------------------------------------------------------------------------------
------------------------------------------------------------------------------
ADVANCED RADIO TELECOM CORP.
(a Delaware corporation)
135,000 Units Consisting of
$135,000,000 Aggregate Principal Amount of
___% Senior Notes due 2007 and Warrants
to Purchase 2,731,725 Shares of Common Stock
PURCHASE AGREEMENT
Dated: February __, 1997
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Table of Contents
PURCHASE AGREEMENT...........................................................1
SECTION 1. Representations and Warranties.............................3
(a) Representations and Warranties by the Company.................3
(b) Officer's Certificates.......................................13
SECTION 2. Sale and Delivery to Underwriters; Closing................13
(a) Securities...................................................13
(b) Payment......................................................13
(c) Denominations; Registration..................................14
SECTION 3. Covenants of the Company..................................14
(a) Compliance with Securities Regulations and Commission
Requests..................................................14
(b) Filing of Amendments.........................................14
(c) Delivery of Registration Statements..........................14
(d) Delivery of Prospectuses.....................................15
(e) Continued Compliance with Securities Laws....................15
(f) Blue Sky Qualifications......................................15
(g) Rule 158.....................................................15
(h) Use of Proceeds..............................................16
(i) Listing......................................................16
(j) Restriction on Sale of Securities............................16
(k) Reporting Requirements.......................................16
(m) Pledged Securities...........................................16
SECTION 4. Payment of Expenses.......................................16
(a) Expenses.....................................................16
(b) Termination of Agreement.....................................17
SECTION 5. Conditions of Underwriters' Obligations...................17
(a) Effectiveness of Registration Statement......................17
(b) Opinion of Counsel for Company...............................17
(d) Opinion of Counsel for Underwriters..........................18
(e) Officers' Certificate........................................18
(f) Accountants' Comfort Letter..................................18
(g) Bring-down Comfort Letter....................................18
(h) Maintenance of Rating........................................18
(i) Approval of Listing..........................................19
(j) Objection....................................................19
(l) Additional Documents.........................................19
(m) Termination of Agreement.....................................19
SECTION 6. Indemnification...........................................19
(a) Indemnification of Underwriters..............................19
(b) Indemnification of Company, Directors and Officers...........20
(c) Actions against Parties; Notification........................20
(d) Settlement without Consent if Failure to Reimburse...........21
SECTION 7. Contribution..............................................21
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery..................................................23
(a) Termination; General.........................................23
(b) Liabilities..................................................23
SECTION 10. Default by One or More of the Underwriters................23
SECTION 11. Notices...................................................24
i
SECTION 12. Parties...................................................24
SECTION 13. Governing Law and Time....................................24
SECTION 14. Effect of Headings........................................24
SCHEDULES
Schedule A - List of Underwriters..............................Sch A-1
Schedule B - Pricing Information...............................Sch B-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel...................A-1
Exhibit B - Form of Opinion of Special Regulatory Counsel..........B-1
Exhibit C - Capitalization of the Company..........................C-1
ii
ADVANCED RADIO TELECOM CORP.
(a Delaware corporation)
135,000 Units Consisting of
$135,000,000 Aggregate Principal Amount of
___% Senior Notes due 2007 and Warrants
to Purchase Shares of Common Stock
PURCHASE AGREEMENT
February __, 1997
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
CIBC WOOD GUNDY SECURITIES CORP.
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Advanced Radio Telecom Corp. (f/k/a Advanced Radio Technologies
Corporation), a Delaware corporation (the "Company"), confirms its agreement
with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx") and each of the other Underwriters named in Schedule A
hereto (collectively, the "Underwriters," which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), for
whom Xxxxxxx Xxxxx and CIBC Wood Gundy Securities Corp. ("CIBC Wood Gundy")
are acting as representatives (in such capacity, the "Representatives") with
respect to the issue and sale by the Company and the purchase by the
Underwriters (the "Offering"), acting severally and not jointly, of the
respective amounts set forth in said Schedule A of 135,000 units (the
"Units"), each consisting of $1,000 principal amount of the Company's ___%
Senior Notes due 2007 (collectively, the "Notes") and 15 warrants
(collectively, the "Warrants"), each Warrant representing the right to
purchase 1.349 shares (collectively, the "Warrant Shares") of common stock,
par value $.001 per share (the "Common Stock"). The Notes are to be issued
pursuant to an indenture, dated as of February __, 1997 (the "Indenture"),
between the Company and The Bank of New York, as trustee (the "Trustee").
The Warrants are to be issued pursuant to a warrant agreement, dated as of
February __, 1997 (the "Warrant Agreement"), between the Company and
Continental Stock Transfer and Trust Company, as warrant agent (the "Warrant
Agent"). The Notes and the Warrants will not be separable until the earlier
of (i) __________, 1997, (ii) a Change in Control with respect to the Company
and (iii) such date as the Underwriters may, in their discretion, deem
appropriate (such date, the "Separation Date"). The Units, the Notes, the
Warrants and the Warrant Shares are herein collectively referred to as the
"Securities."
This Agreement, the Indenture, the Warrant Agreement and the Collateral
Pledge and Security Agreement, dated as of February __, 1997 (the "Pledge
Agreement"), between the Company and The Bank of New York, as collateral
agent (the "Collateral Agent"), are herein collectively referred to as the
"Operative Documents." Capitalized terms used herein but not otherwise
defined herein shall have the meanings given to such terms in the Indenture.
The Company understands that the Underwriters propose to make a public
offering of the Units as soon as the Underwriters deem advisable after this
Agreement has been executed and delivered and the Indenture has been
qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act").
