Exhibit 1.1
EXECUTION COPY
9,668,063 Shares of Class A Common
Stock
XM SATELLITE RADIO HOLDINGS INC.
UNDERWRITING
AGREEMENT
June 8, 2005
UBS Securities LLC
299 Park Avenue
New York, NY 10171
Ladies/Gentlemen:
XM Satellite Radio Holdings Inc., a
corporation organized and existing under the laws of Delaware (the
“Company”), proposes, subject to the terms and
conditions stated herein, to issue and sell to UBS Securities LLC
(the “Underwriter”) an aggregate of 9,668,063 shares
(the “Shares”) of its Class A common stock, par value
$0.01 per share (the “Common Stock”). The Shares are
more fully described in the Registration Statement referred to
below.
1. Representations and Warranties
of the Company . The Company represents and warrants to, and
agrees with, the Underwriter that:
(a) The Company has filed with the
Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-3 (No. 333-114178) and amendments
thereto, and related preliminary prospectus for the registration
under the Securities Act of 1933, as amended (the “Securities
Act”), of the Shares, which registration statement, as so
amended (including post-effective amendments, if any), has been
declared effective by the Commission and copies of which have
heretofore been delivered to the Underwriter. The registration
statement, as amended at or after the time it became effective,
including the prospectus, financial statements, schedules, exhibits
and information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A or
434(d) under the Securities Act, is hereinafter referred to as the
“Registration Statement.” If the Company has filed or
is required pursuant to the terms hereof to file a registration
statement pursuant to Rule 462(b) under the Securities Act
registering additional shares of Common Stock (a “Rule 462(b)
Registration Statement”), then, unless otherwise specified,
any reference herein to the term “Registration
Statement” shall be deemed to include any such Rule 462(b)
Registration Statement. Other than a Rule 462(b) Registration
Statement, which, if filed, becomes effective upon filing, no other
document with respect to the Registration Statement has heretofore
been filed with the Commission. All of the Shares have been
registered under the Securities Act pursuant to the Registration
Statement or, if any Rule 462(b) Registration Statement is filed,
will be duly registered under the Securities Act with the filing of
such Rule 462(b) Registration
Statement. No stop order suspending the
effectiveness of either the Registration Statement or the Rule
462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission. The Company, if required by the rules and regulations
of the Commission under the Securities Act (the “Securities
Act Regulations”), proposes to file the Prospectus Supplement
with the Commission pursuant to Rule 424(b) under the Securities
Act (“Rule 424(b)”). The Prospectus, in the form in
which it was filed with the Commission in the Registration
Statement pursuant to Rule 415 of the Securities Act Regulations,
is hereinafter referred to as the “Prospectus.” The
Prospectus Supplement relating to the Shares for use in connection
with the offering and sale of the Shares, in the form in which it
is to be filed with the Commission pursuant to Rule 424(b) of the
Securities Act Regulations, is hereinafter referred to as the
“Prospectus Supplement.” References to the term
“Prospectus Supplement,” unless otherwise indicated,
shall refer to the Prospectus and the Prospectus Supplement. All
references in this Agreement to the Registration Statement, the
Rule 462(b) Registration Statement, the Prospectus, and the
Prospectus Supplement, or any amendments or supplements to any of
the foregoing, shall be deemed to include any copy thereof filed
with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System.
