8,000,000 Shares
Hyperion Telecommunications, Inc.
Class A Common Stock
U.S. UNDERWRITING AGREEMENT
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May ___, 1998
XXXXX XXXXXX INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
NATIONSBANC XXXXXXXXXX SECURITIES LLC
As Representatives of the U.S. Underwriters
c/o Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies & Gentlemen:
Hyperion Telecommunications, Inc., a Delaware corporation (the "Company"),
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proposes to issue and sell in the United States and Canada an aggregate of
8,000,000 shares (the "Firm Shares") of its Class A Common Stock, $.01 par value
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per share (the "Class A Common Stock"), to the several Underwriters named in
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Schedule I hereto (the "U.S. Underwriters"), for whom Xxxxx Xxxxxx Inc., Credit
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Suisse First Boston and NationsBanc Xxxxxxxxxx Securities LLC are acting as
representatives (the "Representatives"). The Company also proposes to sell to
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the U.S. Underwriters, upon the terms and conditions set forth in Section 2
hereof, up to an additional 1,500,000 shares (the "Additional Shares") of Class
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A Common Stock. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "Shares."
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It is understood that the Company is concurrently entering into an
International Underwriting Agreement, dated the date hereof (the "International
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Underwriting Agreement"), providing for the sale of 2,000,000 shares (the "Firm
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International Shares") of the Class A Common Stock through arrangements with
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certain underwriters outside the United States and Canada (the "Managers"), for
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whom Xxxxx Xxxxxx Inc., Credit Suisse First Boston (Europe) Limited and
NationsBanc Xxxxxxxxxx Securities LLC are acting as lead managers (the "Lead
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Managers"). The Firm International Shares and the Shares, collectively, are
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herein called the "Underwritten Shares."
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The Company also understands that the Representatives and the Lead Managers
have entered into an agreement (the "Agreement Between U.S. Underwriters and
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Managers") contemplating the coordination of certain transactions between the
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U.S. Underwriters and the Managers and that, pursuant thereto and subject to the
conditions set forth therein, the U.S. Underwriters may purchase from the
Managers a portion of the Firm International Shares or sell to the Managers a
portion of the Shares. The Company understands that any such purchases and
sales between the U.S. Underwriters and the Managers shall be governed by the
Agreement Between U.S. Underwriters and Managers and shall not be governed by
the terms of this Agreement or the International Underwriting Agreement.
The Company wishes to confirm as follows its agreement with you (the
"Representatives") and the other several U.S. Underwriters on whose behalf you
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are acting, in connection with the several purchases of the Shares by the U.S.
Underwriters.
1. Registration Statement and Prospectuses. The Company has prepared and
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filed with the Securities and Exchange Commission (the "Commission") in
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accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-1 (File No. 333-48209) under the Act,
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including prospectuses subject to completion, relating to the Underwritten
Shares. The term "Registration Statement" as used in this Agreement means the
----------------------
registration statement (including all financial schedules and exhibits), as
amended at the time it becomes effective, and as thereafter amended by post-
effective amendment. The term "Prospectuses" as used in this Agreement means
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the prospectuses in the forms included in the Registration Statement or, if the
prospectuses included in the Registration Statement omit information in reliance
on Rule 430A under the Act and such information is included in prospectuses
filed with the Commission pursuant to Rule 424(b) under the Act, the term
"Prospectuses" as used in this Agreement means the prospectuses in the forms
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included in the Registration Statement as supplemented by the addition of the
Rule 430A information contained in the prospectuses filed with the Commission
pursuant to Rule 424(b). The term "Prepricing Prospectuses" as used in this
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Agreement means the prospectuses subject to completion in the forms included in
the Registration Statement at the time of the initial filing of the Registration
Statement with the Commission, and as such prospectuses shall have been amended
from time to time prior to the date of the Prospectuses.
It is understood that two forms of Prepricing Prospectus and two forms of
Prospectus are to be used in connection with the offering and sale of the
Underwritten Shares: a Prepricing Prospectus and a Prospectus relating to the
Shares that are to be offered and sold in the United States or Canada to U.S. or
Canadian Persons (the "U.S. Prepricing Prospectus" and the "U.S. Prospectus,"
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respectively), and a Prepricing Prospectus and a Prospectus relating to the Firm
International Shares that are to be offered and sold outside the United States
or Canada to persons other than U.S. or Canadian Persons (the "International
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Prepricing Prospectus" and the "International Prospectus," respectively). The
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U.S. Prospectus and the International Prospectus are herein collectively
referred to as the "Prospectuses," and the U.S. Prepricing Prospectus and the
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International Prepricing Prospectus are herein called the "Prepricing
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Prospectuses." For purposes of this Agreement: "Rules and Regulations" means
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the rules and regulations adopted by the Commission under either the Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as applicable;
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"U.S. or Canadian Person" means any resident or national of the United States or
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Canada, any corporation, partnership or other entity created or organized in or
under the laws of the United States or Canada or any estate or trust the income
of which is subject to United States or Canadian income taxation regardless of
the source of its income (other than the foreign branch of any U.S. or Canadian
Person), and includes any United States or Canadian branch of a person other
than a U.S. or Canadian Person; "United States" means the United States of
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America (including the states thereof and the District of Columbia) and its
territories, its possessions and other areas subject to its jurisdiction; and
"Canada" means Canada and its territories, its possessions and other areas
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subject to its jurisdiction.
2. Agreements to Sell and Purchase. The Company hereby agrees, subject
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to all the terms and conditions set forth herein, to issue and sell to each U.S.
Underwriter and, upon the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions set forth herein, each U.S. Underwriter agrees, severally and not
jointly, to purchase from the
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Company, at a purchase price of $_____ per Share (the "purchase price per
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share"), the number of Firm Shares set forth opposite the name of such U.S.
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Underwriter in Schedule I hereto (or such number of Firm Shares increased as set
forth in Section 10 hereof).
The Company also agrees, subject to all the terms and conditions set forth
herein, to sell to the U.S. Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, the U.S. Underwriters
shall have the right to purchase from the Company, at the purchase price per
share, pursuant to an option (the "over-allotment option") which may be
---------------------
exercised at any time and from time to time prior to 5:00 P.M., New York City
time, on the 30th day after the date of the U.S. Prospectus (or, if such 30th
day shall be a Saturday or Sunday or a holiday, on the next business day
thereafter when the Nasdaq National Market is open for trading), up to an
aggregate of 1,500,000 Additional Shares. Additional Shares may be purchased
only for the purpose of covering over-allotments made in connection with the
offering of the Firm Shares. Upon any exercise of the over-allotment option,
each U.S. Underwriter, severally and not jointly, agrees to purchase from the
Company the number of Additional Shares (subject to such adjustments as you may
determine in order to avoid fractional shares) that bears the same proportion to
the number of Additional Shares to be purchased by the U.S. Underwriters as the
number of Firm Shares set forth opposite the name of such U.S. Underwriter in
Schedule I hereto (or such number of Firm Shares increased as provided for in
Section 10 hereof) bears to the aggregate number of Firm Shares.
3. Terms of Public Offering. The Company has been advised by you that
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the U.S. Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and initially
to offer the Shares upon the terms set forth in the U.S. Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the U.S.
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Underwriters of and payment for the Firm Shares shall be made at the office of
Xxxxxx and Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M.,
New York City time, on _____ ____, 1998 (the "Closing Date"). The place of
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closing for the Firm Shares and the Closing Date may be varied by agreement
between you and the Company.
Delivery to the U.S. Underwriters of and payment for any Additional Shares
to be purchased by the U.S. Underwriters shall be made at the aforementioned
office of Xxxxxx & Xxxxxxx at such time on such date (the "Option Closing
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Date"), which may be the same as the Closing Date but shall in no event be
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earlier than the Closing Date nor earlier than two nor later than ten business
days after the giving of the notice hereinafter referred to, as shall be
specified in a written notice from you on behalf of the U.S. Underwriters to the
Company of the U.S. Underwriters' determination to purchase a number, specified
in such notice, of Additional Shares. The place of closing for any Additional
Shares and the Option Closing Date for such Shares may be varied by agreement
between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 9:30 A.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Option Closing Date, as the case may be, against payment of the purchase
price therefor in immediately available funds.
