EXHIBIT 1.01
ADELPHIA COMMUNICATIONS CORPORATION
$500,000,000
3.25% Convertible Subordinated Notes due 2021
UNDERWRITING AGREEMENT
April 19, 2001
XXXXXXX XXXXX XXXXXX INC.
BANC OF AMERICA SECURITIES LLC as Representatives of the several Underwriters
named on Schedule 1 hereto
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXXXXX XXXXXXX & CO. INCORPORATED
as Independent Underwriter
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Adelphia Communications Corporation, a Delaware corporation
(the "Company"), proposes to sell $500,000,000 in aggregate principal amount of
its 3.25% Convertible Subordinated Notes due 2021 (collectively, the "Firm
Securities") to the several underwriters named in Schedule 1 hereto (the
"Underwriters"), for whom Xxxxxxx Xxxxx Barney Inc. and Banc of America
Securities LLC are acting as representatives (in such capacity, the
"Representatives"). The Company also proposes to grant an option to sell to the
Underwriters, upon the terms and conditions set forth in Section 2 hereof, up to
an additional $75,000,000 in aggregate principal amount of such Notes (the
"Additional Securities"). The Firm Securities and the Additional Securities are
hereinafter collectively referred to as the "Securities." The Securities will be
issued pursuant to an Indenture, dated as of January 23, 2001 (the "Base
Indenture"), as supplemented by the Second Supplemental Indenture thereto, to be
dated as of the Closing Date (as defined herein) (the "Supplemental Indenture"
and, together with the Base Indenture, the "Indenture"), between the Company and
The Bank of New York, as trustee (the "Trustee"). The form of the Supplemental
Indenture will be filed on Form 8-K and incorporated by reference as an exhibit
to the registration statement referred to below. If the Representatives are the
only Underwriters named on Schedule 1 hereto, the term "Representatives" shall
be deemed to refer to the Underwriters.
The Company and the Underwriters, in accordance with the
requirements of rule 2710(c)(8) and Rule 2720 ("Rule 2720") of the National
Association of Securities Dealers, Inc. (the "NASD") and subject to the terms
and conditions stated herein, also hereby confirm the engagement of the services
of Xxxxxx Xxxxxxx & Co. Incorporated (the "Independent Underwriter") as a
"qualified independent underwriter" within the meaning of Section (b)(15) of
Rule 2720 in connection with the offering and sale of the Securities.
1. Representations, Warranties and Agreements of the
Company. The Company represents and warrants to, and agrees with, the several
Underwriters and the Independent Underwriter on and as of the date hereof and
the Closing Date (as defined in Section 3) that:
(a) A Registration Statement on Form S-3 (Registration No.
333-78027), including a prospectus, with respect to the Securities have
been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder and have become
effective. Copies of such registration statement have been delivered by
the Company to you as the Underwriters. As used in this Agreement, (i)
"Registration Statement" means each such registration statement, as
amended and supplemented to the date hereof; (ii) "Basic Prospectus"
means the prospectus included in the Registration Statement; and (iii)
"Prospectus" means the Basic Prospectus, together with any prospectus
amendment or supplement (including in each case all documents
incorporated therein by reference (the "Incorporated Documents"))
specifically relating to the Securities, as filed with the Commission
pursuant to paragraph (b) of Rule 424 of the Rules and Regulations. The
Commission has not issued any order preventing or suspending the use of
any Prospectus, and no proceedings for such purposes have been
instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with;
(b) The Registration Statement and the Prospectus contain, and
(in the case of any amendment or supplement to any such document, or
any material incorporated by reference in any such document, filed with
the Commission after the date as of which this representation is being
made) will contain at all times during the period specified in
paragraph 4(c) hereof, all statements which are required by the
Securities Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the rules and regulations of the Commission
under such Acts; the Indenture, with any amendments and supplements
thereto will conform, with the requirements of the Trust Indenture Act
and the rules and regulations of the Commission thereunder; and the
Registration Statement, the Prospectus and the Incorporated Documents
do not, and (in the case of any amendment or supplement to any such
document, or any material incorporated by reference in any such
document, filed with the Commission after the date as of which this
representation is being made) will not, at any time during the period
specified in paragraph 4(c) hereof, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided that the Company makes no representation or warranty as to
information contained in or omitted from any Registration Statement or
any Prospectus in reliance and based upon information furnished to the
Company by or on behalf of any Underwriter or the Independent
Underwriter, it being understood and agreed that the only such
information is that described as such in Section 9(b) hereof, or as to
any statements in or omissions from the Statement of Eligibility of the
Trustee under the Indenture;
(c) Neither the Company nor any of its material subsidiaries
(the "Subsidiaries") has sustained since December 31, 2000 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) or long-term debt of the Company or any of
its 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 or any of the Acquired Companies (as defined below) and
their subsidiaries, otherwise than as set forth or contemplated in the
Prospectus;
(d) Each of the Company and its Subsidiaries has good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such as do not affect the value of
such property and do not interfere with the use made and proposed to be
made of such property by the Company and its Subsidiaries; and any real
property and buildings held under lease by the Company and its
Subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries; except in any case that
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");
(e) (i) Each of the Subsidiaries that is a partnership or
limited liability company has been duly formed or organized and is
validly existing as a partnership or limited liability company in good
standing under the laws of its state of formation, with full power and
authority (partnership, limited liability company and other) to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign partnership or foreign limited
liability company 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; 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;
(f) Each of the Company and its 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, all of the limited liability company interests
of the Subsidiaries that are limited liability companies 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 non-assessable;
and all of the partnership interests of the Subsidiaries disclosed in
the Prospectus as being owned directly or indirectly by the Company,
all of the limited liability company 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
ownership of the various interests and shares of the Company and its
Subsidiaries is as described in the Prospectus;
(g) The Company has authorized and has reserved, and covenants
to continue to reserve, free of any preemptive or similar rights, a
sufficient number of its authorized but unissued shares of its Class A
common stock, par value $.01 per share (the "Class A Common Stock"), to
satisfy the conversion rights of the Securities and a sufficient number
of its authorized but unissued shares of its Class B common stock, par
value $.01 per share (the "Class B Common Stock"), to satisfy the
conversion rights of the Direct Offering Securities (as defined below)
(such authorized but unissued shares of Class A Common Stock and Class
B Common Stock, issuable upon conversion being referred to as the
"Conversion Shares");
(h) 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
issuance of the Conversion Shares, upon due conversion of the
Securities in accordance with the terms of the Securities or upon due
conversion of the Direct Offering Securities in accordance with terms
of the Direct Offering Securities will not require any further
corporate action; upon such issuance the Conversion Shares will be
validly issued, fully paid and non-assessable, 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;
(i) The Securities have been duly authorized and, when issued
and delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the Indenture under which they are to be issued; the Base
Indenture has been authorized, executed and delivered by the Company,
and assuming the due authorization, execution and delivery thereof by
the Trustee, constitutes the valid and legally binding obligation of
the Company; the Supplemental Indenture has been duly authorized by the
Company and, when executed and delivered by the Company and the
Trustee, the Indenture will constitute a valid and legally binding
instrument, enforceable in accordance with its terms against the
Company, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Securities and the Indenture will conform to the descriptions thereof
in the Prospectus and will be in substantially the form previously
delivered to the Underwriters and the Independent Underwriter;
(j) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement and the Direct Debt Offering Agreement, dated as of the date
hereof and as in effect on the date hereof, between the Company and
