EXHIBIT 1.1
Hyperion Telecommunications, Inc.
Class A Common Stock
(par value $.01 per share)
Underwriting Agreement
(U.S. Version)
............., 1996
Xxxxxxx, Xxxxx & Co.
Bear, Xxxxxxx & Co. Inc.
Lazard Freres & Co. LLC
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Hyperion Telecommunications, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of ........ shares of Class A Common Stock, $.01
par value per share ("Stock"), of the Company and, at the election of the
Underwriters, Adelphia Communications Corporation, a Delaware corporation
("Adelphia" or the "Selling Stockholder") proposes, subject to the terms and
conditions stated herein, to sell to the Underwriters an aggregate of ........
shares of additional Stock; provided that in the event that the Selling
Stockholder elects not to sell such shares of Stock, the Company will issue and
sell up to ........ additional shares of Stock, subject to the terms and
conditions stated herein. The aggregate of ........ shares to be sold by the
Company is herein called the "Firm Shares" and the aggregate of ........
additional shares to be sold by the Selling Stockholder or the Company, as the
case may be, is herein called the "Optional Shares". The Firm Shares and the
Optional Shares that the Underwriters elect to purchase pursuant to Section 2
hereof are herein collectively called the "Shares".
It is understood and agreed to by all parties that the Company and the
Selling Stockholder are concurrently entering into an agreement (the
"International Underwriting Agreement") providing for the sale by the Company
and the Selling Stockholder of up to a total of ....... shares of Stock (the
"International Shares"), including the overallotment option thereunder, through
arrangements with certain underwriters outside the United States (the
"International Underwriters"), for whom Xxxxxxx Xxxxx International is acting as
lead manager. Anything herein or therein to the contrary notwithstanding, the
respective closings under this Agreement and the International Underwriting
Agreement are hereby expressly made conditional on one another. The
Underwriters hereunder and the International Underwriters are simultaneously
entering into an Agreement between U.S. and International Underwriting
Syndicates (the "Agreement between Syndicates") which provides, among other
things, for the transfer of shares of Stock between the two syndicates. Two
forms of prospectus are to be used in connection with the offering and sale of
shares of Stock contemplated by the foregoing, one relating to the Shares
hereunder and the other relating to the International Shares. The latter form
of prospectus will be identical to the former except for certain substitute
pages relating solely to international matters. Except as used in Sections 2,
3, 4, 9 and 11 herein, and except as the context may otherwise require,
references hereinafter to the Shares shall include all the shares of Stock which
may be sold pursuant to either this Agreement or the International Underwriting
Agreement, and references herein to any prospectus whether in preliminary or
final form, and whether as amended or supplemented, shall include both the U.S.
and the international versions thereof.
1. (a) The Company represents and warrants to, and agrees with, each
of the Underwriters that:
(i) The registration statement on Form S-1 (File No. 333-13663) (the
"Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto, to
you for each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no other
document with respect to such Initial Registration Statement has heretofore
been filed with the Commission; and no stop order suspending the
effectiveness of such Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in such
Initial Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the Act,
is hereinafter called a "Preliminary Prospectus"); the various parts of
such Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and including the
information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with Section
5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of
the Initial Registration Statement at the time it was declared effective or
such part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, each as amended at the time such part of the
registration statement became effective, are hereinafter collectively
called the "Registration Statement"; and such final prospectus, in the form
first filed pursuant to Rule 424(b) under the Act, is hereinafter called
the "Prospectus".
(ii) No order preventing or suspending the use of any Preliminary
Prospectus
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has been issued by the Commission, and each Preliminary Prospectus, at the
time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter through Xxxxxxx, Sachs & Co. expressly for
use therein.
(iii) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by an Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein.
(iv) Each of the Company and its Subsidiaries (as defined) (A) has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of its respective jurisdiction of incorporation,
(B) has all requisite power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and (C)
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, the effect of which would be materially adverse to the Company,
the Subsidiaries and the Joint Ventures, taken as a whole, by reason of the
failure to be so qualified in any such jurisdiction. The Company has no
direct or indirect subsidiaries as of the Closing Date other than those set
forth in Schedule II hereto (referred to collectively herein as
"Subsidiaries" and individually as a "Subsidiary"), other than the
Company's Joint Venture (as defined) located in Nashville, Tennessee, which
is treated as a consolidated subsidiary of the Company for accounting
purposes.
(iv) Each of the Joint Ventures (A) has been duly formed as a
partnership or corporation, as applicable, under the laws of its respective
jurisdiction of formation, (B) has all requisite power and authority
(corporate or partnership, as applicable, and other), to carry on its
business as it is currently being conducted and as described in the
Prospectus and to own, lease and operate its properties and (C) is duly
qualified and in good standing as a foreign corporation or partnership, as
applicable, authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification, or is subject to no material liability or disability,
the effect of which would be materially adverse to the Company, the
Subsidiaries and the Joint Ventures, taken as a whole, by reason of the
failure to be so
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qualified in any such jurisdiction. Neither the Company
nor its Subsidiaries has any ownership interest in any joint venture other
than those set forth on Schedule III hereto (referred to herein
collectively as "Joint Ventures" and individually a "Joint Venture"),
except for ownership interests of any Subsidiary or Joint Venture in any
partnership between any such Subsidiary or Joint Venture and !NTERPRISE.
(vi) Each of the Company, its Subsidiaries and the Joint Ventures, has
good and marketable title to all real property and good and marketable
title to all personal property owned by them, in each case free and clear
of all security interests, liens or other encumbrances and defects except
such as are described in the Prospectus or such as do not materially affect
the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company, its
Subsidiaries and the Joint Ventures; and any real property and buildings
held under lease by the Company, its Subsidiaries and the Joint Ventures
are held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not materially interfere with the use
made and proposed to be made of such property and buildings by the Company,
its Subsidiaries and the Joint Ventures.
(vii) None of the Company, its Subsidiaries or the Joint Ventures has
sustained since the date of the latest audited financial statements
included in the Prospectus 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 Registration Statement and the Prospectus, there has not been
any change in the capital stock or long-term debt of the Company, any of
its Subsidiaries or any of its Joint Ventures, or any material adverse
change, or any development involving a prospective material adverse change,
in or affecting the general affairs, management, financial position,
stockholders' or partners' equity or results of operations of the Company,
the Subsidiaries and the Joint Ventures, taken as a whole, otherwise than
as set forth or contemplated in the Prospectus.
(viii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued are fully paid and non-
assessable and conform to the description of the Stock contained in the
Prospectus; and all of the issued shares of capital stock of each
Subsidiary of the Company have been duly and validly authorized and issued,
are fully paid and non-assessable and except as set forth in the Prospectus
are owned directly or indirectly by the Company, free and clear of all
security interests, liens or other encumbrances.
