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ADVANCED RADIO TELECOM CORP.
(a Delaware corporation)
125,000 Units Consisting of
$125,000,000 Aggregate Principal Amount of
___% Senior Notes due 2007 and Warrants
to Purchase 1,128,011 Shares of Common Stock
PURCHASE AGREEMENT
Dated: ____________, 1997
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Table of Contents
PURCHASE AGREEMENT............................................................1
SECTION 1. Representations and Warranties.....................................3
(a) Representations and Warranties by the Company.............................3
(b) Officer's Certificates...................................................12
SECTION 2. Sale and Delivery to Underwriters; Closing........................12
(a) Securities...............................................................12
(b) Payment..................................................................13
(c) Denominations; Registration..............................................13
SECTION 3. Covenants of the Company..........................................13
(a) Compliance with Securities Regulations and Commission Requests...........13
(b) Filing of Amendments.....................................................13
(c) Delivery of Registration Statements......................................14
(d) Delivery of Prospectuses.................................................14
(e) Continued Compliance with Securities Laws................................14
(f) Blue Sky Qualifications..................................................14
(g) Rule 158.................................................................15
(h) Use of Proceeds..........................................................15
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[(i) Listing.................................................................15
(j) Restriction on Sale of Securities........................................15
(k) Reporting Requirements...................................................15
(l) Pledge...................................................................15
SECTION 4. Payment of Expenses...............................................16
(a) Expenses.................................................................16
(b) Termination of Agreement.................................................16
SECTION 5. Conditions of Underwriters' Obligations...........................16
(a) Effectiveness of Registration Statement..................................16
(b) Opinion of Counsel for Company...........................................17
(d) Opinion of Counsel for Underwriters......................................17
(e) Officers' Certificate....................................................17
(f) Accountant's Comfort Letter..............................................18
(g) Bring-down Comfort Letter................................................18
(h) Maintenance of Rating....................................................18
(i) Approval of Listing......................................................18
[(j) No Objection............................................................18
(k) Additional Documents.....................................................18
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(l) Termination of Agreement.................................................18
SECTION 6. Indemnification...................................................19
(a) Indemnification of Underwriters..........................................19
(b) Indemnification of Company, Directors and Officers.......................19
(c) Actions against Parties; Notification....................................20
(d) Settlement without Consent if Failure to Reimburse.......................20
SECTION 7. Contribution......................................................20
SECTION 8. Representations, Warranties and Agreements to Survive Delivery....22
(a) Termination; General.....................................................22
(b) Liabilities..............................................................22
SECTION 10. Default by One or More of the Underwriters.......................22
SECTION 11. Notices..........................................................23
SECTION 12. Parties..........................................................23
SECTION 13. GOVERNING LAW AND TIME...........................................23
SECTION 14. Effect of Headings...............................................23
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
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ADVANCED RADIO TELECOM CORP.
(a Delaware corporation)
125,000 Units Consisting of
$125,000,000 Aggregate Principal Amount of
___% Senior Notes due 2007 and Warrants
to Purchase Shares of Common Stock
PURCHASE AGREEMENT
____________ , 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 125,000 units (the "Units"), each consisting of
$1,000 principal amount of the Company's ___% Senior Notes due 2007
(collectively, the "Notes") and one warrant (collectively, the "Warrants") to
purchase 9.024 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 _________, 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 ___________, 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 the
Collateral Pledge and Security Agreement, dated as of __________, 1997 (the
"Pledge Agreement"), between the Company and The Bank of New York, as collateral
agent (the "Collateral Agent"), and the CIBC Agreements (as defined) 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"). On October
28, 1996, (i) ART Merger Corporation, a subsidiary of the Company, merged with
and into Advanced Radio Telecom Corp. ("Telecom"), with the result that Telecom
became a wholly-owned subsidiary of the Company, (ii) the Company amended its
certificate of incorporation to change its name to "Advanced Radio Telecom
Corp." and (iii) Telecom amended its certificate of incorporation to change its
name to ART Licensing Corp. ("ART Licensing") (collectively, the "Merger").
