Exhibit 1.01
4,000,000 Shares
Adelphia Communications Corporation
Class A Common Stock
UNDERWRITING AGREEMENT
January 11, 1999
XXXXXXX, XXXXX & CO.
00 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies & Gentlemen:
Adelphia Communications Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell an aggregate of 4,000,000 shares (the
"Firm Shares") of its Class A Common Stock, $.01 par value per share (the "Class
A Common Stock"), to Xxxxxxx, Sachs & Co. (the "Underwriter"). The Company also
proposes to sell to the Underwriter, upon the terms and conditions set forth in
Section 2 hereof, up to an additional 600,000 shares (the "Additional Shares")
of Class A Common Stock. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "Shares."
The Company wishes to confirm as follows its agreement with the
Underwriter in connection with the purchase of the Shares by the Underwriter.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
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-3 under the Act (the "Registration
Statement"), including a prospectus and a prospectus supplement relating to the
Shares. The term "Registration Statement" as used in this Underwriting Agreement
means the Registration Statement (including all financial schedules and
exhibits), as supplemented or amended at the time of the execution of this
Underwriting Agreement. If a post-effective amendment or supplement to a
registration statement is filed in connection with the offering of the Shares,
the term "Registration Statement" as used in this Underwriting Agreement means
the Registration Statement as amended by said post-effective amendment or
supplement. The term "Prospectus" as used in this Underwriting Agreement means
the prospectus (including the prospectus supplement relating to the Shares) in
the form included in the Registration Statement, or, if the prospectus
(including the prospectus supplement relating to the Shares) included in the
Registration Statement omits information in reliance on Rule 430A under the Act
and such information is included in a prospectus (or a prospectus supplement)
filed with the Commission pursuant to Rule 424(b) under the Act, the term
"Prospectus" as used in this Underwriting Agreement means the prospectus
(including the prospectus supplement relating to the Shares) in the form
included in the Registration Statement as supplemented by the addition of the
Rule 430A information contained in the prospectus (including the prospectus
supplement relating to the Shares) filed with the Commission pursuant to Rule
424(b). Any reference in this Underwriting Agreement to the Registration
Statement or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of the Registration Statement or the Prospectus
and any reference to any amendment or supplement to the Registration Statement
or the Prospectus shall be deemed to refer to and include any documents filed
after such date under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") which, upon filing, are incorporated by reference therein, as
required by paragraph (b) of Item 12 of Form S-3. As used herein, the term
"Incorporated Documents" means the documents which at the time are incorporated
by reference in the Registration Statement, the Prospectus, or any amendment or
supplement thereto.
For purposes of this Underwriting Agreement: "Rules and Regulations"
means the rules and regulations adopted by the Commission under either the Act
or the Exchange Act, as applicable.
2. Agreements to Sell and Purchase. The Company hereby agrees, subject
to all the terms and conditions set forth herein, to issue and sell to the
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, the Underwriter agrees to purchase from the
Company, at a purchase price of $43.25 per share (the "purchase price per
share"), the Firm Shares.
The Company also agrees, subject to all the terms and conditions set
forth herein, to sell to the 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, the Underwriter 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 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 600,000
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.
3. Terms of Public Offering. The Company has been advised by the
Underwriter that the Underwriter proposes to make a public offering of the
Shares as soon after this Underwriting Agreement has become effective as in the
Underwriter's judgment is advisable and initially to offer the Shares upon the
terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriter of and payment for the Firm Shares shall be made at the office of
Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M., New
York City time, on January 14, 1998 (the "Closing Date"). The place of closing
for the Firm Shares and the Closing Date may be varied by agreement between the
Underwriter and the Company.
Delivery to the Underwriter of and payment for any Additional Shares to
be purchased by the Underwriter shall be made at the aforementioned office of
Xxxxxx & Xxxxxxx at such time on such date (the "Option Closing Date"), which
may be the same as the Closing Date but shall in no event be earlier than the
Closing Date nor earlier than two nor later than five business days after the
giving of the notice hereinafter referred to, as shall be specified in a written
notice from the Underwriter to the Company of the Underwriter's 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 the Underwriter 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 the Underwriter 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 the Underwriter 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 the
Underwriter 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.
5. Agreements of the Company. The Company agrees with the Underwriter
as follows:
(a) If, at the time this Underwriting Agreement is executed
and delivered, it is necessary for a post-effective amendment thereto to be
declared effective before the offering of the Underwritten 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
the Underwriter promptly and, if requested by the Underwriter, will confirm such
advice in writing, when the Registration Statement or such post-effective
amendment has become effective.
(b) The Company will advise the Underwriter promptly and, if
requested by the Underwriter, will confirm such advice in writing: (i) of any
request by the Commission for amendment of or a supplement to the Registration
Statement or the Prospectus 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 (e)
below, of the happening of any event which makes any statement of a material
fact made in the Registration Statement or the Prospectus untrue or which
requires the making of any additions to or changes in the Registration Statement
or the Prospectus 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 Prospectus 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 the Underwriter, without
charge, one signed copy of the Registration Statement as originally filed with
the Commission and of each amendment and supplement thereto, including financial
statements and all exhibits thereto, and will also furnish to the Underwriter,
without charge, such number of conformed copies of the Registration Statement as
originally filed and of each amendment thereto, but without exhibits, as the
Underwriter may request.
(d) The Company will not (i) file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus of
which the Underwriter shall not previously have been advised or to which the
Underwriter shall object after being so advised or (ii) so long as, in the
written opinion of counsel for the Underwriter, a prospectus is required to be
delivered in connection with sales by any 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 the Underwriter
prior to or concurrently with such filing.
(e) As soon after the execution and delivery of this
Underwriting Agreement as possible and thereafter from time to time for such
period as in the written opinion of counsel for the Underwriter a prospectus is
required by the Act to be delivered in connection with sales by any Underwriter
or dealer, the Company will expeditiously deliver to the Underwriter and each
dealer, without charge, as many copies of the Prospectus as the Underwriter may
request. The Company consents to the use of the 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 Underwriter 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 Prospectus is
required by the Act to be delivered in connection with sales by the Underwriter
or any 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 Underwriter is
required to be set forth in the 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 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 Underwriter and dealers a reasonable number of
copies thereof.
