EXHIBIT 1.1
XM SATELLITE RADIO HOLDINGS INC.
$125,000,000 Aggregate Principal Amount of
7.75% Convertible Subordinated Notes due 2006
UNDERWRITING AGREEMENT
February 28, 2001
BEAR, XXXXXXX & CO. INC.
$125,000,000 Aggregate Principal Amount of
7.75% Convertible Subordinated Notes due 2006
XM SATELLITE RADIO HOLDINGS INC.
UNDERWRITING AGREEMENT
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February 28, 2001
Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
XM Satellite Radio Holdings Inc., a corporation organized and existing
under the laws of Delaware (the "Company"), proposes, subject to the terms and
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conditions stated herein, to issue and sell to the several underwriters named in
Schedule I hereto (collectively, the "Underwriters") $125,000,000 aggregate
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principal amount of 7.75% Convertible Subordinated Notes due 2006 (the "Firm
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Notes") and, for the sole purpose of covering over-allotments in connection with
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the sale of the Firm Notes, at the option of the Underwriters, up to an
additional $18,750,000 aggregate principal amount of 7.75% Convertible
Subordinated Notes due 2006 (the "Additional Notes"). The Firm Notes and any
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Additional Notes purchased by the Underwriters are referred to herein as the
"Notes". The Notes are more fully described in the Registration Statement
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referred to below. The Notes will be issued pursuant to an Indenture, to be
dated March 6, 2001, by and between the Company and United States Trust Company
of New York, as trustee (the "Indenture"). Simultaneously with the offer and
sale of the Notes hereunder, the Company is offering to the public 7,500,000
shares of its Class A Common Stock (the "Concurrent Offering").
1. Representations and Warranties of the Company. The Company
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represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") a shelf registration statement on Form S-3 (No. 333-
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47570), as amended by Amendment No. 1 to Registration Statement on Form S-
3, and related prospectus for the registration under the Securities Act of
1933, as amended (the "Securities Act"), of securities of the Company,
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including the Notes, which registration statement, as so amended, has been
declared effective by the Commission and copies of which have heretofore
been delivered to the Underwriters. The registration statement, as amended
at the time it became effective, including the exhibits and information (if
any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Act, is hereinafter referred
to as the "Registration Statement". If the Company has filed or is required
pursuant to the terms hereof to file a registration statement pursuant to
Rule 462(b) under the Securities Act registering additional shares of
Common Stock (a "Rule 462(b) Registration Statement"), then, unless
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otherwise specified, any reference herein to the term "Registration
Statement" shall be deemed to include
such Rule 462(b) Registration Statement. Other than a Rule 462(b)
Registration Statement, which became effective upon filing, no other
document with respect to the Registration Statement has heretofore been
filed with the Commission (other than prospectuses filed pursuant to Rule
424(b) of the rules and regulations of the Commission under the Securities
Act (the "Securities Act Regulations"), each in the form heretofore
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delivered to the Underwriters). No stop order suspending the effectiveness
of either the Registration Statement or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose has
been initiated or, to the Company's knowledge, threatened by the
Commission. The Company, if required by the Securities Act Regulations,
proposes to file the Prospectus Supplement with the Commission pursuant to
Rule 424(b) of the Securities Act Regulations. The Prospectus, in the form
in which it was filed with the Commission in the Registration Statement
pursuant to Rule 415 of the Securities Act Regulations, is hereinafter
referred to as the "Prospectus". The Prospectus Supplement relating to the
Notes for use in the connection with the offering and sale of the Notes
(the "Offering"), in the form in which it is to be filed with the
Commission pursuant to Rule 424(b) of the Securities Act Regulations, is
hereinafter referred to as the "Prospectus Supplement". Any preliminary
prospectus supplement relating to the Notes or prospectus supplement
subject to completion relating to the Notes included in the Registration
Statement or filed with the Commission pursuant to Rule 424(b) under the
Securities Act is hereafter called a "Preliminary Prospectus Supplement".
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All references in this Agreement to the Registration Statement, the Rule
462(b) Registration Statement, the Prospectus, a Preliminary Prospectus
Supplement and the Prospectus Supplement, or any amendments or supplements
to any of the foregoing, shall be deemed to include any copy thereof filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval System ("XXXXX").
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(b) The Registration Statement and the Prospectus, at the time the
Registration Statement became effective and as of the Closing Date referred
to in Section 2 hereof, the Prospectus Supplement, as of the date hereof
and as of the Closing Date, and the Preliminary Prospectus Supplement as of
the date thereof, complied and comply in all material respects with the
requirements of the Securities Act and the Securities Act Regulations and
the Company's Current Report on Form 8-K, dated February 22, 2001 (the
"Form 8-K"), as of the date thereof, complied and comply in all material
respects with the requirements of the Securities Exchange Act, as amended
(the "Exchange Act"), and each of the foregoing did not and as of the
Closing Date do not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus Supplement, as
of the date hereof (unless the term "Prospectus Supplement" refers to a
prospectus supplement which has been provided to the Underwriters by the
Company for use in connection with the offering of the Notes which differs
from the Prospectus Supplement filed with the Commission pursuant to Rule
424(b) of the Securities Act Regulations, in which case at the time it is
first provided to the Underwriters for such use) and on the Closing Date,
and the Form 8-K as of the date hereof and as of the Closing Date, do not
and will not include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this Section
(1)(b) shall not apply to statements in or omissions from the Registration
Statement or Prospectus Supplement made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in
writing by any Underwriter expressly for use in the Registration Statement
or the Prospectus Supplement. Each Preliminary Prospectus Supplement and
Prospectus Supplement and Form 8-K filed as part of the Registration
Statement, as part of any amendment thereto or pursuant to Rule 424 under
the Securities Act Regulations, if filed by electronic transmission
pursuant to Regulation S-T under the Securities Act, was identical to the
copy thereof delivered to the Underwriters for use in connection with the
offer and sales of the
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Notes (except as may be permitted by Regulation S-T under the Securities
Act). There are no contracts or other documents required to be described in
the Prospectus Supplement or Form 8-K or to be filed as exhibits to the
Registration Statement under the Securities Act that have not been
described or filed therein as required, and there are no business
relationships or related-party transactions involving the Company or any of
its subsidiaries or any other person required to be described in the
Prospectus Supplement or Form 8-K that have not been described therein as
required.
(c) Each of the Company and its subsidiaries (i) has been duly
organized and is validly existing as a corporation in good standing under
the laws of its respective jurisdiction of incorporation, (ii) has all
requisite corporate power and authority to carry on its business as it is
currently being conducted and as described in the Prospectus Supplement and
Form 8-K and to own, lease and operate its properties, and (iii) is duly
qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification except, with
respect to clauses (i) (as it relates to good standing) and (iii), where
the failure to be so qualified or in good standing does not and could not
reasonably be expected to (x) individually or in the aggregate, result in a
material adverse effect on the properties, business, results of operations,
condition (financial or otherwise), affairs or prospects of the Company and
its subsidiaries, taken as a whole, (y) interfere with or adversely affect
the issuance or marketability of the Notes pursuant hereto or (z) in any
manner draw into question the validity of this Agreement or the
transactions described in the Prospectus Supplement under the caption "Use
of Proceeds" (any of the events set forth in clauses (x), (y) or (z), a
"Material Adverse Effect").
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(d) All of the outstanding shares of capital stock of the Company
have been duly authorized, validly issued, and are fully paid and
nonassessable and were not issued in violation of any preemptive or similar
rights. The Notes, when issued, delivered and sold in accordance with the
Indenture, will be duly authorized and validly issued, and will not have
been issued in violation of or subject to any preemptive or similar rights.