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. Unless the context
otherwise requires, the "Company" shall refer to the Company after giving effect
to the Merger. References to "subsidiaries" of the Company shall be deemed to
include ART Licensing.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-______) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in such prospectus or in such Term Sheet, as the case may
be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto and schedules thereto at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final prospectus in the form first furnished to the
Underwriters for use in connection with the offering of the Securities is herein
called the "Prospectus." If Rule 434 is relied on, the term "Prospectus" shall
refer to the preliminary prospectus dated __________, 1997 together with the
Term Sheet and all references in this Agreement to the date of the Prospectus
shall mean the date of the
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Term Sheet. For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus or any Term Sheet or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("XXXXX").
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(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
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thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(iii) No action has been taken and no local, state or Federal
law, statute, ordinance, rules, regulation, requirement, judgment or
court decree has been enacted, adopted or issued by any governmental
agency that prevents the issuance of the Securities or prevents or
suspends the use of the Prospectus; no judgment, restraining order or
order of any nature by a Federal or state court of competent
jurisdiction has been issued that prevents the issuance of the
Securities or prevents or suspends the sale of the 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 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
the pledge of all outstanding shares of capital stock of ART Licensing
in connection with the CommcoCCC Financing (as such term is defined in
the Prospectus); and none of such capital stock was issued in violation
of any preemptive or similar rights. Except as disclosed in the
Prospectus, there are no outstanding subscriptions, rights, warrants,
calls, commitments of sale or options to acquire, or instruments
convertible into or exchangeable for, any such shares of capital stock
or other equity interest of any such subsidiary.
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(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 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) The Company has authorized and outstanding capital stock
as set forth in Exhibit C hereto and an authorized and outstanding
capitalization as set forth in the Prospectus under the caption
"Capitalization." All such 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
5
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 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
6
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.
(xix) The Company is the sole beneficial owner of the Pledged
Securities (as defined in the Registration Statement) and no Lien (as
defined in the Registration Statement) exists upon such Pledged
Securities (and no right or option to acquire the same exists 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 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 Securities 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) Each of the CIBC Agreements has been duly authorized,
executed and delivered by each of the parties thereto and is the
legally valid and binding agreement of each such party, enforceable
against each such party in accordance with its terms.
(xxiii) 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 Securities,
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,
7
without limitation, the Communications Act of 1934, as amended by the
Telecommunications Act of 1996 (as so amended, the "Communications
Act"), the rules and regulations of the FCC and the environmental laws,
statutes, ordinances, rules or regulations) applicable to the Company,
any of its subsidiaries or any of their respective assets or properties
or (4) any judgment, order or decree of any court or governmental
agency or authority having jurisdiction over the Company, any of its
subsidiaries or any of their assets or properties, that, in the case of
clauses (2), (3) or (4), (x) would reasonably be expected, either
individually or in the aggregate, to result in a material adverse
effect on the assets, properties, business, management, earnings, net
worth, results of operations, condition (financial or otherwise) or
business prospects of the Company and its subsidiaries, taken as a
whole, (y) would materially interfere with or materially adversely
affect the issuance of the Securities or the consummation of the
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").
(xxiv) 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.
(xxv) 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.
(xxvi) 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
8
("Service"). In particular, the Company or its subsidiaries hold the
authorizations set forth in the table in the Prospectus under the
heading "Business--38 GHz Wireless Broadband Licenses and
Authorizations" (the "License Table") to provide Service in the markets
identified therein as "Owned" and for the amount of bandwidth set forth
in the column entitled "Owned" opposite each such market. The Company
has entered into contracts with third parties that hold, on a combined
basis, 35 authorizations (the "Managed FCC Licenses") to provide
Service. In particular, these third parties hold the authorizations set
forth in the License Table to provide Service in the markets identified
therein as "Managed" and for the amount of bandwidth set forth in the
column entitled "Managed" opposite each such market, 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. 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.
(xxvii) 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.
(xxviii) 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
9
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.
(xxix) 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.
(xxx) Each of the Company, ART Licensing and XXX Xxxx has
filed all reports required to be filed with the FCC.
(xxxi) 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.