(f) The Company will cooperate with the Underwriter and with
counsel for the Underwriter in connection with the registration or qualification
of the Shares for offering and sale by the Underwriter and by dealers under the
securities or Blue Sky laws of such jurisdictions as the Underwriter 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.
(g) 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.
(h) During the period of five years after the date of this
Underwriting 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 the Underwriter of such
mailing or filing and (ii) furnish to the Underwriter from time to time such
other information concerning the Company and its subsidiaries as the Underwriter
may request.
(i) If this Underwriting Agreement shall terminate or shall be
terminated after execution pursuant to any provisions hereof (otherwise than by
notice given by the Underwriter terminating this Underwriting Agreement pursuant
to Section 10 or Section 11 hereof) or if this Underwriting Agreement shall be
terminated by the Underwriter 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
Underwriting Agreement, the Company agrees to negotiate in good faith regarding
the reimbursement to the Underwriter for out-of-pocket expenses (including fees
and expenses of counsel for the Underwriter) incurred by the Underwriter in
connection herewith.
(j) The Company will apply the net proceeds from the sale of
the Shares substantially in accordance with the description set forth in the
Prospectus.
(k) If Rule 430A of the Act is employed, the Company will
timely file the Prospectus pursuant to Rule 424(b) under the Act and will advise
the Underwriter of the time and manner of such filing.
(l) Except as stated in this Underwriting Agreement, the
Prospectus and the Direct Offering Agreement, dated as of the date hereof and as
in effect on the date hereof, between the Company and Highland Holdings II
(together with all of the financing and other ancillary agreements thereto dated
as of or prior to the Closing Date, the "Direct Offering Agreement"), pursuant
to which the Company will issue 4,000,000 shares of Class A Common Stock (the
"Directed Offering Shares") to Highland Holdings II, 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 Class A Common Stock to facilitate the sale or resale of the
Shares.
(m) The Company will use its best efforts to have the Shares
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 and warrants to the Underwriter that:
(a) 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 has or shall become effective and the Prospectus 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 the Prospectus made in reliance
upon and in conformity with information relating to the Underwriter furnished to
the Company in writing by the Underwriter expressly for use therein.
(b) The Company has not sustained since September 30, 1998 any
material loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of which
information is given in the Prospectus, there has not been any reduction in the
consolidated stockholders' equity or change in the capital stock, as applicable
(other than reductions in the ordinary course of business consistent with prior
periods), material increase in the total amount of short-term debt (excluding
trade payables) and long-term debt of the Company or any of its material
subsidiaries (the "Subsidiaries") or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, partners' equity, shareholders'
equity or results of operations of the Company and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Prospectus.
(c) (i) Each of the Subsidiaries that is a partnership has
been duly formed and is validly existing as a partnership in good standing under
the laws of its state of formation, with full power and authority (partnership
and other) to own its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign partnership for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such jurisdiction
except where the failure to so qualify would not have a material adverse effect
on the business, general affairs, management, financial position, partners
equity or shareholders' equity (other than reductions in the ordinary course of
business consistent with prior periods), results of operations or prospects of
the Company and its subsidiaries, taken as a whole (a "Material Adverse
Effect"); and (ii) each of the Company and the Subsidiaries that are
corporations has been duly incorporated and is validly existing as a corporation
in good standing under the laws of its state of incorporation, with full power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification, or is subject to
no material liability or disability by reason of the failure to be so qualified
in any such jurisdiction except where the failure to so qualify would not have a
Material Adverse Effect.
(d) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Underwriting Agreement and the Direct Offering Agreement and to consummate the
transactions contemplated hereby and thereby, including, without limitation, the
corporate power and authority to issue, sell and deliver the Shares as provided
herein.
(e) Each of this Underwriting Agreement and the Direct
Offering 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) All the outstanding shares of capital 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 Underwriter 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 Prospectus.
(g) Each of the Company's Subsidiaries has the ownership or
authorized capitalizations, as the case may be, as set forth in the Prospectus,
and all of the partnership interests of the Subsidiaries that are partnerships
and all of the issued shares of capital stock of its Subsidiaries that are
corporations have been duly and validly authorized and issued and with respect
to shares of capital stock are fully paid and nonassessable; and all of the
partnership interests of the Subsidiaries disclosed in the Prospectus as being
owned directly or indirectly by the Company and all of the issued shares of
capital stock of the Subsidiaries that are corporations disclosed in the
Prospectus as being owned directly or indirectly by the Company have been duly
and validly authorized and issued are fully paid and non-assessable and are
owned directly or indirectly by the Company free and clear of all liens,
encumbrances, equities or claims (other than liens to secure indebtedness under
credit facilities disclosed in the Prospectus); and descriptions of the
ownership of the various interests and shares of the Company and its
Subsidiaries in the Prospectus are true and complete in all material respects;
(h) Except as disclosed, contemplated or referenced in the
Prospectus, there are not currently, and will not be as a result of the
transactions contemplated hereby, any material 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.
(i) Other than as set forth in the Prospectus (including those
matters referred to therein relating to general rulemakings and similar matters
relating generally to the cable television industry), there are no legal or
governmental proceedings pending to which the Company or any of its Subsidiaries
is a party or of which any property of the Company or any of its Subsidiaries is
the subject which, if determined adversely to the Company or any of its
Subsidiaries, would individually or in the aggregate have a Material Adverse
Effect and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or by others; and except
with respect to general rulemakings and similar matters relating generally to
the cable television industry, during the time the Systems (as defined below)
have been owned by the Company or a Subsidiary (i) there has been no adverse
judgment, order, or decree issued by the United States Federal Communications
Commission (the "FCC") relating to any of the Systems that has not been
disclosed in the Prospectus that would be required to be disclosed in the
Prospectus or the Registration Statement; (ii) there are no actions, suits,
proceedings, inquiries or investigations by the FCC pending or threatened in
writing against or affecting the Company, any of its Subsidiaries or any System;
and (iii) to the Company's knowledge, after due inquiry, there is no reasonable
basis for any such action, suit, proceeding or investigation.