(ix) The unissued Shares to be issued and sold by the Company to the
Underwriters hereunder and under the International Underwriting Agreement
have been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and validly
issued and fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus;
(x) None of (A) the execution, delivery or performance by the Company
and the Selling Stockholder of this Agreement and the International
Underwriting Agreement, (B) the issuance and sale of the Shares to be sold
by the Company and the Shares to
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be sold by the Selling Stockholder, if any, hereunder and (C) the
consummation by the Company and the Selling Stockholder of the transactions
described herein, in the International Underwriting Agreement and in the
Prospectus will conflict with, or result in a breach or violation of any of
the terms or provisions of, or constitute a default under (or constitute an
event that with notice or the lapse of time, or both, would constitute a
default), or require consent under, or result in the imposition of a lien
or encumbrance on any properties of the Company, any Subsidiary or any
Joint Venture, or an acceleration of any indebtedness of the Company, any
Subsidiary or any Joint Venture pursuant to, (i) the charter or bylaws of
the Company or any Subsidiary or the partnership agreement governing any
Joint Venture, (ii) any bond, debenture, note, indenture, mortgage, deed of
trust or other agreement or instrument to which the Company, any Subsidiary
or any Joint Venture is a party or by which any of them or their property
is or may be bound, (iii) any local, state or Federal law, statute,
ordinance, rule, regulation or requirement (including, without limitation,
the Telecommunications Act of 1996 (the "Telecommunications Act") and the
rules and regulations of the Federal Communications Commission ("FCC") and
environmental laws, statutes, ordinances, rules or regulations) applicable
to the Company, any Subsidiary, any Joint Venture or any of their
respective assets or properties or (iv) any judgment, order or decree of
any court or governmental agency or authority having jurisdiction over the
Company, the Subsidiaries, the Joint Ventures or any of their assets or
properties except in the case of clauses (ii), (iii) and (iv) for such
violations conflicts, breaches, defaults, consents, impositions of liens or
accelerations that would not, individually or in the aggregate, have a
material adverse effect on the Company, the Subsidiaries and the Joint
Ventures, taken as a whole. Other than as described in the Prospectus, no
consent, approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, (A) any court or governmental
agency, body or administrative agency (including, without limitation, the
FCC) or (B) any other person is required for (1) the execution, delivery
and performance by the Company of this Agreement and International
Underwriting Agreement or (2) the issuance and sale of the Shares and the
transactions contemplated hereby and thereby, except (y) such as have been
obtained and made under the Act for the Shares, and state or foreign
securities or Blue Sky laws or regulations in connection with the purchase
and distribution of the Shares by the Underwriters and the International
Underwriters or such as may be required by the NASD (as defined below) or
(z) where the failure to obtain any such consent, approval, authorization
or order of, or filing, registration, qualification, license or permit
could not reasonably be expected to result in a material adverse effect on
the Company, the Subsidiaries and the Joint Ventures, taken as a whole.
(xi) None of the Company, the Subsidiaries or the Joint Ventures is
and, after giving effect to the transactions set forth in the Prospectus,
including the offerings of the Stock (the "Offerings"), will be (A) in
violation of its charter and bylaws or partnership agreement, as
applicable, (B) in default in the performance of any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or instrument to
which it is a party or by which it is bound or to which any of its
properties is subject, or (C) in violation of any local, state or Federal
law, statute, ordinance, rule, regulation, requirement, judgment or court
decree (including, without limitation, the Communications Act of 1934, as
amended by the Telecommunications Act, and the rules and regulations of the
FCC and environmental laws, statutes, ordinances, rules, regulations,
judgments or court decrees) applicable to the Company, any Subsidiary, any
Joint Venture or any of
5
their respective assets or properties (whether owned or leased), other
than, in the cases of clauses (B) and (C), any default or violation that
could not reasonably be expected to result, individually or in the
aggregate, in a material adverse effect on the Company, any of the
Subsidiaries and any of the Joint Ventures, taken as a whole.
(xii) All of the outstanding capital stock of each Subsidiary is owned
by the Company, free and clear of any security interest, claim, lien,
limitation on voting rights or other charge or encumbrance. Except as
disclosed in the Prospectus, there are not currently, and will not be as a
result of the Offerings, any outstanding subscriptions, rights, warrants,
calls, commitments of sale or options to acquire, or instruments
convertible into or exchangeable for, any capital stock or other equity
interest of the Company or any Subsidiary.
(xiii) 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 Stock, under the caption "Certain United States
Tax Consequences to Non-United States Holders" insofar as they purport to
summarize the laws discussed therein, and under the caption "Underwriting"
(insofar as such statements describe this Agreement and the International
Underwriting Agreement), insofar as they purport to summarize the
provisions of the laws and documents referred to therein, are accurate,
complete and fair, in all material respects.
(xiv) Neither the Company nor any of its 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.
(xv) Deloitte & Touche, LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
(xvi) There is (i) no action, suit or proceeding before or by any
court, arbitrator or governmental agency, body or official, domestic or
foreign, now pending or threatened or contemplated to which the Company,
any of the Subsidiaries or any of the Joint Ventures is or may be a party
or to which the business or property of the Company, any Subsidiary or any
Joint Venture is subject, (ii) no local, state or Federal law, statute,
ordinance, rule, regulation, requirement, judgment or court decree
(including, without limitation, the Telecommunications Act and the rules
and regulations of the FCC) or order that has been enacted, adopted or
issued by any governmental agency or, to the best of the Company's
knowledge, that has been proposed by any governmental body and (iii) no
injunction, restraining order or other order or decree of any nature by a
federal or state court or foreign court of competent jurisdiction to which
the Company, any Subsidiary or any Joint Venture is or could reasonably be
expected to be subject or to which the business, assets, or property of the
Company, any Subsidiary or any Joint Venture are or could reasonably be
expected to be subject, that is not disclosed in the Prospectus or could
reasonably be expected to result, individually or in the aggregate, in a
material adverse effect on the current or future consolidated financial
position, stockholders' or partners' equity, as applicable, or results of
operations of the Company, the Subsidiaries and the Joint Ventures, taken
as a whole.
(xvii) No action has been taken and no local, state or Federal law,
statute, ordinance, rule, regulation, requirement, judgment or court decree
has been
6
enacted, adopted or issued by any governmental agency that prevents the
issuance of the Shares or prevents or suspends the use of the Prospectus or
the Registration Statement; no injunction, restraining order or other order
or decree of any nature by a federal or state court of competent
jurisdiction has been issued that prevents the issuance of the Shares or
prevents or suspends the sale of the Shares in any jurisdiction referred to
in Section 5(b) hereof; and every request of any securities authority or
agency of any jurisdiction for additional information has been complied
with in all material respects.
(xviii) There is (i) no unfair labor practice complaint pending or
threatened against the Company, any Subsidiary or any Joint Venture, before
the National Labor Relations Board, any state or local labor relations
board or any foreign labor relations board, and no significant grievance or
significant arbitration proceeding arising out of or under any collective
bargaining agreement is so pending or threatened against the Company, any
Subsidiary or any Joint Venture, (ii) no significant strike, labor dispute,
slowdown or stoppage pending or threatened against the Company, any
Subsidiary or any Joint Venture and (iii) no union representation question
existing with respect to the employees of the Company, any Subsidiary or
any Joint Venture that, in the case of clauses (i), (ii) or (iii), could
reasonably be expected to result, individually or in the aggregate, in a
material adverse effect on the Company, the Subsidiaries and the Joint
Ventures, taken as a whole. To the best of the Company's knowledge, no
collective bargaining organizing activities are taking place with respect
to the Company, the Subsidiaries or the Joint Ventures. None of the
Company, any Subsidiary or any Joint Venture has violated (A) any federal,
state or local law or foreign law relating to discrimination in hiring,
promotion or pay of employees, (B) any applicable wage or hour laws or (C)
any provision of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the rules and regulations thereunder, which in the
case of clause (A), (B) or (C) above could reasonably be expected,
individually or in the aggregate, to result in a material adverse effect to
the Company, any of its Subsidiaries and any of its Joint Ventures, taken
as a whole.
(xix) None of the Company, any Subsidiary or any Joint Venture has
violated any environmental, safety or similar law or regulation applicable
to it or its business or property relating to the protection of human
health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), lacks any
permit, license or other approval required of it under applicable
Environmental Laws is violating any term or condition of such permit,
license or approval which could reasonably be expected to, either
individually or in the aggregate, have a material adverse effect, on the
Company, the Subsidiaries and the Joint Ventures, taken as a whole.