(b) The Registration Statement and
the Prospectus, at the time the Registration Statement became
effective and as of the Closing Date referred to in Section 3
hereof, the Prospectus Supplement, as of the date hereof and as of
the Closing Date, complied and comply in all material respects with
the requirements of the Securities Act and the Securities Act
Regulations, and each of the foregoing did not and as of the
Closing Date do not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. The
Prospectus Supplement, as of the date hereof (unless the term
“Prospectus Supplement” refers to a prospectus
supplement which has been provided to the Underwriter by the
Company for use in connection with the offering of the Shares which
differs from the Prospectus Supplement filed with the Commission
pursuant to Rule 424(b) of the Securities Act Regulations, in which
case at the time it is first provided to the Underwriter for such
use) and on the Closing Date, does not and will not include any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however , that the representations and warranties
in this Section (1)(b) shall not apply to statements in or
omissions from the Registration Statement or Prospectus Supplement
made in reliance upon and in conformity with information relating
to the Underwriter furnished to the Company in writing by the
Underwriter expressly for use in the Registration Statement or the
Prospectus Supplement. The parties acknowledge and agree that such
information provided by or on behalf of the Underwriter consists
solely of the material included in paragraphs 5, 10, 11, 12 and 13
under the caption “Underwriting” in the Prospectus
Supplement. Each Prospectus Supplement filed as part of the
Registration Statement, as part of any amendment thereto or
pursuant to Rule 424 under the Securities Act Regulations, if filed
by electronic transmission pursuant to Regulation S-T under the
Securities Act, was identical to the copy thereof delivered to the
Underwriter for use in connection with the offer and sales of the
Shares (except as may be permitted by Regulation S-T under the
Securities Act). There are no contracts or other documents required
to be described in the Prospectus Supplement or to be filed as
exhibits to the Registration Statement under the Securities Act
that have not been described or filed therein as required, and
there are no business relationships or related-party transactions
involving the Company or any of its subsidiaries or any other
person required to be described in the Prospectus Supplement that
have not been described therein as required.
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(c) Each of the Company and its
subsidiaries (i) has been duly organized and is validly existing as
a corporation in good standing under the laws of its respective
jurisdiction of incorporation, (ii) has all requisite corporate
power and authority to carry on its business as it is currently
being conducted and as described in the Prospectus Supplement and
to own, lease and operate its properties, and (iii) is duly
qualified and in good standing as a foreign corporation authorized
to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such
qualification except, with respect to clauses (i) (as it relates to
good standing) and (iii), where the failure to be so qualified or
in good standing does not and could not reasonably be expected to
(x) individually or in the aggregate, result in a material adverse
effect on the properties, business, results of operations,
condition (financial or otherwise), affairs or prospects of the
Company and its subsidiaries, taken as a whole, (y) interfere with
or adversely affect the issuance or marketability of the Shares
pursuant hereto or (z) in any manner draw into question the
validity of this Agreement or the transactions described in the
Prospectus Supplement under the caption “Use of
Proceeds” (any of the events set forth in clauses (x), (y) or
(z), a “Material Adverse Effect”).
(d) All of the outstanding shares of
capital stock of the Company and its subsidiaries have been duly
authorized, validly issued, and are fully paid and nonassessable
and were not issued in violation of any preemptive or similar
rights. The Shares, when issued, delivered and sold in accordance
with this Agreement, will be duly authorized and validly issued,
fully paid and nonassessable, and will not have been issued in
violation of or subject to any preemptive or similar rights. At
March 31, 2005, the Company had the Actual and As Adjusted
capitalization as set forth in the Prospectus Supplement under the
caption “Capitalization” (subject in each case to the
assumptions set forth above such caption). As of June 3, 2005, the
Company had 212,057,787 shares of Class A Common Stock outstanding,
zero shares of Class B common stock outstanding, zero shares of
Class C non-voting common stock outstanding, 5,393,252 shares of
Series A convertible preferred stock outstanding, 474,289 shares of
Series B convertible redeemable preferred stock outstanding, 79,246
shares of Series C convertible redeemable preferred stock
outstanding, zero shares of Series D junior participating preferred
stock outstanding, options to purchase 15,640,961 shares of Class A
common stock outstanding and warrants to purchase 12,155,341 shares
of Class A common stock outstanding. There has been no additional
capital stock issued by the Company since June 3, 2005, other than
the exercise of stock options.
(e) Except as disclosed in the
Prospectus Supplement, all of the outstanding capital stock of, or
other ownership interests in, the Company’s subsidiaries is
owned by the Company, free and clear of any security interest,
claim, lien, limitation on voting rights or encumbrance; and all
such securities have been duly authorized, validly issued, and are
fully paid and nonassessable and were not issued in violation of
any preemptive or similar rights.
(f) Except as disclosed in the
Prospectus Supplement there are not currently, and will not be as a
result of the Offering, any outstanding subscriptions, rights,
warrants, calls, commitments of sale or options to acquire or
instruments convertible into or exchangeable for, any capital stock
or other equity interest of the Company or any of its
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subsidiaries (other than options issued pursuant
to the Company’s 1998 Shares Award Plan and Employee Stock
Purchase Plan or ordinary course option grants consistent with the
Company’s past practices).