(j) Except for matters covered by paragraph (w) below or with
respect to matters that would not individually or in the aggregate have a
Material Adverse Effect, (i) the Company and its Subsidiaries have made all
filings, recordings and registrations with, and possess all validations or
exemptions, approvals, orders, authorizations, consents, licenses, certificates
and permits from, the FCC, applicable public utilities and other federal, state
and local regulatory or governmental bodies and authorities or any subdivision
thereof, including, without limitation, cable television franchises, pole
attachment agreements, and cable antenna relay service, broadcast auxiliary,
earth station, business radio, microwave or special safety radio service
licenses issued by the FCC (collectively, the "Authorizations") necessary or
appropriate to own, operate and construct the cable communication systems owned
by them (the "Systems") or otherwise for the operation of their businesses and
are not in violation thereof; (ii) all such Authorizations are in full force and
effect, and no event has occurred that permits, or after notice or lapse of time
could permit, the revocation, termination or modification of any Authorization
which is necessary or appropriate to own, operate and construct the Systems or
otherwise for the operation of any such business; (iii) none of the Company or
any of its Subsidiaries is in violation of any duty or obligation required by
the United States Communications Act of 1934, as amended (the "Communications
Act"), or any FCC rule or regulation applicable to the operation of any portion
of any of the Systems; (iv) none of the Company or any of its Subsidiaries is in
violation of any duty or obligation required by state or local laws, or local
rules or regulations applicable to the operation of any portion of any of the
Systems; (v) there is not pending or, to the best knowledge of the Company or
any of its Subsidiaries, threatened, any action by the FCC or state or local
regulatory authority to modify, revoke, cancel, suspend or refuse to renew any
Authorization; (vi) other than as described in the Prospectus, there is not now
issued or outstanding or, to the best knowledge of the Company or any of its
Subsidiaries, threatened, any notice of any hearing, material violation or
material complaint against the Company or any of its Subsidiaries with respect
to the operation of any portion of the Systems and none of the Company or its
Subsidiaries has any knowledge that any person intends to contest renewal of any
material Authorization.
(k) (i) (A) The Company and its Subsidiaries have entered
into, or have rights under, all required programming agreements (including,
without limitation, all non-broadcast affiliation agreements under which the
Company and its Subsidiaries are accorded retransmission rights relating to
programming that the Systems provide to their customers) that are material to
the conduct of their business as described in the Prospectus; and (B) all such
material agreements are in full force and effect and none of the Company, any of
its Subsidiaries or any of its affiliates has received any written notice of
revocation or material modifications of such material agreements; and (ii) (A)
either the Company or its Subsidiaries has entered into agreements with the
television stations that have notified the Company or its Subsidiaries that such
station's respective consent is required to carry such stations on the Systems
or has ceased carrying such stations; (B) all such agreements grant the Company
or one of its Subsidiaries retransmission consent in exchange for various
non-cash consideration; and (C) all such agreements are in full force and effect
and are not subject to revocation (except in the case of material breach by the
Company or its Subsidiaries) or material modifications, and no event has
occurred that permits, or after notice or lapse of time could permit, the
revocation, termination or material modification of any such agreement, except
where the failure of such agreements to be in full force and effect or such
revocation would not, in either case, individually or in the aggregate have a
Material Adverse Effect.
(l) Except for matters that would not individually or in the
aggregate have a Material Adverse Effect, (i) all registration statements and
all other documents (including but not limited to annual reports) required by
the FCC in connection with the operation of the Systems have been filed with the
FCC; (ii) all frequencies within the restricted aeronautical and navigational
bands (i.e., 108-136 MHz and 225-400 MHz) which are currently being used in
connection with the operation of the Systems have been authorized for such use
by the FCC; (iii) each of the Systems subject to Equal Employment Opportunity
Commission ("EEO") compliance certification by the FCC has been certified by the
FCC for annual EEO compliance during the time such Systems have been owned by
the Company or its Subsidiaries; and (iv) all towers associated with the Systems
are in compliance with the rules and regulations of the United States Federal
Aviation Administration.
(m) Except for matters that would not individually or in the
aggregate have a Material Adverse Effect, none of the Company or any of its
Subsidiaries is in breach or violation of, or in default under, any of the
terms, conditions or provisions of the Communications Act or the rules,
regulations or policies of the FCC thereunder.
(n) (i) Except for matters that would not individually or in
the aggregate have a Material Adverse Effect, all statements of accounts and any
other filings that are required under Section 111 of the United States Copyright
Act of 1976, as amended, in connection with the retransmission of any broadcast
television and radio signals on the Systems have been timely filed with the
United States Copyright Office and indicated royalty payments have been made for
each System for each accounting period during which such Systems have been owned
by the Company or its Subsidiaries; (ii) none of the Company, any of its
Subsidiaries or any System has received any inquiry or request from the United
States Copyright Office or from any other party challenging or questioning any
such statements of account or royalty payments; and (iii) no claim of copyright
infringement has been made or threatened in writing against the Company, any of
its Subsidiaries or any System.
(o) Neither the execution and delivery of this Underwriting
Agreement or the Direct Offering Agreement, nor the consummation of the
transactions contemplated hereby and thereby or by the Prospectus under "Use of
Proceeds," nor compliance with the terms, conditions and provisions hereof and
thereof by the Company, will conflict with the Communications Act or the rules,
regulations or policies of the FCC thereunder, or will cause any suspension,
revocation, impairment, forfeiture, nonrenewal or termination of any material
license, permit, franchise, certificate, consent, authorization, designation,
declaration, filing, registration or qualification.
(p) Neither the execution and delivery of this Underwriting
Agreement or the Direct Offering Agreement nor the consummation of the
transactions contemplated hereby or thereby nor compliance with the terms,
conditions and provisions hereof and thereof by the Company, requires any
license, permit, franchise, certificate, consent, authorization, designation,
declaration, filing, registration or qualification by or with the FCC.
(q) None of the Company or its the Subsidiaries 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 and the rules and regulations of the FCC and
environmental laws, statutes, ordinances, rules, regulations, judgments or court
decrees) applicable to the Company or any Subsidiary 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.