At December 31, 2000, the Company had the actual, as adjusted, and as
further adjusted capitalization as set forth in the Prospectus Supplement
under the caption "Capitalization" (subject in each case to the assumptions
set forth under such caption).
(e) Except as disclosed in the Prospectus Supplement or Form 8-K, all
of the outstanding capital stock of, or other ownership interests in, the
Company's subsidiaries is owned by the Company, free and clear of any
security interest, claim, lien, limitation on voting rights or encumbrance;
and all such securities have been duly authorized, validly issued, and are
fully paid and nonassessable and were not issued in violation of any
preemptive or similar rights.
(f) Upon issuance and delivery of the Notes in accordance with the
Indenture, the Notes will be convertible at the option of the holder
thereof for shares of the Company's Class A Common Stock, par value $.01
per share (the "Class A Common Stock") in accordance with the Indenture;
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the shares of Class A Common Stock issuable upon any such conversion of
Notes have been duly authorized and reserved for issuance upon such
conversion and such shares of Class A Common Stock, when issued upon such
conversion, will be validly issued and will be fully paid and nonassessable
and not issued in violation of any preemptive or similar rights.
(g) [Intentionally Omitted.]
(h) Except as disclosed in the Prospectus Supplement or Form 8-K
there are not currently, and will not be as a result of the Offering, any
outstanding subscriptions, rights,
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warrants, calls, commitments of sale or options to acquire or instruments
convertible into or exchangeable for, any capital stock or other equity
interest of the Company or any of its subsidiaries (other than options
issued pursuant to the Company's 1998 Shares Award Plan and Employee Stock
Purchase Plan).
(i) The shares of Class A Common Stock issuable upon conversion of
the Notes are registered pursuant to Section 12(g) of the Securities
Exchange Act of 1934 (the "Exchange Act"), and the Company has taken no
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action designed to, or likely to have the effect of, terminating the
registration of the Class A Common Stock under the Exchange Act, nor has
the Company received any notification that the Commission is contemplating
terminating such registration.
(j) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby, including, without
limitation, the corporate power and authority to issue, sell and deliver
the Notes as provided herein and the corporate power to effect the Use of
Proceeds as described in the Prospectus Supplement.
(k) The statistical and market-related data included in the
Prospectus Supplement and Form 8-K are based on or are derived from sources
which the Company believes to be reliable and accurate in all material
respects.
(l) This Agreement has been duly and validly authorized, executed and
delivered by the Company and is the legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally
and subject to general principles of equity, and except insofar as
indemnification and contribution provisions may be limited by applicable
law or equitable principles.
(m) The Indenture has been duly and validly authorized by the
Company and when executed will be duly and validly executed and delivered
and will be the legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to
general principles of equity, and except insofar as indemnification and
contribution provisions may be limited by applicable law or equitable
principles.
(n) The Notes have been duly and validly authorized by the Company
for issuance and sale pursuant to this Agreement and, when issued and
authenticated in accordance with the terms of the Indenture and delivered
against payment therefor in accordance with the terms hereof and thereof,
will be duly and validly executed and delivered and will be the legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with their terms and entitled to the benefits of the
Indenture, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity, and except
insofar as indemnification and contribution provisions may be limited by
applicable law or equitable principles
(o) Neither the Company nor any of its subsidiaries is, nor after
giving effect to the Offering and the Concurrent Offering will be, (i) in
violation of its certificate of incorporation or bylaws, (ii) in default in
the performance of any bond, debenture, note, indenture, mortgage, deed of
trust or other agreement or instrument to which it is a party or by which
it is bound or to which any of its properties is subject, or (iii) in
violation of any local, state or federal law,
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statute, ordinance, rule, regulation, requirement, judgment or court decree
(including, without limitation, the Communications Act of 1934 (the
"Communications Act") and the rules and regulations of the Federal
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Communications Commission (the "FCC"), and environmental laws, statutes,
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ordinances, rules regulations, judgments or court decrees) applicable to
the Company or any of its subsidiaries or any of their assets or properties
(whether owned or leased) other than, in the case of clauses (ii) and
(iii), any default or violation that (A) could not reasonably be expected
to have a Material Adverse Effect or (B) which is disclosed in the
Prospectus Supplement or Form 8-K. There exists no condition that, with
notice, the passage of time or otherwise, would constitute a default under
any such document or instrument, except as disclosed in the Prospectus.
(p) None of (i) the execution, delivery or performance by the Company
of this Agreement, (ii) the issuance and sale of the Notes and (iii)
consummation by the Company of the transactions contemplated hereby and in
the Prospectus Supplement, including without limitation the Concurrent
Offering, 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 on any properties of the
Company or any of its subsidiaries, or an acceleration of any indebtedness
of the Company or any of its subsidiaries pursuant to, (A) the certificate
of incorporation or bylaws of the Company or any of its subsidiaries, (B)
any bond, debenture, note, indenture, mortgage, deed of trust, contract or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or its subsidiaries or
their properties is or may be bound, (C) any statute, rule or regulation
applicable to the Company or any of its subsidiaries or any of their assets
or properties or (D) any judgment, order or decree of any court or
governmental agency or authority having jurisdiction over the Company or
any of its subsidiaries or any of their assets or properties, other than,
in the case of clause (B) above, any default or violation that (1) could
not reasonably be expected to have a Material Adverse Effect or (2) which
is disclosed in the Prospectus Supplement or Form 8-K. No consent,
approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, (i) any court or governmental
agency, body or administrative agency or (ii) any other person is required
for (A) the execution, delivery and performance by the Company of this
Agreement, (B) the issuance and sale of the Notes and the transactions
contemplated hereby and thereby, including without limitation the
Concurrent Offering, except such as have been obtained and made under the
Securities Act and state securities or Blue Sky laws and regulations or
such as may be required by the National Association of Securities Dealers,
Inc. (the "NASD").
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(q) There is (i) no action, suit or proceeding before or by any
court, arbitrator or governmental agency, body or official, domestic or
foreign, now pending or, to the best knowledge of the Company or any of its
subsidiaries, threatened or contemplated to which the Company or any of its
subsidiaries is a party or to which the business or property of the Company
or any of its subsidiaries is subject, (ii) no statute, rule, regulation or
order that has been enacted, adopted or issued by any governmental agency
or that has been proposed by any governmental body or (iii) 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 or any of its
subsidiaries is or may be subject or to which the business, assets, or
property of the Company or any of its subsidiaries are or may be subject,
that, in the case of clauses (i), (ii) and (iii) above, (w) is required to
be disclosed in the Prospectus Supplement and that is not so disclosed, or
(x) except as has been disclosed in the Prospectus Supplement or Form 8-K
could reasonably be expected to, individually or in the aggregate, result
in a Material Adverse Effect.
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(r) No action has been taken and no statute, rule, regulation or
order has been enacted, adopted or issued by any governmental agency that
prevents the issuance of the Notes or prevents or suspends the use of the
Prospectus Supplement; no injunction, restraining order or order of any
kind by a federal or state court of competent jurisdiction has been issued
that prevents the issuance of the Notes, prevents or suspends the sale of
the Notes in any jurisdiction referred to in Section 1(c) hereof or that
could adversely affect the consummation of the transactions contemplated by
this Agreement or the Prospectus Supplement; and every request of any
securities authority or agency of any jurisdiction for additional
information has been complied with in all material respects.
