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Exhibit 1.4
XXXXXX BROTHERS INC.
XXXXXXX XXXXX BARNEY INC.
CHASE SECURITIES INC.
X. X. XXXXXX SECURITIES INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
As Representatives of the Several Underwriters
c/x XXXXXX BROTHERS INC.
3 World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Warrants
TERMS AGREEMENT
Dated: February 2, 2000
To: METRICOM, INC.
METRICOM FINANCE, INC.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Re: Underwriting Agreement dated February 1, 2000.
Dear Sirs:
We (the "Representatives") understand that Metricom, Inc., a Delaware
corporation, (the "Company"), proposes to issue and sell 300,000 warrants to
purchase an aggregate of 1,425,000 shares of Common Stock, par value $.001, of
the Company (the "Warrants") and associated 13% Senior Notes due 2010 of the
Company and Metricom Finance, Inc. (the "Notes"). This Agreement is the Terms
Agreement referred to in the underwriting agreement dated February 1, 2000 (the
"Underwriting Agreement"). Terms used herein but not otherwise defined shall
have the meaning ascribed to such terms in the Underwriting Agreement and
Indenture, dated as of December 29, 1999, as supplemented by the First
Supplemental Indenture thereto, dated as of February 7, 2000, and the Warrant
Agreement, dated as of February 7, 2000. Subject to the terms and conditions set
forth herein or incorporated by reference herein, the Underwriters named below
(the "Underwriters") offer to purchase, severally and not jointly, the amount of
Warrants and at the terms set forth below.
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UNDERWRITER WARRANTS
Xxxxxx Brothers Inc. 141,000
Xxxxxxx Xxxxx Barney Inc. 72,000
Chase Securities Inc. 34,500
X. X. Xxxxxx Securities Inc. 34,500
Xxxxxxx Lynch, Pierce, Xxxxxx 18,000
& Xxxxx Incorporated
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TOTAL 300,000
TERMS
TITLE OF SECURITY: Warrants
CURRENCY: US Dollars
ANNUAL CASH DIVIDEND RATE: Not Applicable
PUBLIC OFFERING PRICE: $300,000,000
PURCHASE PRICE: $61,868,505
AGGREGATE OFFERING AMOUNT: 300,000 Warrants to purchase an aggregate of
1,425,000 shares of Common Stock of the Company, representing
approximately 1.50% of the currently outstanding voting stock, on a
fully diluted basis, assuming exercise of all options and warrants.
LISTING REQUIREMENT: None as to Warrants; underlying Common Stock must be listed
on Nasdaq Stock Market or other market on which Common
Stock is listed or quoted.
EXERCISE: Each Warrant entitles the holder to purchase 4.75 shares
of Common Stock upon payment of the Exercise Price.
EXERCISE DATE: August 15, 2000 and as otherwise provided in the Warrant
Agreement.
EXERCISE PRICE: $87.00 per share
EXPIRATION DATE: February 15, 2010
UNITS: No Warrant may be purchased without purchasing corresponding 13% Senior
Notes due 2010 of the Company and Metricom Finance, Inc. (the "Notes").
Each unit will consist of a Warrant and $1,000 aggregate principal
amount of Notes. The Notes and Warrants will not be separately
transferable until the Separation Date, which will be the earlier of (i)
August 15, 2000, (ii) the occurrence of an Event of Default, as defined
in the Indenture, (iii) the occurrence of an Exercise
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Event, as defined in the Warrant Agreement, and (iv) such other date as
Xxxxxx Brothers Inc. shall determine in its sole discretion.
RIGHTS AS STOCKHOLDERS: None
OTHER CONVERSION PROVISIONS: None
DELIVERY DATE AND LOCATION: February 7, 2000 at the offices of Weil, Gotshal
& Xxxxxx LLP, 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxx Xxxx, Xxxxxxxxxx
00000 at 10:00 a.m., New York City time.
ADDITIONAL REPRESENTATIONS, IF ANY: The Company represents, warrants and agrees
as follows:
1. To use the proceeds from the sale of the Warrants in the manner
described in the Prospectus Supplement relating to the Warrants under the
caption "Use of Proceeds."
2. Not to take, 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 Warrants in violation of the Exchange Act or any applicable
rules of the Nasdaq Stock Market. Except as permitted by the Securities Act,
neither the Company nor any of its subsidiaries will distribute any (i)
Prospectus, (ii) Prospectus Supplement, or (iii) other offering material in
connection with the offering and sale of the Warrants. 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 or any
of its subsidiaries to facilitate the sale or resale of the Warrants or (B)
since the date of the Preliminary Prospectus Supplement other than the
Underwriters (1) sold, bid for, purchased or paid any person any compensation
for soliciting purchases of the Warrants or (2) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company or any of its subsidiaries.
3. There exist no conditions that would constitute a material default
(or an event which with notice or the lapse of time, or both, would constitute a
material default) under the Underwriting Agreement or any other Terms Agreement
relating thereto or the Warrants.
4. Each certificate signed by any officer of the Company and delivered
to the Representatives or counsel for the Representatives on the Delivery Date
shall be deemed to be a representation and warranty by the Company, as the case
may be, to the Representatives as to the matters covered thereby.