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5. Agreements of the Company. The Company agrees with the several U.S.
-------------------------
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
Company will endeavor to cause the Registration Statement or such post-effective
amendment to become effective as soon as possible and will advise you promptly
and, if requested by you, will confirm such advice in writing, when the
Registration Statement or such post-effective amendment has become effective.
(b) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, the Prepricing
Prospectuses or the Prospectuses or for additional information; (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in paragraph (f)
below, of the happening of any event which makes any statement of a material
fact made in the Registration Statement or the Prospectuses untrue or which
requires the making of any additions to or changes in the Registration Statement
or the Prospectuses in order to state a material fact required by the Act or the
regulations thereunder to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Prospectuses to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you, without charge, four signed
copies of the Registration Statement as originally filed with the Commission and
of each amendment thereto, including financial statements and all exhibits
thereto, and will also furnish to you, without charge, such number of conformed
copies of the Registration Statement as originally filed and of each amendment
thereto, but without exhibits, as you may request.
(d) The Company will not (i) file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectuses of which you
shall not previously have been advised or to which you shall object after being
so advised or (ii) so long as, in the written opinion of counsel for the U.S.
Underwriters, a prospectus is required to be delivered in connection with sales
by any U.S. Underwriter or dealer, file any information, documents or reports
pursuant to the Exchange Act, without delivering a copy of such information,
documents or reports to you, as Representatives of the U.S. Underwriters, prior
to or concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the Company
has delivered to you, without charge, in such quantities as you have requested,
copies of each form of the U.S. Prepricing Prospectus. The Company consents to
the use, in accordance with the provisions of the Act and with the securities or
Blue Sky laws of the jurisdictions in which the Shares are offered by the
several U.S. Underwriters and by dealers, prior to the date of the U.S.
Prospectus, of each U.S. Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the written
opinion of counsel for the U.S. Underwriters a prospectus is required by the Act
to be delivered in connection with sales by any U.S. Underwriter or dealer,
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the Company will expeditiously deliver to each U.S. Underwriter and each dealer,
without charge, as many copies of the U.S. Prospectus as you may request. The
Company consents to the use of the U.S. Prospectus in accordance with the
provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Shares are offered by the several U.S. Underwriters
and by all dealers to whom Shares may be sold, both in connection with the
offering and sale of the Shares and for such period of time thereafter as the
U.S. Prospectus is required by the Act to be delivered in connection with sales
by any U.S. Underwriter or dealer. If during such period of time any event shall
occur that in the judgment of the Company or in the opinion of counsel for the
U.S. Underwriters is required to be set forth in the U.S. Prospectus or should
be set forth therein in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if it is
necessary to supplement or amend the U.S. Prospectus to comply with the Act or
any other law, the Company will forthwith prepare and, subject to the provisions
of paragraph (d) above, file with the Commission an appropriate supplement or
amendment thereto and will expeditiously furnish to the U.S. Underwriters and
dealers a reasonable number of copies thereof.
(g) The Company will cooperate with you and with counsel for the U.S.
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several U.S. Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may designate and will
file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided that
in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now so
subject.
(h) The Company will make generally available to its security holders
a consolidated earnings statement, which need not be audited, covering a twelve-
month period commencing after the effective date of the Registration Statement
and ending not later than 15 months thereafter, as soon as practicable after the
end of such period, which consolidated earnings statement shall satisfy the
provisions of Section 11(a) of the Act.
(i) During the period of five years after the date of this Agreement,
the Company will (i) make generally available a copy of each report of the
Company mailed to stockholders or filed with the Commission or the Nasdaq
National Market and will promptly notify you of such mailing or filing and (ii)
furnish to you from time to time such other information concerning the Company
and its Subsidiaries as you may request.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 10 hereof or by notice given by you terminating this
Agreement pursuant to Section 10 or Section 11 hereof) or if this Agreement
shall be terminated by the U.S. Underwriters because of any failure or refusal
on the part of the Company to comply with the terms or fulfill any of the
conditions of this Agreement, the Company agrees to reimburse the
Representatives for all out-of-pocket expenses (including fees and expenses of
counsel for the U.S. Underwriters) incurred by you in connection herewith.
(k) The Company will apply the net proceeds from the sale of the
Shares substantially in accordance with the description set forth in the
Prospectuses.
(l) If Rule 430A of the Act is employed, the Company will timely file
the Prospectuses pursuant to Rule 424(b) under the Act and will advise you of
the time and manner of such filing.
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(m) For a period of 180 days after the date hereof (the "Lock-up
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Period"), the Company will not, without the prior written consent of Xxxxx
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Barney Inc., offer, sell, contract to sell or otherwise dispose of any Common
Stock (or any securities convertible into or exchangeable for Common Stock) or
grant any options or warrants to purchase Common Stock, except for (i) sales to
the U.S. Underwriters pursuant to this Agreement and the Managers pursuant to
the International Underwriting Agreement, (ii) the issuance of shares to
Adelphia Communications Corporation (the "Parent") in connection with the
Adelphia Note Contribution (as defined in the Prospectuses) and (iii) the
issuance of shares to the Parent in connection with the Adelphia Share Purchase
(as defined in the Prospectuses); (iv) the issuance of options or grants under
the Company's Long-Term Incentive Compensation Plan; (v) the issuance of the
Adelphia Warrant (as defined in the Prospectuses); (vi) the issuance of the
Additional MCI Warrants (as defined in the Prospectuses) required to be issued
by the Company in accordance with the Company's agreement with MCImetro Access
Transmission Services, Inc.; (vii) the issuance of shares pursuant to the
exercise of warrants and options described in clauses (vi), (v) and (vi), the
MCI Warrant (as defined in the Prospectuses) and the Xxxxxxx Warrant (as defined
in the Prospectuses); (viii) the issuance of Class B Common Stock upon the
exercise of outstanding Class B Warrants (as defined in the Prospectuses); and
(ix) the issuance of shares upon the conversion of Class B Common Stock.
(n) The Company has furnished or will furnish to you "lock-up"
letters, in form and substance satisfactory to you, signed by the Parent and
each of the Company's stockholders set forth on Schedule II hereto.
(o) Except as stated in this Agreement and in the International
Underwriting Agreement and in the Prepricing Prospectuses and Prospectuses, the
Company has not taken, nor will it take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate the
sale or resale of the Shares.
(p) The Company will use its best efforts to have the Common Stock
listed, subject to notice of issuance, on the Nasdaq National Market
concurrently with the effectiveness of the Registration Statement.
6. Representations and Warranties of the Company. The Company represents
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and warrants to each U.S. Underwriter that:
(a) Each U.S. Prepricing Prospectus included as part of the
Registration Statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the Act; except that
this representation and warranty does not apply to statements in or omissions
from such U.S. Prepricing Prospectus made in reliance upon and in conformity
with information relating to any U.S. Underwriter or Manager furnished to the
Company in writing by a U.S. Underwriter through the Representatives or by a
Manager through the Lead Managers expressly for use therein. The Commission has
not issued any order preventing or suspending the use of any Prepricing
Prospectus.
(b) The Registration Statement in the form in which it became or
becomes effective and also in such form as it may be when any post-effective
amendment thereto shall become effective and the Prospectuses and any supplement
or amendment thereto when filed with the Commission under Rule 424(b) under the
Act, complied or will comply in all material respects with the provisions of the
Act and did not or will not at any such times 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; except that this
representation and warranty does not apply to statements in or omissions from
the Registration Statement or
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the Prospectuses made in reliance upon and in conformity with information
relating to any U.S. Underwriter or Manager furnished to the Company in writing
by a U.S. Underwriter through the Representatives or by a Manager through the
Lead Managers expressly for use therein.
(c) All the outstanding shares of Common Stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and
are free of any preemptive or similar rights; the Shares have been duly
authorized and, when issued and delivered to the U.S. Underwriters against
payment therefor in accordance with the terms hereof, will be validly issued,
fully paid and nonassessable and free of any preemptive or similar rights; and
the capital stock of the Company conforms to the description thereof in the
Registration Statement and the Prospectuses.
(d) 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.