Prior to the date hereof, the Company entered into a certain Senior Secured
Credit Agreement and certain ancillary documents attached thereto as exhibits
(collectively, the "CIBC Agreements"), pursuant to which certain investors
identified by CIBC Wood Gundy agreed, under certain circumstances, to
purchase up to $50.0 million of the Company's senior secured notes.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-19295) covering
the registration of the Securities under the Securities Act of 1933, as
amended (the "1933 Act"), including the related preliminary prospectus or
prospectuses. Promptly after execution and delivery of this Agreement, the
Company will either (i) prepare and file a prospectus in accordance with the
provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b)
of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the
Company has elected to rely upon Rule 434 ("Rule 434") of the 1933 Act
Regulations, prepare and file a term sheet (a "Term Sheet") in accordance
with the provisions of Rule 434 and Rule 424(b). The information included
in such prospectus or in such Term Sheet, as the case may be, that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it
became effective (a) pursuant to paragraph (b) of Rule 430A is referred to
as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was
used after such effectiveness and prior to the execution and delivery of
this Agreement, is herein called a "preliminary prospectus." Such
registration statement, including the exhibits thereto and schedules thereto
at the time it became effective and including the Rule 430A Information and
the Rule 434 Information, as applicable, is herein called the "Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of the
1933 Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final prospectus in the
form first furnished to the Underwriters for use in connection with the
offering of the SecuritieUnits is herein called the "Prospectus." If Rule
434 is relied on, the term "Prospectus" shall refer to the preliminary
prospectus dated January 16, 1997 together with the Term Sheet, and all
references in this Agreement to the date of the Prospectus shall mean the
date of the Term Sheet. For purposes of this Agreement, all references to
the Registration Statement, any preliminary prospectus, the Prospectus or
any Term Sheet or any amendment or supplement to any of the foregoing shall
be deemed to include the copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system ("XXXXX").
2
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(b) hereof, and agrees with each
Underwriter, as follows:
(i) Each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement or any Rule
462(b) Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with. At the respective times the Registration Statement, any
Rule 462(b) Registration Statement and any post-effective amendments
thereto became effective and at the Closing Time, the Registration
Statement, the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and did not
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and the Prospectus, any preliminary
prospectus and any supplement thereto or prospectus wrapper prepared in
connection therewith, at their respective times of issuance and at the
Closing Time, complied and will comply in all material respects with any
applicable laws or regulations of foreign jurisdictions in which the
Prospectus and such preliminary prospectus, as amended or supplemented, if
applicable, are distributed in connection with the offer and sale of
Reserved Securities. Neither the Prospectus nor any amendments or
supplements thereto (including any prospectus wrapper), at the time the
Prospectus or any such amendment or supplement was issued and at the
Closing Time, included or will include an untrue statement of a material
fact or omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading. If Rule 434 is used, the Company will
comply with the requirements of Rule 434 and the Prospectus shall not be
"materially different," as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time it became
effective. The representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through Xxxxxxx
Xxxxx expressly for use in the Registration Statement or Prospectus.
(ii) Each preliminary prospectus and the prospectus filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations, and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with the Offering were identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
(iii) No action has been taken and no local, state or Federal law,
statute, ordinance, rules, regulation, requirement, judgment or court
decree has been enacted, adopted or issued by any governmental agency that
prevents the issuance of the Units or prevents or suspends the use
3
of the Prospectus; no judgment, restraining order or order of any nature
by a Federal or state court of competent jurisdiction has been issued that
prevents the issuance of the Units or prevents or suspends the sale of the
Units in any jurisdiction referred to in Section 3(f) hereof; and every
request of any securities authority or agency of any jurisdiction for
additional information has been complied with in all material respects.
(iv) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the 1933 Act or by the 1933 Act Regulations which
have not been described or filed as required. The contracts so described
in the Prospectus are accurate and complete in all material respects, and
all such contracts described as being in full force and effect on the date
hereof are in full force and effect on the date hereof. Neither the
Company nor any of its subsidiaries or, to the best of the Company's
knowledge, any other party is in breach of or default under any such
contract.
(v) Each of the Company and ART Licensing Corp., a Delaware
corporation ("ART Licensing") has been duly formed as a corporation and is
validly existing in good standing under the laws of its jurisdiction of
incorporation and has all requisite corporate power and authority to own,
lease and operate its properties and to conduct its business as described
in the Prospectus. Each of the Company and ART Licensing is duly qualified
to do business and is in good standing as a foreign corporation in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure
to be so qualified would not have, either individually or in the aggregate,
a material adverse effect on the assets, properties, business, management,
earnings, net worth, results of operations, condition (financial or
otherwise) or business prospects of the Company and its subsidiaries, taken
as a whole. No proceeding has been instituted in any such jurisdiction,
revoking, limiting or curtailing, or seeking to revoke, limit or curtail,
such power and authority or qualification.
(vi) ART Licensing, Advanced Radio Telecom Sweden AB, a corporation
organized under the laws of Sweden ("ART Sweden"), and Advanced Radio
Telecom Limited, a corporation organized under the laws of the United
Kingdom ("ART UK"), are the only subsidiaries of the Company. The Company
owns all of the outstanding capital stock of each such subsidiary, subject,
in the case of ART Sweden and ART UK, to the provisions of that certain ART
Europe Shareholders Agreement, dated as of September 30, 1996, between the
Company and Xxxxx Xxxxxxxxxxx; all such capital stock has been duly
authorized and validly issued and is fully paid and nonassessable, free and
clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature, other than any liens arising under the CIBC
Agreements as described in the Prospectus; and none of such capital stock
was issued in violation of any preemptive or similar rights. Except as
disclosed in the Prospectus, there are no outstanding subscriptions,
rights, warrants, calls, commitments of sale or options to acquire, or
instruments convertible into or exchangeable for, any such shares of
capital stock or other equity interest of any such subsidiary.
(vii) Neither ART Sweden nor ART UK has any material assets or
conducts any material business or operations.
(viii) The Company and its subsidiaries do not have any ownership
interest in any joint venture, other than (A) the Company's 50% ownership
interest in the XXX Xxxx Joint
4
Venture, a Delaware partnership owned by the Company and Extended
Communications, Inc. ("XXX Xxxx"), and (B) the Company's investment
in Advantage Telecom, Inc.
(ix) Upon consummation of the Offering, the Company will have an
authorized and outstanding capitalization as set forth in Exhibit C hereto.