(s) There is (i) no significant unfair labor practice complaint
pending against the Company or any of its subsidiaries nor, to the best
knowledge of the Company, threatened against any of them, before the
National Labor Relations Board, any state or local labor relations board or
any foreign labor relations board, and no significant grievance or
significant arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company or any of its
subsidiaries nor, to the best knowledge of the Company, threatened against
any of them, (ii) no significant strike, labor dispute, slowdown or
stoppage pending against the Company or any of its subsidiaries nor, to the
best knowledge of the Company, threatened against the Company or any of its
subsidiaries and (iii) to the best knowledge of the Company, no union
representation question existing with respect to the employees of the
Company or any of its subsidiaries that, in the case of clauses (i), (ii)
or (iii) above, could reasonably be expected to result in a Material
Adverse Effect. To the best knowledge of the Company, no collective
bargaining organizing activities are taking place with respect to the
Company or any of its subsidiaries. None of the Company or any of its
subsidiaries has violated (A) any federal, state or local law or foreign
law relating to discrimination in hiring, promotion or pay of employees,
(B) any applicable wage or hour laws or (C) any provision of the Employee
Retirement Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder (collectively, "ERISA"), which in the
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case of clause (A), (B) or (C) above could reasonably be expected to result
in a Material Adverse Effect.
(t) None of the Company or any of its subsidiaries has violated any
environmental, safety or similar law or regulation applicable to it or its
business or property relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), lacks any permit, license or other
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approval required of it under applicable Environmental Laws or is violating
any term or condition of such permit, license or approval, which could
reasonably be expected to, either individually or in the aggregate, have a
Material Adverse Effect.
(u) Each of the Company and its subsidiaries has (i) good and
marketable title to all of the properties and assets described in the
Prospectus Supplement or Form 8-K as owned by it, free and clear of all
liens, charges, encumbrances and restrictions, except such as are described
in the Prospectus Supplement or Form 8-K or as would not have a Material
Adverse Effect, (ii) peaceful and undisturbed possession of its properties
under all material leases to which it is a party as lessee, (iii) all
licenses, certificates, permits, authorizations, approvals, franchises and
other rights from, and has made all declarations and filings with, all
federal, state and local authorities, all self-regulatory authorities and
all courts and other tribunals (each an "Authorization") necessary to
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engage in the business conducted by it in the manner described in the
Prospectus Supplement or Form 8-K, except as described in the Prospectus
Supplement or Form 8-K or where failure to hold such Authorizations would
not, individually or in the aggregate, have a Material Adverse Effect and
(iv) no reason to believe that any governmental body or agency is
considering limiting, suspending or revoking any such Authorization. Except
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where the failure to be in full force and effect would not have a Material
Adverse Effect, all such Authorizations are valid and in full force and
effect, and each of the Company and its subsidiaries is in compliance in
all material respects with the terms and conditions of all such
Authorizations and with the rules and regulations of the regulatory
authorities having jurisdiction with respect thereto. All material leases
to which the Company or any of its subsidiaries is a party are valid and
binding, and no default by the Company or any subsidiary has occurred and
is continuing thereunder and, to the best knowledge of the Company and its
subsidiaries, no material defaults by the landlord are existing under any
such lease that could reasonably be expected to result in a Material
Adverse Effect.
(v) Each of the Company and its subsidiaries owns, possesses or has
the right to employ all patents, patent rights, licenses (including all
FCC, state, local or other regulatory licenses), inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, software, systems or procedures),
trademarks, service marks and trade names, inventions, computer programs,
technical data and information (collectively, the "Intellectual Property")
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presently employed by it in connection with the businesses now operated by
it or that are proposed to be operated by it or its subsidiaries free and
clear of and without violating any right, claimed right, charge,
encumbrance, pledge, security interest, restriction or lien of any kind of
any other person and none of the Company or any of its subsidiaries has
received any notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing, except as (1) disclosed in the
Prospectus Supplement or Form 8-K or (2) as could not reasonably be
expected to have a Material Adverse Effect. To the best knowledge of the
Company, the use of the Intellectual Property in connection with the
business and operations of the Company and its subsidiaries does not
infringe on the rights of any person, except as disclosed in the Prospectus
Supplement or Form 8-K or as could not reasonably be expected to have a
Material Adverse Effect.
(w) None of the Company or any of its subsidiaries or, to the best
knowledge of the Company, any of their respective officers, directors,
partners, employees, agents or affiliates or any other person acting on
behalf of the Company or any of its subsidiaries has, directly or
indirectly, given or agreed to give any money, gift or similar benefit
(other than legal price concessions to customers in the ordinary course of
business) to any customer, supplier, employee or agent of a customer or
supplier, official or employee of any governmental agency (domestic or
foreign), instrumentality of any government (domestic or foreign) or any
political party or candidate for office (domestic or foreign) or other
person who was, is or may be in a position to help or hinder the business
of the Company or any of its subsidiaries (or assist the Company or any of
its subsidiaries in connection with any actual or proposed transaction),
which (i) might subject the Company or any of its subsidiaries, or any
other individual or entity, to any damage or penalty in any civil, criminal
or governmental litigation or proceeding (domestic or foreign), (ii) if not
given in the past, might have had a material adverse effect on the assets,
business or operations of the Company or any of its subsidiaries or (iii)
if not continued in the future, might have a Material Adverse Effect.
(x) All material tax returns required to be filed by the Company and
each of its subsidiaries in all jurisdictions have been so filed. All
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 or those
currently payable without penalty or interest. To the knowledge of the
Company, there are no material proposed additional tax assessments against
the Company, the assets or property of the Company or any of its
subsidiaries. The Company has made adequate charges, accruals and reserves
in the applicable
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financial statements included in the Prospectus Supplement and Form 8-K in
respect of all federal, state and foreign income and franchise taxes for
all periods as to which the tax liability of the Company or any of its
consolidated subsidiaries has not been finally determined.
(y) None of the Company or any of its subsidiaries is (i) an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), or (ii) a "holding company" or a "subsidiary
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company" or an "affiliate" of a holding company within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(z) Except as disclosed in the Prospectus Supplement or Form 8-K,
there are no holders of securities of the Company or any of its
subsidiaries who, by reason of the execution by the Company of this
Agreement to which it is a party or the consummation by the Company or any
of its subsidiaries of the transactions contemplated hereby, have the right
to request or demand that the Company or any of its subsidiaries register
under the Securities Act or analogous foreign laws and regulations
securities held by them, other than such that have been duly waived.
(aa) Each of the Company and its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets,
(iii) access to assets is permitted only in accordance with management's
general or specific authorization and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences thereto.
(bb) Except as disclosed in the Prospectus Supplement or Form 8-K,
each of the Company and its subsidiaries maintains insurance covering its
properties, operations, personnel and businesses. Such insurance insures
against such losses and risks as are adequate in accordance with customary
industry practice to protect the Company and its subsidiaries and their
respective businesses. None of the Company or any of its subsidiaries has
received notice from any insurer or agent of such insurer that substantial
capital improvements or other expenditures will have to be made in order to
continue such insurance. All such insurance is outstanding and duly in
force on the date hereof, subject only to changes made in the ordinary
course of business, consistent with past practice, which do not, singly or
in the aggregate, materially alter the coverage thereunder or the risks
covered thereby. The Company has no reason to believe that it or any
subsidiary will not be able (a) to renew its existing insurance coverage as
and when such policies expire or (b) to obtain comparable coverage from
similar institutions as may be necessary or appropriate to conduct its
business as now conducted or as presently contemplated and at a cost that
would not result in a Material Adverse Effect.
(cc) None of the Company or any of its subsidiaries has (i) 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 Notes or (ii) since the date of the Preliminary
Prospectus Supplement (A) sold, bid for, purchased or paid any person any
compensation for soliciting purchases of, the Notes or (B) 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.