5. All licenses and authorizations issued by the Federal Communications
Commission ("FCC") and state authorities governing telecommunications matters
(the "Licenses") required for the operation of the business of the Company and
its subsidiaries are in full force and effect there are no pending
modifications, amendments or revocation proceedings which would adversely affect
the operation of any of the telecommunications business currently owned by the
Company and its subsidiaries (the "Businesses"). All fees requested by
governmental authorities pursuant to the rules governing Licenses have been
paid. No event has occurred with respect to the Licenses held by the Company, or
its subsidiaries, which, with the
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giving of notice or the lapse of time or both, would constitute grounds for
revocation of any Licenses. Each of the Company and its subsidiaries is in
compliance in all material respects with the terms of the Licenses, as
applicable, and there is no condition, event or occurrence existing, nor is
there any proceeding being conducted of which the Company has received notice,
nor, to the Company's knowledge, is there any proceeding threatened, by any
governmental authority, which would cause the termination, suspension,
cancellation or non-renewal of any of the Licenses, or the imposition of any
penalty or fine (that is material to the Company and its subsidiaries, taken as
a whole) by any regulatory authority. No registrations, filings, applications,
notices, transfers, consents, approvals, audits, qualifications, waivers or
other action of any kind is required by virtue of the execution, delivery and
performance of this Terms Agreement or any other agreement relating to the
transactions contemplated hereby by the Company and the consummation of the
transactions contemplated hereby and thereby, and the issuance and delivery of
the Warrants, to avoid the loss of any such License, permit, consent, concession
or other authorization or any asset, property or right pursuant to the terms
thereof, or the violation or breach of any applicable law thereto.
6. The Company and its subsidiaries have reviewed the areas within their
business and operations which could reasonably be expected to have a "Year 2000
Problem" (that is, the risk that computer applications used by the Company and
its subsidiaries may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31, 1999)
that would have a material adverse effect on the Company and have developed a
program to address on a timely basis any such problem, and (ii) based on such
review and program, the "Year 2000 Problem" will not, or is not reasonably
likely to, have a material adverse effect on the Company, and further, the
statements contained under the caption "Risk Factors -- We face risks in
connection with the year 2000" in the Preliminary Prospectus Supplement and the
Prospectus Supplement relating to the Common Stock are true.
REDEMPTION PROVISIONS: None
LOCK-UP PROVISIONS: 90 days
NUMBER OF OPTION SECURITIES: None
OTHER TERMS AND CONDITIONS:
1. The respective obligations of the Underwriters hereunder are subject
to the accuracy when made on the Delivery Date, of the representations and
warranties of the Company contained herein and in the Underwriting Agreement, to
the performance by the Company of its obligations hereunder and thereunder, and
to each of the following terms and conditions:
(a) Prior to the applicable Delivery Date, the Company shall have
furnished to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
(b) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or withdrawal
of, or of any review (or of any potential or intended review) for a possible
change that does not indicate the direction of the possible change
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in, any rating of the Company or any securities of the Company (including,
without limitation, the placing of any of the foregoing ratings on credit watch
with negative or developing implications or under review with an uncertain
direction) by any "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Act, (ii) there
shall not have occurred any change, nor shall any notice have been given of any
potential or intended change, in the outlook for any rating of the Company or
any securities of the Company by any such rating organization and (iii) no such
rating organization shall have given notice that it has assigned,(or is
considering assigning) a lower rating to the Warrants than that on which the
Warrants were marketed.
(c) Xxxxxx Godward LLP shall have furnished to the
Representatives their written opinion, as counsel to the Company, addressed to
the Underwriters and dated the applicable Delivery Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) The statements contained in the Prospectus Supplement
under the captions "Management -- Executive Compensation," "Principal
Stockholders" and "Description of Warrants," insofar as they describe charter
documents, contracts, statutes, rules and regulations and other legal matters,
constitute an accurate summary thereof in all material respects;
(ii) The statements contained in the Prospectus Supplement
under the caption "Certain U.S. Federal Income Tax Consequences," insofar as
they describe federal statutes, rules and regulations, constitute an accurate
summary thereof in all material respects.
(d) The Company, Metricom Finance, Inc., the Trustee, and the
Escrow Agent shall have entered into the Pledge Agreement and each of the
Representatives shall have received copies of executed counterparts thereof.
(e) The Company, Metricom Finance, Inc., the Warrant Agent, and
Initial Warrant Agent shall have entered into the Warrant Agreement and each of
the Representatives shall have received copies of executed counterparts thereof.
(f) The Company or an affiliate thereof shall have deposited cash
or U.S. Government Securities in amounts sufficient to cover the first four cash
interest payments on the Notes.
(g) The offering of the Notes (the "Notes Offering") has closed,
it being understood that the offering of Warrants contemplated herein is
conditioned upon the Notes Offering.
2. The Underwriters severally confirm and the Company acknowledges that
the statements with respect to the public offering of the Warrants by the
Underwriters set forth in the last paragraph on the cover page of, and the
information contained in paragraphs entitled "Miscellaneous" under the caption
"Underwriting" in the Prospectus Supplement are correct and constitute the only
information concerning such Underwriters furnished in writing to the Company by
or on behalf of the Underwriters specifically for inclusion in the Registration
Statement, Prospectus and Prospectus Supplement.
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3. Notices to Underwriters:
Xxxxxx Brothers Inc.
Three World Financial Center
New York, New York 10285
Attention: World Financial Center
Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 100 13
Attention: Legal Department
Very truly yours,
Xxxxxx Brothers Inc.
Xxxxxxx Xxxxx Barney Inc.
Chase Securities Inc.
X. X. Xxxxxx Securities Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
For itself, as Sole Book-Running
Manager and as Representative
of the several Underwriters
named above
By XXXXXX BROTHERS INC.
By: /s/ Xxxxx Xxxxxxxxxxx
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Xxxxx Xxxxxxxxxxx
Managing Director
Accepted:
METRICOM, INC.
By /s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
Title: President and CEO
METRICOM FINANCE, INC.
By /s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
Title: President and CEO
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