1
EXHIBIT 1.2
AETHER SYSTEMS, INC.
(a Delaware corporation)
450,000 Shares of Common Stock
INTERNATIONAL PURCHASE AGREEMENT
Dated: March ____, 2000
2
TABLE OF CONTENTS
Page
----
SECTION 1. Representations and Warranties................................................... 3
(a) Representations and Warranties by the Company......................................... 3
(i) Compliance with Registration Requirements..................................... 4
(ii) Independent Accountants....................................................... 4
(iii) Financial Statements.......................................................... 5
(iv) No Material Adverse Change in Business........................................ 5
(v) Good Standing of the Company.................................................. 6
(vi) Good Standing and Ownership of Subsidiaries................................... 6
(vii) Capitalization................................................................ 6
(viii) Authorization of Agreement.................................................... 7
(ix) Authorization and Description of Securities................................... 7
(x) Absence of Defaults and Conflicts............................................. 7
(xi) Absence of Labor Dispute...................................................... 8
(xii) Absence of Proceedings........................................................ 8
(xiii) Accuracy of Exhibits.......................................................... 8
(xiv) Possession of Intellectual Property........................................... 8
(xv) Absence of Further Requirements............................................... 9
(xvi) Possession of Licenses and Permits............................................ 9
(xvii) Title to Property............................................................. 9
(xviii) Compliance with Cuba Act...................................................... 10
(xix) Investment Company Act........................................................ 10
(xx) Environmental Laws............................................................ 10
(xxi) Registration Rights........................................................... 10
(xxii) Dividends and Distributions................................................... 10
(xxiii) Taxes......................................................................... 11
(xxiv) Insurance..................................................................... 11
(xxv) ERISA......................................................................... 11
(xxvi) Year 2000 Compliance.......................................................... 11
(a1) Representations and Warranties by the Company with respect to OmniSky................. 12
(i) Good Standing and Ownership of OmniSky........................................ 12
(ii) No Material Adverse Change in Business........................................ 12
(iii) Certain Representations and Warranties as to the OmniSky Series B Preferred
Stock Purchase Agreement...................................................... 12
(b) Representations and Warranties by the Selling Shareholders............................ 13
(i) Accurate Disclosure........................................................... 13
(ii) Authorization of Agreements................................................... 13
(iii) Good and Marketable Title..................................................... 13
(iv) Due Execution of Power of Attorney and Custody Agreement...................... 14
(v) Absence of Manipulation....................................................... ▇▇
-▇-
▇
(▇▇) ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ Requirements............................................... 14
(vii) Restriction on Sale of Securities............................................. 14
(viii) Certificates Suitable for Transfer............................................ 15
(ix) No Association with NASD...................................................... 15
(c) Officer's and Selling Shareholders' Certificates...................................... 15
SECTION 2. Sale and Delivery to International Managers; Closing............................. 15
(a) Initial International Securities...................................................... 15
(b) International Option Securities....................................................... 16
(c) Payment............................................................................... 16
(d) Denominations; Registration........................................................... 17
SECTION 3. Covenants of the Company......................................................... 17
(a) Compliance with Securities Regulations and Commission Requests........................ 17
(b) Filing of Amendments.................................................................. 18
(c) Delivery of Registration Statements................................................... 18
(d) Delivery of Prospectuses.............................................................. 18
(e) Continued Compliance with Securities Laws............................................. 18
(f) Blue Sky Qualifications............................................................... 19
(g) Rule 158.............................................................................. 19
(h) Use of Proceeds....................................................................... 19
(i) Listing............................................................................... 19
(j) Restriction on Sale of Securities..................................................... 19
(k) Reporting Requirements................................................................ 20
(l) Compliance with Rule 463.............................................................. 20
SECTION 4. Payment of Expenses.............................................................. 20
(a) Expenses.............................................................................. 20
(b) Expenses of the Selling Shareholders.................................................. 21
(c) Termination of Agreement.............................................................. 21
(d) Allocation of Expenses................................................................ 21
SECTION 5. Conditions of International Managers' Obligations................................ 21
(a) Effectiveness of Registration Statement............................................... 21
(b) Opinion of Counsel for Company........................................................ 21
(c) Opinion of Counsel for the Selling Shareholders....................................... 22
(d) Opinion of Counsel for International Managers......................................... 22
(e) Officers' Certificate................................................................. 22
(f) Certificate of Selling Shareholders................................................... 22
(g) Accountants' Comfort Letters.......................................................... 23
(h) Bring-down Comfort Letters............................................................ 23
(i) Approval of Listing................................................................... 23
(j) No Objection.......................................................................... 23
(k) Lock-up Agreements.................................................................... 23
(l) Purchase of Initial U.S. Securities................................................... 23
(m) Conditions to Purchase of International Option Securities............................. 23
-ii-
4
(i) Officers' Certificate............................................................ 24
(ii) Certificate of Selling Shareholders.............................................. 24
(iii)Opinion of Counsel for Company................................................... 24
(iv) Opinion of Counsel for the Selling Shareholders.................................. 24
(v) Opinion of Counsel for International Managers.................................... 24
(vi) Bring-down Comfort Letters....................................................... 24
(n) Additional Documents.................................................................. 25
(o) Termination of Agreement.............................................................. 25
SECTION 6. Indemnification.................................................................. 25
(a) Indemnification of International Managers............................................. 25
(b) Indemnification of Company, Directors, Officers and Selling Shareholders.............. 26
(c) Actions against Parties; Notification................................................. 26
(d) Settlement without Consent if Failure to Reimburse.................................... 27
(e) Other Agreements with Respect to Indemnification...................................... 27
SECTION 7. Contribution..................................................................... 27
SECTION 8. Representations, Warranties and Agreements to Survive Delivery................... 30
SECTION 9. Termination of Agreement......................................................... 30
(a) Termination; General.................................................................. 30
(b) Liabilities........................................................................... 30
SECTION 10. Default by One or More of the International Managers............................. 31
SECTION 11. Default by One or More of the Selling Shareholders or the Company................ 31
SECTION 12. Notices.......................................................................... 32
SECTION 13. Parties.......................................................................... 33
SECTION 14. Governing Law and Time........................................................... 33
SECTION 15. Effect of Headings............................................................... 33
SCHEDULES
Schedule A - List of Selling Shareholders................................................... Sch A-1
Schedule B - List of Underwriters........................................................... Sch B-1
Schedule C - 90-Day Lock-up List............................................................ Sch C-1
Schedule D - 10/21/00 Lock-up List.......................................................... Sch D-1
Schedule E - NASD Affiliations.............................................................. Sch E-1
Schedule F - Pricing Information............................................................ Sch F-1
-iii-
5
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel............................................. A-1
Exhibit B - Form of Opinion of Selling Shareholders' Counsel................................. B-1
Exhibit C - Form of 90-Day Lock-up Letter.................................................... C-1
Exhibit D - Form of 10/21/00 Lock-up Letter.................................................. D-1
-iv-
6
AETHER SYSTEMS, INC.
(a Delaware corporation)
450,000 Shares of Common Stock
(Par Value $.01 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
March ___, 2000
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
as Lead Manager of the several International Managers
c/o Merrill ▇▇▇▇▇ International
Ropemaker Place
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Ladies and Gentlemen:
Aether Systems, Inc., a Delaware corporation (the "Company"), and the
additional persons or entities listed in Schedule A hereto (the "Selling
Shareholders") confirm their respective agreements with ▇▇▇▇▇▇▇ ▇▇▇▇▇
International ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other international underwriters
named in Schedule B hereto (collectively, the "International Managers", which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ is acting as representative (in such
capacity, the "Lead Manager"), with respect to the issue and sale by the Company
and the Selling Shareholders, acting severally and not jointly, and the purchase
by the International Managers, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $.01 per share, of the
Company ("Common Stock") set forth in Schedule A and Schedule B hereto, and with
respect to the grant by the Company and the Selling Shareholders to the
International Managers, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of 67,500
additional shares of Common Stock to cover over-allotments, if any. The
aforesaid 450,000 shares of Common Stock (the "Initial International
Securities") to be purchased by the International Managers and all or any part
of the 67,500 shares of Common Stock subject to the option described in Section
2(b) hereof (the "International Option Securities") are hereinafter called,
collectively, the "International Securities".
The Company and the Selling Shareholders understand that the
International Managers propose to make a public offering of the International
Securities as soon as the Lead Manager deems advisable after this Agreement has
been executed and delivered.