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(dd) The Company and its subsidiaries and any "employee benefit plan"
(as defined under ERISA) established or maintained by the Company, its
subsidiaries or their "ERISA Affiliates" (as defined below) are in
compliance in all material respects with ERISA. "ERISA Affiliate" means,
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with respect to the Company or a subsidiary, any member of any group of
organizations described in Sections 414(b), (c), (m) or (o) of the Internal
Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "Code") of which the Company or such
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subsidiary is a member. No "reportable event" (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any "employee
benefit plan" established or maintained by the Company, its subsidiaries or
any of their ERISA Affiliates. No "employee benefit plan" established or
maintained by the Company, its subsidiaries or any of their ERISA
Affiliates, if such "employee benefit plan" were terminated, would have any
"amount of unfunded benefit liabilities" (as defined under ERISA). Neither
the Company, its subsidiaries nor any of their ERISA Affiliates has
incurred or reasonably expects to incur any liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "employee
benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each
"employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or failure to act, which would cause the loss
of such qualification.
(ee) Subsequent to the respective dates as of which information is
given in the Prospectus Supplement and up to the Closing Date, except as
set forth in the Prospectus Supplement or Form 8-K, (i) none of the Company
or any of its subsidiaries has incurred any liabilities or obligations,
direct or contingent, that 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, (ii) none of the
Company or any of its subsidiaries has incurred any liabilities or
obligations, direct or contingent, that will be material to the Company and
its subsidiaries taken as a whole, (iii) there has not been, singly or in
the aggregate, any change or development that could reasonably be expected
to result in a Material Adverse Effect, (iv) except for the dividend
consisting of shares of Class A Common Stock awarded to the holders of the
Company's Series B preferred stock on February 1, 2000, 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 its capital stock, (v) there has
been no change in accounting methods or practices (including any change in
depreciation or amortization policies or rates) by the Company or any of
its subsidiaries, (vi) there has been no revaluation by the Company or any
of its subsidiaries of any of their assets, (vii) there has been no
increase in the salary or other compensation payable or to become payable
by the Company or any of its subsidiaries to any of their officers,
directors, employees or advisors, nor any declaration, payment or
commitment or obligation of any kind for the payment by the Company or any
of its subsidiaries of a bonus or other additional salary or compensation
to any such person, (viii) there has been no amendment or termination of
any material contract, agreement or license to which the Company or any
subsidiary is a party or by which it is bound, (ix) there has been no
waiver or release of any material right or claim of the Company or any
subsidiary, including any write-off or other compromise of any material
account receivable of the Company or any subsidiary, and (x) there has been
no material change in pricing or royalties set or charged by the Company or
any subsidiary to their respective customers or licensees or in pricing or
royalties set or charged by persons who have licensed Intellectual Property
Rights to the Company or any of its subsidiaries.
(ff) KPMG LLP, who has expressed their opinion with respect to the
financial statements (which term as used in this Agreement includes the
related notes thereto) and supporting schedules included in the Prospectus
Supplement and Form 8-K, are independent public or certified public
accountants within the meaning of Regulation S-X under the Securities Act
and the Exchange Act.
9
(gg) The financial statements, together with the related notes,
included in the Prospectus Supplement and Form 8-K present fairly in all
material respects the consolidated financial position of the Company and
its subsidiaries as of and at the dates indicated and the results of their
operations and cash flows for the periods specified. Such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes thereto.
The financial data set forth in the Prospectus Supplement and Form 8-K
under the captions "SummarySummary Consolidated Financial Data", "Selected
Consolidated Financial Data" and "Capitalization" fairly present the
information set forth therein on a basis consistent with that of the
audited financial statements contained in the Form 8-K.
(hh) Except as pursuant to this Agreement, there are no contracts,
agreements or understandings between the Company and any other person that
would give rise to a valid claim against the Company 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 Notes.
(ii) The statements (including the assumptions described therein)
included in the Prospectus Supplement and Form 8-K (i) are within the
coverage of Rule 175(b) under the Securities Act to the extent such data
constitute forward looking statements as defined in Rule 175(c) and (ii)
were made by the Company with a reasonable basis and reflect the Company's
good faith estimate of the matters described therein.
(xx) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to the
Underwriters as to the matters covered thereby.
The Company acknowledges that each of the Underwriters and, for
purposes of the opinions to be delivered to the Underwriters pursuant to Section
6 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.
2. Purchase, Sale and Delivery of the Notes.
----------------------------------------
(a) On the basis of the representations, warranties, covenants
and agreements herein contained, but subject to the terms and conditions herein
set forth, the Company agrees to sell to the Underwriters and the Underwriters,
severally and not jointly, agree to purchase from the Company, at a purchase
price of $970 per $1,000 principal amount of Notes, the aggregate number of Firm
Notes set forth opposite the respective names of the Underwriters in Schedule I
hereto plus any additional number of Notes which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery of, the Firm
Notes shall be made at the office of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxxxx
0000, Xxx Xxxx, Xxx Xxxx, 00000, or at such other place as shall be agreed upon
by the Underwriters and the Company, at 10:00 A.M. on March 6, 2001 (unless
postponed in accordance with the provisions of Section 9 hereof) after the
determination of the pricing terms of the Notes, or such other time not later
than ten business days after such date as shall be agreed upon by the
Underwriters and the Company (such time and date of payment and delivery being
herein called the "Closing Date"). Payment shall be made to the Company by wire
------------
transfer in same day funds, against delivery to the Underwriters of the Notes to
be purchased by them. The Notes will be evidenced by one or more Global Notes in
definitive form and will be
10
registered in the name of Cede & Co., Inc. as nominee of the Depository Trust
Company ("DTC"). The Company will permit the Underwriters to examine and package
such Global Notes for delivery at least one full business day prior to the
Closing Date.
(c) In addition, the Company hereby grants to the Underwriters the
option to purchase up to an aggregate principal amount of $18,750,000 Additional
Notes at the same purchase price per share to be paid by the Underwriters to the
Company for the Firm Notes as set forth in this Section 2, for the sole purpose
of covering over-allotments in the sale of Firm Notes by the Underwriters. This
option may be exercised at any time, in whole or in part, on or before the
thirtieth day following the date of the Prospectus Supplement, by written notice
by the Underwriters to the Company. Such notice shall set forth the aggregate
principal amount of Additional Notes as to which the option is being exercised
and the date and time, as reasonably determined by the Underwriters, when the
Additional Notes are to be delivered (such date and time being herein sometimes
referred to as the "Additional Closing Date"); provided, however, that the
-----------------------
Additional Closing Date shall not be earlier than the Closing Date or earlier
than the second full business day after the date on which the option shall have
been exercised nor later than the eighth full business day after the date on
which the option shall have been exercised (unless such time and date are
postponed in accordance with the provisions of Section 9 hereof). The Additional
Notes will be evidenced by one or more Global Notes in definitive form and will
be registered in the name of Cede & Co., Inc. as nominee of the Depository Trust
Company ("DTC"). The Company will permit the Underwriters to examine and package
such Global Notes for delivery at least one full business day prior to the
Additional Closing Date.
(d) The aggregate principal amount of Additional Notes to be sold to
each Underwriter shall be the amount which bears the same ratio to the aggregate
principal amount of Additional Notes being purchased as the aggregate principal
amount of Firm Notes set forth opposite the name of such Underwriter in Schedule
I hereto (or such amount increased as set forth in Section 9 hereof) bears to
the aggregate principal amount of Firm Notes being purchased from the Company.