(e) Each of this Agreement and the International Underwriting
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, except insofar as
indemnification and contribution provisions may be limited by applicable law or
public policy or equitable principles and subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of equity.
(f) Each of the Company and its Subsidiaries (as defined) (A) has been
duly organized, is validly existing as a corporation or limited liability
company, as applicable, in good standing under the laws of its respective
jurisdiction of formation, (B) has all requisite corporate or limited liability
company power and authority to carry on its business as it is currently being
conducted and as described in the Registration Statement and the Prospectuses
and to own, lease and operate its properties and (C) is duly qualified and in
good standing as a foreign corporation or limited liability company, as
applicable, and is 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 this clause (C), where the failure of the
Company and its Subsidiaries 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 assets, liabilities, business, results of
operations, condition (financial or otherwise), cash flows, affairs or prospects
of the Company and the Subsidiaries, taken as a whole, (y) interfere with or
adversely affect the issuance or marketability of the Common Stock or (z) in any
manner draw into question the validity of this Agreement or the ability to
conduct its business in the manner set forth in the Registration Statements and
the Prospectuses (any of the events set forth in clauses (x), (y) or (z), a
"Material Adverse Effect"). The Company has no direct or indirect subsidiaries
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as of the Closing Date other than those set forth on Schedule III hereto
(referred to herein collectively as "Subsidiaries" and individually as a
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"Subsidiary").
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(g) Each of the Joint Ventures (as defined) (A) has been duly formed
as a partnership, limited liability company or corporation, as applicable, under
the laws of its respective jurisdiction of formation, (B) has all requisite
partnership, limited liability company or corporate power and authority, as
applicable, to carry on its business as it is currently being conducted and as
described in the Registration Statement and the Prospectuses and to own, lease
and operate its properties and (C) is duly qualified and in good standing as a
foreign partnership, limited liability company or corporation, as applicable,
authorized to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property
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requires such qualification except, with respect to this clause (C), where the
failure to be so qualified or in good standing does not and could not reasonably
be expected to result in a Material Adverse Effect. Neither the Company nor its
Subsidiaries has any ownership interest in any Joint Venture other than those
set forth on Schedule IV hereto (referred to herein collectively as "Joint
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Ventures" and individually a "Joint Venture").
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(h) All of the outstanding capital stock of each Subsidiary is owned
by the Company, free and clear of any security interest, claim, lien,
limitations on voting rights or other charge or encumbrance, other than security
interests, claims, liens, limitation on voting rights or other charges or
encumbrances arising from the pledge of the capital stock of ______, ______,
______, and _____, as security for the Company's 12 1/4% Senior Secured Notes
due 2004. Except as disclosed in the Prospectuses, there are not currently, and
will not be as a result of the transactions contemplated hereby, 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, any Subsidiary or any Joint Venture.
(i) None of the Company, the Subsidiaries or the Joint Ventures is
and, after giving effect to the transactions contemplated hereby will be (A) in
violation of its charter, bylaws, partnership agreement or operating agreement,
as applicable, (B) 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 (C) in violation of any local, state or Federal law, statute, ordinance,
rule, regulation, requirement, judgment or court decree (including, without
limitation, the Communications Act of 1934, as amended by the Telecommunications
Act of 1996 (the "Telecommunications Act"), and the rules and regulations of the
----------------------
Federal Communications Commission (the "FCC") and environmental laws, statutes,
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ordinances, rules, regulations, judgments or court decrees) applicable to the
Company, any Subsidiary, any Joint Venture or any of their respective assets or
properties (whether owned or leased) other than, in the case of clauses (B) and
(C), any default or violation that could not reasonably be expected to have a
Material Adverse Effect. There exists no condition that, with notice, the
passage of time or otherwise, would constitute a default under any such document
or instrument that could reasonably be expected to have a Material Adverse
Effect.
(j) 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 threatened or contemplated to which the Company, any of the
Subsidiaries or any of the Joint Ventures is or may be a party or to which the
business or property of the Company, any Subsidiary or any Joint Venture is
subject, (ii) no local, state or Federal law, statute, ordinance, rule,
regulation, requirement, judgment or court decree (including, without
limitation, the Telecommunications Act and the rules and regulations of the FCC)
or order that has been enacted, adopted or issued by any governmental agency or,
to the best of the Company's knowledge, 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, any Subsidiary or any Joint Venture is or could reasonably be
expected to be subject or to which the business, assets, or property of the
Company, any Subsidiary or any Joint Venture are could reasonably be expected to
be subject, that, in the case of clauses (i), (ii) and (iii) above, (y) is
required to be disclosed in the Registration Statement or the Prospectuses and
that is not so disclosed, or (z) could reasonably be expected to individually or
in the aggregate, result in a Material Adverse Effect.
(k) Neither the issuance and sale of the Shares, the execution,
delivery or performance by the Company of this Agreement or the International
Underwriting Agreement by the Company, or the consummation by the Company of the
transactions contemplated hereby and thereby violate, conflict with
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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, any Subsidiary or any Joint
Venture, or an acceleration of any indebtedness of the Company, any Subsidiary
or any Joint Venture pursuant to, (i) the charter or bylaws of the Company or
any Subsidiary or the partnership agreement or operating agreement governing any
Joint Venture, (ii) any bond, debenture, note, indenture, mortgage, deed of
trust or other agreement or instrument to which the Company, any Subsidiary or
any Joint Venture is a party or by which any of them or their property is or may
be bound, (iii) any local, state or Federal law, statute, ordinance, rule,
regulation or requirement (including, without limitation, the Telecommunications
Act and the rules and regulations of the FCC and environmental laws, statutes,
ordinances, rules or regulations) applicable to the Company, any Subsidiary, any
Joint Venture or any of their respective assets or properties or (iv) any
judgment, order or decree of any court or governmental agency or authority
having jurisdiction over the Company, the Subsidiaries, the Joint Ventures or
any of their assets or properties, except in the case of clauses (ii), (iii) and
(iv) for such violations conflicts, breaches, defaults, consents, impositions of
liens or accelerations that would not singly, or in the aggregate, have a
Material Adverse Effect. Other than as described in the Prospectuses, no
consent, approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, (A) any court or governmental
agency, body or administrative agency (including, without limitation, the FCC)
or (B) any other person is required for (1) the execution, delivery and
performance by the Company of this Agreement or the International Underwriting
Agreement or (2) the issuance and sale of the Shares and the transactions
contemplated hereby and thereby, except (x) such as have been obtained and made
under the Act and state securities or Blue Sky laws and regulations or such as
may be required by the NASD or (y) where the failure to obtain any such consent,
approval, authorization or order of, or filing registration, qualification,
license or permit would not reasonably be expected to result in a Material
Adverse Effect.
(l) The accountants who have certified or shall certify the financial
statements included in the Registration Statement and the Prospectuses are
independent public accountants as required by the Act. The historical financial
statements of the Company and each of the Subsidiaries comply as to form in all
material respects with the requirements applicable to registration statements on
Form S-1 under the Act and present fairly in all material respects the financial
position and results of operations of the Company and each of its Subsidiaries,
at the respective dates and for the respective 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 other financial information and data included in the
Registration Statement and Prospectuses, historical and pro forma, are
accurately presented in all material respects and prepared on a basis consistent
with the financial statements, historical and pro forma, included in the
Prospectuses and the books and records of the Company, each of its Subsidiaries
and each of its Joint Ventures, as applicable. The statistical information and
data included in the Prospectuses are accurately presented in all material
respects.
(m) The financial statements, together with related schedules and
notes, included in the Registration Statement and the Prospectuses, present
fairly the consolidated financial position, results of operations and changes in
financial position of the Company and the Subsidiaries on the basis stated in
the Registration Statement at the respective dates or for the respective periods
to which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data included
in the Registration Statement and the Prospectuses are accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company and the Subsidiaries.
9
(n) Except as disclosed in the Registration Statement and the
Prospectuses, subsequent to the respective dates as of which such information is
given in the Registration Statement and the Prospectuses, (i) none of the
Company, any Subsidiary or any Joint Venture has incurred any liabilities or
obligations, direct or contingent, which are material, individually or in the
aggregate, to the Company, the Subsidiaries and the Joint Ventures taken as a
whole, not entered into any transaction not in the ordinary course of business,
(ii) there has not been, singly or in the aggregate, any change or development
which could reasonably be expected to result in a Material Adverse Effect, (iii)
there has been no dividend or distribution of any kind declared, paid or made by
the Company or its Subsidiaries on any class of capital stock and (iv) there has
been no distribution of profits or return of capital contribution by any Joint
Venture.