Highland 2000, L.P. ("Highland") (together with all of the financing
and other ancillary agreements thereto dated as of or prior to the
Closing Date, the "Direct Debt Offering Agreement"), pursuant to which
the Company will issue $400,000,000 of aggregate principal amount of
the Company's 3.25% Convertible Subordinated Notes due 2021 (the
"Direct Offering Securities") to Highland and Highland agrees to
purchase the Direct Offering Securities within 270 days of the Closing
Date. The Company has all requisite corporate power and authority to
consummate the transactions contemplated by this Agreement and the
Direct Debt Offering Agreement, including, without limitation, the
corporate power and authority to issue and deliver the Conversion
Shares upon due conversion of the Securities and the Direct Offering
Securities in accordance with the terms of the Securities and the
Direct Offering Securities;
(k) Prior to the date hereof, none of the Company or any of
its affiliates (other than the Underwriters and the Independent
Underwriter or any person acting on their behalf as to which the
Company makes no representation) has taken, directly or indirectly, any
action which is designed to or which has constituted or which might
have been expected to cause or result in stabilization or manipulation
of the price of any security of the Company in connection with the
offering of the Securities;
(l) The issuance and sale of the Securities, the issuance and
sale of the Direct Offering Securities, the compliance by the Company
with all of the provisions of the Securities, the Direct Offering
Securities, the Indenture, the Direct Debt Offering Agreement and this
Agreement, the issue and delivery of the Conversion Shares upon due
conversion of the Securities or the Direct Offering Securities in
accordance with the terms of the Securities or the Direct Offering
Securities, as the case may be, and the consummation of the
transactions herein and therein contemplated will not 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 agreement, 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 one of its Subsidiaries 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 has rights
under or to which any of the property or assets of the Company or any
of its Subsidiaries is subject, nor will such action result in any
violation of the provisions of the certificate of incorporation or
bylaws of the Company or its Subsidiaries that are corporations or the
certificates of formation or limited liability company operating
agreements of its Subsidiaries that are limited liability companies or
the certificates of limited partnership or the partnership agreements
of its Subsidiaries that are partnerships 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; and 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 Securities or
the consummation by the Company of the transactions contemplated by
this Agreement or the Indenture, other than such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase
and distribution of the Securities by the Underwriters;
(m) None of the Company or its Subsidiaries is in violation of
its certificate of incorporation, partnership agreement, certificate of
formation, limited liability company operating agreement or bylaws, as
the case may be, or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, sale/leaseback agreement, 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 a subsidiary is a party or
by which it or any of its properties may be bound, except for such
defaults as would not have individually or in the aggregate a Material
Adverse Effect;
(n) The statements set forth in the Prospectus under the
caption "Description of Notes," insofar as they purport to constitute a
summary of the terms of the Securities, and under the caption
"Description of Capital Stock," insofar as they purport to constitute a
summary of the terms of the Company's capital stock, and incorporated
by reference in the Prospectus from the Company's Annual Report on Form
10-K for the year ended December 31, 2000 under the captions "Business"
and "Management's Discussion and Analysis of Financial Condition and
Results of Operations," as applicable, insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate, complete and fair in all material respects;
(o) None of the Company or its Subsidiaries is or, after
giving effect to the offering and sale of the Securities, will be an
"investment company," or an entity "controlled" by an "investment
company," as such terms are defined in the United States Investment
Company Act of 1940, as amended (the "Investment Company Act");
(p) None of the Company, its Subsidiaries or any of their
affiliates does business with the government of Cuba or with any person
or affiliate located in Cuba within the meaning of Section 517.075,
Florida Statutes;
(q) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale
of the Securities) will violate or result in a violation of Section 7
of the Exchange Act, or any regulation promulgated thereunder,
including, without limitation, Regulations T, U and X of the Board of
Governors of the Federal Reserve System;
(r) 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 a public offering registered under the
Securities Act; (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;
(s) Each of Deloitte & Touche LLP, who has reported on the
financial statements of the Company and one of the Acquired Companies
(as defined below), and KPMG LLP, who has reported on the financial
statements of one of the Acquired Companies, is an independent public
accountant as required by the Securities Act and the Rules and
Regulations;
(t) Each of this Agreement and the Direct Debt 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;
(u) Except for matters covered by paragraph (y) 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;
(v) (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;
(w) 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 ("EEOC") compliance certification by the FCC has been
certified by the FCC for annual EEOC 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;
(x) 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;
(y) (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;
(z) Neither the execution and delivery of this Agreement, the
Direct Debt Offering Agreement, the Securities, the Direct Offering
Securities or the Indenture, 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
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;
(aa) Neither the execution and delivery of this Agreement, the
Direct Debt Offering Agreement, the Securities, the Direct Offering
Securities or the Indenture, nor the execution, delivery, offer,
issuance and sale of the Securities, nor compliance with the terms,
conditions and provisions thereof by the Company, requires any license,
permit, franchise, certificate, consent, authorization, designation,
declaration, filing, registration or qualification by or with the FCC;
(bb) On October 1, 1999, the Company consummated its
previously announced acquisition of Century Communication Corp. and
FrontierVision Partners, L.P. (collectively, the "Acquired Companies");
(cc) There are no contracts or documents which are required to
be described in the Registration Statement, the Prospectus or the
documents incorporated by reference therein or to be filed as exhibits
thereto which have not been so described and filed as required;
(dd) The historical financial statements and financial
statement schedules of the Company and its consolidated subsidiaries
included or incorporated by reference in the Registration Statement and
Prospectus comply as to form in all material respects with the
requirements applicable to registration statements on Form S-3 under
the Securities Act and the Rules and Regulations and present fairly in
all material respects the financial position, results of operations and
statements of cash flows of the Company and its consolidated
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 or incorporated by reference 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 its
subsidiaries, and the statistical information and data included in the
Prospectus are accurately presented in all material respects;
(ee) 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 Agreement or the Direct Debt 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 Securities 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; and
(ff) Except pursuant to this 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 any of the
Underwriters for a brokerage commission, finder's fee or like payment
in connection with the issuance, purchase and sale of the Securities.
2. Purchase of the Securities. On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Company agrees to issue and sell to
each of the Underwriters, severally and not jointly, and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company,
the principal amount of Firm Securities set forth opposite the name of such
Underwriter on Schedule 1 hereto at a purchase price equal to 97.75% of the
principal amount thereof (the "purchase price").
The Company also agrees, subject to all the terms and
conditions set forth herein, to sell to the Underwriters, and upon the basis of
the representations, warranties and agreements of the Company herein contained
and subject to all the terms and conditions set forth herein, the Underwriters
shall have the right to purchase from the Company, at the purchase price, up to
an additional $75,000,000 principal amount of additional Securities, 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). Additional Securities may be purchased only for the
purpose of covering over-allotments, if any, made in connection with the
offering of the Firm Securities.