(g) The Common Stock (including the
Shares) is registered pursuant to Section 12(g) of the Securities
Exchange Act of 1934 (the “Exchange Act”) and is listed
for quotation on the Nasdaq National Market System
(“Nasdaq”), and the Company has taken no action
designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or
delisting the Common Stock from Nasdaq, nor has the Company
received any notification that the Commission or Nasdaq is
contemplating terminating such registration or listing.
(h) The Company has all requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby, including, without limitation, the corporate
power and authority to issue, sell and deliver the Shares as
provided herein and the corporate power to effect the Use of
Proceeds as described in the Prospectus Supplement.
(i) The statistical and
market-related data included in the Prospectus Supplement are based
on or are derived from sources which the Company believes to be
reliable and accurate in all material respects.
(j) This Agreement has been duly and
validly authorized, executed and delivered by the Company and is
the legal, valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity, and except
insofar as indemnification and contribution provisions may be
limited by applicable law or equitable principles.
(k) Neither the Company nor any of
its subsidiaries is, nor after giving effect to the Offering will
be, (i) in violation of its certificate of incorporation or bylaws,
(ii) in default in the performance of any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or instrument
to which it is a party or by which it is bound or to which any of
its properties is subject, or (iii) in violation of any local,
state or federal law, statute, ordinance, rule, regulation,
requirement, judgment or court decree (including, without
limitation, the Communications Act of 1934 (the
“Communications Act”) and the rules and regulations of
the Federal Communications Commission (the “FCC”), and
environmental laws, statutes, ordinances, rules regulations,
judgments or court decrees) applicable to the Company or any of its
subsidiaries or any of their assets or properties (whether owned or
leased) other than, in the case of clauses (ii) and (iii), any
default or violation that (A) could not reasonably be expected to
have a Material Adverse Effect or (B) which is disclosed in the
Prospectus Supplement. There exists no condition that, with notice,
the passage of time or otherwise, would constitute a default under
any such document or instrument, except as disclosed in the
Prospectus or Prospectus Supplement.
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(l) None of (i) the execution,
delivery or performance by the Company of this Agreement, (ii) the
issuance and sale of the Shares and (iii) consummation by the
Company of the transactions contemplated hereby and in the
Prospectus Supplement violate, conflict with or constitute a breach
of any of the terms or provisions of, or a default under (or an
event that with notice or the lapse of time, or both, would
constitute a default), or require consent under, or result in the
imposition of a lien or encumbrance on any properties of the
Company or any of its subsidiaries, or an acceleration of any
indebtedness of the Company or any of its subsidiaries pursuant to,
(A) the charter or bylaws of the Company or any of its
subsidiaries, (B) any bond, debenture, note, indenture, mortgage,
deed of trust or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the any of them
or their property is or may be bound, (C) any statute, rule or
regulation applicable to the Company or any of its subsidiaries or
any of their assets or properties or (D) any judgment, order or
decree of any court or governmental agency or authority having
jurisdiction over the Company or any of its subsidiaries or any of
their assets or properties, other than, in the case of clause (B)
above, (x) any default or violation that (1) could not reasonably
be expected to have a Material Adverse Effect or (2) which is
disclosed in the Prospectus Supplement or (y) any
“piggyback” registration rights held by investors that
will have been waived on or prior to the Closing Date. No consent,
approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, (i) any court or
governmental agency, body or administrative agency or (ii) any
other person is required for (A) the execution, delivery and
performance by the Company of this Agreement, (B) the issuance and
sale of the Shares and the transactions contemplated hereby and
thereby except such as have been obtained and made under the
Securities Act and state securities or Blue Sky laws and
regulations or such as may be required by the National Association
of Securities Dealers, Inc. (the “NASD”).