1
7
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "U.S. Purchase Agreement") providing for
(i) the offering by the Company and the Selling Shareholders, acting severally
and not jointly, of an aggregate of 2,550,000 shares of Common Stock (the
"Initial U.S. Securities") through arrangements with certain underwriters in the
United States and Canada (the "U.S. Underwriters") for which ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, FleetBoston ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Inc., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, U.S. Bancorp
▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc., Bear, ▇▇▇▇▇▇▇ & Co. Inc. and Friedman, Billings, ▇▇▇▇▇▇ &
Co., Inc. are acting as representatives (the "U.S. Representatives"), and (ii)
the grant by the Company and the Selling Shareholders to the U.S. Underwriters,
acting severally and not jointly, of an option to purchase all or any part of
the U.S. Underwriters' pro rata portion of up to 382,500 additional shares of
Common Stock solely to cover over-allotments, if any (the "U.S. Option
Securities" and, together with the International Option Securities, the "Option
Securities"). The Initial U.S. Securities and the U.S. Option Securities are
hereinafter called the "U.S. Securities". It is understood that the Company and
the Selling Shareholders are not obligated to sell, and the International
Managers are not obligated to purchase, any Initial International Securities
unless all of the Initial U.S. Securities are contemporaneously purchased by
the U.S. Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters", the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities", and the International Securities and the U.S. Securities are
hereinafter collectively called the "Securities".
The Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated (in such capacity, the "Global Coordinator").
It is further understood that concurrently with the offering and sale
of the Securities the Company intends to offer and sell in a registered public
offering a maximum of $230 million aggregate principal amount of convertible
subordinated notes due 2005 (the "Convertible Notes"). The Company is
concurrently entering into a purchase agreement dated the date hereof (the
"Convertible Note Purchase Agreement") relating to the offering of Convertible
Notes (the "Concurrent Notes Offering") through arrangements with certain
underwriters. Neither the offer and sale of the Securities contemplated hereby
nor the offer and sale of Convertible Notes contemplated by the Convertible Note
Purchase Agreement is conditioned upon consummation of the other.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-30852) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of
2
8
the 1933 Act Regulations, prepare and file a term sheet (a "Term Sheet") in
accordance with the provisions of Rule 434 and Rule 424(b).
Two forms of prospectus are to be used in connection with the offering
and sale of the Securities: one relating to the International Securities (the
"Form of International Prospectus") and one relating to the U.S. Securities (the
"Form of U.S. Prospectus"). The Form of U.S. Prospectus is identical to the Form
of International Prospectus, except for the front cover and back cover pages and
the information under the caption "Underwriting." The information included in
any such prospectus or in any such Term Sheet, as the case may be, that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective (i) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (ii) pursuant to paragraph (d) of Rule 434 is referred to
as "Rule 434 Information." Each Form of International Prospectus and Form of
U.S. Prospectus used before such registration statement became effective, and
any prospectus that omitted, as applicable, the Rule 430A Information or the
Rule 434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto and
schedules thereto at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, but excluding the
prospectus relating to the Concurrent Notes Offering, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final Form of
International Prospectus and the final Form of U.S. Prospectus in the forms
first furnished to the Underwriters for use in connection with the offering of
the Securities are herein called the "International Prospectus" and the "U.S.
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is
relied on, the terms "International Prospectus" and "U.S. Prospectus" shall
refer to the preliminary International Prospectus dated March 1, 2000 and
preliminary U.S. Prospectus dated March 1, 2000, respectively, each together
with the applicable Term Sheet and all references in this Agreement to the date
of such Prospectuses shall mean the date of the applicable Term Sheet. For
purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the International Prospectus, the U.S. Prospectus or any
Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company.
The Company and ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇ (collectively, the "Key Shareholders") represent
and warrant to each International Manager as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agree with each International
Manager, as follows:
3
9
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any International
Option Securities are purchased, at the Date of Delivery), the
Registration Statement, the Rule 462(b) Registration Statement and any
amendments and supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither of the Prospectuses nor any amendments or supplements thereto
(including any prospectus wrapper), at the time the Prospectuses or any
amendments or supplements were issued and at the Closing Time (and, if
any International Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material
fact or omitted or will omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. If Rule 434 is used, the
Company will comply with the requirements of Rule 434 and the
Prospectuses shall not be "materially different", as such term is used
in Rule 434, from the prospectuses included in the Registration
Statement at the time it became effective. The representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or the International
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any International Manager
through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration Statement
or the International Prospectus.
Each preliminary prospectus and the prospectuses filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectuses
delivered to the Underwriters for use in connection with this offering
were identical to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted
by Regulation S-T.
(ii) Independent Accountants. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
4
10
(iii) Financial Statements.
(A) The financial statements included in the Registration
Statement and the Prospectuses, together with the related schedules and
notes, present fairly the financial position of the Company and its
consolidated Subsidiaries (as defined below) at the dates indicated and
the results of operations, stockholders' equity and cash flows of the
Company and the consolidated Subsidiaries for the periods specified;
said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated therein. The
selected financial data and the summary financial information included
in the Prospectuses present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited
financial statements included in the Registration Statement.
(B) The financial statements of Mobeo, Inc. ("Mobeo") and
Riverbed Technologies, Inc. ("Riverbed") included in the Registration
Statement and the Prospectuses, together with the related schedules and
notes, present fairly the respective financial condition of Mobeo and
Riverbed at the dates indicated and the respective results of
operations, changes in stockholders' equity and cash flows of Mobeo and
Riverbed for the periods specified; said financial statements have been
prepared in conformity with GAAP applied on a consistent basis
throughout the periods involved. The selected financial data and the
summary financial information of Mobeo and Riverbed included in the
Prospectuses present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements of Mobeo and Riverbed included in the Registration
Statement.
(C) The pro forma financial statements and the related notes
thereto included in the Registration Statement and the Prospectuses
present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the
bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate
to give effect to the transactions and circumstances referred to
therein.
(D) The Company and each of the Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (w) transactions are executed in accordance with
management's general or specific authorization; (x) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP, as applicable, and to maintain asset
accountability; (y) access to assets is permitted only in accordance
with management's general or specific authorization; and (z) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, except as
5
11
otherwise stated therein, (A) there has been no material adverse change
in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and the Subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (B) there have been
no transactions entered into by the Company or any of the Subsidiaries,
other than those in the ordinary course of business, which are material
with respect to the Company and the Subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its equity
interests or capital stock, as applicable.
(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and to enter into and perform
its obligations under this Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing
in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(vi) Good Standing and Ownership of Subsidiaries. Each
subsidiary of the Company (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation or limited liability company in good standing under the
laws of the jurisdiction of its incorporation or formation, has
corporate or limited liability company power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectuses and is duly qualified as a foreign
corporation or limited liability company to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Registration Statement, all of the
issued and outstanding capital stock or other equity interests of each
such Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and is owned by the Company, directly or
through Subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock or other equity interests of any
Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Subsidiary. The only Subsidiaries are the
Subsidiaries listed on Exhibit 21 to the Registration Statement.
(vii) Capitalization. (a) The authorized, issued and
outstanding capital stock of the Company is set forth in the
Prospectuses in the column entitled "Acquisitions" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to
this Agreement, the U.S. Purchase Agreement and the Convertible Note
Purchase Agreement, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectuses or pursuant to the
exercise of convertible securities or options referred to in the
Prospectuses). The shares of issued and outstanding capital stock of
the Company, including the Securities to be purchased by the
Underwriters from the Selling
6
12
Shareholders, have been duly authorized and validly issued and are
fully paid and non-assessable; none of the outstanding shares of
capital stock of the Company, including the Securities to be purchased
by the Underwriters from the Selling Shareholders, was issued in
violation of the preemptive or other similar rights of any
securityholder of the Company.
(b) The shares of Common Stock and options exercisable for
Common Stock issued pursuant to the Agreement and Plan of Merger, dated
February 9, 2000, by and among the Company, RT Acquisition, Inc. and
Riverbed, were issued pursuant to valid exemptions from the
registration requirements of the 1933 Act and the 1933 Act Regulations,
and were otherwise issued in compliance with all applicable securities
laws.
(viii) Authorization of Agreement. This Agreement and the U.S.
Purchase Agreement have been duly authorized, executed and delivered by
the Company.
(ix) Authorization and Description of Securities. The
Securities to be purchased by the International Managers and the U.S.
Underwriters from the Company have been duly authorized for issuance
and sale to the International Managers pursuant to this Agreement and
the U.S. Underwriters pursuant to the U.S. Purchase Agreement,
respectively, and, when issued and delivered by the Company pursuant to
this Agreement and the U.S. Purchase Agreement, respectively, against
payment of the consideration set forth herein and in the U.S. Purchase
Agreement, respectively, will be validly issued, fully paid and
non-assessable; the Common Stock conforms to all statements relating
thereto contained in the Prospectuses and such description conforms to
the rights set forth in the instruments defining the same; no holder of
the Securities will be subject to personal liability by reason of being
such a holder; and the issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the
Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor
any of the Subsidiaries is in violation of its charter or by-laws or
similar documents or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any of
the Subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any
Subsidiary is subject (collectively, "Agreements and Instruments")
except for such defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement
and the U.S. Purchase Agreement and the consummation of the
transactions contemplated in this Agreement and the U.S. Purchase
Agreement and in the Registration Statement (including the issuance and
sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectuses under the caption "Use of
Proceeds") and compliance by the Company with its obligations under
this Agreement and the U.S. Purchase Agreement have been duly
authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition
of any lien, charge or
7
13
encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or by-laws or
similar documents of the Company or any Subsidiary or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company or
any Subsidiary.