(xx) Each of the Company, the Subsidiaries and the Joint Ventures
has (i) peaceful and undisturbed possession under all leases to which any
of them is a party as lessee, (ii) all licenses, certificates, permits,
authorizations, approvals, franchises and other rights from, and has made
all declarations and filings with, all federal, state and local authorities
(including, without limitation, the FCC), all self-regulatory authorities
and all courts and other tribunals (each an "Authorization") necessary to
engage in the business as presently conducted by any of them in the manner
described in the Prospectus, except as described in the Prospectus or where
failure to hold such
7
Authorizations would not, individually or in the aggregate, have a material
adverse effect on the Company, the Subsidiaries and the Joint Ventures,
taken as a whole and (iii) except as set forth in the Prospectus, no reason
to believe that any governmental body or agency is considering limiting,
suspending or revoking any such Authorization. Except where the failure to
be in full force and effect would not have, individually or in the
aggregate, a material adverse effect on the Company, the Subsidiaries and
the Joint Ventures, taken as a whole, all such Authorizations are valid and
in full force and effect and each of the Company, the Subsidiaries and the
Joint Ventures is in compliance with the terms and conditions of all such
Authorizations and with the rules and regulations of the regulatory
authorities having jurisdiction with respect thereto.
(xxi) Each of the Company, the Subsidiaries and the Joint Ventures
owns, possesses or has the right to employ all patents, patent rights,
inventions, copyrights, know-how (including, without limitation, trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, software, systems or procedures), trademarks,
service marks and trade names, inventions, computer programs, technical
data and information (collectively, the "Intellectual Property") presently
employed by the Company, the Subsidiaries or the Joint Ventures in
connection with the businesses now operated by it or which are proposed to
be operated by the Company, the Subsidiaries or the Joint Ventures free and
clear of and without violating any right, claimed right, charge,
encumbrance, pledge, security interest, restriction or lien of any kind of
any other person and none of the Company, any Subsidiary or any Joint
Venture has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing except as
could not reasonably be expected, individually or in the aggregate, to have
a material adverse effect on the Company, the Subsidiaries and the Joint
Ventures, taken as a whole. The use of the Intellectual Property in
connection with the business and operations of the Company, the
Subsidiaries and the Joint Ventures does not infringe on the rights of any
person, except as would not have, individually or in the aggregate, a
material adverse effect on the Company, the Subsidiaries and the Joint
Ventures, taken as a whole.
(xxii) None of the Company, any Subsidiary, any Joint Venture or any of
their respective officers, directors, partners, employees, agents or
affiliates or any other person acting on behalf of the Company, any
Subsidiary or any Joint Venture, as the case may be, has, directly or
indirectly, given or agreed to give any money, gift or similar benefit
(other than legal price concessions to customers in the ordinary course of
business) to any customer, supplier, employee or agent of a customer or
supplier, official or employee of any governmental agency (domestic or
foreign), instrumentality of any government (domestic or foreign) or any
political party or candidate for office (domestic or foreign) or other
person who was, is or may be in a position to help or hinder the business
of the Company, any Subsidiary or any Joint Venture (or assist the Company,
any Subsidiary or any Joint Venture in connection with any actual or
proposed transaction) which (i) might subject the Company, any Subsidiary,
or any other individual or entity to any damage or penalty in any civil,
criminal or governmental litigation or proceeding (domestic or foreign),
(ii) if not given in the past, could reasonably be expected to have had,
individually or in the aggregate, a material adverse effect on the assets,
business or operations of the Company, any Subsidiary and any
Joint Venture, taken as a whole or (iii) if not continued in the future,
could reasonably be expected to have, individually or in the aggregate, a
material adverse effect on the Company, any Subsidiary and any
8
Joint Venture, taken as a whole.
(xxiii) All tax returns required to be filed by the Company, each of
the Subsidiaries and each of the Joint Ventures in all jurisdictions have
been so filed. All taxes, including, without limitation, withholding taxes,
penalties and interest, assessments, fees and other charges due or claimed
to be due from such entities or that are due and payable have been paid,
other than those being contested in good faith and for which adequate
reserves have been provided or those currently payable without penalty or
interest. There are no proposed additional tax assessments against the
Company, any Subsidiary, any Joint Venture or the assets or property of the
Company, any Subsidiary or any Joint Venture.
(xxiv) None of the Company, the Subsidiaries or the Joint Ventures is,
or will be after giving effect to the offering and sale of the Shares (i)
an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), or (ii) a "holding company" or a
"subsidiary company" or an "affiliate" of a holding company within the
meaning of the Public Utility Holding Company Act of 1935, as amended (the
"PUC Act").
(xxv) Except as set forth in the Prospectus, there are no holders of
securities of the Company, the Subsidiaries or the Joint Ventures who, by
reason of the execution by the Company of this Agreement or the
International Underwriting Agreement or the consummation by the Company of
the transactions contemplated hereby and thereby, have the right to request
or demand that the Company, any of the Subsidiaries or any of the Joint
Ventures register any of its securities under the Act.
(xxvi) Each of the Company, the Subsidiaries and the Joint Ventures
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that: (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect thereto.
(xxvii) Each of the Company, the Subsidiaries and the Joint Ventures
maintains insurance covering its properties, operations, personnel and
businesses. Such insurance insures against such losses and risks as are
adequate in accordance with customary industry practice to protect the
Company, the Subsidiaries, the Joint Ventures and their respective
businesses. None of the Company, any Subsidiary or any Joint Venture has
received notice from any insurer or agent of such insurer that substantial
capital improvements or other expenditures will have to be made in order to
continue such insurance. All such insurance is outstanding and duly in
force.
(xxviii) None of the Company, any Subsidiary or any Joint Venture has
(i) taken, directly or indirectly, any action designed to, or that might
reasonably be expected to, cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of the Shares or (ii) since the date of the Preliminary Prospectus
(A) sold, bid for, purchased or paid any person any compensation
9
for soliciting purchases of the Shares or (B) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company.
(xxix) Set forth on Schedule IV hereto is a list of each employee
pension or benefit plan with respect to which the Company or any
corporation considered an affiliate of the Company within the meaning of
Section 407(d)(7) of ERISA (an "ERISA Affiliate") is a party in interest or
disqualified person.
(xxx) Subsequent to the respective dates as of which information is
given in the Prospectus and up to the Closing Date, except as set forth in
the Prospectus (i) none of the Company, any Subsidiary or any Joint Venture
has incurred any liabilities or obligations, direct or contingent, which
are material, individually or in the aggregate, to the Company, the
Subsidiaries and the Joint Ventures, taken as a whole, nor entered into any
transaction not in the ordinary course of business, (ii) there has been no
dividend or distribution of any kind declared, paid or made by the Company
or its Subsidiaries on any class of capital stock and (iii) there has been
no distribution of profits or return of capital contribution by any Joint
Venture.
(xxxi) The accountants who have certified or will certify the
financial statements included or to be included as part of the Registration
Statement and Prospectus are independent accountants. The historical
financial statements of the Company and each of the Subsidiaries comply as
to form in all material respects with the requirements applicable to
registration statements on Form S-1 under the Act and present fairly in all
material respects the financial position and results of operations of the
Company and each of its Subsidiaries, at the respective dates and for the
respective periods indicated. Such financial statements have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods presented. The other financial
information and data included in the Registration Statement and the
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 Registration
Statement and the Prospectus and the books and records of the Company, each
of its Subsidiaries and each of its Joint Ventures, as applicable. The
statistical information and data included in the Prospectus are accurately
presented in all material respects.
(xxxii) Except pursuant to this Agreement, there are no contracts,
agreements or understandings between the Company, any of the Subsidiaries
or any of the 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 Shares.
(xxxiii) Except as disclosed in the Prospectus, there are no business
relationships or related party transactions required to be disclosed
therein pursuant to Item 404 of Regulation S-K of the Commission.