(m) There is (i) no action, suit or
proceeding before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, now pending or, to
the best knowledge of the Company, threatened or contemplated to
which the Company or any of its subsidiaries is a party or to which
the business or property of the Company or any of its subsidiaries
is or may be subject, (ii) no statute, rule, regulation or order
that has been enacted, adopted or issued by any governmental agency
or that has been proposed by any governmental body or (iii) no
injunction, restraining order or order of any nature by a federal
or state court or foreign court of competent jurisdiction to which
the Company or any of its subsidiaries is or may be subject or to
which the business, assets, or property of the Company or any of
its subsidiaries are or may be subject, that, in the case of
clauses (i), (ii) and (iii) above, (A) is required to be disclosed
in the Prospectus Supplement and that is not so disclosed, or (B)
except as has been disclosed in the Prospectus Supplement could
reasonably be expected to, individually or in the aggregate, result
in a Material Adverse Effect.
(n) No action has been taken and no
statute, rule, regulation or order has been enacted, adopted or
issued by any governmental agency that prevents the issuance of the
Shares or prevents or suspends the use of the Prospectus
Supplement; no injunction, restraining order or order of any kind
by a federal or state court of competent jurisdiction has been
issued that prevents the issuance of the Shares, prevents or
suspends the sale of the Shares in any jurisdiction referred to in
Section 1(c) hereof or that could adversely affect the consummation
of the transactions contemplated by this Agreement or the
Prospectus Supplement; and every request of any securities
authority or agency of any jurisdiction for additional information
has been complied with in all material respects.
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(o) There is (i) no significant
unfair labor practice complaint pending against the Company or any
of its subsidiaries nor, to the best knowledge of the Company,
threatened against any of them, before the National Labor Relations
Board, any state or local labor relations board or any foreign
labor relations board, and no significant grievance or significant
arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company or any of
its subsidiaries nor, to the best knowledge of the Company,
threatened against any of them, (ii) no significant strike, labor
dispute, slowdown or stoppage pending against the Company or any of
its subsidiaries nor, to the best knowledge of the Company,
threatened against any of them and (iii) to the best knowledge of
the Company, no union representation question existing with respect
to the employees of the Company or any of its subsidiaries that, in
the case of clauses (i), (ii) or (iii) above, could reasonably be
expected to result in a Material Adverse Effect. To the best
knowledge of the Company, no collective bargaining organizing
activities are taking place with respect to the Company or any of
its subsidiaries. None of the Company or any of its subsidiaries
has violated (A) any federal, state or local law or foreign law
relating to discrimination in hiring, promotion or pay of
employees, (B) any applicable wage or hour laws or (C) any
provision of the Employee Retirement Income Security Act of 1974,
as amended, and the regulations and published interpretations
thereunder (collectively, “ERISA”), which in the case
of clause (A), (B) or (C) above could reasonably be expected to
result in a Material Adverse Effect.
(p) None of the Company or any of
its subsidiaries has violated any environmental, safety or similar
law or regulation applicable to it or its business or property
relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants
or contaminants (“Environmental Laws”), lacks any
permit, license or other approval required of it under applicable
Environmental Laws or is violating any term or condition of such
permit, license or approval, which could reasonably be expected to,
either individually or in the aggregate, have a Material Adverse
Effect.
(q) Each of the Company and its
subsidiaries has (i) good and marketable title to all of the
properties and assets described in the Prospectus Supplement as
owned by it, free and clear of all liens, charges, encumbrances and
restrictions, except such as are described in the Prospectus
Supplement or as would not have a Material Adverse Effect, (ii)
peaceful and undisturbed possession of its properties under all
material leases to which it is a party as lessee, (iii) all
licenses, certificates, permits, authorizations, approvals,
franchises and other rights from, and has made all declarations and
filings with, all federal, state and local authorities, all
self-regulatory authorities and all courts and other tribunals
(each an “Authorization”) necessary to engage in the
business conducted by it in the manner described in the Prospectus
Supplement, except as described in the Prospectus Supplement or
where failure to hold such Authorizations would not, individually
or in the aggregate, have a Material Adverse Effect and (iv) no
reason to believe that any governmental body or agency is
considering limiting, suspending or revoking any such
Authorization. Except where the failure to be in full force and
effect would not have a Material Adverse Effect, all such
Authorizations are valid and in full force and effect, and each of
the Company and its subsidiaries is in compliance in all material
respects with the terms and conditions of all such Authorizations
and with the rules and
6
regulations of the regulatory authorities having
jurisdiction with respect thereto. All material leases to which the
Company or any of its subsidiaries is a party are valid and
binding, and no default by either the Company or such subsidiary,
as the case may be, has occurred and is continuing thereunder and,
to the best knowledge of the Company, no material defaults by the
landlord are existing under any such lease, except those defaults
that could not reasonably be expected to result in a Material
Adverse Effect.