(xi) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any Subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any Subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any Subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect
the properties or assets thereof or the consummation of the
transactions contemplated in this Agreement and the U.S. Purchase
Agreement or the performance by the Company of its obligations
hereunder or thereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any Subsidiary is a
party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, could
not reasonably be expected to result in a Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectuses or to be filed as exhibits thereto which
have not been so described and filed as required.
(xiv) Possession of Intellectual Property. Except to the
extent described in the Registration Statement, the Company and the
Subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of the Subsidiaries has received any notice or is otherwise
aware of any infringement of or
8
14
conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of the Subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance or
sale of the Securities under this Agreement and the U.S. Purchase
Agreement or the consummation of the transactions contemplated by this
Agreement and the U.S. Purchase Agreement, except such as have been
already obtained or as may be required under the 1933 Act or the 1933
Act Regulations and foreign or state securities or blue sky laws.
(xvi) Possession of Licenses and Permits. The Company and the
Subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them; the
Company and the Subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except where the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and neither
the Company nor any of the Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xvii) Title to Property. The Company and the Subsidiaries
have good and marketable title to all real property owned by the
Company and the Subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any
kind except such as (a) are described in the Prospectuses or (b) do
not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company or any of the Subsidiaries; and all of
the leases and subleases material to the business of the Company and
the Subsidiaries, considered as one enterprise, and under which the
Company or any of the Subsidiaries holds properties described in the
Prospectuses, are in full force and effect, and neither the Company nor
any Subsidiary has any notice of any material claim of any sort that
has been asserted by anyone adverse to the rights of the Company or any
Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such Subsidiary
to the continued possession of the leased or subleased premises under
any such lease or sublease.
9
15
(xviii) Compliance with Cuba Act. The Company has complied
with, and is and will be in compliance with, the provisions of that
certain Florida act relating to disclosure of doing business with Cuba,
codified as Section 517.075 of the Florida statutes, and the rules and
regulations thereunder (collectively, the "Cuba Act") or is exempt
therefrom.
(xix) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectuses will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xx) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of the Subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and the Subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of the
Subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of
the Subsidiaries relating to Hazardous Materials or any Environmental
Laws.
(xxi) Registration Rights. Except as described in the
Registration Statement under the heading "Transactions Between Aether
and its Officers, Directors or Significant Stockholders" or
"Description of Capital Stock," there are no persons with registration
rights or other similar rights to have any securities registered
pursuant to the Registration Statement or otherwise registered by the
Company under the 1933 Act.
(xxii) Dividends and Distributions. No Subsidiary is currently
prohibited, directly or indirectly, from paying any dividends to the
Company, making any other distribution on such Subsidiary's capital
stock, repaying to the Company any loans or advances to such Subsidiary
from the Company, or transferring any of such Subsidiary's property or
assets to the Company or any other Subsidiary.
10
16
(xxiii) Taxes. The Company and each of the Subsidiaries have
filed all foreign, federal, state and local tax returns that are
required to be filed or has requested extensions thereof (except in any
case in which the failure so to file would not result in a Material
Adverse Effect) and have paid all taxes required to be paid by them and
any other assessment, fine or penalty levied against them, to the
extent that any of the foregoing is due and payable, except for any
such assessment, fine or penalty that is currently being contested in
good faith.
(xxiv) Insurance. The Company and each of the Subsidiaries are
insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in
the businesses in which they are engaged; neither the Company nor any
such Subsidiary has been refused any insurance coverage sought or
applied for; and neither the Company nor any such Subsidiary has any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.
(xxv) ERISA. The Company and each of the Subsidiaries are each
in compliance in all material respects with all presently applicable
provisions of ERISA; no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company or any Subsidiary would have any liability; neither
the Company nor any Subsidiary has incurred and nor expects to incur
liability under (A) Title IV of ERISA with respect to termination of,
or withdrawal from, any "pension plan" or (B) Sections 412 or 4971 of
the United States Internal Revenue Code (the "Code"); and each "pension
plan" for which the Company or any Subsidiary would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such
qualification.
(xxvi) Year 2000 Compliance. The Company has reviewed its
operations and those of the Subsidiaries to evaluate the extent to
which the business or operations of the Company or any of the
Subsidiaries have been affected by any Year 2000 Problem (as defined
below); (i) as a result of such review, the Company does not believe
that (A) there have been any issues related to the Company's or any
Subsidiary's failure to address any Year 2000 Problem that are of a
character required to be described or referred to in the Prospectuses
which have not been accurately described in the Prospectuses, and (B)
except to the extent disclosed in the Prospectuses, the Year 2000
Problem has had a Material Adverse Effect; and (ii) the Company has
inquired whether the suppliers, vendors, customers or other material
third parties used or served by the Company and the Subsidiaries have
addressed any Year 2000 Problem in a timely manner, except to the
extent that a failure to address any Year 2000 Problem by any supplier,
vendor, customer or material third party would not have a Material
Adverse Effect. "Year 2000 Problem" means any actual occurrence where,
or significant risk that, the Company's computer hardware or software
applications and those of the Subsidiaries (or of any suppliers,
vendors or other material third parties) have not functioned or will
not function, in each case for dates or time periods occurring after
December 31, 1999, at
11
17
least as effectively as in the case of dates or time periods occurring
prior to January 1, 2000.
(a1) Representations and Warranties by the Company with respect to
OmniSky.
The Company and the Key Shareholders represent and warrant to each
International Manager as of the date hereof (except as to the representation and
warranty set forth in the first sentence of Section (a1)(iii), which
representation and warranty is made as of January 18, 2000), and the Company and
the Key Shareholders represent and warrant as of the Closing Time referred to in
Section 2(c) hereof and as of each Date of Delivery (if any) referred to in
Section 2(b) hereof (except as to the representation and warranty set forth in
the first sentence of Section (a1)(iii), which representation and warranty is
made as of January 18, 2000), as follows:
(i) Good Standing and Ownership of OmniSky. Airweb Corporation
d/b/a OmniSky Airweb Corporation d/b/a OmniSky ("OmniSky") has been
duly organized and is validly existing as a corporation in good
standing under the laws of Delaware. Except as otherwise disclosed in
the Registration Statement, Aether OpenSky Investments LLC, a Delaware
limited liability company and wholly-owned subsidiary of the Company
("OpenSky Investments"), owns 10,000,000 shares of Series A Preferred
Stock of OmniSky and 1,439,809 shares of Series B Preferred Stock of
OmniSky, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity other than rights of first refusal
and co-sale set forth in the related purchase agreements. To the
knowledge of the Company, such 10,000,000 shares of Series A Preferred
Stock and 1,439,809 shares of Series B Preferred Stock constitute 33%
of the equity interests of OmniSky on a fully diluted basis.
(ii) No Material Adverse Change in Business. To the knowledge
of the Company, since the respective dates as of which information is
given in the Registration Statement and the Prospectuses, except as
otherwise stated therein, there has been no material adverse change in
the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of OmniSky, whether or not arising in the
ordinary course of business.
(iii) Certain Representations and Warranties as to the OmniSky
Series B Preferred Stock Purchase Agreement. Except as set forth in the
schedule of exceptions attached thereto, all of the representations and
warranties (the "January OmniSky Representations") set forth in the
Series B Preferred Stock Purchase Agreement, dated as of January 18,
2000, between OmniSky and OmniSky Investments, were true and correct
with respect to OmniSky as of January 18, 2000. To the knowledge of the
Company, all of the January OmniSky Representations are true and
correct with respect to OmniSky.
12
18
(b) Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder severally represents and warrants to each International
Manager as of the date hereof, as of the Closing Time referred to in Section
2(c) hereof and as of each Date of Delivery (if any) referred to in Section 2(b)
hereof, and agrees with each International Manager, as follows:
(i) Accurate Disclosure. To the best knowledge of such Selling
Shareholder, the representations and warranties of the Company
contained in Section 1(a) and 1(a1) hereof are true and correct; such
Selling Shareholder has reviewed and is familiar with the Registration
Statement and the Prospectuses and neither the Prospectuses nor any
amendments or supplements thereto includes any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; such Selling Shareholder is not
prompted to sell the Securities to be sold by such Selling Shareholder
hereunder or under the U.S. Purchase Agreement by any information
concerning the Company or any subsidiary of the Company which is not
set forth in the Prospectuses.