(b) The Selling Stockholder represents and warrants to, and agrees
with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary for
the execution and delivery by the Selling Stockholder of this Agreement,
the International
10
Underwriting Agreement, the Power of Attorney and the Custody Agreement
hereinafter referred to, and for the sale and delivery of the Shares, if
any, to be sold by the Selling Stockholder hereunder and under the
International Underwriting Agreement, have been obtained except, where the
failure to obtain any such consent, approval, authorization or order of, or
filing, registration, qualification, license or permit could not reasonably
be expected to result in a material adverse effect on the Selling
Stockholder; and the Selling Stockholder has full right, power and
authority to enter into this Agreement, the International Underwriting
Agreement, the Power of Attorney and the Custody Agreement and to sell,
assign, transfer and deliver the Shares, if any, to be sold by the Selling
Stockholder hereunder and under the International Underwriting Agreement;
(ii) The sale of the Shares, if any, to be sold by the Selling
Stockholder hereunder and under the International Underwriting Agreement
and the compliance by the Selling Stockholder with all of the provisions of
this Agreement, the International Underwriting Agreement, the Power of
Attorney and the Custody Agreement 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 statute, indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Selling Stockholder
is a party or by which the Selling Stockholder is bound, or to which any of
the property or assets of the Selling Stockholder is subject, nor will such
action result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Selling Stockholder or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Selling Stockholder or the property of the
Selling Stockholder;
(iii) The Selling Stockholder has, and immediately prior to such Time
of Delivery (as defined in Section 4 hereof) the Selling Stockholder will
have, good and valid title to the Shares, if any, to be sold by the Selling
Stockholder hereunder and under the International Underwriting Agreement,
free and clear of all security interests, liens or other encumbrances; and,
upon delivery of such Shares, if any, and payment therefor pursuant hereto
and thereto, good and valid title to such Shares, free and clear of all
security interests, liens or other encumbrances, will pass to the several
Underwriters or the International Underwriters, as the case may be;
(iv) The Selling Stockholder (A) has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, (B) has all requisite power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus and to enter into this Agreement and the
International Underwriting Agreement, and (C) 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;
(v) The Selling Stockholder has not taken and will not take, directly
or indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares;
(vi) To the extent that any statements or omissions made in the
11
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity
with written information furnished to the Company by the Selling
Stockholder expressly for use therein, such Preliminary Prospectus and the
Registration Statement did, and the Prospectus and any further amendments
or supplements to the Registration Statement and the Prospectus, when they
become effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Act and the
rules and regulations of the Commission thereunder and will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading;
(vii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, the Selling Stockholder will deliver to you prior to or at
the Time of Delivery (as hereinafter defined) a properly completed and
executed United States Treasury Department Form W-9 (or other applicable
form or statement specified by Treasury Department regulations in lieu
thereof);
(viii) Certificates in negotiable form representing all of the Shares
to be sold by the Selling Stockholder hereunder and under the International
Underwriting Agreement have been placed in custody under a Custody
Agreement, in the form heretofore furnished to you (the "Custody
Agreement"), duly executed and delivered by the Selling Stockholder to
Xxxxxxxx Xxxxxxxxx, as custodian (the "Custodian"), and the Selling
Stockholder has duly executed and delivered a Power of Attorney, in the
form heretofore furnished to you (the "Power of Attorney"), appointing
Xxxxxx Xxxxxxxx as the Selling Stockholder's attorney-in-fact (the
"Attorney-in-Fact") with authority to execute and deliver this Agreement
and the International Underwriting Agreement on behalf of the Selling
Stockholder, to determine the purchase price to be paid by the Underwriters
and the International Underwriters to the Selling Stockholder as provided
in Section 2 hereof, to authorize the delivery of the Shares, if any, to be
sold by the Selling Stockholder hereunder and otherwise to act on behalf of
the Selling Stockholder in connection with the transactions contemplated by
this Agreement, the International Underwriting Agreement and the Custody
Agreement; and
(ix) The Shares represented by the certificates held in custody for
the Selling Stockholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder and the International Underwriters
under the International Underwriting Agreement; the arrangements made by
the Selling Stockholder for such custody, and the appointment by the
Selling Stockholder of the Attorneys-in-Fact by the Power of Attorney, are
to that extent irrevocable; the obligations of the Selling Stockholder
hereunder shall not be terminated by operation of law, whether by the
dissolution of the corporation, or by the occurrence of any other event; if
the corporation should be dissolved, or if any other such event should
occur, before the delivery of the Shares hereunder, certificates
representing the Shares, if any, shall be delivered by or on behalf of the
Selling Stockholder in accordance with the terms and conditions of this
Agreement, of the International Underwriting Agreement and of the Custody
Agreements; and actions taken by the Attorneys-in-Fact pursuant to the
Powers of Attorney shall be as valid as if such dissolution or other event
had not occurred, regardless of whether or
12
not the Custodian, the Attorneys-in-Fact, or any of them, shall have
received notice of such dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at a purchase
price per share of $......................, the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Selling Stockholder and the Company, as
the case may be, agree to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Selling
Stockholder and the Company, as the case may be, at the purchase price per share
set forth in clause (a) of this Section 2, that portion of the number of
Optional Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Optional Shares by a fraction the numerator of which is the
maximum number of Optional Shares which such Underwriter is entitled to purchase
as set forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum number of Optional Shares that all of the
Underwriters are entitled to purchase hereunder.
The Selling Stockholder hereby grants to Underwriters the right to
purchase, at the Underwriters' election, up to ........... Optional Shares, at
the purchase price per share set forth in the paragraph above; provided, that,
subject to the Selling Stockholder's compliance with the procedure set forth in
the following sentence, the Selling Stockholder shall have the right to elect
not to sell such Optional Shares; provided, further that, in the event that the
Selling Stockholder elects not to sell such Optional Shares, the Company hereby
grants to the Underwriters the right to purchase at such Underwriters' election
that portion of Optional Shares that the Selling Stockholder elects not to sell,
at the purchase price per share set forth in the paragraph above. In the event
that the Selling Stockholder elects not to sell Optional Shares, the Selling
Stockholder shall notify Xxxxxxx, Xxxxx & Co. of such election within 24 hours
of such Selling Stockholder's receipt of notice of the Underwriter's election to
purchase Optional Shares. The Underwriters' election to purchase Optional Shares
may be exercised only by written notice from you to both the Company and the
Attorney-in-Fact, given within a period of 30 calendar days after the date of
this Agreement and setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Company and the Attorney-in-
Fact otherwise agree in writing, earlier than two or later than ten business
days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Company and, in the case of the sale of Optional Shares by the
Selling Stockholder, the Selling Stockholder shall be delivered by or on behalf
of the Company and, in the case of the sale of Optional Shares by the Selling
Stockholder, the Selling Stockholder to Xxxxxxx, Xxxxx & Co., through the
facilities of The
13
Depository Trust Company ("DTC"), for the account of such Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
same day funds and, in the case of the sale of Optional Shares by the Selling
Stockholder, the Custodian and the Selling Stockholder, by same day funds. The
Company will cause the certificates representing the Shares to be made available
for checking and packaging at least twenty-four hours prior to the Time of
Delivery (as defined below) with respect thereto at the office of Xxxxxxx, Sachs
& Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Designated Office"). The
time and date of such delivery and payment shall be, with respect to the Firm
Shares, 9:30 a.m., New York City time, on ............., 1996 or on such other
time and date as Xxxxxxx, Xxxxx & Co. and the Company may agree upon in writing
and, with respect to the Optional Shares, 9:30 a.m., New York City time, on the
date specified by Xxxxxxx, Sachs & Co. in the written notice given by Xxxxxxx,
Xxxxx & Co. of the Underwriters' election to purchase such Optional Shares, or
such other time and date as Xxxxxxx, Sachs & Co., the Company and, in the case
of the sale of Optional Shares by the Selling Stockholder, the Selling
Stockholder may agree upon in writing. Such time and date for delivery of the
Firm Shares is herein called the "First Time of Delivery", such time and date
for delivery of the Optional Shares, if not the First Time of Delivery, is
herein called the "Second Time of Delivery", and each such time and date for
delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the cross-
receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(m) hereof, will be delivered at the offices
of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000-0000 (the
"Closing Location"), and the Shares will be delivered at the Designated Office,
all at each Time of Delivery. A meeting will be held at the Closing Location at