(xxxii) All tax returns required to be filed by the Company or
any of its subsidiaries in any jurisdiction have been so filed. All
material taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due from such
entities or that are due and payable have been paid, other than those
being contested in good faith and for which adequate reserves have been
provided for those currently payable without penalty or interest. There
are no proposed additional taxes assessments against the Company or any
of its subsidiaries, and neither the Company nor any of its
subsidiaries has any knowledge of any tax deficiency which has been or
might be asserted or threatened against the Company or any of its
subsidiaries which would reasonably be expected to have a Material
Adverse Effect.
(xxxiii) Each of the Company and its subsidiaries maintains
reasonably adequate insurance.
(xxxiv) 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.
(xxxv) The financial statements, together with related
schedules and notes forming part of the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present fairly
the individual and consolidated financial positions, results of
operations and changes in financial position of the Company, its
subsidiaries and Telecom on the basis stated in the Registration
Statement and the Prospectus (and any amendment or supplement thereto)
at the respective dates or for the respective periods to which they
apply. Such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied through the periods involved, except as disclosed
therein. The other financial and statistical information and data set
forth in the Registration Statement and the Prospectus (and any
amendment or supplement thereto) is, in all material respects,
accurately
10
presented and prepared on a basis consistent with such financial
statements and the books and records of the Company, its subsidiaries
and Telecom, as applicable. The pro forma financial information and
other financial information included in the Prospectus present fairly
the information shown therein, have been prepared in accordance with
the Commission's rules and regulations with respect to pro forma
financial information, have been properly compiled on the pro forma
basis described therein, and, in the opinion of the Company, the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein. No other financial
statements or schedules are required to be included in the Registration
Statement. The selected financial data set forth in the Prospectus
under the captions "Summary Historical and Pro Forma Financial Data,"
"Capitalization" and "Selected Historical and Pro Forma Financial Data"
fairly present the information set forth therein on the basis stated in
the Registration Statement.
(xxxvi) 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.
(xxxvii) Subsequent to the respective dates as of which
information is given in the Prospectus and except as set forth in the
Prospectus, (A) neither the Company nor any of its subsidiaries has
incurred any liabilities or obligations, direct or contingent, which
are material, individually or in the aggregate, to the Company and its
subsidiaries, taken as a whole, nor entered into any transaction not in
the ordinary course of business, (B) neither the Company nor any of its
subsidiaries has sustained any material loss or interference with its
businesses or properties from fire, flood, windstorm, accident or other
calamity, whether or not covered by insurance, (C) there has not been,
individually or in the aggregate, any change or development which would
reasonably be expected to result in a Material Adverse Effect and (D)
there has been no dividend or distribution of any kind declared, paid
or made by the Company or any of its subsidiaries on any class of
capital stock.
(xxxviii) 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. 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
matured. The assets of the Company on a consolidated basis do not
constitute unreasonably small capital to carry out the business of the
Company and its subsidiaries, taken as a whole, as conducted or as
proposed to be conducted.
(xxxix) 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.
11
(xl) None of the execution, delivery and performance of this
Agreement, the issuance and sale of the Securities, the application of
the proceeds from the issuance and sale of the Securities 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.
(xli) The Company has not distributed, and will not distribute
prior to the First Closing Date, any offering material in connection
with the offering and sale of the Securities other than any preliminary
prospectus, the Prospectus, the Registration Statement and the other
materials permitted by the 1933 Act.
(xlii) 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.
(xliii) Except pursuant to this Agreement, there are no
contracts, agreements or understandings between the Company or any of
its subsidiaries and any other person that would give rise to a valid
claim against the Company, any of its subsidiaries or any of the
Underwriters for a brokerage commission, finder's fee or like payment
in connection with the issuance, purchase and sale of the Securities.
(xliv) Each of the Company and its subsidiaries has complied
with all provisions of Section 517.075, Florida Statutes.
(xlv) 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 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.
12
(b) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, 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.