(o) The Company has not distributed and, prior to the later to occur
of (i) the Closing Date and (ii) completion of the distribution of the Shares,
will not distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, the Prepricing
Prospectuses, the Prospectuses or other materials, if any, permitted by the Act.
(p) There is (i) no unfair labor practice complaint pending against
the Company, or any Joint Venture or threatened, 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 or threatened against the Company, any Subsidiary or any Joint Venture,
(ii) no significant strike, labor dispute, slowdown or stoppage pending against
the Company, any Subsidiary or any Joint Venture threatened against the Company,
any Subsidiary or the Joint Venture and (iii) no union representation question
existing with respect to the employees of the Company, any Subsidiary or any
Joint Venture that, in the case of clauses (i), (ii) or (iii), could reasonably
be expected to result in a Material Adverse Effect. To the best of the
Company's knowledge, no collective bargaining organizing activities are taking
place with respect to the Company, the Subsidiaries or the Joint Ventures. None
of the Company, any Subsidiary or any Joint Venture 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
("ERISA"), or the rules and regulations thereunder, which in the case of clause
-----
(A), (B) or (C) above could reasonably be expected to result in a Material
Adverse Effect.
(q) None of the Company, any Subsidiary or any Joint Venture 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 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.
(r) Each of the Company, the Subsidiaries and the Joint Ventures has
(i) good and marketable title to all of the properties and assets described in
the Prospectuses as owned by it, free and clear of all liens, charges,
encumbrances and restrictions, except such as are described in the Prospectuses
or as would not have a Material Adverse Effect, (ii) peaceful and undisturbed
possession under all leases to which any of them 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 (including, without limitation, the FCC), all self-
regulatory authorities and all courts and other tribunals (each an
"Authorization") necessary to engage in the business as presently conducted by
-------------
any of them in the manner described in the Prospectuses, except as described in
the Prospectuses or where failure
10
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, the Subsidiaries and the Joint
Ventures is in compliance with the terms and conditions of all such
Authorizations and with the rules and regulations of the regulatory authorities
having jurisdiction with respect thereto. All leases to which the Company, the
Subsidiaries and the Joint Ventures is a party are valid and binding and no
default by the Company, any Subsidiary or any Joint Venture has occurred and is
continuing thereunder and no defaults by the landlord are existing under any
such lease that could reasonably be expected to result in a Material Adverse
Effect.
(s) Each of the Company, the Subsidiaries and the Joint Ventures owns,
possesses or has the right to employ all patents, patent rights, licenses
(including all FCC, state, local or other jurisdictional 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 the Company, its Subsidiaries or the Joint
--------
Ventures in connection with the businesses now operated by it or which are
proposed to be operated by the Company, its Subsidiaries or the Joint Ventures
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, any Subsidiary or any Joint Venture has
received any notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing except as could not reasonably be
expected to have a Material Adverse Effect. The use of the Intellectual
Property in connection with the business and operations of the Company, the
Subsidiaries and the Joint Ventures does not infringe on the rights of any
person, except would not have a Material Adverse Effect.
(t) None of the Company, any Subsidiary, any Joint Venture or any of
their respective officers, directors, partners, employees, agents or affiliates
or any other person acting on behalf of the Company, any Subsidiary or any Joint
Venture, as the case may be, 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, any Subsidiary or any Joint Venture (or
assist the Company, any Subsidiary or any Joint Venture in connection with any
actual or proposed transaction) which (i) might subject the Company, any
Subsidiary or any Joint Venture, 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, could reasonably be
expected to have had a Material Adverse Effect on the assets, business or
operations of the Company, any Subsidiary or any Joint Venture or (iii) if not
continued in the future, could reasonably be expected to have a Material Adverse
Effect.
(u) All tax returns required to be filed by the Company, each of the
Subsidiaries and each of the Joint Ventures in all jurisdictions have been so
filed. All taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due from such entities
or that are due and payable have been paid, other than those being contested in
good faith and for which adequate reserves have been provided or those currently
payable without penalty or interest. There are no proposed additional tax
assessments against the Company, any Subsidiary, any Joint Venture or the assets
or property of the Company, any Subsidiary or any Joint Venture.
11
(v) None of the Company, the Subsidiaries or the Joint Ventures is
now, and after sale of the Shares to be sold by the Company hereunder and
application of the net proceeds from such sale as described in the Prospectuses
under the caption "Use of Proceeds" will not be (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 (the "PUC Act").
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(w) Except as disclosed in the Prospectuses, there are no holders of
securities of the Company, the Subsidiaries or the Joint Ventures who, by reason
of the filing of the Registration Statement or consummation of the transactions
contemplated by this Agreement or the International Underwriting Agreement, have
the right to request or demand that the Company, any of the Subsidiaries or any
of the Joint Ventures register any of its securities (including, without
limitation, Class A Common Stock and Class B Common Stock) under the Act. No
such rights with respect to any shares of Class A Common Stock were exercised
and will not be exercised in connection with the sale of the Shares for a period
of 180 days after the date hereof.
(x) Each of the Company, the Subsidiaries and the Joint Ventures
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 thereto.
(y) Each of the Company, the Subsidiaries and the Joint Ventures
maintains insurance covering its properties, operations, personnel and
businesses. Such insurance insures against such losses and risks as are
adequate in accordance with customary industry practice to protect the Company,
the Subsidiaries, the Joint Ventures and their respective businesses. None of
the Company, any Subsidiary or any Joint Venture 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.
(z) None of the Company, any Subsidiary or any Joint Venture 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 to facilitate the sale or resale of the Class A
Common Stock, (ii) since the date of the Prospectuses, (A) sold, bid for,
purchased or paid any person any compensation for soliciting purchases of the
Common Stock or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(aa) Set forth on Exhibit A hereto is a list of each employee pension
---------
or benefit plan with respect to which the Company or any corporation considered
an affiliate of the Company within the meaning of Section 407(d)(7) of ERISA (an
"ERISA Affiliate") is a party in interest or disqualified person. The execution
---------------
and delivery of this Agreement and the issuance and sale of the Shares will not
involve any prohibited transaction within the meaning of Section 406 of ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended.
12
(bb) None of (A) the execution, delivery and performance of this
Agreement or the International Underwriting Agreement, (B) the issuance and sale
of the Shares, (C) the application of the proceeds from the issuance and sale of
the Shares or (D) the consummation of the transactions contemplated in
connection with any of the foregoing as set forth in the Prospectuses, will
violate Regulations G, T, U or X promulgated by the Board of Governors of the
Federal Reserve System or analogous foreign laws and regulations.
(cc) Except pursuant to this Agreement, there are no contracts,
agreements or understandings between the Company, any of its Subsidiaries or any
of its Joint Ventures and any other person that would give rise to a valid claim
against the Company or any of the U.S. Underwriters for a brokerage commission,
finder's fee or like payment in connection with the issuance, purchase and sale
of the Common Stock.
(dd) The Company has filed in a timely manner each document or report
required to be filed by it pursuant to the Exchange Act and the rules and
regulations thereunder; each such document or report at the time it was filed
conformed to the requirements of the Exchange Act and the rules and regulations
thereunder; and none or such documents or reports contained an untrue statement
of any material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(ee) Each of the Company, the Subsidiaries and the Joint Ventures has
complied with all provisions of Section 517.075, Florida Statutes, relating to
doing business with the Government of Cuba or with any affiliate located in
Cuba.
(ff) Except as disclosed in the Prospectuses, there are no business
relationships or related party transactions required to be disclosed therein
pursuant to Item 404 of Regulation S-K of the Commission.
The Company acknowledges that the U.S. Underwriters and, for purposes
of the opinions to be delivered to the U.S. Underwriters pursuant to Section
8(e), (f) and (g) hereof, counsel to the Company and counsel to the U.S.