The Company shall not be obligated to deliver any of the
Securities except upon payment for all of the Securities to be purchased as
provided herein. The Company acknowledges and agrees that the Underwriters may
sell Securities to any affiliate of an Underwriter and that any such affiliate
may sell Securities purchased by it to an Underwriter.
3. Delivery of and Payment for the Securities. (a) Delivery of
and payment for the Firm Securities shall be made at the offices of
Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at
such other place as shall be agreed upon by the Representatives and the
Company, at 10:00 A.M., New York City time, on April 25, 2001, or at
such other time or date, not later than seven full business days
thereafter, as shall be agreed upon by the Representatives and the
Company (such date and time of payment and delivery being referred to
herein as the "Closing Date").
(b) Delivery to the Underwriters of and payment for any
Additional Securities to be purchased by the Underwriters shall be made
at the aforementioned offices 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 Representatives on behalf of the Underwriters to the
Company of the Underwriters' determination to purchase an additional
principal amount, specified in such notice, of Additional Securities.
The place of closing for any Additional Securities and the Option
Closing Date for such Additional Securities may be varied by agreement
between the Representatives on behalf of the Underwriters and the
Company.
(c) On the Closing Date or Option Closing Date, as the case
may be, payment of the purchase price for the Securities shall be made
to the Company by wire transfer of immediately available funds to an
account at a bank acceptable to Xxxxxxx Xxxxx Barney Inc. ("SSB"), or
by such other means as the parties hereto shall agree prior to the
Closing Date, against delivery to the Underwriters of the certificates
evidencing the Securities to be purchased. Time shall be of the
essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligations of the Underwriters
hereunder. Upon delivery, the Securities shall be in global form,
registered in such names and in such denominations as SSB on behalf of
the Representatives on behalf of the Underwriters shall have requested
in writing not less than two full business days prior to the Closing
Date. The Company agrees to make one or more global certificates
evidencing the Securities available for inspection by SSB on behalf of
the Representatives on behalf of the Underwriters in New York, New York
at least 24 hours prior to the Closing Date.
4. Further Agreements of the Company. The Company
agrees with each of the several Underwriters and the Independent Underwriter:
(a) To furnish promptly to the Underwriters, the Independent
Underwriter and counsel for the Underwriters a conformed copy of each
Registration Statement as originally filed and each amendment or
supplement thereto filed prior to the date hereof or relating to or
covering the Securities, and a copy of each Prospectus filed with the
Commission, including all documents incorporated therein by reference
and all consents and exhibits filed therewith and to file with the
Commission pursuant to Rule 424 a prospectus supplement, in form and
substance satisfactory to the Representatives and their counsel,
relating to the offering contemplated hereby no later than the close of
business on April 20, 2001;
(b) To deliver promptly to the Underwriters and the
Independent Underwriter such reasonable number of the following
documents as the Underwriters and the Independent Underwriter may
request: (i) conformed copies of the Registration Statement (excluding
exhibits other than the computation of the ratio of earnings to fixed
charges, the Indenture and this Agreement), (ii) the Prospectus and
(iii) any documents incorporated by reference in the Prospectus;
(c) During such period following the date hereof as, in the
opinion of counsel for the Underwriters, the Prospectus is required by
law to be delivered, to comply with the Securities Act, the Exchange
Act, the Trust Indenture Act and the rules and regulations under each
thereof, so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement and in the Prospectus. If
at any time when a prospectus is required by the Securities Act to be
delivered in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in
the reasonable opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue
statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel,
at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of
the Securities Act or the Rules and Regulations, the Company will
promptly prepare and file with the Commission, subject to paragraph (d)
below, such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish
to the Underwriters and the Independent Underwriter such number of
copies of such amendment or supplement as the Underwriters and the
Independent Underwriter may reasonably request;
(d) Prior to filing with the Commission during the period
referred to in (c) above (i) any amendment to the Registration
Statement, (ii) the Prospectus or any amendment thereto, (iii) the
prospectus supplement utilized in connection with this offering or any
amendment or supplement thereto, or (iv) any document incorporated by
reference in any of the foregoing or any amendment or supplement to
such incorporated document, to furnish a copy thereof to the
Underwriters, the Independent Underwriter and counsel for the
Underwriters and not to file any document that shall have been
disapproved by the Underwriters or the Independent Underwriter,
provided that neither the Representatives' nor the Independent
Underwriter's consent to, nor the Underwriters delivery of, any such
amendments or supplement shall constitute a waiver of any of the
conditions set forth in Section 6 hereof;
(e) To advise the Underwriters and the Independent Underwriter
promptly (i) when any post-effective amendment to the Registration
Statement relating to or covering the Securities becomes effective or
any supplement to the Prospectus shall have been filed, (ii) of any
comments from the Commission or any request or proposed request by the
Commission for an amendment or supplement to the Registration Statement
(insofar as the amendment or supplement relates to or covers the
Securities), to the Prospectus, to any document incorporated by
reference in any of the foregoing or for any additional information,
(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or any order directed
to the Prospectus or any document incorporated therein by reference or
the initiation or threat of any stop order proceeding or of any
challenge to the accuracy or adequacy of any document incorporated by
reference in any Prospectus, (iv) of receipt by the Company of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threat of
any proceeding for that purpose and (v) of the happening of any event
which makes untrue any statement of a material fact made in the
Registration Statement or the Prospectus or which requires the making
of a change in the Registration Statement or the Prospectus in order to
make any material statement therein not misleading;
(f) If, during the period referred to in (c) above, the
Commission shall issue a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain the
lifting of that order at the earliest possible time;
(g) To file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a Prospectus is required in connection with the
offering and sale of the Securities;
(h) To make generally available to the Company's security
holders and to deliver to the Underwriters and the Independent
Underwriter an earnings statement of the Company and its Subsidiaries
(which need not be audited) complying with Section 11(a) of the
Securities Act and the Rules and Regulations (including, at the option
of the Company, Rule 158), as soon as practicable;
(i) For so long as the Securities are outstanding, to furnish
to the Underwriters and the Independent Underwriter, promptly upon
written request, copies of any annual reports, quarterly reports and
current reports filed by the Company with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar forms as may be designated by the
Commission, and such other documents, reports and information as shall
be furnished by the Company to the Trustee or to the holders of the
Securities pursuant to the Indenture or the Exchange Act or any rule or
regulation of the Commission thereunder;
(j) To promptly take from time to time such actions as the
Underwriters may reasonably request to qualify the Securities for