(r) Neither the issuance and sale of the Shares and the Direct
Offering Shares, the execution, delivery or performance by the Company of this
Underwriting Agreement or the Direct Offering Agreement by the Company, or the
consummation by the Company of the transactions contemplated hereby and thereby
violate, conflict with or constitute a breach of any of the terms or provisions
of, or a default under (or an event that with notice or the lapse of time, or
both, would constitute a default), or require consent under, or result in the
imposition of a lien or encumbrance on any properties of the Company or any
Subsidiary or an acceleration of any indebtedness of the Company, any Subsidiary
pursuant to, (i) the charter or bylaws of the Company or any Subsidiary or the
partnership agreement or operating agreement governing any of their material
joint ventures, (ii) any bond, debenture, note, indenture, mortgage, deed of
trust or other agreement or instrument to which the Company, any Subsidiary or
any of their material joint ventures 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
Communications Act and the rules and regulations of the FCC and environmental
laws, statutes, ordinances, rules or regulations) applicable to the Company, any
Subsidiary, any of their material joint ventures 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, any of their material 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 Prospectus, 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
Underwriting Agreement or the Direct Offering Agreement or (2) the issuance and
sale of the Shares and the Direct Offering 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.
(s) The accountants who have certified or shall certify the
financial statements included in the Registration Statement and the Prospectus
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-3 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 Prospectus, 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 Prospectus and
the books and records of the Company and each of its Subsidiaries. The
statistical information and data included in the Prospectus are accurately
presented in all material respects.
(t) The financial statements, together with related schedules
and notes, included in the Registration Statement and the Prospectus, 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 Prospectus are accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company and the Subsidiaries.
(u) 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
Prospectus or other materials, if any, permitted by the Act.
(v) There is (i) no unfair labor practice complaint pending
against the Company or any Subsidiary 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 or any Subsidiary, (ii) no significant
strike, labor dispute, slowdown or stoppage pending against the Company or any
Subsidiary or threatened against the Company or any Subsidiary and (iii) no
union representation question existing with respect to the employees of the
Company or any Subsidiary 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 or the Subsidiaries. None of the
Company or any Subsidiary 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.
(w) None of the Company or any Subsidiary 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.
(x) Each of the Company and the Subsidiaries has (i) good and
marketable title to all of the properties and assets described in the Prospectus
as owned by it, free and clear of all liens, charges, encumbrances and
restrictions, except such as are described in the Prospectus or as would not
have a Material Adverse Effect and (ii) peaceful and undisturbed possession
under all leases to which any of them is a party as lessee. All leases to which
the Company and the Subsidiaries are a party are valid and binding and no
default by the Company or any Subsidiary 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.
(y) Each of the Company and the Subsidiaries 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 and its Subsidiaries in connection
with the businesses now operated by it or which are proposed to be operated by
the Company or its Subsidiaries free and clear of and without violating any
right, claimed right, charge, encumbrance, pledge, security interest,
restriction or lien of any kind of any other person and none of the Company and
any Subsidiary has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing except as
described in the Prospectus 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 and the Subsidiaries does not
infringe on the rights of any person, except as would not have a Material
Adverse Effect.
(z) None of the Company, any Subsidiary, or any of their
respective officers, directors, partners, employees, agents or affiliates or any
other person acting on behalf of the Company or any Subsidiary, 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 or any Subsidiary (or assist the Company or any Subsidiary in connection
with any actual or proposed transaction) which (i) might subject the Company or
any Subsidiary, 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 or any Subsidiary or (iii) if not continued in the future, could
reasonably be expected to have a Material Adverse Effect.
(aa) All tax returns required to be filed by the Company and
each of the Subsidiaries in all jurisdictions have been so filed. All taxes,
including withholding taxes, penalties and interest, assessments, fees and other
charges due or claimed to be due from such entities or that are due and payable
have been paid, other than those being contested in good faith and for which
adequate reserves have been provided or those currently payable without penalty
or interest. There are no proposed additional tax assessments against the
Company, any Subsidiary, or the assets or property of the Company or any
Subsidiary.
(bb) None of the Company or the Subsidiaries is now, and after
sale of the Shares and the Direct Offering Shares to be sold by the Company and
application of the net proceeds from such sale as described in the Prospectus
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 "registered holding company" or a "subsidiary company" or an "affiliate"
of a registered holding company within the meaning of the Public Utility Holding
Company Act of 1935, as amended (the "PUC Act").
(cc) Except as disclosed in the Prospectus, there are no
holders of securities of the Company or the Subsidiaries who, by reason of the
filing of the Registration Statement or consummation of the transactions
contemplated by this Underwriting Agreement or the Direct Offering Agreement,
have the right to request or demand that the Company, any of the Subsidiaries or
any of their joint ventures register any of its securities (including, without
limitation, Class A Common Stock and Class B Common Stock) under the Act. Except
as described in the Prospectus, no such rights with respect to any shares of
Class A Common Stock have been exercised as of the date hereof.
(dd) Each of the Company and the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that: (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect thereto.
(ee) Each of the Company and the Subsidiaries maintains
insurance covering its properties, operations, personnel and businesses. Such
insurance insures against such losses and risks as are adequate in accordance
with customary industry practice to protect the Company and the Subsidiaries and
their respective businesses. None of the Company or any Subsidiary 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.
(ff) None of the Company or any of the Subsidiaries has (i)
taken, directly or indirectly, any action designed to, or that might reasonably
be expected to, cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares, (ii)
since the date of the Prospectus, (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.
(gg) The execution and delivery of this Underwriting Agreement
and the Direct Offering Agreement and the issuance and sale of the Shares and
the Direct Offering 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.
(hh) None of (A) the execution, delivery and performance of
this Underwriting Agreement or the Direct Offering Agreement, (B) the issuance
and sale of the Shares and the Direct Offering Shares, (C) the application of
the proceeds from the issuance and sale of the Shares and the Direct Offering
Shares or (D) the consummation of the transactions contemplated in connection
with any of the foregoing as set forth in the Prospectus, will violate
Regulations T, U or X promulgated by the Board of Governors of the Federal
Reserve System or analogous foreign laws and regulations.