(ii) Authorization of Agreements. Each Selling Shareholder has
the full right, power and authority to enter into this Agreement and
the U.S. Purchase Agreement and a Power of Attorney and Custody
Agreement (the "Power of Attorney and Custody Agreement"), and to sell,
transfer and deliver the Securities to be sold by such Selling
Shareholder hereunder and thereunder. The execution and delivery of
this Agreement, the U.S. Purchase Agreement and the Power of Attorney
and Custody Agreement and the sale and delivery of the Securities to be
sold by such Selling Shareholder and the consummation of the
transactions contemplated herein and therein and compliance by such
Selling Shareholder with its obligations hereunder and thereunder have
been duly authorized by such Selling Shareholder and do not and will
not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any tax, lien, charge or
encumbrance upon the Securities to be sold by such Selling Shareholder
or any property or assets of such Selling Shareholder pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, license, lease or other agreement or instrument to which such
Selling Shareholder is a party or by which such Selling Shareholder may
be bound, or to which any of the property or assets of such Selling
Shareholder is subject, nor will such action result in any violation of
the provisions of the charter or by-laws or other organizational
instrument of such Selling Shareholder, if applicable, or any
applicable treaty, law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over such Selling Shareholder
or any of its properties.
(iii) Good and Marketable Title. Such Selling Shareholder has
(except as set forth on Schedule A), and will at the Closing Time and
on the Date of Delivery (if any) have, good and marketable title to the
Securities to be sold by such Selling Shareholder hereunder and under
the U.S. Purchase Agreement, free and clear of any security interest,
mortgage, pledge, lien, charge, claim, equity or encumbrance of any
kind, other than pursuant to this Agreement and the U.S. Purchase
Agreement; and upon delivery of such Securities and payment of the
purchase price therefor as herein and therein contemplated,
13
19
assuming each such Underwriter has no notice of any adverse claim, each
of the Underwriters will receive good and marketable title to the
Securities purchased by it from such Selling Shareholder, free and
clear of any security interest, mortgage, pledge, lien, charge, claim,
equity or encumbrance of any kind.
(iv) Due Execution of Power of Attorney and Custody Agreement.
Such Selling Shareholder has duly executed and delivered, in the form
heretofore furnished to ▇▇▇▇▇▇▇ ▇▇▇▇▇, the Power of Attorney and
Custody Agreement with ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇ as
attoneys-in-fact (the "Attorneys-in-Fact") and as custodian (the
"Custodian"); the Custodian is authorized to deliver the Securities to
be sold by such Selling Shareholder hereunder and under the U.S.
Purchase Agreement and to accept payment therefor; and each of the
Attorneys-in-Fact is authorized to execute and deliver this Agreement
and the U.S. Purchase Agreement and the certificate referred to in
Section 5(f) hereof or thereof or that may be required pursuant to
Section 5(m)(ii) hereof or thereof on behalf of such Selling
Shareholder, to sell, assign and transfer to the Underwriters the
Securities to be sold by such Selling Shareholder hereunder and under
the U.S. Purchase Agreement, to determine the purchase price to be paid
by the Underwriters to such Selling Shareholder, as provided in Section
2(a) hereof and Section 2(a) of the U.S. Purchase Agreement, to
authorize the delivery of the Securities to be sold by such Selling
Shareholder hereunder and under the U.S. Purchase Agreement, to accept
payment therefor, and otherwise to act on behalf of such Selling
Shareholder in connection with this Agreement and the U.S. Purchase
Agreement.
(v) Absence of Manipulation. Such Selling Shareholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which 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 Securities.
(vi) Absence of Further Requirements. No filing with, or
consent, approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by such Selling
Shareholder of its obligations hereunder or under the U.S. Purchase
Agreement or in the Power of Attorney and Custody Agreement, or in
connection with the sale and delivery of the Securities hereunder or
under the U.S. Purchase Agreement or the consummation of the
transactions contemplated by this Agreement and the U.S. Purchase
Agreement, except such as may have previously been made or obtained or
as may be required under the 1933 Act or the 1933 Act Regulations or
state securities laws.
(vii) Restriction on Sale of Securities. With respect to each
Selling Shareholder listed on Schedule C hereto, during a period of 90
days from the date of the Prospectuses, and with respect to each
Selling Shareholder listed on Schedule D hereto, during the period
beginning on the date hereof and ending at 11:59 p.m. (Eastern Standard
Time) on October 21, 2000, such Selling Shareholder will not, without
the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of, directly or indirectly,
any share of Common
14
20
Stock or any securities convertible into or exercisable or exchangeable
for Common Stock or file any registration statement under the 1933 Act
with respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall
not apply to the Securities to be sold hereunder or under the U.S.
Purchase Agreement.
(viii) Certificates Suitable for Transfer. Certificates for
all of the Securities to be sold by such Selling Shareholder pursuant
to this Agreement and the U.S. Purchase Agreement, in suitable form for
transfer by delivery or accompanied by duly executed instruments of
transfer or assignment in blank with signatures guaranteed, have been
placed, or will be placed prior to the Closing Time, in custody with
the Custodian with irrevocable conditional instructions to deliver such
Securities to the Underwriters pursuant to this Agreement and the U.S.
Purchase Agreement.
(ix) No Association with NASD. Except as set forth on Schedule
E hereto, neither such Selling Stockholder nor any affiliates of such
Selling Shareholder directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, or has any other association with (within the meaning of
Article I, Section 1(m) of the By-laws of the National Association of
Securities Dealers, Inc.), any member firm of the National Association
of Securities Dealers, Inc.
(c) Officer's and Selling Shareholders' Certificates. Any certificate
signed by any officer of the Company or any of the Subsidiaries delivered to the
Global Coordinator, the Lead Manager or to counsel for the International
Managers shall be deemed a representation and warranty by the Company to each
International Manager as to the matters covered thereby; and any certificate
signed by or on behalf of the Selling Shareholders as such and delivered to the
Global Coordinator, the Lead Manager or to counsel for the International
Managers pursuant to the terms of this Agreement shall be deemed a
representation and warranty by such Selling Shareholder to the International
Managers as to matters covered thereby.
SECTION 2. Sale and Delivery to International Managers; Closing.
(a) Initial International Securities. On the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company and each Selling Shareholder, severally
and not jointly, agree to sell to each International Manager, severally and not
jointly, and each International Manager, severally and not jointly, agrees to
purchase from the Company and each Selling Shareholder, at the price per share
set forth in Schedule F, that proportion of the number of Initial International
Securities set forth in Schedule A opposite the name of the Company or such
Selling Shareholder, as the case may be, which the number of Initial
International Securities set forth in Schedule B opposite the name of such
International Manager, plus any additional number of Initial International
Securities which such International Manager may become obligated to purchase
pursuant to the provisions of Section
15
21
10 hereof, bears to the total number of Initial International Securities,
subject, in each case, to such adjustments among the International Managers as
the Lead Manager in its sole discretion shall make to eliminate any sales or
purchases of fractional securities.
(b) International Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company and the Selling Shareholders, acting
severally and not jointly, hereby grant an option to the International Managers,
severally and not jointly, to purchase up to an additional 67,500 shares of
Common Stock at the price per share set forth in Schedule F, less an amount per
share equal to any dividends or distributions declared by the Company and
payable on the Initial International Securities but not payable on the
International Option Securities. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part from time to time
only for the purpose of covering over-allotments which may be made in connection
with the offering and distribution of the Initial International Securities upon
notice by the Global Coordinator to the Company and the Selling Shareholders
setting forth the number of International Option Securities as to which the
several International Managers are then exercising the option and the time and
date of payment and delivery for such International Option Securities. Any such
time and date of delivery for the International Option Securities (a "Date of
Delivery") shall be determined by the Global Coordinator, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the International Option Securities, (i)
the Company and each Selling Shareholder, acting severally and not jointly, will
sell to the International Managers that proportion of the total number of
International Option Securities then being purchased by the International
Managers which the number of International Option Securities set forth in
Schedule B opposite the name of the Company or such Selling Shareholder bears to
the total number of International Option Securities, and (ii) each of the
International Managers, acting severally and not jointly, will purchase that
proportion of the total number of International Option Securities then being
purchased which the number of Initial International Securities set forth in
Schedule A opposite the name of such International Manager bears to the total
number of Initial International Securities, subject in each case to such
adjustments as the Global Coordinator in its discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of ▇▇▇▇▇ &
▇▇▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other
place as shall be agreed upon by the Global Coordinator and the Company, at 9:00
A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Global Coordinator and the Company (such time and date of payment and delivery
being herein called "Closing Time").
In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator and the
16
22
Company, on each Date of Delivery as specified in the notice from the Global
Coordinator to the Company.
Payment shall be made to the Company and the Selling Shareholders by
wire transfer of immediately available funds to bank accounts designated by the
Company and the Custodian pursuant to each Selling Shareholder's Power of
Attorney and Custody Agreement, as the case may be, against delivery to the Lead
Manager for the respective accounts of the International Managers of
certificates for the International Securities to be purchased by them. It is
understood that each International Manager has authorized the Lead Manager, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial International Securities and the International
Option Securities, if any, which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇,
individually and not as representative of the International Managers, may (but
shall not be obligated to) make payment of the purchase price for the Initial
International Securities or the International Option Securities, if any, to be
purchased by any International Manager whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such International Manager from its obligations
hereunder.