offering and sale under the securities or Blue Sky laws of such
jurisdictions as the Underwriters may designate and to continue such
qualifications in effect for so long as required for the resale of the
Securities; and to arrange for the determination of the eligibility for
investment of the Securities under the laws of such jurisdictions as
the Underwriters may reasonably request; provided that the Company and
its Subsidiaries shall not be obligated to qualify as foreign
corporations in any jurisdiction in which they are not so qualified or
to file a general consent to service of process in any jurisdiction;
(k) Not to, for so long as the Securities are outstanding, be
or become, or be or become owned by, an open-end investment company,
unit investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company
Act, and to not be or become, or be or become owned by, a closed-end
investment company required to be registered, but not registered
thereunder;
(l) In connection with the offering of the Securities, until
SSB on behalf of the Representatives on behalf of the Underwriters
shall have notified the Company of the completion of the distribution
of the Securities, not to, and to cause its affiliated purchasers (as
defined in Regulation M under the Exchange Act) not to, either alone or
with one or more other persons, bid for or purchase, for any account in
which it or any of its affiliated purchasers has a beneficial interest,
any Securities, or attempt to induce any person to purchase any
Securities; and not to, and to cause its affiliated purchasers not to,
make bids or purchase for the purpose of creating actual, or apparent,
active trading in or of raising the price of the Securities;
(m) In connection with the offering of the Securities, to make
its officers, employees, independent accountants and legal counsel
reasonably available upon request by the Independent Underwriter or the
Underwriters and to cooperate with the Independent Underwriter, the
Underwriters and Underwriters' counsel with their due diligence review
through the Closing Date;
(n) To furnish to each of the Underwriters and the Independent
Underwriter on the date hereof a copy of each of the independent
accountants' reports included in the Registration Statement signed by
the accountants rendering such reports;
(o) To do and perform all things required to be done and
performed by it under this Agreement that are within its control prior
to or after the Closing Date, and to use its best efforts to satisfy
all conditions precedent on its part to the delivery of the Securities;
(p) To not take any action prior to the execution and delivery
of the Indenture which, if taken after such execution and delivery,
would have violated any of the covenants contained in the Indenture;
(q) To not take any action prior to the Closing Date which
would require the Prospectus to be amended or supplemented pursuant
to Section 4(c);
(r) To apply the net proceeds from the sale of the
Securities as set forth in the Prospectus under the heading "Use of
Proceeds";
(s) To use its best efforts to have the Conversion Shares
listed, subject to notice of issuance, on the Nasdaq National Market as
of the Closing Date or as soon thereafter as practicable;
(t) To the extent that the Conversion Shares constitute
uncertificated securities pursuant to Section 158 of the Delaware
General Corporation Law and within a reasonable time after the issuance
or transfer of such uncertificated Conversion Shares, to send to the
registered owner thereof a written statement that the Company will
furnish without charge to each stockholder who so requests the powers,
designations, preferences, and relative, participating, optional or
other special rights pertaining to such Conversion Shares and any other
information as may be required under Section 151(f) of the Delaware
General Corporation Law; and
(u) For a period of 60 days after the date hereof (the
"Lock-up Period"), to not, without the prior written consent of the
Representatives, issue, offer, sell, offer or contract to sell, grant
any option for the sale of, pledge, make any short sale or maintain any
short position, establish or maintain a "put equivalent position"
(within the meaning of Rule 16-a-1(h) under the Exchange Act) enter
into any swap, derivative transaction or other arrangement that
transfers to another, in whole or in part, any of the economic
consequences of ownership of the Class A Common Stock (whether any such
transaction is to be settled by delivery of Class A Common Stock, other
securities, cash or other consideration) or otherwise dispose of,
directly or indirectly, any Class A Common Stock (or any securities
convertible into or exchangeable for, or any warrants or options to
purchase relating to Class A Common Stock) except for agreements,
transactions or activities in connection with (i) sales to the
Underwriters pursuant to this Agreement; (ii) the issuance of options
or grants of shares under the Company's employee benefit, stock option
or stock plans in existence on the date hereof or in existence from
time to time; (iii) the issuance of any shares pursuant to any existing
agreements; (iv) the issuance of shares of Class A Common Stock
pursuant to a conversion of any Class B Common Stock or convertible
preferred stock outstanding on the date hereof or issued pursuant to
the April 2001 Rigas Notes Direct Placement or the January 2001 Rigas
Notes Direct Placement (each as defined in the Prospectus); (v) the
issuance and sale of capital stock of the Company to the persons or
entities named on Schedule 2 hereto; (vi) any private placement of
capital stock of the Company; provided that such capital stock shall
remain "restricted securities" (as defined in Rule 144(a)(3) of the
Securities Act) for any remaining portion of the Lock-up Period; (vii)
any issuance of shares in connection with a bona fide pledge of Class A
Common Stock or Class B Common Stock; (viii) sales to the persons
listed on Schedule 2 attached hereto in connection with the "April 2001
Rigas Notes Direct Placement" (as defined in the Prospectus); (ix) any
issuance of capital stock in connection with a bona fide acquisition of
telecommunications assets or an entity in the telecommunications
business; (x) the issuance of Class A Common Stock upon conversion of
any of the Securities; and (xi) the issuance of Class B Common Stock
upon conversion of any of the Direct Offering Securities.
5. Conditions of Underwriters' Obligations. The respective
obligations of the several Underwriters and the Independent Underwriter
hereunder are subject to the accuracy, on and as of the date hereof and the
Closing Date, of the representations and warranties of the Company contained
herein, to the accuracy of the statements of the Company and its officers made
in any certificates delivered pursuant hereto, to the performance by the Company
of its obligations hereunder, to the condition (in the case of the Underwriters)
that the Independent Underwriter shall have furnished to the Underwriters the
letter referred to in clause (v) of Section 20(b) hereof and to each of the
following additional terms and conditions:
(a) The Prospectus and supplement referred to in Section 4(a)
of this Agreement shall have been timely filed with the Commission in
accordance with Section 4(a) of this Agreement. Prior to the Closing
Date, no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus
or otherwise shall have been complied with to the reasonable
satisfaction of the Underwriters.
(b) The Prospectus (and any amendments or supplements thereto)
shall have been printed and copies distributed to the Underwriters as
promptly as practicable on or following the date of this Agreement or
at such other date and time as to which the Underwriters may agree.
(c) None of the Underwriters shall have discovered and
disclosed to the Company on or prior to the Closing Date that the
Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for the
Underwriters, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(d) All corporate proceedings and other legal matters incident
to the authorization, form and validity of each of this Agreement, the
Direct Debt Offering Agreement, the Indenture and the Securities
(collectively, the "Transaction Documents") and the Prospectus, and all
other legal matters relating to the Transaction Documents and the
transactions contemplated thereby, shall be satisfactory in all
material respects to the Underwriters, and the Company shall have
furnished to the Underwriters all documents and information that they
or their counsel may reasonably request to enable them to pass upon
such matters.