All of the issued and outstanding shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and
non-assessable and were not issued in violation of any preemptive or
similar rights. Except as disclosed in the Prospectus, there are no
outstanding subscriptions, rights, warrants, calls, commitments of sale or
options to acquire, or instruments convertible into or exchangeable for,
any capital stock of the Company. The description of the Company's stock
option, stock bonus and other stock plans or arrangements, and the options
or other rights granted and exercised thereunder, set forth in the
Prospectus accurately and fairly presents in all material respects the
information required to be shown with respect to such plans, arrangements,
options and rights.
(x) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Operative Documents
and to consummate the transactions contemplated hereby and thereby,
including, without limitation, the corporate power and authority to issue,
sell and deliver the Securities as provided herein and therein.
(xi) The Company has duly authorized, executed and delivered this
Agreement and this Agreement is the legally valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except as the enforceability thereof may be limited (A) by the effect of
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting the
rights and remedies of creditors, (B) by the effect of general principles
of equity, whether enforcement is considered in a proceeding in equity or
at law, and the discretion of the court before which any proceeding
therefor may be brought and (C) to the extent that rights to
indemnification and contribution thereunder may be limited by federal or
state securities laws or public policy relating thereto.
(xii) The Company has duly authorized the Units and, when issued
and delivered to and paid for by the Underwriters in accordance with the
terms hereof, the Units will conform in all material respects to the
description thereof in the Prospectus.
(xiii) The Company has duly authorized the Indenture and, when the
Company has duly executed and delivered the Indenture (assuming the due
authorization, execution and delivery thereof by the Trustee), the
Indenture will be the legally valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as the
enforceability thereof may be limited (A) by the effect of bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws now or hereafter in effect relating to or affecting the rights
and remedies of creditors and (B) by the effect of general principles of
equity, whether enforcement is considered in a proceeding in equity or at
law, and the discretion of the court before which any proceeding therefor
may be brought. The Indenture has been duly qualified under the 1939 Act.
(xiv) The Company has duly authorized the Notes and, when issued
and authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Underwriters
5
in accordance with the terms hereof, the Notes will conform in all
material respects to the description thereof in the Prospectus, will
be entitled to the benefits of the Indenture and will be the legally
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforceability
thereof may be limited (A) by the effect of bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws
now or hereafter in effect relating to or affecting the rights and remedies
of creditors and (B) by the effect of general principles of equity,
whether enforcement is considered in a proceeding in equity or at law,
and the discretion of the court before which any proceeding therefor
may be brought.
(xv) The Company has duly authorized the Warrant Agreement and, when
the Company has duly executed and delivered the Warrant Agreement (assuming
the due authorization, execution and delivery thereof by the Warrant
Agent), the Warrant Agreement will be the legally valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be limited (A) by
the effect of bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws now or hereafter in effect relating to or
affecting the rights and remedies of creditors, (B) by the effect of
general principles of equity, whether enforcement is considered in a
proceeding in equity or at law, and the discretion of the court before
which any proceeding therefor may be brought and (C) to the extent that
rights to indemnification and contribution thereunder may be limited by
federal or state securities laws or public policy relating thereto.
(xvi) The Company has duly authorized the Warrants and, when
countersigned by the Warrant Agent and issued and delivered by the Company
in accordance with the terms of the Warrant Agreement and delivered to and
paid for by the Underwriters in accordance with the terms hereof, the
Warrants will conform in all material respects to the description thereof
in the Prospectus and will have been validly issued, and the issuance of
such Warrants will not be subject to any preemptive or similar rights.
(xvii) The Company has duly authorized and reserved for issuance
the Warrant Shares to be issued upon the exercise of the Warrants and, when
issued and delivered upon the exercise of the Warrants against payment of
the Exercise Price as provided in the Warrant Agreement, the Warrant Shares
will conform in all material respects to the description thereof in the
Prospectus, will have been duly issued and will be fully paid and
non-assessable, and the issuance of such Warrant Shares will not be subject
to any preemptive or similar rights.
(xviii) The Company has duly authorized the Pledge Agreement and,
when the Company has duly executed and delivered the Pledge Agreement
(assuming the due authorization, execution and delivery thereof by the
Collateral Agent), the Pledge Agreement will be the legally valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as the enforceability thereof may be
limited (A) by the effect of bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights and remedies of creditors, (B) by the
effect of general principles of equity, whether enforcement is considered
in a proceeding in equity or at law, and the discretion of the court before
which any proceeding therefor may be brought and (C) to the extent that
rights to indemnification and contribution thereunder may be limited by
federal or state securities laws or public policy relating thereto.
6
(xix) Upon consummation of the Offering, the Company will be the
sole beneficial owner of the Pledged Securities (as defined in the
Registration Statement) and no Lien (as defined in the Registration
Statement) will exist upon such Pledged Securities (and no right or option
to acquire the same will exist in favor of any other person or entity),
except for the pledge and security interest in favor of the Collateral
Agent to be created or provided for in the Pledge Agreement, which pledge
and security interest will constitute a first priority perfected pledge and
security interest in and to all of the Pledged Securities.
(xx) No approval, authorization, order, consent, registration, filing,
qualification, license or permit of or with any court, regulatory,
administrative or other governmental body is required for the execution and
delivery of this Agreement by the Company or the consummation of the
transactions contemplated by this Agreement, except such as have been
obtained and are in full force and effect under the 1933 Act and such as
may be required under applicable Blue Sky laws in connection with the
purchase and distribution of the SecuritieUnits by the Underwriters and the
clearance of the Offering with the National Association of Securities
Dealers, Inc. ("NASD").
(xxi) No preemptive rights or other rights to subscribe for or
purchase exist with respect to the issuance and sale of the Securities by
the Company pursuant to this Agreement. No stockholder of the Company has
any right which has not been waived to require the Company to register the
sale of any shares owned by such stockholder under the 1933 Act in the
Offering contemplated by this Agreement. No further approval or authority
of the stockholders or the board of directors of the Company (the "Board of
Directors") will be required for the issuance and sale of the Securities to
be sold by the Company as contemplated herein.
