatened claim or any action or proceeding arising therefrom, whether or
not such Indemnified Party is a party and whether or not such claim, action or
proceeding is initiated or brought by or on behalf of the Company; PROVIDED,
HOWEVER, that the Company will not be liable under clause (ii) hereof to the
extent that any loss, claim, damage or liability is found in a final judgment by
a court to have resulted from Xxxxxxx Xxxxx'x bad faith, willful misconduct or
gross negligence. The Company also agrees that no Indemnified Party shall have
any
Advanced Radio Telecom Corp.
October 16, 1996
Page 4
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company or its security holders or creditors related to or arising out of the
engagement of Xxxxxxx Xxxxx pursuant to, or the performance by Xxxxxxx Xxxxx of
the services contemplated by, this Agreement, except to the extent that any
loss, claim, damage or liability is found in a final judgment by a court to have
resulted from Xxxxxxx Xxxxx'x bad faith, willful misconduct or gross negligence.
If any action or proceeding (including any governmental proceeding) is
brought or asserted against an Indemnified Party in respect of which indemnity
may be sought against the Company, such Indemnified Party shall promptly notify
the Company in writing of the institution of such action or proceeding; failure
to provide such notice will not, however, relieve the Company from any
obligation or liability it has hereunder or otherwise, except to the extent such
failure results in a material disadvantage to the Company. Xxxxxxx Xxxxx and
each such Indemnified Party shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of Xxxxxxx Xxxxx or such
Indemnified Party unless (a) the Company has agreed to pay such fees and
expenses, or (b) the Company shall have failed to assume the defense of such
action or proceeding. The Company, at its option, may assume the defense of any
such claim with counsel reasonably satisfactory to Xxxxxxx Xxxxx, except if such
Indemnified Party has been advised by counsel that, due to a conflict of
interests or because there may be legal defenses available to such Indemnified
Party that are different from or additional to defenses available to the
Company, separate counsel for the Company and such Indemnified Party is
advisable in which case, the reasonable fees and expenses of Xxxxxxx Xxxxx'x
counsel shall be at the expense of the Company; PROVIDED that, upon invoking
such option the Company shall unconditionally and irrevocably commit in writing
to bear all risk with respect to such claim and to keep such Indemnified Party
informed of the progress of any such claim.
The Company agrees that, without the prior written consent of each of the
relevant Indemnified Parties, it will not settle, compromise or consent to the
entry of any judgment in any pending or threatened claim, action or proceeding
in respect of which indemnification could be sought hereunder (whether or not
such Indemnified Parties are actual or potential parties to such claim, action
or proceeding), (i) that involves any equitable relief that binds or purports to
bind such Indemnified Parties and (ii) unless such settlement, compromise or
consent includes an unconditional release for such Indemnified Parties from all
liability arising out of such claim, action or proceeding and does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of an Indemnified Party. Unless the Company fails to assume the
defense of an action or proceeding, the Company shall not be liable for any
settlement of any such action or proceeding effected without its written consent
(which shall not be unreasonably withheld or delayed), but if the Company has
failed to assume such defense, and if such claim is settled with the Company's
written consent, or if there be a final judgment for the plaintiff in any such
action or proceeding, the Company agrees to indemnify and hold harmless Xxxxxxx
Xxxxx and any such Indemnified Party from and against any loss, liability damage
or expense by reason of such settlement or judgment.
If the indemnification provided for in this Agreement is for any reason
held unenforceable by an Indemnified Party, the Company agrees to contribute to
the losses, claims, damages, liabilities and expenses for which such
indemnification is held unenforceable (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company, on the one hand, and
the Indemnified Party, on the other hand, of any Future Financing or (ii) if
(but only if) the allocation provided by clause (i) is for any reason held
unenforceable, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) but also the relative fault of the
Company, on the one hand, and of the Indemnified Party, on the other hand, as
well as any other relevant equitable considerations. The relative benefits
received by the
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October 16, 1996
Page 5
Company, on the one hand, and the Indemnified Party, on the other hand, shall be
deemed to be in the same proportion as the total net proceeds of any securities
offered in the Future Financing bears to any fees paid or to be paid to Xxxxxxx
Xxxxx in connection with any such Future Financings; PROVIDED, HOWEVER, that, to
the extent permitted by applicable law, in no event shall the respective
Indemnified Parties be required to contribute an amount in excess of the fees
actually paid to Xxxxxxx Xxxxx in connection with any such Future Financing.
The relative fault of the Company on the one hand and of the Indemnified Party
on the other shall be determined by reference to, among other things, whether
such untrue statements or omissions or other actions (or alleged untrue
statements, omissions or other actions) relate to information supplied or action
taken by the Company on the one hand or by the Indemnified Party on the other
and the relevant persons' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement, omissions or actions.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim. The Company and
Xxxxxxx Xxxxx agree that it would not be just and equitable if contribution
pursuant to this Section 4 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above.
The aforesaid indemnity and contribution agreements shall apply to any
modification of Xxxxxxx Xxxxx'x engagement hereunder, and shall remain in full
force and effect regardless of any investigation made by or on behalf of Xxxxxxx
Xxxxx or its affiliates or its or their respective directors, officers,
employees, agents or controlling persons and shall survive the delivery and sale
of the securities offered in the Future Financings. The Company agrees promptly
to notify Xxxxxxx Xxxxx of the commencement of any litigation or proceeding
against it or any of its directors, officers, agents or employees in connection
with the transactions contemplated hereby. The agreements contained in this
Section 4 shall remain in full force and effect following the completion or
termination of Xxxxxxx Xxxxx'x engagement hereunder and shall be in addition to
any liability that the Company may otherwise have to Xxxxxxx Xxxxx and its
affiliates and its and their respective directors, officers, employees, agents
or controlling persons.