(r) Each of the Company and its
subsidiaries owns, possesses or has the right to employ all
patents, patent rights, licenses (including all FCC, state, local
or other regulatory licenses), inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, software, systems or
procedures), trademarks, service marks and trade names, inventions,
computer programs, technical data and information (collectively,
the “Intellectual Property”) presently employed by it
in connection with the businesses now operated by it or that are
proposed to be operated by it or its subsidiaries free and clear of
and without violating any right, claimed right, charge,
encumbrance, pledge, security interest, restriction or lien of any
kind of any other person and none of the Company or any of its
subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the
foregoing, except as (1) disclosed in the Prospectus Supplement or
(2) as could not reasonably be expected to have a Material Adverse
Effect. To the best knowledge of the Company, the use of the
Intellectual Property in connection with the business and
operations of the Company or any of its subsidiaries does not
infringe on the rights of any person, except as disclosed in the
Prospectus Supplement or as could not reasonably be expected to
have a Material Adverse Effect.
(s) Neither the Company nor any of
its subsidiaries or, to the best knowledge of the Company, any of
their respective officers, directors, partners, employees, agents
or affiliates or any other person acting on behalf of the Company
or any of its subsidiaries has, directly or indirectly, given or
agreed to give any money, gift or similar benefit (other than legal
price concessions to customers in the ordinary course of business)
to any customer, supplier, employee or agent of a customer or
supplier, official or employee of any governmental agency (domestic
or foreign), instrumentality of any government (domestic or
foreign) or any political party or candidate for office (domestic
or foreign) or other person who was, is or may be in a position to
help or hinder the business of the Company or any of its
subsidiaries (or assist the Company or any of its subsidiaries in
connection with any actual or proposed transaction), which (i)
might subject the Company or any of its subsidiaries, or any other
individual or entity, to any damage or penalty in any civil,
criminal or governmental litigation or proceeding (domestic or
foreign), (ii) if not given in the past, might have had a Material
Adverse Effect or (iii) if not continued in the future, might have
a Material Adverse Effect.
(t) All material tax returns
required to be filed through the date hereof by the Company or any
of its subsidiaries in all jurisdictions have been so filed. All
taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due from
such entities or that are due and payable through the date hereof
have been paid, other than those being contested in good faith and
for which adequate reserves have been provided or those currently
payable without penalty or interest. To the best knowledge of the
Company, there are no material proposed additional tax assessments
against the Company, or any of its subsidiaries, or the assets or
property of the Company or any of its subsidiaries. Each
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of the Company and its subsidiaries has made
adequate charges, accruals and reserves in the applicable financial
statements included in the Prospectus Supplement in respect of all
federal, state and foreign income and franchise taxes for all
periods as to which the tax liability of the Company or any of its
consolidated subsidiaries has not been finally
determined.
(u) None of the Company or any of
its subsidiaries is (i) an “investment company” or a
company “controlled” by an “investment
company” within the meaning of the Investment Company Act of
1940, as amended (the “Investment Company Act”), or
(ii) a “holding company” or a “subsidiary
company” or an “affiliate” of a holding company
within the meaning of the Public Utility Holding Company Act of
1935, as amended.
(v) Except as disclosed in the
Prospectus Supplement, there are no holders of securities of the
Company or any of its subsidiaries who, by reason of the execution
by the Company of this Agreement to which they are a party, or the
consummation by the Company or any of its subsidiaries of the
transactions contemplated hereby and thereby, have the right to
request or demand that the Company or any of its subsidiaries
register under the Securities Act or analogous foreign laws and
regulations securities held by them, other than such that have been
duly waived on or prior to the Closing Date.
(w) Each of the Company and its
subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets, (iii) access to assets is
permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences
thereto.