(e) Payment for the Additional Notes shall be made by wire transfer
in same day funds each payable to the order of the Company at the office of
Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx, 00000, or
such other location as may be mutually acceptable, against delivery of the
Additional Notes to the Underwriters.
3. Offering. Upon the Underwriters' authorization of the release of
---------
the Firm Notes, the Underwriters propose to offer the Notes for sale to the
public upon the terms set forth in the Prospectus Supplement.
4. Covenants of the Company. The Company covenants and agrees with each of
------------------------
the Underwriters that:
(a) The Company will notify the Underwriters immediately (and, if
requested by the Underwriters, will confirm such notice in writing) (i)
when any post-effective amendment to the Registration Statement becomes
effective, (ii) of any request by the Commission for any amendment of or
supplement to the Registration Statement, the Prospectus Supplement or Form
8-K or for any additional information, (iii) of the mailing or the delivery
to the Commission for filing of the Prospectus Supplement or any amendment
of or supplement to the Registration Statement or the Prospectus Supplement
or any document to be filed pursuant to the Exchange Act during any period
when the Prospectus Supplement is required to be delivered under the
Securities Act, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any post-
effective amendment thereto or of the initiation, or the threatening, of
any proceedings therefor, (v) of the receipt of any comments or inquiries
from the Commission, and (vi) of the receipt by the
11
Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation
or threatening of any proceeding for that purpose. The Company shall
maintain continuous registration of the shares of Class A Common Stock
underlying the notes with the Commission. If the Commission shall propose
or enter a stop order at any time, the Company will make every reasonable
effort to prevent the issuance of any such stop order and, if issued, to
obtain the lifting of such order as soon as possible. The Company will not
file any post-effective amendment to the Registration Statement or any
amendment of or supplement to the Prospectus Supplement (including any
revised prospectus supplement which the Company proposes for use by the
Underwriters in connection with the offering of the Notes which differs
from the prospectus supplement filed with the Commission pursuant to Rule
424(b) of the Securities Act Regulations, whether or not such revised
prospectus supplement is required to be filed pursuant to Rule 424(b) of
the Securities Act Regulations) to which the Underwriters or Underwriters'
Counsel (as hereinafter defined) shall reasonably object, will furnish the
Underwriters with copies of any such amendment or supplement a reasonable
amount of time prior to such proposed filing or use, as the case may be,
and will not file any such amendment or supplement or use any such
prospectus supplement to which the Underwriters or counsel for the
Underwriters shall reasonably object.
(b) If any event shall occur as a result of which the Prospectus
Supplement or Form 8-K would, in the judgment of the Underwriters or the
Company, include an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it shall be necessary at any time to amend or
supplement the Prospectus Supplement or the Registration Statement to
comply with the Securities Act or the Securities Act Regulations, the
Company will notify the Underwriters promptly and prepare and file with the
Commission an appropriate amendment or supplement (in form and substance
satisfactory to the Underwriters) which will correct such statement or
omission or which will effect such compliance.
(c) The Company has delivered to the Underwriters a signed copy of
the Registration Statement as originally filed, including exhibits, and all
amendments thereto, and the Company will promptly deliver to each of the
Underwriters, from time to time during the period that the Prospectus
Supplement is required to be delivered under the Securities Act, such
number of copies of the Prospectus Supplement and the Registration
Statement, and all amendments of and supplements to such documents, if any,
as the Underwriters may reasonably request.
(d) The Company will endeavor in good faith, in cooperation with the
Underwriters, to qualify the Notes for offering and sale under the
securities laws relating to the offering or sale of the Notes of such
jurisdictions as the Underwriters may designate and to maintain such
qualification in effect for so long as required for the distribution
thereof; except that in no event shall the Company be obligated in
connection therewith to qualify as a foreign corporation or to execute a
general consent to service of process.
(e) The Company will make generally available (within the meaning of
Section 11(a) of the Securities Act) to its security holders and to the
Underwriters as soon as practicable, but not later than 45 days after the
end of its fiscal quarter in which the first anniversary date of the
effective date of the Registration Statement occurs (or if such fiscal
quarter is the Company's fourth fiscal quarter, not later than 90 days
after the end of such quarter), an earnings statement (in form complying
with the provisions of Rule 158 of the Securities Act Regulations) covering
a period of at least twelve consecutive months beginning after the date of
the Prospectus Supplement.
(f) During the period of 90 days from the date of the Prospectus
Supplement, the Company will not, directly or indirectly, without the prior
written consent of Bear, Xxxxxxx & Co. Inc, offer, sell, contract to sell,
grant any option to purchase, pledge or otherwise dispose
12
(or announce any offer, sale, contract to sell, grant of an option to
purchase, pledge or other disposition) of any shares of Class A Common
Stock of the Company or any securities convertible into or exercisable or
exchangeable for such Class A Common Stock, except that the Company may
issue (i) shares of Class A Common Stock and options to purchase Class A
Common Stock under its 1998 Shares Award Plan and Employee Stock Purchase
Plan, (ii) shares of Class A Common Stock upon exercise of warrants to
purchase Class A Common Stock or conversion of notes and other convertible
securities that were issued and outstanding on the date of the Prospectus
Supplement, (iii) shares of Class A Common Stock in connection with
strategic relationships and acquisitions of businesses, technologies and
products complementary to those of the Company, so long as the recipients
of such shares with respect to clause (iii) agree to be bound by a lock-up
agreement substantially in the form of Exhibit C hereto (which shall
---------
provide that any transferees and assigns of such recipients shall be bound
by the lock-up agreement) for the remainder of the 90-day lock-up period,
(iv) shares of Class A common stock to satisfy its obligations, if any, to
pay a dividend on any of its capital stock or interest on any of its debt
securities, in each case, in accordance with the terms of such security or
(v) the shares of Class A Common Stock as may be issued in the Concurrent
Offering.
(g) During a period of three years from the date of the Prospectus
Supplement, the Company will furnish to the Underwriters copies of (i) all
reports to its stockholders; and (ii) all reports, financial statements and
proxy or information statements filed by the Company with the Commission or
any national securities exchange.
(h) The Company will apply the proceeds from the sale of the Notes as
set forth under "Use of Proceeds" in the Prospectus Supplement.
(i) If the Company elects to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York
City time, on the date of this Agreement, no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission, and all requests for additional information
on the part of the Commission shall have been complied with to the
Underwriters' reasonable satisfaction.
(j) The Company, during the period when the Prospectus Supplement is
required to be delivered under the Securities Act or the Exchange Act, will
file all documents required to be filed with the Commission pursuant to
Sections 13, 14 or 15 of the Exchange Act within the time periods required
by the Exchange Act and the rules and regulations thereunder.
(k) Intentionally Omitted.
(l) The Company will effect and maintain the quotation of the shares
of Class A Common Stock issuable upon conversion of the Notes on the Nasdaq
National Market.
5. Payment of Expenses. Whether or not the transactions contemplated in
-------------------
this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including those in connection with (a)
preparing, printing, duplicating, filing and distributing the Registration
Statement, as originally filed and all amendments thereto (including all
exhibits thereto), any Preliminary Prospectus Supplement, the Prospectus
Supplement, the Form 8-K and any amendments or supplements
13
thereto (including, without limitation, fees and expenses of the Company's
accountants and counsel), the underwriting documents (including this Agreement
and the Agreement Among Underwriters and the Selling Agreement, if any) and all
other documents related to the public offering of the Notes (including those
supplied to the Underwriters in quantities as hereinabove stated), (b) the
issuance, transfer and delivery of the Notes to the Underwriters, including any
transfer or other taxes payable thereon, (c) the qualification of the Notes
under state or foreign securities or Blue Sky laws, including the costs of
printing and mailing a preliminary and final "Blue Sky Memorandum" and the fees
of counsel in connection therewith and such counsel's disbursements in relation
thereto, (d) listing of the shares of Class A Common Stock issuable upon
conversion of the Notes for quotation on the Nasdaq, (e) filing fees of the
Commission and the NASD, (f) the cost of printing certificates representing the
Notes and (g) the cost and charges of any transfer agent or registrar.