2:00 p.m., New York City time, on the New York Business Day next preceding each
Time of Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Section 4, "New York Business Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in New York are generally authorized or
obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or
Prospectus which shall be disapproved by you promptly after reasonable
notice thereof; to advise you, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you copies thereof; to advise you,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or prospectus, of the suspension of the
14
qualification of the Shares for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus or
suspending any such qualification, promptly to use its best efforts to
obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Shares, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to
furnish the Underwriters with copies of the Prospectus in New York City in
such quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months
after the time of issue of the Prospectus in connection with the offering
or sale of the Shares and if at such time any events shall have occurred as
a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary during such period to amend or supplement the Prospectus in order
to comply with the Act, to notify you and upon your request to prepare and
furnish without charge to each Underwriter and to any dealer in securities
as many copies as you may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with sales of
any of the Shares at any time nine months or more after the time of issue
of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies as
you may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to
and including the date 180 days after the date of the Prospectus, not to,
directly or indirectly, offer, sell, grant any option to purchase or
otherwise dispose (or approve any offer, sale, grant or other disposition),
except as provided hereunder and under the International Underwriting
Agreement, the Shares or any securities of the Company that are
substantially similar to the Shares, including but not limited to any
securities that are
15
convertible into or exchangeable for, or that represent the right to
receive, Stock or any such substantially similar securities (other than, as
described in the Prospectus, pursuant to the 1996 Long Term Compensation
Plan, the exercise of warrants existing on, or upon the conversion or
exchange of convertible or exchangeable securities outstanding as of, the
date of this Agreement or private transactions with an Affiliate of
Adelphia), without your prior written consent. For purposes of this
subsection (e), an "Affiliate" of a specified person shall mean a person
that directly or indirectly through one or more intermediaries, controls or
is controlled by, or is under common control with, the person specified;
(f) To furnish to its securityholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, stockholders' equity and cash flows of the Company
and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter
ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to
deliver to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the
Company is listed; and (ii) such additional information concerning the
business and financial condition of the Company as you may from time to
time reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its stockholders generally or to the
Commission);
(h) To use the net proceeds received by it from the sale of the Shares
pursuant to this Agreement and the International Underwriting Agreement in
the manner specified in the Prospectus under the caption "Use of Proceeds";
(i) To use its best efforts to list, subject to notice of issuance, the
Shares on the Nasdaq National Market;
(j) To file with the Commission such reports on Form SR as may be
required by Rule 463 under the Act; and
(k) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M. Washington D.C. time, on the date of this
Agreement, the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
6. (a) The Company covenants and agrees with the several Underwriters that
(a) the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares
16
under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, the
International Underwriting Agreement, the Agreement between Syndicates, the
Selling Agreements, the Blue Sky Memorandum, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Shares; (iii) all expenses in connection with
the qualification of the Shares for offering and sale under state securities
laws as provided in Section 5(b) hereof, including, without limitation, the
reasonable fees and disbursements of counsel for the Underwriters in connection
with such qualification and in connection with the Blue Sky surveys; (iv) all
fees and expenses in connection with listing the Shares on the Nasdaq National
Market; (v) the filing fees incident to, and the reasonable fees and
disbursements of counsel for the Underwriters in connection with, securing any
required review by the National Association of Securities Dealers, Inc. ("NASD")
of the terms of the sale of the Shares; (vi) the cost of preparing stock
certificates; (vii) the cost and charges of any transfer agent or registrar; and
(viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section; and (b) the Selling Stockholder will pay or cause to be paid all costs
and expenses incident to the performance of such Selling Stockholder's
obligations hereunder which are not otherwise specifically provided for in this
Section, including (i) any fees and expenses of counsel for such Selling
Stockholder, (ii) the fees and expenses of the Attorneys-in-Fact and the
Custodian and (iii) all expenses and taxes incident to the sale and delivery of
the Shares to be sold by such Selling Stockholder to the Underwriters hereunder.
In connection with Clause (b)(iii) of the preceding sentence, Xxxxxxx, Xxxxx &
Co. agrees to pay New York State stock transfer tax, and the Selling Stockholder
agrees to reimburse Xxxxxxx, Sachs & Co. for associated carrying costs if such
tax payment is not rebated on the day of payment and for any portion of such tax
payment not rebated. It is understood, however, that the Company shall bear, and
the Selling Stockholder shall not be required to pay or to reimburse the Company
for, the cost of any other matters not directly relating to the sale and
purchase of the Shares pursuant to this Agreement, and that, except as provided
in this Section, and Sections 8 and 11 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, stock
transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholder herein are, at and as of such Time of
Delivery, true and correct, the condition that the Company and the Selling
Stockholder shall have performed all of its and their obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the rules and regulations under the Act and in accordance with Section
5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M.
Washington, D.C. time, on the date of this Agreement; 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 all requests for
additional information on
17
the part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Xxxxxx & Xxxxxxx, counsel for the Underwriters, shall have
furnished to you such opinion or opinions (a draft of each such opinion is
attached as Annex II(a) hereto), dated such Time of Delivery, with respect
to the matters covered in paragraphs (i), (ii), (vii), (xi) and (xiii) of
subsection (c) below as well as such other related matters as you may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Xxxxxxxx Ingersoll, counsel for the Company, shall have furnished
to you their written opinion (a draft of each such opinion is attached as
Annex II(b) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, 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
Delaware, with corporate power and corporate authority to own its
properties and conduct its business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the
Company (including the Shares being delivered at such Time of Delivery)
have been duly and validly authorized and issued and are fully paid and
non-assessable and were not issued in violation of preemptive rights;
and the Shares conform to the description of the Stock contained in the
Prospectus;
(iii) The Company 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, the effect of which
would be materially adverse to the Company, the Subsidiaries and the
Joint Ventures, taken as a whole, by reason of failure to be so
qualified in any such jurisdiction;
(iv) Each of the Subsidiaries has been duly formed or
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation; all of the issued
shares of capital stock of each such Subsidiary have been duly and
validly authorized and issued, are fully paid and non-assessable and
were not issued in violation of preemptive rights, and, are owned of
record directly or indirectly by the Company, to the best of such
counsel's knowledge, free and clear of all security interests, liens or
other encumbrances.
(v) Each of the Joint Ventures has been duly formed or
incorporated as a corporation, general partnership or limited
partnership under the laws of its jurisdiction of incorporation or
formation, as applicable, and has all requisite corporate or
partnership power and authority to own its properties and conduct is
business as described in the Prospectus, and is duly qualified as a
foreign corporation, general partnership or limited partnership, as
applicable, in each 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, the effect of which
would be materially adverse to the Company, the Subsidiaries and the
Joint Ventures, taken as a whole, by reason
18
of failure to be so qualified in any such jurisdiction. Each Joint
Venture that is a corporation or a limited partnership is validly
existing as a corporation or limited partnership, as applicable, and is
in good standing under the laws of its jurisdiction or formation, as
applicable. All of the limited partnership interests owned by each
Subsidiary have been duly authorized and validly issued and, except as
set forth in the Prospectus, all of such limited partnership interests
are owned of record by each respective Subsidiary, and are, to the best
of such counsel's knowledge, owned free and clear of any security
interest, lien or other encumbrance;
(vi) Except with regard to matters addressed by the counsel
retained by the Company to deliver the opinions set forth in Sections
7(d) and (e) (the "Local and Regulatory Opinions") (as to which such
counsel is not required to express an opinion), 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, threatened or
contemplated 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 consolidated financial position,
stockholders' equity or results of operations of the Company, the
Subsidiaries and the Joint Ventures, taken as a whole.