(x) Except as disclosed in the
Prospectus Supplement, each of the Company and its subsidiaries
maintains insurance covering their properties, operations,
personnel and businesses. Such insurance insures against such
losses and risks as are adequate in accordance with customary
industry practice to protect the Company, its subsidiaries and
their respective businesses. None of the Company or any of its
subsidiaries has received notice from any insurer or agent of such
insurer that substantial capital improvements or other expenditures
will have to be made in order to continue such insurance. All such
insurance is outstanding and duly in force on the date hereof,
subject only to changes made in the ordinary course of business,
consistent with past practice, which do not, singly or in the
aggregate, materially alter the coverage thereunder or the risks
covered thereby. The Company has no reason to believe that the
Company or any of its subsidiaries will not be able (a) to renew
its existing insurance coverage as and when such policies expire or
(b) to obtain comparable coverage from similar institutions as may
be necessary or appropriate to conduct their business as now
conducted or as presently contemplated and at a cost that would not
result in a Material Adverse Effect.
(y) None of the Company or any of
its subsidiaries has (i) taken, directly or indirectly, any action
designed to, or that might reasonably be expected to, cause or
result in stabilization or manipulation of the price of any
security of the Company or any of its subsidiaries to facilitate
the sale or resale of the Shares or (ii) sold, bid for, purchased
or paid any
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person any compensation for soliciting purchases
of, the Shares or paid or agreed to pay to any person any
compensation for soliciting another to purchase any other
securities of the Company or any of its subsidiaries.
(z) The Company and its subsidiaries
and any “employee benefit plan” (as defined under
ERISA) established or maintained by the Company and its
subsidiaries or their “ERISA Affiliates” (as defined
below) are in compliance in all material respects with ERISA.
“ERISA Affiliate” means, with respect to the Company or
its subsidiaries, any member of any group of organizations
described in Sections 414(b), (c), (m) or (o) of the Internal
Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the “Code”) of which the
Company or such subsidiary is a member. No “reportable
event” (as defined under ERISA) has occurred or is reasonably
expected to occur with respect to any “employee benefit
plan” established or maintained by the Company, any of its
subsidiaries, or any of their ERISA Affiliates. No “employee
benefit plan” established or maintained by the Company, any
of its subsidiaries, or any of their ERISA Affiliates, if such
“employee benefit plan” were terminated, would have any
“amount of unfunded benefit liabilities” (as defined
under ERISA) that would reasonably be expected to have a Material
Adverse Effect. None of the Company, any of its subsidiaries, or
any of their ERISA Affiliates has incurred or reasonably expects to
incur any liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “employee benefit
plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code.
Each “employee benefit plan” established or maintained
by the Company, any of its subsidiaries, or any of their ERISA
Affiliates that is intended to be qualified under Section 401(a) of
the Code is so qualified and nothing has occurred, whether by
action or failure to act, which would cause the loss of such
qualification.
(aa) Subsequent to the respective
dates as of which information is given in the Prospectus Supplement
and up to the Closing Date, except as set forth in the Prospectus
Supplement, (i) none of the Company or any of its subsidiaries has
incurred any liabilities or obligations, direct or contingent, that
are material, individually or in the aggregate, to the Company and
its subsidiaries taken as a whole, nor entered into any transaction
not in the ordinary course of business, (ii) none of the Company or
any of its subsidiaries has incurred any liabilities or
obligations, direct or contingent, that will be material to the
Company and its subsidiaries taken as a whole, (iii) there has not
been, singly or in the aggregate, any change or development that
could reasonably be expected to result in a Material Adverse
Effect, (iv) except for the dividends consisting of shares of Class
A Common Stock paid to the holders of the Company’s Series B
convertible redeemable preferred stock on May 1, 2005 there has
been no dividend or distribution of any kind declared, paid or made
by the Company or any of its subsidiaries on any class of its
capital stock, (v) there has been no change in accounting methods
or practices (including any change in depreciation or amortization
policies or rates) by the Company or any of its subsidiaries, (vi)
there has been no revaluation by the Company or any of its
subsidiaries of any of their assets, (vii) there has been no
increase in the salary or other compensation payable or to become
payable by the Company or any of its subsidiaries to any of their
officers, directors, employees or advisors, nor any declaration,
payment or commitment or obligation of any kind for the payment by
the Company or any of its subsidiaries of a bonus or other
additional salary or compensation to any such person in each case,
which is material to the Company, (viii) there has been no
amendment or termination of any material contract, agreement or
license to which the Company or any of its subsidiaries is a party
or by which it is bound,
9
(ix) there has been no waiver or release of any
material right or claim of the Company or any of its subsidiaries,
including any write-off or other compromise of any material account
receivable of the Company or any of its subsidiaries, and (x) there
has been no material change in pricing or royalties set or charged
by the Company or any of its subsidiaries to their respective
customers or licensees or in pricing or royalties set or charged by
persons who have licensed Intellectual Property Rights to the
Company or any of its subsidiaries.