(d) Denominations; Registration Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Manager may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Manager in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company.
The Company covenants with each International Manager as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Global Coordinator immediately,
and confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectuses or any amended Prospectuses shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectuses or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was
17
23
received for filing by the Commission and, in the event that it was not, it will
promptly file such prospectus. The Company will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Global Coordinator
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectuses,
will furnish the Global Coordinator with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file or use any such document to which the Global Coordinator
or counsel for the International Managers shall object.
(c) Delivery of Registration Statements.
The Company has furnished or will deliver to the Lead Manager and
counsel for the International Managers, without charge, signed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein) and
signed copies of all consents and certificates of experts, and will also deliver
to the Lead Manager, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without exhibits)
for each of the International Managers. The copies of the Registration Statement
and each amendment thereto furnished to the International Managers will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the 1933
Act. The Company will furnish to each International Manager, without charge,
during the period when the International Prospectus is required to be delivered
under the 1933 Act or the Securities Exchange Act of 1934 (the "1934 Act"), such
number of copies of the International Prospectus (as amended or supplemented) as
such International Manager may reasonably request. The International Prospectus
and any amendments or supplements thereto furnished to the International
Managers will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in this Agreement, the U.S.
Purchase Agreement and in the Prospectuses. If at any time when a prospectus is
required by the 1933 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result of which
it is necessary, in the opinion of counsel for the International Managers or for
the Company, to amend the Registration Statement or amend or supplement any
Prospectus in order that the Prospectuses will not include any untrue statements
of a material fact or omit to state a
18
24
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement any
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectuses comply with such requirements, and the Company will furnish to the
International Managers such number of copies of such amendment or supplement as
the International Managers may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the International Managers, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Global Coordinator may designate and
to maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectuses
under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect and
maintain the listing of the Securities on the Nasdaq National Market and will
file with the Nasdaq National Market all documents and notices required by the
Nasdaq National Market of companies that have securities that are traded in the
over-the-counter market and quotations for which are reported by the Nasdaq
National Market.
(j) Restriction on Sale of Securities. During a period of 90 days from
the date of the Prospectuses, the Company will not, without the prior written
consent of the Global Coordinator, (i) directly or indirectly, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of the foregoing
or (ii) enter into any swap or any other agreement
19
25
or any transaction that transfers, in whole or in part, directly or indirectly,
the economic consequence of ownership of the Common Stock, whether any such swap
or transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Securities to be sold hereunder or
under the U.S. Purchase Agreement or the Convertible Notes to be sold under the
Convertible Note Purchase Agreement, (B) any shares of Common Stock issued by
the Company upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the Prospectuses or
any Convertible Note, (C) any shares of Common Stock issued or options to
purchase Common Stock granted pursuant to existing employee benefit plans of the
Company referred to in the Prospectuses, (D) any shares of Common Stock issued
pursuant to any non-employee director stock plan or dividend reinvestment plan,
or (E) any shares of Common Stock issued in connection with a stock split
involving the Common Stock approved by the board of directors and stockholders
of the Company pursuant to applicable law.
(k) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.
(l) Compliance with Rule 463. The Company will comply with Rule 463 of
the 1933 Act Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company and the Selling Shareholders will pay or
cause to be paid all expenses incident to the performance of their obligations
under this Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to the
Underwriters and the transfer of the Securities between the U.S. Underwriters
and the International Managers, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectuses and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities, (ix) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters in
20
26
connection with, the review by the NASD of the terms of the sale of the
Securities, and (x) the fees and expenses incurred in connection with the
listing of the Securities in the Nasdaq National Market.
(b) Expenses of the Selling Shareholders. Each Selling Shareholder will
pay all of the expenses incident to the performance of such Selling
Shareholder's obligations under, and the consummation of the transactions
contemplated by, this Agreement, including (i) any stamp duties, capital duties
and stock transfer taxes, if any, payable upon the sale of the Securities to the
Underwriters, and their transfer between the Underwriters pursuant to an
agreement between such Underwriters, and (ii) the fees and disbursements of such
Selling Shareholder's respective counsel and accountants.
(c) Termination of Agreement. If this Agreement is terminated by the
Lead Manager in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company and the Selling Shareholders shall reimburse the
International Managers for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the International Managers.
(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company and the Selling Shareholders may make for
the sharing of such costs and expenses.
SECTION 5. Conditions of International Managers' Obligations. The obligations of
the several International Managers hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholders
contained in Section 1 hereof or in certificates of any officer of the Company
or any Subsidiary or on behalf of any Selling Shareholder delivered pursuant to
the provisions hereof, to the performance by the Company of its covenants and
other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the International Managers. A
prospectus containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A) or, if the Company has elected to
rely upon Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Lead Manager
shall have received the favorable opinion, dated as of Closing Time, of ▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel for the Company, in form and substance reasonably
satisfactory to counsel for the
21
27
International Managers, together with signed or reproduced copies of such letter
for each of the other International Managers to the effect set forth in Exhibit
A hereto and to such further effect as counsel to the International Managers may
reasonably request.
(c) Opinion of Counsel for the Selling Shareholders. At Closing Time,
the Lead Manager shall have received the favorable opinion, dated as of Closing
Time, of counsel for the Selling Shareholders acceptable to the Lead Manager in
its sole discretion, in form and substance reasonably satisfactory to counsel
for the International Managers, together with signed or reproduced copies of
such letter for each of the other International Managers to the effect set forth
in Exhibit B hereto and to such further effect as counsel to the International
Managers may reasonably request.
(d) Opinion of Counsel for International Managers. At Closing Time, the
Lead Manager shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., counsel for the International Managers,
together with signed or reproduced copies of such letter for each of the other
International Managers with respect to the matters set forth in clauses (i),
(ii), (v), (vi) (solely as to preemptive or other similar rights arising by
operation of law or under the charter or by-laws of the Company), (viii) through
(x), inclusive, (xii), (xiv) (solely as to the information in the Prospectus
under "Description of Capital Stock -- Common Stock") and the penultimate
paragraph of Exhibit A hereto. In giving such opinion such counsel may rely, as
to all matters governed by the laws of jurisdictions other than the law of the
State of New York and the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Lead Manager. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and the Subsidiaries and
certificates of public officials.
(e) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectuses, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and the Subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the Lead Manager
shall have received a certificate of the President or a Vice President of the
Company, of the chief financial or chief accounting officer of the Company and
of each Key Shareholder, dated as of Closing Time, to the effect that (i) there
has been no such material adverse change, (ii) the representations and
warranties in Section 1(a) and Section 1(a1) (except to the extent such
representations and warranties are made as of January 18, 2000) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or are contemplated by the Commission.
(f) Certificate of Selling Shareholders. At Closing Time, the Lead
Manager shall have received a certificate of one of the Attorneys-in-Fact on
behalf of each Selling Shareholder,
22
28
dated as of Closing Time, to the effect that (i) the representations and
warranties of each Selling Shareholder contained in Section 1(b) hereof are true
and correct in all respects with the same force and effect as though expressly
made at and as of Closing Time and (ii) each Selling Shareholder has complied
with all agreements and satisfied in all material respects all conditions on its
part to be performed or satisfied under this Agreement at or prior to Closing
Time.
(g) Accountants' Comfort Letters. At the time of the execution of this
Agreement, the Lead Manager shall have received from KPMG LLP and
PricewaterhouseCoopers LLP letters dated such date, in form and substance
satisfactory to the Lead Manager, together with signed or reproduced copies of
such letters for each of the other International Managers containing statements
and information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and certain
financial information (including, in the case of KPMG LLP, pro forma financial
information) contained in the Registration Statement and the Prospectuses.
(h) Bring-down Comfort Letters. At Closing Time, the Lead Manager shall
have received from KPMG LLP and PricewaterhouseCoopers LLP letters, dated as of
Closing Time, to the effect that they reaffirm the statements made in the
letters furnished pursuant to subsection (g) of this Section, except that the
specified date referred to shall be a date not more than three business days
prior to Closing Time.
(i) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the Nasdaq National Market, subject only to
official notice of issuance.
(j) No Objection. The NASD shall have confirmed that it has not raised
any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(k) Lock-up Agreements. At the date of this Agreement, the Lead Manager
shall have received (i) an agreement substantially in the form of Exhibit C
hereto signed by each of the Selling Shareholders listed on Schedule C hereto
and (ii) an agreement substantially in the form of Exhibit D hereto signed by
each of the Selling Shareholders listed on Schedule D hereto.
(l) Purchase of Initial U.S. Securities. Contemporaneously with the
purchase by the International Managers of the Initial International Securities
under this Agreement, the U.S. Underwriters shall have purchased the Initial
U.S. Securities under the U.S. Purchase Agreement.