6. Conditions of Underwriters' Obligations. The obligations of the
-- ---------------------------------------
Underwriters to purchase and pay for the Firm Notes and the Additional Notes, as
provided herein, shall be subject to the accuracy of the representations and
warranties of the Company herein contained, as of the date hereof and as of the
Closing Date (for purposes of this Section 6, "Closing Date" shall refer to the
------------
Closing Date for the Firm Notes and any Additional Closing Date, if different,
for the Additional Notes), to the absence from any certificates, opinions,
written statements or letters furnished to the Underwriters or to Xxxxxx &
Xxxxxxx ("Underwriters' Counsel") pursuant to this Section 6 of any material
---------------------
misstatement or omission, to the performance by the Company of its obligations
hereunder, and to the following additional conditions:
(a) Prior to the Closing Date the Registration Statement shall have
become effective, and on the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
Securities Act or proceedings therefor initiated or, to the Company's knowledge,
threatened by the Commission. The Prospectus Supplement shall have been filed or
transmitted for filing with the Commission pursuant to Rule 424(b) of the
Securities Act Regulations within the prescribed time period, and prior to
Closing Date the Company shall have provided evidence satisfactory to the
Underwriters of such timely filing or transmittal.
(b) All of the representations and warranties of the Company
contained in this Agreement shall be true and correct on the date hereof and on
the Closing Date with the same force and effect as if made on and as of the date
hereof and the Closing Date, respectively. The Company shall have performed or
complied with all of the agreements herein contained and required to be
performed or complied with by it at or prior to the Closing Date.
(c) The Prospectus Supplement shall have been printed and copies
distributed to the Underwriters not later than 10:00 a.m., New York City time,
on the second business day following the date of this Agreement or at such later
date and time as to which the Underwriters may agree, and no stop order
suspending the qualification or exemption from qualification of the Notes in any
jurisdiction referred to in Section 4(d) shall have been issued and no
proceeding for that purpose shall have been commenced or shall be pending or
threatened.
(d) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental agency
which would, as of the Closing Date, prevent the issuance of the Notes; no
action, suit or proceeding shall have been commenced and be pending against or
affecting or, to the best knowledge of the Company, threatened against, the
Company or any of its subsidiaries before any court or arbitrator or any
governmental body, agency or official that (i) could reasonably be expected to
result in a Material Adverse Effect or (ii) has not been disclosed in the
Prospectus Supplement or Form 8-K.
14
(e) Since the dates as of which information is given in the
Prospectus Supplement, (i) there shall not have been any material adverse
change, or any development that is reasonably likely to result in a material
adverse change, in the capital stock or the long-term debt, or material increase
in the short-term debt, of the Company or any of its subsidiaries from that set
forth in the Prospectus Supplement or Form 8-K, (ii) except for the dividend
consisting of shares of Class A Common Stock awarded to the holders of the
Company's Series B preferred stock on February 1, 2000, no dividend or
distribution of any kind shall have been declared, paid or made by the Company
or any of its subsidiaries on any class of its capital stock, (iii) neither the
Company nor any of its subsidiaries shall have incurred any liabilities or
obligations, direct or contingent, that are material, individually or in the
aggregate, to the Company and its subsidiaries, taken as a whole, and that are
required to be disclosed on a balance sheet or notes thereto in accordance with
generally accepted accounting principles and are not disclosed on the latest
balance sheet or notes thereto included in the Prospectus Supplement or Form 8-
K. Since the date hereof and since the dates as of which information is given in
the Prospectus Supplement, there shall not have occurred any Material Adverse
Effect.
(f) The Underwriters shall have received (1) a certificate, dated the
Closing Date, signed on behalf of the Company by each of the Company's Chief
Executive Officer and Chief Financial Officer in form and substance reasonably
satisfactory to the Underwriters, confirming, as of the Closing Date, the
matters set forth in paragraphs (a) through (e) of this Section 6 and that, as
of the Closing Date, the obligations of the Company to be performed hereunder on
or prior thereto have been duly performed in all material respect and (2) a
certificate, dated the Closing Date, signed by the Company's Secretary, in form
and substance reasonably satisfactory to the Underwriters.
(g) The Underwriters shall have received on the Closing Date an
opinion, dated the Closing Date, in form and substance satisfactory to the
Underwriters and counsel to the Underwriters, of Xxxxx & Xxxxxxx L.L.P., counsel
for the Company, to the effect set forth in Exhibit A hereto.
---------
(h) The Underwriters shall have received on the Closing Date an
opinion, dated the Closing Date, in form and substance satisfactory to the
Underwriters and counsel to the Underwriters, of ShawPittman, counsel for the
Company, to the effect set forth in Exhibit B hereto.
---------
(i) The Underwriters shall have received an opinion, dated the
Closing Date, in form and substance reasonably satisfactory to the Underwriters,
of Xxxxxx & Xxxxxxx, counsel to the Underwriters, covering such matters as are
customarily covered in such opinions.
(j) Xxxxxx & Xxxxxxx shall have been furnished with such documents,
in addition to those set forth above, as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in this
Section 6 and in order to evidence the accuracy, completeness or satisfaction in
all material respects of any of the representations, warranties or conditions
herein contained.
(k) At the time this Agreement is executed and at the Closing Date
the Underwriters shall have received from KPMG LLP, independent public
accountants for the Company and its subsidiaries, dated as of the date of this
Agreement and as of the Closing Date, customary comfort letters addressed to the
Underwriters in form and substance satisfactory to the Underwriters and counsel
to the Underwriters with respect to the financial statements and certain
financial information of the Company and its subsidiaries contained in the
Prospectus Supplement and Form 8-K.
15
(l) At the time this Agreement is executed, the Underwriters shall
have received a "lock-up" agreement, substantially in the form attached as
Exhibit C hereto, from each of the officers and directors of the Company
---------
identified on Exhibit D hereto.
---------
(m) At the time this Agreement is executed, the Underwriters shall
have received a "lock-up" agreement, substantially in the form attached as
Exhibit E hereto, from each of the stockholders of the Company identified
---------
on Exhibit F hereto.
---------
(n) At the time this Agreement is executed, the Underwriters shall
have received a "lock-up" agreement, substantially in the form attached as
Exhibit G hereto, from Motient Corporation.
---------
(o) Each of the (1) Amended and Restated Shareholders' Agreement,
dated August 8, 2000, by and among the Company and the other parties
thereto, (2) Technology Licensing Agreement, dated January 1, 1998, by and
among the Company and the other parties thereto as amended on June 7, 1999,
(3) Technical Services Agreement, dated January 1, 1998, as amended,
between the Company and Motient Corporation, (4) Satellite Purchase
Contract for In-Orbit Delivery, dated March 20, 1998, between the Company
and Xxxxxx Space and Communications International, Inc., (5) Amended and
Restated Agreement, dated November 2, 1998, by and between the Company and
STMicroelectronics Srl, (6) Distribution Agreement, dated June 7, 1999,
between the OnStar Division of General Motors Corporation and the Company,
(7) Operational Assistance Agreement, dated June 7, 1999, between the
Company and DIRECTV, INC., (8) Operational Assistance Agreement, dated June
7, 1999, between the Company and Clear Channel Communications, Inc., (9)
Operational Assistance Agreement, dated June 7, 1999, between the Company
and TCM, LLC., (10) Agreement, dated August 18, 1999, as amended on
November 2, 1999 and July __, 2000, between LCC International and the
Company and (11) Joint Development Agreement, dated February 16, 2000,
between Sirius Satellite Radio, Inc. and the Company, shall be in full
force and effect, and no party to any such agreement shall have given any
notice of termination or amendment of any material provision thereof, or of
any intention to terminate or amend any material provision thereof, to any
other party, and no event shall have occurred which would prevent any party
from substantially performing its obligations under such agreements.