(ii) Except pursuant to this Underwriting Agreement, there are
no contracts, agreements or understandings between the Company, any of its
Subsidiaries or any of their joint ventures and any other person that would give
rise to a valid claim against the Company or the Underwriter for a brokerage
commission, finder's fee or like payment in connection with the issuance,
purchase and sale of the Shares.
(jj) During the past twenty-four months, 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.
(kk) Each of the Company and the Subsidiaries 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.
(ll) Except as disclosed in the Prospectus, 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 Underwriter and, for
purposes of the opinions to be delivered to the Underwriter pursuant to Section
8(e), (f), (g) and (k) hereof, counsel to the Company and counsel to the
Underwriter, will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless the Underwriter against any losses, claims, damages or
liabilities, joint or several, to which the Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Underwriter for
any legal or other expenses reasonably incurred by the Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the Underwriter expressly for use
therein.
(b) The Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by the Underwriter
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish to assume
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then the
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriter on
the other from the offering of the Shares. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law or if
the indemnified party failed to give the notice required under subsection (c)
above, then the indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriter on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriter 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 Underwriter, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault 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 the
Underwriter on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriter agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), the Underwriter shall not be required to contribute any amount
in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which the 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.
(e) The obligations of the Company under this Section 7 shall
be in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
the Underwriter within the meaning of the Act; and the obligations of the
Underwriter under this Section 7 shall be in addition to any liability which the
Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Act.
8. Conditions of Underwriter's Obligations. The obligations of the
Underwriter 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 Underwriting 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 Underwriting 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 the
Underwriter, 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 the
Underwriter, threatened by the Commission, and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the Underwriter's
satisfaction.
(c) Subsequent to the effective date of this Underwriting
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 and the Subsidiaries, taken as a whole, not contemplated by the
Prospectus, which in the Underwriter's opinion, would materially adversely
affect the market for the Shares, or (ii) any event or development relating to
or involving the Company, the Subsidiaries, or any officer or director of the
Company or the Subsidiaries which makes any statement made in the Prospectus
untrue or which, in the opinion of the Company and its counsel or the
Underwriter and its counsel, requires the making of any addition to or change in
the Prospectus 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 Prospectus to reflect
such event or development would, in the Underwriter's opinion, materially
adversely affect the market for the Shares.
(d) The Underwriter shall have received a certificate, dated
the Closing Date, signed on behalf of the Company by any two officers (for the
purpose of this subsection (d) "officer" shall mean the Chairman of the Board,
the President, any Vice President, the Chief Financial Officer, the Treasurer,
the Secretary or Assistant Secretary) in form and substance reasonably
satisfactory to the Underwriter, 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.
(e) The Underwriter shall have received on the Closing Date,
an opinion, dated the Closing Date, in form and substance satisfactory to the
Underwriter, of Xxxxxxxx Xxxxxxxxx Professional Corporation, counsel for the
Company, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the state of its formation, with full corporate power and authority to
own its properties and conduct its business as described in the
Prospectus.
(ii) This Underwriting Agreement and the Direct
Offering Agreement have been duly authorized, executed and delivered by
the Company.
(iii) All of the outstanding shares of capital stock
of the Company have been duly authorized, validly issued, and are fully
paid and nonassessable and were not issued in violation of any
preemptive or similar rights. The outstanding shares of capital stock
of the Company are as set forth in the Prospectus 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 Prospectus under the caption "Description of Capital
Stock."
(iv) The Shares to be issued and sold to the
Underwriter by the Company under this Underwriting Agreement have been
duly authorized and when issued and delivered to the Underwriter
against payment therefor in accordance with the terms of this
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, other than as described in
the Prospectus.
(v) The Direct Offering Shares have been duly
authorized and when issued and delivered against payment therefor in
accordance with the terms of the Direct Offering Agreement, 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, other than as described in the Prospectus.
(vi) The form of certificates for the Shares and
Direct Offering Shares conforms to the requirements of the Nasdaq
National Market and the Delaware General Corporation Law.
(vii) 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
Prospectus pursuant to Rule 424(b) has been made in accordance with
Rule 424(b).
(viii) The Company has the corporate power and
authority to enter into this Underwriting Agreement and the Direct
Offering Agreement and to issue, sell and deliver the Shares and the
Direct Offering Shares as provided therein, and each of this
Underwriting Agreement and the Direct Offering Agreement have been duly
authorized, executed and delivered by the Company and is a legal, valid
and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except that (A) such enforceability may
be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium (whether general or specific) or other
similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, (B) such enforceability may be limited by
the effects of general principles of equity and by the discretion of
the court before which any proceeding therefor may be brought (whether
such proceeding is at law or in equity or in a bankruptcy proceeding)
and (C) rights to contribution or indemnification may be limited by the
laws, rules or regulations of any governmental authority or agency
thereof or public policy and (D) waivers as to usury, stay or extension
laws may be unenforceable.
(ix) The Registration Statement and the Prospectus,
as of their dates (except for the financial statements, including the
notes thereto, and supporting schedules and other financial,
statistical and accounting data included therein or omitted therefrom,
as to which no opinion is expressed), and each amendment or supplement
thereto, as of its date, comply as to form in all material respects
with the Act.
(x) Neither the issuance, sale or delivery of the
Shares and the Direct Offering Shares, nor the execution, delivery or
performance of this Underwriting Agreement or the Direct Offering
Agreement, or compliance by the Company with all provisions of this
Underwriting Agreement and the Direct Offering Agreement, nor
consummation by the Company of the transactions contemplated hereby or
by the Direct Offering 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 (ii) any judgment, order or decree of any court or governmental
agency or authority having jurisdiction over the Company or its assets
or properties known to such counsel, except in the case of clause (ii)
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 Prospectus.
(xi) None of the Company, its Subsidiaries is (i) an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act or (ii) a
"registered holding company" or a "subsidiary company" or an
"affiliate" of a registered holding company within the meaning of the
PUC Act.
(xii) Except as set forth in the Prospectus, there
are no holders of securities of the Company who, by reason of the
execution by the Company of this Underwriting Agreement or the Direct
Offering 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.
(xiii) None of (A) the execution, delivery and
performance of this Underwriting Agreement and the Direct Offering
Agreement or (B) the issuance and sale of the Shares and the Direct
Offering Shares and the application of the proceeds from the issuance
and sale of the Shares and the Direct Offering Shares will violate
Regulations T, U or X promulgated by the Board of Governors of the
Federal Reserve System.