(e) The Underwriters shall have received on the Closing Date
an opinion of Xxxxxxxx Xxxxxxxxx Professional Corporation, counsel for
the Company, dated the Closing Date and addressed to the Underwriters,
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 Agreement and the Direct Debt
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 Conversion Shares issuable as of
the date hereof have been duly authorized and reserved for
issuance; the issuance of the Conversion Shares upon due
conversion of the Securities or the Direct Offering Securities
will not require any further corporate action; upon such
conversion the Conversion Shares 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 Securities or Class A Common Stock upon
the issuance thereof by the Company, other than as described
in the Prospectus;
(v) The Securities have been duly authorized
and, when issued and delivered pursuant to this Agreement,
will have been duly executed, authenticated, issued and
delivered and will constitute valid and legally binding
obligations of the Company entitled to the benefits provided
by the Indenture and enforceable against the Company in
accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other
laws of general applicability relating to or affecting
creditors' rights and to general equity principles and further
except that (a) rights to contribution or indemnification may
be limited by the laws, rules or regulations of any
governmental authority or agency thereof or by public policy,
and (b) waivers as to usury, stay or extension laws may be
unenforceable; and the Securities and the Indenture conform in
all material respects to the descriptions thereof in the
Prospectus;
(vi) The form of certificates for the
Conversion Shares conforms to the requirements of the Nasdaq
National Market and the Delaware General Corporation Law;
(vii) The Indenture has been duly
authorized, executed and delivered by the Company and duly
qualified under the Trust Indenture Act, and assuming that the
Indenture is a valid and binding agreement of the Trustee,
constitutes a valid and legally binding instrument,
enforceable in accordance with its terms against the Company,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and
to general equity principles and further except that (a)
rights to contribution or indemnification may be limited by
the laws, rules or regulations of any governmental authority
or agency thereof or by public policy, and (b) waivers as to
usury, stay or extension laws may be unenforceable;
(viii) The Registration Statement has become
effective under the Securities Act and the Prospectus
(including the prospectus supplement contemplated by Section
4(a) hereof) was filed pursuant to Rule 424(b) of the Rules
and Regulations and, to our knowledge, no stop order
suspending the effectiveness of the Registration Statement has
been issued or proceeding for that purpose has been instituted
or threatened by the Commission;
(ix) The Company has the corporate power and
authority to enter into the Underwriting Agreement and the
Direct Debt Offering Agreement and to issue, sell and deliver
the Securities and the Direct Offering Securities as provided
therein, and the Underwriting Agreement has 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, if applicable, (D) waivers as to usury,
stay or extension laws may be unenforceable;
(x) The issuance and sale of the Direct Debt
Offering Securities under the Direct Debt Offering Agreement
is not required to be registered under the Securities Act;
(xi) 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
Securities Act, the Rules and Regulations and Trust Indenture
Act;
(xii) The documents incorporated by
reference in the Prospectus (other than the financial
statements (and notes thereto) and related schedules therein,
as to which such counsel need express no opinion), when they
were filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act
and the Rules and Regulations;
(xiii) Neither the issuance, sale or
delivery of the Securities and the Direct Offering Securities,
nor the execution, delivery or performance of the Underwriting
Agreement or the Direct Debt Offering Agreement, or compliance
by the Company with all provisions of this Underwriting
Agreement, the Securities, the Direct Offering Securities, the
Indenture and the Direct Debt Offering Agreement, nor
consummation by the Company of the transactions contemplated
hereby or by the Direct Debt 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;
(xiv) The Company is not an "investment
company" or an entity "controlled" by an "investment company,"
as such terms are defined in the Investment Company Act;
(xv) 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 Agreement or
the Direct Debt 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
Securities Act securities held by them;
(xvi) None of (A) the execution, delivery
and performance of this Agreement, (B) the execution and
delivery of the Direct Debt Offering Agreement or (C) the
issuance and sale of the Securities and the application of the
proceeds from the issuance and sale of the Securities and the
Direct Offering Securities will violate Regulations T, U or X
promulgated by the Board of Governors of the Federal Reserve
System;
(xvii) 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 that
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; and
(xviii) The statements set forth in the
Prospectus under the caption "Description of Notes," insofar
as they purport to constitute a summary of the terms of the
Securities, and the statements set forth in the Prospectus
under the caption "Description of Capital Stock," insofar as
they purport to constitute a summary of the terms of the
Company's capital stock and under the caption "Certain United
States Tax Considerations," insofar as they purport to
constitute a summary of laws, governmental rules or
regulations or documents, are accurate in all material
respects;
In addition, such counsel shall also state that such counsel
has participated in conferences with officers and representatives of the Company
and its subsidiaries, representatives of the independent public accountants for
the Company and the Underwriters at which the contents of the Registration
Statement and the Prospectus (including the Incorporated Documents) and related
matters were discussed and, although such counsel is not passing upon and does
not assume any responsibility for and has not verified the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus, and has not made any independent check or
verification thereof, on the basis of the foregoing (relying as to materiality
to the extent such counsel deemed appropriate upon facts provided by officers
and other representatives of the Company), no facts have come to the attention
of such counsel that lead such counsel to believe that the Registration
Statement, as of the date it was declared effective, or the Prospectus, as of
its date or as of the Closing Date, in each case including the Incorporated
Documents, contained or contains any untrue statement of material fact or
omitted or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no belief or
opinion with respect to the financial statements and other financial and
statistical data included therein).
The opinion of such counsel may be limited to the laws of the
Commonwealth of Pennsylvania, the General Corporation Law of the State of
Delaware and the federal laws of the United States.
(f) The Underwriters shall have received on the Closing
Date an opinion of Xxxxxxx X. Xxxxxx, Esq., General Counsel to the
Company, dated the Closing Date and addressed to the Underwriters,
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, Massachusetts, New
Hampshire, Vermont, Connecticut, Wyoming, Wisconsin, Indiana,
Alabama, Mississippi, Puerto Rico, Georgia, Idaho, Washington,
California, Maryland, Illinois, West Virginia, Florida, South
Carolina, Oklahoma, Kansas, Kentucky, Colorado, Maine,
Tennessee, Arizona, North Carolina and Montana (collectively,
the "Adelphia Jurisdictions") 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
Underwriters 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 the Adelphia Jurisdictions and the ordinances of
the jurisdiction'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 each of the Adelphia Jurisdictions and its
political subdivisions, if any, required for the consummations
of the transactions contemplated in this 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 the Adelphia Jurisdictions (other than Vermont)
against or affecting any of the Company or its subsidiaries,
or the business of the Company and its subsidiaries or, with
respect to Vermont, which if adversely determined would have a
Material Adverse Effect;
(v) The statements in the Prospectus under
the headings "Risk Factors - We are Subject to Extensive
Regulation" and "Risk Factors - Competition," insofar as they
relate to the Company and its subsidiaries operations each of
the Adelphia Jurisdictions and purport to describe the
provisions of the laws and documents referred to therein, are
accurate, complete and fair in all material respects; and
(vi) Neither the execution and delivery of
the Underwriting Agreement or the Direct Debt Offering
Agreement, the issuance of the Conversion Shares upon due
conversion of the Securities or Direct Offering Securities in
accordance with the terms of the Securities or Direct Offering
Securities nor the offering of the Securities or Direct
Offering Securities contemplated thereby will conflict with or
result in a violation of any order or regulation of each of
the Adelphia Jurisdictions 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 Underwriters shall have received on the
Closing Date an opinion of Xxxxx X. Xxxxxx, Esq., Deputy General
Counsel to the Company, dated the Closing Date and addressed to the
Underwriters, to the effect that:
(i) None of the Company or its subsidiaries
is in violation of its certificate of incorporation, by-laws,
certificate of formation, limited liability company operating
agreement, 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
Underwriters 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
Underwriters 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) The issue and sale of the Securities and
the Direct Offering Securities, the compliance by the Company
with all of the provisions of the Securities, the Direct
Offering Securities, the Indenture, the Direct Debt Offering
Agreement and this Agreement, the issuance of the Conversion
Shares upon due conversion of the Securities in accordance
with the terms of the Securities and the consummation 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 certificates of incorporation, by-laws,
certificates of formation, limited liability company operating
agreements, certificates of limited partnership or 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; and
(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 Securities or the Direct Offering Securities or
the consummation by the Company of the transactions
contemplated by the Underwriting Agreement, the Direct Debt
Offering Agreement or the Indenture, 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 Securities by
the Underwriters.