(m) Conditions to Purchase of International Option Securities. In the
event that the International Managers exercise their option provided in Section
2(b) hereof to purchase all or any portion of the International Option
Securities, the representations and warranties of the Company and the Selling
Shareholders contained herein and the statements in any certificates furnished
by the Company, any Subsidiary of the Company or the Selling Shareholders
23
29
hereunder shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Lead Manager shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company, of the
chief financial or chief accounting officer of the Company and of each
Key Shareholder confirming that the certificate delivered at the
Closing Time pursuant to Section 5(e) hereof remains true and correct
as of such Date of Delivery.
(ii) Certificate of Selling Shareholders. A certificate, dated
such Date of Delivery, of one of the Attorneys-in-Fact on behalf of
each Selling Shareholder selling U.S. Option Securities confirming that
the certificate delivered at Closing Time pursuant to Section 5(f)
remains true and correct as of such Date of Delivery.
(iii) Opinion of Counsel for Company. The favorable opinion of
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel for the Company, in form and
substance reasonably satisfactory to counsel for the International
Managers, dated such Date of Delivery, relating to the International
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(b)
hereof.
(iv) Opinion of Counsel for the Selling Shareholders. The
favorable opinion of counsel for the Selling Shareholders acceptable to
the Lead Manager in its sole discretion, in form and substance
reasonably satisfactory to counsel for the International Managers,
dated such Date of Delivery, relating to the International Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(c) hereof.
(v) Opinion of Counsel for International Managers. The
favorable opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., counsel for the
International Managers, dated such Date of Delivery, relating to the
International Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(d) hereof.
(vi) Bring-down Comfort Letters. Letters from each of KPMG LLP
and PricewaterhouseCoopers LLP, in form and substance satisfactory to
the Lead Manager and dated such Date of Delivery, substantially in the
same form and substance as the letters furnished to the Lead Manager
pursuant to Section 5(g) hereof, except that the "specified date" in
the letter furnished pursuant to this paragraph shall be a date not
more than five days prior to such Date of Delivery.
24
30
(n) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the International Managers shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company and the Selling Shareholders in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Lead Manager and
counsel for the International Managers.
(o) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of International
Option Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several International Managers to purchase the relevant
International Option Securities, may be terminated by the Lead Manager by notice
to the Company at any time at or prior to Closing Time or such Date of Delivery,
as the case may be, and such termination shall be without liability of any party
to any other party except as provided in Section 4 and except that Sections 1,
6, 7 and 8 shall survive any such termination and remain in full force and
effect.
SECTION 6. Indemnification.
(a) Indemnification of International Managers. The Company and each Key
Shareholder jointly and severally agree, and each of the Selling Shareholders
other than the Key Shareholders severally and not jointly agree, to indemnify
and hold harmless each International Manager and each person, if any, who
controls any International Manager within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
25
31
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇
▇▇▇▇▇), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the International Prospectus (or any amendment or supplement
thereto).
Notwithstanding the foregoing, (x) each Selling Shareholder other than the Key
Shareholders shall only have liability pursuant to this Section 6(a) in respect
of information furnished by or on behalf of such Selling Shareholder expressly
for use in any preliminary prospectus or the Prospectuses (or any amendment or
supplement thereto) and (y) the liability of each Selling Shareholder pursuant
to this Section 6(a) shall be limited to an amount equal to the product of (I)
the number of shares of Common Stock to be sold by such Selling Shareholder and
(II) the public offering price of the shares of Common Stock set forth in the
Prospectuses less the underwriting discount applicable to such shares.
(b) Indemnification of Company, Directors, Officers and Selling
Shareholders. Each International Manager severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and
each Selling Shareholder and each person, if any, who controls any Selling
Shareholder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary international prospectus or the
International Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company by such
International Manager through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the U.S. Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from
26
32
any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement among the Company and the Selling
Shareholders with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof
is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the International Managers on the other
hand from the offering of the International Securities pursuant to this
Agreement or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Selling
27
33
Shareholders on the one hand and of the International Managers on the other hand
in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Selling
Shareholders on the one hand and the International Managers on the other hand in
connection with the offering of the International Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the International Securities pursuant to this
Agreement (before deducting expenses) received by the Company and the Selling
Shareholders and the total underwriting discount received by the International
Managers, in each case as set forth on the cover of the International
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the International
Securities as set forth on such cover.
The relative fault of the Company and the Selling Shareholders on the
one hand and the International Managers on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Selling Shareholders
or by the International Managers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Selling Shareholders and the International Managers
agree that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the International
Managers were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 7. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in
this Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no International
Manager shall be required to contribute any amount in excess of the amount by
which the total price at which the International Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such International Manager has otherwise been required to pay
by reason of any such untrue or alleged untrue statement or omission or alleged
omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person,
28
34
if any, who controls the Company or any Selling Shareholder within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company or such Selling Shareholder, as the case
may be. The International Managers' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of Initial
International Securities set forth opposite their respective names in Schedule B
hereto and not joint.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Shareholders with respect to contribution.
29
35
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of the Subsidiaries or the
Selling Shareholders submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any International Manager or controlling person, or by or on behalf of the
Company or any Selling Shareholder, and shall survive delivery of the
International Securities to the International Managers.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Lead Manager may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the International Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and the Subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Lead Manager, impracticable to market the Securities or
to enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the Nasdaq National Market, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal
or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the International Managers. If one or more
of the International Managers shall fail at Closing Time or a Date of Delivery
to purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Lead Manager shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting International Managers, or any other underwriters, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as may
be agreed upon and upon the terms herein set forth; if, however, the Lead
Manager shall not have completed such arrangements within such 24-hour period,
then:
30
36
(a) if the number of Defaulted Securities does not exceed 10% of the
number of International Securities to be purchased on such date, each of the
non-defaulting International Managers shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
International Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the International Managers to purchase and of the Company to sell
the Option Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting International
Manager.
No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
International Managers to purchase and the Company to sell the relevant
International Option Securities, as the case may be, either (i) the Lead Manager
or (ii) the Company and any Selling Shareholder shall have the right to postpone
Closing Time or the relevant Date of Delivery, as the case may be, for a period
not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements.
As used herein, the term "International Manager" includes any person substituted
for an International Manager under this Section 10.
SECTION 11. Default by One or More of the Selling Shareholders or the Company.
(a) If a Selling Shareholder shall fail at Closing Time or at a Date of
Delivery to sell and deliver the number of International Securities which such
Selling Shareholder or Selling Shareholders are obligated to sell hereunder (the
number of International Securities with respect to which such Selling
Shareholder and any other Selling Shareholders are in default are referred to
herein as the "Shareholder Defaulted Securities"), (i) first, the remaining
Selling Shareholders shall have the right to increase, pro rata or otherwise,
the number of International Securities to be sold by them hereunder to the total
number to be sold by all Selling Shareholders as set forth in Schedule A hereto,
and (ii) second, if such remaining Selling Shareholders do not so increase the
number of International Securities to be sold by them hereunder to the total
number to be sold by all Selling Shareholders as set forth on Schedule A hereto,
then the Company shall have the right to increase the number of International
Securities to be sold by it hereunder by up to a maximum of 20,000 shares of
Common Stock (such International Securities sold by the remaining Selling
Shareholders and the Company being referred to herein as the "Cure Securities").
If the remaining Selling Shareholders and the Company do not exercise the
foregoing rights to increase the number of International Securities to be sold
by them hereunder, or do exercise the foregoing rights to increase the number of
International Securities to be sold by them hereunder but the difference between
the number of Shareholder Defaulted Securities and Cure Securities is greater
than 20,000 shares of Common Stock, then the International Managers may, at the
option of the
31
37
Lead Manager, by notice from the Lead Manager to the Company and the
non-defaulting Selling Shareholders, either (i) terminate this Agreement without
any liability on the fault of any non-defaulting party except that the
provisions of Sections 1, 4, 6, 7 and 8 shall remain in full force and effect or
(ii) elect to purchase the U.S. Securities which the non-defaulting Selling
Shareholders and the Company have agreed to sell hereunder. No action taken
pursuant to this Section 11 shall relieve any Selling Shareholder so defaulting
from liability, if any, in respect of such default.
In the event of a default by any Selling Shareholder as
referred to in this Section 11, each of the Lead Manager, the Company and the
non-defaulting Selling Shareholders shall have the right to postpone Closing
Time or the relevant Date of Delivery for a period not exceeding seven days in
order to effect any required change in the Registration Statement or
Prospectuses or in any other documents or arrangements.
(b) If the Company shall fail at Closing Time or at the Date of
Delivery to sell the number of International Securities that it is obligated to
sell hereunder, then this Agreement shall terminate without any liability on the
part of any nondefaulting party; provided, however, that the provisions of
Sections 1, 4, 6, 7 and 8 shall remain in full force and effect. No action taken
pursuant to this Section shall relieve the Company from liability, if any, in
respect of such default.