Underwriters, will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
7. Indemnification and Contribution. (a) The Company agrees to indemnify
--------------------------------
and hold harmless each of you and each other U.S. Underwriter and each person,
if any, who controls any U.S. Underwriter within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any U.S. Prepricing Prospectus
or in the Registration Statement or the U.S. Prospectus or in any amendment or
supplement thereto, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based upon
any untrue statement or omission or alleged untrue statement or omission which
has been made therein or omitted therefrom in reliance upon and in conformity
with the information relating to such U.S. Underwriter or Manager furnished in
writing to the Company by any U.S. Underwriter through the Representatives and
by any Manager through the Lead Managers expressly for use in connection
therewith; provided, however, that the indemnification contained in this
paragraph (a) with respect to any U.S. Prepricing Prospectus shall not inure to
the benefit of any U.S. Underwriter (or to the benefit of any person controlling
such U.S. Underwriter) on account of any such loss, claim, damage, liability or
expense arising
13
from the sale of the Shares by such U.S. Underwriter to any person if a copy of
the U.S. Prospectus shall not have been delivered or sent to such person within
the time required by the Act and the regulations thereunder, and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such U.S. Prepricing Prospectus was corrected in the
U.S. Prospectus, provided that the Company has delivered the U.S. Prospectus to
the several U.S. Underwriters in requisite quantity on a timely basis to permit
such delivery or sending. The foregoing indemnity agreement shall be in addition
to any liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against any U.S.
Underwriter or any person controlling any U.S. Underwriter in respect of which
indemnity may be sought against the Company, such U.S. Underwriter or such
controlling person shall promptly notify the Company, and the Company shall
assume the defense thereof, including the employment of counsel and payment of
all fees and expenses. Such U.S. Underwriter or any such controlling person
shall have the right to employ separate counsel in any such action, suit or
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such U.S. Underwriter or such
controlling person unless (i) the Company has agreed in writing to pay such fees
and expenses, (ii) the Company has failed to assume the defense and employ
counsel, or (iii) the named parties to any such action, suit or proceeding
(including any impleaded parties) include both such U.S. Underwriter or such
controlling person, and the Company and such U.S. Underwriter or such
controlling person shall have been advised by its counsel that representation of
such indemnified party and the Company by the same counsel would be
inappropriate under applicable standards of professional conduct (whether or not
such representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the Company shall not
have the right to assume the defense of such action, suit or proceeding on
behalf of such U.S. Underwriter or such controlling person). It is understood,
however, that the Company shall, in connection with any one such action, suit or
proceeding or separate but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
all such U.S. Underwriters and controlling persons not having actual or
potential differing interests with you or among themselves, which firm shall be
designated in writing by Xxxxx Xxxxxx Inc., and that all such fees and expenses
shall be reimbursed as they are incurred. The Company shall not be liable for
any settlement of any such action, suit or proceeding effected without its
written consent, but if settled with such written consent, or if there be a
final judgment for the plaintiff in any such action, suit or proceeding, the
Company agrees to indemnify and hold harmless any U.S. Underwriter, to the
extent provided in the preceding paragraph, and any such controlling person from
and against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
(c) Each U.S. Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, to the
same extent as the foregoing indemnity from the Company to each U.S.
Underwriter, but only with respect to information relating to such U.S.
Underwriter furnished in writing by or on behalf of such U.S. Underwriter
through the Representatives expressly for use in the Registration Statement, the
U.S. Prospectus or any U.S. Prepricing Prospectus, or any amendment or
supplement thereto. If any action, suit or proceeding shall be brought against
the Company, any of its directors, any such officer, or any such controlling
person based on the Registration Statement, the U.S. Prospectus or any U.S.
Prepricing Prospectus, or any amendment or supplement thereto, and in respect of
which indemnity may be sought against any U.S. Underwriter pursuant to this
paragraph (c), such U.S. Underwriter shall have the rights and duties given to
the Company by paragraph (b) above (except that if the Company shall have
assumed the defense thereof such U.S. Underwriter shall not be required to do
so, but may employ separate counsel therein and participate in the
14
defense thereof, but the fees and expenses of such counsel shall be at such U.S.
Underwriter's expense), and the Company, its directors, any such officer, and
any such controlling person shall have the rights and duties given to the U.S.
Underwriters by paragraph (b) above. The foregoing indemnity agreement shall be
in addition to any liability which the U.S. Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 7 is unavailable to
an indemnified party under paragraphs (a) or (c) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the U.S. Underwriters on the other hand from the offering of
the Shares, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the U.S. Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the U.S. Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the U.S. Underwriters, in each case as set forth in the
table on the cover page of the U.S. Prospectus. The relative fault of the
Company on the one hand and the U.S. Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or by the U.S. Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Company and the U.S. Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by a
pro rata allocation (even if the U.S. Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 7, no U.S.
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price of the Shares underwritten by it and distributed to the
public exceeds the amount of any damages which such U.S. Underwriter has
otherwise been required to pay by reason of 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 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The U.S. Underwriters' obligations to contribute pursuant to
this Section 7 are several in proportion to the respective numbers of Firm
Shares set forth opposite their names in Schedule I hereto (or such numbers of
Firm Shares increased as set forth in Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding.
15
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any U.S. Underwriter or any person
controlling any U.S. Underwriter, the Company, its directors or officers, or any
person controlling the Company, (ii) acceptance of any Shares and payment
therefor hereunder, and (iii) any termination of this Agreement. A successor to
any U.S. Underwriter or any person controlling any U.S. Underwriter, or to the
Company, its directors or officers, or any person controlling the Company, shall
be entitled to the benefits of the indemnity, contribution, and reimbursement
agreements contained in this Section 7.
8. Conditions of U.S. Underwriters' Obligations. The several obligations
--------------------------------------------
of the U.S. Underwriters to purchase the Firm Shares hereunder are subject to
the following conditions:
(a) All of the representations and warranties of the Company contained
in this Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date.
(b) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
(including pursuant to Rule 462(b)) to be declared effective before the offering
of the Shares may commence, the Registration Statement or such post-effective
amendment shall have become effective not later than 5:30 P.M., New York City
time, on the date hereof, or at such later date and time as shall be consented
to in writing by you, and all filings, if any, required by Rules 424 and 430A
under the Act shall have been timely made; no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceeding for that purpose shall have been instituted or, to the knowledge of
the Company or any U.S. Underwriter, threatened by the Commission, and any
request of the Commission for additional information (to be included in the
Registration Statement or the Prospectuses or otherwise) shall have been
complied with to your satisfaction.
(c) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, that would have a Material Adverse Effect on the Company, the
Subsidiaries and the Joint Ventures, taken as a whole, not contemplated by the
Prospectuses, which in your opinion, as Representatives of the several U.S.
Underwriters, would materially adversely affect the market for the Shares, or
(ii) any event or development relating to or involving the Company, the
Subsidiaries, the Joint Ventures or any officer or director of the Company which
makes any statement made in the Prospectuses untrue or which, in the opinion of
the Company and its counsel or the U.S. Underwriters and their counsel, requires
the making of any addition to or change in the Prospectuses in order to state a
material fact required by the Act or any other law to be stated therein or
necessary in order to make the statements therein not misleading, if amending or
supplementing the Prospectuses to reflect such event or development would, in
your opinion, as Representatives of the several U.S. Underwriters, materially
adversely affect the market for the Shares.
(d) You shall have received a certificate, dated the Closing Date,
signed on behalf of the Company by (i) the President or a Vice Chairman and (ii)
a Vice President, Vice Chairman, Secretary or Assistant Secretary, in form and
substance reasonably satisfactory to you, confirming, as of the Closing Date,
the matters set forth in paragraphs (a), (b), and (c) of this Section 8, certain
incumbency matters and that, as of the Closing Date, the obligations of the
Company to be performed hereunder on or prior thereto have been duly performed.
16
(e) You shall have received on the Closing Date, an opinion, dated the
Closing Date, in form and substance satisfactory to you, of Xxxxxxxx Xxxxxxxxx,
counsel for the Company, to the effect set forth in Exhibit B hereto.
---------
(f) You shall have received on the Closing Date an opinion, dated the
Closing Date, in form and substance satisfactory to you, of Xxxxxxx & Berlin,
special regulatory counsel to the Company, to the effect set forth in Exhibit C
---------
hereto.