(p) The Company and the Trustee shall have entered into the
Indenture, and the Underwriters shall have received counterparts, conformed
as to the execution thereof.
(q) At the Closing Date, the shares of Class A common Stock issuable
upon conversion of the Notes shall have been approved for quotation on the
Nasdaq.
(r) At the time this Agreement is executed and at the Closing Time,
the NASD shall not have withdrawn, or given notice of an intention to
withdraw, its approval of the fairness of the underwriting terms and
arrangements of the Offering of the Notes by the Underwriters..
(s) All opinions, certificates, letters and other documents required
by this Section 6 to be delivered by the Company will be in compliance with
the provisions hereof only if they are reasonably satisfactory in form and
substance to the Underwriters. The Company will furnish the Underwriters
with such conformed copies of such opinions, certificates, letters and
other documents as Bear, Xxxxxxx & Co. Inc. shall reasonably request. Prior
to the Closing Date, the Company shall have furnished to the Underwriters
such further information, certificates and documents as the Underwriters
may reasonably request.
16
If any of the conditions specified in this Section 6 shall not have been
fulfilled when and as required by this Agreement, or if any of the certificates,
opinions, written statements or letters furnished to the Underwriters or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to the Underwriters and
to Underwriters' Counsel, all obligations of the Underwriters hereunder may be
canceled by the Underwriters at, or at any time prior to, the Closing Date and
the obligations of the Underwriters to purchase the Additional Notes may be
canceled by the Underwriters at, or at any time prior to, the Additional Closing
Date. Notice of such cancellation shall be given to the Company in writing, or
by telephone, telecopy, telex or telegraph, confirmed in writing.
7. Indemnification.
---------------
(a) 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 Securities Act or Section 20(a) of the Exchange Act
against any and all losses, liabilities, claims, damages and expenses whatsoever
as incurred (including but not limited to attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, as originally filed or any amendment thereof, or any
related Preliminary Prospectus Supplement or the Prospectus Supplement or
Form 8-K, or in any supplement thereto or amendment thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the Company will not be liable in any such
case (i) to the extent but only to the extent that any such loss, liability,
claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter expressly for use therein and
(ii) with respect to any preliminary prospectus supplement to the extent that
any such loss, claim, damage or liability results from the fact that an
Underwriter sold Notes to a person as to whom it shall be established that there
was not sent or given, at or prior to written confirmation of such sale, a copy
of the prospectus or prospectus supplement as then amended or supplemented in
any case where such delivery is required by the Securities Act if the Company
has previously furnished copies thereof in sufficient quantity to such
Underwriter and with sufficient time to effect a recirculation pursuant to Rule
461 under the Securities Act and the loss, claim, damage or liability of the
Underwriters results from an untrue statement or omission of a material fact
contained in the preliminary prospectus supplement which was identified in
writing prior to the effective date of the registration statement to such
underwriter and corrected in the prospectus or prospectus supplement as then
amended, and such correction would have cured the defect giving rise to such
loss, claim, damage or liability. This indemnity agreement will be in addition
to any liability which the Company may otherwise have including under this
Agreement.
(b) Each Underwriter severally, and not jointly, agrees to indemnify
and hold harmless the Company and each other person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act, against any and all losses, liabilities, claims, damages
and expenses whatsoever as incurred (including but not limited to attorneys'
fees and any and all expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims,
17
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, as originally filed or any amendment
thereof, or any related preliminary prospectus supplement or prospectus
supplement, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that any
such loss, liability, claim, damage or expense arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter
expressly for use therein; provided, however, that in no case shall any
Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Notes purchased by such Underwriter
hereunder. This indemnity will be in addition to any liability which any
Underwriter may otherwise have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may otherwise have). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying parties
in connection with the defense of such action, (ii) the indemnifying parties
shall not have employed counsel to take charge of the defense of such action
within a reasonable time after notice of commencement of the action, or (iii)
such indemnified party or parties shall have reasonably concluded that there may
be defenses available to it or them which are different from or additional to
those available to one or all of the indemnifying parties (in which case the
indemnifying party or parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses shall be borne by the indemnifying parties.
Anything in this subsection to the contrary notwithstanding, an indemnifying
party shall not be liable for any settlement of any claim or action effected
without its written consent; provided, however, that such consent was not
unreasonably withheld.
8. Contribution. In order to provide for contribution in circumstances in
-------------
which the indemnification provided for in Section 7 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company and the Underwriters shall
contribute to the aggregate losses, claims, damages, liabilities and expenses of
the nature contemplated by such indemnification provision (including any
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company any contribution received by
the Company from persons, other than the Underwriters, who may also be liable
for contribution, including persons who control the Company within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act,
officers of the Company who signed the Registration Statement and directors of
the Company) as incurred to which the Company and one or more of the
Underwriters may be subject, in such proportions
18
as is appropriate to reflect the relative benefits received by the Company and
the Underwriters from the offering of the Notes or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 7
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Underwriters in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other hand shall be deemed to be in
the same proportion as (x) the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and (y) the underwriting discounts and commissions received by
the Underwriters, respectively, in each case as set forth in the table on the
cover page of the Prospectus Supplement. The relative fault of the Company and
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or 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 8 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above. Notwithstanding the
provisions of this Section 8, (i) in no case shall any Underwriter be liable or
responsible for any amount in excess of the underwriting discount applicable to
the Notes purchased by such Underwriter hereunder, and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person, if any, who controls an Underwriter within the meaning of Section
15 of the Securities Act or Section 20(a) of the Exchange Act shall have the
same rights to contribution as such Underwriter, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to clauses
(i) and (ii) of this Section 8. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 8 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its consent; provided, however, that such consent was not unreasonably
withheld.
9. Default by an Underwriter.
-------------------------
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Notes or Additional Notes hereunder, and if the Firm
Notes or Additional Notes with respect to which such default relates do not
(after giving effect to arrangements, if any, made by the Underwriters pursuant
to Subsection (b) below) exceed in the aggregate 10% of the aggregate principal
amount of Firm Notes or Additional Notes, the aggregate principal amount of Firm
Notes or Additional Notes which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase shall be purchased by the non-
defaulting Underwriters in proportion to the respective proportions which the
aggregate principal amount of Firm Notes set forth opposite their respective
names in Schedule I hereto bear to the aggregate principal amount of Firm Notes
set forth opposite the names of the non-defaulting Underwriters.
19
(b) In the event that such default relates to more than 10% of the
aggregate principal amount of the Firm Notes or Additional Notes, as the case
may be, the Underwriters may in their discretion arrange for themselves or for
another party or parties (including any non-defaulting Underwriter or
Underwriters who so agree) to purchase such aggregate principal amount of Firm
Notes or Additional Notes, as the case may be, to which such default relates on
the terms contained herein. In the event that within five calendar days after
such a default the Underwriters do not arrange for the purchase of the Firm
Notes or Additional Notes, as the case may be, to which such default relates as
provided in this Section 9, this Agreement, or in the case of a default with
respect to the Additional Notes, the obligations of the Underwriters to purchase
and of the Company to sell the Additional Notes, shall thereupon terminate,
without liability on the part of the Company with respect thereto (except in
each case as provided in Section 5, 7(a) and 8 hereof) or the Underwriters, but
nothing in this Agreement shall relieve a defaulting Underwriter or Underwriters
of its or their liability, if any, to the other Underwriters and the Company for
damages occasioned by its or their default hereunder.