SECTION 12. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the International Managers
shall be directed to the Lead Manager at North Tower, World Financial Center,
New York, New York 10281-1201, attention of ▇▇▇▇ ▇▇▇▇▇▇▇▇; notices to the
Company shall be directed to it at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, attention of ▇▇▇▇▇ ▇. ▇▇▇▇; and notices to the Selling Shareholders shall
be directed to at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention
of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
32
38
SECTION 13. Parties. This Agreement shall inure to the benefit of and be binding
upon the International Managers, the Company and the Selling Shareholders and
their respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the International Managers, the Company and the Selling Shareholders and
their respective successors and the controlling persons and officers and
directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the International Managers, the Company and the Selling
Shareholders and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any International Manager shall be deemed to be a successor by reason merely of
such purchase.
SECTION 14. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein and the
Table of Contents are for convenience only and shall not affect the construction
hereof.
33
39
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Selling Shareholders a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement between the International Managers, the Company and
the Selling Shareholders in accordance with its terms.
Very truly yours,
AETHER SYSTEMS, INC.
By_________________________________________
Title:
SELLING SHAREHOLDERS
By_________________________________________
As Attorney-in-Fact acting on behalf of
the Selling Shareholders named in
Schedule A hereto
40
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
By____________________________________________
Authorized Signatory
For itself and as representative of the
other International Managers named in Schedule B hereto.
41
SCHEDULE A
THE COMPANY AND THE SELLING SHAREHOLDERS
Number of Maximum Number of
Initial International
International Securities Option Securities
------------------------ -----------------
The Company
Aether Systems, Inc.
Selling Shareholders
-----------------
Total
Sch ▇-▇
▇▇
▇▇▇▇▇▇▇▇ ▇
Number of
Initial
International
Name of Manager Securities
--------------- ----------
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ International Limited
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ International
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
Bear, ▇▇▇▇▇▇▇ International Limited
Friedman, Billings, ▇▇▇▇▇▇ International, Ltd.
-------------
Total
Sch B - 1
43
SCHEDULE C
90-DAY LOCK-UP LIST
J. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇. Ein
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Columbia Capital
Sch C - 1
44
SCHEDULE D
10/21/00 LOCK-UP LIST
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
E. ▇▇▇▇▇ ▇▇▇▇▇▇▇ III
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
3Com Corporation
NexGen Technologies, L.L.C.
Pyramid Ventures, Inc.
Reuters MarketClip Holdings Sarl
Telcom-ATI Investors, L.L.C.
▇▇▇▇▇▇▇▇ Funds
Remaining Selling Shareholders
Sch D - 1
45
SCHEDULE E
NASD AFFILIATIONS
Sch E - 1
46
SCHEDULE F
AETHER SYSTEMS, INC.
450,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The public offering price per share for the International
Securities, determined as provided in said Section 2, shall be $_____.
2. The purchase price per share for the International Securities to be
paid by the several International Managers shall be $______, being an amount
equal to the public offering price set forth above less $_____ per share;
provided that the purchase price per share for any International Option
Securities purchased upon the exercise of the over-allotment option described in
Section 2(b) shall be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial International
Securities but not payable on the International Option Securities.
Sch F - 1
47
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the
laws of the State of Delaware.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its
business as described in the Prospectuses and to
enter into and perform its obligations under the
International Purchase Agreement and the U.S.
Purchase Agreement.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good
standing in each jurisdiction in which such
qualification is required, whether by reason of the
ownership or leasing of property or the conduct of
business, except where the failure so to qualify or
to be in good standing would not result in a Material
Adverse Effect.
(iv) The authorized, issued and outstanding capital stock
of the Company will, at the Closing Time and giving
effect to the issuance of the Initial Securities
under the International Purchase Agreement and the
U.S. Purchase Agreement, be as set forth in the
Prospectuses in the column entitled "Acquisitions and
Common Stock Offering" under the caption
"Capitalization" (except for subsequent issuances, if
any, pursuant to the International Purchase Agreement
and the U.S. Purchase Agreement or pursuant to
reservations, agreements or employee benefit plans
referred to in the Prospectuses or pursuant to the
exercise of convertible securities or options
referred to in the Prospectuses); the shares of
issued and outstanding capital stock of the Company
have been duly authorized and validly issued and are
fully paid and non-assessable; and none of the
outstanding shares of capital stock of the Company
was issued in violation of the preemptive or other
similar rights of any securityholder of the Company.
(v) The Securities to be purchased by the International
Managers and the U.S. Underwriters from the Company
have been duly authorized for issuance and sale to
the International Managers and the U.S. Underwriters
pursuant to the International Purchase Agreement and
U.S. Purchase Agreement, respectively, and, when
issued and delivered by the Company pursuant to the
International Purchase Agreement and the U.S.
Purchase Agreement, respectively, against payment of
the consideration set forth in the International
Purchase Agreement and U.S. Purchase Agreement,
respectively, will be validly issued and fully paid
and non-assessable and no holder of the Securities is
or will be subject to personal liability by reason of
being such a holder.
1
48
(vi) The issuance of the Securities is not subject to
preemptive or other similar rights of any
securityholder of the Company.
(vii) Each Subsidiary has been duly organized and is
validly existing as a corporation or limited
liability company in good standing under the laws of
the jurisdiction of its incorporation or formation,
has corporate or limited liability company power and
authority to own, lease and operate its properties
and to conduct its business as described in the
Prospectuses and is duly qualified as a foreign
corporation or limited liability company to transact
business and is in good standing in each jurisdiction
in which such qualification is required, whether by
reason of the ownership or leasing of property or the
conduct of business, except where the failure so to
qualify or to be in good standing would not result in
a Material Adverse Effect; except as otherwise
disclosed in the Registration Statement, all of the
issued and outstanding capital stock or other equity
interests of each Subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable
and, to the best of our knowledge, is owned by the
Company, directly or through Subsidiaries, free and
clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock or other equity
interests of any Subsidiary was issued in violation
of the preemptive or similar rights of any
securityholder of such Subsidiary.
(viii) The International Purchase Agreement and the U.S.
Purchase Agreement were duly authorized, executed and
delivered by the Company.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective
under the 1933 Act; any required filing of the
Prospectuses pursuant to Rule 424(b) has been made in
the manner and within the time period required by
Rule 424(b); and, to the best of our knowledge, no
stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933
Act and no proceedings for that purpose have been
instituted or are pending or threatened by the
Commission.
(x) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and
the Rule 434 Information, as applicable, the
Prospectuses and each amendment or supplement to the
Registration Statement and the Prospectuses as of
their respective effective or issue dates (other than
the financial statements and supporting schedules
included therein or omitted therefrom, as to which we
express no opinion) complied as to form in all
material respects with the requirements of the 1933
Act and the 1933 Act Regulations.
(xi) If Rule 434 has been relied upon, the Prospectuses
were not "materially different," as such term is used
in Rule 434, from the prospectuses included in the
Registration Statement at the time it became
effective.
2
49
(xii) The form of certificate used to evidence the Common
Stock complies in all material respects with all
applicable statutory requirements, with any
applicable requirements of the charter and by-laws of
the Company and the requirements of the Nasdaq
National Market.
(xiii) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any Subsidiary
is a party, or to which the property of the Company
or any Subsidiary is subject, before or brought by
any court or governmental agency or body, domestic or
foreign, which is required to be disclosed in the
Prospectuses other than those described or referred
to therein and the descriptions thereof or references
thereto are correct in all material respects, or
which might reasonably be expected to materially and
adversely affect the properties or assets thereof or
the consummation of the transactions contemplated in
the International Purchase Agreement and the U.S.
Purchase Agreement or the performance by the Company
of its obligations thereunder.
(xiv) The information in the Prospectuses under
"Description of Capital Stock" and "Business --
Intellectual Property Rights", "Business --
Government Regulation", "Business -- Legal
Proceedings" and "United States Federal Tax
Consequences to Non-U.S. Holders of Common Stock,"
and in the Registration Statement under Item 14, to
the extent that it constitutes matters of law,
summaries of legal matters, the Company's charter and
bylaws or legal proceedings, or legal conclusions,
has been reviewed by us and is correct in all
material respects.
(xv) To the best of our knowledge, there are no statutes
or regulations that are required to be described in
the Prospectuses that are not described as required.
(xvi) All descriptions in the Prospectuses of contracts and
other documents to which the Company or the
Subsidiaries are a party are accurate in all material
respects; to the best of our knowledge, there are no
franchises, contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments
required to be described or referred to in the
Registration Statement or to be filed as exhibits
thereto other than those described or referred to
therein or filed or incorporated by reference as
exhibits thereto, and the descriptions thereof or
references thereto are correct in all material
respects.