(g) You shall have received an opinion, dated the Closing Date, in
form and substance reasonably satisfactory to you, of Xxxxxx & Xxxxxxx, counsel
to the Representatives of the Underwriters, covering such matters as are
customarily covered in such opinions.
(h) At the time this Agreement is executed and at the Closing Date,
you shall have received from Deloitte & Touche, independent public accountants
for the Company dated as of the date of this Agreement and of the Closing Date,
respectively, a customary comfort letter addressed to the you and in form and
substance satisfactory to you with respect to the financial statements and
certain financial information of the Company, the Subsidiaries and the Joint
Ventures contained in the Registration Statement and the Prospectuses.
(i)(i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of the Company, shall be contemplated by the
Commission at or prior to the Closing Date; (ii) there shall not have been any
change in the capital stock of the Company nor any material increase in the
short-term or long-term debt of the Company (other than in the ordinary course
of business) from that set forth or contemplated in the Registration Statement
or the Prospectuses; (iii) there shall not have been, since the respective dates
as of which information is given in the Registration Statement and the
Prospectuses, except as may otherwise be stated in the Registration Statement
and, any material adverse change in the condition (financial or other),
business, prospects, properties, net worth or results of operations of the
Company and the Subsidiaries taken as a whole; and (iv) the Company and the
Subsidiaries shall not have any liabilities or obligations, direct or contingent
(whether or not in the ordinary course of business), that are material to the
Company and the Subsidiaries, taken as a whole, other than those reflected in
the Registration Statement or the Prospectuses.
(j) The Company shall not have failed at or prior to the Closing Date
to have performed or complied with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or prior to the
Closing Date.
(k) Xxxxxx & Xxxxxxx shall have been furnished with such documents, in
addition to those set forth above, as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in this
Section 8 and in order to evidence the accuracy, completeness or satisfaction in
all material respects of any of the representations, warranties or conditions
herein contained.
(l) The Shares shall have been listed or approved for listing upon
notice of issuance on the Nasdaq National Market.
(m) The closing under the International Underwriting Agreement shall
have occurred concurrently with the closing hereunder on the Closing Date.
17
(n) The Adelphia Share Purchase shall have occurred in accordance with
the terms and conditions set forth in the letter agreement by which the Parent
and the Company have agreed to effectuate the Adelphia Share Purchase (the
"Adelphia Share Purchase Agreement") and the Adelphia Note Contribution shall
have occurred in accordance with the terms and conditions set forth in the
letter agreement by which the Parent and the Company have agreed to effectuate
the Adelphia Note Contribution (the "Adelphia Note Contribution Agreement").
(o) As set forth in that certain letter of understanding dated April
___, 1998, among the Company, the Parent and MCI (the "MCI Agreement"): (i) the
MCI Warrant (as defined in the Prospectuses) and the Additional MCI Warrants
shall been issued to MCI (as defined in the Prospectuses), (ii) the MCI Warrant
and the Additional MCI Warrants shall have been purchased from MCI by the Parent
and (iii) the Company shall have issued the Adelphia Warrant (as defined in the
Prospectuses) to the Parent.
(p) Prior to the Closing Date, the Company, the Subsidiaries and the
Joint Ventures shall have furnished or caused to be furnished to you such
further certificates and documents as you shall have requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and your counsel.
Any certificate or document signed by any officer of the Company and
delivered to you, as Representatives of the U.S. Underwriters, or to counsel for
the U.S. Underwriters, shall be deemed a representation and warranty by the
Company to each U.S. Underwriter as to the statements made therein.
The several obligations of the U.S. Underwriters to purchase Additional
Shares hereunder are subject to delivery to you on the applicable Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Company, the Subsidiaries and the Joint Ventures, the due
authorization and issuance of such Additional Shares and other matters related
to the issuance of such Additional Shares.
9. Expenses. The Company agrees to pay the following costs and
--------
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Prepricing Prospectuses, the Prospectuses,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, the
Prepricing Prospectuses, the Prospectuses, and all amendments or supplements to
any of them as may be reasonably requested for use in connection with the
offering and sale of the Shares; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares, including
any stamp taxes in connection with the original issuance and sale of the Shares;
(iv) the printing (or reproduction) and delivery of this Agreement, the Blue Sky
Memorandum and all other agreements or documents printed (or reproduced) and
delivered in connection with the offering of the Shares; (v) the registration of
the Class A Common Stock under the Exchange Act and the listing of the Shares on
the Nasdaq National Market; (vi) the registration or qualification of the Shares
for offer and sale under the securities or Blue Sky laws of the several states
as provided in Section 5(g) hereof (including the reasonable fees, expenses and
disbursements of counsel for the U.S. Underwriters relating to the preparation,
printing or reproduction, and delivery of the Blue Sky Memorandum and such
registration and qualification); (vii) the filing fees and the fees and expenses
of counsel for the U.S. Underwriters in connection with any filings required to
be made with the National Association of Securities Dealers, Inc.; (viii) the
transportation and other expenses incurred by or
18
on behalf of Company representatives in connection with presentations to
prospective purchasers of the Shares; (ix) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Company.
10. Effective Date of Agreement. This Agreement shall become
---------------------------
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for the Registration Statement or a post-effective amendment thereto to be
declared effective before the offering of the Shares may commence, when
notification of the effectiveness of the Registration Statement or such post-
effective amendment has been released by the Commission. Until such time as
this Agreement shall have become effective, it may be terminated by the Company,
by notifying you, or by you, as Representatives of the several U.S.
Underwriters, by notifying the Company.
If any one or more of the U.S. Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting U.S.
Underwriter or U.S. Underwriters are obligated but fail or refuse to purchase is
not more than one-tenth of the aggregate number of Shares which the U.S.
Underwriters are obligated to purchase on the Closing Date, each non-defaulting
U.S. Underwriter shall be obligated, severally, in the proportion which the
number of Firm Shares set forth opposite its name in Schedule I hereto bears to
the aggregate number of Firm Shares set forth opposite the names of all non-
defaulting U.S. Underwriters or in such other proportion as you may specify in
accordance with Section 20 of the Master Agreement Among U.S. Underwriters of
Xxxxx Xxxxxx Inc., to purchase the Shares which such defaulting U.S. Underwriter
or U.S. Underwriters are obligated, but fail or refuse, to purchase. If any one
or more of the U.S. Underwriters shall fail or refuse to purchase Shares which
it or they are obligated to purchase on the Closing Date and the aggregate
number of Shares with respect to which such default occurs is more than one-
tenth of the aggregate number of Shares which the U.S. Underwriters are
obligated to purchase on the Closing Date and arrangements satisfactory to you
and the Company for the purchase of such Shares by one or more non-defaulting
U.S. Underwriters or other party or parties approved by you and the Company are
not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting U.S. Underwriter or the
Company. In any such case which does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting U.S. Underwriter from liability
in respect of any such default of any such U.S. Underwriter under this
Agreement. The term "U.S. Underwriter" as used in this Agreement includes, for
all purposes of this Agreement, any party not listed in Schedule I hereto who,
with your approval and the approval of the Company, purchases Shares which a
defaulting U.S. Underwriter is obligated, but fails or refuses, to purchase.
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement. This Agreement shall be subject to
------------------------
termination in your absolute discretion, without liability on the part of any
U.S. Underwriter to the Company, by notice to the Company, if prior to the
Closing Date or any Option Closing Date (if different from the Closing Date and
then only as to the Additional Shares), as the case may be, (i) trading in
securities generally on the New York Stock Exchange, the American Stock Exchange
or the Nasdaq National Market shall have been suspended or materially limited,
(ii) a general moratorium on commercial banking activities in New York or
Philadelphia shall have been declared by either federal or state authorities, or
(iii) there shall have occurred any outbreak or escalation of hostilities or
other international or domestic calamity, crisis or change in
19
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to commence or continue the offering of the Shares
at the offering price to the public set forth on the cover page of the U.S.
Prospectus or to enforce contracts for the resale of the Shares by the U.S.