In addition, such counsel shall also state that such counsel
has participated in conferences with officers and representatives of the Company
and its subsidiaries, representatives of the independent public accountants for
the Company and the Underwriters at which the contents of the Registration
Statement and the Prospectus (including the Incorporated Documents) and related
matters were discussed and, although such counsel is not passing upon and does
not assume any responsibility for and has not verified the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus, and has not made any independent check or
verification thereof, on the basis of the foregoing (relying as to materiality
to the extent such counsel deemed appropriate upon facts provided by officers
and other representatives of the Company), no facts have come to the attention
of such counsel that lead such counsel to believe that the Registration
Statement, as of the date it was declared effective, or the Prospectus, as of
its date or as of the Closing Date, in each case including the Incorporated
Documents, contained or contains any untrue statement of material fact or
omitted or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no belief or
opinion with respect to the financial statements and other financial and
statistical data included therein).
(h) The Underwriters shall have received on the Closing Date
an opinion of Xxxxxxxxxx & Xxxxx, P.C., special regulatory counsel for
the Company and its subsidiaries, dated the Closing Date, and addressed
to the Underwriters 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 and other than rate
proceedings, 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) 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 July 1 through December 31, 1997 accounting
period and ending with the July 1 through December 31, 2000
accounting period during which such Cable Systems have been
operated by the subsidiaries. We have not reviewed the
information or calculations contained in these Statements, and
express no opinion with respect to the accuracy thereof. Based
solely on material in counsel's file and material
representations provided by the Company, to the best of such
counsel's knowledge, there is no pending or threatened claim
against the Company or any of its subsidiaries for copyright
infringement or for non-payment of royalty fees nor does such
counsel know of any basis for such a claim.
(v) The Company has obtained all consents,
approvals and authorizations of the FCC, if any, required for
the consummation of the transactions contemplated in the
Underwriting 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.
(vi) Neither the execution and delivery of
the Underwriting Agreement nor the offering of the Securities
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 your attention to the following:
(A) Under the Communications 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 you by any agreement or by applicable
law might constitute an assignment of an FCC license, or
transfer of control of an FCC licensee, requiring for its
consummation the prior consent of the FCC granted upon an
appropriate application thereof.
(B) Under the Communications 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
the Underwriting Agreement and/or related financing documents
purport to grant to you a security interest in any FCC
licenses, such security interest may not be legally
enforceable.
(vii) 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 reasonably be expected to have
a materially adverse impact upon the cable television
operations of the Company and the subsidiaries taken as a
whole.
(viii) In our opinion, the Statements in the
Prospectus under the headings "Risk Factors--We are Subject to
Extensive Regulation" and the statements incorporated in the
Prospectus by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 2000 under the headings
"Business--Cable Television Operations--Subscriber Services
and Rates," "--Franchises," "--Cable Television Operations,"
"--Legislation and Regulation," and "Management's Discussion
and Analysis of Financial Condition and Results of
Operations--Regulatory and Competitive Matters", insofar as
they purport to describe the provisions of the law referred to
therein regarding the cable television industry, are accurate,
complete and fair in all material respects.
(i) The Underwriters shall have received from Xxxxxx &
Xxxxxxx, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to such matters as the Underwriters may
reasonably require, and the Company shall have furnished to such
counsel such documents and information as they request for the purpose
of enabling them to pass upon such matters.
(j) The Company shall have furnished to the Underwriters a
letter from each of Deloitte & Touche LLP and KPMG LLP, addressed to
the Underwriters and dated as of the date of this Agreement and as of
the Closing Date covering the matters previously requested by the
Representatives, in form and substance satisfactory to the
Representatives and their counsel in their sole discretion.
(k) The Company shall have furnished to the Underwriters a
certificate, dated the Closing Date, of its chief executive officer and
its chief financial officer stating that (A) such officers have
carefully examined the Registration Statement and the Prospectus, (B)
in their opinion, the Registration Statement and the Prospectus did not
include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and no event has occurred
which should have been set forth in a supplement or amendment to the
Registration Statement and the Prospectus so that the Registration
Statement and the Prospectus (as so amended or supplemented) would not
include any untrue statement of a material fact and would not omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading and (C) as of the Closing
Date, the representations and warranties of the Company in this
Agreement are true and correct in all material respects, the Company
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder on or prior to the Closing
Date, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the best of such officer's knowledge, are
contemplated by the Commission, and subsequent to the date of the most
recent financial statements contained in the Registration Statement and
the Prospectus, there has been no material adverse change in the
financial position or results of operation of the Company or any of its
Subsidiaries, or any change, or any development including a prospective
change, in or affecting the condition (financial or otherwise), results
of operations, business or prospects of the Company and its
Subsidiaries taken as a whole, except as set forth in the Prospectus.
(l) The Indenture shall have been duly executed and delivered
by the Company and the Trustee, and the Securities shall have been duly
executed and delivered by the Company and duly authenticated by the
Trustee.
(m) All of the Rigas family members and affiliates listed on
Schedule 2 hereto shall have delivered to the Underwriters executed
lock-up letters, dated on or before the Closing Date, agreeing to
"lock-up" their shares of Class A common stock, subject to certain
exceptions, for a period of 60 days from the Closing Date, in form and
substance satisfactory to the Representatives and their counsel.
(n) If any event shall have occurred that requires the Company
under Section 4(d) to prepare an amendment or supplement to the
Prospectus, such amendment or supplement shall have been prepared, the
Underwriters shall have been given a reasonable opportunity to comment
thereon, and copies thereof shall have been delivered to the
Underwriters reasonably in advance of the Closing Date.
(o) Subsequent to the execution and delivery of this Agreement
or, if earlier, the dates as of which information is given in the
Registration Statement (exclusive of any amendment thereto) and the
Prospectus (exclusive of any supplement thereto), there shall not have
been any change, or any development involving a prospective change,
that would have a Material Adverse Effect on the Company and
Subsidiaries, taken as a whole, not contemplated by the Prospectus, the
effect of which, is, in the judgment of a majority in interest of the
Underwriters including the Representatives, so material and adverse as
to make it impracticable or inadvisable to proceed with the public
offering of the Securities on the terms and in the manner contemplated
by this Agreement and the Prospectus (exclusive of any supplement
thereto).