(vii) This Agreement and the International Underwriting Agreement
have been duly authorized, executed and delivered by the Company;
(viii) The issue and sale of the Shares being delivered at such
Time of Delivery to be sold by the Company and the compliance by the
Company with all of the provisions of this Agreement and the
International Underwriting Agreement 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, (i) any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such
counsel to which the Company, any of the Subsidiaries or Joint Ventures
is a party or by which the Company, any of the Subsidiaries or Joint
Ventures is bound or to which any of the property or assets of the
Company, any of its Subsidiaries or Joint Ventures is subject and
identified to such counsel as material (assuming for purposes of such
opinion that all of such agreements are governed by Pennsylvania law),
(ii) the provisions of the Certificate of Incorporation or Bylaws of
the Company or (iii) any statute or any order, rule or regulation known
to such counsel of any court or governmental agency or body having
jurisdiction over the Company, the Subsidiaries or the Joint Ventures
or any of their properties except as to the clauses (i) and (iii) in
cases in which such violation, breach or default would not have a
material adverse effect on the Company, the Subsidiaries and the Joint
Ventures, taken as a whole (such counsel shall be entitled to state
that is expressing no opinion with respect to state or foreign
securities or blue sky laws in connection with the purchase and
distribution of the shares by the Underwriters and the International
Underwriters);
(ix) No consent, approval, authorization, order, filing,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated by this
Agreement and the International Underwriting Agreement, except the
registration under the Act of the Shares, and such consents, approvals,
19
authorizations, registrations or qualifications as may be required
under state or foreign securities or Blue Sky laws in connection with
the purchase and distribution of the Shares by the Underwriters and the
International Underwriters;
(x) None of the Company, the Subsidiaries or the Joint Ventures
is in violation of its Certificate of Incorporation or By-laws, or
certificate of formation or similar document, 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, 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;
(xi) 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 Stock, under the caption Certain United
States Tax Consequences to Non-United States Holders", under the
caption "Certain Relationships and Transactions," insofar as they
purport to summarize the terms of documents, and under the caption
"Underwriting" (insofar as such statements describe this Agreement and
the International Underwriting Agreement), 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;
(xii) 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; and
(xiii) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior to
such Time of Delivery (other than the financial statements (including
the notes thereto) and related schedules therein and financial data, as
to which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the rules and
regulations thereunder; although they do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus, except for those
referred to in the opinion in subsection (xi) of this Section 7(c), no
facts have come to their attention which have given them a reason to
believe that, as of its effective date, the Registration Statement or
any further amendment thereto made by the Company prior to such Time of
Delivery (other than the financial statements (including the notes
thereto) and related schedules therein and financial data, as to which
such counsel need express no opinion) contained an untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that, as of its date, the Prospectus or any further
amendment or supplement thereto made by the Company prior to such Time
of Delivery (other than the financial statements (including the notes
thereto) and related schedules therein and financial data, as to which
such counsel need express no opinion) contained an untrue statement of
a material fact or omitted to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading or that, as of such Time of Delivery,
either the Registration Statement or the Prospectus or any further
amendment or supplement thereto made by the Company prior to such Time
of Delivery (other than the financial statements (including the notes
thereto) and related schedules therein and financial data, as to which
such counsel need express no opinion) contains an untrue
20
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and they do
not know of any amendment to the Registration Statement required to be
filed or of any contracts or other documents of a character required to
be filed as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus or required to be
described in the Registration Statement or the Prospectus which are not
filed or incorporated by reference or described as required.
In rendering such opinion, such counsel may state that they express no
opinion as to (i) any compliance by the Company, the Subsidiaries and the Joint
Ventures with any statute, rule, regulation, order or other requirement dealing
with the regulation of telecommunications or with the terms or provisions of any
Authorization, as to which counsel may state that it is its understanding that
the U.S. Underwriters and International Underwriters are relying upon the
opinions of Local Counsel being delivered pursuant to this Agreement and the
International Underwriting Agreement and (ii) the laws of any jurisdiction
outside the United States;
(d) Dow Xxxxxx & Xxxxxxxxx, special regulatory counsel for the Company,
shall have furnished to you their written opinion (a draft of such opinion is
attached as Annex II(c) hereto), dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) Each of the Company, the Subsidiaries and the Joint Ventures has
all of the licenses, permits and authorizations, if any, required by the
FCC and the State Regulatory Agencies for the provision of
telecommunications services except where the failure to obtain or hold such
license, permit or authority would not have a material adverse effect on
the Company, the Subsidiaries and the Joint Ventures, taken as a whole.
(ii) Neither the Company, any Subsidiaries nor any Joint Ventures is
subject to any pending complaint or investigation before the FCC or, to the
best knowledge of counsel, to any threatened complaint or investigation
before the FCC, or, any pending or threatened complaint or investigation
before any State Regulatory Agencies based on any alleged violation by the
Company, the Subsidiaries or the Joint Ventures in connection with their
provision of or failure to provide telecommunications services.
(iii) The statements in the Prospectus under the headings "Risk Factors
- Regulation" and "Business - Government Regulation" are fair accurate and
complete summaries of the matters therein described.
(iv) The Company, the Subsidiaries and the Joint Ventures have the
consents, approvals, authorizations, licenses, certificates, permits, or
orders of the FCC or any State Regulatory Agency, if any, for the
consummation of the transactions contemplated in the Purchase Agreement
except where the failure to obtain the consents, approvals, authorizations,
licenses, certificates, permits or orders would not have a Material Adverse
Effect on the Company, the Subsidiaries and the Joint Ventures, taken as a
whole.
(v) Neither the execution and delivery of this Agreement nor the sale
of the
21
Shares contemplated hereby will conflict with or result in a violation of
any order or regulation of the FCC or any State Regulatory Agency
applicable to the Company, its Subsidiaries or the Joint Ventures except
where the conflict with or the violation of which would not have a material
adverse impact on the Company, the Subsidiaries and the Joint Ventures,
taken as a whole.
(e) Each of Pennington, Culpepper, Moore, Wilkinson, Xxxxxx & Xxxxxx, P.A.
(Florida), Roland, Fogel, Koblenz & Xxxx (New York), Sonneschein, Nath &
Xxxxxxxxx (Missouri), Downs Xxxxxxx & Xxxxxx (Vermont), and Xxxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx (Tennessee), each of whom are special state regulatory counsel
for the Company for their respective states, shall have furnished to you their
written opinion (a draft of each such opinion is attached as Annex II(d)-(h)
hereto), dated as of such Time of Delivery, in form and substance satisfactory
to you, to the effect that, with respect to each of the Company's Subsidiaries
or Joint Ventures, as the case may be, that are located in their respective
states:
(i) Each of the Subsidiaries and Joint Ventures, as the case may be,
has all of the licenses, permits and authorizations, if any, required by
the FCC and the State Regulatory Agencies for the provision of
telecommunications services except where the failure to obtain or hold such
license, permit or authority would not have a material adverse effect on
the Company, the Subsidiaries and the Joint Ventures, taken as a whole.
(ii) Neither any of the Subsidiaries nor any of the Joint Ventures, as
the case may be, is subject to any pending complaint or investigation
before the FCC or, to the best knowledge of counsel, to any threatened
complaint or investigation before the FCC, or, any pending or threatened
complaint or investigation before any state regulatory agencies based on
any alleged violation by the Company, the Subsidiaries or the Joint
Ventures in connection with their provision of or failure to provide
telecommunications services.
(iii) The statements in the Prospectus under the headings "Risk Factors
- Regulation" and "Business - Government Regulation" are fair, accurate and
complete summaries of the matters therein described.
(iv) Each of the Subsidiaries and the Joint Ventures, as the case may
be, have the consents, approvals, authorizations, licenses, certificates,
permits, or orders of the FCC or any state regulatory agency, if any, for
the consummation of the transactions contemplated in this Agreement except
where the failure to obtain the consents, approvals, authorizations,
licenses, certificates, permits or orders would not have a material adverse
effect on the Company, the Subsidiaries and the Joint Ventures, taken as a
whole.
(v) Neither the execution and delivery of this Agreement nor the sale
of the Shares contemplated hereby will conflict with or result in a
violation of any order or regulation of the FCC or any state regulatory
agency applicable to the Company, its Subsidiaries or the Joint Ventures
except where the conflict with or the violation of which would not have a
material adverse impact on the Company, the Subsidiaries and the Joint
Ventures, taken as a whole.