(bb) KPMG LLP, who have expressed
their opinion with respect to the financial statements (which term
as used in this Agreement includes the related notes thereto) and
supporting schedules included in the Prospectus Supplement, are
independent public or certified public accountants within the
meaning of Regulation S-X under the Securities Act and the Exchange
Act. Except as expressly stated in the letters delivered pursuant
to Section 6(f) hereof, the historical financial statements,
together with related schedules and notes thereto, comply as to
form in all material respects with the requirements applicable to
Registration Statement on Form S-1 under the Securities Act and
present fairly in all material respects the financial position and
results of operations of the Company and its subsidiaries, at the
dates and for the periods indicated. Such financial statements have
been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods
presented. The pro forma financial information included in the
Prospectus Supplement has been prepared on a basis consistent with
such historical financial statements of the Company and its
subsidiaries, and gives effect to assumptions made on a reasonable
basis and present fairly in all material respects the historical
and proposed transactions contemplated by this Agreement and the
Prospectus Supplement.
(cc) The financial statements,
together with the related notes, included in the Prospectus
Supplement present fairly in all material respects the consolidated
financial position of the Company and its subsidiaries as of and at
the dates indicated and the results of their operations and cash
flows for the periods specified. Such financial statements have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes
thereto. The financial data set forth in the Prospectus Supplement
under the captions “Summary—Summary Consolidated
Financial Data” and “Capitalization,” and the
financial data schedule set forth in the Registration Statement
fairly present the information set forth therein on a basis
consistent with that of the audited financial statements contained
in the Prospectus Supplement.
(dd) Except as pursuant to this
Agreement, there are no contracts, agreements or understandings
between the Company and its subsidiaries and any other person that
would give rise to a valid claim against the Company, any of its
subsidiaries or the Underwriter for a brokerage commission,
finder’s fee or like payment in connection with the issuance,
purchase and sale of the Shares.
(ee) The statements (including the
assumptions described therein) included in the Prospectus
Supplement (i) are within the coverage of Rule 175(b) under the
Securities Act to the extent such data constitute forward looking
statements as defined in Rule 175(c) and (ii) were made by the
Company with a reasonable basis and reflect the good faith estimate
made by the Company of the matters described therein.
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(ff) Each certificate signed by any
officer of the Company and delivered to the Underwriter or counsel
for the Underwriter shall be deemed to be a representation and
warranty by the Company to the Underwriter as to the matters
covered thereby.
(gg) The conditions for use of Form
S-3, as in effect on the date hereof and as in effect immediately
prior to October 21, 1992, as set forth in the General Instructions
thereto, have been satisfied.
The Company acknowledges that the
Underwriter and, for purposes of the opinions to be delivered to
the Underwriter pursuant to Section 6 hereof, counsel to the
Company and counsel to the Underwriter, will rely upon the accuracy
and truth of the foregoing representations and hereby consents to
such reliance.
In addition, any certificate signed
by any officer of the Company or any of the Company’s
subsidiaries and delivered to the Underwriter or counsel for the
Underwriter in connection with the offering of the Shares shall be
deemed to be a representation and warranty by the Company or any
subsidiary thereof, as the case may be, as to matters covered
thereby, to the Underwriter.
2. Purchase, Sale and Delivery of
the Shares .