(xiv) 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 Prospectus 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 or local regulatory commission or body, (ii)
statutes, rules, regulations or orders by any FCC or any similar state
or local regulatory commission or (iii) injunctions, restraining orders
or other orders by the FCC or any similar state or local regulatory
commission or body.
(xv) The statements set forth in the Prospectus under
the caption "Risk Factors -- Shares Eligible for Future Sale,"
"Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Financing Transactions," insofar as they
purport to describe the Company's Capital Stock or the debt instruments
referred to therein are, when taken together with the other information
included in the Prospectus, accurate in all material respects.
In addition, such counsel shall also state that, during the
course of the preparation of the Registration Statement and Prospectus, such
counsel participated in conferences with officers and other representatives of
the Company, representatives of the certified public accountants of the Company,
the Underwriter's representatives and the Underwriter's counsel, at which
conferences the contents of the Prospectus and related matters were generally
discussed and, although such counsel has not undertaken, except as otherwise
indicated in our opinion, to determine independently, and such counsel is not
passing upon and do not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement and have
not made an independent investigation of facts for the purpose of rendering this
opinion, such counsel advises the Underwriter that, on the basis of the
foregoing (relying as to materiality to the extent we deemed appropriate upon
the statements of officers and other representatives of the Company), no facts
have come to our attention which lead us to believe that the Registration
Statement at the time it became effective, or the Prospectus, as of their
respective dates and as of the Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated in the
Prospectus or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Such counsel expresses
no opinion as to financial statements (including the schedules and notes
thereto) or any other financial or statistical data or calculations directly or
indirectly contained or referenced to in, or related to, or omitted from, the
Prospectus.
The opinion of such counsel may be limited to the laws of the
State of New York, the General Corporation Law of the State of Delaware, the
Commonwealth of Pennsylvania and the federal laws of the United States.
(f) The Underwriter shall have received on the Closing Date,
an opinion, dated the Closing Date, in form and substance satisfactory to the
Underwriter, of Xxxxxxx X. Xxxxxx, Esq., General Counsel of the Company, to the
effect that:
(i) Except as set forth in the Prospectus, each of
the Company and its Subsidiaries has all of the licenses, permits,
franchises and authorizations, if any, required by the relevant
governmental authorities of each of New York, Virginia, Pennsylvania,
Ohio, New Jersey, Massachusetts, New Hampshire, Vermont, Michigan and
Connecticut and/or its political subdivisions for the provision of
cable television service (as such counsel understands service to be
provided which may be based on a certificate of an officer of the
Company, provided that such counsel shall state that they believe that
both the Underwriter and he are justified in relying on such
certificate), where the failure to obtain or hold such license, permit,
franchise or authorization would have a Material Adverse Effect;
(ii) To the best of such counsel's knowledge after
due inquiry, each of the Company and its Subsidiaries has made all
filings, reports, applications and submissions required by the laws and
ordinances relating to cable services of each of New York, Virginia,
Pennsylvania, Ohio, New Jersey, Massachusetts, New Hampshire, Vermont,
Michigan and Connecticut, and the ordinances of the state's political
subdivisions relating thereto, and the rules and regulations
promulgated therewith.
(iii) Each of the Company and its Subsidiaries has
the consents, approvals, authorizations, licenses, certificates,
permits, or orders of any governmental authorities of the each of New
York, Virginia, Pennsylvania, Ohio, New Jersey, Massachusetts, New
Hampshire, Vermont, Michigan and Connecticut, and its political
subdivisions, if any, required for the consummations of the
transactions contemplated in the this Underwriting Agreement or the
Direct Offering Agreement where the failure to obtain the consents,
approvals, authorizations, licenses, certificates, permits or orders
would have a Material Adverse Effect.
(iv) There are no actions, suits or proceedings
pending or, to the best of such counsel's knowledge, threatened by or
before any court or governmental body each of New York, Virginia,
Pennsylvania, Ohio, New Jersey, Massachusetts, New Hampshire, Vermont,
Michigan and Connecticut, against or affecting any of the Company or
its Subsidiaries, or the business of the Company and its Subsidiaries.
(v) The statements in the Prospectus under the
headings "Risk Factors -- Regulation in the Telecommunications
Industry," "Risk Factors -- Extensive Regulation" and "Risk Factors --
Competition," insofar as they relate to the Company and its
Subsidiaries operations in each of New York, Virginia, Pennsylvania,
Ohio, New Jersey, Massachusetts, New Hampshire, Vermont, Michigan and
Connecticut, and purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair in all
material respects.
(vi) Neither the execution and delivery of this
Underwriting Agreement or the Direct Offering Agreement nor the
offering of the Shares or the Direct Offering Shares contemplated
hereby or thereby will conflict with or result in a violation of any
order or regulation of each of New York, Virginia, Pennsylvania, Ohio,
New Jersey, Massachusetts, New Hampshire, Vermont, Michigan and
Connecticut, or its political subdivisions applicable to the Company
and its Subsidiaries, the conflict with or the violation of which would
have a material adverse effect on the Company and its Subsidiaries.
(g) The Underwriter shall have received on the Closing Date,
an opinion, dated the Closing Date, in form and substance satisfactory to the
Underwriter, of Xxxxx X. Xxxxxx, Deputy General Counsel of the Company, to the
effect that:
(i) None of the Company or its Subsidiaries is in
violation of its certificate of incorporation, by-laws, certificate of
limited partnership or partnership agreement, as applicable, or in
default in the performance or observance of any material obligation,
covenant or condition contained in any partnership agreement,
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of
its properties may be bound.
(ii) Each of the Company and its Subsidiaries has
been duly qualified as a foreign corporation or partnership, as the
case may be, for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction,
except where the failure to so qualify would not have a Material
Adverse Effect (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company, provided
that such counsel shall state that he believes that both the
Underwriter and he are justified in relying upon such opinions and
certificates).