22
(f) In the event that the Selling Stockholder sells Optional Shares,
counsel for the Selling Stockholder, shall have furnished to you their written
opinion (a draft of each such opinion is attached as Annex II(i) hereto) with
respect to the Selling Stockholder for whom they are acting as counsel, dated
such Time of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) A Power of Attorney and a Custody Agreement have been duly
executed and delivered by the Selling Stockholder and constitute valid and
binding agreements of the Selling Stockholder in accordance with their
terms;
(ii) This Agreement and the International Underwriting Agreement
have been duly executed and delivered by or on behalf of the Selling
Stockholder; and the sale of the Shares to be sold by the Selling
Stockholder hereunder and thereunder and the compliance by the Selling
Stockholder with all of the provisions of this Agreement and the
International Underwriting Agreement, the Power of Attorney and the Custody
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any terms or provisions of, or constitute a default under, any statute,
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Selling Stockholder is a
party or by which the Selling Stockholder is bound, or to which any of the
property or assets of the Selling Stockholder is subject, nor will such
action result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Selling Stockholder if the Selling
Stockholder is a corporation or any order, rule or regulation known to such
counsel of any court or governmental agency or body having jurisdiction
over the Selling Stockholder or the property of the Selling Stockholder;
(iii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement and the International
Underwriting Agreement in connection with the Shares to be sold by the
Selling Stockholder hereunder or thereunder, except which have been duly
obtained and are in full force and effect, such as have been obtained under
the Act and such as may be required under state or foreign securities or
Blue Sky laws in connection with the purchase and distribution of such
Shares by the Underwriters or the International Underwriters;
(iv) Immediately prior to such Time of Delivery the Selling
Stockholder had good and valid title to the Shares to be sold at such Time
of Delivery by the Selling Stockholder under this Agreement and the
International Underwriting Agreement, free and clear of all security
interests, liens or other encumbrances, and full right, power and authority
to sell, assign, transfer and deliver the Shares to be sold by the Selling
Stockholder hereunder and thereunder; and
(v) Good and valid title to such Shares, free and clear of all
security interests, liens or other encumbrances, has been transferred to
each of the several Underwriters or International Underwriters, as the case
may be, who have purchased such Shares in good faith and without notice of
any such lien, encumbrance, equity or claim or any other adverse claim
within the meaning of the Uniform Commercial Code.
In rendering such opinion, such counsel may state that they express no
opinion as to the
23
laws of any jurisdiction outside the United States and in rendering the opinion
in subparagraph (iv) such counsel may rely upon a certificate of such Selling
Stockholder in respect of matters of fact as to ownership of, and security
interests, liens or other encumbrances on the Shares sold by such Selling
Stockholder, provided that such counsel shall state that they believe that both
you and they are justified in relying upon such certificate;
(g) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at such Time of Delivery, Deloitte & Touch, LLP
shall have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(a) hereto and a draft of the
form of letter to be delivered on the effective date of any post effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex I(b) hereto);
(h) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Prospectus any 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 (ii) since the respective dates as
of which information is given in the Prospectus there shall not have been any
change in the capital stock or long-term debt of the Company, any of its
Subsidiaries or any of its Joint Ventures or any change, or any development
involving a prospective change, in or affecting the general affairs, management,
financial position, stockholders' or partners' equity or results of operations
of the Company, its Subsidiaries and the Joint Ventures, otherwise than as set
forth or contemplated in the Prospectus, the effect of which, in any such case
described in Clause (i) or (ii), is in the judgment of the Representatives so
material and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares being delivered at such Time
of Delivery on the terms and in the manner contemplated in the Prospectus;
(i) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization", as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities or the Company's preferred stock;
(j) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on the Nasdaq National Market; (ii)
a suspension or material limitation in trading in the Company's securities on
the Nasdaq National Market; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this Clause (iv) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares being delivered at such Time of Delivery
on the terms and in the manner contemplated in the Prospectus; (v) a material
adverse change in general economic, political or financial conditions in the
United States, or the effect
24
of international conditions on the financial markets in the United States, that
in the opinion of the Underwriters, makes it inadvisable or impracticable to
proceed with the delivery of the Stock as contemplated hereby; or (vi) any
domestic or international event or act or occurrence has materially disrupted,
or in the opinion of the Underwriters, will in the immediate future, materially
disrupt, the market for the Company's securities or for securities in general;
(k) The Shares to be sold by the Company and the Selling Stockholder,
if any, at such Time of Delivery shall have been duly listed, subject to notice
of issuance, on the Nasdaq National Market;
(l) The Company has obtained and delivered to the Underwriters executed
copies of an agreement from the stockholders of the Company set forth on
Schedule V to the effect set forth in Section 5(e) hereof in form and substance
satisfactory to you;
(m) The Company and the Selling Stockholder shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of officers
of the Company and of the Selling Stockholder, respectively, satisfactory to you
as to the accuracy of the representations and warranties of the Company and the
Selling Stockholder, respectively, herein at and as of such Time of Delivery, as
to the performance by the Company and the Selling Stockholder of all of their
respective obligations hereunder to be performed at or prior to such Time of
Delivery, and as to such other matters as you may reasonably request, and the
Company shall have furnished or caused to be furnished certificates as to the
matters set forth in subsections (a) and (h) of this Section, and as to such
other matters as you may reasonably request; and
(n) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement.
8. (a) The Company, each of the Subsidiaries, and, in the case of the
sale of Optional Shares by the Selling Stockholder and to the extent set forth
in this Section 8, the Selling Stockholder, jointly and severally, will
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company, the Subsidiaries, and the Selling Stockholder shall not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use
therein; provided, further that the liability of the Selling Stockholder
pursuant to this subsection (a) shall not exceed the product of the number of
Shares sold by such Selling Stockholder hereunder and the initial public
offering price of the Shares set forth in the Prospectus.
25
(b) Each Underwriter will indemnify and hold harmless the Company and,
in the case of the sale of Optional Shares by the Selling Stockholder, the
Selling Stockholder against any losses, claims, damages or liabilities, joint or
several, to which the Company or such Selling Stockholder may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through Xxxxxxx, Sachs & Co.