In the event the parties enter into an agreement referred to in Sections 1
and 6, the provisions thereof relating to indemnification, contribution and
notice, defense and settlement of claims shall supersede the provisions of this
paragraph 4 solely with respect to the subject matter of such other agreement.
5. SURVIVAL OF CERTAIN PROVISIONS. The representations, warranties
and covenants contained in Section 3, the provisions contained in Section 4 of
this Agreement and the Company's obligation to pay Xxxxxxx Xxxxx any
compensation pursuant hereto or reimburse any expenses (pursuant to Section 2
hereof) as provided for herein shall remain operative and in full force and
effect regardless of (a) any completion of this engagement, (b) any termination
of this Agreement, or (c) any investigation made by or on behalf of Xxxxxxx
Xxxxx or any affiliate of Xxxxxxx Xxxxx, and shall be binding upon, and shall
inure to the benefit of, any successors, assigns, heirs and personal
representatives of the Company, Xxxxxxx Xxxxx, the Indemnified Parties and any
such person.
6. NO COMMITMENT. This Agreement is not intended to constitute, and
should not be construed as, an agreement or commitment between the Company and
Xxxxxxx Xxxxx relative to underwriting or purchasing securities in any Future
Financings, and Xxxxxxx Xxxxx or the Company, in its respective sole judgment
and discretion, may determine at any time not to proceed with any such
transaction. Such an agreement will be made only by the execution of a
definitive agreement in Merrill
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October 16, 1996
Page 6
Xxxxx'x customary form and shall be conditioned further upon all necessary
approvals and upon compliance by the Company with the terms contained in this
Agreement and such definitive documentation.
7. NOTICES. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and shall be mailed or delivered (a) if to the
Company, at its offices at 000 000xx Xxxxxx, XX, Xxxxx 0000, Xxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xx. Xxxxxx X. Xxxxx; and (b) if to Xxxxxxx Xxxxx at
its offices at World Financial Center, North Tower, 250 Xxxxx Street, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xx. Xxxxxx X. Xxxxx. The
parties hereto, by written notice to the other parties, may designate additional
or different addresses for subsequent notices or communications.
8. COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
9. THIRD PARTY BENEFICIARIES. This Agreement has been and is made
solely for the benefit of the parties hereto, and their respective successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement.
10. CHOICE OF LAW, JURISDICTION, RECOVERY OF ATTORNEY'S FEES. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York (without regard to its conflict of laws provisions). The
Company hereby irrevocably submits to the jurisdiction of the Federal and New
York State courts located in the City of New York in connection with any suit,
action or proceeding related to this Agreement or any of the matters
contemplated hereby, irrevocably waives any defense of lack of personal
jurisdiction and irrevocably agrees that all claims in respect of any suit,
action or proceeding may be heard and determined in any such court. The Company
irrevocably waives, to the fullest extent it may effectively do so under
applicable law, any objection which it may now or hereafter have to the laying
of venue of any such suit, action or proceeding brought in any such court and
any claims that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum. Subject to paragraph 2(c) above, the
Company further agrees to pay or reimburse Xxxxxxx Xxxxx for all reasonable
costs and expenses incurred by Xxxxxxx Xxxxx in connection with the enforcement
of any of its rights under this Agreement, including without limitation, all
attorneys fees and expenses of its counsel.
11. HEADINGS. The section headings in this Agreement have been as a
matter of convenience of reference and are not a part of this Agreement.
12. PRESS ANNOUNCEMENTS. At any time after the consummation or other
public announcement of any portion of this engagement and with prior approval of
the Company (which approval shall not be unreasonably withheld or delayed),
Xxxxxxx Xxxxx may place an announcement (at its expense) in such newspapers and
publications as it may choose, stating that Xxxxxxx Xxxxx has acted as sole
book-running manager of the Future Financings contemplated by this Agreement.
13. TERM. Except as provided herein, the Agreement shall extend from
the date of this letter until the earlier of (i) two years following the IPO and
(ii) the time at which the Company has issued through Xxxxxxx Xxxxx at least
$300 million in gross proceeds of any combination of debt and/or equity
securities (without giving effect to gross proceeds from the IPO).
Advanced Radio Telecom Corp.
October 16, 1996
Page 7
14. AMENDMENT. This Agreement may not be modified or amended except
in writing duly executed by the parties hereto.
15. ASSIGNMENT. The Company consents to the assignment of this
Agreement to any affiliate of, or successor to, Xxxxxxx Xxxxx and the assumption
of such affiliate or successor of Xxxxxxx Xxxxx'x rights and obligations
hereunder.
16. ENFORCEABILITY. If any term, provision, covenant or restriction
contained in this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
17. WAIVER OF TRIAL BY JURY. Each of Xxxxxxx Xxxxx and the Company
(in its own behalf and, to the extent permitted by applicable law, on behalf of
its shareholders) waives all right to trial by jury in any action, proceeding,
claim or counterclaim (whether based upon contract, tort or otherwise) related
to or arising out of the engagement of Xxxxxxx Xxxxx pursuant to, or the
performance by Xxxxxxx Xxxxx of the services contemplated by, this agreement.
Advanced Radio Telecom Corp.
October 16, 1996
Page 8
If the foregoing terms correctly set forth our agreement, please confirm by
signing and returning to us the duplicate copy of this agreement. We look
forward to working with you toward the successful conclusion of this engagement.
Very truly yours,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: ________________________________
Xxxxxx X. Xxxxx
Vice President
Investment Banking Group
Confirmed and accepted as of the
date first written above.
Advanced Radio Telecom Corp.
By: ________________________________
Name:
Title:
Advanced Radio Technologies Corporation
By: ________________________________
Name:
Title:
Dated: October ____, 1996