Underwriters. Notice of such termination may be given to the Company by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
12. Information Furnished by the U.S. Underwriters. The statements set
----------------------------------------------
forth in the last paragraph on the cover page, the stabilization legend on the
inside cover page, and the statements in the first, third, seventh, eighth,
ninth and fifteenth paragraphs under the caption "Underwriting" in any U.S.
Prepricing Prospectus and in the U.S. Prospectus, constitute the only
information furnished by or on behalf of the U.S. Underwriters through you as
such information is referred to in Sections 6(b) and 7 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10 and
-------------
11 hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at Hyperion Telecommunications, Inc., Main at Xxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx, Xx., Vice President, Finance;
or (ii) if to you, as Representatives of the several U.S. Underwriters, care of
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
several U.S. Underwriters, the Company, its directors and officers, and the
other controlling persons referred to in Section 7 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the
term "successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any U.S. Underwriter of any of the Shares in his
status as such purchaser.
14. Applicable Law; Counterparts. This Agreement shall be governed by
----------------------------
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
20
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several U.S. Underwriters.
Very truly yours,
HYPERION TELECOMMUNICATIONS, INC.
By:
-------------------------------------------
Name:
Title:
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
U.S. Underwriters named in Schedule I
hereto.
XXXXX XXXXXX INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
NATIONSBANC XXXXXXXXXX SECURITIES LLC
As Representatives of the Several U.S. Underwriters
By XXXXX XXXXXX INC.
By:
-------------------------------------------
Name:
Title:
21
SCHEDULE I
HYPERION TELECOMMUNICATIONS INC.
U.S. Underwriter Number of Firm Shares
---------------- ---------------------
Xxxxx Xxxxxx Inc.
Credit Suisse First Boston Corporation
NationsBanc Xxxxxxxxxx Securities LLC ________________
TOTAL
22
SCHEDULE II
Xxxxxx X. Xxxxxxxx
Xxxxxxx X Xxxxxxxx
Xxxx X. Xxxxxxxx
Xxxxxxxx X. Xxxxxx
23
SCHEDULE III
------------
SUBSIDIARIES
------------
24
SCHEDULE IV
------------
JOINT VENTURES
--------------
25
EXHIBIT A
---------
LIST OF EMPLOYEE PENSION AND BENEFIT
------------------------------------
PLANS OF HYPERION TELECOMMUNICATIONS, INC.
------------------------------------------
AND ITS SUBSIDIARIES
--------------------
26
EXHIBIT B
---------
FORM OF OPINION OF XXXXXXXX INGERSOLL
-------------------------------------
1. Each of the Company and the Subsidiaries is duly organized and validly
existing as a corporation or limited liability company in good standing under
the laws of its jurisdiction of formation, as applicable, and has all requisite
corporate or limited liability company power and authority to carry on its
business as it is being conducted and as described in the Registration Statement
and the Prospectuses and to own, lease and operate its properties, and is duly
qualified and in good standing as a foreign corporation or limited liability
company, as applicable, 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 where the failure to be so qualified would not, singly or
in the aggregate, have a material adverse effect on the business, financial
condition or results of operations of the Company and the Subsidiaries, taken as
a whole (a "Material Adverse Effect").
2. Each of the Joint Ventures has been duly incorporated or formed as a
corporation, general partnership, limited partnership or limited liability
company under the laws of its jurisdiction of incorporation or formation, as
applicable, and has all requisite corporate, partnership 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 to
transact business as a foreign corporation, general partnership, limited
partnership or limited liability company, as applicable, in each jurisdiction in
which the character of the business being conducted by it or the location of the
property owned by it makes such qualification necessary, except where the
failure to so qualify, singly or in the aggregate, would not have a Material
Adverse Effect. Each Joint Venture that is a corporation, limited partnership
or limited liability company is validly existing and is in good standing under
the laws of its jurisdiction of incorporation or formation, as applicable.
3. All of the outstanding shares of capital stock of the Company have been
duly authorized, validly issued, and are fully paid and nonassessable and were
not issued in violation of any preemptive or similar rights. All of the
outstanding shares of capital stock of the Company is as set forth in the
Prospectuses under the caption "Capitalization." The authorized capital stock
of the Company conforms in all material respects as to legal matters to the
description thereof contained in the Prospectuses under the caption "Description
of Capital Stock."
4. All the shares of capital stock of the Company outstanding prior to the
issuance of the Shares to be issued and sold by the Company pursuant to the
Underwriting Agreements have been duly authorized and validly issued, and are
fully paid and nonassessable.
5. The Underwritten Shares to be issued and sold to the U.S. Underwriters and
Managers by the Company under the U.S. Underwriting Agreement and the
International Underwriting Agreement have been duly authorized and when issued
and delivered to the U.S. Underwriters and Managers against payment therefor in
accordance with the terms of the U.S. Underwriting Agreement and the
International Underwriting Agreement, will be validly issued, fully paid and
nonassessable and free of any (A) preemptive rights or (B) to the best knowledge
of such counsel after reasonable inquiry, similar rights that entitle or will
entitle any person to acquire any Class A Common Stock upon the issuance thereof
by the Company.
6. The Adelphia New Shares (as defined in the Prospectuses) have been duly
authorized and when issued and delivered to the Parent against payment therefor
in accordance with the
27
terms of the Adelphia Share Purchase Agreement or the Adelphia Note Contribution
Agreement, as the case may be, will be validly issued, fully paid and
nonassessable and free of (A) preemptive rights or (B) to the best knowledge of
such counsel after reasonable inquiry, similar rights that entitle or will
entitle any person to acquire any shares of Class A Common Stock upon the
issuance thereof by the Company.
7. The Additional MCI Warrants (as defined in the Prospectuses) have been
duly authorized and, when executed and delivered pursuant to the terms of the
Warrant Agreement (the "MCI Warrant Agreement"), dated June 13, 1997, between
the Company and MCImetro Access Transmission Services, Inc. ("MCI"), will be
valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the enforceability of creditors' rights generally and by general
principles of equity (whether arising under a proceeding at law or in equity).
8. The maximum number of Shares issuable upon exercise of the Additional MCI
Warrants has been duly authorized and reserved for issuance by the Company at
the time and in the manner required by the MCI Warrant Agreement and, upon (i)
due exercise of the Additional MCI Warrants and (ii) delivery of Shares upon
such exercise, in each case, in accordance with the terms of the Additional MCI
Warrants and the MCI Warrant Agreement, such Shares will be validly issued,
fully paid and nonassessable.
9. Upon due issuance of the Additional MCI Warrants, the Company will have
satisfied its obligation to issue "Additional Initial Warrants" (as such term is
defined in the MCI Warrant Agreement) under Section 2.2 of the MCI Warrant
-----------
Agreement.
10. The Adelphia Warrant (as defined in the Prospectuses) has been duly
authorized and, when executed and delivered pursuant to the terms of the MCI
Agreement, will be valid and binding obligations of the Company, enforceable
against the Company in accordance with its terms, except as enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting the enforceability of creditors' rights generally
and by general principles of equity (whether arising under a proceeding at law
or in equity).
11. The maximum number of Shares issuable upon exercise of the Adelphia
Warrant has been duly authorized and reserved for issuance by the Company and,
upon (i) due exercise of the Adelphia Warrant and (ii) delivery of Shares upon
such exercise, in each case, in accordance with the terms of the Adelphia
Warrant, such Shares will be validly issued, fully paid and nonassessable.
12. The form of certificates for the Underwritten Shares and the Adelphia New
Shares conforms to the requirements of the Nasdaq National Market and the
Delaware General Corporation Law.
13. The Registration Statement and all post-effective amendments, if any,
have become effective under the Act and, to the best knowledge of such counsel
after reasonable inquiry, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose are
pending before or contemplated by the Commission; and any required filing of the
Prospectuses pursuant to Rule 424(b) has been made in accordance with Rule
424(b).
14. The Company has the corporate power and authority to enter into the U.S.
Underwriting Agreement and the International Underwriting Agreement and to
issue, sell and deliver the Shares to be sold by it to the U.S. Underwriters and
Managers as provided therein, and each of the U.S. Underwriting Agreement and
the International Underwriting Agreement have been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of the
Company,
28
enforceable against the Company in accordance with its terms, except that (A)
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws not or hereafter in effect relating to
creditors' rights generally, (B) the remedy of specific performance and other
forms of equitable relief may be subject to certain equitable defenses and to
the discretion of the court before which the proceedings may be brought and (C)
rights to indemnity and contribution thereunder may be limited by Federal or
state securities laws or the public policy underlying such laws.