expressly for use therein; and will reimburse the Company and the Selling
Stockholder for any legal or other expenses reasonably incurred by the Company
or such Selling Stockholder in connection with investigating or defending any
such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying party
under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (which shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholder on the one
hand and the Underwriters on the other from the offering of the
26
Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company and the Selling Stockholder on the
one hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering of the
Shares purchased under this Agreement (before deducting expenses) received by
the Company and the Selling Stockholder bear to the total underwriting discounts
and commissions received by the Underwriters with respect to the Shares
purchased under this Agreement, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Selling Stockholder on the
one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Stockholder and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission and the Selling Stockholder shall not
be required to contribute any amount in excess of the amount equal to the
product of the number of Optional Shares sold by the Selling Stockholder and the
initial public offering price of the Shares set forth in the Prospectus. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company and the Selling Stockholder under
this Section 8 shall be in addition to any liability which the Company and the
respective Selling Stockholder 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 8 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 officer and director of the Company (including any person
who, with his or her consent, is named in the Registration Statement as about to
become a director of the Company) and to each person, if any, who controls the
Company or any Selling Stockholder within the meaning of the
27
Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after
such default by any Underwriter you do not arrange for the purchase of such
Shares, then the Company and, in the case of the sale of Optional Shares by the
Selling Stockholder, the Selling Stockholder, shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company and, in
the case of the sale of Optional Shares by the Selling Stockholder, the Selling
Stockholder that you have so arranged for the purchase of such Shares, or the
Company and, in the case of the sale of Optional Shares by the Selling
Stockholder, the Selling Stockholder notify you that they have so arranged for
the purchase of such Shares, you or the Company and, in the case of the sale of
Optional Shares by the Selling Stockholder, the Selling Stockholder shall have
the right to postpone such Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and,
in the case of the sale of Optional Shares by the Selling Stockholder, the
Selling Stockholder as provided in subsection (a) above, the aggregate number of
such Shares which remains unpurchased does not exceed one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of Delivery,
then the Company and, in the case of the sale of Optional Shares by the Selling
Stockholder, the Selling Stockholder shall have the right to require each non-
defaulting Underwriter to purchase the number of Shares which such Underwriter
agreed to purchase hereunder at such Time of Delivery and, in addition, to
require each non-defaulting Underwriter to purchase its pro rata share (based on
the number of Shares which such Underwriter agreed to purchase hereunder) of the
Shares of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and,
in the case of the sale of Optional Shares by the Selling Stockholder, the
Selling Stockholder as provided in subsection (a) above, the aggregate number of
such Shares which remains unpurchased exceeds one-eleventh of the aggregate
number of all of the Shares to be purchased at such Time of Delivery, or if the
Company and, in the case of the sale of Optional Shares by the Selling
Stockholder, the Selling Stockholder shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase Shares
of a defaulting Underwriter or Underwriters, then this Agreement or, with
respect to the Second Time of Delivery, the obligations of the Underwriters to
purchase and of the Company and the Selling Stockholder to sell the Optional
Shares) shall thereupon terminate, without liability on the part of any non-
defaulting Underwriter or the Company or the Selling Stockholder, except for the
expenses to be borne by the Company
28
and the Selling Stockholder and the Underwriters as provided in Section 6 hereof
and the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company, the Selling Stockholder and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or any of the Selling Stockholder, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Stockholder, and shall survive delivery of and payment for the
Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholder shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Company and the Selling Stockholder, as provided herein, the Company and the
Selling Stockholder, pro rata (based on the number of Shares to be sold by the
Company and the Selling Stockholder hereunder) will reimburse the Underwriters
through you for all out-of-pocket expenses approved in writing by you, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of the Shares not so
delivered, but the Company and the Selling Stockholder, only to the extent that
such Selling Stockholder is selling Shares hereunder, shall then be under no
further liability to any Underwriter in respect of the Shares not so delivered
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives; and in all dealings with the Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of the Selling Stockholder made or given by any or
all of the Attorneys-in-Fact for the Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Sachs
&. Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; if to any Selling Stockholder shall be delivered or sent by mail,
telex or facsimile transmission to counsel for the Selling Stockholder at 0 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxxxx, XX 00000, Attention: Xxxxxxx X. Xxxxx; and if to the
Company shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Company set forth in the Registration Statement, Attention:
President; provided, however, that any notice to an Underwriter pursuant to
Section 8 (c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire or telex constituting such Questionnaire, which address will be
supplied to the Company or the Selling Stockholder by you upon request. Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and the Selling Stockholder and, to the extent
provided in Sections
29
8 and 10 hereof, the officers and directors of the Company and each person who
controls the Company, any Selling Stockholder or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Shares from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
30
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and for each of the Representatives plus one
for each counsel counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters, the Company and
the Selling Stockholder. It is understood that your acceptance of this letter
on behalf of each of the Underwriters is pursuant to the authority set forth in
a form of Agreement among Underwriters (U.S. Version), the form of which shall
be submitted to the Company and the Selling Stockholder for examination upon
request, but without warranty on your part as to the authority of the signers
thereof.
Very truly yours,
Hyperion Telecommunications, Inc.
By: .........................................
Name:
Title:
Adelphia Communications Corporation
(as Selling Stockholder)
By: .........................................
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Sachs & Co.
Bear, Xxxxxxx & Co. Inc.
Lazard Freres & Co. LLC
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: ..................................
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
31
SCHEDULE I
Number of Optional
Shares to be
Total Number of Purchased if
Firm Shares Maximum Option
Underwriter to be Purchased Exercised
-----------
Xxxxxxx, Xxxxx & Co. ...................
Bear, Xxxxxxx & Co.
Lazard Freres & Co. LLC ................
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ..................
Names of other Underwriters ............
Total ....................
32
SCHEDULE II
Subsidiaries
Hyperion Enhanced Networks of Virginia, Inc.
Hyperion Telecommunications of Florida, Inc.
Hyperion Telecommunications of Kansas, Inc.
Hyperion Telecommunications of Kentucky, Inc.
Hyperion Telecommunications of Massachusetts, Inc.
Hyperion Telecommunications of Michigan, Inc.
Hyperion Telecommunications of New Jersey, Inc.
Hyperion Telecommunications of New York, Inc.
Hyperion Telecommunications of North Carolina, Inc.
Hyperion Telecommunications of Ohio, Inc.
Hyperion Telecommunications of Pennsylvania, Inc.
Hyperion Telecommunications of South Carolina, Inc.
Hyperion Telecommunications of Tennessee, Inc.
Hyperion Telecommunications of Vermont, Inc.
Hyperion Telecommunications of Virginia, Inc.
33
SCHEDULE III
Joint Ventures
Alternet of Virginia
AVR of Tennessee, L.P., d/b/a Hyperion of Tennessee, L.P.
Continental Fiber Technologies, Inc.
Hyperion Telecommunications of Harrisburg
Louisville Lightwave
Multimedia Hyperion Telecommunications
NewChannels Hyperion Telecommunications of New York
New Jersey Fiber Technologies
NHT Partnership
PECO Hyperion Telecommunications
Susquehanna Hyperion Telecommunications
34
SCHEDULE IV
List of Employee Pension and Benefit Plans
of Hyperion Telecommunications, Inc.
and its Affiliates
Adelphia Communications Corporation Employee Benefit Plan
Adelphia Communications Corporation 401(k) Savings and Protection
Profit Sharing Plan
Hyperion Telecommunications, Inc. 1996 Long Term Compensation Plan
35
SCHEDULE V
List of stockholders subject to Lock-Up Agreements
Adelphia Communications Corporation
Xxxxxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx
Xxxxxxxx X. Xxxxxx
36
ANNEX I
DESCRIPTION OF COMFORT LETTER
FOR REGISTRATION STATEMENTS ON FORM S-1
Pursuant to Section 7(g) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included in the Prospectus or the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of the
Act and the related published rules and regulations thereunder; and, if
applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited consolidated interim financial statements, selected financial
data, pro forma financial information, financial forecasts and/or condensed
financial statements derived from audited financial statements of the
Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been separately furnished to the
representatives of the Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus; and
on the basis of specified procedures including inquiries of officials of
the Company who have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in all material
respects with the applicable accounting requirements of the Act and the
related published rules and regulations, nothing came to their attention
that caused them to believe that the unaudited condensed consolidated
financial statements do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the related published
rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the three most recent fiscal years included in the Prospectus agrees
with the corresponding amounts (after restatements where applicable) in the
audited consolidated financial statements for such three fiscal years which
were included or incorporated by reference in the Company's Annual Reports
on Form 10-K for such fiscal years;
1
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an examination
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) (i) the unaudited consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in
the Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the related
published rules and regulations, or (ii) any material modifications
should be made to the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of cash
flows included in the Prospectus for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in
the unaudited consolidated financial statements from which such data
and items were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial statements
included in the Prospectus;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived any unaudited condensed
financial statements referred to in Clause (A) and any unaudited income
statement data and balance sheet items included in the Prospectus and
referred to in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited consolidated financial
statements included in the Prospectus;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and
2
the published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical amounts in
the compilation of those statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock upon exercise of options
and stock appreciation rights, upon earn-outs of performance shares and
upon conversions of convertible securities, in each case which were
outstanding on the date of the latest financial statements included in
the Prospectus) or any increase in the consolidated long-term debt of
the Company and its subsidiaries, or any decreases in consolidated net
current assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the
latest balance sheet included in the Prospectus, except in each case
for changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(F) for the period from the date of the latest financial statements
included in the Prospectus to the specified date referred to in Clause
(E) there were any increases or decreases in consolidated net revenues
or operating profit or the total or per share amounts of consolidated
net income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case
as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the
Representatives, except in each case for decreases or increases which
the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and
(vi) above, they have carried out certain specified procedures, not
constituting an examination in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives, which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Prospectus, or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
3