(xvii) To the best of our knowledge, neither the Company nor
any Subsidiary is in violation of its charter or
by-laws or similar documents and no default by the
Company or any Subsidiary exists in the due
performance or observance of any material obligation,
agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is
described or referred to in the Registration
Statement or the Prospectuses or filed or
incorporated by reference as an exhibit to the
Registration Statement.
3
50
(xviii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree
of, any court or governmental authority or agency,
domestic or foreign (other than under the 1933 Act
and the 1933 Act Regulations, which have been
obtained, or as may be required under the securities
or blue sky laws of the various states, as to which
we express no opinion) is necessary or required in
connection with the due authorization, execution and
delivery of the International Purchase Agreement or
the U.S. Purchase Agreement or for the offering,
issuance, sale or delivery of the Securities.
(xix) The execution, delivery and performance of the
International Purchase Agreement and the U.S.
Purchase Agreement and the consummation of the
transactions contemplated in the International
Purchase Agreement and the U.S. Purchase Agreement
and in the Registration Statement (including the
issuance and sale of the Securities, and the use of
the proceeds from the sale of the Securities as
described in the Prospectuses under the caption "Use
Of Proceeds") and compliance by the Company with its
obligations under the International Purchase
Agreement and the U.S. Purchase Agreement do not and
will not, (A) whether with or without the giving of
notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event
(as defined in Section 1(a)(x) of the International
Purchase Agreement and the U.S. Purchase Agreement,
respectively) under or result in the creation or
imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any
Subsidiary pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement,
note, lease or any other agreement or instrument
known to us, to which the Company or any Subsidiary
is a party or by which it or any of them may be
bound, or to which any of the property or assets of
the Company or any Subsidiary is subject (except for
such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a
Material Adverse Effect), (B) result in any violation
of the provisions of the charter or by-laws or
similar documents of the Company or any Subsidiary,
or (C) violate any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to
us, of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over
the Company or any Subsidiary or any of their
respective properties, assets or operations.
(xx) To the best of our knowledge, except as disclosed in
the Prospectuses, there are no persons with
registration rights or other similar rights to have
any securities registered pursuant to the
Registration Statement or otherwise registered by the
Company under the ▇▇▇▇ ▇▇▇.
(xxi) The Company is not an "investment company" or an
entity "controlled" by an "investment company," as
such terms are defined in the ▇▇▇▇ ▇▇▇.
(xxii) The shares of Common Stock and options exercisable
for Common Stock issued pursuant to the Agreement and
Plan of Merger, dated February 8, 2000, by and among
the Company, RT Acquisition, Inc. and Riverbed, were
issued pursuant
4
51
to valid exemptions from the registration
requirements of the 1933 Act and the 1933 Act
Regulations, and were otherwise issued in compliance
with all applicable securities laws.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we make no statement), at the time such Registration
Statement or any such amendment became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectuses or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we need make no statement), at the time the Prospectuses
were issued, at the time any such amended or supplemented prospectuses were
issued or at the Closing Time, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
5
52
Exhibit B
FORM OF OPINION OF SELLING SHAREHOLDERS' COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(c)
FORM OF OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) No filing with, or consent, approval, authorization,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, (other than the issuance
of the order of the Commission declaring the Registration Statement effective
and such authorizations, approvals or consents as may be necessary under state
securities laws, as to which we need express no opinion) is necessary or
required to be obtained by the Selling Shareholders for the performance by each
Selling Shareholder of its obligations under the International Purchase
Agreement and the U.S. Purchase Agreement or in the Power of Attorney and
Custody Agreement, or in connection with the offer, sale or delivery of the
Securities to be purchased by the International Managers and the U.S.
Underwriters.
(ii) Each Power of Attorney and Custody Agreement has been
duly executed and delivered by the respective Selling Shareholder named therein
and constitutes the legal, valid and binding agreement of such Selling
Shareholder.
(iii) The International Purchase Agreement and the U.S.
Purchase Agreement have been duly authorized, executed and delivered by or on
behalf of each Selling Shareholder.
(iv) Each Attorney-in-Fact has been duly authorized by the
respective Selling Shareholder named therein to deliver the Securities on behalf
of the Selling Shareholders in accordance with the terms of the International
Purchase Agreement and the U.S. Purchase Agreement.
(v) The execution, delivery and performance of the
International Purchase Agreement and the U.S. Purchase Agreement and the Power
of Attorney and Custody Agreement and the sale and delivery of the Securities
and the consummation of the transactions contemplated in the International
Purchase Agreement and the U.S. Purchase Agreement and in the Registration
Statement and compliance by the Selling Shareholders with their obligations
under the International Purchase Agreement and the U.S. Purchase Agreement have
been duly authorized by all necessary action on the part of the Selling
Shareholders and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of, or
default under or result in the creation or imposition of any tax, lien, charge
or encumbrance upon the Securities or any property or assets of the Selling
Shareholders pursuant to, any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, license, lease or other instrument or agreement to
which any Selling Shareholder is a party or by which such Selling Shareholder
may be bound, or to which any of the property or assets of the Selling
Shareholders may be subject nor will such action result in any violation of the
provisions of the charter or by-laws of the
1
53
Selling Shareholders, if applicable, or any law, administrative regulation,
judgment or order of any governmental agency or body or any administrative or
court decree having jurisdiction over such Selling Shareholder or any of its
properties.
(vi) To the best of our knowledge, at the Closing Time each
Selling Shareholder will deliver valid and marketable title to the Securities to
be sold by such Selling Shareholder pursuant to the International Purchase
Agreement and the U.S. Purchase Agreement, free and clear of any pledge, lien,
security interest, charge, claim, equity or encumbrance of any kind, and has
full right, power and authority to sell, transfer and deliver such Securities
pursuant to the International Purchase Agreement and the U.S. Purchase
Agreement. By delivery of a certificate or certificates therefor such Selling
Shareholder will transfer to the Underwriters who have purchased such Securities
pursuant to the International Purchase Agreement or the U.S. Purchase Agreement
(without notice of any defect in the title of such Selling Shareholder and who
are otherwise bona fide purchasers for purposes of the Uniform Commercial Code)
valid and marketable title to such Securities, free and clear of any pledge,
lien, security interest, charge, claim, equity or encumbrance of any kind.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we need make no statement), at the time such Registration
Statement or any such amendment became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectuses or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we need make no statement), at the time the Prospectuses
were issued, at the time any such amended or supplemented prospectuses were
issued or at the Closing Time, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
2
54
Exhibit C
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS
PURSUANT TO SECTION 5(k)
March __, 2000
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
as Lead Manager of the several International Managers
c/o Merrill ▇▇▇▇▇ International
Ropemaker Place
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Re: Proposed Public Offering by Aether Systems, Inc.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of
Aether Systems, Inc., a Delaware corporation (the "Company"), understands that
▇▇▇▇▇▇▇ ▇▇▇▇▇ International ("▇▇▇▇▇▇▇ ▇▇▇▇▇") proposes to enter into an
International Purchase Agreement (the "International Purchase Agreement") with
the Company providing for the public offering of shares (the "Securities") of
the Company's common stock, par value $.01 per share (the "Common Stock"). In
recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder and an officer and/or director of the Company, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned agrees with each underwriter to be
named in the International Purchase Agreement that, during a period of 90 days
from the date of the International Purchase Agreement, the undersigned will not,
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of the Company's
Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock, whether now owned or hereafter acquired by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the Securities Act of
1933, as amended, with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction is to be settled by delivery
of Common Stock or other securities, in cash or otherwise.
Very truly yours,
Signature: ______________________________
Print Name: _____________________________
1
55
Exhibit D
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS
PURSUANT TO SECTION 5(k)
March __, 2000
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
as Lead Manager of the several International Managers
c/o Merrill ▇▇▇▇▇ International
Ropemaker Place
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Re: Proposed Public Offering by Aether Systems, Inc.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of
Aether Systems, Inc., a Delaware corporation (the "Company"), understands that
▇▇▇▇▇▇▇ ▇▇▇▇▇ International ("▇▇▇▇▇▇▇ ▇▇▇▇▇") proposes to enter into an
International Purchase Agreement (the "International Purchase Agreement") with
the Company providing for the public offering of shares (the "Securities") of
the Company's common stock, par value $.01 per share (the "Common Stock"). In
recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder [and an officer and/or director] of the Company,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with each underwriter to
be named in the International Purchase Agreement that, during the period
beginning on the date of the International Purchase Agreement and ending at
11:59 p.m., Eastern Standard Time, on October 21, 2000, the undersigned will
not, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly,
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant for the sale of, or otherwise dispose of or transfer any shares of the
Company's Common Stock or any securities convertible into or exchangeable or
exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or file any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing or (ii)
enter into any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership
of the Common Stock, whether any such swap or transaction is to be settled by
delivery of Common Stock or other securities, in cash or otherwise.
Very truly yours,
Signature: ______________________________
Print Name: _____________________________
1