(p) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities or prevent the issuance
of the Conversion Shares; and no injunction, restraining order or order
of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance or sale of the Securities or the issuance of the
Conversion Shares.
(q) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any downgrading in the
rating of any debt securities of the Company by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Securities Act), or any public announcement that
any such organization has under surveillance or review its rating of
any debt securities of the Company (other than an announcement with
positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating); (ii) any material suspension or
material limitation of trading in securities generally on the New York
Stock Exchange or the American Stock Exchange or any setting of minimum
prices for trading on such exchange, or any suspension of trading of
any securities of the Company on any exchange or in the
over-the-counter market; (iii) any banking moratorium declared by U.S.
Federal or New York authorities; or (iv) any outbreak or escalation of
major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a majority
in interest of the Underwriters including the Representatives, the
effect of any such outbreak, escalation, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
Securities.
(r) The Conversion Shares shall have been listed or approved
for listing upon notice of issuance on the Nasdaq National Market.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
The respective obligations of the several Underwriters to
purchase and pay for any Additional Securities shall be subject, in their
discretion, to each of the foregoing conditions to purchase the Firm Securities,
except that all references to the Firm Securities and the Closing Date shall be
deemed to refer to such Additional Securities and the Option Closing Date,
respectively.
6. Effectiveness and Termination. This Agreement shall become
effective upon the execution of this Agreement. The obligations of the
Underwriters and the Independent Underwriter hereunder may be terminated by the
Underwriters and the Independent Underwriter, respectively, in their absolute
discretion, by notice given to and received by the Company prior to delivery of
and payment for the Securities if, prior to that time, any of the events
described in Section 5 shall have occurred and be continuing.
7. Defaulting Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase the Securities hereunder on the Closing
Date and the aggregate principal amount of the Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of
the total principal amount of the Securities that the Underwriters are obligated
to purchase on such Closing Date, the Representatives may make arrangements
satisfactory to the Company for the purchase of such Securities by other
persons, including any of the Underwriters, but if no such arrangements are made
by such Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Securities that such defaulting Underwriters agreed but failed to purchase
on such Closing Date. If any Underwriter or Underwriters so default and the
aggregate principal amount of the Securities with respect to which such default
or defaults occur exceeds 10% of the total principal amount of the Securities
that the Underwriters are obligated to purchase on such Closing Date and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Securities by other persons are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company, except as provided in Sections 8 and
9. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve a
defaulting Underwriter from liability for its default.
8. Reimbursement of Underwriters' Expenses. If (a) the Company
shall fail to tender the Securities for delivery to the Underwriters and the
Independent Underwriter for any reason permitted under this Agreement or (b) the
Underwriters and the Independent Underwriter shall decline to purchase the
Securities for any reason permitted under this Agreement, the Company shall
reimburse the Underwriters and the Independent Underwriter for such
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
as shall have been reasonably incurred by the Underwriters and the Independent
Underwriter in connection with this Agreement and the proposed public offering
and sale of the Securities, and upon demand the Company shall pay the full
amount thereof to the Underwriters. If this Agreement is terminated pursuant to
Section 7 by reason of the default of one or more of the Underwriters, the
Company shall not be obligated to reimburse any defaulting Underwriter on
account of such expenses.
9. Indemnification and Contribution. (a) The Company shall
indemnify and hold harmless each Underwriter, its partners, directors and
officers and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Securities Act, against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, 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 each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will 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 in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below.
(b) Each Underwriter will severally and not jointly
indemnify and hold harmless the Company, its directors and officers and
each person, if any who controls the Company within the meaning of
Section 15 of the Securities Act, against any losses, claims, damages
or liabilities to which the Company may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus,
or arise out of or are based upon the omission or the 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
reliance upon and in conformity with written information furnished to
the Company by such Underwriter through the Representatives
specifically for use therein, and will reimburse any legal or other
expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred, it being understood and agreed
that the only such information furnished by any Underwriter consists of
the following information in the Prospectus furnished on behalf of each
Underwriter: the third paragraph, the second sentence of the seventh
paragraph, the eighth paragraph, the ninth paragraph and the tenth
paragraph under the caption "Underwriting."
(c) The Company also agrees to indemnify and hold harmless
Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx Xxxxxxx") and each person,
if any, who controls Xxxxxx Xxxxxxx within the meaning of either
Section 15 of the Securities Act, or Section 20 of the Exchange Act,
from and against any and all loses, claims, damages, liabilities and
judgments incurred as a result of Xxxxxx Xxxxxxx'x participation as a
"qualified independent underwriter" within the meaning of Rule 2720 of
the National Association of Securities Dealers' Conduct Rules in
connection with the offering of the Securities, except for any losses,
claims, damages, liabilities, and judgments resulting from Xxxxxx
Xxxxxxx'x, or such controlling person's, willful misconduct.
(d) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under subsection (a), (b) or (c) above,
notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than
under subsection (a), (b) or (c) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, 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 will not be liable
to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement (i) includes an unconditional
release of such indemnified party from all liability on any claims that
are the subject matter of such action 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 an indemnified party. The indemnifying party
shall not be liable in any one claim or action or separate but
substantially similar or related claims or actions in the same
jurisdiction for the expenses of more than one separate counsel in
additional to local counsel.
(e) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a), (b) or (c) above (i) in such proportion as is
appropriate to reflect the relative benefits received by each party to
this agreement from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative
fault of each party to this agreement in connection with the statements
or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Underwriters 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
Underwriters. 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 one hand or the
Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the
first sentence of 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 action or claim which
is the subject of this subsection (d). Notwithstanding the provisions
of this subsection (d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
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 Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations and
not joint.
(f) The obligations of the Company under this Section 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 any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section shall be in
addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to
each director of the Company, to each officer of the Company who has
signed a Registration Statement and to each person, if any, who
controls the Company within the meaning of the Securities Act.
10. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the
Independent Underwriter, the Company and their respective successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except as provided in Sections 9 and 12 with respect to
affiliates, officers, directors, employees, representatives, agents and
controlling persons of the Company, the Independent Underwriter and the
Underwriters. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 10, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
11. Expenses. The Company agrees with the Underwriters and the
Independent Underwriter to pay (a) the costs incident to the authorization,
issuance, sale, preparation and delivery of the Securities and any taxes payable
in that connection; (b) the costs incident to the preparation, printing and
filing under the Securities Act of the Registration Statement and any amendments
and exhibits thereto; (c) the costs of printing and distributing the
Registration Statement as originally filed and each amendment thereto and any
post-effective amendments thereof (including, in each case, exhibits) and the
Prospectus and any amendment or supplement thereto, all as provided in this
Agreement; (d) the costs of printing, reproducing and distributing the
Indenture, this Agreement and any underwriting and selling group documents; (e)
the filing fees incident to securing any required review by the National
Association of Securities Dealers, Inc. of the terms of sale of the Securities;
(f) the fees and expenses of the Company's counsel and independent accountants;
(g) the fees and expenses of preparing, printing and distributing Blue Sky
Memoranda (including related fees and expenses of counsel to the Underwriters);
(h) the registration of the Class A Common Stock under the Securities Act and
the listing of the Shares on the Nasdaq National Market; (i) the transportation
and other expenses incurred by or on behalf of Company representatives in
connection with presentations to prospective purchasers of the Securities; (j)
any fees charged by rating agencies for rating the Securities; (k) all fees and
expenses of the Trustee and any paying agent (including related fees and
expenses of any counsel to such parties); and (l) all other costs and expenses
incident to the performance of the obligations of the Company under this
Agreement; provided that, except as provided in this Section 11 and Section 8,
the Underwriters shall pay their own costs and expenses.