(xxii) The Company has filed each of (A) the Cooperation Agreement
between Landover Holdings Corp. ("LHC"), Xxxxxxxx X. Xxxxxxxxx and the
Company, (B) the Voting Trust Agreement among Xxxxxx X. Xxxxxxxxxxxx,
Xxxxxx X. Xxxxxx and Xxxx X. Xxxxxxxx, as trustees, LHC, Xxxxxxxx
Xxxxxxxxx, the Xxxxxxx Xxxxx Xxxxxxxxx Trust and the Company and (C) the
Confidentiality Agreement among Xxxxxxxx X. Xxxxxxxxx, the Company and
Telecom (collectively, the "Voting Trust Agreements"), with the Secretary
of State of the State of Delaware and has taken all acts necessary to
comply with Delaware law; each of the Voting Trust Agreements complied with
Delaware law when so filed; and, to the Company's knowledge, Xxxxxxxx X.
Xxxxxxxxx has taken all acts necessary to comply with Delaware law.
(xxiii) Each of the CIBC Agreements will terminate upon consummation
of the Offering.
(xxiv) The CommcoCCC Agreement (as such term is defined in the
Prospectus) has been duly authorized and validly executed by each of the
parties thereto and is the legally valid and binding agreement of each such
party, enforceable against each such party in accordance with its terms,
except as the enforceability thereof may be limited (A) by the effect of
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting the
rights and remedies of creditors, (B) by the effect of general principles
of equity, whether enforcement is considered in a proceeding in equity or
at law, and the discretion of the court before which any proceeding
therefor may be
7
brought and (C) to the extent that rights to indemnification and
contribution thereunder may be limited by federal or state securities
laws or public policy relating thereto.
(xxv) None of the execution, delivery and performance of the
Operative Documents by the Company, the compliance by the Company with all
of the provisions thereof, the issuance and sale of the Units, the
consummation by the Company and its subsidiaries of the transactions
contemplated thereby (A) require any consent, approval, authorization or
other order of or filing, registration, qualification, license or permit of
or with, any court, regulatory body, administrative agency or other
governmental body (including, without limitation, the Federal
Communications Commission (the "FCC")), other than those that have been
obtained and are in full force and effect, or (B) violate, conflict with,
or constitute a breach of any of the terms or provisions of, or a default
under (or an event that with notice or the lapse of time, or both, would
constitute a default), or require consent under, or result in the
imposition of a lien or encumbrance on any properties of the Company or any
of its subsidiaries pursuant to (1) the charter or bylaws of the Company or
any of its subsidiaries, (2) any bond, debenture, note, mortgage, deed of
trust or other agreement, indenture or other instrument to which or by
which any of them is a party or by which any of them or any of their
respective property is bound, (3) any local, state or Federal law, statute,
ordinance, rule, regulation or requirement (including, without limitation,
the Communications Act of 1934, as amended by the Telecommunications Act of
1996 (as so amended, the "Communications Act"), the rules and regulations
of the FCC and any environmental laws, statutes, ordinances, rules or
regulations) applicable to the Company, any of its subsidiaries or any of
their respective assets or properties or (4) any judgment, order or decree
of any court or governmental agency or authority having jurisdiction over
the Company, any of its subsidiaries or any of their assets or properties,
that, in the case of clauses (2), (3) or (4), (x) would reasonably be
expected, either individually or in the aggregate, to result in a material
adverse effect on the assets, properties, business, management, earnings,
net worth, results of operations, condition (financial or otherwise) or
business prospects of the Company and its subsidiaries, taken as a whole,
(y) would materially interfere with or materially adversely affect the
issuance of the Units or the consummation of the Offering or (z) would in
any manner draw into question the validity of any of the Operative
Documents (any of the events set forth in clauses (x), (y) or (z), a
"Material Adverse Effect").
(xxvi) Neither the Company nor any of its subsidiaries is or,
immediately after giving effect to the Offering, will be (A) in violation
of its charter or bylaws, (B) in default in the performance of any material
obligation, agreement or condition contained in any bond, debenture, note
or any other evidence of indebtedness or in any other agreement, indenture
or instrument material to the conduct of the business of the Company and
its subsidiaries, taken as a whole, to which any of them is a party, or by
which any of their respective properties is bound or (C) in violation of
any local, state or Federal law, statute, ordinance, rule, regulation,
requirement, judgment or court decree (including, without limitation, the
Communications Act and the rules and regulations of the FCC and
environmental laws, statutes, ordinances, rules, regulations, judgments or
court decrees) applicable to any of them or any of their respective assets
or properties (whether owned or leased), other than, in the case of clauses
(B) and (C), any default or violation that would not reasonably be expected
to have a Material Adverse Effect. There exists no condition that, with
notice, the passage of time or otherwise, would constitute a default under
any such document or instrument that would reasonably be expected to have a
Material Adverse Effect.
8
(xxvii) Other than routine FCC proceedings relating to applications
for and assignments of 38 GHz wireless broadband authorizations and other
than rulemaking procedures of general applicability to the 38 GHz wireless
broadband telecommunications industry, there is (A) no action, suit or
proceeding before or by any court, arbitrator or governmental agency, body
or official, domestic or foreign, now pending or threatened or, to the
Company's knowledge, contemplated to which the Company or any of its
subsidiaries is or may be a party or to which the business or property of
any of them is subject, or (B) no injunction, restraining order or order of
any nature by a Federal or state court or foreign court of competent
jurisdiction to which the Company, any of its subsidiaries or their
business, assets, or property are, or would reasonably be expected to be,
subject.