15. All of the Joint Venture's limited partnership and limited liability
company interests owned by each Subsidiary have been duly authorized and validly
issued and, except for matters referenced by the Prospectuses, all of the
partnership and limited liability company interests owned in the Joint Ventures
which are owned of record by each respective Subsidiary are, to the best of our
knowledge, owned free and clear of any security interest, lien or other
encumbrance.
16. All of the outstanding capital stock of each Subsidiary is owned by the
Company, free and clear of any security interest, claim, lien, limitation on
voting rights or encumbrance. There are not, to our knowledge, other than as
set forth in the Prospectuses, currently, and will not be following the issuance
and sale of the Shares, 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 Subsidiary.
17. The Registration Statement and the Prospectuses and any supplements or
amendments thereto (except for the financial statements, schedules, and notes
thereto and other financial and statistical data included therein, as to which
such counsel need not express any opinion) comply as to form in all material
respects with the requirements of the Act.
18. Neither the issuance, sale or delivery of the Underwritten Shares, nor
the execution, delivery or performance of the U.S. Underwriting Agreement or the
International Underwriting Agreement, or compliance by the Company with all
provisions of the U.S. Agreement and the International Underwriting Agreement,
nor consummation by the Company of the transactions contemplated hereby or by
the International Underwriting Agreement violates, conflicts with or constitutes
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 Subsidiary, or an acceleration of any
indebtedness of the Company or any Subsidiary pursuant to, (i) the charter or
bylaws of the Company or any Subsidiary, (ii) any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or instrument to which the
Company or any Subsidiary is a party or by which it or its property is or may be
bound identified to such counsel as material (assuming all of such agreements
are governed by Pennsylvania law), (iii) any local, state or Federal law,
statute, ordinance, requirement, administrative statute, rule or regulation
applicable to the Company or any Subsidiary or its assets or properties (except
with respect to the matters set forth in the opinion of Xxxxxxx & Berlin, as to
which no opinion need be expressed) or (iv) any judgment, order or decree of any
court or governmental agency or authority having jurisdiction over the Company
or any Subsidiary or its assets or properties known to such counsel, except in
the case of clauses (ii), (iii) and (iv) for such violations, conflicts,
breaches, defaults, consents, impositions of liens or accelerations that (x)
would not, singly or in the aggregate, have a Material Adverse Effect or (y) are
disclosed in the Prospectuses. Assuming compliance with applicable state
securities and Blue Sky laws, as to which such counsel need express no opinion,
and except for the filing of a registration statement under the Act, no consent,
approval, authorization or order of, or filing, registration, qualification,
license or permit of or with, any court or governmental agency, body or
administrative agency is required for (1) the execution, delivery and
performance by the Company of the U.S. Underwriting Agreement and the
International Underwriting
29
Agreement, (2) the issuance and sale of the Shares or (3) consummation by the
Company, the Subsidiaries and the Joint Ventures of the transactions described
in the Prospectuses, except such as have been obtained and made or have been
disclosed in the Prospectuses, and except where the failure to obtain such
consents or waivers would not, singly or in the aggregate, have a Material
Adverse Effect. To the best of such counsel's knowledge, no consents or waivers
from any other person are required for the execution, delivery and performance
by the Company of the U.S. Underwriting Agreement and the International
Underwriting Agreement or the issuance and sale of the Underwritten Shares,
other than such consents and waivers as have been obtained.
19. None of the Company, its Subsidiaries or the Joint Ventures 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, 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.
20. Except as set forth in the Prospectuses, there are no holders of
securities of the Company who, by reason of the execution by the Company of the
U.S. Underwriting Agreement or the International Underwriting Agreement or the
consummation by the Company of the transactions contemplated thereby, have the
right to request or demand that the Company register under the Act securities
held by them.
21. None of (A) the execution, delivery and performance of the U.S.
Underwriting Agreement or the International Underwriting Agreement, (B) the
issuance and sale of the Shares and the application of the proceeds from the
issuance and sale of the Shares or (C) the consummation of the transactions
contemplated in connection with any of the foregoing as set forth in the
Prospectuses, will violate Regulations G, T, U or X promulgated by the Board of
Governors of the Federal Reserve System.
22. To the knowledge of such counsel, there is (i) no action, suit,
investigation or proceeding before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, now pending, or threatened or
contemplated to which any of the Company or any Subsidiary is or may be a party
or to which the business or property of any of the Company or any Subsidiary is
or may be subject, (ii) no statute, rule, regulation or order that has been
enacted, adopted or issued by any governmental agency, or (iii) no injunction,
restraining order or order of any nature by a federal or state court of
competent jurisdiction to which any of the Company or any Subsidiary is or may
be subject has been issued that, in the case of clauses (i), (ii) and (iii)
above, (x) is required to be disclosed in the Prospectuses and that is not so
disclosed and, (y) could reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect, it being understood that for
purposes of this opinion, such counsel need express no opinion with respect to
(i) actions, suits investigation or proceedings before the FCC or any similar
state regulatory commission or body, (ii) statutes, rules, regulations or orders
by any FCC or any similar state regulatory commission or (iii) injunctions,
restraining orders or other orders by the FCC or any similar state regulatory
commission or body.
Although we have not undertaken, except as otherwise indicated in our opinion,
to determine independently, and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements in the Registration
Statement, we have participated in the preparation of the Registration Statement
and the Prospectuses, including general review and discussion of the contents
thereof but have made no independent check or verification thereof, and no facts
have come to our attention that would lead us to believe that the Registration
Statement at the time the Registration Statement became effective, or the
Prospectuses, as of their respective dates and as of the Closing Date or the
Option Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be
30
stated in the Prospectuses or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading or that
any amendment or supplement to the Prospectuses, as of their respective dates,
and as of the Closing Date and the Option Closing Date, as the case may be,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated in the Prospectuses or necessary in order to make the
statements in the Prospectuses, in the light of the circumstances under which
they were made, not misleading (it being understood that such counsel need
express no opinion with respect to the financial statements, schedules, pro
forma financial statements and the notes thereto and other financial data
included in the Registration Statement and the Prospectuses.
31
EXHIBIT C
---------
FORM OF OPINION OF REGULATORY COUNSEL
-------------------------------------
1. Each of the Company, the Subsidiaries and the Joint Ventures has all of
the licenses, permits and authorizations, if any, required by the FCC and the
State Regulatory Agencies for the provision of telecommunications services
except where the failure to obtain or hold such license, permit or authority
would not have a Material Adverse Effect on the Company, the Subsidiaries and
the Joint Ventures, taken as a whole.
2. Neither the Company, any Subsidiaries nor any Joint Ventures is subject to
any pending complaint or investigation before the FCC or, to the best knowledge
of counsel, to any threatened complaint or investigation before the FCC, or, any
pending or threatened complaint or investigation before any State Regulatory
Agencies based on any alleged violation by the Company, the Subsidiaries or the
Joint Ventures in connection with their provision of or failure to provide
telecommunications services.
3. The statements in the Prospectuses under the heading of "Risk Factors -
Regulation" and "Regulation" fairly and accurately summarize the matters therein
described.
4. The Company, the Subsidiaries and the Joint Ventures have the consents,
approvals, authorizations, licenses, certificates, permits, or orders of the FCC
or any State Regulatory Agency if any, for the consummation of the transactions
contemplated in the Underwriting Agreements except where the failure to obtain
the consents, approvals, authorizations, licenses, certificates, permits or
orders would not have a Material Adverse Effect on the Company, the Subsidiaries
and the Joint Ventures, taken as a whole.
5. Neither the execution and delivery of the Underwriting Agreements nor the
issuance of the Shares will conflict with or result in a violation of any order
or regulation of the FCC or any State Regulatory Agency applicable to the
Company, its Subsidiaries or the Joint Ventures except where the conflict with
or the violation of which would not have a material adverse impact on the
Company, the Subsidiaries and the Joint Ventures, taken as a whole.
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