12. Survival. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Company, the
Independent Underwriter and the Underwriters contained in this Agreement or made
by or on behalf of the Company, the Independent Underwriter or the Underwriters
pursuant to this Agreement or any certificate delivered pursuant hereto shall
survive the delivery of and payment for the Securities and shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any of them or any of
their respective affiliates, officers, directors, employees, representatives,
agents or controlling persons.
13. Notices, etc. All statements, requests, notices
and agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent
by mail or telecopy transmission to Xxxxxxx Xxxxx Barney Inc., 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department (telecopier no.: (000) 000-0000) and Banc of America
Securities LLC, Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Equity Linked Capital Markets (telecopier no.: (212)
583-8457), as Representatives of the Underwriters, with a copy to
Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxx X. Xxxxxxx (telecopier no.: (000) 000-0000);
(b) if to the Independent Underwriter, shall be
delivered or sent by mail or telecopy transmission to Xxxxxx Xxxxxxx &
Co. Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxx XxXxxx (telecopier no.: (000) 000-0000); or
(c) if to the Company, shall be delivered or sent by
mail or telecopy transmission to the address of the Company set forth
in the Registration Statement, Attention: Chief Financial Officer
(telecopier no.: (000) 000-0000).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Company shall be entitled to act and rely upon any
request, consent, notice or agreement given or made on behalf of the
Underwriters by the Representatives.
14. Definition of Terms. For purposes of this
Agreement, (a) the term "business day" means any day on which the New York Stock
Exchange, Inc. is open for trading and (b) the term "subsidiary" has the meaning
set forth in Rule 405 under the Securities Act.
15. Representation of Underwriters. The
Representatives will act for the several Underwriters in connection with this
financing, and any action under this Agreement taken by the Representatives
jointly will be binding upon all the Underwriters.
16. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
17. Counterparts. This Agreement may be executed in
one or more counterparts (which may include counterparts delivered by
telecopier) and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original, but all such counterparts
shall together constitute one and the same instrument.
18. Amendments. No amendment or waiver of any
provision of this Agreement, nor any consent or approval to any departure
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the parties hereto.
19. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
20. Independent Underwriter.
(a) The Company hereby confirms its engagement of the
services of the Independent Underwriter as, and the Independent Underwriter
hereby confirms its agreement with the Company to render services as, a
"qualified independent underwriter" within the meaning of Section b(15) of Rule
2720 with respect to the offering and sale of the Securities.
(b) The Independent Underwriter hereby represents and warrants
to, and agrees with, the Company and the Underwriters that with respect to the
offering and sale of the Securities as described in the Prospectus:
(i) The Independent Underwriter
constitutes a "qualified independent
underwriter" within the meaning of Section b(15) of Rule 2720;
(ii) The Independent Underwriter has
conducted due diligence in respect thereto;
(iii) The Independent Underwriter has
undertaken the legal responsibilities and liabilities of an
underwriter under the Securities Act specifically including
those inherent in Section 11 thereof;
(iv) The Independent Underwriter recommends,
as of the date of the execution and delivery of this
Agreement, that the yield on the Securities be not less than
3.25% (corresponding to an initial public offering price of
100.00%); and
(v) Subject to the provisions of Section 5
hereof, the Independent Underwriter will furnish to the
Underwriters on the Closing Date a letter, dated the Closing
Date, in form and substance satisfactory to the Underwriters,
to the effect of clauses (i) through (iv) above.
(c) The Independent Underwriter hereby agrees with the Company
and the Underwriters that, as part of its services hereunder, in the event of
any amendment or supplement to the Prospectus, the Independent Underwriter will
render services as a "qualified independent underwriter" within the meaning of
Section (b)(15) of Rule 2720 with respect to the offering and sale of the
Securities as described in the Prospectus as so amended or supplemented that are
substantially the same as those services being rendered with respect to the
offering and sale of the Securities as described in the Prospectus (including
those described in subsection (b) above).
(d) The Company and the Independent Underwriter agree that the
Independent Underwriter will provide its services in its capacity as Independent
Underwriter hereunder without compensation other than such compensation that the
Independent Underwriter may receive as an Underwriter hereunder.
(e) The Independent Underwriter hereby consents to the
references to it as set forth under the caption "Underwriting" in the Prospectus
and in any amendment or supplement thereto made in accordance with Section 4
hereof.
[Signature Pages Follow]
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement among each of the Company, the
Independent Underwriter and the several Underwriters in accordance with its
terms.
Very truly yours,
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Vice President
Underwriting Agreement
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written:
XXXXXXX XXXXX XXXXXX INC.
BANC OF AMERICA SECURITIES LLC
as Representatives of the Underwriters listed on
Schedule 1 hereto
By: XXXXXXX XXXXX BARNEY INC.
By: /s/ Xxxxxxxxxxx Clipper
Name: Xxxxxxxxxxx Clipper
Title: Vice President
By: BANC OF AMERICA SECURITIES LLC
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Managing Director
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written:
XXXXXX XXXXXXX & CO. INCORPORATED
Acting as Independent Underwriter
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
SCHEDULE 1
Additional Principal Amount of
Securities to be Purchased if
Name of Underwriter Principal Amount of Maximum Option is Exercised
------------------- - ---------------------------
Securities
Xxxxxxx Xxxxx Barney Inc. $200,000,000 $30,000,000
Banc of America Securities LLC $200,000,000 $30,000,000
BMO Xxxxxxx Xxxxx Corp. $18,150,000 $2,722,500
First Union Securities, Inc. $18,150,000 $2,722,500
Xxxxxx Xxxxxxx & Co. Incorporated $18,150,000 $2,722,500
BNY Capital Markets, Inc. $9,110,000 $1,366,500
Credit Lyonnais Securities (USA) Inc. $9,110,000 $1,366,500
X.X. Xxxxxx Securities Inc. $9,110,000 $1,366,500
Scotia Capital (USA) Inc. $9,110,000 $1,366,500
XX Xxxxx Securities Corporation $9,100,000 $1,366,500
TOTAL
$500,000,000 $75,000,000
SCHEDULE 2
Xxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxx
Dorellenic
Eleni Acquisition Inc.
Xxxxx Holdings, L.P.
Highland Holdings
Highland Holdings II
Highland 2000, L.P.