(c) DENOMINATIONS; REGISTRATION. Certificates for 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. The
Units 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 Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect
the filings necessary pursuant to Rule 424(b) and will take such steps
as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will
promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order
is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) FILING OF AMENDMENTS. The Company will give the
Representatives notice of its intention to file or prepare any
amendment to the Registration Statement (including any filing under
13
Rule 462(b)), any Term Sheet or any amendment, supplement or revision
to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, will furnish the
Representatives with copies of any such documents a reasonable amount
of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or
counsel for the Underwriters shall object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein) and
signed copies of all consents and certificates of experts, and will
also deliver to the Representatives, without charge, a conformed copy
of the Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Company has delivered to
each Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each Underwriter, without charge,
during the period when the Prospectus is required to be delivered under
the 1933 Act or the Securities Exchange Act of 1934 (the "1934 Act"),
such number of copies of the Prospectus (as amended or supplemented) as
such Underwriter may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with
the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company
will comply with the 1933 Act and the 1933 Act Regulations 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 Securities,
any event shall occur or condition shall exist as a result of which it
is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue
statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel,
at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly
prepare and file with the Commission, subject to Section 3(b), 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
14
laws of such states and other jurisdictions as the Representatives may
designate and to maintain such qualifications in effect for a period of
not less than one year from the later of the effective date of the
Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Securities have been so
qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement. The Company will also supply the Underwriters
with such information as is necessary for the determination of the
legality of the Securities for investment under the laws of such
jurisdictions as the Underwriters may request.
(g) RULE 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) USE OF PROCEEDS. The Company will use the net proceeds
received by it from the sale of the 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.
(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 securities of the Company. The
foregoing sentence shall not apply to (i) the Securities to be sold
hereunder, (ii) any shares of Common Stock issued by the Company upon
the exercise of an option or warrant or conversion of a security
outstanding on the date hereof and referred to in the Prospectus, (iii)
any shares of Common Stock issued or options of Common Stock granted
pursuant to existing employee benefit plans of the Company referred to
in the Prospectus, (iv) 6,000,000 shares of Common Stock issued
pursuant to the CommcoCCC Agreement, (v) the issuance by the Company of
warrants to purchase Common Stock in accordance with the CIBC
Agreements or (vi) the issuance by the Company of senior secured notes
issued, or debt securities issued in order to refinance senior secured
notes, if any, outstanding, pursuant to the CIBC Agreements
(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) 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 and Pledged Securities in such
amount as
15
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 Securities to
the Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of 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 Securities, (xii) the
filing fees incident to, and the reasonable fees and disbursements of counsel to
the Underwriters in connection with, the review by the NASD of the terms of the
sale of the Securities and (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
16
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.
(c) OPINION OF SPECIAL REGULATORY COUNSEL FOR COMPANY. At
Closing Time, the Representatives shall have received the favorable
opinion, dated as of Closing Time, of Xxxxxx & Xxxxxxx, special
regulatory 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 B hereto and to such further effect as counsel to
the underwriters may reasonable 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,
together with signed or reproduced copies of such letter for each of
the other 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.
17
(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 Securities
shall be rated at least ___ by Moody's Investor's Service Inc. and ___
by Standard & Poor's Ratings Group, a division 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 Securities
have such ratings; and since the date of this Agreement, there shall
not have occurred a downgrading in the rating assigned to the
Securities 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 Securities 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) 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 Securities as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and
sale of the Securities as herein contemplated shall be satisfactory in
form and substance to the Representatives and counsel for the
Underwriters.
(l) TERMINATION OF AGREEMENT. If any condition specified in
this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement 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.
18
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 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 Merrill
19
Xxxxx expressly for use in the Registration Statement (or any amendment thereto)
or such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. CONTRIBUTION. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
20
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.
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 Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the principal amount of Securities set forth opposite their
respective names in Schedule A hereto and not joint.
21
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 Securities to the Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and 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.
22
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at Xxxxx Xxxxx, Xxxxx
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, attention of 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.
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 Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. EFFECT OF HEADINGS. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
23
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
24
SCHEDULE A
Name of Underwriter Number of Units
------------------- ---------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated..................
CIBC Wood Gundy Securities Corp...............
---------
Total......................................... 125,000
=========
Sch A-1
SCHEDULE B
ADVANCED RADIO TELECOM CORP.
125,000 Units Consisting of
$125,000,000 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 $125,000,000.
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
claw-back feature of the optional redemption provisions of the Indenture shall
be ___%.
5. The exercise price of the Warrants shall be $____ per share.
Sch B-1