(c) In the event that the Firm Notes or Additional Notes to which the
default relates are to be purchased by the non-defaulting Underwriters, or are
to be purchased by another party or parties as aforesaid, the Underwriters or
the Company shall have the right to postpone the Closing Date or Additional
Closing Date, as the case may be, for a period not exceeding five business days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus Supplement or in any other documents
and arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus Supplement which, in
the opinion of Underwriters' Counsel, may thereby be made necessary or
advisable. The term "Underwriter" as used in this Agreement shall include any
party substituted under this Section 9 with like effect as if it had originally
been a party to this Agreement with respect to such Firm Notes or Additional
Notes.
10. Survival of Representations and Agreements. All representations and
------------------------------------------
warranties, covenants and agreements of the Underwriters and the Company
contained in this Agreement, including the agreements contained in Section 5,
the indemnity agreements contained in Section 7 and the contribution agreements
contained in Section 8, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter or any
controlling person thereof or by or on behalf of the Company, any of its
officers and directors, or any controlling person of the Company, and shall
survive delivery of and payment for the Notes to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in Sections
5, 7, 8, 11(d) and 12 hereof shall survive the termination of this Agreement,
including termination pursuant to Section 9 or 11 hereof.
11. Effective Date of Agreement; Termination.
----------------------------------------
(a) This Agreement shall become effective upon the execution and
delivery of a counterpart hereof by each of the parties hereto.
(b) The Underwriters shall have the right to terminate this Agreement
at any time prior to the Closing Date or the obligations of the Underwriters to
purchase the Additional Notes at any time prior to the Additional Closing Date,
as the case may be, if on or prior to such date, (i) the Company shall have
failed, refused or been unable to perform in any material respect any agreement
on its part to be performed hereunder, (ii) any other condition to the
obligations of the Underwriters hereunder as provided in Section 6 is not
fulfilled when and as required in any material respect, (iii) in the judgment of
the Underwriters any changes of circumstance shall have occurred since the
respective dates as of which information is given in the Prospectus Supplement
which could have a Material Adverse Effect, other than as set forth in the
Prospectus Supplement or Form 8-K, or (iv) (A) any
20
domestic or international event or act or occurrence has materially adversely
affected, or in the opinion of the Underwriters will in the immediate future
materially adversely affect, the market for the Company's securities or for
securities in general; or (B) trading in securities generally on the New York
Stock Exchange ("NYSE") or quotations on the Nasdaq shall have been suspended or
----
materially limited, or minimum or maximum prices for trading shall have been
established, or maximum ranges for prices for securities shall have been
required, on such exchange, or by such exchange or other regulatory body or
governmental authority having jurisdiction; or (C) a banking moratorium shall
have been declared by federal or state authorities, or a moratorium in foreign
exchange trading by major international banks or persons shall have been
declared; or (D) there is an outbreak or escalation of armed hostilities
involving the United States on or after the date hereof, or if there has been a
declaration by the United States of a national emergency or war, the effect of
which shall be, in the Underwriters' judgment, to make it inadvisable or
impracticable to proceed with the offering, sale and delivery of the Firm Notes
or the Additional Notes, as the case may be, on the terms and in the manner
contemplated by the Prospectus Supplement; or (E) there shall have been such a
material adverse change in general economic, political or financial conditions
or if the effect of international conditions on the financial markets in the
United States shall be such as, in the Underwriters' judgment, makes it
inadvisable or impracticable to proceed with the offering, sale and delivery of
the Firm Notes or the Additional Notes, as the case may be, on the terms and in
the manner contemplated by the Prospectus Supplement.
(c) Any notice of termination pursuant to this Section 11 shall be
by telephone, telecopy, telex, or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (other than pursuant to Section 9(b) or 11(b) hereof), or if
the sale of the Notes provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by the Underwriters, reimburse the Underwriters
for all out-of-pocket expenses (including the reasonable fees and expenses of
their counsel), incurred by the Underwriters in connection herewith.
12. Underwriters' Information. The Company and the Underwriters severally
-------------------------
acknowledge that the statements set forth in (i) the third paragraph under the
caption "Underwriting" in the Prospectus Supplement concerning the proposed
public offering price, discount and concession; and (ii) the seventh paragraph
under the caption "Underwriting" in the Prospectus Supplement concerning
transactions that stabilize, maintain, or otherwise affect the price of the
Notes, constitute the only information furnished in writing by or on behalf of
any Underwriter expressly for use in the Registration Statement, as originally
filed or in any amendment thereof, any related Preliminary Prospectus Supplement
or the Prospectus Supplement or in any amendment thereof or supplement thereto,
as the case may be.
13. Notices. All communications hereunder, except as may be otherwise
-------
specifically provided herein, shall be in writing and, if sent to the
Underwriters shall be mailed, delivered, telegraphed or telecopied and confirmed
in writing to the Underwriters, c/o Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Finance Department, telecopy
number: (000) 000-0000, with a copy to Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxxxx
0000, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxx, telecopy number
(000) 000-0000, and if sent to the Company, shall be mailed, delivered or
telexed, telegraphed or telecopied and confirmed in writing to XM Satellite
Radio Holdings Inc., 0000 Xxxxxxxxx Xxxxx, XX, Xxxxxxxxxx, X.X. 00000,
Attention: Chief Financial Officer, telecopy number: (000) 000-0000, with a copy
to Xxxxx & Xxxxxxx L.L.P., 000 Xxxxxxxxxx Xxxxxx XX, Xxxxxxxxxx, X.X. 00000-
1109, Attention: Xxxxx Xxxxxxx, telecopy number (202)
21
637-5910; provided, however, that any notice pursuant to Sections 7 or 8 shall
be mailed, delivered, telegraphed or telecopied and confirmed in writing.
14. Parties. This Agreement shall inure solely to the benefit of, and
-------
shall be binding upon, the Underwriters, the Company and the controlling
persons, directors, officers, employees and agents referred to in Section 7 and
8, and their respective successors and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or claim under or
in respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its capacity
as such, of Notes from any of the Underwriters.
15. Construction. This Agreement shall be construed in accordance with the
------------
internal laws of the State of New York applicable to agreements made and to be
performed within New York, without giving any effect to any provisions thereof
relating to conflicts of law. TIME IS OF THE ESSENCE IN THIS AGREEMENT.
16. Captions. The captions included in this Agreement are included solely
---------
for convenience of reference and are not to be considered a part of this
Agreement.
17. Counterparts. This Agreement may be executed in various counterparts
------------
which together shall constitute one and the same instrument.
22
If the foregoing correctly sets forth the understanding among the
Underwriters and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement among
us.
Very truly yours,
XM SATELLITE RADIO HOLDINGS INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President,
General Counsel and Secretary
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
Acting severally on behalf of themselves and the
several Underwriters named in Schedule I hereto
BEAR, XXXXXXX & CO. INC.
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Senior Managing Director
23
SCHEDULE I
Aggregate Principal Amount
Name of Underwriter of Notes to be Purchased
------------------- ---------------------------
Bear, Xxxxxxx & Co. Inc......................... $125,000,000
------------
Total.......................................... $125,000,000