(a) On the basis of the
representations, warranties, covenants and agreements herein
contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to the Underwriter and the
Underwriter agrees to purchase from the Company 9,668,063 Shares at
a purchase price per share of $31.03.
(b) Payment of the purchase price
for, and delivery of certificates representing, the Shares shall be
made at the office of Latham & Watkins LLP, Washington, D.C.
(“Underwriter’s Counsel”), or at such other place
as shall be agreed upon by the Underwriter and the Company, at
10:00 A.M., New York City time, on the third or (as permitted under
Rule 15c6-1 under the Exchange Act) fourth business day following
the date of the determination of the public offering price, or such
other time not later than ten business days after such date as
shall be agreed upon by the Underwriter and the Company (such time
and date of payment and delivery being herein called the
“Closing Date”).
(c) Payment of the purchase price
for the Shares shall be made by wire transfer in same day funds to
the Company upon delivery of certificates for the Shares to the
Underwriter through the facilities of The Depository Trust Company
for the account of the Underwriter. Certificates for the Shares
shall be registered in such name or names and shall be in such
denominations as the Underwriter may request at least two business
days before the Closing Date. The Company will permit the
Underwriter to examine and package such certificates for delivery
at least one full business day prior to the Closing
Date.
3. Offering . Upon
authorization of the release of the Shares by the Underwriter, the
Underwriter proposes to offer the Shares for sale to the public
upon the terms and conditions set forth in the Prospectus
Supplement.
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4. Covenants of the Company
.
(a) The Company covenants and agrees
with the Underwriter that:
(i) The Registration Statement and
any amendments thereto has been declared effective, and if Rule
430A is used or the filing of the Prospectus Supplement is
otherwise required under Rule 424(b) or Rule 434, the Company will
file the Prospectus Supplement (properly completed if Rule 430A has
been used) pursuant to Rule 424(b) within the prescribed time
period and will provide evidence satisfactory to the Underwriter of
such timely filing. If the Company elects to rely on Rule 434, the
Company will prepare and file a term sheet that complies with the
requirements of Rule 434, and the Prospectus Supplement shall not
be “materially different” (as such term is used in Rule
434) from the Prospectus included in the Registration Statement at
the time it became effective.
The Company will notify the
Underwriter immediately (and, if requested by the Underwriter, will
confirm such notice in writing) (A) when any post-effective
amendment to the Registration Statement becomes effective, (B) of
any request by the Commission for any amendment of or supplement to
the Registration Statement or the Prospectus Supplement or for any
additional information, (C) of the mailing or the delivery to the
Commission for filing of the Prospectus Supplement or any amendment
of or supplement to the Registration Statement or the Prospectus
Supplement, including but not limited to Rule 462(b) under the
Securities Act, (D) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereto or of the initiation, or the
threatening, of any proceedings therefor, it being understood that
the Company shall make every reasonable effort to avoid the
issuance of any such stop order, (E) of the receipt of any comments
or inquiries from the Commission, and (F) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for that purpose. If
the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance
of any such stop order and, if issued, to obtain the lifting of
such order as soon as possible. The Company will not file any
post-effective amendments to the Registration Statement or any
amendment of or supplement to the Prospectus Supplement (including
any revised prospectus supplement which the Company proposes for
use by the Underwriter in connection with the offering of the
Shares which differs from the prospectus supplement filed with the
Commission pursuant to Rule 424(b), whether or not such revised
prospectus supplement is required to be filed pursuant to Rule
424(b)) to which the Underwriter or Underwriter’s Counsel
shall reasonably object after being timely furnished in advance a
copy thereof. The Company will provide the Underwriter with copies
of all such amendments, filings and other documents a sufficient
time prior to any filing or other publication thereof to permit the
Underwriter a reasonable opportunity to review and comment
thereon.
(ii) The Company shall comply with
the Securities Act to permit completion of the distribution as
contemplated in this Agreement, the Registration Statement and the
Prospectus Supplement. If at any time when a prospectus relating to
the Shares is required to be delivered under the Securities Act in
connection with the sales of Shares, any event shall have occurred
as a result of which the Prospectus Supplement as then amended or
supplemented would, in the judgment of the Underwriter or the
Company, include an untrue
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statement of a material fact or omit to state
any ma