(iii) Each subsidiary of the Company is owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (other than liens to secure
indebtedness under credit facilities disclosed in the Prospectus) (such
counsel being entitled to rely in respect of the opinion in this clause
upon opinions of local counsel and in respect of matters of fact upon
certificates of officers of the Company or its Subsidiaries, provided
that such counsel shall state that he believes that both the
Underwriter and he are justified in relying upon such opinions and
certificates).
(iv) To the best of such counsel's knowledge and
other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
Subsidiaries is a party or of which any property of the Company or any
of its Subsidiaries is the subject which, if determined adversely to
the Company or any of its Subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, shareholder's equity, partners'
equity, or results of operations of the Company and its Subsidiaries;
and, to the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
(v) Neither the issuance and sale of the Shares and
the Direct Offering Shares, the execution, delivery or performance by
the Company of this Underwriting Agreement or the Direct Offering
Agreement, or the consummation by the Company of the transactions
herein and therein contemplated will not, to the best of my knowledge
after due inquiry, conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under any
material indenture, mortgage, deed of trust, sale/leaseback
transaction, loan agreement or other similar financing agreement, or
instrument or other agreement or instrument (including, without
limitation, any license or franchise granted to the Company or a
Subsidiary by a local franchising governmental body) to which the
Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound or to which any of the property or
assets of the Company or any of its Subsidiaries is subject, nor will
such actions result in any violation of the provisions of the
certificate of incorporation, by-laws, the certificate of limited
partnership or the partnership agreements of the Company and its
Subsidiaries, as appropriate, or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its Subsidiaries or any of
their properties.
(vi) No consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Shares, the
execution, delivery or performance by the Company of this Underwriting
Agreement or the Direct Offering Agreement or the consummation by the
Company of the transactions contemplated herein or therein, except such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection
with the purchase and resale of the Shares by the Underwriter and the
Managers.
(vii) Except as described in the Prospectus or in
this Underwriting Agreement, 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
(other than liens to secure indebtedness under credit facilities
disclosed in the Prospectus). There are not, to my knowledge, other
than as set forth, contemplated or referenced in the Prospectus,
currently, and will not be immediately following the issuance and sale
of the Shares, any material 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.
(viii) The Consummation of the transactions
contemplated in connection with any of the foregoing as set forth in
the Prospectus, will not violate Regulations T, U or X promulgated by
the Board of Governors of the Federal Reserve System.
In addition, such counsel shall also state that,
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 Prospectus, 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 Prospectus, 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 stated in the Prospectus 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
Prospectus, 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 Prospectus or necessary in order to make
the statements in the Prospectus, 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 Prospectus).
(h) The Underwriter shall have received on the Closing Date,
an opinion of Xxxxxxxxxx & Xxxxx, L.L.P., special regulatory counsel for the
Company and its Subsidiaries, dated the Closing Date, in form and substance
satisfactory to the Underwriter, of, to the effect that:
(i) The communities listed in Section A of Attachment
1 to the opinion have been registered with the FCC in connection with
the operation of the Systems. The filing of a registration statement
constitutes initial FCC authorization for the commencement of cable
television operations in the community registered.
(ii) The Subsidiaries hold certain FCC licenses, as
that term is defined below ("FCC Licenses"). All FCC Licenses and
receive-only earth station registrations held by the Subsidiaries in
connection with the operation of the Cable Systems are listed on
Attachment 1 to the Opinion. To the best of our knowledge, all such FCC
Licenses have been validly issued or assigned to the present licensee
and are currently in full force and effect. We have no knowledge of any
event which would allow, or after notice or lapse of time which would
allow, revocation or termination of any FCC License held by the
Subsidiaries or would result in any other material impairment of the
rights of the holder of such license. To the best of our knowledge, no
other FCC Licenses are required in connection with the operation of the
Cable Systems by the Subsidiaries in the manner we have advised they
are presently being operated. For the purposes of this opinion, an FCC
License is defined as an authorization, or renewal thereof, issued by
the FCC authorizing the transmission of radio energy through the
airways.
(iii) Other than proceedings affecting the cable
television industry generally, there is no action, suit or proceeding
pending before or, to the best of our knowledge, threatened by the FCC
which is reasonably likely to have a materially adverse impact upon the
cable television operations of the Company and its Subsidiaries taken
as a whole.
(iv) To the best of our knowledge after due inquiry,
the Company and the Subsidiaries have filed all current and routine
filings, reports, applications and submissions required under the
Communications Act, as amended, and under the rules and regulations of
the FCC.
(v) The Subsidiaries hold all authorizations and/or
have filed all notifications required by the FCC in connection with
their operation on all frequencies in the 108-137 MHz and 225-400 MHz
bands which we have been advised are currently being utilized on the
Cable Systems. The geographic and technical parameters with respect to
the authorized use of these frequencies are listed on Attachment 1
hereto.
(vi) The employment units covered by the Cable
Systems and operated by the Subsidiaries have been certified, where
required, by the FCC for compliance with equal employment opportunity
("EEO") requirements in each of calendar years 1992 through 1996 in
which such Cable Systems have been owned and operated by the Company or
the Subsidiaries. Employment certification records for the years prior
to 1992 have been purged from the FCC's database and are therefore
outside the scope of this opinion.
(vii) Statements of Account required by Section 111
of the Copyright Act of 1976, as amended have been filed, together with
royalty payments accompanying said Statements of Account, with the U.S.
Copyright Office for the Cable Systems covering each of the accounting
periods beginning with January 1 through June 30, 1994 accounting
period and ending with the July 1 through December 31, 1996 accounting
period during which such Cable Systems have been operated by the
Subsidiaries. We have not received the information or calculations
contained in these Statements, and express no opinion with respect to
the accuracy thereof. To the best of our knowledge, there are no
currently outstanding inquiries received from the U.S. Copyright Office
or any other party which question the copyright filings or payments
made by the Company or the Subsidiaries with respect to the Cable
Systems. It is possible that there may be matters pending before the
U.S. Copyright Office relating to the Cable Systems, the Company or the
Subsidiaries of which we do not have knowledge because such matters
have not yet been incorporated into the available public files of the
U.S. Copyright Office. However, we are not aware of the pending or
threatened claim, action or demand for copyright infringement or for
non-payment of royalties with respect to the Statements of Account or
related royalty payments filed by the Company and the Subsidiaries for
the Cable Systems.