(xxviii) Each of the Company and ART Licensing has good and
marketable title, free and clear of all liens, claims, encumbrances and
restrictions, except for liens described in the Prospectus, liens for taxes
not yet due and payable and other liens not material to the business,
prospects, financial condition or results of operations of the Company and
its subsidiaries, taken as a whole, to all property and assets described in
the Prospectus as currently being owned by each of the Company and its
subsidiaries. The Company or its subsidiaries hold 73 authorizations (the
"Company FCC Licenses") to provide 38 GHz wireless broadband services
("Service"). In particular, the Company or its subsidiaries hold the
authorizations set forth in the table in the Prospectus under the heading
"Business--38 GHz Wireless Broadband Licenses and Authorizations" (the
"License Table") to provide Service in the markets identified therein as
"Owned" and for the amount of bandwidth set forth in the column entitled
"Owned" opposite each such market. The Company has entered into contracts,
pursuant to which the Company is authorized to manage such authorizations
on the terms set forth in the Prospectus, with third parties (including,
without limitation, the ICG Agreement (as defined in the Prospectus)) that
hold, on a combined basis, 351 authorizations (the "Managed FCC Licenses")
to provide Service. In particular, these third parties hold the
authorizations set forth in the License Table to provide Service in the
markets identified therein as "Managed" and for the amount of bandwidth set
forth in the column entitled "Managed" opposite each such market, subject
to such qualifications as are set forth in the Prospectus. The
shareholders of CommcoCCC, Inc. ("CommcoCCC") hold 129 authorizations (the
"CommcoCCC FCC Licenses") to provide Service, which authorizations will be
contributed to CommcoCCC. In particular, the shareholders of CommcoCCC
hold the authorizations set forth in the License Table to provide Service
in the markets identified therein as "Under Definitive Agreement to
Acquire" and for the bandwidth set forth in the column entitled "Under
Definitive Agreement to Acquire" opposite each such market. All of the
Company FCC Licenses, the Managed FCC Licenses and the CommcoCCC FCC
Licenses (collectively, the "Licenses") are in full force and effect. Each
of the Company and its subsidiaries is in compliance with the terms and
conditions of all such Licenses and with the rules and regulations of the
regulatory authorities having jurisdictions with respect thereto. All
leases to which the Company or any of its subsidiaries is a party are valid
and binding, and no default has occurred or is continuing thereunder which
would reasonably be expected to result in a Material Adverse Effect. Each
of the Company and its subsidiaries enjoys peaceful and undisturbed
possession under all such leases to which it is a party as lessee or as
assignee of lessee with such exceptions as do not materially interfere with
the use made by the Company or its subsidiaries.
9
(xxix) Each of the Company, ART Licensing and XXX Xxxx has such
permits, licenses, franchises, trademarks and authorizations of
governmental or regulatory authorities other than the FCC ("Permits") as
are necessary to own, lease and operate their respective properties and
to conduct their respective business in the manner described in the
Prospectus. Each of the Company, ART Licensing and XXX Xxxx has fulfilled
and performed all of its material obligations with respect to such Permits,
and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or result in any other
material impairment of the rights of the holder of any such Permit, except
for any such impairments which would not, individually or in the aggregate,
have a Material Adverse Effect. Except as described in the Prospectus,
such Permits contain no restrictions that are materially burdensome to the
Company and its subsidiaries, taken as a whole.
(xxx) The development, implementation and operation of the 38 GHz
wireless broadband telecommunications services network as described, and in
the markets described, in the Prospectus will not (A) result in any
violation of the provisions of the charter or bylaws of the Company or any
of its subsidiaries, (B) result in any violation of any applicable law,
administrative regulation or administrative or court decree (including,
without limitation, the Communications Act, the rules and regulations of
the FCC and environmental laws) or (C) conflict with or constitute a breach
or violation of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or its subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company or any of its subsidiaries is a party or by which any of
them may be bound, or to which any of their property is subject, except, in
the case of clauses (B) and (C) above, any such violations, conflicts or
breaches that would not individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(xxxi) Except as described in the Prospectus, the business and
operations conducted and proposed to be conducted by the Company and its
subsidiaries as described in the Prospectus are not regulated by any public
service or public utility commissions in the States in which the Company
and its subsidiaries conduct or propose to conduct such business and
operations as described in the Prospectus; and neither the Company nor any
of its subsidiaries is or will be required to obtain any Permit from any
public service or public utility commission in any such State to conduct
its business as described in the Prospectus.
(xxxii) Each of the Company, ART Licensing and XXX Xxxx has filed
all reports required to be filed with the FCC.
(xxxiii) Neither the Company nor ART Licensing has violated any
foreign, Federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants, except where any
such violations would not, individually or in the aggregate, have a
Material Adverse Effect.
(xxxiv) All tax returns required to be filed by the Company or any
of its subsidiaries in any jurisdiction have been so filed. All material
taxes, including withholding taxes, penalties and interest, assessments,
fees and other charges due or claimed to be due from such entities or that
are due and payable have been paid, other than those being contested in
good faith and for which adequate reserves have been provided for those
currently payable without penalty or
10
interest. There are no proposed additional taxes assessments against the
Company or any of its subsidiaries, and neither the Company nor any of its
subsidiaries has any knowledge of any tax deficiency which has been or
might be asserted or threatened against the Company or any of its
subsidiaries which would reasonably be expected to have a Material
Adverse Effect.
(xxxv) Each of the Company and its subsidiaries maintains
reasonably adequate insurance.
(xxxvi) Coopers & Xxxxxxx, L.L.P., who have expressed their opinion
with respect to the financial statements and schedules filed with the
Commission as part of the Registration Statement and included in the
Prospectus and in the Registration Statement, are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(xxxvii) The financial statements, together with related schedules
and notes forming part of the Registration Statement and the Prospectus
(and any amendment or supplement thereto), present fairly the individual
and consolidated financial positions, results of operations and changes in
financial position of the Company and its subsidiaries on the basis stated
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) at the respective dates or for the respective periods
to which they apply. Such statements and related schedules and notes have
been prepared in accordance with generally accepted accounting principles
consistently applied through the periods involved, except as disclosed
therein. The other financial and statistical information and data set
forth in the Registration Statement and the Prospectus (and any amendment
or supplement thereto) is, in all material respects, accurately presented
and prepared on a basis consistent with such financial statements and the
books and records of the Company and its subsidiaries. The pro forma
financial information and other financial information included in the
Prospectus present fairly the information shown therein, have been prepared
in accordance with the Commission's rules and regulations with respect to
pro forma financial information, have been properly compiled on the pro
forma basis described therein, and, in the opinion of the Company, the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
or circumstances referred to therein. No other financial statements or
schedules are required to be included in the Registration Statement. The
selected financial data set forth in the Prospectus under the captions
"Summary Historical and Pro Forma Financial Data," "Capitalization" and
"Selected Historical and Pro Forma Financial Data" fairly present the
information set forth therein on the basis stated in the Registration
Statement.
(xxxviii) Each of the Company and its subsidiaries maintains a system
of internal accounting controls sufficient to provide reasonable assurance
that (A) transactions are executed in accordance with management's general
or specific authorizations, (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets,
(C) access to assets is permitted only in accordance with management's
general or specific authorizations and (D) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto.
(xxxix) Subsequent to the respective dates as of which information
is given in the Prospectus and except as set forth in the Prospectus, (A)
neither the Company nor any of its
11
subsidiaries has incurred any liabilities or obligations, direct or
contingent, which are material, individually or in the aggregate, to
the Company and its subsidiaries, taken as a whole, nor entered into any
transaction not in the ordinary course of business, (B) neither the
Company nor any of its subsidiaries has sustained any material loss or
interference with its businesses or properties from fire, flood,
windstorm, accident or other calamity, whether or not covered by insurance,
(C) there has not been, individually or in the aggregate, any change or
development which would reasonably be expected to result in a Material
Adverse Effect and (D) there has been no dividend or distribution of
any kind declared, paid or made by the Company or any of its subsidiaries
on any class of capital stock.
(xl) As disclosed in the Prospectus, the Company does not intend to,
nor does it believe that it will, incur debts beyond its ability to pay
such debts as they mature. As disclosed in the Prospectus, after giving
effect to the Offering, the fair saleable value of the assets of the
Company on a consolidated basis will exceed the amount that will be
required to be paid on or in respect of the existing debts and other
liabilities (including contingent liabilities) of the Company on a
consolidated basis as they become absolute and mature. As disclosed in the
Prospectus, the assets of the Company on a consolidated basis do not
constitute unreasonably small capital to carry out the business of the
Company and its subsidiaries, taken as a whole, as conducted or as proposed
to be conducted.
(xli) Neither the Company nor any of its subsidiaries is (A) an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or
(B) a "holding company" or a "subsidiary company" or an "affiliate" of a
holding company within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
(xlii) None of the execution, delivery and performance of this
Agreement, the issuance and sale of the Units, the application of the
proceeds from the issuance and sale of the Units and the consummation of
the transactions contemplated thereby as set forth in the Prospectus, will
violate Regulation G, T, U or X promulgated by the Board of Governors of
the Federal Reserve System or analogous foreign laws and regulations.
(xliii) The Company has not distributed, and will not distribute
prior to the First Closing Date, any offering material in connection with
the offering and sale of the Units other than any preliminary prospectus,
the Prospectus, the Registration Statement and the other materials
permitted by the 1933 Act.
(xliv) Neither the Company nor any of its subsidiaries has (A)
taken, directly or indirectly, any action designed to, or that might
reasonably be expected to, cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of the Units or (B) since the date of the Prospectus (1) sold, bid
for, purchased or paid any person any compensation for soliciting purchases
of, the Units or (2) paid or agreed to pay to any person any compensation
for soliciting another to purchase any other securities of the Company.
(xlv) Except pursuant to this Agreement, there are no contracts,
agreements or understandings between the Company or any of its subsidiaries
and any other person that would give rise to a valid claim against the
Company, any of its subsidiaries or any of the Underwriters
12
for a brokerage commission, finder's fee or like payment in connection
with the issuance, purchase and sale of the Units.
(xlvi) Each of the Company and its subsidiaries has complied with
all provisions of Section 517.075, Florida Statutes.
(xlvii) Except as disclosed in the Prospectus, there are no business
relationships or related party transactions required to be disclosed
therein pursuant to Item 404 of Regulation S-K of the Commission.
The Company acknowledges that each of the Underwriters and,
for purposes of the opinions to be delivered to the Underwriters pursuant to
Section 5 hereof, counsel to the Company and counsel to the Underwriters,
will rely upon the accuracy and truth of the foregoing representations and
hereby consents to such reliance.
(b) Officer's Certificates. Any certificate signed by any
officer of the Company or any of its subsidiaries delivered to the
Representatives or to counsel for the Underwriters on or prior to Closing
Time shall be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein
set forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price set forth in Schedule B, the number of Units
set forth in Schedule A opposite the name of such Underwriter, plus any
additional number of Units which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(b) Payment. Payment of the purchase price for, and delivery
of, the Units shall be made at the offices of Xxxxxx & Xxxxxxx, or at such
other place as shall be agreed upon by the Representatives and the Company,
at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after
4:30 P.M. (Eastern time) on any given day) business day after the date hereof
(unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten business days after such date as shall be
agreed upon by the Representatives and the Company (such time and date of
payment and delivery being herein called "Closing Time").
Payment shall be made to the Company by wire transfer of
immediately available funds to a bank account designated by the Company,
against delivery to the Representatives for the respective accounts of the
Underwriters of certificates for the Units to be purchased by them. It is
understood that each Underwriter has authorized the Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Units which it has agreed to purchase. Xxxxxxx Xxxxx,
individually and not as representative of the Underwriters, may (but shall
not be obligated to) make payment of the purchase price for the Units to be
purchased by any Underwriter whose funds have not been received by the
Closing Time, but such payment shall not relieve such Underwriter from its
obligations hereunder.
13
(c) Denominations; Registration. Certificates for the Notes
and Warrants comprising the Units shall be in such denominations and
registered in such names as the Representatives may request in writing at
least one full business day before the Closing Time. Such certificates will
be made available for examination and packaging by the Representatives in The
City of New York not later than 10:00 A.M. (Eastern time) on the business day
prior to the Closing Time.