(viii) The Company has obtained all consents,
approvals and authorizations of the FCC, if any, required for the
consummation of the transactions of the transactions contemplated in
this Underwriting Agreement or the Direct Offering Agreement where the
failure to obtain the consents, approval, authorizations, licenses,
certificates, permits or orders would reasonably be expected to have a
materially adverse impact on the Company or the Subsidiaries.
(ix) Neither the execution and delivery of the this
Underwriting Agreement or the Direct Offering Agreement nor the
offering of the Senior Notes contemplated thereby will conflict with or
result in a violation of any order or regulation of the FCC applicable
to the Company and the Subsidiaries, the conflict with or the violation
of which would reasonably be expected to have a materially adverse
impact on the Company or the Subsidiaries. However, we call the
Underwriter's attention to the following.
(x) Under the Act as now in effect, the sale or other
disposition of certain pledged collateral and the exercise of certain
other rights and remedies conferred upon the Underwriter by any
agreement or by applicable law might constitute an assignment of an FCC
licensee, or transfer of control of an FCC license, requiring for its
consummation the prior consent of the FCC granted upon an appropriate
application thereof.
(xi) Under the Act as now in effect, and as now
interpreted by the FCC, no valid security interest may be granted in an
FCC license. To the extent that this Underwriting Agreement or the
Direct Offering Agreement and/or related financing documents purport to
grant to the Underwriter a security interest in any FCC licenses, such
security interest may not be legally enforceable.
(xii) In the course of our representation of the
Company and its Subsidiaries, no matters have come to our attention,
other than matters affecting the cable television industry generally,
which would reasonable be expected to have a materially adverse impact
upon the cable television operations of the Company and the
Subsidiaries taken as a whole.
(xiii) In our opinion, the Statements in the
Prospectus under the headings "Risk Factors -- Regulation in the
Telecommunications Industry," "Risk Factors -- Extensive Regulation"
and "Risk Factors -- Competition," insofar as the purport to describe
the provisions of the law referred to therein, are accurate, complete
and fair in all material respects.
(i) The Underwriter shall have received an opinion, dated the
Closing Date, in form and substance reasonably satisfactory to the Underwriter,
of Xxxxxx & Xxxxxxx, counsel to the Underwriter, covering such matters as are
customarily covered in such opinions.
(j) At the time this Underwriting Agreement is executed and at
the Closing Date, the Underwriter shall have received from Deloitte & Touche
LLP, independent public accountants for the Company dated as of the date of this
Underwriting Agreement and of the Closing Date, respectively, a customary
comfort letter addressed to the Underwriter and in form and substance
satisfactory to the Underwriter with respect to the financial statements and
certain financial information of the Company and the Subsidiaries contained in
the Registration Statement and the Prospectus.
(k) (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 Prospectus; (iii) there shall not have been, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, 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; (iv) there
shall not have been any announcement by either Xxxxx'x Investors Service, Inc.
or Standard & Poor's that (a) it is downgrading its rating assigned to any class
of securities of the Company or any of its Subsidiaries, or (b) it is reviewing
its ratings assigned to any class of securities of the Company or any of its
Subsidiaries with a view to possible downgrading, or with negative implications
and (v) 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
Prospectus.
(l) 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.
(m) 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.
(n) The Shares shall have been listed or approved for
listing upon notice of issuance on the Nasdaq National Market.
(o) The issuance and sale of the Direct Offering Shares shall
have occurred in accordance with the terms and conditions set forth in the
Direct Offering Agreement.
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 the Underwriter and the Underwriter's counsel.
Any certificate or document signed by any officer of the
Company and delivered to the Underwriter or to counsel for the Underwriter,
shall be deemed a representation and warranty by the Company to the Underwriter
as to the statements made therein.
The obligations of the Underwriter to purchase Additional
Shares hereunder are subject to delivery to the Underwriter on the applicable
Option Closing Date of such documents as the Underwriter may reasonably request
with respect to the good standing of the Company, 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 Prospectus, 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 Prospectus, 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
Underwriting 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 Underwriter 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 Underwriter
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 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 Underwriting Agreement shall
become effective: (i) upon the execution and delivery hereof by the parties
hereto; or (ii) if, at the time this Underwriting 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 Underwriting Agreement shall have become effective, it may be
terminated by the Company, by notifying the Underwriter, or by the Underwriter,
by notifying the Company.
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 Underwriting Agreement shall be
subject to termination in the Underwriter's absolute discretion, without
liability on the part of the 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 of the Company on the Nasdaq National Market
or 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 political,
financial or economic conditions, the effect of which on the financial markets
of the United States is such as to make it, in the Underwriter's 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
Prospectus or to enforce contracts for the resale of the Shares by the
Underwriter. 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 Underwriter. The statements set forth
in the statements in the fourth, fifth, sixth and seventh paragraphs under the
caption "Underwriting" in the Prospectus, constitute the only information
furnished by or on behalf of the Underwriter as such information is referred to
in Sections 6(a) and 7 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10 and
11 hereof, notice given pursuant to any provision of this Underwriting Agreement
shall be in writing and shall be delivered (i) if to the Company, at the office
of the Company at Adelphia Communications Corporation, Main at Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Chief Financial Officer; or (ii) if
to the Underwriter, care of Xxxxxxx, Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Registration Department.
This Underwriting Agreement has been and is made solely for
the benefit of the Underwriter, 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 Underwriting Agreement.
Neither the term "successor" nor the term "successors and assigns" as used in
this Underwriting Agreement shall include a purchaser from the Underwriter of
any of the Shares in his status as such purchaser.
14. Applicable Law; Counterparts. This Underwriting 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 Underwriting Agreement may be signed in various
counterparts which together constitute one and the same instrument. If signed in
counterparts, this Underwriting Agreement shall not become effective unless at
least one counterpart hereof shall have been executed and delivered on behalf of
each party hereto.
[signature pages follow]
Please confirm that the foregoing correctly sets forth the agreement between the
Company and the Underwriter.
Very truly yours,
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Vice-President
Confirmed as of the date first above mentioned.
/s/Xxxxxxx, Xxxxx & Co.
Xxxxxxx, Sachs & Co.