SECTION 3. Covenants of the Company. The Company
covenants with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule
430A or Rule 434, as applicable, and will notify the Representatives
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary prospectus,
or of the suspension of the qualification of the Units for offering or sale
in any jurisdiction, or of the initiation or threatening of any proceedings
for any of such purposes. The Company will promptly effect the filings
necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted
for filing under Rule 424(b) was received for filing by the Commission and,
in the event that it was not, it will promptly file such prospectus. The
Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or
to the Prospectus, will furnish the Representatives with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and
of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Representatives,
without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each
of the Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
14
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Company hereby consents
to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period
when the Prospectus is required to be delivered under the 1933 Act or the
Securities Exchange Act of 1934 (the "1934 Act"), such number of copies of
the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act, the 1933 Act Regulations and the 1939 Act and the
regulations thereunder so as to permit the completion of the distribution
of the Units as contemplated in this Agreement and in the Prospectus. If at
any time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Units, any event shall occur or condition shall
exist as a result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Company, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will not
include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of
such counsel, at any such time to amend the Registration Statement or amend
or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare
and file with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission or to
make the Registration Statement or the Prospectus comply with such
requirements, and the Company will furnish to the Underwriters such number
of copies of such amendment or supplement as the Underwriters may
reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from the
later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject. In each jurisdiction in which the Securities
have been so qualified, the Company will file such statements and reports
as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement. The Company will also supply the Underwriters with
such information as is necessary for the determination of the legality of
the Units for investment under the laws of such jurisdictions as the
Underwriters may request.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an
15
earnings statement for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Units in the manner specified in the Prospectus
under "Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect the
listing of the Warrant Shares on the Nasdaq National Market in compliance
with applicable Nasdaq National Market listing requirements.
(j) Restriction on Sale of Securities. During a period of 180 days from
the date of the Prospectus, the Company will not, without the prior written
consent of Xxxxxxx Xxxxx, directly or indirectly, issue, sell, offer or
contract to sell, grant any option for the sale of, or otherwise transfer
or dispose of, any debt security of the Company (other than the Notes) in a
public offering registered under the 1933 Act or in a transaction exempt
from the registration requirements of the 1933 Act by operation of Rule
144A under the 1933 Act Regulations.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the
rules and regulations of the Commission thereunder.
(l) Compliance with Warrant Agreement. The Company will comply with the
provisions of the Warrant Agreement relating to the registration under the
1933 Act of the initial issuance of the Warrant Shares upon exercise of the
Warrants.
(m) Pledged Securities. Pursuant to the Indenture and upon closing of
the Offering, the Company will use a portion of the net proceeds of the
Offering to purchase and pledge to the Collateral Agent for the benefit of
holders of the Notes Pledged Securities in such amount as will be
sufficient upon receipt of scheduled interest and principal payments of
such securities, in the opinion of a nationally recognized firm of public
accountants selected by the Company, to provide for payment in full for the
first six scheduled interest payments due on the Notes. The Company will
take all actions necessary to pledge, assign and set over to the Collateral
Agent, for the benefit of holders of the Notes, and irrevocably grant to
the Collateral Agent for the benefit of the holders of the Notes a first
priority security interest in, all of its respective right, title and
interest in such Pledged Securities held by the Collateral Agent or on its
behalf, in order to secure the obligations of the Company to pay interest
on the Notes and in certain circumstances the obligations of the Company to
pay principal on the Notes.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will
pay all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation,
printing and delivery to the Underwriters of this Agreement, any Agreement
among Underwriters, the other Operative Documents and such other documents as
may be required in connection with the offering, purchase, sale, issuance or
delivery of the Securities, (iii) the preparation, issuance and delivery of
the certificates for the Notes and the Warrants to the Underwriters,
16
(iv) the fees and disbursements of the Company's counsel, accountants and
other advisors, (v) the qualification of the Securities under securities laws
in accordance with the provisions of Section 3(f) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any
Term Sheets and of the Prospectus and any amendments or supplements thereto,
(vii) the preparation, printing and delivery to the Underwriters of copies of
the Blue Sky Survey and any supplement thereto, (viii) the fees and expenses
of the Trustee, including the fees and disbursements of counsel for the
Trustee in connection with the Indenture and the Notes, (ix) the fees and
expenses of the Collateral Agent, including the fees and disbursements of
counsel for the Collateral Agent in connection with the Pledge Agreement, (x)
the fees and expenses of the Warrant Agent, including the fees and
disbursements of counsel for the Warrant Agent in connection with the Warrant
Agreement and the Warrants, (xi) any fees payable in connection with the
rating of the Units to the SecuritiNotes, (xii) the filing fees incident to,
and the reasonable fees and disbursements of counsel Underwriters in
connection with, the review by the NASD of the terms of the sale of the
UnitsSecuritie and (xiii) the fees and expenses incurred in connection with
the listing of the Warrant Shares on the Nasdaq National Market.
(b) Termination of Agreement. If this Agreement is
terminated by the Representatives in accordance with the provisions of
Section 5 or Section 9(a)(i) hereof, the Company shall reimburse the
Underwriters for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The
obligations of the several Underwriters hereunder are subject to the accuracy
of the representations and warranties of the Company contained in Section 1
hereof or in certificates of any officer of the Company or any subsidiary of
the Company delivered pursuant to the provisions hereof, to the performance
by the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and
at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of Rule 430A)
or, if the Company has elected to rely upon Rule 434, a Term Sheet shall
have been filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Representatives
shall have received the favorable opinion, dated as of Closing Time, of
Xxxx & Hessen LLP, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to the
effect set forth in Exhibit A hereto and to such further effect as counsel
to the Underwriters may reasonably request.
17
(c) Opinion of Special Regulatory Counsel. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Xxxxxx & Xxxxxxx, special regulatory counsel, in form and
substance satisfactory to the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to the
effect set forth in Exhibit B hereto and to such further effect as the
Underwriters may reasonably request.
(d) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Xxxxxx & Xxxxxxx, counsel for the Underwriters, with
respect to certain matters requested by the Underwriters. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York, the federal law
of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Representatives.
Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(e) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information
is given in the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the President or a
Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct
with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission.
(f) Accountants' Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from Coopers & Xxxxxxx
L.L.P. a letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter
for each of the other Underwriters containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(g) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from Coopers & Xxxxxxx L.L.P. a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (f) of this Section, except that
the specified date referred to shall be a date not more than three business
days prior to Closing Time.
(h) Maintenance of Rating. At Closing Time, the Notes shall be rated
at least "Caa" by Moody's Investor's Service Inc. and "CCC+" by Standard &
Poor's Ratings Group, a division
18
of XxXxxx-Xxxx, Inc., and the Company shall have delivered to the
Representatives a letter dated the Closing Time, from each such rating
agency, or other evidence satisfactory to the Representatives, confirming
that the Notes have such ratings; and since the date of this Agreement,
there shall not have occurred a downgrading in the rating assigned to the
Notes or any of the Company's other securities by any "nationally recognized
statistical rating agency," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the 1933 Act, and no such organization
shall have publicly announced that it has under surveillance or review its
rating of the Notes or any of the Company's other securities.
(i) Approval of Listing. At Closing Time, the Warrant Shares shall have
been approved for listing on the Nasdaq National Market, subject only to
official notice of issuance.
(j) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(k) Opinion Regarding Pledged Securities. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Coopers & Xxxxxxx L.L.P. to the effect that the Company
has deposited with, and pledged to, the Collateral Agent for the benefit of
holders of the Notes Pledged Securities in an amount as will be sufficient
upon receipt of scheduled interest and principal payments of such
securities to provide for payment in full for the first six scheduled
interest payments due on the Notes.
(l) Additional Documents. At Closing Time, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and sale
of the SecuritieUnits as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the SecuritieUnits as
herein contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
(m) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by notice to the Company
at any time at or prior to Closing Time, and such termination shall be
without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information
19
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact included in
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section 6(d)
below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Xxxxxxx Xxxxx),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through Xxxxxxx
Xxxxx expressly for use in the Registration Statement (or any amendment thereto)
or such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall give
notice as promptly as reasonably practicable to each indemnifying party of any
action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account
20
of this indemnity agreement. In the case of parties indemnified pursuant to
Section 6(a) above, counsel to the indemnified parties shall be selected by
Xxxxxxx Xxxxx, and, in the case of parties indemnified pursuant to Section
6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the
indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent
to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof
(whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising
out of such litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If
at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by
such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with
such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided
for in Section 6 hereof is for any reason unavailable to or insufficient to
hold harmless an indemnified party in respect of any losses, liabilities,
claims, damages or expenses referred to therein, then each indemnifying party
shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other hand from
the offering of the SecuritieUnits pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand
and the Underwriters on the other hand in connection with the offering of the
Units pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Units pursuant
to this Agreement (before deducting expenses) received by the Company and the
total underwriting discount received by the Underwriters, in each case as set
forth on the cover of the Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet, bear to the aggregate initial
public offering price of the Units as set forth on such cover.
21
The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Notes underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company
who signed the Registration Statement, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Company. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Units set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained
in this Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of the Units to the Underwriters.
22
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate
this Agreement, by notice to the Company, at any time at or prior to Closing
Time (i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Units or to enforce contracts
for the sale of the Units, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the
Nasdaq National Market, or if trading generally on the American Stock
Exchange or the New York Stock Exchange or in the Nasdaq National Market has
been suspended or materially limited, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
NASD or any other governmental authority, or (iv) if a banking moratorium has
been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full
force and effect.
SECTION 10. Default by One or More of the Underwriters. If
one or more of the Underwriters shall fail at Closing Time to purchase the
Units which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representatives shall have the right, but not
the obligation, within 24 hours thereafter, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth; if,
however, the Representatives shall not have completed such arrangements
within such 24-hour period, then this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representatives or the Company
shall have the right to postpone Closing Time for a period not exceeding
seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements.
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to
the Underwriters shall be directed to the Representatives c/o Merrill Xxxxx
at North Tower, World Financial Center, New York, New York 10281-1201,
attention of Xxxxxx X. Xxxxx; and notices to the Company shall be directed to
it at 000 000xx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxxx, Xxxxxxxxxx 00000,
attention of Chief Financial Officer.
23
SECTION 12. Parties. This Agreement shall each inure to
the benefit of and be binding upon the Underwriters and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and
7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Underwriters and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of
SecuritieUnits from any Underwriter shall be deemed to be a successor by
reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section
headings herein and the Table of Contents are for convenience only and shall
not affect the construction hereof.
24
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company in accordance with its
terms.
Very truly yours,
ADVANCED RADIO TELECOM CORP.
By
-------------------------
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
CIBC WOOD GUNDY SECURITIES CORP.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By
-------------------------------
Authorized Signatory
25
SCHEDULE A
Number
Name of Underwriter of Units
------------------- --------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ..................
CIBC Wood Gundy Securities Corp. ..............
-------
Total .............................................135,000
-------
-------
Sch A-1
SCHEDULE B
ADVANCED RADIO TELECOM CORP.
135,000 Units Consisting of
$135,000,000 Aggregate Principal Amount of
___% Senior Notes due 2007 and Warrants
to Purchase Shares of Common Stock
1. The initial public offering price of the Units shall $135,000,000.
2. The purchase price to be paid by the Underwriters for the Units shall
be $____________.
3. The interest rate on the Notes shall be ___% per annum.
4. The prices at which the Company may repurchase Notes pursuant to the
optional redemption provisions of the Indenture shall be as follows:
2002 ...........................____%
2003 ...........................____%
2004 ...........................____%
2005 and thereafter ............____%.
5. The price at which the Company may repurchase Notes pursuant to the
equity claw-back feature of the optional redemption provisions of the Indenture
shall be ___%.
6. The number of shares of Common Stock for which a Warrant may be
initially exercised shall be 1,349.
7. The initial exercise price of the Warrants shall be $____ per share
of Common Stock.
Sch B-1
